Jersey Unreported Judgments

Estate - unless order

[2022]JRC256

Royal Court

(Samedi)

18 November 2022

The Plaintiffs appeared in person.

The Defendant not present.

CONTENTS

judgment

the MASTER:

Introduction

1.        This judgment contains my reasons in relation to the plaintiffs' application for an unless order due to the defendant not having complied with paragraphs 8 to 11 of an Act of Court dated 14^th July 2022.

Background

2.        The original background to this dispute is set out in my previous judgment in this matter reported at Fisher and Anor v Walker [2022] JRC 201 at paragraphs 2 to 24 of that judgment which I adopt for the purposes of this decision.

3.        For the reasons set out in that judgment I refused to permit the defendant to withdraw from a previous agreement to apply for lifetime gifts she had received.

4.        Since that decision, the defendant has not made a payment into court of the lifetime gifts she received as required and accordingly paragraphs 4a to d, 5b(ii) and 15 of her answer were struck out with the result that she was removed as executor.

5.        As contemplated at paragraph 42 of my previous decision, the plaintiffs have now applied to the Royal Court for a new executor to be appointed.

6.        The present application concerns paragraphs 8 to 11 of the Act of Court of 14^th July 2022 which ordered as follows: -

"8.       within 6 weeks the Defendant shall provide the best copies she is able to procure of the Defendant's bank statements at Barclays Bank and by consent the Caveat granted preventing the Defendant from acting as executor is varied to permit the Defendant and/or her advocate to seek copies of such statements;

9.        also within 6 weeks the Defendant shall also use her best endeavours to obtain from her bank a written explanation as to why certain statements had been lost in 2018 and 2019;

10.      the Defendant is further directed within 6 weeks to seek to obtain bank statements for account number 23720764 at Barclays Bank in Jersey and from any account maintained by the deceased with Credit Agricole, France and the caveat is varied accordingly by consent to permit the Defendant and her advocate to obtain copies of such statements;

11.      within 10 weeks of this Act of Court the Defendant shall file an affidavit setting out the Defendant's evidence in full to stand as evidence in chief in relation to: -

a.        the Schedule of Loan payments disclosed by the Defendant setting out for each loan payment who the money loaned was actually paid to and how it was used; insofar as any of the loan payments represent any earnings of the Defendant paid into any bank account of the deceased, the Defendant shall explain whether any such earnings or any part of them were used at all for the Defendant's benefit and if so how.

b.        why the loan payments are said to be loans and the full circumstances leading to each and every repayment of the loans which took place in 2018;

c.        any evidence the Defendant wishes to rely on in relation to any expenses payments that remain disputed and the claim for care..."

7.        The orders at paragraphs 8 and 9 were made because they relate to monies said to have been advanced by the defendant to the deceased.

8.        The defendant in her discovery had also stated that she could not obtain certain bank statements in 2018 and 2019.  These dates were important as they related to when the deceased made certain payments to the defendant.  This is because in schedule 2 of her affidavit of discovery, the defendant had stated that 2018/2019 bank statements in an account were not recoverable due to a "banking error".  The nature of the error was not explained.

9.        In relation to paragraph 10 the defendant had disclosed that the deceased had these bank accounts but had not provided discovery of the same.  Accordingly, the caveat was varied to enable her to obtain these records so that the plaintiffs could verify the statements made in her statement about these bank accounts.

10.      In respect of paragraph 11, in paragraph 9 of her statement sworn on 29^th April 2022, the defendant had explained that she had lent the deceased £39,570.24 which loans the deceased had repaid in tranches in 2018.  Attached to her statement was a schedule of loan payments made out of her account, between March 2013 and February 2017.  However, these statements simply showed a transfer of funds without any other information or explanation which led to the order at paragraph 11.

The application

11.      As the defendant had not complied with the orders made the plaintiffs sought an unless order.  Notification of the application was given to Advocate Emmanuel, who no longer represents the defendant but who remained on the record as an address for service.

12.      The hearing was conducted on video link due to two of the three parties being outside Jersey.  The defendant, through Advocate Emmanuel, was also given details of when the hearing was taking place and what information was needed in order for the defendant to take part in the hearing remotely.

13.      At 09:30am on the day of the hearing the defendant emailed my secretary informing me that she was unable to attend the hearing as she was unwell.  No medical evidence was supplied in support of this statement and no adjournment was asked for.

14.      She was also critical of her former advocate and expressed her views on the desire of the plaintiffs to become executors.  These observations were not relevant to the present application and so I express no views on them.  It is right to record that the defendant did assert that all relevant bank statements and evidence of the loans to her mother had been produced.

15.      However, when I made the original order of 14^th July 2022, I was satisfied that it was appropriate to do so and that all relevant documents had not been produced.  I have reconfirmed whether that is the case in relation to the decisions I made and I am satisfied that the documents or explanations the defendant was ordered to provide remain relevant.

16.      In relation to the applicable legal test where it is said that a party is in breach of an order, I considered this in Newman v De Lima [2018] JRC 155.  The approach I adopted in Newman was reviewed and accepted by the Royal Court in Sheyko v Consolidated Minerals [2021] JRC 267 where the court stated the following at paragraphs 105 to 108: -

"105.   The Master further held that, as Jersey now had in RCR 1/6 an overriding objective identical to that found in the CPR, it was appropriate to apply the first two limbs of the test set out by the English Court of Appeal in Denton v TH White Limited [2014] 1 WLR 3926 when considering what sanction to impose (see paragraph 42) namely:

(i)        Was the breach serious or significant? and

(ii)       Was there good reason for the breach?

106.    In addressing these questions, the Master stated at paragraph 43:

"what needs to be considered are the orders that have not been complied with and the effect of such non-compliance on the progress of the litigation either to a trial or to a settlement."          

107.    The Master did not follow the third limb of Denton (which refers specifically to CPR 3.9) and instead held that the discretion in Jersey was more general (at para 47 et seq.):

"47. In my judgment in this jurisdiction, the discretion is a more general one. This discretion still requires me to consider whether the case can be dealt with justly and at proportionate cost and any relevant factors listed in Rule 1/6. However, I consider that I am also required to look at the case as a whole and the nature of the proceedings in particular, what is in issue where some form of strike out of a claim is contemplated. In cases involving a failure to issue a summons for direction (albeit pre-dating the overriding objective), the Royal Court has noted that the most severe sanction of striking out a plaintiff's claim should not be applied if there are other sanctions which could be applied which would enable justice to be done between the parties - see for example Viera v Kordas [2014] JRC 042 at paragraph 19 and Mayhew v Bois Bois [2016] JRC 024 at paragraphs 8 and 9.  Whether the failure is to issue a summons for directions required by the Rules or a failure to comply with a particular order, I consider that the same approach should be taken to imposition of sanction which has the effect of striking out a claim or counterclaim or an answer, thus depriving a party of their day in Court.

48. I also consider it may be possible to make orders which fall short of striking out the entire claim. Depending on the breach it may be possible to limit the sanction to striking out part of a case or that if a particular step is not complied with part of the case will be struck out or evidence may not be adduced on a particular issue. There is also the sanction of costs.

49. I have referred to these different possibilities available to the Court because they are all illustrative of the more general discretion available to the Court where a party has not complied with a Court order. In reaching this view, it should not be forgotten that procedure is a means to an end namely a trial or settlement and breaches should be kept in that context. The key issue is therefore the effect of any non-compliance and whether or not a fair trial can take place after a breach. I accept I have to also take into account, if it is right to impose a sanction for non-compliance, whether that non-compliance was either deliberate or there is no justification for it. In every case there will always come a point where the conduct of a party in ignoring Court orders will lead to the ultimate sanction of a case being dismissed even if a trial could still take place. This judgment should not therefore be taken as any indication that non-compliance of any Rules and Practice Directions is acceptable, will be tolerated or will not, in appropriate cases lead to the ultimate penalty of a claim or answer being struck out." (emphasis added)

108.    The Master, whose approach we endorse, applied the same test in Powell v Chambers [2018] JRC 169, which was about relief from sanction after a party had been automatically struck out for failure to comply with an unless order in respect of discovery."

17.      This is the approach I have adopted in this case.

18.      Firstly, therefore I was satisfied that the breach was serious and/or significant because without it the plaintiffs could not test the explanations given by the defendant in her affidavit about monies, she said she had loaned to the deceased and/or whether or not a full explanation of the assets of the deceased's estate and how they had been dealt with had been provided.  As was clear from Sheyko testing of assertions by one party by documentary evidence is a significant part of the court process and therefore a failure to provide relevant documents is a serious or significant breach.

19.      Secondly, in this case there was no good reason for the breach.  As set out above, I was satisfied that the documents and statement I had ordered to be provided remained relevant.  No excuse was offered for the noncompliance.  Rather the defendant stated that she had complied, but I was satisfied this was not the case.

20.      In relation to the sanction to be applied, the order sought by the plaintiffs was a fair order.  Without the documents being provided a fair trial on whether the defendant did make loans to the deceased could not take place.  It was therefore appropriate to make an order carrying the sanction if there was noncompliance by the defendant with the orders made previously.

21.      I however allowed the defendant time to comply notwithstanding her previous breach.  This was not a case where it was appropriate to impose an immediate penalty of striking out the relevant part of her statement, without allowing her one final opportunity to comply.  I therefore gave the defendant 21 days to comply failing which the part of her statement stating that the deceased had repaid loans to her would be struck out and accordingly the repayments made would be all treated as gifts not repayment of loans, thus increasing the amount the defendant was required to account for as lifetime gifts.  This order will take effect automatically if the defendant does not comply.  If the defendant does comply, then there will be an issue to be determined about whether the monies advanced by the defendant to the deceased were loans or not.

22.      For all these reasons the plaintiffs' application is therefore granted.

23.      In terms of costs, as there was no excuse for the defendant's breach and as the defendant had been given the opportunity to appear but chose not to do so, on this occasion I was satisfied it was appropriate to order indemnity costs in favour of the plaintiffs.  A breach of a court order is a serious matter and if further sanction is sought the subsequent application may well lead to an indemnity costs order in favour of plaintiff as occurred in Newman v De Lima.

Authorities

Fisher and Anor v Walker [2022] JRC 201. 

Newman v De Lima [2018] JRC 155. 

Sheyko v Consolidated Minerals [2021] JRC 267.