Jersey Unreported Judgments

[2011]JRC101

royal court

(Samedi Division)

19^th May 2011

Before     :

M. C. St. J. Birt, Bailiff, and Jurats Clapham and Liddiard.

 

Advocate P. C. Sinel for the Plaintiffs.

Mr R. Weston, Director on behalf of the defendant.

 

judgment

the bailiff:

1.        This is an application by the plaintiffs for judgment to be entered against the defendant following its failure to comply with two unless orders made on 19th January, 2011. 

Background

2.        Although this litigation has a lengthy and complicated procedural history, having begun as long ago as December 2005, the facts relevant to this particular application can be shortly stated. 

3.        On 12th February, 2010, the plaintiffs issued a summons seeking to strike out the answer of the defendant and obtain judgment on the ground that the defendant's "continued actions/inactions" constituted an abuse of process.  The hearing of the summons was adjourned on two occasions because of illness on the part of Mr Weston but eventually came before the Court on 26th October, 2010.  The plaintiffs relied amongst other matters on the fact that, on 17th December, 2009, the defendant had been ordered to file a re-amended answer to re-amended particulars of the claim by 1st February, 2010, and a revised affidavit of discovery by 15th February, 2010.  Furthermore, on 19th January, 2010, the defendant had become liable to pay to the plaintiffs a taxed award of costs in the sum of £63,529.79.  By the date of the hearing in October 2010, neither document had been filed and the costs remained unpaid. 

4.        The Court delivered its decision on 19th January, 2011.  For the reasons set out in its judgment Leeds-v-Admatch [2011] JRC 016A, the Court declined to strike out the answer and gave the defendant a "final opportunity" to consider how it wished to proceed in the knowledge of the consequences should it fail to comply. 

5.        The Court made orders in the following terms:-

(i)        that unless the defendant file its re-amended answer to the re-amended particulars of claim (as described in paragraphs 2 and 3 of the Act of Court dated 17th December, 2009) and the revised affidavit of discovery (as described in paragraphs 5 - 8 of the said Act) by the close of business on 23rd February, 2011, (being 5 weeks from the date hereof), the answer of the defendant shall be struck out without further order and the plaintiffs will be entitled to judgment;

(ii)       that unless the defendant pays to the plaintiffs the outstanding costs in the sum of £63,529.79, by the close of business on 23rd February, 2011, the defendant's answer shall be struck out without further order and the plaintiffs will be entitled to judgment. 

6.        The defendant did not comply with these two orders.  Instead, on 18th February, 2011, it applied to the Court of Appeal for leave to appeal against this Court's decision of 19th January.  On 23rd February, a single judge of the Court of Appeal ordered a stay of the unless orders until the conclusion of his consideration of an application to him by the defendant for leave to appeal.  On 25th February the single judge referred the application for leave to appeal to the full Court and extended the stay of the unless orders until the conclusion of the hearing before that Court. 

7.        There was some uncertainty on the part of the defendant as to whether this had extended the time for complying with the unless orders but on 25th February it was clarified that the time for complying with the unless orders had not been extended; there had merely been a stay of the orders.  This was repeated by further e-mail clarification on 2nd March. 

8.        The matter came before the Court of Appeal on 22nd March.  The application for leave to appeal was dismissed on that date with reasons to follow.  Those reasons were described in a judgment dated 19th April, 2011, Leeds-v-Admatch [2011] JCA 084.  At paragraph 10 of the judgment, referring to its decision to refuse leave to appeal, the Court of Appeal said this:-

"The consequences of our decision are that the stay which was granted by the single judge expired when we refused leave to appeal on 22nd March and, in terms of the unless orders, the answer of the Defendant was struck out and the Plaintiffs became entitled to judgment."

9.        Following the decision of the Court of Appeal to refuse leave to appeal, the plaintiffs applied for judgment and this originally came before this Court at the usual afternoon sitting of the Samedi Court on Friday 1st April.  The Court was addressed by Mr Weston on why judgment should not be given but it did not prove possible to finish the hearing on that occasion.  It was adjourned until 27th April when it came before a court which included Jurat Liddiard in place of Jurat King.  The matter was therefore heard afresh.  Although the Court had made it clear at the hearing on 1st April that the defendant should file a written skeleton argument before the resumed hearing, this did not occur and Mr Weston only presented the Court with his written submissions at the beginning of the hearing on 27th April.  

Discussion

10.      Mr Weston does not dispute that the defendant has failed to comply with the unless orders.  It appears that the defendant filed an affidavit of discovery on 22nd March i.e. the day of the hearing before the Court of Appeal but that was not served on the plaintiffs and, following the decision of the Court of Appeal, Mr Weston applied for its return.  The defendant apparently also filed an amended answer on the same date but again, following the decision of the Court of Appeal, it was, on the application of the defendant, returned.  Mr Weston informed the Court that he was not willing for these documents to be supplied to the plaintiffs in case they prejudiced his case in connection with the new litigation bought against him and Mr Levi.  The Court was not willing to inspect a document which could not be shown to the plaintiffs and accordingly we have not seen either of these documents.  In any event, as at the date of the hearing, neither document was filed with the Greffe and neither document had been supplied to the plaintiff.  There had therefore been a continuing failure to comply with the unless order in relation to both these documents. 

11.      As to the taxed costs, these had not been paid to the plaintiffs.  As described in the Court of Appeal judgment, various sums were collected and paid to the Judicial Greffe by post dated cheques.  However, none of these had been cashed as at the date of the hearing before the Court of Appeal and, following the decision of the Court of Appeal, Mr Weston requested the return of the cheques on 22nd March.  They were returned to him on that date.  Accordingly, as at the date of the hearing before this Court, the defendant had not complied with the order to pay the taxed costs to the plaintiffs and there were no monies lodged with the Greffe.  Mr Weston informed the Court that the monies had been returned to the various individuals who had loaned them and it would take a month or so to re-gather the money and pay it over should the Court so order. 

12.      Advocate Sinel's case was simple.  The answer had been struck out and the plaintiffs were therefore entitled to judgment.  He asserted that the Court had no discretion to refuse his application.  When it was pointed out to him that the Court undoubtedly had a discretion to extend time for compliance with any of its orders, he submitted that the defendant was undeserving of any latitude on the part of the Court and the Court should exercise its discretion to grant judgment. 

13.      Mr Weston addressed the Court at some length as to why judgment should not be granted and, as already mentioned, also supplied the Court with a written submission.  He argued that the Court should adjourn the plaintiff's application sine die or for at least three months to allow the defendant to consider appealing to the Judicial Committee of the Privy Council against the Court of Appeal's decision or until the new Jersey action by the plaintiffs against Mr Weston and Mr Levi (referred to later) had been determined.  When the Court pointed out to him that a more conventional application in these circumstances would be for a retrospective extension of time for compliance with the unless orders, he indicated that he wished, as an alternative, to apply for such an extension.  In all the circumstances we have treated his opposition to the plaintiff's summons as including an application for a retrospective extension of time. 

14.      Mr Weston relied upon a number of grounds in support of this case.  First, he argued that this Court should not place too much weight on the fact that the Court of Appeal had refused leave to appeal against the unless orders because, he argued, that Court had not properly considered his final written submissions.  He pointed out that his original document setting out his grounds, although filed on 18th February, was incorrectly dated 18th March.  Although this error in the date was spotted by Mr Weston almost immediately and communicated to the Court of Appeal Greffier on 18th February by e-mail, he believed that the members of the Court of Appeal had been working from that document, in the erroneous belief that it was the most recent document.  He had filed a revised/supplementary notice of appeal on 21st February and a further second supplementary notice of appeal on 7th March and it was the document dated 7th March which was much longer and more detailed and contained his full case.  He pointed out that the transcript of the hearing before the Court of Appeal showed that there was some confusion over which document he was relying upon and that the hearing had been comparatively short without the Court calling upon Advocate Sinel.  The Court had only retired for a short time and he did not believe that the members would have had time to read his document of 7th March, comprising some 18 pages, during their retirement.  In short, it was his belief that, although the members of the Court of Appeal had read the document by the time of the subsequent written judgment, they had not read his document of 7th March before they made the decision to refuse leave to appeal. 

15.      We are very doubtful that it is open to us to question the nature of the proceedings before the Court of Appeal.  However, the problem does not arise because we are quite satisfied that Mr Weston has come nowhere near establishing that the members of the Court of Appeal had not read the document of 7th March before they made their decision refusing leave to appeal on 22nd March.  On the contrary it is quite clear that they were working from the 7th March document and not the document erroneously dated 18th March.  We say that for the following reasons:-

(i)        We have been supplied with the bundle which was before the Court of Appeal and the index to that bundle.  The first document in the bundle and in the index is described as "Appellant's second supplementary notice of appeal dated 7th March, 2011".  Document 3 in the bundle is described as "Appellant's revised/supplementary notice of appeal dated 21st Feb, 2011, (superseded)" and document 4 is described in the index as "Appellant's notice of appeal dated 18th February, 201,1 (superseded)". 

(ii)       It is true that, if one looks to the last page of document 4, it is erroneously dated 18th March, although the attached record of service shows that it was served on 18th February.  Nevertheless, it is inconceivable that the members of the Court would not have read the first document listed in the bundle which is described as the second supplementary notice of appeal in circumstances where the other two notices are described as having been superseded. 

(iii)      There is nothing in the transcript to suggest that the members of the Court had not read the document of 7th March (i.e. document 1).  It is correct that the transcript shows that initially there was some confusion as to whether the document erroneously dated 18th March (i.e. document 4) was the latest document or not but this was clarified unambiguously on page 7 when Jones JA confirmed that the notice dated 7th March (i.e. document 1) was the latest one which they should be looking at and Mr Weston confirmed that that document incorporated the earlier ones and so there was little point in looking at the earlier documents. 

(iv)      Indeed immediately following that passage there is a discussion where Jones JA takes Mr Weston through certain passages in the revised second document which do not appear in document 4; so clearly the Court was looking at the correct document, i.e. that of 7th March. 

(v)       This is further confirmed on page 19 and 20 of the transcript where Mr Weston refers to page 8 of the 7th March document.  It is clear that he is referring to that document because he states that page 8 refers to the "first material change".  Page 8 of the 7th March document refers to the "first material change" whereas page 8 of the document dated 18th February (i.e. document 4) does not so refer.  In relation to the document which was being referred to, Jones JA confirmed specifically on two occasions that they had read that document. 

16.      Secondly, Mr Weston argues that the defendant had filed the amended answer and affidavit of discovery by the day of the hearing before the Court of Appeal.  This was of course known to the Court of Appeal when it refused leave to appeal.  Mr Weston referred the Court of Appeal to the fact that the plaintiffs had commenced a new action against Mr Weston and Mr Levi in mid December 2010 and this was the reason why he had not been able to comply with the 5 week deadline contained in the unless orders; indeed he had no doubt that that was one of the reasons for the institution of the new litigation.  However, this matter was fully ventilated before the Court of Appeal which held at paragraph 30 of that judgment that it was not seriously arguable that the raising of the new action in December against Mr Weston and Mr Levi was a change of circumstance which would have justified a decision different from that which the Royal Court made on 19th January, 2011.  The fact remains that the defendant did not comply with the unless orders and chose not to instruct lawyers so as to enable it to comply.  Furthermore, as at the date of the hearing before this Court, none of the documents remained filed, they had never been supplied to the plaintiffs and the taxed costs had not been paid. 

17.      Thirdly, Mr Weston argued that he had been given the wrong impression initially as to whether the stay granted by Pleming JA as a single judge of the Court of Appeal had had the effect of extending the date for compliance with the unless orders.  However, any such erroneous impression was corrected by 25th February and the fact remains that the defendant had not complied with the unless orders by the due date of 23rd February.  It cannot have been materially misled because it was only informed that a stay had been granted on 23rd. 

18.      Fourthly, Mr Weston argues that there will be no prejudice to the plaintiff if judgment is deferred because there are no assets which can be recovered in order to satisfy the judgment.  The balance of justice therefore comes down in favour of no judgment being taken.  

19.      Fifthly, Mr Weston argues that the defendant may wish to take the decision of the Court of Appeal to the Privy Council and no judgment should be granted by this Court pending consideration and pursuance of such an appeal.  However, we consider it very unlikely that the Privy Council would consider the points raised of sufficient legal significance as to justify granting leave.  In any event, should this occur and should such an appeal be successful, any judgment could of course be set aside at that time. 

20.      Finally, Mr Weston argued that, as the Act of the Court of Appeal did not specifically refer to a refusal to extend the deadline for compliance with the unless orders, it was not clear that the Court of Appeal had considered that application despite the fact that it was an important part of the defendant's application to the Court of Appeal.  We have to say that we cannot accept that argument.  It is clear from pages 8 and 26 - 27 of the transcript of the proceedings before the Court of Appeal that the judges were fully aware and were indeed considering the application for an extension of time in which the defendant could comply with the unless orders.  Furthermore, on page 30 of the transcript, Jones JA, after giving the decision of the Court to refuse leave to appeal, confirmed specifically that the Court was not granting an extension of time.  That is of course entirely consistent with paragraph 10 of the judgment giving the Court's reasons (see para 8 above). 

Decision

21.      Contrary to Advocate Sinel's submissions, this Court clearly has a discretion even at this late stage to extend time for compliance with the unless orders.  We have considered Mr Weston's submissions carefully but we are in no doubt that the time has come to grant judgment in this case.  We have given some reasons in the preceding section for rejecting certain of Mr Weston's submissions but in addition we would summarise our reasons as follows:-

(i)        In the judgment of 19th January, 2011, I concluded by saying the following at paragraph 50:-

"By way of conclusion I would add this.  The Court made it clear in its judgment of 10th June, 2010, that it would grant no further adjournments on the grounds of the ill health of Mr Weston.  The defendant is the company and it is up to the company to ensure that it is adequately represented in this case, whether this is by Mr Weston, by Mrs Weston if she feels up to it, by another director or by a lawyer.   The same principle will apply going forward.  The defendant must appreciate that the orders of the court must be complied with.  If it does not comply with the unless orders, I find it hard to imagine any circumstances in which further time would be granted."

Thus the defendant was given the clearest possible warning of the consequences of failing to comply with the unless orders. 

(ii)       That decision was upheld by the Court of Appeal which refused leave to appeal.  As already mentioned it stated that the effect of its decision was that the answer of the defendant was struck out and the plaintiffs became entitled to judgment. 

(iii)      In Alhamrani-v-Alhamrani  [2008] JCA 187A, the Court of Appeal approved at paragraph 84 the following observations of Ward LJ in Hytec Information Systems Limited-v-Coventry City Council [1997] 1 WLR 1666 at pages 1674 - 1675:-

(1) An unless order is an order of last resort.  It is not made unless there is a history of failure to comply with other orders.  It is the party's last chance to put his case in order.  (2) Because that was his last chance, a failure to comply will ordinarily result in the sanction being imposed.  (3) This sanction is a necessary forensic weapon which the broader interests of the administration of justice require to be deployed unless the most compelling reason is advanced to exempt his failure.  (4) It seems axiomatic that if a party intentionally or deliberately (if the synonym is preferred) flouts the order then he can expect no mercy.  (5) A sufficient exoneration will almost inevitably require that he satisfies the Court that something beyond his control has caused his failure to comply with the order.  (6) The judge exercises his judicial discretion in deciding whether or not to excuse.  A discretion judicially exercised on the facts and circumstances of each case on its own merits depends on the circumstances of that case; at the core is service to justice.  (7) The interests of justice require that justice be shown to the injured party for the procedural inefficiencies caused by the twin scourges of delay and wasted costs.  The public interest in the administration of justice to contain those two blights upon it also weighs very heavily.  Any injustice to the defaulting party, though never to be ignored, comes a long way behind the other two."

(iv)      The defendant has a history of failing to comply with unless orders on two previous occasions (see paras 8 and 9 of the judgment of 19th January). 

(v)       No good reason has been given for the failure to comply with the unless orders.  The Court of Appeal rejected the defendant's argument that the institution of the new action against Mr Weston and Mr Levi was even seriously arguable as a change of circumstance which would have justified a more generous time period for the unless orders.  Despite having been advised on numerous occasions of the dangers of not engaging legal representation and of relying on Mr Weston to carry out all the work of the defendant notwithstanding his ill health, the defendant has chosen not to do so.  It has only itself to blame for the failure to file the necessary documents within the stipulated period.  

(vi)      It has made no attempt to pay the taxed costs.  On the contrary, it has made a deliberate decision not to pay them and has instead simply lodged certain sums with the Greffe which have in any event subsequently been withdrawn.  Mr Weston informed us that it would take about a month to raise the monies again.  Thus, even if the Court were to agree to an extension of time, the suggestion was that such extension would have to be for at least one month. 

(vii)     Nothing beyond its control has caused its failure to comply with the unless orders. 

22.      In summary, as at the date of the hearing, the defendant had still not complied with the unless orders in any respect because it had withdrawn the documents which it had filed and the taxed costs had not been paid. 

23.      The Court believes that it has made considerable allowance for the fact that the defendant has been represented by one of its directors rather than by an advocate.  However the time comes when repeated failures to comply with the orders of the Court must result in the ultimate sanction being applied.  The defendant was given a clear warning of the likelihood of this course of action in the January judgment but has chosen not to comply with the unless orders.  In all the circumstances the Court is not willing to grant any retrospective extension of time nor is it willing to stay or adjourn this application for any of the reasons put forward by Mr Weston. 

24.      The Court therefore grants judgment in the sum of £190,400 against the defendant.  It seems to us that that judgment can only be in favour of the second plaintiff because the plaintiffs rely upon the validity of the assignment of the cause of action.  As to interest, the claim is for contractual interest at 2% above the base rate from time to time of Barclays Bank plc.  Ironically, following the amendment to its pleading, the plaintiff now alleges that the third draft (rather than the fourth draft) of the agreement reflects the true agreement between the parties and the third draft refers to an interest rate at 3% above Barclays base rate.  However, Advocate Sinel properly accepted that it was the 2% rate which had been claimed and we think that is the appropriate rate.  We therefore order interest at that rate from the commencement of these proceedings in December 2005. 

Authorities

Leeds-v-Admatch [2011] JRC 016A.

Leeds-v-Admatch [2011] JCA 084.

Alhamrani-v-Alhamrani [2008] JCA 187A.

Hytec Information Systems Limited-v-Coventry City Council [1997] 1 WLR 1666.