Jersey Unreported Judgments

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You are here: BAILII >> Databases >> Jersey Unreported Judgments >> 1999/76 - Mayo & Ors v Anagram & Ors [1999] UR 76 (5 May 1999)
URL: http://www.bailii.org/je/cases/UR/1999/76.html
Cite as: [1999] UR 76

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Royal Court

(Samedi Division)

5 May 1999

 

Before: Sir Godfray Le Quesne, QC, Commissioner

 

 

Action 94/6

Between:Mayo Associates SA

Troy Associates Ltd

TTS International SAPlaintiffs

And:Anagram (Bermuda) Limited

Robert Young

Maureen YoungDefendants

And:Lionrock Limited

Edgefield Properties Limited

Box Limited

Starshield Limited

Cantrade Private Bank Switzerland (CI) Limited

TSB Bank Channel Islands LimitedParties Cited

 

 

Action 94/254

Between:Mayo Associates SA

Troy Associates Limited

TTS International SAPlaintiffs

And:Cantrade Private Bank Switzerland (CI) Limited

Touche Ross & Co

(Being the person listed in Exhibit A to the Order of Justice)Defendants

And:Robert John Young

(joined at the instance of the First Defendant)

Anagram (Bermuda) Limited

(joined at the instance of the First Defendant)

Myles Tweedale Stott

(joined at the instance of the First Defendant)

Michael Gordon Marsh

(joined at the instance of the First Defendant)

Monica Gabrielli

(joined at the instance of the First Defendant)

Touche Ross & Co

(joined at the instance of the First Defendant)

Cantrade Private Bank Switzerland (CI) Limited

(joined at the instance of the Second Defendant)

The Attorney General

(joined at the instance of the Plaintiffs)Third Parties

JUDGMENT

(1) Application by the 2^nd Defendant in Action 94/6 and 1^st Third Party in Action 94/254 for a stay of proceedings until he has been provided with legal representation and/or adequate facilities to defend himself, and until the Plaintiffs make payment of £1,156.20 against Petty Debts’ Court Order dated 28 October 1998, representing taxed costs awarded in Action 94/6. Adjourned from 3 March 1999.

THE COMMISSIONER: When this matter was last before the Court the Second Defendant in the First Action, that is Dr Young, had no legal representation. He then presented an application for a stay of proceedings:

Since then legal representation has been arranged for Dr Young and Mr Winchester now appears on his behalf. That notwithstanding, Mr Winchester tells me he is instructed to renew this application because Dr Young is not satisfied with the adequacy of the legal representation which has been provided for him.

In answer to my question: What was the nature of Dr Youngs objection?, Mr Winchester made two points: first, he said, Dr Young was not satisfied with the calibre of the representation which had been provided compared with that which is being employed by other parties to the action. The Legal Aid Scheme provides legal representation for those who are unable to provide it for themselves. That has been done. It is not the function of the Court to compare the abilities and endowments of one advocate with those of another. That would be an extremely invidious, indeed an obviously impossible, task. Legal representation has now been provided and as far as the Court is concerned that is that.

Secondly, as regards other facilities to defend himself Mr Winchester tells me that Dr Young is not satisfied that where he is, that is to say in prison, he has adequate facilities to take the necessary steps to protect his position. The answer to that is that he has now been provided with legal representation and it is Mr Winchester's duty to take whatever steps need to be taken for the protection of Dr Young's position.

I should add this: I said that it was not the function of the Court to compare one advocate with another. That is true, but I should make it clear that I do not mean any implication to be drawn that, if such a comparison were to be made, Dr Young would be found to be at a disadvantage.

This application for a stay is dismissed.

 

Mr Winchester is now acting for Dr Young. Although he has been doing so since 15 March for some reason which has not been explained to me, the files have not yet been delivered to him by the lawyers previously acting for Dr Young.

In those circumstances Mr Winchester has obviously not yet been in a position to prepare an affidavit of documents. I appreciate that there was an earlier period since the order for discovery was made when others were acting for Dr Young and might have prepared the affidavit, but they did not, and in these circumstances some consideration seems to me to be due to Mr Winchesters position. I think therefore that some further period must be allowed to Dr Young for providing the affidavit of documents. I have felt some hesitation about what the period should be because Mr Sinel is quite justified in submitting that after the delay which has already occurred, any further extension should be short.

Mr Sinel asks me to make an unless order. In the circumstances I think it is right to make an unless order, but I emphasise that the unless order means what it says, and therefore since I have decided to make an unless order I am going to make it for a somewhat longer period than I should have done if I had merely granted an extension. I shall order that if Dr Youngs affidavit is not filed by Wednesday 16 June next, his defence will be struck out.

Mr Sinel also asks for an unless order against the other two defendants, that is Mrs Young and Anagram (Bermuda) Limited. I shall make the same order against each of those two defendants, that if their affidavits are not delivered by the same date, their defences will be struck out. Since the point has been raised, I add that I make the order against Mrs Young simply because she is a litigant who, like any other litigant, is subject to the orders of the Court. This is not a method of getting discovery out of Dr Young. That will be effected, I hope, by the order which I have made against him.

Two points arise in deciding whether to allow this amendment. The first concerns the form of the amendment. The amendment alleges that in reliance upon results certified by Touche Ross the plaintiffs, and I quote from the amendment asked, "made payments to investors of supposed profits or by way of refund of investments…" and so on.

It is obvious, and this is not disputed by Mr Sinel, that that is an allegation of which particulars would have to be given. There is an argument about the extent of particulars which would have to be given and I shall come to that in a moment. Mr Sinel says he should be given leave to amend now and the defendants can then make an application for particulars. Mr Journeaux says that the application being for an amendment, the amendment should not be allowed by the Court unless it is in proper form and in this case proper form means including the necessary particulars.

In my judgment Mr Journeaux is right. At this stage of the action nothing can be inserted into the pleading without the leave of the Court. The Court ought not to give leave unless the amendment asked is in proper form. ‘In proper form’ means, among other things, that it must include particulars necessary to enable the opposing party to plead to it. In my judgment, particulars - I repeat I shall come to the extent of them in a minute - of the payments and the investors are needed to enable the defendants to plead to this paragraph. However, in view of the procedural history of this action which has already elapsed, I am reluctant simply to dismiss the application, which would probably have the result of its being renewed at a later stage. What I propose to do therefore is this: I shall adjourn the application for three weeks. If, within those three weeks, Mr Sinel provides the particulars, the nature of which I shall come to in a moment, I shall then give leave for the amendment to be made. If at the end of the three weeks no particulars have been supplied I shall dismiss the application.

I come now to the question of what particulars ought to be given. In a letter written on 22 August Mr Journeaux said that he would need the following particulars:

The last, in my judgment, is not something of which particulars should be given at this stage. Apart from that, the arguments are centred upon the submission that the identity of the investor ought to be given. Mr Sinel does not dispute that the amount of the investment must be given nor, as I understand, does he dispute that the terms upon which it was made must also be given. But he says it is sufficient if he gives the number of the account, not the name of the investor. The number of the account is a number which was put upon it by Mr Sinels clients and will therefore not mean anything to the defendants. They ought in my judgment to be given particulars which will enable them to check, if they wish to do so, whether the alleged repayments were made. I do not see how that can effectively be done unless the identity of the investor is provided. The first heading of the particulars ought, therefore, to read: "The identity of the investor and the amount and terms of the investment".

The Order that I make is that this application be adjourned for three weeks. That is the Order, but for the information of the parties I add this: If within the three weeks Mr Sinel has provided adequate particulars of heads 1-4, I shall give leave for the amendment. If within three weeks no particulars have been given I shall dismiss it. If particulars are given but there is some disagreement between the parties whether they are adequate or not, I shall have to hear the arguments.

Touche Ross, within five weeks of service of the re-re-amended Order of Justice, shall apply to the Court for amendment of their answer and Cantrade should apply to the Court for amendment of their answer within the same period

I first state in very summary terms the circumstances out of which this action arises. Money was put into the hands of the plaintiffs by investors for use in speculative dealings in foreign exchange. Those dealings were actually conducted by Dr Young, who was authorised by the plaintiffs to conduct them. A time arrived at which Dr Young, so it is alleged, appointed Touche Ross to audit the results of his dealings on the plaintiffs behalf and to certify these results. In those circumstances it is alleged Touche Ross owed a duty of care to the plaintiffs.

Touche Ross, it is said, provided certificates which were false. In round figures the certificates showed that the amounts standing to the credit of the accounts conducted by Dr Young on the plaintiffs behalf were $35,000,000 when the true figure was about $10,000,000. The plaintiffs in reliance on these certificates took actions which they would not have taken if they had known the truth and did not take actions which, if they had known the truth, they would have taken.

On the basis of these allegations the plaintiffs plead thus in paragraph 84 of the Order of Justice:

There are then other sub-paragraphs to paragraph 84 in which the plaintiffs claim that they took certain actions or did not take certain actions in reliance on the certificates and in consequence suffered loss.

Thus there is a fundamental difference between the claim in sub-paragraphs (1) and (2) and the claims in the following sub-paragraphs. Whereas the following sub-paragraphs claim losses which are said to have arisen from conduct resulting from reliance on the false certificates, sub-paragraphs (1) and (2) claim loss consisting simply of the difference between the amounts falsely certified and the true amounts which should have been certified.

Touche Ross now apply to strike out sub-paragraphs (1) and (2) on the basis that this difference is not an appropriate, nor indeed a possible, measure of the plaintiffs loss. The certified figures - that is the false figures, so they contend - do not, they say, represent amounts which ever were or should have been standing to the credit of the plaintiffs’ accounts and they cannot serve as the basis of any calculation of loss.

Mr Sinel, in reply, emphasises the conduct of the plaintiffs whether by action or by omission which resulted from their knowledge of the figures which had been certified falsely; conduct, he says, which would never have taken place if the plaintiffs had known that the figures certified were wildly wrong.

There are certainly allegations in the Order of Justice that the plaintiffs did take certain action or omitted to take certain action in reliance on the false certificates. I have already pointed out that the sub-paragraphs in paragraph 84 which follow sub-paragraph (2) do contain such claims. I have also pointed out that sub-paragraphs (1) and (2) are fundamentally different because they contain allegations, not of any conduct resulting from the falsely certified figures, but alleging as loss simply the difference between the certified figures and the true figures.

The discrepancy between the certified figures and the true figures is indeed part of the calculation of loss (if there was any) suffered by the plaintiffs but it is part only and no loss is shown until a further feature is added. That further feature is conduct in reliance upon the certificates and loss flowing therefrom. The allegations contained in sub-paragraphs (1) and (2) that the plaintiffs suffered loss simply by the reporting and certifying of inaccurate figures is in my judgment an impossible basis for the establishment of loss. To put it another way, the allegation (and I use the language of paragraph 84) that the plaintiffs have suffered loss and damage consisting of simply the difference between the certified figures and the real figures is, in my judgment, an impossible allegation which is liable to be struck out upon any of the grounds recited in Rule 6/13/1 of the Royal Court Rules 1992, as amended.

The matter which has caused me some hesitation is Mr Sinels submission that even if that is so it is not something which ought to lead to striking out. What he says is that when the evidence has been given at the trial it will be necessary for calculation to be made of the loss suffered by the plaintiffs. He says that he will in fact be able to put before the Court material which will show loss far greater than that claimed in sub-paragraphs (1) and (2) and he goes on to submit that since those matters will have to be put before the Court there will be no benefit in striking out at this stage the allegations made in sub-paragraphs (1) and (2). Nothing will result, so he contends, which will have the result of shortening or simplifying the conduct of the trial.

It is certainly right that when the evidence has been given there will have to be a discussion of what loss - if any - has been suffered by the plaintiffs. From what Mr Sinel says about the availability of material showing a much greater loss than that claimed in sub-paragraphs (1) and (2), I infer that some material not at present foreshadowed in the pleadings will be put before the Court, and that there will in due course have to be some amendment of the pleading as to loss to show what the right basis of it is. If that is going to take place it does seem to me that it will be helpful to all parties concerned, and may in some degree simplify the task of the Court at the trial, if it is made clear at this stage that sub-paragraphs (1) and (2) of paragraph 84 contain a computation of loss which cannot possibly be justified and in order to make that clear I shall, I have come to the conclusion, be justified in ordering that sub-paragraphs (1) and (2) be struck out. That I shall accordingly do.

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