Jersey Unreported Judgments

2001/15

5 pages

ROYAL COURT

(Samedi Division)

 

15^th January 2001

 

Before:  Sir Philip Bailhache, Bailiff

and Jurats Ruez and Le Brocq

 

 

 

Between                                      Daniel Benedict McCann                              First Appellant

 

And                                                Anthony Edwin Groves                            Second Appellant

 

And                                          Johannes Lambertus De Geoij                         Third Appellant

 

And                                           Theodora Clementina Helena

                                                      De Goeij (née Bellman)                             Fourth Appellant

 

And                                            Clanbrassil Trust Company                             Fifth Appellant

 

And                                               AIB Bank (C.I.) Limited                                    Respondent

 

Appeal against an Order of the Master, dated 24th July 2000 striking out the Order of Justice

 

                                    Advocate C. G. P. Lakeman for the appellants

                                   Advocate A. R. Binnington for the respondents

 

JUDGMENT.

 

THE BAILIFF:

 

1.    This is an appeal by Daniel Benedict McCann ("Mr. McCann") and others (to whom we refer collectively as "the appellants") against an order of the Greffier Substitute (to whom we shall refer as "the Master") dated 24th July 2000 striking out their Order of Justice issued against AIB Bank (C.I.) Limited ("AIB").   AIB argued before the Master that the Order of Justice should be struck out on one of two grounds, viz. either that it disclosed no reasonable cause of action or that it was scandalous, frivolous or vexatious or otherwise an abuse of the process of the Court.  The background was summarized conveniently in the Master's judgment, and we can do no better than repeat it.

 

"There have already been before the Royal Court two sets of proceedings related directly or indirectly to the subject matter raised in the present Order of Justice.  All three sets of proceedings have some connection with the delivery of American securities by a company called Medos Investments Limited ("Medos") to a New York broker for the account of the defendant and the defendant's subsequent failure to advise Medos of their delivery.  These events occurred back in October 1987.

 

What I shall call the "First Action" was commenced by Order of Justice dated 11th July 1991 (which was subsequently amended on a number of occasions) and in which Medos sued AIB, the defendant in the present case.  The Order of Justice states that Medos was the owner of a portfolio of US securities and Medos was administered by Clanbrassil Trust Company (the fifth plaintiff in the present action), the principal and a director of which was Mr. McCann, the first plaintiff in this action.  In September 1987 Clanbrassil, acting on behalf of Medos, agreed to deliver US securities to a firm of brokers in New York for the account of AIB with a request that Medos be advised when delivery was made.  The Order of Justice states that by virtue of these arrangements a contract was established between Medos and AIB.  Medos then alleges that AIB failed to advise immediately when the securities were in a deliverable state and as a result Medos suffered loss and damage.

 

Although the claim of Medos in the Order of Justice in the First Action is primarily founded in contract it does also allege that AIB was negligent (see paragraph 12 of the Order of Justice) and goes on (in paragraph 15) to say that by reason of AIB's breach of contract and/or negligence and/or negligent advice the plaintiff has suffered loss and damage.  On the face of it, therefore, it does appear that the claim of Medos is founded in both contract and tort.  This seems to be acknowledged in the Answer filed on behalf of AIB because in paragraph 12 of that Answer AIB avers that the claim of Medos in negligence is prescribed by law in that proceedings were not instituted within the relevant three year limitation period.

 

The hearing of the First Action commenced before the Royal Court on 19th April, 1993.  Following the hearing of all the evidence in the case but before the Royal Court delivered its judgment Medos and AIB settled their differences.  This apparently occurred on 26th April 1993 and the settlement agreed was the payment of £85,000 by AIB to Medos in full and final settlement of the First Action.

 

Matters rested there until almost three years later.  Then, on 18th April 1996, Medos instituted new proceedings against five defendants who are the plaintiffs in the Present Action.  It should be noted that these new proceedings (which I shall refer to as "the Second action") did not concern AIB.

 

A number of claims were made in the Order of Justice in the Second Action.  It was alleged by Medos that the First Action had been settled by the defendants in the Second Action contrary to instructions and/or at an inappropriate figure and therefore the defendants were in breach of the duties they owed Medos under Liberian law or in breach of trust.  It was alleged, in addition, that the defendants in the Second Action had acted in breach of contract or in breach of their duties as directors or trustees in dealings with the US securities which belonged to Medos.  There were also two separate claims regarding loans which had been made to Medos in 1989 and 1991.  On reading the Order of Justice in the Second Action it seems, on the face of it, that only the first claim mentioned has any direct connection with the subject matter of the First Action.

 

The Second Action came on for trial before the Royal Court in October 1997.  After some only of the evidence was heard and before any judgment was delivered the Second Action was compromised by an agreement by the plaintiffs to pay to Medos the sum of £119,000 together with interest and a contribution to costs."

 

2.    The current proceedings are therefore the third to be convened with essentially the same subject matter.  The plaintiffs in the present action were the defendants in the Second Action and the defendant AIB was the defendant in the First Action.  It is alleged in this action that AIB was a joint tortfeasor with the appellant, and is therefore liable to indemnify or to make a contribution to the sum paid by the appellant in settlement of the Second Action.  This claim is made pursuant to Article 5(1)(c) of the Law Reform (Miscellaneous Provisions) (Jersey) Law 1960 which is in the following terms:-

 

            "(1)      Where damage is suffered by any person as a result of a tort (whether a crime or not)

            .......

(c)        any tortfeasor liable in respect of that damage may recover contribution from any other tortfeasor who is, or would if sued have been, liable in respect of the same damage, whether the joint tortfeasor or otherwise, so however that no person shall be entitled to recover contribution under this Article from any person entitled to be indemnified by him in respect of the liability in respect of which the contribution is sought."

 

3.    The Master based his decision to strike out the Order of Justice on the first ground advanced by AIB, i.e. that it disclosed no reasonable cause of action.  We find it convenient to consider first the second ground advanced by AIB, viz. that the proceedings are scandalous, frivolous or vexatious or otherwise an abuse of the process of the Court.

 

4.    It was accepted by Mr. Lakeman for the appellants that, if these proceedings were to be allowed to continue, the Court would have to re-try the First and Second Actions notwithstanding that both these actions were settled many years ago.  Counsel also conceded that the Court would be concerned with events which took place as long ago as September 1987 although he emphasized that they took place within a relatively short time-span of one or two months.  He also conceded that it was possible that witnesses from New York would have to be called.

 

5.    Mr. Binnington, for AIB, argued that AIB would be placed at a considerable disadvantage not only because of the passage of time but also by reason of the topsy-turvy effect of Article 5 of the 1960 Law in relation to the history of this litigation.  In relation to the Second Action, the appellants would be arguing that they were negligent or that their conduct was tortious while AIB would be arguing the contrary.  The witnesses for Medos, who would clearly have material evidence to give in relation to these proceedings, would have no incentive to appear as witnesses because Medos having obtained settlement from both AIB and the appellants in the First and Second Actions respectively would have no interest in re-apportioning the damages between the parties to this action.  The spider at the centre of this tangled web is Mr. McCann.  Mr. McCann was the architect, on behalf of Medos, of the settlement of the First Action against AIB.  He was also closely involved, on behalf of the defendants in the Second Action (of whom he was one) in the settlement of that action.  He could have procured, but he did not, that AIB be joined as a Third Party to the Second action.  If he had done so, the issue of a possible further contribution by AIB would have been resolved in the context of that action. 

 

6.    Taken in the round, we agree with counsel for AIB that this action should be struck out on the ground that it is an abuse of the process of the Court.  The re-litigation of issues which have been long settled, the unfair prejudice thereby caused to AIB and the attempt to have a second bite of the cherry in re-apportioning liability for damages paid to Medos amount collectively to an abuse which should not be permitted.  The appellants had their opportunity in the context of the Second Action to draw in AIB and they did not do so.  There is a public interest in bringing litigation to a close.

 

7.    In arriving at the conclusion that the action should be struck out on that ground, we do not intend to imply that we disagree with the decision of the Master that the action should be struck out as disclosing no cause of action.  On the contrary, we agree with his analysis of the issues in relation to the first ground advanced by AIB and with his conclusion that the Order of Justice discloses no cause of action against AIB.

 

8.    Indeed, we think that the Master might have arrived at his conclusion on one further ground, although we have heard no argument on the point and it is unnecessary for us to express a concluded view.  However, it is not every tortfeasor who can avail himself of the remedy set out in Article 5 of the 1960 Law.  "Tortfeasor" is defined in Article 1 as meaning a person who commits a tort.  A "tort" is defined as meaning a "tort personnel" or a "tort matérial".  We express some doubt as to whether a breach by the directors of a company of Liberian statutory duty would be either a "tort personnel" or a "tort matériel".

 

9.    For all these reasons the appeal is accordingly dismissed.

 

AUTHORITIES.

 

Law Reform (Miscellaneous Provisions) (Jersey) Law 1960: Article 5(1)(c).