Jersey Unreported Judgments

2001/108

ROYAL COURT

(Samedi Division)

 

17th May 2001

 

 

 

 

 

Application by the plaintiff to reinstate the action struck

out by the Deputy Judicial Greffier on 18th June, 1999.

 

 

Advocate T. J. Le Cocq for the Plaintiff.

Advocate P. C. Sinel for the Defendants.

 

judgment

 

THE MASTER:

1.        In December, 1992 the plaintiff issued an Order of Justice which was duly served on the defendants.  In simple terms, the plaintiff claims that the defendants are in breach of an oral agreement made in 1991 whereby, in exchange for the plaintiff procuring funding for the first defendant, the plaintiff would be given shares in the first defendant and representation on its board of directors.

2.        The action was placed on the pending list at the instance of the defendants.  In its answer and counterclaim the first defendant, whilst accepting that there was an agreement, disputes its terms.  In addition, the first defendant counterclaims for misrepresentation.  The second defendant in his answer denies being party to the agreement alleged.  A reply was filed by the plaintiff in March 1993 to the pleadings of both defendants.  Further and better particulars of the first defendant's answer and counterclaim were provided in July 1993.  All procedural activity in the action then ceased.

3.        On 26th March, 1996 Advocate Sinel wrote to Advocate Le Cocq expressing concern at the delay in progressing matters.  On 19th April, 1996 Advocate Le Cocq replied saying that Advocate Sinel's letter had been forwarded for instructions.  No further reply was sent to Advocate Sinel.  No further action in the case was taken by any of the parties.

4.        On 18th June, 1999, after requisite notice had been given to the parties by the Deputy Judicial Greffier, the action was dismissed pursuant to Rule 6/20(1) of the Royal Court Rules 1992.  Rule 6/20(1) states as follows:-

"6/20.-(1) Where, at the expiration of five years from the date on which an action was placed on the pending list, the action has not been set down on the hearing list, the Court may, of its own motion, after giving not less than 28 days' notice in writing to all the parties to the action, order that the action, and any related counterclaim and/or third party claim, be dismissed."

5.        On 29th January, 2001 the plaintiff issued a summons asking that the action be reinstated and consequential directions given.  That summons was part heard by me on 6th March and the hearing was concluded on 17th April.  I then reserved my decision which I give today with my reasons.  I should also mention that in March this year, in order to avoid potential limitation problems, the plaintiff issued new proceedings in identical terms to the present action.  These new proceedings have been placed on the pending list by the defendants.

6.        In support of the present application two affidavits sworn by Mr. George Max Raccah were filed.  Mr. Raccah is, apparently, the principal beneficial owner of the plaintiff.  In essential terms, Mr. Raccah says that the considerable delay in progressing the plaintiff's claim was unavoidably due to the serious financial difficulties which both the plaintiff and Mr. Raccah experienced during the 1990's.  He says that the plaintiff is now in a position to fund the claim and seeks the opportunity to do so.  In addition an affidavit sworn by Advocate M. J. Thompson, a partner in Mr. Le Cocq's firm, was also filed.  Advocate Thompson was asked to review his firm's whole file on the action and he deposes as to what has happened.  In particular, he explains the reason for the delay between the action being struck out in June 1999 and the subsequent issue of the summons seeking to reinstate it.  In response, an affidavit sworn by the second defendant and affidavits sworn by a Swiss notary and a Swiss accountant have been filed on behalf of the defendants.

7.        In addition to referring me to all factual matters, Advocate Le Cocq also referred me in detail to the applicable law and authorities.  He urged that I had power either under Rule 1/5 of the Royal Court Rules 1992 or the inherent jurisdiction of the Court to allow the present application.  He also argued that the present case was an appropriate one for me to exercise that jurisdiction in favour of reinstatement.

8.        I turn to the question of jurisdiction.  Rule 1/5 is in the following terms:-

"Power to extend and abridge time

1/5.-(1) The Court or the Viscount may, on such terms as it or he thinks just, by order extend or abridge the period within which a person is required or authorized by rules of court, or by any judgment, order or direction, to do any act in any proceedings.

(2)  The Court or the Viscount may extend any such period as is referred to in paragraph (1) of this Rule although the application for extension is not made until the expiration of that period.

(3)                   The period within which a person is required by rules of court, or by any order or direction, to serve, file or amend any pleading or other document may be extended by consent (given in writing) without an order being made for that purpose."

9.        Advocate Le Cocq in his initial submissions argued that if I did not have jurisdiction under Rule 1/5 then as an alternative I could use the inherent jurisdiction of the Court.  In the course of argument he did concede, however, that in the present application the inherent jurisdiction of the Court possibly goes no further than Rule 1/5.  Advocate Sinel for the defendants argued that the inherent jurisdiction of the Court could not be used to act in a manner inconsistent with the express terms of Rules of Court and especially Rule 6/20(1).  Having considered the position I consider that I should restrict the question of my jurisdiction to a review of the relevant Royal Court Rules.  If they not give me the power to reinstate the action I do not think I can resort to inherent jurisdiction as a means to do so.

10.      In support of his submission that I had the necessary power under the Royal Court Rules 1992 to reinstate the action after it had been struck out under Rule 6/20(1) Advocate Le Cocq referred me to the case of Croxford v. Le Claire (22nd September, 1994) Jersey Unreported.  That case in fact concerned the reinstatement of an action to which Rule 6/20(2) had applied.  That particular provision states:-

"(2) Where an action has been adjourned sine die, if at the expiration of five years from the date on which it was so adjourned no further steps have been taken, the action shall be deemed to have been withdrawn."

In Croxford an application had been made to reinstate an action deemed to have been withdrawn under Rule 6/20(2) either by using Rule 1/5 of the Royal Rules 1992 or the inherent jurisdiction of the Court.  In its judgment in Croxford, the Royal Court having set out Rule 1/5 then said as follows:-

"This rule is written in very similar terms to Order 3 Rule 5 of the Rules of the Supreme Court and we have the benefit of reading the scope of the rule in the commentary contained within the White Book.  That commentary states "the object of the rule is to give the Court a discretion to extend time with a view to the avoidance of injustice to the parties".

In our view, however, 6/20(2) is not a rule that requires some action to be taken by either party.  It is the second method by which an action is dismissed under this rule.  It applies specifically to actions adjourned sine die, as contrasted with the first method, where the Court, of its own motion, can, after giving twenty-eight days' notice in writing to all the parties, order that the action be dismissed.  During that twenty-eight days, it is open to the parties to take some action.  Not so, in our view, under 6/20(2), where no party is "required" or "authorised" to do any act in any proceeding whatsoever.  The action is "deemed to be withdrawn" and no rule of court, in our view, can be used to reinstate it.

Once the action has been automatically struck out under Rule 6/20(2), then the only way that it can be restored is if we are able to exercise our inherent jurisdiction...."

The Court in Croxford then went on to decide whether it could exercise its discretion under its inherent jurisdiction.  It held that it could exercise such jurisdiction and did so to refuse to reinstate the action.

11.      It is most important to distinguish between the terms of Rule 6/20(2) which provides effectively for an automatic strike out and Rule 6/20(1) under which the parties are given notice and have 28 days to act to prevent dismissal of an action.  In Croxford the Royal Court in analysing the position considered the English case of Rastin v. British Steel plc which is now reported at (1994) 2 All.E.R. 641.  In coming to its conclusions in the Rastin case it is quite apparent that the English Court of Appeal clearly distinguished between circumstances where an action is struck out automatically under the rules as opposed to being dismissed as the result of a judicial order (see for example the judgment of Sir Thomas Bingham M.R. at page 645 paragraph h to page 646 at paragraph e).

12.      The distinction is, in my opinion, crucial to the present application.  The parties to this action were given notice under Rule 6/20(1) and each of them had 28 days to respond.  They did not do so.  Once the notice period had expired a judicial act was still required to dismiss the action and this was done on 18th June, 1999.  This is very different from the way in which Rule 6/20(2) operates without the need for any action on anyone's part.

13.      Advocate Le Cocq urged that as Rule 6/20(1) was really a "housekeeping" rule I could exercise jurisdiction to reinstate the action.  That is, with respect, not something that I can accept.  There has been a judicial act after notice has been given to both parties.  I do not consider that Rule 1/5 which, as the Royal Court pointed out in Croxford, deals with extensions of time is appropriate to overturn a judicial act.

14.      The only real argument which could be mounted is that as the parties were not heard there is jurisdiction to reinstate the action.  There is no express provision to allow this to be done under the Royal Court Rules.  This is in direct contrast with the position where a judgment in default has been obtained.  In those circumstances Rule 9/3 of the Rules expressly confers a power on the Royal Court to set aside judgements in default.  I consider it very significant that the Rules contain no provision to allow an order made under Rule 6/20(1) to be overturned.  I also consider that, in the absence of any such provision, to resort to inherent jurisdiction to look for such a power would be a step too far.

15.      In view of what I have said I have come to the conclusion that I do not have the jurisdiction to entertain the present application.  What the plaintiff is doing, in reality,  is asking me to overturn the decision of 18th June, 1999 dismissing the action.  I do not consider that I have the power to do so.  It is only in exceptional cases that such a power may be exercised (see Alsford v. Alsford née Boyd (Court of Appeal)( 6th May, 1992) Jersey Unreported and Blenheim Trust Company Limited v. Morgan and Others (2000) JLR 196 none of which apply here.  I therefore dismiss the application.

16.      Having heard both Advocate Le Cocq and Advocate Sinel on the question of costs I consider that costs should follow the event.  I therefore order that the plaintiff pay the costs of the defendant in this application on the standard basis subject to one refinement.  The costs of the plaintiff thrown away as a result of the adjournment of the hearing on 6th March shall be paid by the defendant in any event.

Authorities

Royal Court Rules 1992 Rules 1/5 and 6/20

Croxford -v- Le Claire Jersey Unreported 22nd September, 1994

Alsford -v- Alsford née Boyd (Court of Appeal) Jersey Unreported 6th May, 1992

Blenheim Trust Company Limited -v- Morgan and Others 2000 JLR 196

Rastin -v- British Steel plc (1994) 2 All.E.R. 641