Jersey Unreported Judgments

Lease - reasons for refusing an adjournment, granting summary judgment and ordering costs on an indemnity basis

[2019]JRC217

Royal Court

(Samedi)

30 October 2019

Before     :

Advocate Matthew John Thompson, Master of the Royal Court

 

Advocate J. N. Heywood for the Plaintiff.

The First Defendant did not appear.

Advocate S. M. J. Chiddicks for the Second Defendant.

CONTENTS

		Paras
1.	Introduction	1
2.	Background	2-17
3.	Adjournment application	18-25
4.	Judgment in default of an answer	26
5.	The summary judgment application	27-34
6.	Indemnity costs	35-40

judgment

the MASTER:

Introduction

1.        This judgment contains my reasons for:

(i)        Refusing an application for an adjournment made at the request of the second defendant;

(ii)       Granting summary judgment against both defendants; and

(iii)      Ordering the defendants to pay the plaintiff's costs on an indemnity basis.

Background

2.        The proceedings relate to a sub-lease entered into between Lloyds Pharmacy Limited (the "plaintiff") and the second defendant as sub-lessee.  The first defendant was guarantor of the obligations of the second defendant under the lease.

3.        The lease runs from 25^th March, 2011 until 21^st March, 2020.

4.        The initial rent was £15,000 per year from 24^th July, 2011.  For the period of 25^th March, 2012 to 24^th March, 2013 the annual rental was £18,000.  For the period 25^th March, 2013 to 24^th March, 2013 the annual rental was £20,000.  In all cases rent was payable quarterly in advance.  The annual rental for all the subsequent years remained at £20,000, although there was provision to increase the rent by reference to the Jersey retail price index.

5.        The guarantee provisions contained in the lease are the sort of provisions usually required from guarantors under Jersey Law leases. 

6.        The sub-lease was entered into with the consent of the ultimate landlords who were also party to the sub-lease.

7.        The present proceedings were commenced by simple summons dated 3^rd May, 2018.  This followed extensive correspondence between the plaintiff and the first defendant and his daughter Leslie Le Falher-Le Bourser ("Leslie").  The correspondence records various attempts to agree repayment plans because the second defendant had failed to keep up with the payments required under the terms of the lease.  It is not necessary for the purpose of this judgment to set out this correspondence.

8.        What is relevant is that on 18^th June, 2014 Mr Martin Ebsworth Estates Manager for the plaintiff sent the following email to Leslie.  The email states as follows:-

"Hi Leslie

Following our recent discussion, I have asked the contractors to ensure they

1)        Repair (although likely replace) the rear door leading onto flat roof on second floor

2)        Put the 2 upstairs windows back to good working order

3)        Tidy up any damage to decoration on the stairs

We have not seen any rent for almost a year, and the payments of £5,000 per quarter must re-start immediately

In terms of arrears, Lloyds Pharmacy will accept half rent for nine months it took to complete the roof repairs

June 13 to Sept 13 - £5,000

Sept 13 to Dec 13 - £2,500

Dec 13 to Mar 14 - £2,500

Mar 14 to June 14 - £2,500

Lloyds Pharmacy will allow this to be paid off monthly over the next 18 months

June 14 onwards - £5,000 per quarter as per lease

Please start paying rent and ensure you keep Shelley ay Innes England informed."

9.        I refer to the relevance of this email later in this judgment.

10.      Following the commencement of proceedings the parties had further negotiations but without success.  This led to a directions hearing being fixed for 20^th March, 2019.  This hearing was adjourned for reasons I address later in this judgment. 

11.      A directions hearing therefore took place on 17^th April, 2019 when I made the following orders:-

"1.       the Plaintiff shall have leave to amend its Summons, in the form appended hereto, which includes, inter-alia, the joining of Re-Play (Video Games and Movies) Limited as Second Defendant to the action.  The Plaintiff shall, by close of business on 18th April 2019, file and serve the Amended Summons;

2.        the Plaintiff shall, by close of business on 18^th April 2019, file and serve its Particulars of Claim on the Defendants;

3.        the Defendants shall, by close of business on 17th May 2019, each file an Answer setting out their respective cases in relation to the Amended Summons and the Particulars of Claim;

4.        there be discovery by affidavit and list by close of business on 7th June 2019.  Any initial request for inspection or copy documents is to be made within 7 days of service of the lists;

5.        the Parties shall file and exchange witness statements of fact by close of business on 5th July 2019;

6.        the Defendants shall provide the Plaintiff's advocate with the following information by close of business on 26th April 2019:-

a.        the full, current, residential postal address, telephone number and functioning e-mail address, if available, of Didier Le Falher-Le Bourser;

b.        the full, current, residential postal address, telephone number and functioning e-mail address, if available, of Leslie Le Falher-Le Bourser; and

c.        Contact details, including, full name, postal address, telephone number and email address, if available, of the sub-sub tenant of the flat at 44 Don Street.

7.        the Parties shall attend upon the Bailiff's Judicial Secretary by close of business on Friday 24th May 2019 to fix a date for trial, with a trial estimate of one day, such not to be before 29th July 2019;

8.        At the same time as fixing a date for trial, the Parties shall fix a date for a Pre-Trial Review hearing, with an estimate of one hour, to be heard before the trial judge, not less than 2 weeks before trial..."

12.      The plaintiff filed particulars of claim in accordance with paragraph 2 of the above directions.  Neither defendant has filed an answer.  Nor has there been any discovery or exchange of witness statements.

13.      Initially the plaintiff fixed a trial date but this was later vacated by the plaintiff as recorded in an Act of Court issued by the Royal Court dated 9^th July, 2019.  Instead, the plaintiff issued the present application for summary judgment and in the alternative judgment in default of an answer.

14.      The application for summary judgment was due to be heard on 3^rd September, 2019 but that hearing was adjourned because the plaintiff's affidavit in support of its application was served later than the time limits contained in Rule 7 of the Royal Court Rules 2004, as amended.  Accordingly, the hearing was re-fixed for 16^th October, 2019.

15.      The plaintiff's application was supported by an affidavit of Martin Ebsworth an Estates Manager of the plaintiff sworn on 3^rd July, 2019.

16.      No affidavit in response has been received from either defendant.

17.      On 15^th October, 2019, I received an email from the first defendant indicating he wished to apply for an adjournment.  I informed the first defendant by an email in response sent at 17:21 p.m. on 15^th October, 2019 that, if the first defendant wished to apply for an adjournment, he would have to appear in person and make an application at the hearing.  Ultimately the first defendant did not appear at the hearing.

Adjournment application

18.      Although the first defendant did not appear, Advocate Chiddicks did appear for the second defendant.  He informed me that he had been instructed at 09:20 a.m. that morning to appear.  He had been called by Leslie.  Advocate Chiddicks informed me that Leslie stated she was speaking on behalf of Neves Le Falher ("Neves").  Neves is Leslie's mother and the spouse of the first defendant, although I was informed that they had been separated for some time.  I was also told that Neves was a shareholder and director of the second defendant and that she had only recently became aware of the proceedings.  This information was provided by Leslie to Advocate Chiddicks.  Advocate Chiddicks sought an adjournment in order to obtain instructions.

19.      I refused the adjournment for a number of reasons.  Firstly, Neves had appeared to have been aware of the dispute since at least November 2017.  The first defendant in emails to BCR Law dated 30^th November, 2017, 4^th, 5^th and 6^th December, 2017 stated that Neves was taking her own legal advice.  These emails were contrary to the submissions made by Advocate Chiddicks made on instructions from Leslie that Neves was not aware of the present proceedings or what was occurring.

20.      Secondly, I refused an adjournment because at the directions hearing on 17^th April, 2019, Leslie was present albeit she had no authority to represent either defendant.  I made it clear to Leslie that she was required to inform both defendants that they had to comply with the directions I issued.  I also ordered Leslie to provide information about the contact details of both defendants so that as far as possible any documents required to be served would come to the attention of both defendants.  Leslie should have therefore told her mother about the dispute.

21.      Thirdly, when the hearing date for the present summons was fixed, both defendants were informed of the obligation to file any relevant material one week before the hearing.  This request was repeated when the hearing date was re-fixed.  The defendants were therefore clearly on notice of the obligation to provide any material in response before the hearing.

22.      The plaintiff's affidavit was also served some six weeks before the hearing.  Both defendants therefore had every opportunity to respond to the plaintiff's claim.

23.      Moreover, the plaintiff's claim is not complex.  This claim is for arrears of rent under a lease, the terms of which are straightforward.  The affidavit of Mr Ebsworth was also concise and therefore it would not have been difficult for the defendants to respond.

24.      There has also been a pattern of seeking an adjournments.  I have already referred to the first defendant seeking an adjournment on 15^th October, 2019 and then failing to appear.

25.      Leslie also sought an adjournment on 20^th March, 2019.  That application was granted because Leslie informed the court and the plaintiff that her child had died.  After the adjournment was granted, the plaintiff established that the reason for the adjournment sought by Leslie was untrue.  It is also Leslie who has now on behalf of Neves asked Advocate Chiddicks to seek an adjournment.  The present application falls into a pattern of trying to delay hearings.

Judgment in default of an answer

26.      As no answer had been filed in accordance with the directions I issued on 17^th April, 2019, I granted judgment in default.  However, the plaintiff wanted summary judgment because it was of the view that a successful summary judgment application was more secure than a judgment in default.

The summary judgment application

27.      There was no dispute about the applicable principles on a summary judgment application.  I set out the relevant principles in Gothard v Strada Drilling International Limited [2019] JRC 017A at paragraphs 21 to 23 as follows:-

"21.    In respect of the applicable legal principles on a summary judgment application, there was no dispute on the general test found at MacFirbhisigh and Ching v CI Trustees and Executors Limited [2017] JRC 130A at paragraph 13 to 19.  These are the principles I have applied. 

22.      At paragraph 19 of Ching Commissioner Hunt also referred to my decision in Holmes v Lingard & Anor [2017] JRC 113 in particular requiring judges not to abandon their "critical faculties" in evaluating a summary judgment application as set out in paragraph 164 and the extract quoting as follows:-

"164.   Paragraph 24.2.5, of the 2017 White Book also contains the following statement:-

"If the applicant for summary judgment adduces credible evidence in support of their application the respondent becomes subject to an evidential burden of proving some real prospect of success or some other reason for a trial.  The standard of proof required of the respondent is not high.  It suffices merely to rebut the applicant's statement of belief.  The language of r.24.2 ("no real prospect ... no other reason...") indicates that, in determining the question, the court must apply a negative test.  The respondent's case must carry some degree of conviction: the court is not required to accept without analysis everything said by a party in his statements before the court.  In evaluating the prospects of success of a claim or defence judges are not required to abandon their critical faculties.  However, the proper disposal of an issue Pt 24 does not involve the judge in conducting a mini-trial.""[Emphasis Added]

23.      I also refer to paragraph 165 of the said judgment where I refer to the case Amy v Amy [2011] JLR 603 at paragraph 28 which reads as follows:-

""28    On the other hand, as r.7/2(1) makes clear, where the application is within the rule and properly supported by an affidavit on behalf of the plaintiff, it is for the defendant to satisfy the court that there is an issue which ought to be tried. This, in general, requires evidence on behalf of the defendant rather than just an assertion or the production of a pleading; and it is well established that the defendant's affidavit should be specific enough to enable the court to see that there is a real issue to be tried (see Toothill v. HSBC Bank plc. (6) (2008 JLR 77, at para. 29, per Birt, Deputy Bailiff)): [Emphasis Added]

"In short, the court must consider whether the defendant has shown an arguable defence, i.e. whether there is a triable issue. If so, leave to defend should be given. We would, however, refer specifically to the passage at para. 14/4/5, at 173 which states:

'The defendant's affidavit must "condescend upon particulars," and should, as far as possible, deal specifically with the plaintiff's claim and affidavit, and state clearly and concisely what the defence is, and what facts are relied on to support it.' [Emphasis Added]

As is stated later in the same passage: 'Indeed, in all cases, sufficient facts and particulars must be given to show that there is a triable issue.'" [Emphasis Added]"

28.      Advocate Heywood emphasised that the affidavit filed on behalf of the plaintiff adduced credible evidence that the defendants were liable to pay rent accrued under the sub-lease.  This meant that the defendants were under an evidential burden to show that there was a defence with some real prospect of success that was probable rather than fanciful.  He argued that, as no answer or affidavit had been filed, there was no degree of conviction that could be attached to any assertions by the defendant.

29.      He also emphasised what was required was evidence not just an assertion or even the production of a pleading.  What was required was an affidavit which was specific enough to enable the court to determine whether or not there was a real issue to be tried.

30.      In this case there was nothing.  The possible suggestion that the premises were at times in need of repair had never been elaborated on and had not been supported by any evidence.  It was also contradicted by the various offers made by Leslie or the first defendant to try to resolve matters.

31.      In granting judgment I generally accepted Advocate Heywood's submissions subject to one point in relation to the amount of the judgment.

32.      The one qualification concerned the amount claimed for the three quarters set out in the email cited paragraph 7 of this judgment.  The schedule of arrears provided to me for these quarters claimed the sum of £5,000 per quarter.  However, I reached the view that it was arguable by reference to the email of 18^th June, 2014 that the plaintiff had agreed that the amount due for these quarters was only £2,500 per quarter not £5,000 per quarter.  I accept that Advocate Heywood contended that the acceptance of half rent was conditional upon the arrears being paid which did not happen.  However, the email of 18^th June, 2014 is also capable of being construed as an agreement by the plaintiff to reduce rent for the three relevant quarters with the plaintiff taking the risk that the outstanding arrears would be repaid over a certain period of time.  This is a question of construction that I do not consider could be resolved without evidence and accordingly I was not prepared to grant summary judgment in the amount claimed, which I reduced by £7,500.  I also required a recalculation of the claim for interest because of this reduction.

33.      In light of this conclusion the judgment in default of answer is for the same amount.

34.      I also gave the plaintiff 28 days to consider whether it wishes to pursue the balance of its claim.  If it does I will issue further directions for the defendants to file an answer to the balance of the claim and also transferring the remainder of the claim to the Petty Debts Court.

Indemnity costs

35.      Finally, Advocate Heywood sought indemnity costs because of the overall approach of the defendants including Leslie who purported to represent the defendants at different times to the litigation.  In particular, he emphasised that an adjournment was obtained in March of this year by Leslie lying to the court.  He also emphasised this was part of a wider pattern of behaviour where the first defendant and Leslie failed to engage with the plaintiff by raising unjustified excuses which were a combination of problems with banking systems, problems with emails, illnesses and other untrue statements about relatives being ill or passing away.

36.      Advocate Chiddicks, who was understandably able to say little, realistically advanced the following observations.  Firstly, he questioned whether the conduct of Leslie was relevant to the conduct of the litigation because she was not a party and had never in fact been authorised by the second defendant.  Secondly, he questioned whether the costs incurred were necessary because judgment in default could have been obtained and therefore a summary judgment hearing with the expense involved was not necessary.

37.      In response to this point Advocate Heywood contended that any such summary judgment ruling was necessary only because of the prevarication of the first defendant and Leslie.  The plaintiff wanted to be in a secure position as possible.  Had the defendants engaged as they were invited to on many occasions, the level of costs incurred would not have been necessary.  Ultimately he contended, if this was not a case which justified indemnity costs, then there was little point to the jurisdiction to order such costs.

38.      The decision I have reached is that it is appropriate to require the defendants to pay the plaintiff's costs on an indemnity basis.  I am satisfied that the overall conduct of the defendants is such that it takes this case out of the ordinary and justifies indemnity costs.  It is also clear from the correspondence which I have reviewed since the hearing and in the production of this judgment that Leslie was clearly representing the defendants because she was running the business in the premises sub-let to the second defendant and negotiating for both defendants with the plaintiff.  Her conduct is therefore relevant to the decision I have reached.  She clearly lied to the court in seeking an adjournment and it is appropriate to express the court's displeasure at Leslie having misled the court in such a manner which was wholly unacceptable.  This conduct is also linked to a wider pattern of prevarication and delay as summarised by Advocate Heywood.

39.      In relation to the present hearing to illustrate my conclusion, the first defendant indicated he was going to apply for an adjournment yesterday and then failed to appear without any explanation.  Leslie instructed a lawyer 40 minutes before the hearing was due to start in the hope of obtaining an adjournment even though the plaintiff was informed that Neves had taken legal advice some two years earlier.  These applications also ignored the very clear warning I gave to Leslie on 17^th April, 2019 about the importance of the defendants complying with orders made and preparing for hearings.  There were also other reminders referred to above about preparing for the present hearing.  Yet the defendants including Leslie ignored all this guidance.  This is also unacceptable.

40.      For all the above reasons an order for indemnity costs is therefore clearly justified in this case.

Authorities

Royal Court Rules 2004, as amended

Gothard v Strada Drilling International Limited [2019] JRC 017A.