Jersey Unreported Judgments

Appeal against the decision of the Judicial Greffier dated 17 May 2021

[2021]JRC273

Royal Court

(Samedi)

4 November 2021

Before     :

T. J. Le Cocq, Esq., Bailiff, sitting alone

 

Court ref: 2019/165

 

Court ref: 2021/066

 

Advocate H. Sharp for David Banks and Hunters Investments Limited.

Advocate J. D. Kelleher for Simon Young, Peter Machon, Sanne Holdings Limited and Sanne Fiduciary Services Limited.

judgment

the bailiff:

Introduction

1.        On 8 July 2021, I issued a decision dismissing the appeal of the Second - Fifth Defendants ("the Defendants") against a decision of the Judicial Greffier of 20 April 2021.  On that occasion, I indicated that reasons would follow at a later date.  These are those reasons.

2.        The nature of the Defendants application before the Judicial Greffier was to put a requirement into the proceedings that before the Plaintiffs might proceed with an application for summary judgment there should first be a hearing before the Court to consider whether any summary judgment application should be allowed to proceed at all. 

3.        In the decision, the Judicial Greffier declined to make such an order and his reasons are set out in his judgment of 17 May 2021 Hunters Investments Limited v Crill and Ors [2021] JRC 139 ("the Judgment"). 

4.        Having set out the arguments of the parties, in paragraphs 19 and 20 of the Judgment, the Judicial Greffier set out his decision and reasons:

"19.      During the ex tempore judgment, I expressed the view that the court was uncomfortable with the notion of a preliminary hearing on the issue of the summary judgment application.  I also expressed the view that in light of the fact that any such application was likely to be strongly contested and given the views that had been aired during the directions hearing on this topic, unsuccessful parties in any subsequent summary judgment application can expect the court to take a strong view on the issue of the costs incurred in the application.

20.      I made those observations for the following reasons:

(i)        First, whilst I acknowledged the duties imposed upon the court to take a proactive stance in case management, I did not consider that RCR 1/6 (and particularly RCR 1/6(6)(h)) was intended to encourage the court to add further layers of screening to any application brought in accordance with the existing RCR.  To suggest that it did would be to invite such applications in regard to all and any contested applications brought to Royal Court.  It cannot be appropriate that any recipient of a summons will be entitled to have what amounts to two bites at the cherry in defeating the application; one where the efficacy of the application is determined by the court and then a second when the actual application is substantively heard.

(ii)       In my estimation, to accede to the request for a preliminary hearing would be akin to encouraging the practice of determining cases on an issue by issue basis.  I therefore had regard to the court's comments in Corbin v Dorynek and Flath [2020] JRC 031 at paragraph 57:

"57.    The other conclusion I have reached is that this part of Mr Flath's application is an example of approaching determination of a case on an issue by issue basis which the courts on various occasions have warned against (see for example Cohen, Kerr & Anor v Arbitrage Research Trading Ltd [2019] JRC 229).  I therefore refer to the well-known warning in Public Services Committee v Maynard [1996] JLR 343) cited at paragraph 13 of Stock v Pantrust as follows:-

"However, in our judgment, the Royal Court should consider its current practice.  To single out bare points of law in this way (which might, when the facts are found, prove to be hypothetical) is likely to increase costs and to extend the time before the plaintiff knows whether he or she is to receive damages for his or her injury and receives the damages awarded.  Justice delayed is usually justice denied, particularly in personal injury cases, in which the normal approach should be to fix as early a date as possible for the trial of all issues.""

(iii)      Second, to give provenance to a principle that the court should or could screen applications via a preliminary hearing process ignores the very real possibility that the issues that will be raised at the preliminary hearing will be the same as those raised at an actually summary judgment application.  All the points raised by the defendants in questioning the purpose and proportionality of the proposed summary judgment application are ones that the court would have regard to at the actually hearing.  The principles established in the The Federal Republic of Nigeria case are principles intended to be utilised by the court within the summary judgment application and not in assessing the merits of an application in a preliminary hearing.  The appropriate methodology of ensuring that inappropriate or vexatious applications are not made without consequences is the exercise of the discretion of the court to award costs. I was clear at the hearing that unsuccessful parties in summary judgment applications can expect the court to take a strong view on costs.

(iv)      Third, and without derogating from the two reasons set out above, at the time of the hearing (whilst the plaintiff has indicated in detail that it intended to bring an application for summary judgment) neither the court nor the defendants were actually in possession of the exact wording of the proposed summons.  The plaintiff may recast its application (as is its right) thereby invalidating or mitigating the arguments already raised by the defendants for a preliminary hearing.  As such, notwithstanding that I had concluded that employing a preliminary hearing was fundamentally a regressive proposition, had I concluded otherwise, I would still have determined that it "too early" to adjudicate on the need for a preliminary hearing prior to the issuance of the summary judgment summons."

Hunter Investment Limited (HIL) Pleaded case

5.        HILs case against the Defendants is set out fully in its Order of Justice.  In summary, however, HIL's case is:

(i)        All of the Defendants knew that Sanne Holdings was balance sheet insolvent from March 2010 onwards.  At that time Sanne Holdings had issued £4 million 10% preference shares to Ivegill which constituted a liability to be recorded on Sanne Holdings balance sheet.  There was a lack of financial resources to do this and so the Defendants determined wrongly to account for the shares at an incorrect nominal value rather than the true liability created at £4 million.  This in effect concealed a balance sheet insolvency although the Defendants knew their accounting was wrong.  They had been told by Appleby that the accounting treatment of the preference shares was unlawful on 4 February 2010, and by Carey Olsen at a meeting on 19 May 2011.  Sanne Holdings never received either formal written advice or approval from its auditors who have refused to hand over any written advice.  This financial information was kept from HIL which was at the time its largest single shareholder.  HIL alleges fraudulent silence and false accounting including back dated minutes of a meeting, a misleading letter of 20 May 2011, created to keep Sanne Holdings insolvency a secret from HIL.  This, it is alleged, was necessary part of HIL's case as, without it, the Defendants would not have been able to execute a transfer deal in 2011.  The result of this is that HIL sold its equitable interest at a heavy discount. 

(ii)       When the question of false accounting was raised, with Sanne in pre-action correspondence, Sanne Holdings and Sanne Fiduciary Services Limited made a false complaint to the Law Society in which it apparently claimed that the accounts were accurate and the 10% preference shares were recorded as equity and not as a liability.  This was untrue.  The Law Society rejected the complaint at the preliminary stage.

(iii)      Other allegations are made relating to Sanne's state of knowledge and lack of the provision of adequate explanations and allegations are made of a large number of mis representations made in the proposal that was put to HIL in November of 2010 and which ultimately resulted in the 2011 transfer of HIL's shares.  Those misrepresentations included suggestions that there was a crisis in the Sanne business.  Furthermore, so it is alleged, the Second and Third Defendants asserted to HIL that they would use Article 41 of Sanne Holdings Articles of Association to take their part in the Sanne business to a trading subsidiary company which they could do without breach of a number of covenants. 

6.        I do not go into the detail explaining that particular aspect of the allegation but suffice to say that it is alleged that it was part of the overall campaign, if I may put it that way, to procure that HIL sell its shares in Sanne at what was in effect so it is claimed an undervalue. 

The Law

7.        A number of cases were put before me.  Some cases are examples and I do not need to refer to them all.

8.        I was referred to the overriding objective set out in Rule 1/6 of the Royal Court Rules 2004.  Rule 1/6(6) is in the following terms as is relevant:

"Active case management includes

...

(c )      Deciding promptly which issues need full investigation and trial and accordingly disposing summarily of the others;

...

(h)       Considering whether the likely benefits of taking a particular step justify the costs of taking it;

...

(l)        Giving directions to ensure that the trial of a case proceeds quickly and efficiently.

..."

9.        Rule 7/1 of the Royal Court Rules deals with the grounds for summary judgment.  It states:

""7/1    Grounds for summary judgment

(1)     The Court may in any proceedings give summary judgment against a plaintiff or defendant on the whole of a claim or on a particular issue in any pleading if -

(a)     it considers that -

(i)      the plaintiff has no real prospect of succeeding on the claim or issue, or

(ii)      the defendant has no real prospect of successfully defending the claim or issue; and

(b)     there is no other compelling reason why the case or issue should be disposed of at a trial.

(2)     A summary judgment hearing may be ordered by the Court of its own motion or on application made by either party in accordance with this Part."

10.      In the case of HRCKY Limited v Hard Rock Limited and another [2019] (2) JLR 47, the Court considered an application for summary dismissal and, at paragraphs 59 and 60 said this:

"59.   At para. 18 of his judgment giving the appellant leave to appeal the judgment and of the Royal Court of February 1, 2018, McNeil, J.A. helpfully set out the test which is to be adopted by the court  on an application for summary dismissal.  In essence the principles are those set out by Lewison, J.  In Easyair Ltd. (t/a Openair) v Opal Telecom Ltd (2) [2009] EWHC 339 (Ch), at para. 15):

"i)  The court must consider whether the claimant has a 'realistic' as opposed to a 'fanciful' prospect of success:  Swain  v Hillman [2001] 1 All ER 91;

ii)       A "realistic" claim is one that carries some degree of conviction.  This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel [2003] EWCA Civ 472 at [8];

(iii)      In reaching its conclusion the court must not conduct a "mini-trial": Swain v Hillman;

(iv)      This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court.  In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED& F Man Liquid Products v Patel at [10];

(v)       However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application of a summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5) [2001] EWCA Civ 550;

(vi)      Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment.  Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Limited v Bolton Pharmaceutical Co 100 Limited [2007] FSR 63;

(vii)     On the other hand it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it.  The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be.  Similarly, if the applicant's case is bad in law, the sooner that is determined, the better.  If it is possible to show by evidence that although material in the form or documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success.  However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction: ICI Chemicals& Polymers Limited v TTE Training Limited [2007] EWCA Civ 725."

60.      On a procedural application of this kind it is important to note, as we set out at paragraph 2 above that the Court will not make findings of fact.  However, the Court will look at the affidavit evidence, both in support and in defence of an application for summary dismissal, to identify the extent to which facts are materially in dispute and whether the facts upon which a party relies in this procedural application are consistent with what may be described as the hard facts revealed by agreed documents.  The analysis which flows from that review will indicate the extent to which it is safe for a court to exercise its jurisdiction to order a summary dismissal and by contrast will enable the Court to identify those cases which ought to go to trial so that evidence as to the material facts can be adduced and challenged in the usual way.

11.      Counsel for the Plaintiffs referred me to the case of Foglia v The Family Officer Limited and Others [2021] EWHC 650 Comm in which at paragraph 10 - 18 the Court said:

"Legal principles

CPR 24 sets out the Court's power to give summary judgment in respect of the whole or part of a claim if it considers that the defendant has no real prospect of successfully defending it and there is no other compelling reason why the claim should be disposed of at trial.

The classic statement of the test to be applied by the Court in determining whether a defendant has a real prospect of successfully defending a claim is that set out by Lewison J (as he then was) in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) at [15] which has been approved by the Court of Appeal (inter alia in AC Ward & Sons v Catlin (Five) Ltd [2009] EWCA Civ 1098 at [24]) and recited in countless applications at first instance. I need not reproduce it here.

In this case Mrs Foglia places particular emphasis on the latter part of the EasyAir summary, and in particular the adjuration to the court to "grasp the nettle" in a suitable case. She points also to Calland v Financial Conduct Authority [2015] EWCA Civ 192, where Lewison LJ re-emphasised the need for the Court to carry out a "critical examination of the raw material" in order to determine whether a claim has a real prospect of success, noting that "the fact that some factual or legal questions may be disputed does not absolve the judge from her duty to make an assessment of the claimant's prospects of success" (at [28]-[29]).

...............

This, of course, is a somewhat unusual application - an application for summary judgment in a fraud claim on the merits. As to this, the authorities (perhaps unsurprisingly) say that there is no bar to granting such an application, but that very considerable caution is required.

Thus, subject to being satisfied that the test in CPR 24.2 is met, there is no impediment to the Court granting summary judgment where dishonesty is alleged. Mrs Foglia produced examples of cases where this had been done, .........  All of these are cases which turn on their facts and do not advance the matter.

As to caution, reference was made to the judgment of Mummery LJ at [4-18] of his judgment in Doncaster Pharmaceuticals Group Ltd v The Bolton Pharmaceutical Company 100 Ltd [2006] EWCA Civ 661 and in particular:

"[5] ....The decision-maker at trial will usually have a better grasp of the case as a whole, because of the added benefits of hearing the evidence tested, of receiving more developed submissions and of having more time in which to digest and reflect on the materials....

[17] It is well settled by the authorities that the Court should exercise caution in granting summary judgment in certain kinds of case. The classic instance is where there are conflicts of fact on relevant issues, which have to be resolved before a judgment can be given ... A mini-trial on the facts conducted under CPR Part 24 without having gone through normal pre-trial procedures must be avoided, as it runs a real risk of producing summary injustice.

[18] In my judgment, the Court should also hesitate about making a final decision without a trial where, even though there is no obvious conflict of fact at the time of the application, reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case."

..................

Mr Cerri also emphasises the caution needed in relation to claims in fraud more generally by reference to:

i) The authorities on pleading, which establish that pleadings of fraud should be subjected to close scrutiny and state that it is not possible to infer dishonesty from facts that are equally consistent with honesty (including of course negligence): .........................

ii) Fiona Trust & Holding Corporation v Privalov [2010] EWHC 3199 (Comm) at [1438]-[1439] per Andrew Smith J, a passage which describes how more serious allegations require more cogent evidence, how fraud has per se to be regarded as less likely than honesty and how this impacts the balance of probabilities standard of proof in civil cases.

A key passage relied on by Mr Cerri is from Sir Igor Judge PQBD in Wrexham Association Football Club v Crucialmove Ltd [2006] EWCA Civ 237 at [57]-[58] (later approved by Sir Terence Etherton CHC in Allied Fort Insurance Services Ltd v Ahmed [2015] EWCA Civ 841 at [81]):

"[57] I do not underestimate the importance of a finding adverse to the integrity to one of the parties. In itself, the risk of such a finding may provide a compelling reason for allowing a case to proceed to full oral hearing, notwithstanding the apparent strength of the claim on paper, and the confident expectation, based on the papers, that the defendant lacks any real prospect of success. Experience teaches us that on occasion apparently overwhelming cases of fraud and dishonesty somehow inexplicably disintegrate. In short, oral testimony may show that some such cases are only tissue paper strong. As Lord Steyn observed in Medcalf v Weatherill [2003] 1 AC 120 at paragraph 42, when considering wasted costs orders:

'The law reports are replete with cases which were thought to be hopeless before investigation but were decided the other way after the Court had allowed the matter to be tried'.

And that is why I commented in Esprit Telecoms UK Ltd and others -v- Fashion Gossip Ltd, unreported, 27 July 2000 that I was

'troubled about entering summary judgment in a case in which the success of the claimant's case involves, as this one does, establishing allegations of dishonesty and fraud, which are strongly denied, and which cannot be conclusively proved by, for example, a conviction before a criminal court.'

[58] This collective judicial experience does not always, or inevitably, provide a compelling reason for allowing the case to proceed to trial, nor for that matter require the judge considering the application to reject the conclusion that there is no real prospect of a successful defence of the claim if he is satisfied that there is none. That is not what the Rules provide, and if that had been intended, express provision would have been made. It is however a factor constantly to be borne in mind, if and when, as here, the reason for concluding summary judgment is appropriate is consequent on a disputed finding, adverse to the integrity of the unsuccessful party."

The Defendants submissions

12.      In essence, the Defendants, as appears from their skeleton argument and submissions of counsel argue that there should be a preliminary screening hearing in relation to DB's application for summary judgment and any application that might be brought by HIL.  Their reason for doing so is that any such applications would be bad on their face and would involve issues clearly more suitable for trial, which are not decisive, and which seek findings which overlap with evidence that will be needed to be called on other issues and which will simply delay the progress of those proceedings to trial.  This overall statement is particularised in five paragraphs in the skeleton argument as follows:

(i)        save in the very clearest of cases, finding on issues alleging deliberate fraud and/or dishonesty, which are the central issues on which the summary judgment applications seek judgment upon, are properly matters for trial, following the hearing by the court of oral testimony from all of the relevant witnesses and cross examination;

(ii)       The summary judgment applications, which seemingly invites the Court to make a wide range of factual findings, will inexorably lead to the conduct of what is effectively a mini trial;

(iii)      The summary judgment applications (if successful) do not appear to lead anywhere.  The issues are not decisive on liability and seek no relief as a consequence either in whole or in part, and are likely to involve significant duplication of the evidence which will be necessary at trial irrespective of the outcome of the application;

(iv)      DB and HIL ought not to be allowed to try their cases summarily on an issue-by-issue basis (this being the second such summary judgment application which the Defendants have faced in relation to the accounting issues with the 2010 accounts of Sanne);

(v)       The summary judgment applications will inevitably significantly delay the progress of the proceedings to trial and increase the costs. 

13.      It is further argued that the Judicial Greffier ought to have ordered the above matters, which the Defendants characterise as self-evident, to be dealt with at a preliminary stage to determine whether or not a summary judgment application should be allowed to continue.  The Judicial Greffier had power to do so under the active case management powers conferred in the furtherance of the overriding objective and because the court has a discretion as to whether or not and when to allow a hearing of a summary judgment application to take place. 

14.      It was argued that the correct approach for me to apply on appeal was to consider the matter afresh and in support of that the Sanne Defendants referred to the case of Alhamarani v Russa Management & Ors [2006] JLR 176.  I agree that this is the appropriate test to apply on appeal and I am therefore entitled to look at the matter afresh and to exercise my own discretion whilst paying due regard to the decision of the Judicial Greffier. 

15.      At the time of the argument before me, a Summons had been issued in proceedings 2019/165 on 18 January 2021, for summary judgment but none issued in proceedings 2021/066.  Correspondence nonetheless suggests that an application for summary judgment will be forthcoming in the latter proceedings.

16.      Reference was made to DB's earlier application for summary judgment.  It too concerned the Sanne Holdings 2010 accounts and was ultimately conceded by the Defendants.  The effect of that Summary Judgment was to hold that the 2010 Sanne Holdings accounts were materially misstated in respect of preference shares.  These shares had been issued as part of a transaction to acquire the interests of one of the principal shareholders, Ivegill Holdings Limited.  The misstatement related to the fact that the liability created by issuing 10% preference shares in connection with the transaction was recorded in the accounts at an incorrect nominal value of the shares rather than at the fair value of the shares which had the effect of giving the appearance that Sanne Holdings was balance sheet solvent instead as the true position would have been, balance sheet insolvent to a relatively modest extent.  It is argued that what was accomplished earlier in the summary judgment application was "entirely unclear" and no relief had been granted as a consequence nor had there been any significant narrowing of the issues.  In fact, this was reflected in the judgment of the Court in connection with the original summary judgment application in which the Court said at paragraph 42 of that judgment:

"In my estimation, the extent to which the summary judgment granted in this judgment affects the litigation as a whole is far from clear.  As the Defendants asserted, the Plaintiff has received none of the relief pleaded in the Order of Justice as a direct consequence of this judgment."

17.      The Defendants argue that the current summary judgment application made by DB is unclear as to what the Plaintiff may be seeking the Court to find and they make the point that a proper definition of the scope of any summary judgment application is a legitimate concern to the Defendants in respect of which they should be entitled to require clarity. 

18.      The Defendants are accordingly concerned that they are now facing further and costly summary judgment applications which will cover similar ground to the original summary judgment application, and which will overlap with matters in trial.  This, it is argued, will enable DB (and HIL) to take successive bites of the cherry on an issue-by-issue basis in relation to isolated and non-decisive issues.  This could be a continuing process which is not in accordance with the overriding objective and the evidence that would be needed to be deployed by the Defendants in response to any such summary judgment applications would duplicate the evidence that would need to be deployed at trial. 

19.      It is argued that the Court has the power to stop such conduct on the part of the Plaintiffs because it has powers of active case management under the overriding objective and ultimately the order of a summary judgment application is at the discretion of the Court.  Rule 7/1(2) RCR states:

"A summary judgment hearing maybe ordered by the Court of its own motion or an application made by either party in accordance with this part."

20.      Further it is argued that the Court can deal with matters under its inherent jurisdiction.

21.      It is well understood that there is a high threshold for a Plaintiff to reach in order to succeed in a summary judgment application.  The Plaintiff must be able to establish that there is no real prospect of successfully defending the claim or the issue.  The Court should not engage in making findings of fact.  It is asserted that the current/anticipated summary judgment applications would be in relation to accusations of dishonesty and/or fraud.  It is correct, indeed, that dishonesty and fraud feature significantly in the pleadings in this case.  It is argued by the Defendants that where that is the case and in particular where the Court might need to determine whether or not certain parties have done something deliberately or innocently, that assessment will need to be made by way of oral evidence and cross examination at a trial.  Whilst there is no complete ban on summary judgment applications where there are allegations of fraud or dishonesty it is clear, and has been emphasised in a number of judgments, that the Court needs to proceed cautiously where such allegations are involved. 

22.      The Defendants argue that that part of the Judgment which suggests that the holding of a preliminary hearing would invite such applications in regard to all and any contested applications, as overstating the position and submits that for summary judgment applications it will often be clear to the parties that there would be a saving of time and costs even if the summary judgment application is contested. 

23.      In answer to the Judicial Greffier's statement in the Judgment that for him to permit a preliminary examination as wished for by the Defendants would enable a Defendant to have "two bites of the cherry" it is argued that in fact in this case the Plaintiffs were themselves seeking to have multiple bites of the cherry by making successive applications on discreet issues in isolation to the other issues requiring determination at trial. 

24.      The case of Corbin v Dorynek & Flath [2020] JRC 031 was put before me.  In that case the Court was considering applications for a split trial on liability and quantum and preliminary issues and not, as such, summary judgment.  However, the principles in that case were urged upon me as being helpful. 

25.      In that case the following principles were accepted as applying:

(i)        Only issues which are decisive or potentially decisive should be identified;

(ii)       The question should usually be questions of Law;

(iii)      They should be decided on the basis of a Schedule of Agreed or assumed facts;

(iv)      They should be triable without significant delay, making full allowance for the implications of a possible appeal;

(v)       Any order should be made by the Court following a case management conference.

26.      It is further argued that the Judicial Greffier was wrong in referring to the possibility of the Plaintiffs recasting their summary judgment applications.  It was clear, so it was argued, that what the current DB application and the anticipated HIL application are likely seeking summary judgment and judicial findings that the misstatement of the 2010 Sanne Holdings accounts was deliberate and made with the intention of concealing the insolvency of that company from HIL.  It is argued that given that that was the thrust of the application for summary judgment it would be difficult to see how that might be recast in a way that would address the concerns raised before the Judicial Greffier.  The Defendants repeat their arguments to the effect that:

"(i)  It's generally inappropriate for the Court to make findings of dishonesty or fraud on a summary basis, without having heard all the evidence and in particular the oral evidence of those accused of acting fraudulently;

(ii)       The Plaintiffs Summary Judgment applications will not be decisive of liability or lead to any relief;

(iii)      That there is an inevitable and significant overlap between the issues on which summary judgment is sought and the evidence which will be adduced in relation to the remaining issues in the case at trial."

27.      Advocate Kelleher accepted that he has not in his research discovered any cases that show that the Court has taken the stance that he urges upon me and ordered a preliminary assessment of any application for summary judgment to determine whether or not it should proceed but he argues that this could be simply a case management matter. 

The Plaintiffs Submissions

28.      The Plaintiffs for their part, observed that any preliminary hearing would inevitably be decided in the absence of full affidavits and therefore the applying party would be prevented from bringing forward their best evidence and arguments to the Court.  It is only if the preliminary hearing finds in favour of the applying party that evidence would then be served, and the full case would be deployed for the summary judgment hearing. 

29.      This, so it is argued, complicates the existing procedure and would have the effect of benefitting parties who would have no real defence to a summary judgment application. 

30.      With regard to the factual background, the Plaintiffs state that they have given the Defendants a number of opportunities to address their questions as to why a summary judgment application is not merited by reference to the evidence.  This was, so I am told, met by a summons issued in the DB proceedings without warning seeking a stay of the entire proceedings. 

31.      The Plaintiffs rely on Foglia cited above, to the effect that it is perfectly acceptable to seek summary judgment in fraud cases by reference to contemporaneous records, common sense and logic without the necessity of engaging in a mini trial.  Each case turns on its particular facts and to form any view in some form of preliminary hearing, so the Plaintiff asserts, the Court would need to see the affidavit evidence from both sides. 

32.      It is further submitted by the Plaintiffs that the Defendants wish to put in a preliminary step before they can bring a summary judgment application in effect deprives the Plaintiffs of full access to justice.  The Plaintiffs assert that their case is compelling to the effect, that the 2010 accounts were deliberately misstated and that lies have been told. 

33.      The Plaintiffs assert that the Defendants desire to argue at a preliminary hearing that the Court should be slow to make findings of dishonesty at a summary judgment hearing and should not conduct a mini trial can only properly be assessed by the Court with a proper and informed understanding of the evidential dispute between the parties if any. 

Conclusions

34.      The Court can of course give directions, amongst others, as to the timing of any application for summary judgment and indeed could give other case management directions such as may impinge upon the ambit of any such application and, possibly, the evidence that may be adduced to deal with it. 

35.      However, in my view, whereas the Court should be proactive in case management, it should not impose another layer of hearings or permission before a party can bring an application that is expressly provided for within Rule 7/1 of the Royal Court Rules. 

36.      The Court can make such an application of its own motion and it may grant summary judgment if any party before it brings such an application.  Naturally, if the nature of the summary judgment application is such that in principle, or in fact, the Court should not grant it then the summary judgment will itself be unsuccessful and there would be a very real prospect of an adverse costs order against the unsuccessful party.  I do not, of course, prejudge any costs order that might be made in this case should such an application be made and should it be unsuccessful.  That will depend upon a number of factors on which I have not been addressed and I would not propose to give any indication.  The natural sanction, however, for meritless applications which are either unsuccessful on their facts or brought on wrong principles, is an adverse costs order and that is the risk that an unsuccessful applicant takes in all matters.

37.      I agree with the Plaintiffs characterisation of any potential application along the lines anticipated by the Defendants in this appeal.  In effect, the Court would be asked to make a ruling without, possibly, understanding the position of the various parties in law and in fact.  A Court should only make a ruling on the basis of incomplete information in exceptional circumstances where it is clear that for reasons unconnected with the information that is not before the Court the matter must either succeed or fail as the case may be.  If it is not clear, and if it is fact specific, I cannot see how the Court should attempt a preliminary consideration without the full information that would normally be before it in a summary judgment application. 

38.      Moreover, although I do not suggest that the Royal Court Rules are not capable of supplementation or augmentation under the inherent jurisdiction of the Court or otherwise there is a clear mechanism, namely Rule 7/1, for the bringing of a summary judgment application and it does not appear to me to be appropriate or indeed necessary to place an additional hurdle before a party in taking what is a procedural step provided for within the Rules. 

39.      It is for those reasons that I upheld the judgment of the Judicial Greffier and dismissed the appeal.

40.      However, I add this.  The nature of this litigation requires in my view robust management to bring this matter before the Court for final determination.  Interlocutory processes which do not advance the matter to final determination, cause unnecessary delay or unnecessarily add to the costs, are to be avoided.  The original summary judgment application does not appear to me to have been thought by the determining court as achieving a great deal.

41.      Should therefore any summary judgment application be made which, so the Defendants may wish to argue, clearly does not advance the matter to final determination or result in a material narrowing of the issues or the potential saving of time or costs overall .  It is open of course to them to seek the directions of the Court in a case management hearing.

Authorities

Hunters Investments Limited v Crill and Ors [2021] JRC 139. 

Royal Court Rules 2004. 

HRCKY Limited v Hard Rock Limited and another [2019] (2) JLR 47. 

Foglia v The Family Officer Limited and Others [2021] EWHC 650 Comm 

Alhamarani v Russa Management & Ors [2006] JLR 176. 

Corbin v Dorynek & Flath [2020] JRC 031.