Jersey Unreported Judgments

You are here: BAILII >> Databases >> Jersey Unreported Judgments >> 1998/5 - Pirunico and others v Jefferson Seal [1998] UR 5 (13 January 1998)
URL: http://www.bailii.org/je/cases/UR/1998/5.html
Cite as: [1998] UR 5

[New search] [Contents list] [Help]

ROYAL COURT

(Samedi Division)

13 January 1998

Before: F C Hamon Esq, Deputy Bailiff and

Jurats Rumfitt and Jones

Between: Pirunico Trustees (Jersey) LimitedPlaintiff

And: Jefferson Seal, LimitedDefendant

AND

Between: Banque Nationale de ParisPlaintiff

And: Jefferson Seal, LimitedDefendant

AND

Between: John Stuart Clements

Lance Dorian Ranger

Attendus Treuhandgesellschaft

(suing as Trustees of J D Settlements, nos. 1 and 3 Plaintiffs

And: Walbrook Trustees (Jersey) LimitedFirst Defendant

And: Jefferson Seal, LimitedSecond Defendant

And: Jefferson Seal, LimitedThird Party

(joined at the instance of the First Defendant)

1 Application by the Plaintiffs in all three actions and by the First Defendant in the Third Action for an order that the proposed expert evidence of Michael Anthony Hayes should be excluded from the forthcoming trials due to be heard in the week beginning 16 February 1998, on the ground that it does not qualify as expert testimony.

2 Application by the Second Defendant in the third action for an Order that it be provided with copies of the experts’ reports filed in accordance with paragraph (c) (iii) of the Act of the Royal Court, dated 29 September 1997, on the due dates described, and in the event of this application’s being heard on or after all or any of the dates referred to in the said paragraph (c) (iii), that the Second Defendant be provided with such copy/ies forthwith.

Advocate N M Santos Costa for Pirunico Trustees (Jersey) Limited

and for Banque Nationale de Paris

Advocate A D Robinson for J S Clements, L D Ranger, Attendus Treuhandgesellschaft

Advocate M St J O O’Connell for Walbrook Trustees (Jersey) Limited

Advocate A D Hoy for Jefferson Seal Limited

JUDGMENT

THE DEPUTY BAILIFF: We have the summonses before us dealing with two matters.

First, there is an application by the plaintiffs and the first defendant, Wallbrook Trustees (Jersey) Ltd, by summonses which seek to exclude the expert evidence of Michael Anthony Hayes from the trials due to commence on 16 February. These are known as "the Trustee actions". The grounds upon which the striking out is sought is that the evidence tendered does not qualify as expert evidence.

The second application is by Jefferson Seal in the case 95/250 where that party seeks a sight of the English Law Experts Report which has been exchanged between the plaintiff and the first defendant in that action.

THE APPLICATION ON THE REPORT OF MICHAEL ANTHONY HAYES

When the Court sat on 26 September 1997 there were many and varied matters brought for decision but one of these was left over. It related to the report "of an expert trustee" which was at that time not finalised. Its relevance was questioned at the time by the parties in contest with Jefferson Seal but the Court felt unable to adjudicate upon it until it had seen it. The Act of Court said this:-

"The Court ordered the defendant to file the report of its expert trustee with the parties within fourteen days and directed that the question of the relevance of the said trustee report would be decided at a future hearing."

We do not need to enter into a detailed examination of how the matter then evolved because the report is in and the summonses are before us.

On 19 June 1997 the Court of Appeal in a different interlocutory action concerning Jefferson Seal, but not the other parties now before us, Dixon, Richardson, Reeb Investments, Simon -v- Jefferson Seal Ltd. (19 June 1997) Jersey Unreported C of A. said:

"The application to the Royal Court was in the nature of a striking out application, that is to say an application that in each case the reports should be struck out, wholly or in part, pursuant to the inherent jurisdiction of the Royal Court on the ground that they or part of them were prejudicial or embarrassing to a fair trial of the action."

The Court went on to say:-

"The Royal Court in the exercise of its discretion took what, in our experience, is a more than unusual course. Having held, rightly as we conclude, that the Royal Court Rules do not empower the Court to strike out a part of an expert report as if it were a pleading, the Court was prepared to require that the reports be edited so that while any circumstances relative to the establishment of a pattern or course of conduct might be established, it would be inappropriate for the background of the Plaintiffs - other than the seven in question - to be set out in the reports. There are before this Court two reports which have been edited in accordance with those directions and there being no cross-appeal there is no room for criticism of the approach of the learned Deputy Bailiff in being prepared to undertake such an exercise. For the future we would discourage any practice arising under which the Royal Court or indeed this Court is requested to proceed on a course of detailed editing of an expert report with the risk that it, to a greater or lesser extent, ceases to be the report of the witness. Such a practice should only be considered in plain and obvious cases where substantial injustice would otherwise be caused or in cases where the contents of the report or part of the contents are scandalous or embarrassing. Furthermore, again except in unusual or exceptional cases the application, if it is to be made, should be made at the trial and not before.

Reverting to the instant case it is to be borne in mind that it is the Deputy Bailiff who has the management of these twenty-nine cases and that he is well apprised of their nature and of the pleaded issues which they throw up. The decision under appeal was a discretionary one and the exercise of such a power is one with which this Court is loath to interfere. The circumstances in which this Court is prepared to interfere with the discretion of the lower Court are well established as being limited. They are conveniently to be found in the report of Rahman v Chase Bank (CI) Trust Company Ltd. [1984] JJ 127 CofA, a decision of this Court, by reference in particular in that judgment to the Abidin Daver [1984] 1 All ER 470, a decision of the House of Lords and in particular the speech of Lord Brandon."

It is clear that the opinion of experts are not receivable upon disputed points of professional duty, morality or etiquette unless they are necessary to elucidate the rules of a particular profession. So we can conceive that expert evidence would be admissible as to technical matters such as science, medicine, literature or foreign law and this is not generally because of the competency of the witness but because of the incompetence of the Court.

Mr Hayes is an English Solicitor of over 30 years standing. He has clearly great expertise on wills, trusts and financial planning generally.

In Midland Bank v Hett, Stubbs & Kemp [1979] Ch 384 at 402, Oliver J said this:-

"This new plea does however raise an issue of law not apparent upon the original pleadings, namely, what is the scope of a solicitor’s duty when he is consulted about a particular aspect of a problem - is he entitled to confine himself to the particular matters for which he is retained to advise or must he consider all the circumstances affecting the underlying data including hypothetical circumstances or risks to which his attention is not directed and upon which his advice is not specifically sought?

As to this, I have heard the evidence of a number of practising solicitors. Mr Harman modestly contented himself with calling one; but Mr Gatehouse - mindful, no doubt, of what is said to be the divine preference for big battalions - called no less than three. I must say that I doubt the value, or even the admissibility, of this sort of evidence, which seems to be becoming customary in cases of this type. The extent of the legal duty in any given situation must, I think, be a question of law for the court. Clearly, if there is some practice in a particular profession, some accepted standard of conduct which is laid down by a professional institute or sanctioned by common usage, evidence of that can and ought to be received. But evidence which really amounts to no more than an expression of opinion by a particular practitioner of what he thinks that he would have done had he been placed, hypothetically and without the benefit of hindsight, in the position of the defendants, is of little assistance to the court; whilst evidence of the witnesses view of what, as a matter of law, the solicitor’s duty was in the particular circumstances of the case is, I should have thought, inadmissible, for that is the very question which it is the court’s function to decide."

Mr Hayes says this at paragraph 5 of his report:

"I understand that the proper law of the trusts in the actions commenced by BNP and Pirunico is that of Jersey. My report is based on the assumption that Jersey law is the same as English law in all matters which are material to this report. The following represents my opinion from many years experience as a Trustee".

Mr Hayes is a member of the First Working Party of the Trust Law Committee. Its brief is apparently to carry out research and make suggestions designed to improve and modernise English Trust Law. That can have no relevance whatsoever to this jurisdiction. The whole tenor of the opinion of Mr Hayes is based on the duty of a trustee. We will only know whether the professional trustee fulfilled his duty - a concept which this Court is well able to grasp - when we have heard the evidence.

Let us, by way of example, examine paragraph 11 of Mr Hayes report. He says:-

"I would not expect a reasonably competent professional trustee to have a detailed knowledge of individual bonds and therefore I would not expect the scope of knowledge in this case to include an awareness that the bond was subordinated. I would, however, expect a reasonable professional trustee to understand the information given to him by an investment adviser about a particular bond and to be able to evaluate this information properly".

To that we would add "and so say all of us". But everything in that statement will be decided by the evidence and nothing will be gained by an English Solicitor expounding it to this Court. Indeed, if the evidence is allowed in the length of the trial and the cost of the trial will surely be extended because those opposing Jefferson Seal will have to call their own experts - who do they call? Senior trust practitioners in Jersey? The authors of Matthews and Sowden on the Jersey Law of Trusts? One of those legion of English Silks who have in many learned opinions advised on trust law in all the important Jersey trust cases? Those opinions, of course, have never been seen by this court.

The third action (92/50) is slightly different as the new trustees are suing Wallbrook Trustees for breach of trust while at the same time they are suing Jefferson Seal for negligence. The JD Hawe Settlements Nos. 1 and 3 are governed by English law, so that Advocate Robinson’s objection to Mr Hayes report is differently phrased from that of Advocate Costa and Advocate O’Connell.

There can be little doubt that Mr Hayes report is now considered to be finalised. Correspondence ensued between Advocate Robinson and Advocate Hoy and we have a letter from Advocate Hoy dated as late as 5 January 1998 which states:-

"I have indicated to you that Mr Hayes does not intend to produce a report other than that sent to you under cover of my letter of 17 October 1997".

It must be said that Advocate Hoy made an argument before us (not included in his helpful skeleton argument faxed to the Court at 1738 on the evening before trial) that he objected to our hearing the matter at this interlocutory stage. He appeared to be basing his argument on the decision of Sullivan v West Yorkshire Passenger Transport Executive & Others [1985] 2 All ER 134 which held that under orders of the Supreme Court, a master, registrar or judge in chambers has no power to rule on the admissibility of non-medical oral expert evidence when application is made under RSC Order 38 rr 36(1) and 38(1) for leave to adduce such evidence at trial, since the issue of admissibility is a matter solely for the trial judge.

That perhaps picks up the words of the Court of Appeal when the learned President said (in the passage cited above) "Furthermore, again except in unusual or exceptional cases the application, if it is to be made, should be made at the trial and not before".

This Court is as well equipped now as it will be at trial, to decide this matter. What would be the point, if after hearing such considerable argument and where the Court has taken a view, to adjourn the matter to a trial where three further experts will have had to be retained to answer Mr Hayes in a fail-safe exercise? That, to us, would be an example of case management at its most wasteful.

We have already decided to limit the number of experts on stockbroking practice. We cannot see why we should not examine the necessity of hearing experts on trustee practice at this stage, so close as it is to trial.

The pleadings are of assistance. In the amended Answer in the action 94/250 - the JD Hawe Settlements Numbers 1 and 3 actions - there is raised this argument at paragraph 22:-

"Further or in the alternative in the event that the Second Defendant is held liable to the Plaintiffs or any of them, the Second Defendant will claim against the First Defendant to be indemnified against the Plaintiffs claim and the costs of this action or a contribution to the extent that the Court considers just on the grounds that the Second Defendant’s liability to the Plaintiffs and such damage as the Plaintiffs may prove that they have suffered were caused by the First Defendant’s breach of duty towards the Plaintiffs and/or the Second Defendant and that it is just and equitable that the Second Defendant should be so indemnified or recover such a contribution".

That was amplified in further and better particulars filed on 3 November 1997. Jefferson Seal are claiming an indemnity or contribution from Wallbrook because Wallbrook was in breach of its duty to the beneficiaries.

That of course does not now conform with the strike out made in our judgment (not appealed) of 16 December where we said:-

"What Advocate Hoy says is that the right to contribution arises not because the former trustees are in breach of a duty to Jefferson Seal but because they are (on the assumed facts) in breach of a duty to the beneficiaries. It is that point that this Court is quite unable to grasp."

It is for Advocate Robinsons clients to prove that Wallbrook were in breach of trust; it is for Advocate Hoys clients to resist a claim in negligence.

In our view in all respects the evidence of Mr Hayes is not relevant to any matter of law that this Court has to decide at trial. Mr Hayes explains his report in this way:

"The purpose of this Report is to examine the duties and responsibilities of trustees in circumstances where trustees seek advice from their professional advisers in relation to the management of the trusts’ assets."

There is in the report much of trustees duties but very little of trustees practice and what there is, of course, is English practice hallowed no doubt by long usage in that jurisdiction. In his report, Mr Hayes tells us what he would have done as a matter of personal opinion. We have to decide these matters on the evidence, not on the opinions of an English expert, however qualified he may be to express views on English trust law.

There is, in our view, nothing technical nor esoteric in the duties of a trustee. We order that the evidence of Mr Hayes be not admitted at trial.

THE APPLICATION BY JEFFERSON SEAL FOR SIGHT OF THE ENGLISH LAW EXPERTS’ REPORT EXCHANGED BETWEEN THE PLAINTIFF AND THE FIRST DEFENDANT IN ACTION 95/250.

An order for the exchange of experts reports on English law was ordered as between the plaintiff and Wallbrook on 29 September. These reports have been exchanged but have been withheld from Jefferson Seal. They are there because the proper law of the relevant trusts in that case only is English law. The order was a consent order. In our view, Jefferson Seal have to meet a claim in negligence. They have no interest in our view in the question of English law raised by the consent order. The only matter governed by English law is the trustee against trustee claim. In fact, we were told by Advocate O’Connell that there may well be a consensus between the two English Counsel because the two Silks retained are, in the interests of saving costs, trying to reach an agreed statement. If that is the case, then the reports will not be necessary. The application is in our view ill-founded and fails accordingly.

Authorities

Dixon & Ors. -v- Jefferson Seal, Limited (5 June 1997) Jersey Unreported

Dixon, Richardson, Reeb Investments, Simon -v- Jefferson Seal, Limited (19 June 1997) Jersey

Unreported C.of A

Midland Bank -v- Hett, Stubbs, and Kemp [1979] Ch. 384 @ 402

Sullivan -v- West Yorkshire Passenger Transport Executive [1985] 2 All ER 134

Stanton & Ors. -v- Mourant, du Feu, and Jeune (5 October 1992) Jersey Unreported

Jackson & Powell: Professional Negligence (4^th Ed’n: 1997) pp. 101-2; 482-3

Lord Wolf: " Access to Justice" (July 1996; HMSO)

RSC (1997 Ed’n) 0.38 r.4, 35-44

Royal Court Rules 1992: Rule 6/18