Royal Court
(Samedi Division)
19 January 1999
Before: Francis C Hamon, Esq., Deputy Bailiff,
and Jurats Herbert, de Veulle.
BetweenAshbourne Marketing Limited Plaintiff
AndAlfred G Mosca First Defendant
AndYankee Exports IncSecond Defendant
Appeal by the first and second Defendants against the Order of the Judicial Greffier of 30 October 1998:
Appeal against order for service out of jurisdiction dismissed;
Appeal against order for substitute service stayed.
Advocate A D Hoy for the Plaintiff
Advocate A D Robinson for First Defendant
Advocate M P G Lewis for Second Defendant
JUDGMENT
THE DEPUTY BAILIFF: In 1998, the Plaintiff filed an Order of Justice containing allegations that the First Defendant in this action was in serious breach of a consultancy agreement and had been guilty of serious misconduct. It was alleged that funds were improperly transferred from Jersey, either to accounts held by the Second Defendant, or direct to certain third parties. Further, that improper representations were made which had led to the Plaintiffs loaning $250,000 to the Second Defendant for the purchase of a warehouse.
The claims against the Second Defendant allege that it is liable as a constructive trustee to the Plaintiff by virtue of the fact that it paid out, or applied, certain funds otherwise than for the proper purpose of an agreement known as the Sonangol Agreement. Sonangol is the State Oil Company of Angola, and the agreement with that company concerned the supply of vehicles, repair parts and other equipment.
The Greffier heard Advocate Hoy ex parte on 30 October 1998, and as a result of that he made three orders:
We should in passing, of course, point out that Advocate Robinson and his firm acts for the First Defendant and he appeared today for that Defendant.
On the question of the dispensing of personal service we have, with the agreement of all Counsel, stayed that part of the action for two weeks to enable Mr Hoy to attempt to effect personal service on the Defendants in accordance with the rules. We shall await the result and we will abridge time to 48 hours notice to bring the matter back to this Court as presently constituted.
We must, however, deal with the first limb of the Greffiers Order which is that the Plaintiff has leave to serve a summons on each of the Defendants out of the jurisdiction.
Let us deal with the arguments of the Second Defendant first. Rule 5 of the Service of Process (Jersey) Rules 1994 provides that no summons shall be served outside the island without the leave of the Court. The Rule goes on to state the grounds upon which an application can be founded. Mr Hoy in his affidavit in support when he appeared before the Greffier relied on grounds (d), (e), (f) and (q). These are as follows:
"d. the claim is brought to enforce, rescind, dissolve, annul or otherwise affect a contract, or to recover damages or obtain other relief in respect of the breach of a contract, being (in either case) a contract which -
(e) the claim is brought in respect of a breach committed within the jurisdiction of a contract made within or out of the jurisdiction, and irrespective of the fact, if such be the case, that the breach was preceded or accompanied by a breach committed out of the jurisdiction that rendered impossible the performance of so much of the contract as ought to have been performed within the jurisdiction;
(q) the claim is brought for money had and received or for an account or other relief against the defendant as constructive trustee, and the defendants alleged liability arises out of acts committed, whether by him or otherwise, within the jurisdiction;"
Mr Hoy in his argument before us relied strongly on Ghana Commercial Bank -v- C & Ors (March 3 1997) TLR, where the Court - probably the Commercial Court - held that the words "constructive trustee" in Order 11 Rule 1 of the Rules of the Supreme Court, should be construed as referring to a constructive trustee against whom a personal claim could be made as well as one against whom a proprietary claim could be made.
We feel that the important matter in this case is that the Plaintiff claims a proprietary right to the money and only when the Second Defendant is on notice can it be aware that there is a claim that it had held the monies as a constructive trustee. The written agreement is deemed to be construed according to Jersey Law.
The learned Greffier must have found that there was a serious issue to be tried. The relevant provisions of Order 11, Rule 1 of the Rules of the Supreme Court are identical to those of our Rule 7 except that they add certain grounds not relevant in this jurisdiction, and when we look at the allegations in the Order of Justice there is, in our view, a good arguable case.
In the case of the First Defendant, Mr Robinson raised with us certain matters concerning, for example, the cancellation of the agreement and the fact that apparently there is mentioned in the agreement no question of payment. We felt that these were interesting points which may, in due course, lead to him making a striking out application but they are certainly not fatal, in our view, to the application made by the Plaintiff and granted by the Greffier.
We are able to hold that, on the face of the Order of Justice, and the affidavit of Mr Hoy, there is a serious issue to be tried and a good arguable case. There is sufficient, in our view, on the papers before us to show that the Plaintiff makes a proprietary claim to the monies that it says it has lost and the First Defendant is, in our view on the face of it, in a contractual arrangement with the Plaintiff. He is a director and in fact owns half of the Second Defendant. We would go further and say that the Second Defendant, albeit in Maine (USA), has in our view sufficient connection with the funds to enable the Royal Court to exercise its discretion, should that be necessary, to make Jersey the appropriate forum.
We accordingly uphold the Greffiers decision to allow the Plaintiff to serve out of the jurisdiction on the two Defendants, but the secondary matter, of course, is stayed pending a further application from the parties.
Authorities
Porter -v- Freudenberg [1915] 1 KB 857 at 889
The Golden Mariner [1990] 2 Lloyds Re. 215
Gurtner -v- Circuit [1968] 1 All ER 328
Ghana Commercial Bank -v- C & Ors. (3 March 1997) TLR
Service of Process (Jersey) Rules, 1994