[2008]JRC035
royal court
(Samedi Division)
5th March 2008
Before : |
J. A. Clyde-Smith, Esq., Commissioner, and Jurats Tibbo and King. |
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Between |
Incat Equatorial Guinea Limited |
Plaintiffs |
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Incat Oil Field Services Limited |
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West African Marine Logistics Inc |
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Incat Equipment Rental Limited |
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Incat Technical Services Limited |
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Integrated Petroleum Services (Gabon) Limited |
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And |
Luba Freeport Limited |
Defendant |
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Advocate M. C. Goulborn for the Plaintiffs.
Advocate J. M. P. Gleeson for the Defendant.
judgment
The COMMISSIONER:
1. The defendant appeals against the decision of the Master of the Royal Court dated 16th January, 2008 ("the Master's decision") whereby it was ordered that the defendant's application for specific discovery set out in its summons dated 7th November, 2007 ("the defendant's summons") be dismissed and that the defendant pay the costs of the plaintiffs on the standard basis.
2. The Court was reminded that on an appeal against the exercise by the Master of his discretion to order specific discovery, the Court may substitute the exercise of its own discretion to order discovery, the Court not being bound by but being obliged to take into consideration and give due weight to the decision of the Master (see Victor Hanby Associates Limited v Oliver and Hanby [1990] JLR N 2b). It was also reminded of the test to be applied for specific discovery as laid down by the Court of Appeal in Victor Hanby Associates Limited and Hanby v Oliver [1990] JLR 337 and as summarised in Trustcorp Limited and Ors v Barclays [2007] JRC 043, namely that the appellant must show by evidence on oath:-
(i) that there is a prima facie case that the other party has, or had, documents which have not been disclosed;
(ii) that there is a prima facie case that the documents in question must be relevant to matters in issue in the case.
Even if a prima facie case of possession and relevance is made out by evidence on oath, the Court must go on to consider whether an order for specific discovery is necessary for disposing fairly of the case (the "third limb" of the Hanby test).
Background
3. The defendant is the part owner of a 25 year concession granted on or about 21st June, 2003 by the government of Equatorial Guinea in relation to the rehabilitation, expansion, development and direction of Luba Freeport. The plaintiffs, who formed part of the same "Incat" group of companies as the defendant at the material time, provided plant and services to the defendant at Luba Freeport. It is not denied by the defendant that such services were provided. The defendant suffered from a lack of funding and in May 2006, at a time when the concession was under threat, it was sold out of the Incat Group to Lonrho Africa Plc.
Pleaded issues
4. The plaintiffs claim from the defendant the sum of $US 8,631,971.32. The plaintiffs do not base their claim on the contract or contracts under which these services were provided. Instead, they say that the indebtedness was agreed between the plaintiffs and the defendant in or around April 2007, at the amount shown in the balance sheet of the defendant as at 31st March, 2007. It is upon that alleged agreement that they action the defendant. They have not pleaded, in the alternative, that the defendant is in any event indebted to the plaintiffs in that or some other sum to be determined by the Court. The defendant denies that it entered into such an agreement in or around April 2007 and this constitutes the first issue to be determined at the main hearing. We will refer to this as the "April Agreement".
5. The total amount of the claim set out above includes (as we understand the pleadings) a claim to interest on payments the first plaintiff has made in respect of the defendant's indebtedness to certain banks, pursuant to the defendant's obligation to take over all financial engagements of the first plaintiff to those banks under an agreement between the banks, the first plaintiff and the defendant dated 8th July, 2002. This claim is denied by the defendant and this constitutes the second issue to be determined at the main hearing. We will refer to this as the "Interest Claim".
6. Finally, the plaintiffs assert that they are not bound by an offer they made to the defendant by letter dated 11th May, 2006 to defer any indebtedness. The defendant says they are bound by this letter. The validity, effectiveness and ambit of this letter constitute the third issue to be determined at the main hearing. We will refer to this as the "Deferment Letter".
Specific Discovery
7. We canvassed these issues, which we think are the issues disclosed by the pleadings, before counsel and it is clear that they agree. It was a helpful exercise as Advocate Gleeson conceded that all of his applications for specific discovery relate to the quantum of the underlying indebtedness, if any, between the defendant and the plaintiffs. His concern was that if the defendant succeeded in defeating the plaintiffs' claim in respect of the April Agreement, the Court could go on to find that there was still an underlying debt arising out of the services that had been provided which it would then quantify. Understandably, the defendant would wish to be heard on any such determination and quantification and have discovery of documents relevant to such an exercise.
8. There is, however, no claim in relation to the underlying indebtedness, if any, between the defendant and the plaintiffs. The plaintiffs have not made any such claim and Advocate Goulborn accepts that this is the case. Apart from the Interest Claim, the plaintiffs rely entirely upon the April Agreement. If the plaintiffs fail, therefore, on the April Agreement, they have no alternative or further claim in these proceedings to pursue other than, potentially, the Interest Claim. In that eventuality, there is no basis upon which the Court could go on to make findings in respect of the underlying indebtedness, if any.
9. Documents which relate to the quantum of the underlying indebtedness, if any, between the defendant and the plaintiffs are not, therefore, relevant to any issue in this case as currently pleaded. We therefore uphold the decision of the Master and dismiss the appeal.
Authorities
Victor Hanby Associates Limited v Oliver and Hanby [1990] JLR N 2b.
Victor Hanby Associates Limited and Hanby v Oliver [1990] JLR 337.