Jersey Unreported Judgments
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URL: http://www.bailii.org/je/cases/UR/2023/2023_122.html
Cite as: [2023] JRC 122
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Debt - application for summary judgment in respect of unpaid invoices.
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Before : |
Advocate David Michael Cadin, Master of the Royal Court. |
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Between |
JTC (Jersey) Limited |
Plaintiff |
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And |
(1) Oisin Fanning |
First Defendant |
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(2) Red Cedar Limited (on its own account and in its capacity as Nominee for Mr Oisin Fanning) |
Second Defendant |
Advocate J. Garrood for the Plaintiff.
The Defendants did not appear and were not represented.
judgment
the MASTER:
1. This is an application by the Plaintiff, JTC (Jersey) Limited ("JTC") for summary judgment against Mr Fanning and Red Cedar Limited in respect of unpaid invoices.
Background-¯
2. JTC is a corporate services provider.-¯ By a letter of engagement from JTC dated 29 July 2020, countersigned by Mr Fanning on 30 July 2020, JTC agreed to provide administration services to Red Cedar Limited on the basis of the terms set out in that letter of engagement and JTC's standard terms and conditions.-¯
3. Between July 2020 and August 2022, JTC provided administration services to Red Cedar Limited and raised various invoices, the majority of which were unpaid.-¯
4. On 10 August 2022, JTC issued proceedings by way of an Order of Justice (signed by the Bailiff) containing an interim arrêt entre mains provisoire, in respect of all rights, assets and interests held by the Second Defendant for and/or for the benefit of the First Defendant and seeking judgment in sum of £62,116.07 plus interest, together with an order confirming the arrêt entre mains.-¯ The sum claimed in the Order of Justice was set out by reference to a schedule in the following terms:
5. An Answer was filed by Advocate Thomas as "Advocate for the Defendants" in September 2022 putting JTC to proof but:
(i) admitting the terms of the letter of engagement and seeking to rely on provisions of it;-¯
(ii) denying that the Plaintiff is entitled to charge for legal, financial, tax or other such professional advice;
(iii) alleging that the amount charged is unreasonable;
(iv) alleging a breach of contract on the part of JTC is failing to provide cost estimates in respect of additional amounts and/or failing to get authority to incur such fees;
(v) raising the provisions of the Supply of Goods and Services (Jersey) Law 2009 in relation to the First Defendant dealing as a consumer, reasonable price, and unreasonable interest.-¯
6. JTC filed a Reply to that Answer.-¯
7. By a Summons dated 1 March 2023, JTC sought summary judgment in the sum of £62,116.07 plus interest. That application was supported by an affidavit from Mr Byrne, the Chief General Counsel of JTC Group, stating amongst other things that he believes that the Defendants have no defence to the whole of JTC's claim.
8. In support of its Summons, JTC has filed a Skeleton Argument seeking:-¯
"Summary judgment for the amount of £108,881.34 as set out in paragraphs 99 and 100 of the Second Affidavit of Mr Byrne. The Plaintiff also claims interest in the amount of £17,290.76 interest calculated to 31 March 2023 at the contractual rate of interest and accruing at a rate of £34.44 per day until the date of judgment."
9. Paragraph 100 of Mr Byrne's affidavit contains the following table which he says, detail the amounts outstanding:
10. The Summons was fixed (and indeed, re-fixed at the Court's request) with Notice to Advocate Thomas's firm for 15 May 2023. No material was uploaded to Case Centre on behalf of the Defendants and on enquiry from the Court, Advocate Thomas's firm notified the Court that it had "been acting for the First Defendant, Mr Fanning" and came off the record on 27 April 2023. No mention was made of the Second Defendant (in respect of whom it had purportedly filed an Answer, albeit that JTC which provides the directors for the Second Defendant does not accept that Advocate Thomas' firm was ever instructed by the Second Defendant).
11. No notification under RCR 20/4 of any change in representation has been received by the Court, nor has the First Defendant indicated that he will be acting in person.-¯
12. By way of an email dated 14 May 2023 sent to the Court, Mr Fanning applied to adjourn the application for summary judgment. Mr Fanning's application was granted, and I further directed that:
(i) the Plaintiff to file with the Court and provide to the Defendants full particulars of the amount claimed by way of an Updated Schedule to the Order of Justice be filed by 5pm on 19 May 2023; and
(ii) the First Defendant if so minded, to respond to the said Updated Schedule by 19 June 2023.
13. In granting the adjournment, I reminded Mr Fanning of the provisions of RCR 7/3 which requires a respondent to an application for summary judgment to file any evidence upon which they wish to rely at least 7 days before the hearing. A copy of my judgment was sent by the Court to the email address Mr Fanning had used to communicate with the Court.
14. The Plaintiff provided the Court with an updated Schedule to the Order of Justice on 19 May 2023 particularising its claim for £129,891.87 on the basis of:
(i) Unpaid invoices of £52,381.07;
(ii) Unpaid disbursements of £56,500.27; and
(iii) Contractual interest (calculated to 17 July 2023) in the sum of £21,010.53.
15. The Plaintiff's Advocate has confirmed to me that the updated Schedule was served on Mr Fanning by email on 19 May 2023. The First Defendant has not filed any response to that Schedule.
16. The Second Defendant has played no role in these proceedings. It is a Jersey-registered company, administered by the Plaintiff which also provides its directors. The shares in the Second Defendant are held by JTC entities. The Second Defendant holds assets on trust for the First Defendant.
Relevant Law
17. Rule 7/1 is in the following terms:
18. The test to be applied for summary judgment is conveniently stated by McNeil JA in-¯Hard Rock Limited and Another v HRCKY Limited-¯[2018] JCA 152 at paragraph 18 (following the principles set out in MacFirbhisigh and Ching v CI Trustees and Others [2017] JRC 130A and in the English decision of Easyair Limited v Opal Telecom Limited [2009] EWHC 339 (Ch):
19. As is apparent, the rules relating to summary judgment mirror those applicable in England and Wales and the Royal Court has followed English decisions in this area. In Sainsbury's Supermarkets Ltd v Condek Holdings Ltd (formerly Condek Ltd) [2014] EWHC 2016 (TCC) the Court held at paragraph 13 that:
20. Notwithstanding the provisions of RCR 7/3, and my reminder to him, Mr Fanning has not filed any affidavit in response to the application.
The Contractual Terms
21. A Letter of Engagement was sent by the First Plaintiff on or about 29 July 2020 and was countersigned by the First Defendant on 30 July 2020. It defines Red Cedar Limited, the Second Defendant, as "the Structure" and contains the following terms:
"This letter, together with our Standard Terms and Conditions ("Terms") and any other terms agreed between us in connection with Services, including trust documentation or an administration agreement, sets out the terms of our Engagement. Our prevailing Terms are enclosed for your information, and these may in future be found on our website at www.itcgroup.com. The Terms are updated from time to time...
1. Period and Scope of Services
Services will be limited to the administration of the Structure and shall not, absent further agreement, extend to other structures (the "Services"). The Services shall continue until terminated in accordance with Terms or any other terms agreed between us, whether in this letter or in any trust documentation or an administration agreement or otherwise.
Please note that Services do not include legal, financial, tax or other such professional advice and JTC will not accept or endorse such advice as is received and, accordingly, JTC will not entertain any liability whatsoever, whensoever, and howsoever arising in relation to such professional advice, in accordance with clause 2.1.11 of the Terms. You must or should take independent professional including legal, financial or tax advice...
3. Basis of Charging
JTC agrees to provide the Services on the charging basis as detailed in Appendix A, this fee will be reviewed and adjusted periodically to ensure that it remains consistent with the activities of each entity. Any proposed adjustments will be discussed and agreed in advance.
On-boarding Fee of €1,500 (non-recurring)...
Annual Responsibility Fee of €5,095 (Responsibility Fee")
This will be invoiced annually in advance in January each year. Included within the Responsibility Fee:
Provision of a corporate director, company secretary and nominee shareholders (if required); Provision of Registered Office for the entities.
Annual filing fee International Service Entity fee
Administration Fee - Time Cost Basis
These will usually be billed on a quarterly basis in arrears unless we agree a different billing frequency with you separately. Any activity undertaken by JTC in connection with the entities will be charged on a time-spent basis. Time is recorded in units of 5 minutes. The charges for such activity will depend on the charge out rate of the member of staff undertaking activities on behalf of the entities. Our current charge-out rates are available on request and reflect the level of experience / seniority required to carry out any particular task. We review our hourly rates on an annual basis and any resulting changes are automatically applicable. For illustration purposes our rates range from £145 ph for a junior administrator to £480 ph for a Group Director,
Annual Accounts Fee minimum €1,500...
FATCA / CRS Fee €250 (each entity)...
Jersey Tax Return Fee €450...
Termination Fee €2,000 minimum per entity..."
22. Appendix A to the Letter of Engagement contains the following table:
23. JTC's standard terms and conditions provide (amongst other things) that:
"1 'Administered Body' shall mean any corporate body (wherever incorporated), foundation, individual, partnership (of whatever kind as permitted by the applicable law) or other association or body (whether or not incorporated) or trust or fund or other structure or arrangement to or in respect of which JTC provides Services.
'Interest holder' shall mean the beneficial owner, directly or indirectly, of the Interests and, in the case of a trust, the settlor and each beneficiary, and in the case of an Administered Body, to which Fund Services are provided, the promoter of any such fund, and in the case of an individual shall include his heirs, personal representatives, estates or other successors and assigns and in the case of a corporate body any predecessor or successor or assign; more than one Person shall mean all such Persons jointly and severally.
6.8 Each Administered Body and all relevant Interest holders are jointly and severally liable in their personal capacity for the settlement of all amounts invoiced to an Administered Body. In addition, the customer or applicant for business of JTC, who completes a questionnaire, committing him to these Terms and concerning directly or indirectly any Administered Body or Interest holder, to which JTC supplies Services, shall be responsible (and if there are more than one such customer or applicant for business, each shall be liable on a joint and several basis) for the non-payment by such Administered Body or Interest holder of fees, expenses and other costs."
The Plaintiff's Affidavit
24. Mr Byrne's affidavit sets out details of, amongst other things:
(i) the contractual arrangements between JTC and the Defendants;
(ii) the work carried out by JTC for the Defendants in relation to two complex loan arrangements;
(iii) the process JTC undertook before instructing lawyers which included getting approval from the First Defendant; and
(iv) JTC attempts to engage with Mr Fanning in relation to the unpaid fees.
25. In my judgment, that affidavit provides credible evidence that the fees alleged owed by Mr Fanning are properly due and payable.
The First Defendant's Position
26. The First Defendant has filed neither a Skeleton Argument nor any affidavit in support of his defence. Nor did he appear at the hearing.
27. Mr Byrne's affidavit, filed on behalf of the Plaintiff, sets out the attempts made by JTC to secure payment of its fees. He notes that "at no time did the First Defendant raise contemporaneous queries on any invoice tendered" and this is certainly correct until 21 June 2021 when he replied to a chasing email from JTC's Credit Controller stating, "Those fees are ridiculous please send a full breakdown". A full breakdown was sent, and the First Defendant replied that he "will be addressing these later today".
28. According to Mr Byrne's affidavit:
(i) the outstanding fees were not addressed, either in June or at all;
(ii) in July 2021, the First Defendant paid JTC the sum of £2,700;
(iii) further unsuccessful attempts were made by JTC to engage with the First Defendant;
(iv) a letter before action was sent to the First Defendant in February 2022 and this prompted a request from a Mr Blimes, purportedly acting on behalf of Mr Fanning, for more information;
(v) JTC provided the information requested but heard nothing further until the First Defendant filed his Answer.
29. Mr Fanning's defence to the claim therefore rests with what he set out in his Answer, albeit wholly unsupported by submissions, evidence or even particulars of his complaints.
30. In my judgment, he has had more than adequate time to provide particulars of any complaints and/or evidence in support of any such complaints given that the first invoice is dated 21 September 2020. The fact that he has not done so is a matter which I take into account when considering the evidence that "can reasonably be expected to be available at trial". In my judgment, if additional evidence were likely to be available to support Mr Fanning's position, it would have been adduced by now; the fact that it has not leads me to conclude that there is no additional material which might reasonably be expected to be available at trial to support of the First Defendant's case.
31. His Answer contains the following averments:
(i) at paragraph 7, the First Defendant denies that JTC is entitled to charge for any services which are not the Annual Services (which they allege at paragraph 6 of their Answer are the fees listed in Appendix A to the letter of engagement).
(ii) at paragraph 8, the First Defendant avers that:
"the Letter of Engagement states that: "Services do not include legal, financial, tax or other such professional advice.". The Additional Services relate to the provision of such advice and therefore do not fall to be charged as "Services" within the meaning of the Letter of Engagement."
(iii) he alleges that the amount charged is unreasonable both in terms of magnitude (when viewed against the charge for Annual Services) (at paragraph 9) and in terms of duplication (paragraph 11).
(iv) he alleges that:
(a) contrary to the provisions of the Letter of Engagement, no costs estimates were provided by the Plaintiff to the Defendants in respect of the amounts charged beyond the Annual Services and no authority was sought from the Defendants before the instruction of advisers, performance of the services or incurring of sums beyond the Annual Service Fee; and
(b) insufficient details of the costs said to have been incurred have been provided by the Plaintiff and no explanation has been given as to why, where details have been provided, it has been thought necessary for administrative work to be undertaken by senior fee earners charging up to £480 an hour.
(v) the amount charged does not represent a reasonable price for the provision of the serves contrary to the Supply of Goods and Services (Jersey) Law 2009.
32. In my judgment, each of these purported defences can be dealt with shortly:
(i) the First Defendant asserts that he is only liable for the fees listed in Appendix A to the letter of engagement, and nothing else. As a matter of construction, I do not accept that this averred defence has a realistic prospect of success this given that:
(a) the Letter of Engagement itself refers in section 3, under the heading "Basis of Charging" to fees which are not included in Appendix A namely the On-boarding Fee, Administration Fee, Annual Accounts Fee, and a Termination Fee; if the First Defendant's suggested interpretation were to be correct, none of these other fees could ever be charged.
(b) the Administration Fee itself is calculated on a time spent basis such that "Any activity undertaken by JTC in connection with the entities will be charged on a time-spent basis"; the activities for which JTC can charge on a time spent basis are not limited to the activities set out in Appendix A but extend to "any activity undertaken by JTC" which militates against the construction proposed by the First Defendant.
(ii) the First Defendant alleges that the fees charged relate to the provision of legal, financial, tax or other such professional advice:
(a) He has provided no evidence in support of such an assertion.
(b) I note, and accept, paragraph 16 of Mr Byrne's affidavit in which he states that:
"Having reviewed the correspondence in this matter and having spoken with the JTC employees with day-to-day conduct of this matter, I have not identified any occasion in which the First Defendant sought legal, financial or tax advice from JTC and none was given."
(c) Insofar as the First Defendant asserts that the services provided "relate to" the provision of legal, financial, tax or other such professional advice (by third parties) and cannot therefore be charged by JTC, I do not think that such a reading is justified. The Letter of Engagement states that JTC will not itself provide such advice; it does not provide that they cannot obtain it from the third party and charge for so doing.
(d) Accordingly, I do not think that this pleaded defence has a realistic prospect of success.
(iii) The amount charged by JTC is clearly significant and in excess of the fees set out in Appendix A:
(a) however, Mr Fanning has adduced no evidence as to the reasonableness or otherwise of the quantum of those fees, notwithstanding the repeated provision of breakdowns to him;
(b) Mr Fanning has not provided JTC, either contemporaneously or after proceedings were issued, with particulars of any specific items charged which he thought unreasonable;
(c) Mr Byrne's affidavit sets out details of the work done, and it is not plain and obvious to me that in the light of that work, these fees are unreasonable;
(d) I do not regard the fact that, for example, JTC charged for obtaining legal advice to be unreasonable duplication and in the ordinary course would expect to see an hourly charge by the administrator for obtaining, considering, and implementing the advice together with a disbursement for the cost of the advice itself;
(e) Accordingly, I do not think that this pleaded defence has a realistic prospect of success.
(iv) In relation to JTC's alleged failure to provide estimates of costs:
(a) The obligation to provide estimates stems from the Letter of Engagement which states that:
"JTC agrees to provide the Services on the charging basis as detailed in Appendix A, this fee will be reviewed and adjusted periodically to ensure that it remains consistent with the activities of each entity. Any proposed adjustments will be discussed and agreed in advance."
(b) In my view, this pleaded defence does not have any realistic prospect of success given that:
(1) the obligation to provide estimates relates to changes to Appendix A not to the incurring of fees more generally;
(2) this interpretation is supported by the inclusion of a separate provision under "Administration Fee - Time Cost Basis" noting that hourly rates are reviewed annually and "any resulting changes are automatically applicable".
(3) There is no evidence to suggest that the fees charged arise from changes to Appendix A charges.
(v) The assertion by Mr Fanning that insufficient details of the costs have been provided by the Plaintiff and no explanation has been given as to why, where details have been provided, it has been thought necessary for administrative work to be undertaken by senior fee earners charging up to £480 an hour is wholly unparticularised. Whilst this may be a question of customer relations, it does not in my judgment impact on the recoverability or otherwise of the fees charged. Accordingly, I do not think that this pleaded defence has a realistic prospect of success.
(vi) As to the final limb of his Answer:
(a) Article 30 of the Supply of Goods and Services (Jersey) Law 2009 provides that:
(b) For the reasons set out above, the price for the services to be provided by JTC was set out in its letter of engagement and in my judgment, Article 30 of the Supply of Goods and Services (Jersey) Law 2009 does not apply.
33. In my judgment, on the basis of his Answer alone, the First Defendant does not have any realistic prospects of successfully defending this claim.
34. Nor has the First Defendant discharged the evidential burden placed on him to prove that he has some real prospect of success or some other reason for having a trial of this matter.
Disposal
35. Accordingly:
(i) I grant summary judgment in favour of the Plaintiff in the sum of £129,891.87 as against the First and Second Defendants; and
(ii) I direct that the Plaintiff shall attend before the Bailiff's Judicial Secretary within 7 days of today to fix a date to bring this matter back before the Royal Court to deal with the arrêt entre mains provisoire.
36. I further direct that the costs of the application shall be paid by the First Defendant to the Plaintiff, to be taxed on a standard basis if not agreed.