Jersey Unreported Judgments

"A. Remove John Glyn Evans as a Joint Liquidator of the Company.

B. Appoint Godfrey St. John Smith as the sole liquidator of the Company.

"If there are grounds for suspecting that a liquidator is acting improperly or is neglecting his duty, then the court may interfere: see the judgment in Re Stephen Matthews Ltd".

"7.I wrote to John Evans on 13 June 1996, and explained that with the conclusion of the litigation in Scotland I saw no reason why the liquidation could not be brought to a conclusion. The remaining items to my mind consisted of finalising a statement of affairs, settling outstanding liquidator fees, paying the creditors, paying a final dividend to the shareholder and obtaining a discharge from the Royal Court. In a letter dated 24 June 1996, John Evans agreed with these points.

8.I became concerned about John Evans conduct after receiving a letter from him dated 26 July 1996. It became evident that John Evans had a personal dispute with Dr Strasser concerning his own fees for unrelated business which had no bearing upon the liquidators fees to be charged to Inter Estate Limited and he provided me with copies of the liquidators bank statements which were in his name and that of a former liquidator, Mr Abbas Padidar.

9.I became concerned about the operation of the accounts at the Bank as they were still held in the names of John Glyn Evans and Abbas Padidar. I wrote to the Bank on 15 August 1996, and provided it with a copy of the Act of the Royal Court confirming my appointment as joint liquidator. I requested that the Bank formally suspend all dealings on the accounts of the joint liquidators in its possession until the formality of the legal operation of the account could be established and I had provided my written consent.

10.The Bank confirmed in a letter dated 19 August 1996, that stops had been placed on the account to ensure that no funds would be removed from the account until my legal position had been resolved. Further it confirmed that only upon receipt of written confirmation of the correct signatories would the stops be removed.

11.On 5 November 1996, I received a cheque from John Evans in the sum of £1,500 in respect of my fee note from 31 March 1994, to 9 November 1995. I was most concerned that John Evans was still using cheques on which Abbas Padidar was named as a joint liquidator and on which my name did not appear".

12.I received a telephone call at 9.30 am. on Monday, 25 November 1996, from David Reid at the Bank informing me that he was in receipt of a written request from John Evans to transfer funds. I advised him during our conversation that under no circumstances should any funds be transferred out of, or moved from, the Inter Estate Limited accounts without my express written permission. I requested that he transmit the letter of authority to me for my records and review. At 2.20 pm on 25 November 1996, I received a facsimile copy of the instruction given by John Evans dated 19 November 1996, from David Reid who is employed at the Bank. John Evans had requested that all funds held in the current account 67255922 and business reserve account 83602798 be transferred to the current account of Westminster Trust Company Limited held by the National Westminster Bank plc at Library Place. I immediately telephoned David Reid to confirm again that no funds were to be transferred without my express written authority. At 2.20 pm I wrote to the Bank and reaffirmed my authority as joint liquidator and requested that no funds be transferred anywhere until further notice. I further requested that no funds be removed until I had an opportunity to revert to the Bank after discussions with John Evans and the shareholder of Inter Estate. During that afternoon I made numerous telephone calls to the Bank and spoke to David Reid, David Francis, David Eastwood, Di Rimmersol and in addition placed telephone calls to Philip Hermitage and Richard Alletson. I was informed by David Reid that the senior management team at the Bank were in a meeting which had been convened to consider whether to process the instruction from John Evans or uphold my request that the ‘stop’ be maintained on the account that was agreed by Clive T. Wright, who is a Customer Services Officer at the Bank, in writing, on 19 August 1996. Further enquiries with others at the Bank by telephone between 3.00 pm and 5.30 pm also confirmed that the meeting was still in progress.

13.I wrote to John Evans after 12.00 pm on 25 November 1996, and advised him that his unilateral instruction to the Bank without my approval or consultation was a breach of his power as joint liquidator. I asked him to withdraw his letter of instruction. No response was forthcoming from John Evans until 5.41 pm that same day when a facsimile was received from John Evans advising me to contact his advocate at Olsen, Backhurst and Dorey. I was only informed by Philip Hermitage on 28^h November 1996, that, despite the confirmation of my authority and appointment as joint liquidator and my express written and verbal requests to the Bank, the Bank had transferred the sums of £1,300.69 and £5,012.67 from the joint liquidators bank accounts to the Westminster Trust Company Limited, a company owned by John Evans. I was most concerned that we had not followed the correct procedure in seeking to bring the liquidation to a close and in particular I was most concerned that no application had been made to the Royal Court seeking its confirmation that we may distribute funds from that account to the creditors and to the shareholder.

14.The Bank has admitted its error in correspondence dated 23 January 1997, and 24 February, 1997. The Bank refunded the sum of £1,300.69 together with £1,230.90 (which John Evans had taken as fees) to the current account and the sum of £5,012.67 to the business reserve account from its own reserves on 4 December 1996.

15.The present position is totally unsatisfactory as John Evans has not returned the funds to the liquidators accounts and the Bank will not allow the accounts to be operated without an original authority signed by both liquidators or until an order is made by the Royal Court of Jersey".

"Dear Sir,

On 19 November I hand delivered to your branch a letter requesting you to close this companys current account no. 67255922 and the company’s business reserve account no. 83602798 and to transfer the resulting balances as per my letter. A copy of this letter is enclosed for ease of reference. From a telephone conversation I had with your branch yesterday I understand that these instructions have not been carried out. Although a week has elapsed I have had no explanation as to why this was not done. You will note from the mandate in your possession that I am the sole signatory on the accounts and you should have therefore honoured these instructions. Furthermore, I understand from Mr Smith, my co-liquidator, who is not mentioned on the mandate, that you have been corresponding with him regarding the account without reference to myself. This is clearly a breach of banking confidentiality. I was appointed a liquidator of this company by the Royal Court of Jersey on 19 June 1990, which Court has sole jurisdiction over the appointment and removal of liquidators. Mr Smith was appointed a liquidator to act with myself on 8 January 1993. The matter has been dealt with by the Royal Court as the company technically does not exist, having been struck off the Jersey Register of Companies. I request you, therefore, to immediately honour my instructions in accordance with the existing mandate otherwise I shall have no alternative other to seek an order from the Court. I also request you to desist from disclosing any further information regarding this account other than in accordance with the mandate you are holding and to provide me with a full explanation of your actions to date. For your information I have instructed Advocate Dr JD Kelleher of Olsen Backhurst and Dorey in this matter and he has a copy of this letter.

Yours faithfully,

(Signed): JG Evans".