Jersey Unreported Judgments

Debt - application for leave to appeal the decision of the Royal Court on 28 September 2011.

[2012]JCA083

Court of Appeal

23 April 2012

	Before     :		Dame Heather Steel, D.B.E., President; Michael Jones, Q.C., and; James McNeill, Q.C..
Between		Leeds United Football Club Limited		Appellant
And		Robert Lawrence Weston		First Respondent
And		Melvyn Stuart Levi		Second Respondent

Application for leave to appeal the decision of the Royal Court on 28 September 2011.  Referred to the plenary Court on 22 November 2011 by McNeill JA.

Advocate P. Sinel for the Appellant

Advocate W. Redgrave for the Respondents.

JUDGMENT

JONES JA:

1.        This is the judgment of the court in this application for leave to appeal a decision of the Bailiff to stay proceedings, on the ground of forum non conveniens.

2.        The Royal Court has jurisdiction to order a stay in a case where it is satisfied that "there is some other tribunal, having competent jurisdiction, in which the case may be tried more suitably for the interests of all the parties and for the ends of justice." (Sim v. Robinow (1892) 19 R 665 per Lord Kinnear at page 668)

3.        In approaching the issues in this application, we have in mind the following words of Lord Templeman:-

"the solution of disputes about the relative merits of trial in England and trial abroad is pre-eminently a matter for the trial judge. ... ... An appeal should be rare and the appellate court should be slow to interfere." (Spiliada Maritime Corporation v Cansulex Limited "The Spiliada" [1987] 1 AC 460, page 465F)

4.        The applicant will be referred to throughout this judgment as "the plaintiff" and the respondents as "the defendants".

5.        The background to and the history of these proceedings are recorded in the Bailiff's judgment in the following terms, which are not in dispute and which we gratefully adopt:-

"3. In 2004, Leeds United Football Club ("the Club") was in serious financial difficulty. At the time it was owned by Leeds United Association Football Club Limited ("LUAFC"), an English company.

4. In March 2004 a consortium known as the Yorkshire Consortium was formed with a view to rescuing the Club. The consortium acquired the shares in LUAFC through a wholly owned company called Adulant Force Limited ("Adulant"). The consortium consisted of Mr Gerald Krasner, the second defendant Mr Levi, Mr Simon Morris, Mr Melvin Helme and Mr David Richmond. According to Mr Levi his interest in the project and certain loans advanced to Adulant were held for the benefit of Cope Industrial Holdings Limited ("Cope"), an English company which was owned as to 25% by Mr Levi and 75% by Mr Weston, the first defendant in these proceedings.

5. Unfortunately the financial position of the Club did not improve, so much so that apparently none of the major credit card companies was willing to do business with LUAFC. It was in these circumstances that in 2004 LUAFC entered into an agreement with the Phone-In Trading Post Limited, a Jersey company which was wholly owned by Mr Weston and has always traded under the name of Admatch ("Admatch").

6. The agreement was for Admatch to act as agent to LUAFC for the purpose of selling match and season tickets by credit card. Admatch would receive the monies and then pass them on periodically to LUAFC.

7. In early 2005, control of LUAFC was acquired from the Yorkshire consortium by interests associated with Mr Ken Bates. LUAFC then terminated the agreement. There is no dispute that, when the agreement was terminated, Admatch owed £190,400 to LUAFC in respect of monies it had received but not yet passed on to LUAFC. In December 2005 LUAFC instituted proceedings in Jersey ("the Admatch proceedings") seeking payment from Admatch of the sum of £190,400.

8. On 4th May 2007 LUAFC went into administration, with net debts reported to be about £40 million. By an agreement of that date, the administrators transferred the assets of LUAFC (including the claim against Admatch) to the plaintiff in these proceedings, and the shares in the plaintiff were sold to a consortium led by Mr Bates. Subsequently, LUAFC went into liquidation. The plaintiff was later joined to the Admatch proceedings as second plaintiff.

9. As already mentioned, Admatch admitted the debt of £190,400. However, it contended in the Admatch proceedings that the agreement contained at clause 9(f) a set-off clause which entitled Admatch to set-off from any monies it owed to LUAFC any sum owed by LUAFC (or by any parent, associate or subsidiary company of LUAFC) to Admatch (or to any parent, associate or subsidiary company of Admatch). Admatch alleged that the sum of £1,439,734 (referred to hereafter for convenience as £1.4M) was owed by LUAFC and I or an associated company to Cope, which is the company referred to earlier and was therefore said to be an associate company of Admatch.

10. In the Admatch proceedings, the plaintiffs (i.e. LUAFC and the plaintiff in this case) originally admitted the existence of the set-off provision at clause 9(f) of the agreement but denied that it was relevant on the grounds that the debt of the £1.4M was owed to Mr Levi personally rather than to Cope. Subsequently, in December 2009, the plaintiffs in the Admatch proceedings were granted leave to further amend their claim so as to allege that, contrary to what they had admitted previously, the agreement did not in fact contain the set-off provision in clause 9(f). It was agreed by both parties that the agreement had never been signed but what appeared to be at issue between them was whether the agreement was as contained in a document described as the third draft (which did not contain the set-off provision) or the fourth draft (which did).

11. The Admatch proceedings continued for many years with numerous interlocutory hearings but eventually on 19th January 2011 the Court made certain unless orders against Admatch. Admatch did not comply with the unless orders with the consequence that its answer was struck out. Subsequently, in a judgment dated 19th May 2011, the Court granted judgment against Admatch in the sum of £190,400. During the course of the Admatch proceedings Mr Weston, who was representing Admatch as a director, confirmed on a number of occasions that Admatch had no assets. The sum of £190,400 had been paid away to other companies in his group because Admatch believed it was entitled to set-off its liability of £190,400 against the £1.4M debt. Thus Admatch is an empty shell. Further details of Mr Weston's assertions as to what had happened to the money are set out in the judgment of the Court dated 15th August 2011, which ordered Admatch to provide certain information in this respect.

12. The circumstances surrounding the acquisition of the Club on behalf of Mr Bates have given rise to a number of items of litigation as well as the Admatch proceedings in Jersey. There are or have been three material proceedings in England:-

(i) Mr Levi instituted proceedings for defamation ("the original defamation proceedings") against Mr Bates for statements he had made in relation to Mr Levi's conduct in connection with the Club. This came to trial in July 2009 in the High Court. The judge found in favour of Mr Levi and awarded damages against Mr Bates.

(ii) Mr Weston has brought proceedings for defamation against the plaintiff and Mr Bates in England in relation to certain statements made about Mr Weston and these are continuing ("the ongoing defamation action').

(iii) Mr Levi and his wife have brought an action for harassment against the plaintiff, Mr Bates and Yorkshire Radio Limited, which again relates generally to the matters arising out of the acquisition of the Club by Mr Bates. In all of these proceedings the plaintiff or Mr Bates, as the case may be, are represented by Carter-Ruck, Solicitors in London and Mr Levi and Mr Weston are represented by Ford and Warren, Solicitors in Leeds.

History of these proceedings

13. On 15th December 2010 the plaintiff issued the present proceedings against Mr Weston and Mr Levi. It sued as assignee of LUAFC pursuant to a second assignment dated 9th April 2010. As in the first action against Admatch, the foundation of the claim is the agreement between LUAFC and Admatch, the allegation that there is no set-off provision because what was actually agreed was based upon the 3rd draft, and the failure of Admatch to pay over the £190,400. The Order of Justice also alleges that Admatch held this sum upon trust for LUAFC because the agreement provided that the monies held by Admatch were the property of LUAFC. It is alleged that Admatch was therefore in breach of trust when paying the money away to Mr Weston or other companies in his group. The Order of Justice further alleges that, by his actions in procuring that Admatch should pay away these monies, Mr Weston is in breach of fiduciary duty towards LUAFC, is also liable for dishonest assistance of Admatch's breach of trust and is further liable for knowing receipt. Mr Levi is also alleged to have been in breach of his fiduciary duty towards LUAFC and to have dishonestly assisted Admatch's breach of trust and Mr Weston's breach of fiduciary duty. Both Mr Weston and Mr Levi are also said to have conspired to defraud LUAFC. Thus the plaintiff seeks to recover the relevant monies from Mr Weston and Mr Levi personally.

14. The Order of Justice was served on Mr Weston on 17th December 2010 and leave to serve outside the jurisdiction on Mr Levi was granted by the Master on 20th December. The matter came before the Court on 28th January 2011 when both defendants appeared personally. It would seem that Mr Levi sought to challenge the jurisdiction of this Court on that occasion but I have not been given any further information about what was said.

15. On 17th February, which was one day before the time for filing an answer expired, Messrs Baker and Partners ("Bakers") wrote to Messrs Sinels stating that they had very recently been instructed and seeking an extension of four weeks for service of an answer. Sinels replied the same day raising the point that Mr Levi had attempted to challenge the Court's jurisdiction on 28th January and seeking confirmation that this was no longer the case and that both defendants accepted this Court's jurisdiction. An extension of three weeks for filing an answer was offered.

16. Bakers replied the next day accepting the extension of three weeks and stating as to jurisdiction:- "As for jurisdiction, there are in our view strong arguments that both this matter and the first claim against Admatch should have been litigated in England. However in the circumstances we do not seek on behalf of the defendants to challenge the jurisdiction of the Royal Court in this matter." In the same letter Bakers sought certain documents in order to prepare an answer and these were subsequently delivered by Sinels.

17. The defendants filed an answer on 11th March 2011 which at paragraph 4 said this:- "The second assignment appears to have been entered into in contemplation of this action and requires the Court to determine matters of English law. Consequently, the proper venue for the trial of the action is in England. The defendants do not challenge the jurisdiction, because it is convenient for this matter to be determined by the Court determining the Plaintiff's claim against Admatch and the Defendants anticipate that the Plaintiff would not be prepared to consent to the removal of both actions to the place of the proper law of the contract." The answer was filed after Admatch's answer had been struck out but before its appeal to the Court of Appeal had been heard and before judgment in default was given against it.

18. On 4th April the plaintiff filed a reply to the answer and gave notice of a draft summons in respect of a request for further and better particulars of the answer and directions generally. That summons was in due course listed for 14th June.

19. On 15th April Bakers wrote commenting in some detail on the plaintiff's request for further particulars and enclosing a request by the defendants for further and better particulars of the Order of Justice.

20. As previously mentioned judgment in default was given against Admatch on 19th May. On 26th May Bakers wrote to Sinels to the following effect:- "Following the conclusion of the Leeds v Admatch proceedings we are of the clear view that the most appropriate forum for the current proceedings is now England and Wales. We invite your clients to agree to a transfer of the action to that jurisdiction" The letter confirmed that Mr Weston would submit to the jurisdiction of the English court and gave notice that, if agreement was not forthcoming, a summons seeking a change of forum would be issued. The letter also invited the plaintiff to consent to a minor amendment to the answer and provided certain further particulars of the answer as had previously been requested. The minor amendments to the answer were agreed by Sinels the next day and a consent order to that effect issued by the Master on 31st May.

21. On 1st June Bakers gave notice of a date fix appointment for the issue of a summons seeking a stay on the grounds of forum non conveniens and accordingly the plaintiffs summons before the Master which was due to be heard on 14th June was subsequently adjourned.

22. In summary therefore, the action taken by the defendants in this case comprises the filing of an answer, the provision of some further and better particulars, the issue of a request for further and better particulars of the Order of Justice and the seeking of a minor amendment to the answer."

6.        The grounds of appeal, set out in the plaintiff's Notice of Appeal, are as follows:-

"1) Misdirection in law

1. That the Learned Bailiff has misdirected himself in law in concluding that a defendant who has willingly participated in proceedings by taking a step such as filing an Answer is not precluded from thereafter applying for a stay on the ground of forum non conveniens.

2. As a matter of justice and public policy the Royal Court ought to apply an approach similar to that of England and Wales and various commonwealth countries whereby an onus is put on a defendant to raise any objection to the plaintiff's choice of forum within the initial period for responding to the issuing process.

3. A fortiori where (as here) a defendant has taken positive steps in the proceedings such as filing an Answer, or where a defendant has positively (on advice and after mature reflection) resolved not to raise any objection to the plaintiffs choice of forum and/or to submit to the jurisdiction, he ought to be precluded from seeking to have the proceedings heard in a foreign jurisdiction in preference to the jurisdiction of the Royal Court; alternatively the circumstances in which he might be permitted so to seek ought to be extensively circumscribed.

4. Properly construed, and in accordance with the foregoing public policy considerations, Rule 6/7(3) of the Royal Court Rules provides that any application by the defendant to seek to have the proceedings heard in a foreign jurisdiction in preference to the jurisdiction of the Royal Court must be made within 28 days of the return date for appearance before the Court. The Learned Bailiff misdirected himself in law in concluding that an application for a stay did not have to be made just as early in the proceedings as a challenge to the jurisdiction. The nature of the former is comprised within that of the latter. In reality in both cases (save where the complaint is that the Royal Court never had any jurisdiction of any kind at all) the challenge is to the ongoing exercise of the Court's jurisdiction (as opposed to its existence).

5. The Learned Bailiff misdirected himself in law in preferring a dictum in Jaiswal v Jaiswal [2007] JLR 305 to obiter dicta of Collins JA in Wright v Rockway Ltd [1994] JLR 321 and Lord Walker in Gheewala v Compendium Trust Co Ltd [2003] JLR 627. The dictum in Jaiswal was given in an appeal in circumstances where the appeal was not pursued and the Court gave judgment in respect of the Respondent's notice in relation to arguments as to forum conveniens opposing the grant of a stay even though there was no appeal against the refusal to grant a stay on foot. Accordingly, in the unusual circumstances of Jaiswal the point was not necessary for any decision by the Court and had no impact upon any order. Further, the excerpt from the judgment relied upon by the Learned Bailiff was not necessary for the decision given, and the case is distinguishable from the present case, since the Court regarded the appellant as having always protested the jurisdiction. The Court of Appeal decision in Rockway was not apparently cited to the Court of Appeal in Jaiswal. The decision in Durant International Corp v the Federal Republic of Brazil [2010] JCA 214, which apparently followed the reasoning in Jaiswal may readily be distinguished from the present case, since any step taken in those proceedings had (as found by the Court of Appeal) to be construed in the light of the pending appeal in that case against the decision not to grant a stay. ... ...

6. The Learned Bailiff misdirected himself in law in finding that a defendant who has positively accepted and stated that he will not challenge the exercise of jurisdiction by the Royal Court may thereafter apply for a stay on the grounds of forum non conveniens.

7. The Learned Bailiff misdirected himself in law in allowing the Defendants to apply for a stay on the grounds of forum non conveniens when they had, as a matter of specific choice, waived their right to do so and were estopped from so applying by reason of their conduct in the proceedings (in particular the filing of an Answer and the issue of a Request for Further and Better Particulars) and/or their positive statement of acceptance of the jurisdiction in a letter dated 18 February 2011 and in their Answer and their conscious election to submit to the jurisdiction of the Royal Court.

2) Error in evaluation

8. The Learned Bailiff took into account the following irrelevant matters in reaching his decision:

(a) The existence of ongoing litigation in England between different parties and concerning different matters. The Learned Bailiff regarded the existence of the proceedings in England as producing duplication if the current proceedings were litigated in Jersey. However, the proceedings in Jersey do not concern the same matters as the English proceedings and do not involve the same parties. The proceedings in Jersey concern the provenance of the fourth draft of the agreement, the payment of the monies out of Admatch and the conduct in respect of long-running proceedings in Jersey {the Admatch Proceedings). The Admatch Proceedings (File no.2005/481) are proceedings in Jersey between the Plaintiff and Leeds United Football Association Football Club Limited (in liquidation) ("LUAFC") on the one-hand and The Phone-in Trading-post Limited ("Admatch") on the other.

(b) The Learned Bailiffs conclusion that there would be a considerable saving of expense was based upon an erroneous assumption that the Jersey lawyers would no longer be required if the stay was granted. The Admatch Proceedings started in Jersey and remain live for the purposes of enforcement and pursuit of the monies apparently dissipated from Admatch. Indeed, it is far more natural for the current proceedings in pursuit of recovery of the same funds to continue in Jersey in tandem;

(c) The Learned Bailiff concluded that the majority of witnesses in the current proceedings will be resident in England without sufficient basis so to do and without any evidence as to the specific individuals who either party intend to call. The key witnesses are Messrs Levi and Weston and Mrs Weston, most of whom are resident in Jersey (and Mr Levi is a defendant). The Plaintiffs witnesses have all agreed to attend Court in Jersey. At best, the location of witnesses was a neutral factor;

(d) The Learned Bailiff concluded that the witnesses would be more likely to attend in England than Jersey, without any knowledge as to the witnesses or as to which witnesses would be likely to give evidence in which court. The Plaintiffs witnesses are prepared to attend the Royal Court to give evidence. The key witnesses other than that are Messrs Weston and Levi; and

(e) The Learned Bailiff found that there was a change of position after judgment in the Admatch Proceedings and that this justified the timing of the Defendants' application. There was no material change of circumstances to justify the timing of the Defendants' application. It was clear that judgment would be entered in the Admatch Proceedings at the time of the filing of the Defendants' Answer and such event was within the hands of Mr Weston as director and representative of Admatch (it was within his powers to procure compliance with the orders of the Royal Court). It is quite unjust if Mr Weston is able to avoid the consequences of the Admatch Proceedings by failing to comply with orders from the Royal Court and thereby deprives the Plaintiff of its choice of-¢ forum in circumstances when Mr Weston has previously confirmed that he would not challenge the jurisdiction.

9. The Learned Bailiff failed to take into account the following relevant matters:

(a) The Defendants' application in the current proceedings is, and was, a tactical ruse and should be seen in the light of a deliberate course of noncompliance and delay pursued by Admatch (represented through Mr Weston) in the Admatch Proceedings;

(b) The relevant documents are located in Jersey. The Learned Bailiff accepted that the documents of Admatch would be relevant, but he regarded the location of the LUAFC documents as more important. The Learned Bailiff failed to take into account that the LUAFC documents were also in Jersey. The LUAFC documents were the documents with which the Admatch Proceedings are and were concerned and such documents had already been collated and reviewed by the Plaintiffs Jersey lawyers and were in Jersey for the purposes of the Admatch Proceedings. The Plaintiff had completed its discovery in the Admatch Proceedings. All or substantially all of the documents are in Jersey. The Admatch documents are in Jersey, but not in England;

(c) the difficulty of obtaining production in England of documents located in Jersey, namely the Admatch documents;

(d) the "Cambridgeshire factor'' - the current case is a case where a team of lawyers has already been preparing a similar (and in respect of what the Learned Bailiff regarded as the key primary issue of the provenance of the "fourth draft" agreement a virtually identical) case in Jersey, albeit against Mr Weston's company. The Admatch Proceedings have been on foot for five or six years. It would be wasteful of talent, effort and money if the Plaintiff were to have to start all over again in England. Indeed, the current proceedings are essentially an organic growth from the Admatch Proceedings and are necessitated by Mr Weston procuring the payment out by Admatch of the funds claimed by the Plaintiff and Admatch's impecuniosity. In particular the effort that has been expended and the knowledge-base that has been developed in Jersey cannot simply be "made available" to English lawyers. The Learned Bailiff does not seem to have had any regard to this factor at all;

(e) The duplication and waste of costs in re-pleading. The learned Bailiff does not appear to acknowledge that there will be any waste of cost in the duplication necessitated by producing new pleadings in England with different lawyers;

(f) The fact that the Admatch Proceedings are continuing as the Plaintiff seeks to enforce its judgment and obtain further documents in Jersey;

(g) The fact that part of the relief sought in the Order of Justice is the recovery of the costs incurred in the Admatch Proceedings;

(h) The interests of the Jersey court as a matter of public policy in the administration of justice in investigating the veracity of evidence submitted to it which is alleged to be an instrument of fraud;

(i) The incidence of complex arguments in respect of limitation in proceedings in England and the risk of the Plaintiffs claims being time-barred.

(j) The need for the English court to consider and apply Jersey law in respect of all (alternatively most) of the claims, including rules on prescription. There are significant differences between English law and that of Jersey in respect of the various claims made in the current proceedings.

(k) The key acts in the implementation of the tort of conspiracy took place in Jersey, where the funds were paid out in breach of trust and where the affidavit was filed in the Ad Match Proceedings;

(l) One aspect, at least, of the alleged conspiracy is an attempt to avoid the consequences of a Jersey judgment in favour of the Plaintiff;

(m) Insofar as Mr Weston (or one or other of his companies) was a knowing recipient the knowing receipt took place in Jersey;

(n) The assets which are the subject of the claim were and are apparently situated in Jersey;

(o) Mr Levi, although his principal connection with Jersey is through his relationship with Mr Weston, engaged himself with the Royal Court in Jersey by providing an affidavit in Jersey proceedings, which forms part of the Plaintiffs complaint.

10. The Learned Bailiff reached a conclusion outside the spectrum of reasonableness.

(a) The action has its most real and substantial connection with Jersey, as set out above. In particular the acts complained of principally took place in Jersey; breach of trust by a Jersey company in respect of a sum of money held in Jersey pursuant to a contract which is (as accepted by the learned Bailiff for the purposes of the application) governed by Jersey law;

(b) Far from being a case where a plaintiff issued against a defendant in Jersey solely to obtain grounds for jurisdiction, these proceedings primarily concern Admatch and the operation of its affairs in Jersey by Mr Weston. The complaint is that Mr Levi involved himself in such affairs and combined with Mr Weston in order to enable Mr Weston to justify the extraction of monies from Admatch in Jersey and to defeat the Plaintiffs proceedings in Jersey; and

(c) The material before the Court was wholly insufficient to demonstrate that England is clearly the most appropriate forum and the natural forum. Indeed, the evidence demonstrated that Jersey is the most natural forum. At best, the evidence disclosed that there was no natural forum, such that the application ought clearly to have failed. Further, insofar as concerns the grounds for granting Leave to Appeal:

11. The appeal concerns an important point of law upon which further argument and a decision of the Court of Appeal would be to the public advantage. There is currently uncertainty with conflicting views having been expressed in various decisions of the Court of Appeal and the Privy Council and clear guidance from the Court of Appeal would be to the public benefit. The specific area of uncertainty is particularly worthy of consideration because it has a significant impact upon the timing of a defendant seeking to cause the Royal Court to defer to the Courts of another jurisdiction and upon the steps which a defendant may take prior to such an application. In cases with a foreign element parties need certainty as to the circumstances in which a defendant may seek to cause the Royal Court not to exercise jurisdiction, especially where decisions taken early in the proceedings may have far-reaching effects upon the forum which hears the dispute.

12. This is a clear case of something going wrong. The action has its closest and most real connection with Jersey. The Plaintiff refers to the matters set out above. In particular, the Learned Bailiff appears to have wholly disregarded the "Cambridgeshire factor."

7.        These Grounds of Appeal were elaborated in the plaintiff's written contentions, and further expanded in the hearing before us on 24 January 2012. We deal with each in the order presented by the plaintiff.

1. Misdirection in law

8.        The first argument advanced in the plaintiff's written contentions in support of this ground is to the effect that the Bailiff erred in law in concluding that the application for a stay did not have to be made within 28 days of the return date for appearance before the court, in accordance with the terms of Rule 6/7(3) of the Royal Court Rules.

9.        Rule 6/7 is headed "Dispute as to jurisdiction". Rule 6/7(3) is in these terms:-

"Any party (in this Rule referred to as 'the applying party') who wishes to dispute the jurisdiction of the Court in the proceedings by reason of any such irregularity as is mentioned in paragraph (1) or on any other ground must-

(a) if a return date for appearance before the Court has been fixed-

(i) ask the Court to order that the proceedings be placed on the pending list, and

(ii) not later than 28 days thereafter apply to the Bailiff in chambers for a day to be fixed for the hearing of one or more of the applications mentioned in paragraph (4); or

(b) if no return date for appearance before the Court has been fixed, apply to the Bailiff in chambers, not later than 7 days after the expiry of the time limited for the filing by that party of a pleading in the proceedings, for a day to be fixed for the hearing of one or more of the applications mentioned in paragraph (4)."

10.      Having regard to the clear words of Rule 6/7(3) we have no hesitation in holding that it has no application in a case where a stay is sought on the ground of forum non conveniens. The party making the application does not "dispute the jurisdiction of the court". Such a party accepts that the court has jurisdiction, but asserts that "the case may be tried more suitably for the interests of all the parties and for the ends of justice" "in some other tribunal, having competent jurisdiction". (Sim v Robinow (supra); The Spiliada (supra.), per Lord Goff of Chieveley at p. 574)

11.      We are of the opinion, further, that the defendants' participation in the proceedings is not a bar to their making an application for a stay. In Jaiswal v Jaiswal [2007] JLR 305 the plaintiff sought a declaration that two wills made by his father were invalid. The defendants' application for a stay, on the ground that the Delhi High Court was the appropriate forum, was refused. The first defendant (Karamjit) appealed the refusal to this court, and the plaintiff (Anand) cross-appealed, seeking a variation of the Royal Court's order by adding to the grounds on which he succeeded in resisting a stay. By the time the appeal and cross-appeal were heard in this court, the first defendant had been enjoined by the Delhi High Court from prosecuting his appeal, but the plaintiff remained free to pursue the cross-appeal. The judgment of the court was delivered by Beloff J.A. who, at paragraphs 77-78, said this:-

"77 Counsel for Anand had yet another arrow in his quiver. He argued that Karamjit had, by various actions, submitted to the jurisdiction of the Royal Court and that, by so submitting, had disabled himself from contending that the High Court of Delhi was a more appropriate forum for resolution of the issues as to the validity of the Jersey will. This argument, apparently ventilated before the Royal Court, was rejected so peremptorily that no reference was made to it in the judgment. There is in it an element of paradox. From a fair reading of the various documents relied on by Anand, Karamjit was at all material times taking the position in the Jersey courts that the appropriate forum was India. The facts are very different from those of Solvalub Ltd v. Match lnvs. Ltd where the respondent had asked for positive relief (by way of counterclaim) and was, in our respectful view, properly held no longer able to contest the jurisdiction of the Royal Court.

78. But even if, on close analysis, Karamjit had at some stage dropped his guard and failed to continue to protest the jurisdiction of the Royal Court, at most this would, in our view, prevent him from contending that the Royal Court was not an appropriate (or, at any rate, available) forum, it would not prevent him from contending that another forum was more appropriate."

12.      In Durant International Corp v the Federal Republic of Brazil [2010] JCA 214, Sir Philip Bailhache, sitting as a single judge of this court, was called upon to determine an application for leave to appeal a judgment of the Royal Court determining that Jersey was the most natural and appropriate forum for the resolution of the dispute between the parties. In opposing the application, counsel for the respondents submitted that the applicants had submitted to the jurisdiction by filing an answer to the merits without any reservation as to jurisdiction, and that it was no longer open to them to argue that Jersey was not the appropriate forum. Having regard to the whole circumstances, the single judge rejected that submission, saying:-

"The respondents were well aware that a notice of appeal had been entered when the answer was filed. Even if, by failing to reserve the position, the applicants could be prevented from contending that the Royal Court was not an appropriate forum, they are not disentitled from arguing that Brazil is the more suitable forum for the ends of justice."

13.      In our view, the decision in each of these cases ought properly to be seen as the result of the application of a principle that can best be explained by identifying the difference between a plea of no jurisdiction and a challenge to the forum. The first is a matter of law and falls to be determined by strict application of the relevant legal rules. For example, legal rules are applied to determine whether or not a party, who would otherwise not be subject to the jurisdiction of the Jersey courts, is to be held to have submitted to it. By contrast, a forum challenge falls to be decided in the exercise of the court's equitable jurisdiction. We have already cited the passage from Sim, in which Lord Kinnear made it clear that the plea of forum non conveniens is to be determined by a consideration of what the ends of justice require. Further, in a passage in Société du Gaz de Paris v. Société Anonyme de Navigation "Les Armateurs Français 1926 S.C.(H.L.) 13 at p. 22, described by Lord Goff of Chieveley in The Spiliada as a statement of principle, Lord Summer said this:-

"The real proposition is, I think, that the Court has to consider how best the ends of justice in the case in question and on the facts before it, so far as they can be measured in advance, can be respectively ascertained and served. I would therefore venture to suggest, what I think is in conformity with the conclusion already stated in different words by your Lordships, with only a slight amendment, that the canon is nearly laid down in Lord Cowan's words in Clements's case: Is the other forum -the existence of which is of course a condition precedent to the application of the plea at all-"more convenient and preferable for securing the ends of justice?" The true course is to leave out the words "more convenient and," because one cannot think of convenience apart from the convenience of the pursuer or the defender or the Court, and the convenience of all these three, as the cases show, is of little, if any, importance. If you read it as "more convenient, that is to say, preferable, for securing the ends of justice," I think the true meaning of the doctrine is arrived at. The object, under the words "forum non conveniens" is to find that forum which is the more suitable for the ends of justice, and is preferable because pursuit of the litigation in that forum is more likely to secure those ends."

14.      In our judgment, it would be inconsistent with the purpose identified by Lord Summer in the passage just cited if, by reference to such matters as the degree of a party's participation in the proceedings or the timing of the challenge, the court were to be disabled from considering what the interests of justice require in a particular case. Factors such as these may be relevant in determining how best the ends of justice may be served, but they cannot operate as an absolute bar to an application for a stay.

15.      The two cases cited by the plaintiff in support of its misdirection ground merit discussion. In Wright v Rockway Ltd [1994] JLR 321, Collins J.A. made the following observations:-

"I would add not only that it would seem far too late for Rockway to seek to stay the action against them on the ground of forum non conveniens, but also that if they were to seek to do so they would face the insurmountable difficulty that they have already served an answer and thus accepted the jurisdiction of the court."

16.      As the plaintiff acknowledges, these words are obiter dicta. Further, it appears that the effect of the service of an answer was not the subject of argument. Finally, and in any event, the pronouncement is, in our judgment, inconsistent with the principles on which rests the court's power to grant a stay, and ought not to be followed.

17.      In Gheewala, proceedings were raised in Jersey. Non-resident defendants applied for a stay of proceedings on the ground of forum non conveniens. The Royal Court granted the stay, holding that Kenya was the appropriate forum. That determination was reversed in this court, but the Privy Council re-instated the decision of the Royal Court. In giving the advice of the Board, Lord Walker of Gestingthorpe noted that there had been a discussion as to the burden of proof, and continued:-

"This discussion was prompted by the fact that although none of the family defendants is resident in Jersey, none applied to set aside the Royal Court's orders for service out. It may be that those defendants who strongly opposed the action proceeding in Jersey missed a tactical advantage in not applying to set aside the order for service out, since then it would have been for Mahesh to show that Jersey was an appropriate forum (see the speech of Lord Goff of Chieveley in Spiliada ([1986] 3 All E.R. at 854-856). But it was not suggested that a defendant's failure to apply for an order setting aside the service out disentitled him from applying for a stay (provided, of course, that he had not taken further active steps in the proceedings). (Emphasis supplied)

18.      In his judgment below, the Bailiff commented on that passage in the following terms, with which we agree:-

"Whilst any statement of Lord Walker is to be treated with the utmost respect, the emphasised passage ... ... from his judgment in Gheewala was clearly obiter. It was merely an aside by Lord Walker in the context of an observation that no-one had suggested that a defendant's failure to apply for an order setting aside service out disentitled him from applying for a stay on the ground of forum non conveniens. The point did not arise for decision and was not material to the outcome of the case. There is no suggestion in the judgment that the point had been argued."

19.      As we have noted earlier in this judgment, in paragraphs 6 and 7 of its first ground of appeal, the plaintiff contends that the Bailiff misdirected himself in law by entertaining the defendants' stay application notwithstanding that they (i) had "positively accepted and stated that [they would] not challenge the exercise of jurisdiction by the Royal Court" (ii) had "waived their right to do so" and (iii) "were estopped from so applying by reason of their conduct in the proceedings (in particular the filing of an Answer and the issue of a Request for Further and Better Particulars) and/or their positive statement of acceptance of the jurisdiction in a letter dated 18 February 2011 and in their Answer and their conscious election to submit to the jurisdiction of the Royal Court."

20.      In our judgment, the actions of and representations by the defendants which are relied on by the plaintiff should be looked at in their context. By Act of Court, dated 19th January 2011, the following order was pronounced in respect of the Admatch proceedings:-

"1. That unless the Defendant files 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 to 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;

2. That unless the Defendant pays to the Plaintiffs the outstanding costs in the sum of sixty three thousand, five hundred and twenty-nine pounds and seventy-nine pence, 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; ... ..."

On the same day, the Royal Court refused the defendant's application for leave to appeal.

21.      On 18th February 2011, Admatch served on LUAFC a Notice of Appeal, challenging the unless orders and the refusal of leave to appeal. The Notice contained an application for a stay of execution of the unless orders. By Act of Court, dated 23rd February, a single judge of this court ordered a stay of the unless orders until the conclusion of his consideration of an application to him by Admatch for leave to appeal. By Act of Court of 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 the full court.

22.      At the time when Bakers' letter of 18 February 2011 was written, therefore, the first action against Admatch was still live. Bakers expressed the view that there were "strong arguments" that both the present action and the first claim against Admatch "should have been litigated in England". It was explained, however, that, "in the circumstances" it was the defendants' intention not to challenge the court's jurisdiction. In our view, there was no possibility of the Admatch proceedings being stayed at that stage, and it would have made no sense to seek to have the present proceedings litigated separately in England. In their answer, which was filed on 11 March, the defendants made the point, in terms, that it was "convenient for this matter to be determined by the Court determining the Plaintiff's claim against Admatch".

23.      The hearing before the full court took place on 22nd March 2011. On that day, Admatch's application for leave to appeal was refused. The consequences of the court's decision were that the stay which was granted by the single judge expired and, in terms of the unless orders, Admatch's answer was struck out and LUAFC became entitled to judgment, which was given, as we have said, on 19th May. In our view, these events constituted a significant change of circumstances on which the defendants were entitled to rely in arguing that they should not be estopped from departing from the position which they had previously adopted. Having regard to the whole circumstances, we reject the plaintiff's submission that the Bailiff misdirected himself in law by entertaining the application.

2. Error in evaluation

24.      The plaintiff contends that the Bailiff took into account a number of irrelevant factors, as more fully set out at paragraph 6 above. These can be summarised as follows:-

(i)        The existence of proceedings in England;

(ii)       Saving in expense;

(iii)      Location of witnesses;

(iv)      Attendance of witnesses;

(v)       Change of circumstances after judgment in the Admatch proceedings.

25.      We have carefully considered the arguments advanced by the plaintiff in support of this part of the second ground, and find it to be without substance. In its criticism of the Bailiff's conclusions in respect of witnesses (c and d), the plaintiff contends that he found "that the majority of witnesses in the current proceedings will be resident in England without sufficient basis so to do and without any evidence as to the specific individuals who either party intend(s) to call" and "that the witnesses would be more likely to attend in England than Jersey, without any knowledge as to the witnesses or as to which witnesses would be likely to give evidence in which court." As to the first of these, Advocate Tracey, who appeared for the plaintiff in the Royal Court, said, in terms that, as far as he was aware, the plaintiff's witnesses "will be certain [LUAFC] employees and a former employee, all of whom do live in England". (Transcript, 11 August 2011, page 41) We can find nothing in the Bailiff's judgment to the effect that the witnesses would be more likely to attend in England than Jersey. On the contrary, what he said was this:-

"I have no knowledge at this stage as to who would be willing to give evidence in Jersey but the best prospects of ensuring that all relevant witnesses can be compelled to appear before the fact-finding tribunal would be if the case were heard in England where the majority of witnesses are resident."

26.      Contrary to the plaintiff's submissions, we have no doubt that the existence of proceedings in England, the question of expense and the granting of the default judgment were all matters relevant to the question that the Bailiff had to decide. Indeed, the plaintiff does not advance any reason in support of its contention that they were irrelevant. Instead, it seeks to argue that the Bailiff's assessment of the materiality of each of these factors was flawed. Such arguments, however, go to the weight which he accorded to them rather than to their relevance. We are, in effect, being invited to re-try these issues. That is not the function of this court, and we decline to do so.

27.      In paragraph 9 of its Notice of Appeal, the plaintiff identifies fifteen matters that it claims to have been relevant to the Bailiff's decision but which, it argues, were left out of account. Of these, three were not advanced by the plaintiff in the court below. These are:-

"(a) All or substantially all of [the LUAFC] documents are in Jersey" (paragraph 9(b));

"(b) The interests of the Jersey court ... ... in investigating the veracity of evidence submitted to it which is alleged to be an instrument of fraud" (paragraph 9(h)); and

"(c) ... ... the risk of the Plaintiff's claims being time-barred" (paragraph 9(i)).

28.      It is correct to say that Advocate Redgrave, who appeared for the defendants at the stay hearing, submitted that the location of documents was a matter which pointed to England as the appropriate forum. As he put it, "the central issue" without which the plaintiff's claim could not succeed was this:-

"is the fourth draft a forgery made up after the event or did it represent something that was being negotiated, discussed, agreed in 2004?" (Transcript, page 14)

Advocate Redgrave characterised the foundation of the plaintiff's case on that issue as being the absence in the plaintiff's files, prior to March 2005, of evidence of the agreement. (ibid.) These documents, he submitted:-

"must be presumed to be in Leeds and the people who have control over them are in England, in, no doubt in Leeds."

29.      Advocate Tracey, who appeared for the plaintiff, responded in this way:-

"a considerable number of relevant documents and materials have of course already been marshalled on this Island as part of the preparation for discovery in the first proceedings ... ... some documents are without [the jurisdiction] some documents are within". (Transcript, pages 39-40)

30.      Having regard to these exchanges, it is clear to us that it was not the plaintiff's position in the court below that "all or substantially all" of the LUAFC documents are in Jersey. Further, neither the interests of the Jersey court, nor limitation problems were mentioned during the hearing. It is too late for the plaintiff to seek to introduce these arguments now.

31.      In paragraph 9(d), the plaintiff makes special mention of "the Cambridgeshire factor", and complains that the Bailiff appears to have wholly disregarded it. The term was coined by Lord Goff of Chieveley in The Spiliada, at page 469D, and more fully explained in his speech at pages 485E-486C. The plaintiffs in that case had been granted leave, ex parte, to serve proceedings in Canada. The defendants sought discharge of the ex parte order on the ground, among others, that the case had not been shown to be "a proper one for service out of the jurisdiction". The application came before Staughton J., who had already started to hear the trial of a similar action for damages in respect of another vessel, the Cambridgeshire, in which Cansulex was also a defendant. The application was dismissed. The Court of Appeal reversed the judge's decision, and the Judicial Committee reinstated it. In the passage referred to above, Lord Goff expressed the following views:-

"But the crucial point, in the judge's view, was the Cambridgeshire factor. This was regarded, certainly by Neill L.J., as relevant; and in this I find myself to be in agreement. The criticism of the judge's view of this factor goes, therefore, to its weight, as Neill L.J. indicated [1985] 2 Lloyd's Rep. 116 , 124 when he said that it seemed to him that the judge attached far too much importance to this factor. With all respect, however, when I read the judgments of both the Lords Justices, I consider that they underrated it. I believe that anyone who has been involved, as counsel, in very heavy litigation of this kind, with a number of experts on both sides and difficult scientific questions involved, knows only too well what the learning curve is like; how much information and knowledge has to be, and is, absorbed, not only by the lawyers but really by the whole team, including both lawyers and experts, as they learn about the interrelation of law, fact and scientific knowledge, having regard to the contentions advanced by both sides in the case, and identify in their minds the crucial matters on which attention has to be focused, why these are the crucial matters, and how they are to be assessed. The judge in the present case has considerable experience of litigation of this kind, and is well aware of what is involved. He was, in my judgment, entitled to take the view (as he did) that this matter was not merely of advantage to the shipowners, but also constituted an advantage which was not balanced by a countervailing equal disadvantage to Cansulex; and (more pertinently) further to take the view that having experienced teams of lawyers and experts available on both sides of the litigation, who had prepared for and fought a substantial part of the Cambridgeshire action for Cansulex (among others) on one side and the relevant owners on the other, would contribute to efficiency, expedition and economy - and he could have added, in my opinion, both to assisting the court to reach a just resolution, and to promoting a possibility of settlement, in the present case. This is not simply a matter, as Oliver L.J. suggested, of financial advantage to the shipowners; it is a matter which can, and should, properly be taken into account, in a case of this kind, in the objective interests of justice."

32.      We can find no express reference to the Cambridgeshire factor in the transcript of the hearing on 11 August. In its Notice of Appeal and written contentions, however, the plaintiff submits that the Cambridgeshire factor in this case is the fact that litigation in respect of the same issues as in the current proceedings has been running in Jersey for almost six years. It would have been difficult for the plaintiff to argue that the existence of the Admatch proceedings, which had never gone to trial, involved no experts and turned on the question of whether the fourth draft was ever agreed by the parties as binding on them, carried anything like the weight that the existence and progress of the Cambridgeshire action did in the determination of the forum argument in The Spiliada case. But Advocate Tracey did not seek to make that argument. The fourth chapter of his submissions concerned costs: "costs thrown away or costs saved". (Transcript, pages 32 and 49) There was only passing reference to the knowledge acquired by the lawyers in Jersey, and the emphasis was on the resultant waste of costs if proceedings had to be taken in England. What Advocate Tracey said was this:-

" ... ... if the proceedings, if these current proceedings were stayed in this jurisdiction and had to go up to England, what you would have is the years of litigation and knowledge in relation to the first proceedings firstly thrown away, at least in respect of the Plaintiff's current solicitors. The proceedings would naturally have to start again and that in the face of pleadings in these proceedings having closed here. There would inevitably be substantial costs thrown away. Now my friend, my learned friend referred to the English Court having the power at the end of the, possible end of the story in England making orders as to costs, as to costs thrown away in the Jersey proceedings. He didn't refer to a CPR rule in respect of that." (Transcript, page 53)

A similar point was made about knowledge having been acquired by the defendants' solicitors, and costs, therefore, being "thrown away" in the event of proceedings in Jersey being stayed. (Transcript, page 54)

33.      The Bailiff addressed these arguments at paragraphs 44(v) and 45(viii) of his judgment, concluding that, in the long term, costs were likely to be less if the matter were litigated in England rather than in Jersey. In our view, that was a conclusion which he was entitled to reach on the material that was before him.

34.      On our analysis, none of the remaining 11 factors invoked in paragraph 9 of the Notice of Appeal is a relevant matter of fact which was not taken into account. Each is simply a restatement of the arguments deployed by the plaintiff in the court below. As we have observed in respect of the contention that irrelevant factors were taken into account, the plaintiff is, effectively, asking this court to re-try these issues. For the reasons that we have explained, we will not do so.

35.      The Bailiff was very well acquainted with the historical background to this action, within which the forum arguments fell to be understood. We have no doubt that he was entitled to hold, as he did, that England is the forum in which the case may be tried more suitably for the interests of all the parties and for the ends of justice.

36.      It follows that we reject the plaintiff's assertions that the Bailiff reached a conclusion which was outside the spectrum of reasonableness and that this was a clear case of something having gone wrong.

37.      In its written contentions, the plaintiff refers to events which have occurred since the hearing in the Royal Court. These were, as the plaintiff puts it, "the recent [alleged] contempt by Admatch and its directors ... ... of the post judgment orders [in the Admatch proceedings]" and "the fact that both parties and the Bailiff contemplate further proceedings in Jersey once disclosure has been extracted from Admatch". (Paragraph 53) We agree with the defendants that these matters are not relevant to the determination of this application. Any issue that remains to be determined in Jersey in connection with the Admatch proceedings will be concerned with enforcement of the judgment and costs, not with the issues in this case.

38.      It follows from what we have said above that we refuse leave to appeal the decision to stay these proceedings.

Authorities

Sim v. Robinow (1892) 19 R 665.

Spiliada Maritime Corporation v Cansulex Limited "The Spiliada" [1987] 1 AC 460.

Jaiswal v Jaiswal [2007] JLR 305.

Durant International Corp v the Federal Republic of Brazil [2010] JCA 214.

Société du Gaz de Paris v. Société Anonyme de Navigation "Les Armateurs Français 1926 S.C.(H.L.) 13.

Wright v Rockway Ltd [1994] JLR 321.