ROYAL COURT
(Samedi Division)
13 November 1998
Before: Bryan Ian Le Marquand, Greffier Substitute
Between | Beghins Shoes Limited | First Plaintiff |
And | Island Gift Shops Limited | Second Plaintiff |
And | Axa Equity & Law Life Assurance Society plc | Third Plaintiff |
And | Avancement Limited | Defendant |
(By original Action)
AND
Between | Avancement Limited | Plaintiff |
And | Beghins Shoes Limited | First Defendant |
And | Island Gift Shops Limited | Second Defendant |
(By counterclaim)
Application by the plaintiffs in the original action (hereinafter referred to as "the plaintiffs") for certain words to be struck out of the defendant in the original action’s (hereinafter referred to as "the defendant") amended answer and counterclaim.
Advocate R J F Pirie for the plaintiffs
Mr R L Weston a Director of the defendant representing the defendant.
JUDGMENT
GREFFIER SUBSTITUTE: The plaintiffs issued a summons dated 17 and 26 June 1998, seeking to strike out parts of the amended answer and counterclaim and seeking various other orders.
The defendant issued a cross summons dated 7 August 1998, in which it sought leave to file a re-amended answer and counterclaim.
I heard the parties through their advocate and director respectively on 13 August 1998, in relation to the general principle as to whether leave to file a re-amended answer ought to be granted, subject to the first strike out point which was in relation to the date of the cancellation of the lease. I decided that, in principle, leave to file a re-amended answer and counterclaim ought to be granted on the usual terms as to costs and on other terms which are not relevant to this decision.
I then heard the parties through their intermediaries in relation to the first strike out point and this Judgment relates thereto.
The first strike out point was set out in paragraph 1 of the plaintiffs summons dated 17 and 26 June 1998, and was that the words:-
"£51,820.98 (if the correct date of cancellation be adjudicated as the 24 March 1996) or",
Contained in sub-paragraph 10.1 of the defendants amended answer and counterclaim dated 8 June 1998, be struck out on the ground that following the Consent Orders made on 2 February 1998, as recorded in two Acts of the Royal Court of that date, the defendant is estopped from pleading or seeking adjudication that the Paper Lease should be cancelled with effect from any date other than 11 August 1996, or 28 September 1997, and that the inclusion of the said words is thus likely to prejudice, embarrass or delay the fair trial of the Preliminary Issue and the main action and /or is scandalous, frivolous, or vexatious and/or is an abuse of the process of the Court.
Although I had decided in principle that leave to re-amend the defendant’s answer and counterclaim ought to be granted it was subject to the question as to whether the words objected to or similar words could be contained in the re-amended answer and counterclaim.
This action relates to a lease for premises at 55 King Street and 12 Broad Street, St Helier. The situation in relation to the Lease was complicated by the fact that the original landlord, the first plaintiff, purported to insert an intermediate landlord, the second plaintiff, between itself and the defendant. Subsequently the property was sold by the first plaintiff to the third plaintiff who is the current owner thereof.
The defendant partially vacated the premises during early 1996 and finally completely vacated them on 11 August 1996. Subsequently, the parties hereto reached an agreement that the lease ought to be cancelled with effect from midnight on 28 September 1997, but strictly without prejudice to:
(a)the defendants claim that the correct date of cancellation should be deemed to be midnight on 11 August 1996; and
(b)the plaintiffs claim for rental to the correct date of cancellation of the lease as declared by the Royal Court in due course and the defendants counterclaim.
The cancellation without prejudice to the matters referred to above was set out in paragraph (1) of the Consent Order dated 2 February 1998 and this Consent Order also dealt with other matters in relation to the giving up of the lease and the premises as well as dealing with various procedural matters in relation to the action. The Consent Order arose out of a document headed "Application for Consent Order" which was submitted jointly on behalf of the parties to this action and dated 2 February 1998.
It seems to me that two things arose from that application for a Consent Order. The first is that there was an agreement between the parties in the terms thereof and the second is that there was a Court Order to give effect to the terms thereof.
What appears to me to have happened subsequently is that the defendant has realised that the lease contained a break clause which allowed it to be terminated on various rent review dates subject to certain notice being given. The defendant, therefore, now wants to plead that the terms of the agreement and the Consent Order to the effect that the cancellation of the lease is strictly without prejudice to the defendants claim that the correct date of cancellation should be deemed to be midnight on 11 August 1996, does not prevent the defendant from alleging that an earlier date is applicable. The plaintiffs case is simply that an agreement has been reached between the parties and incorporated in a Court Order by virtue of which the defendant is bound, and that the defendant cannot now plead anything which is contrary to that agreement.
If I had been dealing with this point simply on the striking out application then I would, obviously, have to apply the normal test in relation to a striking out which is that it should only take place in plain and obvious cases. However, in this case, technically I was dealing with the matter on an application to file a re-amended answer and counterclaim. In my view, in this case, this makes no difference because no relevant amendment was being sought in the amended answer and counterclaim. Furthermore, both parties had come prepared to argue the point on a strike out basis. Accordingly, I proceeded with this matter as if I were hearing a striking out application on this point.
If the position is clear that an agreement has been entered into and an Order made by virtue of which the defendant is precluded from alleging an earlier date as being the effective date from which the lease is cancelled then it would be an abuse of process for the defendant to seek to argue for an earlier date.
Although both parties, through their intermediaries, addressed me on the question of what was or must have been in the minds of the various parties, it seems to me that the matter merely comes down to one of construction as to what was agreed and ordered and that I need look no further than the terms of the agreement, which was embodied in the order.
In the normal course of events, where a lease is cancelled, the correct date of cancellation will be the date with effect from which the cancellation occurred, which in this case was midnight on 28 September 1997.
Both parties, in order to preserve their positions in relation to this action, have stipulated that the cancellation be without prejudice to their position. The position of the defendant at that time was that the correct date of cancellation was 11 August 1996, and that was embodied in the agreement and in the Court Order. The agreement and the Court Order were very precise in specifying a time and date. The parties could simply have agreed that the defendants position was preserved to the effect that the correct date of cancellation of the lease was earlier than midnight on 28 September 1997. The plaintiffs position was preserved in a general way.
Paragraph 4 of the Application for Consent Order, which is in effect paragraph 4 of the Consent Order, was to the effect that the issue as to the correct date of cancellation of the lease ("the Preliminary Issue") be the subject of a preliminary hearing before the Royal Court. Mr Weston, on behalf of the defendant, argued that there is nothing in that paragraph to limit the earliest date which he can argue as being the correct date of the cancellation of lease. Advocate Pirie on behalf of the plaintiffs, argues that paragraph 4 must be understood in the light of paragraph 1 which defines the outstanding issues.
In my view, the inclusion of the specific time and date of midnight on 11 August 1996, when no specific date needed to be included must have had some effect. Furthermore, the effect of sub-clause (i) of paragraph 1 of the Application for Consent Order was to preserve a claim of the defendant which without that sub-clause would not be arguable. It provided a limit on the normal rule in relation to the effect of a cancellation of a lease from a particular date. therefore, seems to me that it has the narrow effect of preserving the defendant’s position only in relation to arguing that the correct date of cancellation is midnight on 11 August 1996, and that the position of the defendant has not been preserved for any earlier date.
Accordingly, I have come to the conclusion that the agreement between the parties set out in the Application for the Consent Order and reflected in the Court Order is binding on the defendant and prevents the defendant from arguing for an earlier date than midnight on 11 August 1996. Accordingly, in the re-amended answer and counterclaim all words which tend to maintain a claim for an earlier date will be deleted.
When a further date is fixed for the continuation of the hearing in relation to the parties’ different summonses then I will need to be addressed in detail in relation to the precise effect which the decision which I have now made has upon the re-amended answer and counterclaim. I will also need to be addressed in relation to the various matters which I left over from the earlier hearing including matters of the costs of and incidental to the striking out application, the costs in relation to the application to file a re-amended answer and counterclaim and the application of the plaintiffs for security for costs in relation to the defendant’s counterclaim.
Accordingly, I have let both parties have access to this written judgment in draft form in advance of the further hearing.
Authorities
R.S.C. (1997 Ed’n) O.18, r.19: pp.328-336
Royal Court Rules 1992, as amended: Rule 6/13