Before : |
Advocate Matthew John Thompson, Master of the Royal Court. |
Between |
Trico Limited |
Plaintiff |
And |
Anthony Buckingham |
First Defendant |
Advocate H. Sharp for the Plaintiff.
Advocate J. S. Dickinson for the Defendant.
contents
|
|
Paras |
1. |
Introduction |
1-11 |
2. |
The plaintiff's application to amend |
12-44 |
3. |
Miscellaneous |
45-47 |
judgment
the master:
1. This judgment contains my reasons in relation to applications to amend pleadings brought by both the plaintiff and the defendant.
2. The applications to amend follow on from my judgment in this matter dated 29th May, 2019, reported at Trico Limited v Buckingham [2019] JRC095 (the "summary judgment decision"). The definitions in that judgment are adopted for ease of reference as is the background to the present dispute.
3. In summary the summary judgment application:-
(a) refused the defendant's application to re-amend;
(b) construed the Side Letter;
(c) concluded there was a trial able issue in relation to whether or not the Side Letter was executed on 13th February, 2014; and
(d) construed the Release and conducted that it did not apply to the Side Letter.
4. Subsequent to my decision, the defendant has appealed paragraphs 79 to 84 of my summary judgment application to set aside the construction I reached in respect of the Side Letter.
5. The basis of the defendant's appeal is to run an argument in respect of construction of the Side Letter that was not advanced in the hearing before me. The unsworn but approved eighth affidavit of the defendant explained that this argument had not been thought about prior to the summary judgment hearing before me and arose due to further advice being taken in the United Kingdom from an eminent lawyer not previously retained by the defendant.
6. The defendant's application to amend also sought various amendments in relation to the Advisory Agreement and the defendant's case that he had not signed the Side Letter on 13th February, 2014.
7. The plaintiff also issued an application to amend and to seek summary judgment on the basis of that amendment. The amendment was to plead an alternative case that because the defendant's signature was admitted to be on the Side Letter, the Side Letter was a binding and valid contract between the parties irrespective of when or where the defendant signed the Side Letter.
8. This application appeared to be in response to paragraph 108 of the summary judgment decision where I ruled that a trial was required because there was "no alternative case on execution advanced by the plaintiff". The plaintiff's primary case based on the affidavits before me was that the Side Letter had been signed on 13th February, 2014, at the defendant's house.
9. As the new application for summary judgment by the plaintiff was on the basis that the defendant was bound by his signature whenever the Side Letter was signed, I referred this issue to the Royal Court to be determined at the same time as the defendant's appeal against the summary judgment decision.
10. I referred the plaintiff's summons to be heard at the same time as the defendant's appeal because there was an interplay between the two. If the plaintiff is correct in its assertions that the defendant is bound by his signature, even if the plaintiff cannot establish it was signed on 13th February, 2014, which is the plaintiff's primary case the plaintiff may then be entitled to judgment. However, if the defendant is correct about the construction argument he now wishes to advance in relation to termination of the Side Letter, this would trump any argument that the defendant is bound by his signature alone because any claim that could be made on the basis of the defendant's signature of the Side Letter would not arise.
11. However, I ruled that I would deal with the application to amend pleadings brought by both the plaintiff and the defendant. This was principally because I was familiar with the issues raised in light of my summary judgment decision; I also considered that my analysis of the pleadings would assist the Royal Court on the appeal.
12. By the time the matter came before me for hearing the plaintiff's application to amend was agreed. However, this was subject to one issue which was that the pleading as presented to me was inconsistent with the sixth affidavit of Mr Ruane sworn on 10th June, 2019, (and indeed earlier affidavits of Mr Ruane) that his evidence is that the contract was signed on 13th February, 2014, and "I am adamant about that" (see paragraph 10 of the sixth affidavit).
13. The pleading as drafted however put as a primary case that the defendant's signature on the Side Letter took effect as a binding and valid contract between the parties.
14. I ruled that I was not prepared to allow this to be put as a primary case in light of the sixth affidavit of Mr Ruane and his earlier affidavits as referred to in my summary judgment decision filed in support of that application.
15. The plaintiff's amendments were therefore permitted so long as the plaintiff's primary case was that the Side Letter was signed on 13th February, 2014, the next alternative was that the Side Letter was signed at some time on 13th February, 2014, or a later date, and therefore was valid with the final alternative being that the signature of the defendant on the Side Letter was binding, irrespective of when or where the signature came to be on the Side Letter. The plaintiff considered it was able to advance this argument because there was no permitted allegation that the defendant's signature admitted to be on the Side Letter had procured by fraud.
16. I also permitted amendments to the order of justice to clarify that there were two different versions of the Advisory Agreement. I referred to this at paragraph 37 of the summary judgment decision. I therefore gave the plaintiff permission to amend paragraph 5 of the amended order of justice to plead that version one of the Advisory Agreement was executed on 13th February, 2014, with version two being executed on 6th March, 2014. This amendment as I indicate later in this judgment was also relevant to certain proposed re-amendments by the defendant to his re-amended answer.
17. The first set of amendments sought by the defendant concerned steps subsequent to the issue of proceedings. The defendant wanted to insert these in his answer in order to justify why he wished to alter an admission that the Advisory Agreement had been executed on 13th February, 2014 to a denial that the Advisory Agreement had been executed at his house on that date. In relation to this set of amendments I refused the same. I accept that the history of the litigation in relation to how the plaintiff's pleaded case became clear was necessary and relevant to why the defendant should be permitted to withdraw an admission. However, in my judgment the correct place for this explanation was in the defendant's affidavit evidence, not in a pleading. A pleading, as it is well-known, is to identify issues between the parties to a dispute and the material facts relied upon.
18. By contrast the procedural history of an action, once commenced, is not something that should ordinarily find its way into a pleading. If an amendment sought requires justification, including withdrawing an admission because of how an action has developed, the history of the action should be set out in a chronology or by affidavit. To be clear, the defendant's eighth affidavit did explain the history of the action and why this justified amending an admission to a denial. This evidence did not however need to be repeated in a pleading.
19. At paragraph 24 of his eighth affidavit the defendant stated that it was only when Mr Ruane served his first affidavit on 9th November, 2018, that the defendant became aware that the plaintiff was alleging that any version of the Advisory Agreement had been concluded at the same time as the plaintiff alleged the Side Letter was signed. This was why he now wished to deny that execution of the Advisory Agreement took place when the Side Letter was alleged to have been signed.
20. As I am not prepared to allow the procedural history dispute to find its way into a pleading, I refused permission in respect of the amendments sought at paragraphs 2(A), 2(B), 2(C), 9.5.6. to 9.5.8. and 9.5.10. to 9.5.12.
21. The next set of re-amendments proposed concerned the defendant's case in relation to execution of the Advisory Agreements. As noted above it was originally admitted that the Advisory Agreement was executed on 13th February, 2014. What later emerged was that there were two versions of the Advisory Agreement as noted at paragraph 37 of my summary judgment decision. The difference between the two versions was that in the first version HBJ was identified as the sourced investor, as where as in the second version, references to HUBJ had been anonymised and instead referred to a "private investor". Nothing turns on these differences in themselves; rather their relevance is that the second version of the Advisory Agreement could not have been executed on 13th February, 2014, because the amendments were only made on 6th March, 2014.
22. The real thrust of the defendant's proposed amendments was that he wished to deny that the first version of the Advisory Agreement was executed at the meeting that the plaintiff claims took place on 13th February, 2014, at the defendant's house because the defendant denied that any such meeting had taken place. When either version of the Advisory Agreement was actually executed, if not executed at the defendant's house on 13th February, was not central to the dispute and therefore was a matter that the defendant simply wished not to admit. In light of the fact that where either version of the Advisory Agreement was executed, if not signed at the defendants' house on 13th February, was not relevant to whether or not the Side Letter was executed at the defendants' house, I therefore refused to allow paragraph 6.5 of the proposed re-amendment. The matters referred to in paragraph 6.5 were not relevant to the dispute between the parties.
23. The next two re-amendments I allowed were paragraphs 9.5.5 and 9.5.9 of the draft re-amended answer. Paragraph 9.5.5 contained a denial that Mr Atherton had any actual or ostensible authority to negotiate the Side Letter. Advocate Sharp did not object to this amendment. The amendment at paragraph 9.5.9 concerned a letter from Carey Olsen to Dickinson Gleeson dated 14th September, 2018 (see paragraph 111 (xiii) of the summary judgment decision. Whether Mr Atherton was present at the alleged meeting at the defendant's house is an issue already, which is why I had no difficulty with this proposed amendment. Both these amendments will need to be put in context as I disallowed the other proposed amendments to paragraph 9.5.
24. The next area of contention concerned paragraph 9.6 and sub-paragraphs 9.6.1 to 9.6.8 of the draft re-amended order of justice. What the defendant wished to be permitted to do in relation to these amendments was to advance a case that, although the defendant's signature appeared on the Side Letter, the defendant never agreed to enter into an agreement with the plaintiff on the terms of the Side Letter and would not have been willing to enter into such an agreement. He also wished to assert that it was unlikely he would have signed the Side Letter when he was due to fly to Doha on 14th February, 2014, and that he never knowingly signed the Side Letter.
25. Why this mattered became clear from the defendant's skeleton argument in two respects. Firstly, in footnote 11, the skeleton argument stated:-
"And, for the avoidance of doubt, it will be appropriate for Mr Buckingham to cross-examine Mr Ruane on the basis that he dishonestly fabricated the Alleged Signing Meeting".
26. Paragraph 23.3 of the defendant's skeleton also stated:-
"Finally, if Mr Buckingham were asked how his signature came to be present on the Side Letter, he would reply that he did not know. He might perhaps say that he could speculate; it would be a matter for the trial judge to decide whether to permit him to do so."
27. Advocate Sharp took objection to this approach because he argued it was trying to allege fraud by the back door. The defendant had to make his case clear and could not be allowed to proceed to a trial on the basis that he would make allegations or speculate from the witness box. Nor could positive allegations of dishonesty be made in cross examination. As the defendant's signature was on the Side Letter, the defendant was not permitted to imply fraud or to allege that any signing said to have taken place at the defendant's house was a dishonest fabrication. Such matters could only be alleged if pleaded specifically.
28. Advocate Dickinson reconfirmed that he was not looking to allege fraud but maintained he was entitled to cross-examine Mr Ruane robustly including to allege that Mr Ruane was not telling the truth and had made-up the allegation of a signing meeting taking place dishonestly.
29. The view I have reached was that to allow the pleading in the form suggested by Advocate Dickinson for the defendant was an attempt to allow allegations of dishonesty to be made by the back door, and would permit suggestions of dishonest conduct to be put in cross-examination. In my judgment, this is not permissible without clear warning and a clear pleading. An allegation that a party has dishonestly fabricated evidence that a meeting took place to sign the Side Letter is caught by the principles about how fraud should be pleaded as referred to in the summary judgment decision. At paragraph 47 I cited extracts from the Makarenko case including the following: -
"The acts alleged to be fraudulent must be stated fully and precisely, with full particulars."
30. There was nothing in the draft pleading which set out why the Alleged Signing Meeting was a dishonest fabrication. Challenging the recollection of events of a party or a witness called by a party to suggest that a recollection is mistaken was permissible. A direct challenge that party is lying may also be permitted by a trial judge. However, there are limits and in particular neither a party nor counsel in testing recollection are allowed to advance a different set of facts to allege a positive case that a witness is being dishonest. There is a difference between putting to a witness that they are wrong in their recollection and any cross examination that goes further to suggest either expressly or by implication that a different set of facts existed. An allegation that Mr Ruane has dishonestly fabricated the allegation of a meeting in my judgment is the wrong side of the line and requires positive facts to be pleaded before such an allegation can be put in cross examination. This is not a case where the defendant is alleging that his signature was procured fraudulently or dishonestly; there is no appeal against that part of the summary judgment decision. The defendant cannot therefore circumvent that decision by alleging dishonesty in cross examination without a pleading alleging such dishonesty.
31. For the same reasons allowing any form of pleading by the defendant to say that he did not "knowingly" sign the Side Letter would allow him to then contend that his signature had somehow been procured dishonestly. This is also alleging fraud or dishonesty by the back door. This proposed re-amendment was therefore also refused.
32. What I did allow the defendant to plead was that he denied he was bound by the Side Letter because he did not recall entering into an agreement with Trico on the terms of the Side Letter or agreeing to be bound by its terms and he would not have been willing to enter into such an agreement. Whether that argument prevails or whether the defendant is bound by his signature is of course a matter for the appeal or a trial, but that is as far as I permit the defendant to go in respect of disputing the effect of his signature appearing on the Side Letter.
33. The final category of amendments concerned the new construction argument the defendant wishes to run on his appeal.
34. The reason why objection was taken to this amendment by Advocate Sharp was that the argument could have been advanced at the hearing before me and was not yet. Unsuccessful parties to summary judgment applications could not be permitted to keep raising new grounds. Otherwise there would never be finality to litigation. This issue led both parties to refer me to relevant English and Jersey authorities on applications to amend pleadings.
35. In respect of the Jersey position, I was referred to MacFirbisigh v C.I. Trustees an Executors Limited and Others [2014] (1) JLR 244 where I summarised the applicable legal principles on an application to amend at paragraphs 27 to 30 including citing the decision of Cunningham v Cunningham [2009] JLR 227. In summary, the principles was covered by paragraph 21 of Cunningham as follows:-
"21 Where there is a late application for an amendment to the order of justice (or to the answer or reply) the Jersey courts have to strike a balance which is primarily between the parties to the instant case. The burden on the applicant is a heavy one to show, for example, (1) why the matters now sought to be pleaded were not pleaded before; (2) what is the strength of the new case; (3) why an adjournment should be granted, if one is necessary; (4) how any adverse effects on the other party including the effects of any adjournment, any additional discovery, witness statements or experts reports, or other preparation for trial can be remedied; and (5) why the balance of justice should come down in favour of the party seeking to change its case at a late stage of the proceedings."
36. My decision in MacFirbisigh however was prior to the introduction of the overriding objective into the Royal Court Rules in June 2017. The current approach in England to late applications to amend therefore goes further than the approach in MacFirbisigh and other previous decisions on applications to amend. In Quah Su-Ling v Goldman Sachs International [2015] EWHC 759 (Comm), Mrs Justice Carr DBE summarised these principles at paragraphs 36 to 38 as follows:-
"36. An application to amend will be refused if it is clear that the proposed amendment has no real prospect of success. The test to be applied is the same as that for summary judgment under CPR Part 24. Thus the applicant has to have a case which is better than merely arguable. The court may reject an amendment seeking to raise a version of the facts of the case which is inherently implausible, self-contradictory or is not supported by contemporaneous documentation.
37. Beyond that, the relevant principles applying to very late applications to amend are well known. I have been referred to a number of authorities: Swain-Mason v Mills & Reeve [2011] 1 WLR 2735 (at paras. 69 to 72, 85 and 106); Worldwide Corporation Ltd v GPT Ltd [CA Transcript No 1835] 2 December 1988; Hague Plant Limited v Hague [2014] EWCA Civ 1609 (at paras. 27 to 33); Dany Lions Ltd v Bristol Cars Ltd [2014] EWHC 928 (QB) (at paras. 4 to 7 and 29); Durley House Ltd v Firmdale Hotels plc [2014] EWHC 2608 (Ch) (at paras. 31 and 32); Mitchell v News Group Newspapers [2013] EWCA Civ 1537.
38. Drawing these authorities together, the relevant principles can be stated simply as follows:
a) whether to allow an amendment is a matter for the discretion of the court. In exercising that discretion, the overriding objective is of the greatest importance. Applications always involve the court striking a balance between injustice to the applicant if the amendment is refused, and injustice to the opposing party and other litigants in general, if the amendment is permitted;
b) where a very late application to amend is made the correct approach is not that the amendments ought, in general, to be allowed so that the real dispute between the parties can be adjudicated upon. Rather, a heavy burden lies on a party seeking a very late amendment to show the strength of the new case and why justice to him, his opponent and other court users requires him to be able to pursue it. The risk to a trial date may mean that the lateness of the application to amend will of itself cause the balance to be loaded heavily against the grant of permission;
c) a very late amendment is one made when the trial date has been fixed and where permitting the amendments would cause the trial date to be lost. Parties and the court have a legitimate expectation that trial fixtures will be kept;
d) lateness is not an absolute, but a relative concept. It depends on a review of the nature of the proposed amendment, the quality of the explanation for its timing, and a fair appreciation of the consequences in terms of work wasted and consequential work to be done;
e) gone are the days when it was sufficient for the amending party to argue that no prejudice had been suffered, save as to costs. In the modern era it is more readily recognised that the payment of costs may not be adequate compensation;
f) it is incumbent on a party seeking the indulgence of the court to be allowed to raise a late claim to provide a good explanation for the delay;
g) a much stricter view is taken nowadays of non-compliance with the Civil Procedure Rules and directions of the Court. The achievement of justice means something different now. Parties can no longer expect indulgence if they fail to comply with their procedural obligations because those obligations not only serve the purpose of ensuring that they conduct the litigation proportionately in order to ensure their own costs are kept within proportionate bounds but also the wider public interest of ensuring that other litigants can obtain justice efficiently and proportionately, and that the courts enable them to do so."
37. The Court of Appeal in Nesbit Law Group LLP v Acasta European Insurance Company Limited [2018] EWCA Civ 268 endorsed this approach at paragraph 41 as follows:-
"41. The principles relating to the grant of permission to amend are set out in Swain-Mason and in a series of recent authorities. The parties referred particularly to Mrs Justice Carr's summary in Quah Su-Ling v. Goldman Sachs International [2015] EWHC 759 (Comm) at paragraphs 36-38 of her judgment. In essence, the court must, taking account of the overriding objective, balance the injustice to the party seeking to amend if it is refused permission, against the need for finality in litigation and the injustice to the other parties and other litigants, if the amendment is permitted. There is a heavy burden on the party seeking a late amendment to justify the lateness of the application and to show the strength of the new case and why justice requires him to be able to pursue it. These principles apply with even greater rigour to an amendment made after the trial and in the course of an appeal."
38. In my judgment, the approach now taken in England should be reflected in this jurisdiction and therefore greater emphasis should be given to the overriding objective compared to the approach taken in MacFirbisigh and other decisions in Jersey. I stress however this is a change of emphasis rather than a marked departure from the previous approach because some of the factors in MacFirbisigh overlap with those now relied upon before the English Court. Nevertheless that change of emphasis giving greater emphasis to the overriding objective is one that in the future I consider should be taken in this jurisdiction.
39. In the present case, in one sense this application is very late indeed because the summary judgment application by the plaintiff has already been determined. The argument, the defendant now seeks to advance could have been run before me but was not. As noted above the defendant candidly accepts that the new argument is only being run now because it was an argument that had not been considered previously.
40. If this were an appeal to the Court of Appeal where leave from the Royal Court would be required or leave of the Court of Appeal would be required, unless there is a clear case of something having gone wrong, the defendant would be in difficulty in trying to obtain leave in trying to raise an argument that could have been pursued at an earlier hearing.. However, appeals from the Master of the Royal Court or the Judicial Greffier to the Royal Court are a rehearing of the application, albeit the Royal Court pays due regard to the decision of the court below. In my judgment, this difference is significant. It means that the defendant is entitled to raise arguments before the Royal Court not raised before me. This does not mean that the defendant may not be penalised for not raising all arguments before me that could have been raised. In particular, the Royal Court as a matter of discretion if the appeal is successful, may elect not to disturb previous costs orders. That is of course a matter for the Royal Court. However, the right of appeal to a complete rehearing means that it would be wrong to prevent the defendant from amending its pleading to set out his new construction argument.
41. My conclusion on this question however was subject to one qualification. The normal approach in England, as set out at paragraph 36 of Quah, would be to refuse leave to amend where the amendment had no real prospect of success applying the relevant summary judgment test. In this case I cannot apply that test because the amendment is sought to appeal the summary judgment decision. The approach I took therefore was to allow the amendments but to also order that, if the Royal Court dismissed the appeal then the relevant amendments (found in paragraphs 15 and 15A of the re-amended order of justice) would be struck out.
42. In reaching the above conclusion I have not ignored the strength of the defendant's case. However, because of the right of appeal, I have not applied a summary judgment test of no real prospect of success, which is a matter for the Royal Court. Rather, I have considered whether the proposed amendments were frivolous or vexatious or amounted to an abuse of process. In my judgment they were not and therefore ought to be allowed for the purposes of the appeal.
43. I also took into account that the trial dates fixed would not be prejudiced if the appeal was successful if the Royal Court ruled that the question of construction required a trial.
44. That is not to say that there are not issues with the case but these will be for the Royal Court to grapple with. In particular, the Side Letter describes the Advisory Agreement as being "covered by the separate engagement letter between Trico Limited (the plaintiff) and Heritage Oil Plc))". The Side Letter covers "all and any transactions" with HBJ. This led to the conclusion I reached at paragraph 81 of the summary judgment decision. Advocate Sharp also suggested that the Side Letter could only be terminated by written notice which was never given. Advocate Dickinson's position was that no notice was required because an investor was found and the Investment was concluded; this case is set out in the relevant part of the proposed amended pleading at paragraph 15A.
45. There are two other matters appropriate to refer to in respect of my decision.
46. Firstly, in allowing the defendant to re-amend his answer, this was subject to the defendant's approved and unsworn eighth affidavit being sworn within 14 days. The Royal Court has made it clear that affidavits must be sworn by the time a hearing takes place. As the importance of this requirement has only been re-emphasised recently, in this case the defendant was given the benefit of the doubt. However, if the eighth affidavit is not sworn within 14 days then the amendments otherwise approved will not take effect.
47. Secondly, I also directed the defendant through Advocate Dickinson to consider whether the notice of appeal ought to be amended because the argument the defendant wished to bring on appeal as explained to me suggested that the defendant was challenging other findings apart from paragraphs 79 to 84. The purpose of this indication was so that the extent of any challenge to my reasons and the issues between the parties on the appeal were clear well in advance of the dates fixed for the hearing of the appeal. In similar vein I also indicated to the parties that I expected any further affidavit evidence to be filed in sufficient time for any appeal and that all relevant evidence should be filed at least one month before the dates already fixed.
Authorities
Trico Limited v Buckingham [2019] JRC095
MacFirbisigh v C.I. Trustees an Executors Limited and Others [2014] (1) JLR 244
Cunningham v Cunningham [2009] JLR 227
Royal Court Rules 2017
Quah Su-Ling v Goldman Sachs International [2015] EWHC 759 (Comm)
Nesbit Law Group LLP v Acasta European Insurance Company Limited [2018] EWCA Civ 268