Jersey Unreported Judgments

Business dispute - reasons regarding summons brought by the plaintiff and decision regarding application for discovery brought by the first defendant.

[2015]JRC249

Royal Court

(Samedi)

3 December 2015

Before     :		Advocate Matthew John Thompson, Master of the Royal Court
Between	Richard Campbell		Plaintiff
And	Robert Campbell		First Defendant
And	Longton Holdings Limited		Second defendant
And	Financial Consultants (Jersey) Limited		First Party Cited
And	FCM Limited		Second Party Cited

Advocate G. C. Staal for the Plaintiff.

Advocate M. T. Jowitt for the First Defendant.

CONTENTS OF THE JUDGMENT

		Paras
1.	Introduction	1-3
2.	Richard's summons for further and better particulars	4-27
3.	The parties' contentions	28-31
4.	Decision	32-36
5.	Richard's application for specific discovery	37-42
6.	The economic effect of the parties' cases	43-50
7.	The applicable legal principles	51-53
8.	The parties submissions	54-77
9.	Decision	78-99
10.	Constructive Trust	100-101
11.	Conclusion on specific discovery application	102
12.	The overall conduct of the parties to this litigation	103-106

judgment

the master:

Introduction and general background

1.        This judgment firstly represents my detailed reasons in respect of a summons brought by the plaintiff, whom I shall refer to as Richard, in respect of proceedings brought by Richard against the defendants, whom I shall refer to as Robert and Longton Holdings Limited ("Longton"), seeking further and better particulars of Robert's answer.  Secondly this judgment contains my decision in respect of an application for specific discovery also brought by Richard against Robert. 

2.        The general background to the dispute between Richard and Robert was set out in a judgment of Sir Michael Birt as Bailiff in the present action reported at Campbell-v-Campbell and Longton [2014] JRC 213B at paragraphs 4 to 17.  I adopted those paragraphs for the purposes of this judgment.  

3.        Since Sir Michael Birt's judgment, part of the issues between Richard and Robert have been resolved, as Richard and Robert have agreed terms as to the ownership of shares in Longton.  The terms of this agreement are recorded in a consent order approved by Sir Michael Birt and dated 22^nd June, 2015.  Pursuant to this consent order it was agreed that Richard was entitled to 50% beneficial ownership of Longton.  On the pleadings, while Richard had claimed a 50% interest, Robert had contended that he held 51% of Longton beneficially with Richard only holding 49%.  It was further recorded in the consent order that Longton had never been an asset of any partnership between Richard and Robert.  I refer to the relevant part of the pleadings of Richard and Robert in respect of this issue later in this judgment. 

Richard's summons for further and better particulars

4.        I firstly deal with Richard's application for further and better particulars of Robert's answer by a summons dated 26^th August, 2015.  By the time this summons came to be heard, the issues between the parties had narrowed, because certain particulars had been provided as had certain schedules which I explain in more detail below.  To understand the effect of these documents, however, it is necessary to record the current state of the pleadings and what particulars have been provided by Robert both prior to issuing the present summons before me and by the time of the hearing of Richard's summons. 

5.        The claims currently brought by Richard are recorded in a re-amended order of justice dated 11^th November, 2014. 

6.        Robert filed an answer on 3^rd December, 2014. 

7.        A reply was filed on 24^th December, 2014. 

8.        A request for further and better particulars comprising of 35 requests and running to 18 pages was filed on 10^th February, 2015. 

9.        Requests 1 to 16 of this request for further and better particulars however were not pursued because shortly after the request for further and better particulars Robert conceded in open correspondence, that Richard was entitled to a 50% share in Longton which was therefore owned by Richard and Robert beneficially in equal shares. 

10.      Answers to the remaining requests for further and better particulars were provided on 17^th March, 2015, 1^st April, 2015, and 6^th May, 2015, prior to issue of Richard's summons on 26^th August, 2015, together with a clarification statement dated 14^th May, 2015. 

11.      Subsequent to the issue of Richard's summons, further and better particulars dated 5^th October, 2015, were provided as well as a schedule analysing the source of funds for loans made by Robert to Longton attached to a letter dated 26^th October, 2015, from Robert's English Solicitors Wragge Lawrence Graham ("the October Schedule"). 

12.      As a result of the filing of further and better particulars on 5^th October, 2015, and the provision of the October Schedule, Richard's application was narrowed to the following issues:-

(i)        That Robert within 7 days should file and serve proper further and better particulars in response to requests 32, 34.2, 34.5, 34.6 and 34.7 of Richard's request dated 10^th February, 2015;

(ii)       An order was sought that the October Schedule should be provided by way of further and better particulars and/or verified by a statement of truth;

(iii)      To the extent not already covered by request (i) Robert should provide further and better particulars of the "informal arrangement" referred to in the particulars produced on 5^th October, 2015.  Richard therefore sought further and better particulars of this informal arrangement by reference to paragraphs 34.5 to 34.7 of his request dated 10^th February, 2015. 

13.      In order to evaluate the issues that needed to be determined and to put these issues in their proper context it is necessary to set out certain parts of Richard's re-amended order of justice, the answer filed by Robert, Richard's request for further and Better Particulars and the various answers given by Robert to Richard's request for further and better particulars.  These extracts are also set out because later in this judgment I comment on the approach taken by both parties to both applications before me. 

14.      The material paragraphs of the re-amended order of justice are paragraphs 21 and 45 to 49 which state as follows:-

"21. At about the end of June or the beginning of July 2002, the London Property was recommended to Richard by Will Dickens, a member of staff of King Sturge.  Shortly after Richard had viewed the London Property, Richard (who was in London) telephoned Robert and proposed its purchase.  Robert was at the material time on holiday with his family and LC in France, staying with LC's sister.  When Robert heard that the purchase price of the London Property was likely to exceed £3.3 million (including related purchase costs) he initially dismissed Richard's proposal and expressed the view that he and Richard could not afford the London Property.  After further discussions with Richard, Robert accepted that the London Property represented good value for money and accepted that, if funding could be raised, the acquisition of the London Property should proceed.  Robert and Richard also discussed the proposed purchase of the London Property with LC, with Richard on the phone in London and Robert and LC in France.  On the basis that the London Property would be owned by Robert and Richard (via Longton) on a 50:50 basis, LC orally agreed that she would be willing to lend monies to Robert and Richard in order to facilitate the purchase of the London Property.  LC also agreed that Robert and Richard should try and buy the London Property.

45.      It is averred that, pursuant to the agreements referred to at sub paragraph 43. c. above, during the period 25 July 2007 to 31 December 2009 (and according to an email sent by Robert to Richard dated 14 December 2011) the following further funds were advanced to Longton from the Business in order to assist with the payment of monies due in respect of the RBS Loan and the Longton Loan and the following interest payments were made to Robert pursuant to the Longton Loan:-

Date/approximate date	Advance of Monies to Longton (£)	Interest Payment made by Longton in connection with the Longton Loan (£)
Late 2007	80,000
Late 2007		88,170
May 2008	90,000
5 June 2008		117,840
12 November 2008	70,000
5 December 2008		88,600
12 December 2008	25,000
16 December 2008		21,602.95
9 June 2009		39,650
22 July 2009		21,923.52
Second half of 2009		51,502.69
Total	265,000	429,289.16

46.      It is further averred as follows: -

a.        In a telephone call between Robert and Richard that took place in early 2012 Robert confirmed to Richard that the funds that had been advanced to Longton (as referred to in his email to Richard dated 14 December 2011 and as set out in the table immediately above) had been taken out of the Business (and had not been advanced by Robert from his own personal funds).

b.        In his email to Richard dated 14 December 2011, Robert advised that the transfers  referred to in the table immediately above had been made  "on the HSBC account" and stated that "All other interest payments after that were made on the Barclays account."

c.        In an email that Robert sent Richard on 13 March 2012 Robert advised that "my accounts at HSBC got closed". 

d.        In contradiction of Robert's statements in Robert's email to Richard of 14 December 2011 and Robert's email to Richard of 13 March 2012, as referred to in sub paragraph 46.b. and c. above, in a letter to Dickinson Gleeson (Richard's Advocates) dated 21 October 2013 Lawrence Graham ("Lawrence Graham"), which firm acts for Robert and is now called Wragge Lawrence Graham, stated the following in connection with interest payments made by Longton to Robert:

"...As set out above in the ordinary course of business interest in relation to the loans (as has been the case for a number of years) is automatically calculated and paid into an account in our client's name. To date, the interest paid into the relevant account has been neither disposed of nor transferred out of the account by our client, who has not accessed the account in the time the interest has been paid into it..." [Emphasis supplied]

e.        In letters from Lawrence Graham to Dickinson Gleeson dated 29 October 2013 and 8 January 2014 Lawrence Graham contradicted the position adopted on Robert's behalf in Lawrence Graham's letter dated 21 October 2013 (to the effect that the interest has only ever been paid into one account) and instead adopted the position that the relevant point is that the interest has been consistently been paid into "an account" in Robert's name. In addition in Lawrence Graham's letter to Dickinson Gleeson dated 29 October 2013, inter alia the following was stated: -

"As for the undertaking sought at paragraph 6 of your letter, we do not see why this is necessary in circumstances where our client has already undertaken not to dispose of or seek to transfer to any third party any monies paid to him to date or ongoing by way of interest in relation to loans owed by Longton." [Emphasis supplied].

47.      In the premises it is averred that, including by reference to the contradictory positions that have been adopted by or on Robert's behalf in connection with the account(s) to which interest payments have been made in connection with the Longton Loan (and any subsequent loan agreement entered into between Robert and Longton (as to which see paragraphs 49. and 49A. below)), prior to discovery and save as referred to in paragraphs 53A. to 53C. below, Richard is unable to give further particulars as to where interest payments have been made in connection with such loan(s) and reserves the right to amend this Re-Amended Order of Justice after discovery. 

48.      It is averred (on the basis that interest has been paid in relation to the Longton Loan at an interest rate of 3% above the UK base rate and that the capital sum due under the Longton Loan is in the amount of £2,919,019) that Longton has (or should have) made the following further interest payments in respect of the Longton Loan to Robert prior to the expiry of its term on 26 July 2012: -

Period	Interest Rates	Amounts
1 December 2009 - 31 May 2010 (181 days)	3.5% (Base rate 0.5%)	£50,662.97
1 June 2010 - 30 November 2010 (182 days)	3.5% (Base rate 0.5%)	£50,942.88
1 December 2010 - 31 May 2011 (181 days)	3.5% (Base rate 0.5%)	£50,662.97
1 June 2011 - 30 November 2011 (182 days)	3.5% (Base rate 0.5%)	£50,942.88
1 December 2011 - 31 May 2012 (182 days)	3.5% (Base rate 0.5%)	£50,942.88
1 June 2012 - 26 July 2012 (55 days)	3.5% (Base rate 0.5%)	£15,394.83
Total		£269,549.41

It is further averred that by the time that the term of the Longton Loan expired on 26 July 2012 Longton had paid interest to Robert pursuant thereto in the total amount of (£429,289.16 + £269,549. 41 =) £698,838.57. 

49.      It is averred that Richard does not know what loan arrangements have been put in place subsequent to the expiry of the term of the Longton Loan on 26 July 2012. It is further averred that interest payments are continuing to be made to Robert (including by reference to a letter dated 8 November 2013 from Franckel Law (who act for FCJ and FCM) to Dickinson Gleeson, Richard's Advocates, in which it was stated that "An interest payment is due to Robert shortly") and that Richard does not know what the terms of any new loan arrangements are.

49A.    In the event that interest has continued to be paid to Robert at the same interest rates as were applied in respect of the Longton Loan and payment of interest was made on the same dates as made pursuant to the Longton Loan, it is averred that the following further amounts will have been paid to Robert since 27 July 2012:-

Period	Interest Rate	Amount
27 July 2012 - 30 November 2012 (126 days)	3.5% (Base rate 0.5%)	£35,267.40
1 December 2012 to 31 May 2013 (182 days)	3.5% (Base rate 0.5%)	£50,942.88
1 June 2013 to 30 November 2013	3.5% (Base rate 0.5%)	£50,942.88
1 December 2013 to 1 June 2014 (182 days)	3.5% (Base rate 0.5%)	£50,942.88
Total		£188,096.04

It is accordingly further averred (on the basis set out in this paragraph) that by 1 June 2014  Longton had paid interest to Robert pursuant thereto in the total amount of (£429,289.16 + £269,549. 41 + £188,096.04 =) £886, 934.61."

15.      The relevant parts of Robert's answer are found at paragraphs 26. b., 44 and 45.

"26. (b) Save as aforesaid, paragraph 21 is denied.  The opportunity to buy a long lease of the London property was given to the First Defendant and to Longton Holdings Ltd.  Lucie Campbell loaned £564,920, (hereinafter 'the Lucie Campbell loan'), to the First Defendant at an annual interest rate of 4.25%, (which amounted to £24,009.10 per annum but was rounded to £24,000), for the purposes of the acquisition by Longton Holdings Ltd of the long lease of the London property.  This was confirmed in an email from Lucie Campbell dated 21st January 2005 in which she said: thank you for sending me the update re the figures.  I agree that you now owe me £564,920."

"44. The First Defendant pleads to paragraphs 45 to 49 as follows:

a         The monies which the First Defendant loaned to Longton Holdings Ltd came from the Lucie Campbell loan to the First Defendant, and from monies loaned interest-free to the First Defendant by Azure Gold Ltd.

b         In so far as the monies derived from the Lucie Campbell loan, the Lucie Campbell loan was to the First Defendant solely.

c         In so far as the monies derived from money loaned to the First Defendant by Azure Gold Ltd, pursuant to the loan, the First defendant is liable to repay the capital to Azure Gold Ltd.

d.        In the premises, it is denied that the Plaintiff had any interest in any of the funds loaned to Longton Holdings by the First Defendant and denied that the Plaintiff has any interest in the interest payments made by Longton Holdings to the First Defendant on such loans.

45. without prejudice to paragraph 45 above if, which is denied, the Plaintiff proves that he had any interest in any of the monies loaned and/or otherwise advanced to Longton Holdings Ltd by the First defendant, and any interest in the interest payments made by Longton Holdings to the First Defendant on such sums, then the extent of any such interest as the Plaintiff may prove falls to be assessed by reference to the terms of the verbal agreement."  [emphasis added]

16.      In Richard's reply, paragraph 26b of the answer was responded to at paragraph 8.2 which provides as follows:-

"8.2 as to paragraph 26:-

8.1      As to the final sentence of paragraph 26(a) it is denied, to the extent it be alleged, that the decision to purchase the London Property was the sole decision of Robert.

8.2.1   Insofar as paragraph 26(b) avers that "the opportunity to buy a long lease of the London Property was given to the First Defendant and Longton Holdings Limited", the allegations is not comprehensible and is inconsistent with Robert's pleaded case at paragraphs 6 and 7 that Longton and the London Property are the assets of a partnership between him and Richard.

8.2.2   It is denied that LC agreed to make any loan solely to the First defendant in connection with Longton and the purchase of the London Property.  (The loan that Robert has alleged was made solely to him in connection with Longton and the London Property shall hereafter be referred to as the ("Alleged LC Loan").  Robert is put to strict proof of all matters relating to the Alleged LC Loan including, without limitation, (a) the circumstances in which it is alleged to have been made, (b) its alleged terms including without limitation all terms as to the payment of interest, repayment(s) of capital and its duration, (c) the date/s upon which any monies were advanced pursuant to it, (d) the bank accounts from which any such monies were advanced by or on behalf of LC, (e) the bank accounts to which any such monies were paid (having been so advanced by or on behalf of LC), (f) the dates upon which any payments of interest and repayment>s) of capital were made, (g) the source of the funds used to make all such payments of interest and repayments of capital and (h) the method by which such payments of interest and repayments of capital were effected including details of the bank accounts from which the transfers of monies consisting such payments and repayments were made and the bank accounts to which such payments were made.

8.2.3   It is denied that the email from LC dated 21 January 2005 provides any confirmation either of the full amount of the monies advanced by LC to Robert and Richard in connection with Longton and the London Property (the "LC Loan") or any confirmation of the Alleged LC Loan.  (Richard's case as to the LC Loan is pleaded inter alia at paragraphs 22. A. iv., 22.d, 22.i, 34 and 41 of the Re-Amended Order of Justice and reference is made thereto).  It is averred as follows:-

8.2.3.1 The email from LC dated 21 January 2005 was intended by LC to provide a confirmation of the amount then owed to her by Robert and Richard in respect of the LC Loan.

8.2.3.2 Robert has acknowledged that the LC Loan was made by LC to both Robert and Richard inter alia by way of emails to LC dated 25 May 2006 and 26 October 2007 and acknowledgements to that effect have been made on Robert's behalf in a letter from Lawrence Graham ("LG") to Cooke, Young & Keidan LLP "CYK") dated 21 March 2014 and in a letter from LG to CYK and PCB Litigation ("PCB") dated 24 March 2014.  (LG is a firm of English solicitors which at the material time acted for Robert.  It is now part of the merged firm Wragge Lawrence Graham & Co ("WLG") that continues to act for Robert and any references herein to LG shall include references to WLG.  CYK is a firm of English solicitors that acts for Richard.  PCB is a firm of English solicitors that acts for LC.

8.2.3.3 In the email dated 25 May 2006, Robert stated inter alia, "Money loaned by you [a reference to LC] to Robert and Richard for Bond Street [a reference to the London Property] £565K".  It is averred that this is a reference to the LC Loan.

8.2.3.4 In the email dated 26 October 2007 (which set out at its foot the email dated 25 May 2006) Robert stated inter alia:-

"Richard and I have some outstanding loans with you [a reference to LC].  These are:

The amount of £564,920.  We are paying interest to you on this regularly."

It is averred that text in the second paragraph of the above quoted extract is a reference to the LC Loan.

8.2.3.5 In the letter from LG to CYK dated 21 March 2014 it was asserted on Robert's behalf that the obligation owed to LC Loan was one in respect of which Robert and Richard were jointly and severally liable.  LG stated inter alia:-

"Your client [Richard] will be aware that the sums owed in this respect are owed by our client [Robert] and your client [Richard] on a joint and several basis."

8.2.3.6 In the letter from LG and PCB dated 24 March 2014, LG stated inter alia:-

"It is our client's case that in a personal capacity he owes £350,000 to Lucie (Robert's Defence, paragraph 30).  It is also our client's case that £660,920 is owed to Lucie by our client and Richard on a joint and several basis (Robert's Defence, paragraph 43; this firm's letter to Cooke, Young and Keidan dated 21 March 2014).  Our client's liability to Lucie is therefore £1,010,920.""

17.      The relevant requests for further and better particulars are requests 20.1 to 20.5 and 32 and 34.1 to 34.7.  The material particulars provided by Robert in response to these requests as set out above are found in a number of responses.  The relevant requests are as follows:-

"20.1   When the loan of £564,920 is alleged to have been made.

20.2    Whether the terms for such loan were agreed orally or in writing. 

20.3    If orally state: -

20.3.1  who was present at the time the alleged agreement was made; 

20.3.2  where was the alleged agreement made;

20.3.3  the words used or their gist; and

20.3.4  all of the terms of the alleged oral agreement including without limitation as to (a) how the funds loaned were to be advanced, provided or transferred to the First Defendant by Lucie Campbell, (b) what the capital repayment terms were and (c) as to the method by which repayment was to be effected to the First Defendant. 

20.4.   If the alleged agreement is alleged to have been made in writing, identify each document relied on and provide a copy.

20.5    Please identify how the funds comprising the said loan were advanced, provided or transferred to the First Defendant.  In particular please:-

           20.5.1   identify the amount of each such transfer;

           20.5.2   when each such transfer was made;

           20.5.3   the account from which each such transfer was made;

           20.5.4   the account to which each such transfer was made including:-

The account number of each such account;

The name of the account holder of each such account;

The name of the bank at which each such account was held;

The address of the branch of the bank at which each the account was held.

32.      The First Defendant has not pleaded (or properly pleaded) to any of paragraphs 45-49.  Accordingly state in relation to the allegations therein contained which the First Defendant admits, does not admit or denies.

34.      In respect of each amount alleged to have been loaned to the First Defendant by Azure Gold Limited please: -

34.1    State the amount loaned.

34.2    state the date upon which the loan is alleged to have been made;

34.3    identify the bank account from which the loan is alleged to have been advanced or by Azure Gold Ltd. to the First Defendant including without limitation: -

           34.3.1   the account number;

           34.3.2   the name of the account holder;

           34.3.3   the name of the bank with which the account is/was held; and

           34.3.4   the address of the branch at which the account is/was held;

           34.4.     identify the bank account to which the loan is alleged to have been paid including without limitation: -

           34.4.1   the account number;

           34.4.2   the name of the account holder;

           34.4.3   the name of the bank with which the account is/was held; and

           34.4.4   the address of the branch at which the account is/was held.

34.5    state whether the alleged loan agreement was reached orally or in writing. 

           34.6      if orally: -

           34.6.1   who was present at the time the alleged loan agreement was made and who acted on behalf of Azure Gold in making such agreement;

           34.6.1   where the alleged loan agreement was made; and 

           34.6.3   the words used or their gist.

34.7    If in writing please identify each document relied on and provide a copy."

18.      The answer to requests 32 was provided on 17^th March, 2005, as follows:-

"In response to request 32:

(a)       As to paragraph 45 of the Re-Amended Order of Justice the First Defendant will plead a particularised case in response by 14 days from 18th March 2015.

(b)       As to paragraphs 46a. to c. of the Re-Amended Order of Justice, the first Defendant's case is adequately pleaded at paragraph 44a. to d. and paragraph 45 of the Answer.  It is denied that the Plaintiff had any interest in any of the monies loaned and/or otherwise advanced to Longton Holdings Ltd by the First Defendant.

(c)       As to paragraphs 46d and e and paragraph 47 of the Re-Amended Order of Justice, neither correspondence between lawyers nor the opinions of the plaintiff's lawyers as to what inferences should be drawn from correspondence have any place in pleadings.  The First defendant is not required to plead to such things and does not do so.

(d)       As to paragraphs 49 of the Re-Amended Order of Justice, the First Defendant cannot and does not plead to the Plaintiff's state of mind or state of knowledge."

19.      A response to request 34 was also provided on 17^th March, 2005 as follows:-

"In response to request 34:

(a)       34.1: the further particulars request will be provided by 14 days from 18th March 2015.

(b)       34.2 to 34.7 inclusive: these are requests for evidence to which the Plaintiff is not entitled."

20.      The further and better particulars provided on 1^st April, 2015, state as follows:-

"1.       In response to request 33:

           £2,619,087 represents the total amount loaned to the First Defendant by Azure Gold Limited.

2.        In response to request 34.1:

           £2,619,087 represents the total amount loaned to the First Defendant by Azure Gold Limited.

3.        In response to request 35:

           All the funds lent to Longton since 25 July 2007 were derived from Lucie Campbell loan of £564,920. [emphasis added]"

21.      The further and better particulars provided on 6^th May, 2015, state as follows:-

"1.      In response to request 20.1

           The loan of £564,920 was made in two amounts; £400,000 and £164,920.  The sum of £400,000 was loaned on or around 20 January 2005 by the First Defendant.  The sum of £164,920 was an outstanding balance of monies owed by Longton to the First Defendant as at 19 November 2003.

2.        In response to requests 20.2, 20.3 and 20.4:

           A casual arrangement was in place in relation the loans referred to in response to request 20.1 in which no terms were formally agreed.  Lucie Campbell was happy for the First Defendant to use funds transferred to him without her prior permission as and when the need arose.  The First defendant therefore informed Lucie Campbell on 20 January 2005 that he had taken a loan of £400,000 from funds transferred to him by her earlier and that £164,920 was outstanding in respect of monies loaned to him.  Lucie Campbell confirmed her understanding and agreement that this sum was outstanding in an email dated 21 January 2005.  There was no explicit agreement as to terms.

3.        In response to request 34:

           Azure Gold Limited made a loan of £74,865 the First Defendant on or around 8 December 2007.  There was a previous loan of £9,135 but the First Defendant cannot currently give a date of that loan on the present information available.  No terms in relation to these loans were formally agreed.

4.        In response to paragraph 45 of the Re-Amended Order of Justice dated 11 November 2014 (the "Re-amended Order of Justice"):

           The First Defendant admits the interest payments set out in paragraph 45."

22.      These further and better particulars were provided following an act of court issued by me dated 22^nd April, 2015, which required Robert to provide further and better particulars of requests 20.1 to 20.4, 32, 34.2, 34.5, 34.6, 34.7.  Requests 20.5, 34.3 and 34.4 were refused.  I did not give detailed reasons for my refusal but in summary the requests were refused as they were requests for evidence. 

23.      In the particulars provided on 5^th October, 2015, Robert set out tables in response to request 32 detailing the amounts he alleges he advanced to Longton and interest paid to him by Longton in connection with the Longton Loan.  It is not necessary for the purpose of this judgment to set out the relevant tables. 

24.      By these tables Robert contends that a total of £1,018,161.08 has been received by way of interest payments from Longton and that a further £72,375.67 is outstanding. 

25.      In respect of requests 34.5 to 34.7, the particulars of 5^th October, 2015, state as follows:-

"Requests 34.5 - 34.7

The loan from Azure Gold was an informal one and as such, there was no formal agreement in relation to the monies whether orally or in writing.

2.4 The First Defendant loaned a small amount of his own monies to Longton.  These include a sum of £2,100 lent on 2 January 2002 and £11,000 lent on 12 July 2002.  There was also a loan made of £2,100 on 2 January 2002 in relation to the reduction of share capital but this was immediately repaid.

2.5 The First Defendant admits that each and every sum identified in the table at paragraph 34 of the Re-Amended Order of Justice was paid into the HSBC bank account in Hong Kong.

2.6 In respect of the sum of £11,000 lent to Longton please refer to the response to paragraph 2.4 above.  Other than an additional sum of £2,100, no other sums were lent by the First Defendant to Longton.

2.8 No sums have been repaid in connection with any loans and/or advances made by the First Defendant to Longton."

26.      In respect of the October Schedule the final page of the covering letter of 26^th October, 2015, contains a summary and states as follows:-

"Summary of source of funds spreadsheet

Prior to having sight of the disclosure from Longton our client did not recall either making transfers to Longton from the 833 account or using his own monies to loan from Longton. You will be aware that these transfers were made some time ago so it is hardly surprising that without contemporaneous records our client did not recall these transfers. We note that the bulk of the funds were transferred from the 888 account with only seven transfers being made from the 833 account. Further, only the sum of £13,100.00 of our client's own money was transferred to Longton with the remainder being borrowed by our client from funds belonging to Lucie Campbell and AG.

We refer to you to the summary of transfers made from the 888 account set out on page 11 of the document. The sum of £2,076,438.75 was borrowed by our client to loan to Longton from this account. Of this £527,765.01 was lent from monies belonging to Lucie Campbell and £1,548,673.74 was lent from monies belonging to AG

We then refer you to the summary of transfers made from the 833 account set out at page 20 of the document. The sum of £1,105,470.00 was borrowed by our client to loan to Longton from the 833 account. Of this sum £37,154.99 was borrowed by our client from monies belonging to Lucie Campbell and £1,068,315.01 was borrowed by our client from monies belonging to AG. As previously stated, page 21 of the document illustrates that £13,100 was lent to Longton directly from monies belonging to our client.

In total, the sum of £564,920.00 was borrowed by our client from Lucie Campbell to loan to Longton (the total of £527,765.01 and £37,144.99).

In total, the sum of £2,616,988.75 was borrowed by our client from AG to loan to Longton (£1,548,673.74 and £1,068,315.01 added together).

In grand total, our client transferred to Longton the sum of £3,195,008.75. Our client previously pleaded that he transferred only £3,184,007.00. We believe that the discrepancy of £11,001.75 (the sum of £3,195,008.75 less £3,184,007.00) is due to failure on our client's part to take into account currency conversion and transfer charges."

27.      Summaries of the source of payments made to Robert from the accounts referred to in Wragge Lawrence Graham's letter of 26^th October, 2015, the relevant part of which is set out above were found at pages 12, 22 and 24 of the October Schedule. 

The parties' contentions

28.      The contentions of Richard in relation to the issues that remained outstanding were as follows:-

(i)        The October Schedule should form part of Robert's pleaded case and should either be ordered by the court to be provided as further and better particulars or should be verified by a statement of truth. 

(ii)       Robert should now plead all facts and matters relied upon as to what the informal arrangement was in respect of loans from Azure Gold ("AGL").  Richard still does not know what case he had to meet in that regard.  This was in the context of Robert having changed his case.  It was in this context that paragraph 1 of Richard's summons sought full and proper particulars in response to requests 32, 34.2, 34.5, 34.6 and 34.7. 

29.      Advocate Jowitt on behalf of Robert contended that the October Schedule was evidence not a pleading.  While Robert's case had changed, all these matters would be dealt with by a detailed witness statement he was due to provide shortly.  From a pleading perspective the case was clear and there was nothing further for Robert to plead.  There were no written documents in relation to the loan agreement in respect of loans from AGL.  This was a family business which was run informally where monies and personal bank accounts were used for different businesses.  Advocate Jowitt accepted that it was for Robert to explain how these arrangements worked in detail but this was a matter for evidence.  Robert's case in part had changed because it was only on analysis of the records that have been produced from HSBC involving a forensic accountant that what monies had been loaned when they were loaned and from whom had become clear.  Robert's earlier recollection to that extent was flawed.  The position that has now been arrived at is that Richard knows Robert's case as to when payments were made and what amounts were made and this will be verified by a witness statement.  The accuracy of that witness statement is a matter for trial.  The flaw in Richard's approach was that he was trying to cross-examine Robert through the use of further and better particulars about changes to Robert's case or by reference to documents Richard alleges are inconsistent with Robert's case.  That was not an appropriate case of a request for particulars. 

30.      In respect of Robert's case in relation to paragraphs 45 to 49 of the re-amended order of justice Advocate Jowitt contended:-

(i)        Paragraph 45 was dealt in Robert's response dated 17^th March, 2015, to request 32 of the request for further and better particulars and paragraph 4 of the particulars dated 6^th May, 2015;

(ii)       In respect of paragraph 46 this was a request for evidence;

(iii)      Paragraph 47 was a matter of submission and did not require a response;

(iv)      Paragraph 48 had been dealt with by the further and better particulars provided on 5^th October, 2015;

(v)       Any remaining requests were frivolous and disproportionate.

Decision

31.      In relation to the request that Robert should provide the October Schedule by way of further and better particulars, the fundamental issue between Richard and Robert was where Robert obtained the funds he loaned to Longton and whether these came from their mother by way of a loan to Robert or a loan to Robert and Richard jointly, or whether the funds came from any legal entity forming part of the business including AGL.  Ultimately, Richard is entitled to know what Robert's case is as to where the money came from and when the money was borrowed.  Richard is also entitled to know when those monies were paid to Longton.  That information is found at pages 12, 22 and 24 of the October Schedule.  These pages are not just evidence but summarise Robert's present case in relation to where monies he borrowed came from and when these monies were advanced to Longton.  Accordingly, I ordered Robert within 7 days to provide by way of further and better particulars of Robert's case, a schedule recording the payments set out at paragraphs 12, 22 and 24 of the October Schedule. 

32.      I refused the request for the remaining parts of the October Schedule to be provided by way of further and better particulars.  This was because I accepted Advocate Jowitt's submission that the remainder of the October Schedule is evidence which it is appropriate for Robert to address in evidence advanced when witness statements are produced.  It is a matter for Robert to what extent he explains the payments or whether they are explained by reference to evidence from the forensic accountant to whom Advocate Jowitt referred. 

33.      In respect of paragraph 1 of Richard's summons and the application seeking further and better particulars of the informal arrangement, I refused these requests.  Robert has made it clear that there was no formal contract either agreed in writing or orally in respect of the loans from AGL and this was an informal arrangement.  I also have recorded my understanding of the submissions made by Advocate Jowitt as to how the informal arrangement worked at paragraph 29 above.  In my judgment at this stage of the action which started in early 2014, the most effective way to proceed is for Robert to provide his witness statement to explain how the informal arrangement worked in respect of each sum advanced by AGL to Robert.  Robert through Advocate Jowitt is on notice that I expect Robert's witness statement to explain precisely how the arrangement worked in respect of each payment, including who authorised or was aware of each payment said to be from AGL, which account the monies advanced came from and how these were recorded in the books and records of AGL.  His evidence should also address who else in AGL was involved in the making of these loans.  The essence of his case however that monies were advanced under an informal arrangement with no written documentation is clear. 

34.      Having regard to the approach as to when particulars should be ordered set out in Daisy Hill Real Estate Limited v Rent Control Tribunal [1995] JLR 176, which I adopted in Crociani v Crociani [2015] JRC 177, I do not consider that Richard would be taken by surprise in having to deal with the case that Robert now advances.  He knows when Robert says amounts were advanced from AGL to Longton how much was advanced and he has a detailed schedule showing from which accounts various monies were advanced.  He also knows that these advances occurred in the informal operation of a family business. 

35.      To avoid any misunderstanding I ordered that to the extent that the particulars to be provided in relation to the October Schedule are inconsistent with any earlier particulars provided, in particular answers 1 to 3 provided on 1^st April, 2015, answers 1 to 3 of the further and better particulars dated 6^th May, 2015, and the Clarification Statement dated 14^th May, 2015, then Robert's case is that set out in the particulars I have ordered be provided by this decision. 

36.      In relation to the request that Robert plead properly to paragraphs 45 to 49A of the re-amended order of justice I agreed with the submissions made by Advocate Jowitt, which I have recorded at paragraph 30 above and therefore concluded that no further particulars or clarification was required in response to paragraphs 45 to 49A. 

Richard's application for specific discovery

37.      The documents sought by Richard in his amended summons in summary were as follows:-

(i)        A supplemental list of documents be filed verified by affidavit in proper form (paragraph1);

(ii)       Disclosure of all further relevant documents related to ownership of any entity forming part of the business or Longton including any Wills, tax advice or documents relating to the K Trust, or following on from various letters sent by Dickinson Gleeson (paragraph 2.1):

(iii)      Documents generated as a result of requests by Richard asking Robert to transfer 50% share of companies or entities forming part of the business, Longton or the Longton loan (paragraph 2.2);

(iv)      Documents showing the source of the sums referred to in the spreadsheet pleaded at paragraphs 34 and 41 of the re-amended order of justice (paragraph 2.3);

(v)       Documents relating to the payment and treatment of loans said to be made by Lucie Campbell ("LC") (paragraph 2.4);

(vi)      Documents relating to loans allegedly made by AGL to Robert, whether forming part of Robert's records or the records of AGL (paragraph 2.5); and

(vii)     Documents going to the source of funds used to pay interest from Longton to Robert (paragraph 2.8). 

38.      The essence of the dispute between Richard and Robert concerns who is entitled to benefit from the Longton Loan.  Richard claims fifty per cent of the capital of the loan due from Longton to Robert and interest paid to Robert on a constructive trust for Richard, by reference to paragraphs 22(a).(ii), 22(e), 50(a) and 50(b) of the re-amended order of justice. 

39.      Robert alleges in respect of monies borrowed from LC, now clarified in the sum of £564,920 as referred to in the first part of this judgment, that those monies were borrowed by him solely and therefore Richard has no interest in relation to them.  Robert also contends that he repaid these loans so if they were borrowed jointly (which Robert disputes), Richard is liable to account to Robert, as Robert has repaid such loans personally, Richard's claim is therefore offset by monies Robert has repaid to LC in respect of any joint liability Richard and Robert are found to owe her. 

40.      In respect of monies advanced from AGL, Robert's case is that he is liable to repay the capital of any monies borrowed from AGL to that company.  I add that if it is established that any money came from any other entity forming part of the business it is difficult to see why the same liability to repay that part of the business on the part of Robert would not arise.  It is Richard's case that monies taken out of the business would not have to be repaid to paragraph 22.a.v. of the re-amended order of justice. 

41.      In the alternative if Richard proves any entitlement to monies loaned to Longton by Robert and/or any interest payments made by Longton to Robert, then Robert contends he is entitled to 51% of such capital and interest and Richard 49%.  Richard's case by contrast is that he is entitled to a 50% share not 49%. 

42.      For the sake of completeness I note that in his reply at paragraph 6 Richard disputes Robert's case that assets were to be divided by reference to a split of 51%-49%. 

The economic effect of the parties' cases

43.      It is appropriate at this point to summarise the economic value of what is in issue in Jersey.  By reference to the pleadings of the parties' cases as they now stand.  Robert's present case is that he transferred to Longton the sum of £3,195,008.75 of which £564,920 was borrowed by Robert from LC, £2,616,988.75 from AGL and the balance of £13,100.00 was provided by Robert directly. 

44.      Richard claims 50% of the sum of £3,195,008.75 plus interest paid by Longton to Robert.  The amount of interest paid according to Robert is £1,018,161.08 plus an unpaid sum of £72,375.67, as set out in the further and better particulars dated 5^th October, 2015.  However, in respect of the capital of the loans advanced from AGL, Robert argues that this sum is liable to be repaid to AGL and the English Court will allocate any surplus in AGL after creditors are paid between Richard and Robert.  If he is correct the English Court will therefore decide whether that is on a 51%/49% basis or by way of equal division. Richard argues for immediate payment to him. 

45.      The economic reality of Robert and Richard's dispute in relation to AGL is therefore about 1% of the value of the sums borrowed from AGL, namely the difference between 50% and 49% which is the sum of £26,169.89. 

46.      I address later in this judgment the relationship between these proceedings and the English proceedings commenced by Richard. 

47.      To the extent that Richard establishes that monies were not borrowed from AGL but were borrowed from the business, he still claims no more than a 50% interest in such sums.  In other words the economic value of the argument is still over a 1% interest.  I accept that if the constructive trust claim fails and monies are returned to an entity within the business what Richard and Robert recover from that entity may vary depending what other liabilities those business have before distributions can be made, but such an issue is not a matter for the Royal Court.  Neither is Richard's concern that he may not recover any monies returned to AGL.  This is an issue in England where an account is sought; it is for Richard to take such steps as he is advised are necessary to address his concerns.  

48.      In relation to monies borrowed from LC, Robert alleges that he borrowed £564,920 which sum he has repaid.  While Richard is claiming 50% of this sum, it is difficult to see why Richard should not give credit for any sums borrowed jointly from LC which Robert has repaid personally.  I also note that Richard at paragraph 38.1 of his fifth affidavit filed in support of the present application refers to an email dated 19^th November, 2003, which he contends supports the proposition that "£839,854 was the amount Robert and I owed to LC in connection with Longton as of June 2003".  It is not in dispute that Robert has repaid LC in proceedings brought by LC against Robert a sum in excess of one million pounds representing borrowings from LC.  Again therefore it appears Robert has paid the entirety of any borrowings from LC even if such borrowings are found to have been made jointly by Richard and Robert.  If Robert has therefore repaid the sum of £839,854 and these sums were borrowed jointly as Richard alleges, then again it would seem appropriate for Richard as I presently understand matters to give credit for 50% of the sum repaid namely £419,927 against his claim for 50 % of interest paid by Longton to Robert. 

49.      The effect of this is that, if Richard establishes an entitlement to interest paid and to be paid by Longton to Robert in the total sum of £1,090,536, Richard would recover £545,268.  However, if Robert has repaid LC loans which Richard establishes were joint loans, from interest due would have to be deducted any loans to LC repaid by Robert solely where those loans were joint loans.  If the joint loans totalled £839,854, as Richard alleges, that half of that loan repaid by Robert is £419,927.  This sets the net value of Richard's claim to interest paid by Longton at around £125,000; if the sums borrowed from LC were £564,920 the net amount of interest at stake is £262,540.  If the loans were joint loans but Robert is entitled to keep interest paid by Longton then Richard may owe Robert money. 

50.      I have set out these figures because what is at stake in the Jersey proceedings in terms of the economic value of the disagreement between Robert and Richard ranges between £150,000 and around £290,000 if Richard's arguments prevail.  I have referred to this because it is clear, both from the costs claimed by Richard for the applications presently before me and the extent of the pleading and discovery issues raised that significant legal sums have already been spent and/or will be spent in this dispute.  Yet the real value of what is in issue is limited; the reality of what is at stake is a relevant factor to take into account in exercising any discretion in relation to Richard's application. 

The applicable legal principles

51.      There was no dispute between the parties on the applicable legal principles on a specific discovery application.  The leading case is Victor Hanby Associates Limited v Oliver [1990] JLR 337.  I summarised the principles in Vilsmeier v AI Airports International Limited & PI Power International Limited [2014] JLR N 26.  The first paragraph of the note reads as follows:-

"On an application for specific discovery, an applicant is required to show (a) a prima facie case that the defendant has, or has had, documents that have not been disclosed; (b) that the documents in question are relevant to matters in issue in the case-relevance is determined, primarily, by reference to the issues pleaded; and (c) that an order for specific discovery is necessary for disposing fairly of the case (Victor Hanby Associates Ltd. v. Oliver, 1990 JLR 337, applied; Trustcorp Ltd. v. Barclays Private Bank & Trust Ltd., 2007 JLR N [24], applied). Specific discovery should not be ordered where it is sought solely for cross-examination as to credit (Thorpe v. Greater Manchester Police (Chief Const.), [1989] 1 W.L.R. 665, applied)."

52.      I also note that in Booth v Zenith Trust Company Limited [2015] JRC 126 in response to an argument that an affidavit of discovery was required I stated:-

"...it is clear that an affidavit of discovery in proper form should be regarded as conclusive save in exceptional circumstances.

It is also clear that generally the party seeking further discovery should show on oath that there are documents relevant to matters in issue in the action to rebut the conclusive nature of the other party's affidavit of discovery."

53.      On the facts of Booth v Zenith I ruled that the affidavit of discovery was not conclusive because subsequent to an affidavit of discovery being provided, the defendant produced further documents which had been omitted from the affidavit of discovery.  I have referred to Booth v Zenith because Advocate Staal on behalf of Richard, in his submissions, was critical of the form of Robert's affidavit and contended that it was not conclusive. 

The parties' submissions

54.      Advocate Staal, to whom I am grateful for stepping in relatively late in the day for Advocate Dickinson, started by reference to the fact that the affidavit of discovery sworn by Robert was defective.  This was because the affidavit firstly did not contain a schedule 2 and therefore did not identify which documents had been but were no longer in the possession, custody or power of Robert.  Accordingly, the affidavit of discovery of Robert should not be accepted as conclusive, as in Booth v Zenith.  Secondly, again as in Booth v Zenith there has been supplemental discovery which had not had been the subject of any affidavit of discovery sworn by Robert in any form. 

55.      The request for documentation in relation to the ownership arrangements of all companies forming part of the business and Longton was relevant because of Robert's alternative case at paragraph 45 of the answer that Richard's entitlement to any benefit of the Longton loan was only an entitlement to 49% not 50%.  All of the material identified at paragraphs 2.1.1 to 2.1.4 of the summons would enable Richard to test the case advanced by Robert which Richard disputed. 

56.      The documents sought by paragraph 2.2 of the summons also went to the extent of Richard's interest in the Longton loan. 

57.      Advocate Staal complained that redacted bank statements had been produced by Robert.  He also complained that the bank statements produced were not complete, and that, if Robert no longer had them, that no affidavit had been produced explaining what bank statements were no longer in his possession, custody or power because they had been lost.  He raised these specifically because the accounts from which payments were made to Longton were accounts of Robert at HSBC.  HSBC's position was that they did not keep any bank accounts for more than 7 years.  Notwithstanding HSBC's position Robert had been able to produce bank statements in England and in Jersey which were more than 7 years old without explaining the entirety of records that he held.  This was what also underlay request at 2.3 of the summons namely any documents relating to the source of funds referred to in paragraphs 34 and 41 of the re-amended order of justice. 

58.      In respect of paragraph 2.4 the position was not clear.  Richard disputed Robert's case, as it is now put, on the source of funds from which Robert lent monies to Longton.  He therefore wanted to see all documents not yet disclosed in relation to loans made by LC to Robert including the holding or treatment of any such loans.  These documents could enable him to carry out a forensic exercise to see where loans came from to test any witness statement put forward by Robert or by a forensic accountant on his behalf. 

59.      It was important to see the records of AGL either in Robert's possession or in the possession of AGL so that Richard could see what sums had in fact been advanced and how the informal arrangement referred to in Robert's particulars of 5^th October, 2015, operated.  This was a matter solely within the control of Robert who was the operating force of AGL. 

60.      In relation to paragraph 2.8 and the uses to which interest payments received were used by Robert, Richard deposed at paragraph 137(b) of his fifth affidavit that use of these payments was relevant to whether or not Robert considered that Richard had any interest in these payments.  As an illustration Richard suggested that if Robert could use such interest payments for business purposes then that was consistent with Richard having an interest in the interest payments. 

61.      Advocate Jowitt in response contended as follows. 

62.      Firstly, insofar as bank statements had been redacted, this was to try to show Richard the relevant entry corresponding to the claims in Richard's order of justice.  However, Robert had produced in England full copies of all bank statements he had which were in an un-redacted form.  Richard therefore had the bank statements already and it had been agreed that the use of these documents could be made in Jersey without the need for any further discovery. 

63.      The issue of what will happen to any monies due to AGL is a matter to be determined in England.  Subsequent to filing of the answer in the present proceedings, Richard filed particulars of claim in England, where Richard claimed a 50% shareholding/interest in the companies/legal entities described by Sir Michael Birt as the business in the forum judgment, including seeking an order for Robert to take such steps as may be necessary to procure that 50% of the legal ownership of these companies is vested in Richard.  These proceedings do not concern Longton, which proceedings have been resolved.  What Richard was really seeking by his specific discovery application was evidence for use in the English proceedings. 

64.      In the forum proceedings, Richard contended the issue of Longton was separate from the issue of any ownership interests in companies' part of the business and therefore could be heard in Jersey.  He should not be permitted to depart from that approach. 

65.      The issue of ownership is not only being raised in England but is not raised on the pleadings in Jersey. 

66.      Richard's pleading does not set out the basis on which a constructive trust should arise.  The proper course is for any monies found to be due to AGL to be returned to AGL and Robert had accepted this was the case in his answer. 

67.      The approach taken in this litigation is uneconomic, which was a relevant factor to take into account in deciding how to exercise a discretion to order specific discovery. 

68.      Richard's case does not set out why he is entitled to interest.  Evidence relating to how monies were transferred from AGL to Robert and then loaned to Longton and how interest was paid do not assist Richard in establishing why he is entitled to a share in interest paid by Longton to Robert.  There is no loan agreement between Richard and Longton setting out any entitlement to interest. 

69.      Paragraph 1 of the summons was far too broad and did not meet the relevant test. 

70.      In relation to paragraph 2 of the summons, the legal ownership of the other entities and Longton is irrelevant.  The issue of legal and beneficial ownership of companies/legal entities other than Longton is before the English High Court in proceedings brought by Richard after Robert's answer was filed in Jersey.  

71.      The issue of ownership of the Longton loan does not also address why Richard is entitled to 50% of the interest paid by Longton to Robert.  The beneficial ownership of other companies said to form part "the business" is not relevant to either ownership of the Longton loan or entitlement to interest.  What steps Robert might have taken or not taken in respect of transferring shares of a jointly held business interest is not relevant to ownership of the Longton loan.  This is also an oppressive request. 

72.      The spreadsheets and bank statements, as far as Robert has them, have been disclosed. 

73.      In relation to the K Trust, Richard knew that the K Trust was irrelevant and he had applied to the Royal Court for disclosure from the liquidator of the former trustee, as a result of which Richard knew that the K Trust failed for want of assets.  Advocate Jowitt also contended that AGL was never settled on the K Trust which was something known to Richard in 2011.  In any event what was held in the K Trust was not relevant. 

74.      The information sought in respect of the LC loan is not relevant because LC has accepted that she was repaid in full.  Richard had also had the benefit of explanations in an account provided by Robert in London prior to settlement of his proceedings with LC. 

75.      In respect of the request for accounting information in respect of AGL, it is not relevant how money came out of AGL.  Such accounts also do not help prove what was agreed in respect of interest. 

76.      In respect of paragraph 2.8, Longton had produced their bank statements so Richard has evidence of what interest was paid to Robert.  How Robert used that money subsequently is irrelevant. 

77.      Advocate Staal in reply contended that:-

(i)        The entitlement to interest arose by way of the constructive trust claim as pleaded at paragraph 50(b) of the re-amended order of justice;

(ii)       There was no affidavit from Robert explaining what bank statements he had and no longer had and what he disclosed;

(iii)      Richard did not have the explanations in the account produced by Robert in London prior to his settlement with LC.  Richard was not bound in any event by this settlement (see paragraph 99 of Richard's fifth affidavit);

(iv)      Advocate Staal agreed to produce what had been said to the Royal Court in respect of the K Trust (see paragraph 2.1.3 of the Richard's summons);

(v)       The value of the claim was around £1.5 million being 50% of sums loaned to Longton plus interest which should be paid to Richard directly;

(vi)      The information sought in respect of the relevant interest paid to him went to Richard's constructive trust claim and his equitable entitlement to 50% of the interest paid when he was 50% owner of Longton. 

Decision

78.      In relation to Richard's application I start by reference to the affidavit of discovery of Robert.  I agree with Advocate Staal that the affidavit filed by Robert is not in the correct form because it is not conclusive and because additional documentation has been produced subsequent to Robert swearing his affidavit of discovery on 22^nd July, 2015. 

79.      This is not just a matter of semantics because it is important for Richard and the Royal Court to understand what relevant documents exist and if they exist for Richard to see the same.  This is particularly important for Robert's bank accounts at HSBC because while HSBC has confirmed in correspondence that accounts are not kept beyond seven years, Richard has illustrated in his affidavit that bank statements of HSBC accounts of Robert which are more than seven years old have been disclosed or relied upon by Robert in the dispute between them.  Advocate Jowitt contended that some statements more than seven years old were not destroyed by HSBC and so Robert was able to produce them on discovery.  However, Robert does not explain this in the affidavit of discovery.  It is therefore appropriate for Robert to explain what relevant documents he has disclosed and what documents he no longer possesses and therefore he has not been able to disclose.  This should include identifying documents disclosed to Richard in England which it has been accepted Richard may use in Jersey.  Accordingly, I have reached the conclusion that Robert should swear an affidavit of discovery listing all relevant documents and which identifies which documents Robert had but no longer has.  This affidavit should be in compliance with Royal Court practice direction RC05/04 and inspection should be provided of any additional documents not already disclosed by Robert.  I consider it is important for this issue to be clarified so that the Royal Court and Richard know what documents Robert is relying on in support of the case he is now advancing. 

80.      In respect of request 2.1 which relates to ownership, there is an issue of ownership of the Longton loan on the pleadings, by reference to paragraphs 8, 9 and 45 of the answer and paragraph 6 of the reply.  Even if this is an alternative case advanced by Robert only, this is still an issue the jurats will have to rule upon. 

81.      There is also an issue in proceedings in England raised by Richard (foreshadowed in the forum challenge) about ownership of the companies forming the business.  Richard in his affidavit has also produced evidence to show that further documents may exist which record Richard's entitlement to a 50% beneficial interest of the companies and the fact that he was a beneficiary of the K Trust. 

82.      The view I have reached is that I am not prepared to make a general order ordering discovery of all documentation going to ownership of all legal entities forming part of the business.  This is because firstly, given what is at stake in respect of ownership of the capital of loans advanced for the reasons set out at paragraphs 43 to 50 above, the economic value of what is at stake is limited.  In these circumstances in my judgment it would be oppressive to require Robert to look for documents relating to ownership arrangements to establish Richard's beneficial ownership of all the companies referred to on the basis this would assist Richard to attack Robert's case in respect of ownership of the loans made by Robert to Longton.  There is no time limit on the materials sought so enquiries would therefore have to go back many years because the verbal arrangement was said to have taken place in early 1990's.  What Richard is asking for is anything since that date which might contain something relevant to the point which the Royal Court is asked to determine.  Such a task would be time consuming and extremely expensive. 

83.      In addition, by reference to the matters Richard has already pleaded, he has material on ownership of the entities forming part of the business which could be put to Robert in cross-examination to challenge Robert's alternative case.  I regard this material as sufficient to enable the jurats to reach a view on Robert's alternative answer.  The discovery sought would only provide him with additional material. 

84.      Robert has also now conceded that Richard is entitled to beneficial ownership of 50% of Longton. Richard does not need therefore discovery to prove what has now been conceded.  This concession means that Richard will be entitled to put to Robert why it is that the benefit of a liability of Longton if due to Robert and Richard jointly should not also be split equally just as Longton is owned equally.  

85.      In respect of beneficial ownership of the Longton loan, Robert, in producing his affidavit of discovery in proper form, is to produce any documents in his possession or custody about beneficial ownership of the Longton loan.  However he is not required to go searching for such documents which may exist in the hands of others or to ascertain whether such documents used to exist.  This is because, while I am satisfied that documents about beneficial ownership of the Longton loan are relevant, and Robert's affidavit is defective, so I do not know if all relevant documents have been produced, I am not satisfied by reference to Richard's affidavit at paragraphs 55-74 that it is necessary to require Robert to look for documents others may hold or have held.  I have reached this view because I regard the requests at sub-paragraphs 2.1.1-2.1.4 as of limited relevance and to look for them would be oppressive.  

86.      The request for any wills requires Robert to look back over many years to track down wills whether current or past on the basis they may contain something relevant.  Such a task is clearly oppressive and adds little to information Richard already possesses. 

87.      Similarly requiring Robert to produce any tax advice given to him in relation to the manner in which the shares in Longton were to be held without defining the period goes too far and is oppressive.  Again, Richard already has information to question Robert which Richard has already referred to in his affidavit. 

88.      In respect of the K Trust, because I was informed by Advocate Jowitt, of an earlier application to the Royal Court, I asked for a copy of the relevant proceedings which were produced to me after the hearing.  The proceedings were a representation brought by Messrs. Bedell Cristin for the liquidators of the EBC Financial Services (Jersey) Limited which led to an act of court of 25^th November, 2014, and which involved Richard and to some degree Robert.  In a detailed affidavit filed by Nicola Ann Robinson dated 25^th September, 2015, at paragraph 19 Mrs Robinson deposed that in 2013 she had explained to Richard "that Deloitte had been advised by a former employee of a company at the outset of the company's liquidation that the K Trust had no assets and therefore it was our understanding from the early stage of the liquidation the K Trust had failed through lack of assets".  The affidavit of Mrs Robinson runs to 46 paragraphs and sets out the lengthy attempts Deloitte carried out to find documentation in respect of the K Trust and Longton.   

89.      The consent order contained an agreed way forward for Richard to obtain any relevant documents from Deloitte.  The terms of this order and any documents produced as a result of it should have been drawn to my attention and should have been referred to in Richard's affidavit given the request for documents concerning the manner in which shares in Longton were held.  It was material for me to have known the attempts Richard already made to obtain such documents and the difficulties that had arisen.  Such information was relevant to the exercise of my discretion as to whether or not I should require Robert to produce such information in terms of the limited role played by the K Trust in relation to Longton, the lack of records maintained by the trustee and the difficulties in finding old records.  To require Robert to engage in such an exercise where Richard has tried and failed in my judgment is again oppressive; Richard already has documents which can be put to Robert in cross-examination in respect of the Longton loan.  He also has access to K Trust records and may put anything relevant revealed by his own enquiries.   

90.      The request at paragraph 2.1.4 for any communications consequent upon letters sent by Dickinson Gleeson relates to ownership of AGL.  The argument advanced in respect of ownership of AGL is that if there are documents indicative of Richard having 50% ownership interest of AGL then it is open to the court to draw an inference that a similar agreement was reached in respect of the Longton loan.  In my judgment any answers are of marginal relevance to the issues at stake in Jersey which relate to what was agreed many years before.  Again Richard has sufficient information to cross-examine Robert on the verbal agreement.  It would be oppressive to require Robert to look for other information bearing in mind the economic reality of what is at stake in these proceedings.  Finally ownership of AGL is not in issue in Jersey. 

91.      In relation to request 2.2, the issue of transfer of the entities referred to in paragraph 2.2 and those entities listed at paragraph 2.2.1 is not in issue in the present proceedings.  The issue of whether 50% of the loan made to Longton should be transferred to Richard itself depends on the outcome of the present proceedings.  The letters sent in any event relate to AGL and not to the Longton loan.  I am not therefore satisfied that there are any documents that exist which relate to 50% of the loan made to Longton.  Even if there are relevant documents for the reasons previously given, I regard such a request as oppressive. 

92.      In respect of advice given in respect of transfers of interests in entities forming part of the business from accountants which is not privileged, from the information already available to Richard such advice relates to UK tax or a possible asset reorganisation.  It is of no relevance to a verbal agreement said to have been reached many years before about the Longton loan. 

93.      In respect of request 2.3, it was not disputed that the spreadsheets themselves had been disclosed.  The affidavit I have ordered to be produced should also confirm that all relevant bank statements relating to paragraphs 34 and 41 of the re-amended order of justice have been disclosed or that they have not been disclosed because they are no longer in the possession, custody or power of Robert.  Any bank statements should not be redacted in any form and insofar as Richard has only been provided with redacted bank statements, rather than full statements either in Jersey or England, full bank statements should be provided.  Disclosure of all bank statements that exist must cover the period from when payments were made by Robert to Longton from accounts in the name of Robert including receipts during that period to allow Richard with such advice he may choose to retain to analyse Robert's case.  I do not consider that to go any further is appropriate or necessary.  The request was for any documents showing the source of monies received into Robert's bank accounts.  This request was without limitation.  I do not at this stage see what such evidence would add to a proper analysis of bank statements.  In reaching this view I have taken into account the fact that Advocate Jowitt indicated that Robert was going to produce a full witness statement explaining the case as it is currently put.  Production of an affidavit of discovery disclosing of all relevant bank statements, based on my understanding of the real issues between the parties as I have summarised them in this judgment, will allow Richard a fair opportunity to test Robert's case.  I am not persuaded that more is necessary for a fair trial to take place.  To require more to be produced again in my judgment is also oppressive. 

94.      In respect of request 2.4, namely all documents in respect of loans made by LC to Robert, my decision is the same as in respect of request 2.3 and for the same reasons.  Insofar as they exist Richard should see bank statements of Robert showing funds received from LC and what happened to those funds between them being received by Robert and paid out by Robert to Longton.  I am also satisfied that explanations in statements of account produced by Robert and provided to LC in the High Court proceedings between LC, Richard and Robert are relevant to whether or not the loan or loans made by LC were made to Robert alone or to Robert and Richard.  These should also be disclosed by Robert. 

95.      In respect of requests 2.4.3 and 2.4.4, Robert in his affidavit of discovery, albeit that affidavit is defective for the reasons I have already given, produced bank account statements from Barclays.  By reference to paragraph 96(4) of Richard's affidavit, the Barclays account statements should cover the entire period when Robert was making repayments whether of capital or interest to LC.  If payments were made out of any other bank accounts than Barclays, to enable Robert to repay loans to LC or to make interest payments to her, then all bank statements relating to such accounts should also be disclosed.  

96.      In relation to request 2.5, given the further and better particulars of the October Schedule I have ordered that bank statements of AGL should be disclosed, either because they are in the possession, custody or power of Robert or because Robert jointly with Richard as the economic owners of AGL ultimately can require the directors of AGL to provide information to them.  To that extent the bank statements of AGL are within the combined power of Robert and Richard.  Accordingly, I order Robert to produce such bank statements.  I note it is not disputed that the present directors of AGL are Mr Parmenter who has had a long standing relationship with Robert since 1999 (see paragraph 121 of Richard's affidavit) and Robert's wife.  In addition, on his own case, Robert is the 51% majority beneficial owner of AGL.  Robert therefore on his own can require directors to provide information to him.  He can certainly do so with the agreement of Richard, which I understand has been forthcoming. 

97.      These bank statements are relevant because it is in issue between Richard and Robert as to whether monies came from LC, AGL or another part of the business.  The fact that this issue may not have any significant economic consequences as I have set out above does not matter.  Where funds came from is directly in issue as is whether or not funds came from AGL.  I also refer to the fact that it is Robert's case that monies advanced from AGL occurred on the basis of an informal arrangement.  It is not fair for Robert on the one hand to say that monies were advanced on the basis of such an arrangement (which I repeat he has indicated will be explained in his evidence) and on the other hand to hide behind the corporate personality of AGL, where a long standing friend and his wife are the directors, to refuse to provide relevant AGL bank statements. 

98.      I am not prepared however to order production of any information above and beyond the bank statements of AGL.  The bank statements will show what monies were advanced and when they were advanced.  The issue of whether AGL could afford to advance them or the existence of any internal records of AGL concerning the advances do not advance matters further and to require them to be produced given what is in issue, in my judgment, is not necessary and also would be oppressive. 

99.      In relation to request 2.8 and the sources of funds used to fund payments of interest, this application is brought because Robert's affidavit does not indicate that Robert provided full disclosure of his bank accounts showing or covering the periods during which interest payments were made by Longton to Robert and movements of monies in and out of such accounts during such periods.  Robert should therefore disclose any bank statements in his possession, custody or power showing amounts of interest paid to him by Longton, including any payments out of such accounts where interest was received by him from Longton in respect of the Longton loan.  This is because Richard claims a constructive trust in respect of such interest payments.  Given that some bank accounts of Longton have been produced (see paragraph 138 of Richard's fifth affidavit), but the corresponding account of Robert has not been produced (see paragraph 139.2) I am satisfied that such accounts should be produced.  Again, however, production of bank accounts is as far as I am prepared to go, as to require all documents is not necessary to assess how monies received by Robert were treated and in addition is oppressive. 

Constructive Trust

100.   I have noted above that Richard claims an entitlement to 50% of the capital and interest of the Longton loan by reference to a constructive trust.  This is therefore an issue on the pleadings in Jersey.  Yet Richard has commenced proceedings in England where the English High Court will adjudicate upon ownership of the other companies forming part of the business.  Robert also accepts that monies loaned by AGL to Robert are liable to be repaid by him to AGL. 

101.   In my judgement there is a danger of an inconsistent approach between Richard in Jersey where he claims an entitlement to monies advanced either by AGL or other businesses directly and the English proceedings.  The basis upon which a constructive trust claim arises is also not clear to me as it is not pleaded.  I consider that I possess a power either under Rule 6/15(1) or Rule 6/26(8) of the Royal Court Rules 2004, as amended, to require Richard to explain the basis of his constructive trust claim and to set out a summary of his case as to why a constructive trust arises both in respect of his claim to 50% of the capital of sums loaned by Robert to Longton and in respect of his claim to interest.  I require Richard to provide such a summary and to set out any materials facts relied upon to be provided within 21 days of this judgment from being formally handed down. 

Conclusion on specific discovery application

102.   Accordingly, in respect of Richard's application for specific discovery I order as follows:-

(i)        Robert shall file and swear an affidavit in compliance with Practice Direction RC05/04 which affidavit specifically addresses relevant documents Robert has had but no longer has in his possession, custody or power, in particular any bank statements of HSBC and secondly listing all relevant documents including documents disclosed subsequent to his original affidavit of discovery or disclosed previously in England. I propose to allow 14 days for the affidavit to be produced. 

(ii)       The affidavit of discovery shall identify all documents in Robert's possession or custody but not power relating to beneficial ownership of the Longton loan. 

(iii)      The affidavit of discovery shall list all bank statements of HSBC in Robert's possession, custody or power and shall identify any relevant bank statements that Robert had but no longer has in his possession, custody or power, covering the period of any loans made by LC, AGL or any other entity forming part of the "business". 

(iv)      Discovery of all bank statements of Robert insofar as not already made covering the period of monies loaned from and repaid to LC together with his explanations in accounts provided to LC before her proceedings were settled.   

(v)       Discovery of all bank statements of AGL in Robert's possession, custody or power covering the period of loans advanced by AGL to Robert. 

(vi)      Insofar as bank statements of AGL required pursuant to sub-paragraph (v) above are not in Robert's possession or custody, such bank statements shall be produced as they are in Robert's power either by virtue of his claim to 51% interest in AGL or alternatively by virtue of Richard and Roberts' combined ownership of AGL (whether 51%/49% or as equal beneficial owners). 

(vii)     Discovery of any bank statements in the possession, custody or power of Robert showing interest paid by Longton to Robert and all payments out of such accounts covering the period or periods when interest was received by Robert from Longton in respect of the Longton loan. 

(viii)    All other requests for specific discovery are refused for the reasons set out in this judgment.   

(ix)      Inspection of any additional documents not already disclosed should occur within 7 days of the affidavit required by sub paragraph (i) above. 

The overall conduct of the parties to this litigation

103.   As I have set out at paragraphs 43 to 50, the economic value of what is in dispute between the parties is between £150,000 and £290,000.  The risk of AGL not accounting to Richard for monies received by it is not in issue in Jersey.  Yet, significant sums have been spent on this litigation including the present application, which does not reflect what is at stake in the present proceedings.  The conduct of both parties therefore leaves much to be desired. 

104.   From Robert's perspective, he has changed his case and until October it was not clear what his case is in terms of sums received by Robert from LC or AGL.  His affidavit of discovery also clearly does not comply with the required practice direction, which must have been known to both his Jersey lawyer and his English solicitors, the partner of whom is also a Jersey advocate.  I am also not satisfied with his refusal to provide bank statements from AGL, or to co-operate in doing so. 

105.   In relation to Richard, his legal team have spent significant sums on an application which has only met with limited success and which was not proportionate to what is at stake in Jersey and where many of the requests were oppressive.  Yet, in support of his applications Richard produced an affidavit running to 65 pages, much of which amounts to submission or argument by correspondence.  This approach is heavy handed and disproportionate. 

106.   These failings are not satisfactory.  I have made it clear in a number of recent judgments such as Ching v CI Trustees and Executors Limited [2014] JRC 033, Haden-Taylor v Canopius [2014] JRC 221 and Crociani v Crociani [2015] JRC 145 and Crociani-v-Crociani [2015] JRC 177 proceedings should be conducted in accordance with an agreed timetable at a reasonable level of cost and should progress to trial within a reasonably short time frame.  Both parties' approaches do not meet this objective.  I therefore wish to be addressed by both counsel on what costs orders I should make when this judgment is formally handed down. 

Authorities

Campbell-v-Campbell and Longton [2014] JRC 213B.

Daisy Hill Real Estate Limited v Rent Control Tribunal [1995] JLR 176.

Crociani v Crociani [2015] JRC 177.

Victor Hanby Associates Limited v Oliver [1990] JLR 337.

Vilsmeier v AI Airports International Limited & PI Power International Limited [2014] (1) JLR N 26.

Royal Court Rules 2004.

Ching v CI Trustees and Executors Limited [2014] JRC 033.

Haden-Taylor v Canopius [2014] JRC 221.

Crociani v Crociani [2015] JRC 145.