Before : |
A. R. Binnington, Esq., Commissioner, and Jurats Dulake and Opfermann |
Between |
Elleonerd Dawn Millard (née Bosworth), former wife of Michael Royston Millard |
Plaintiff |
And |
Annette Stone (née Cox), wife of Timothy Stone |
First Defendant |
|
Timothy Stone |
Second Defendant |
|
Marcus Kraig Stone |
Third Defendant |
|
Bois Executors Limited |
Fourth Defendant |
Advocate P. C. Sinel for the Plaintiff
Advocate M. L. Preston for the First and Second Defendants
Advocate H. Sharp for the Third Defendant
judgment
the commissioner:
1. This is the Court's judgment in respect of:
(i) A summons issued by the Plaintiff and dated 9 December 2022 appealing orders made by the Master refusing certain applications by the Plaintiff to amend her Order of Justice;
(ii) A summons issued by the Plaintiff dated 9 December 2022 seeking leave to continue derivative actions against the First, Second and Third Defendants;
(iii) A summons issued by the Third Defendant dated 8 December 2022 appealing orders made by the Master in relation to certain of the applications by the Plaintiff to amend her Order of Justice.
2. We heard argument on the appeal at a hearing on 13 April 2023. Advocate Preston appeared on behalf of the First and Second Defendants but was released and the Fourth Defendant did not participate in the hearing.
3. The present proceedings relate to the real and personal estates of Annie May Bosworth ("the Deceased") and in particular two wills of personalty and realty made by the Deceased in 2017.
4. The First Defendant is the daughter of the Deceased and her first husband, Frederick Cox. The Plaintiff is the daughter of the Deceased and her second husband, Glenn Harris. She was adopted by the Deceased's last husband, Philip Stanley Bosworth ("Mr Bosworth"). The Plaintiff and the First Defendant are accordingly half-sisters. The Second Defendant is the husband of the First Defendant. The Third Defendant is one of the two sons of the First and Second Defendants and the Fourth Defendant acted as attorney of the Third Defendant in applying for a grant of probate in respect of the 2017 will of personalty. On 9 April 2020 the 2017 will of realty was registered before the Royal Court.
5. The Order of Justice seeks to set aside both wills on the basis that they were procured through undue influence on the part of the First, Second and/or Third Defendants and/or that the Deceased lacked the capacity to make the wills.
6. In relation to the 2017 will of realty, it is also alleged that the provisions of this will were in breach of an agreement between the Deceased and the Plaintiff that the Deceased would provide for the Plaintiff: the Plaintiff had allegedly agreed to renounce her entitlement to participate in Mr Bosworth's estate as there would otherwise have been adverse tax implications for her. According to the Plaintiff this agreement manifested itself in various wills of realty executed by the Deceased leaving the Deceased's home in Jersey to the Plaintiff.
7. The dispute further includes a challenge by the Plaintiff to the sale of the property where the Deceased was living from 1989 to 2019, known as 3 Parcq du Rivage, which was sold, following which a property called Les Quatres Saisons was purchased in which the Deceased and the First and Second Defendants came to reside. It is the Plaintiff's case that these transactions were entered into on the basis of undue influence and were procured without the consent of the Deceased. The relevant sale and purchase occurred on 20 April 2018.
8. The Order of Justice contains allegations that when the First and Second Defendants were caring for the Deceased from 2019 onwards the Plaintiff and her family were excluded in later years from any dealings with the Deceased. However, no specific relief is sought in respect of these allegations.
9. For ease of reference when referring to factual matters we may in this judgment refer to the Plaintiff as "Dawn", the First and Second Defendants as "Annette" and "Tim" and the Third Defendant as "Marcus". In addition, the Deceased was referred to by her family as "Nancy" and we may similarly refer to her in the course of this judgment.
10. The Plaintiff's description of the facts underpinning her claims (the evidence for which has not, as yet, been tested by the court) was outlined before the Master by the Plaintiff's counsel as follows:
(i) Nancy was widowed unexpectedly on 11 April 1980. Her husband, Philip Bosworth, Dawn's father, left behind very significant wealth in a company known as Qu-Vib Limited ("Qu-Vib"). Within Qu-Vib was a significant commercial freehold property in Bromsgrove and other assets.
(ii) The Plaintiff, Dawn, was entitled to a legitime upon her father's death which she forgave. A trust of which she was (but not her sister, Annette) a beneficiary was then formed. That trust was later dismantled for a variety of reasons and again she gave up her rights as a beneficiary on the agreed basis that Nancy would, upon her death, leave her home to Dawn (the "Family agreement"). Dawn was a director of Qu-Vib but was little, if at all, consulted by Marcus who effectively took control over it in 2004, if not before.
(iii) Nancy lived for many years at 3 Parcq du Rivage. She was happy and comfortable in that home, where she lived frugally. She was in almost daily contact with Dawn, who lived in Marbella. However, when Nancy went to live with Annette and Tim, Nancy was deliberately isolated from Dawn and her three sons (referred to collectively as "the Millards"). The Millards were so concerned that they went to the police. Dawn submitted that Nancy's life altered radically thereafter as she also lost any control over her finances.
(iv) Tim and Annette had previously had a series of disastrous business dealings (in Birmingham and Devon) and do not appear to have been gainfully employed for very many years. Their means of support for many years is unknown.
(v) The property known as Les Quatre Saisons, was eventually bought in Nancy's name, using a power of attorney in Marcus' favour with Nancy's money, to which improvements were made using Nancy's money and it was alleged that it was bought to Tim's specifications, not Nancy's.
(vi) Annette and Tim's financial position was by their own admission impecunious, particularly so once Nancy was under their control.
(vii) It was alleged that Marcus had had a series of business difficulties and had also gone through a divorce. During this time, Nancy's wealth allegedly decreased significantly. It was suggested that Marcus had borrowed money from Nancy and had been given money by Nancy and that he had many conflicting roles.
(viii) Whilst isolated from the Millards by design of Annette, Tim and Marcus (referred to collectively as "the Stones"), Marcus, having drawn up a power of attorney in his own favour, used Nancy's monies to buy her the much larger (and unnecessary) house, Les Quatre Saisons. Marcus also drafted Nancy's new wills of personalty and realty and had the same executed by Nancy when she lacked capacity, which left the whole of Nancy's realty to Annette (i.e. the Stones) instead of Dawn (i.e. the Millards). An expert opinion has been obtained and Nancy's capacity at the time of her last wills is now very much in issue.
(ix) Dawn is now actioning Annette, Tim and Marcus to bring into the estate lifetime gifts, to account for the unexplained transactions, and to set aside Nancy's wills.
11. These allegations have not yet, as we have noted, been tested in court but they are clearly of a serious nature and are being pursued with a high degree of vigour on the part of the Plaintiff. Equally, these allegations are being strongly disputed by the Third Defendant.
12. Answers have been filed by the First, Second and Third Defendants disputing the Plaintiff's claims. The Third Defendant pleaded that in 2015 Nancy executed a new will of personalty, the material terms of which were the same as the 2017 will of personalty, namely that her estate was to be split equally between the Plaintiff and the First Defendant. The Third Defendant therefore contended that even if the 2017 will of personalty was set aside the 2015 will would take effect in its place. The 2007 will of Realty left Nancy's realty to the Plaintiff in contrast to the 2017 will of realty which left her realty to the First Defendant. The Plaintiff asserted that she was not aware of the 2015 will, which was why it had not been referred to in the Order of Justice. The Plaintiff contended that as far as she was aware the last wills made by Nancy prior to 2017 had been made in 2007 and these divided the personal estate as to two-thirds for the Plaintiff and one-third for the First Defendant and left her realty to the Plaintiff.
13. Following filing of the pleadings a limited discovery order was made and the action was stayed until 29 October 2021 for the purposes of mediation. On the expiration of the stay the Plaintiff's then lawyer, Advocate Begg, alleged that the Defendants had failed to provide proper discovery in accordance with the limited discovery order and as a result the Master suggested that if the Plaintiff considered the Defendants were in breach of orders that he had made previously then a specific summons should be issued to that effect. In the alternative, if what was sought was specific discovery then again, an appropriate summons should be issued.
14. On 5 January 2022 the Master made a general discovery order pursuant to which all relevant documents were to be disclosed by exchange of lists by 5:00 pm on Friday 11 February 2022. This order specifically included: i) documents sufficient to provide a full explanation of the terms of the sale of 3 Parcq du Rivage and the purchase of Les Quatre Saisons; ii) the Third Defendant's dealings with the affairs of the deceased from 2007 onwards; and iii) any records held in respect of Qu-Vib.
15. On 30 November 2022 the Master handed down a judgment in relation to an application made by the Plaintiff seeking to amend her Order of Justice. Although the application also included applications for specific discovery the Master decided to proceed with the application to amend first before dealing with specific discovery issues.
16. In relation to the amendments that the Plaintiff sought, four different versions of the draft amended Order of Justice had been provided by the Plaintiff to the Defendants and whilst the Master focused on the final version provided, he noted in his judgment that criticisms were made by the First, Second and Third Defendants of allegations that had been made in earlier drafts but which were then not pursued.
17. In his judgment the Master categorised the amendments sought by the Plaintiff as follows:
(i) Amendments relating to the challenges to set aside the 2017 wills and extending the challenges to the 2015 will.
(ii) A claim requiring the First, Second and Third Defendants to account for their dealings with the assets of the deceased during her lifetime. Insofar as the amendments sought to require the First, Second and Third Defendants to account for their dealings with the assets of the deceased, the pleading also sought to bring a derivative claim on behalf of the deceased's estate.
(iii) Amendments relating to the Plaintiff's claim requiring the Defendants, in particular the Third Defendant, to account for lifetime gifts by way of application of the doctrine of Rapport a la Masse.
(iv) Minor amendments relating to existing factual matters already pleaded; and
(v) Amendments to the relief sought.
18. We have adopted the approach taken by the Royal Court in Cook v Clapham, Le Cheminant and Crapp [2022] (2) JLR 180, namely that the Court is entitled to approach the matter de novo if we wish to do so, and to exercise a discretion unfettered by the exercise of discretion by the Master, while at the same time giving that decision due weight.
19. The Master referred to a judgment that he delivered in Trico v Buckingham [2019] JRC 163, which related to an amendment being sought at a late stage, where, at paragraph 38, he had noted, inter alia, that:
"Whether to allow an amendment is a matter for the discretion of the court. In exercising that discretion, the overriding objective is of the greatest importance. Applications always involve the court striking a balance between injustice to the applicant if the amendment is refused, and injustice to the opposing party and other litigants in general, if the amendment is permitted."
20. In Trico (supra), the Master had gone on to refer to a passage in a judgment of Mrs Justice Carr in Quah Su-Ling v Goldman Sachs International [2015] EWHC 759 (Comm) where, having referred to the need for finality in litigation and the injustice to the other parties and other litigants, if the amendment is permitted, she went on to say:
"An application to amend will be refused if it is clear that the proposed amendment has no real prospect of success. The test to be applied is the same as that for summary judgment under CPR Part 24. Thus the applicant has to have a case which is better than merely arguable. The court may reject an amendment seeking to raise a version of the facts of the case which is inherently implausible, self-contradictory or is not supported by contemporaneous documentation."
21. The Master went on to say:
"In my judgment, the approach now taken in England should be reflected in this jurisdiction and therefore greater emphasis should be given to the overriding objective compared to the approach taking in MacFirbisigh and other decisions in Jersey. I stress however this is a change of emphasis rather than a marked departure from the previous approach because some of the factors in MacFirbisigh overlap with those now relied upon before the English courts. Nevertheless, that change of emphasis giving greater emphasis to the overriding objective is one that in the future I consider should be taken in this jurisdiction."
22. We note that in both the Trico and the Quah Su-Ling cases the applications to amend were made at a very late stage of the proceedings and accordingly there was a higher bar to cross but nevertheless the introduction of the Overriding Objective, requiring the Court to deal with cases justly and at proportionate cost, requires the Court in this case to consider the impact that the amendment will have on these proceedings when measured against the Objective.
23. In relation to the amendments referred to in paragraph 16(i) above these were, for the most part, allowed by the Master. However, he did not allow the amendments that were set out in paragraphs 20A and 20B of the draft Amended Order of Justice with which he was provided. These amendments concerned a will of personalty made by the deceased in July 2004. The Master regarded this amendment as irrelevant because the existing claim made by the Plaintiff was that the division of the deceased's movable estate should be governed by her 2007 will. The fact that the deceased made an earlier will which was later revoked did not, in his view, have any bearing on allegations made in respect of the 2015 will and the 2017 will. He noted that no party, if the 2015 or 2017 wills were to be set aside, had made any assertion that the 2007 wills should be set aside. There was therefore no need to go back further in time than 2007. We agree with his decision in relation to paragraphs 20A and 20B for the same reasons.
24. The amendments referred to in paragraph 16(ii) above essentially required the First, Second and Third Defendants to account for their dealings with the assets of the deceased and the amended pleading also sought to bring a derivative claim on behalf of the deceased's estate.
25. The Master recognised that there were certain financial transactions to which the Plaintiff had referred that called for an explanation on the part of the Defendants but noted that it was necessary to consider the correct approach to be adopted in evaluating them. There was clearly some overlap between the request for an accounting in respect of transactions and the Plaintiff's claim that transfers to the Third Defendant were "avances de succession" to which a claim for "rapport a la masse" should be applied. Linked to these claims against the Third Defendant were assertions that the Third Defendant, as executor, and the fourth Defendant as his attorneys, were conflicted and this was put forward as justification for the Plaintiff's claim to be allowed to pursue a derivative action on behalf of the estate. Accordingly, the Master had to consider the legal principles applicable to the bringing of derivative claims.
26. The Master noted that pursuant to Rule 6/39 of the Royal Court Rules 2004, as amended, ("the Rules") leave is required from the Royal Court to continue a claim brought by way of derivative action. The issue before him was therefore only to consider whether the pleading showed a case that was better than arguable to plead a derivative claim, leave for which could then be considered by the Royal Court, if the amendment were to be granted. The Plaintiff appeals the Master's decision not to allow amendments to the Order of Justice seeking an account, by way of derivative action, and (on the assumption that appeal is successful) leave for the Plaintiff to continue proceedings on behalf of the estate by way of derivative action.
27. No Jersey authority was cited to the Master as to when a beneficiary under a will might bring a claim by way of derivative action. However, he was referred to the Supreme Court decision in Roberts v Gill & Co [2010] UKSC 22 which all parties accepted contained the applicable legal principles.
28. The issue in the Roberts case was whether the claimant (who was a beneficiary under a will) should be permitted to amend proceedings to bring a claim in a representative capacity on behalf of an estate. The claimant had sued a firm of solicitors personally within time, but the representative claim was out of time. The question that arose in the appeal was summarised at paragraphs 22 and 23 of the judgment as follows:
"22. Mark Roberts seeks to bring a derivative action in his own name on behalf of the estate against a third party. The action is a derivative action in which the beneficiary stands in the place of the administrator and sues in right of the estate and does not enforce duties owed to him rather than to the administrator. It has often been said that a beneficiary can bring a derivative action only in special circumstances: Hayim v Citibank NA [1987] AC 730, to which it will be necessary to revert.
23. The question on this appeal is whether Mark Roberts should be permitted to amend so as to put his claim as a derivative claim. That involves two further questions. The first question is whether the amendment can be made notwithstanding expiry of the limitation period in respect of his personal claim. The second question is whether, even if the expiry of the limitation period is not a bar to the necessary amendments, the claim is bound to fail because there are no special circumstances justifying a derivative action."
29. The Master noted that the second question was relevant to the Plaintiff's application to amend in this case. He noted that all the members of the Supreme Court in Roberts were in agreement that this was not a case where special circumstances were justified. The leading judgment was given by Lord Collins in relation to what amounts to special circumstances where he stated the following:
"46. The cases go back to the 18th century, and many of them were reviewed in Hayim v Citibank NA [1987] AC 730 (PC). The special circumstances which were identified in the earliest authorities as justifying a beneficiary's action were fraud on the part of the trustee, or collusion between the trustee and the third party, or the insolvency of the trustee, but it has always been clear that these are merely examples of special circumstances, and that the underlying question is whether the circumstances are sufficiently special to make it just for the beneficiary to have the remedy."
30. The Master went on to refer to an observation made by Lord Walker, at paragraph 110 of the judgment, where he stated:
"110. There is ample authority, comprehensively reviewed in the judgment of Lord Collins, as to the need for special circumstances before the court will countenance a derivative action. Such actions are now relatively common in cases concerned with mismanaged companies, and in many jurisdictions actions by or on behalf of minority shareholders are now regulated by a statutory code... Derivative actions by beneficiaries under inter vivos trusts or wills are less common, Hayim v Citibank NA [1987] AC 730, (an appeal to the Privy Council from Hong Kong) and Bradstock Trustee Services Limited v Nabarro Nathanson [1995] 1 WLR 1405 being modern examples. But in all these cases the unifying factor - what has to be special about the circumstances - is that the derivative action is needed to avoid injustice... For the reasons given by Pill LJ at paragraphs 58 to 60, reinforced by the further reasons given by Lord Collins, special circumstances are not made out in this case."
31. In light of the principles to which he had referred the Master then went on to consider whether the arguments relied upon by the Plaintiff amounted to a case that was better than arguable to plead the derivative claim, leave for which could only be considered by the Royal Court. He noted that the Plaintiff's counsel, Advocate Sinel, accepted that he had not sought to replace the Fourth Defendant with an independent executor. Advocate Sinel had argued that this was a question to be considered on the application for leave. The Master disagreed both as a matter of principle and as a matter of practice. The Master stated:
"50. As a matter of principle, if a beneficiary considers that an executor/trustee should be removed based on an allegation of conflict, the first step is to approach that executor to ascertain their position. In the absence of having made that inquiry, the sort of special circumstances in Roberts at paragraphs 46 and 53 do not arise.
51. In this case Advocate Young indicated that if the appointment of the Fourth Defendant was challenged it would likely step aside. Advocate Sharp having taken instructions from the Third Defendant who was the named executor in the 2017 will of movables confirmed that his client would have no objection to an independent executor being appointed; Advocate Boothman was not able to speak to his clients but did speak to his clients' other son and felt, allbeit without instructions, that the appointment of an independent executor to investigate matters of concern would not be resisted. It therefore appears that a new executor could be appointed by agreement as long as an entity could be found to act.
52. If there was a dispute about whether the Fourth Defendant should remain that can be dealt with by a standalone application to the Royal Court to remove the Fourth Defendant on grounds of conflict. The grounds relied upon are known and therefore such an application should not be complex and should not take significant time to determine, if resisted.
53. The other issue to note as a matter of principle is that prima facie the claims for an account in relation to how assets of the deceased were dealt with by others on her behalf are vested in the executor on behalf of the deceased. It is therefore for the executor to review these claims from a neutral standpoint and decide whether or not to pursue them. Something therefore needs to be pleaded to justify a beneficiary exercising those rights. Although the question of conflict has been raised it has not been pursued either by an invitation to resign or by a court application to appoint another executor both of which would address any conflict issue.
54. The executor also has the advantage of having the rights to call for documents from the deceased's bankers...
55. It should also not be forgotten that this is a dispute essentially where two sides of a family are at loggerheads. The phrase internecine warfare has been used in respect of disputes between beneficiaries of trusts. This case at its lowest runs that risk. There is certainly a lack of trust between the parties which is clear from the way allegations have been framed in previous drafts and then not pursued. In that regard Advocate Sharp forcefully suggested that the Plaintiff was conflicted as she was seeking to review the affairs of the Stone family but, given assertions previously dropped, she would not review her own family's affairs and yet they had benefited too. These assertions further confirm the importance of an executor, provided it is independent or seen to be independent, having the advantage of being able to stand above the dispute and review matters impartially.
56. In contrast to a position an independent executor might adopt, Advocate Sinel did not hold back from making it clear that he and his client wanted to review the affairs of the First to Third Defendants over many years and in some respects long before any questions of capacity or undue influence might arise. The discovery he was seeking confirmed this approach."
32. The Master pointed out that an executor, in common with a trustee, has the safeguard of being able to go to court, having carried out a review, for the blessing of a momentous decision in cases where the executor considers that money is owed and wishes to take steps to recover such monies or indeed not to do so. In the Master's view the powers vested in an executor might therefore lead to a resolution of matters without engaging the full costs and expense of a Royal Court trial. In that regard, he stated that he could not ignore the fact that "the Plaintiff is seeking a full review of the affairs of the First, Second and Third Defendants going back twenty years or more. Yet the issues where an account is required appear to be more limited in scope and do not justify such an expense".
33. In relation to the argument relied upon by the Plaintiff of an overlap between the claim for rapport and the claims for an account the Master did not regard this as giving rise to a case that was capable of being pleaded as special circumstances. He noted that the primary claims that the Plaintiff wished to bring were for an account and if the responses of the Defendants to claims for an account were that what had been paid over or spent were gifts, that could be dealt with by the executor, possibly in consultation with other family members, as to whether the recipient should be required to return any monies found, absent any election to rester sur ses avances.
34. The Master's conclusion in relation to these amendments was that he was "not satisfied that the Plaintiff's pleaded case sets out sufficient circumstances to enable a derivative action claim to be pleaded. Rather the correct approach is for the Plaintiff to raise her concerns either with the Fourth Defendant or an independent executor with all the safeguards that go with the responsibilities of an executor. The present proceedings should not therefore be used to advance such claims at this stage".
35. The Master went on to note that "The Plaintiff's approach is also not the most appropriate way to proceed having regard to the overriding objective. This decision does not mean that the Plaintiff's concerns are being ignored; that is not the position. Rather the decision is that in respect of requiring the First, Second and Third Defendants to account for how they dealt with the deceased's monies, this issue is a matter for an executor to pursue".
36. The Master therefore refused the Plaintiff's claims seeking an account at paragraphs 6, 20C, 20D, 23A to 23H,38A, 44A, 44B, 48A and 49A. The refusal in relation to paragraphs 44A and 44B was however subject to one clarification which he addressed later in his judgment.
37. We note that these proceedings began principally as a claim for (i) the setting aside of wills of personalty and realty on the grounds of undue influence and/or incapacity; (ii) the setting aside of the sale of 3 Parcq du Rivage and/or the purchase of Les Quatre Saisons on the grounds that the power of attorney used for the transactions was obtained through coercion and/or undue influence and/or was void for incapacity; and (iii) that the First and/or the Second and/or the Third and/or the Fourth Defendants provide a full and complete inventory of the avances which they had received from the deceased during her lifetime. The claims in respect of the setting aside of the wills and contracts relating to real property are relatively straightforward and the nature of the evidence that would typically be regarded as relevant, in particular as to capacity and undue influence, is reasonably easy to identify. Essentially the rival claimants would conduct the litigation and the executor's function would be limited to identifying the estate assets and in due course distributing them once the beneficiaries and their entitlement had been identified. Given the claim for rapport a la masse it would be necessary for the executor to identify the relevant avances and the consequent sums that should be taken into account in determining the distributions to the beneficiaries.
38. In relation to the claim for rapport a la masse the claim was already pleaded in paragraph 60 of the unamended Order of Justice and what was sought was to add a more detailed description of the intended purpose of part of the funds allegedly paid to the Third Defendant by the Deceased, namely to enable the Third Defendant to transfer a property to his former wife. The Third Defendant objected to any claim for rapport being made against him on the grounds that the doctrine does not apply to him as he is not an heir and in any event he is entitled to elect to keep any lifetime gifts.
39. The Third Defendant referred us to the decision of the Royal Court in De la Haye v Walton [2013] JRC 021 where, at paragraph 54 the Court found that:
"The law concerning Avancement de Succession and Rapport a la Masse is well established and is not in dispute between the parties. In short, an inter vivos gift by a parent to a child (excluding of course matters of parental obligation such as provision of food, clothing, education, vocational training, etc.) is described as an "Avance de Succession". On the death of the parent the child may be compelled at the instance of the co-heirs to "la rapporter a la masse" i.e. to bring the gift back into the gross of the estate. The aim of the principle is to prevent one heir benefitting to the prejudice of the others by means of inter vivos gifts that are made to him."
40. The court in De la Haye went to say that "A child who has received a gift may elect to rest on his advance ("rester sur ses avances") and forgo any claim to participate in the succession provided that the estate is solvent and he has not committed any "act d'heritier".
41. The Third Defendant argued that as he did not stand to benefit under the will he should not be required to bring into account lifetime gifts made by his grandmother.
42. The Plaintiff argued that whether the doctrine of rapport a la masse extends to grandchildren is a novel point which will need to be tried. Advocate Sinel referred us to a passage in Basnage, Commentaires sur La Coutume de Normandie, 3rd ed. "Des Donations" where, at page 237 the author states: "Les heritiers ausquels il n'est pas permis de faire avantage sont les enfans, & sous ce mot d'enfans il faut comprendre les petits-enfans & tous les decendans en ligne directe : Car c'est une maxime que lors que la loi defend en ligne directe de donner a l'heritier, cette prohibition comprend l'heritier...". [It is not permitted to confer a benefit on one's children including the grandchildren and all descendants in the direct line: for there is a maxim that where the law prohibits gifts in direct line to the heir, this prohibition includes the heir...]
43. It is clear that the objective which underlies the doctrine of rapport a la masse under Norman customary law, namely the need to prevent one heir benefitting to the prejudice of the others by means of inter vivos gifts made to him, has been accepted as part of Jersey law (see De la Haye v Walton supra).
44. Although no Jersey authority was cited to us in respect of the application of rapport to grandchildren it is at the very least arguable that Jersey law would follow Norman Customary law in this respect.
45. The right of a child who has received a gift to rest on his advance ("rester sur ses avances") and forego any claim to participate in the succession, provided that the estate is solvent and he has not committed any "act d'heritier", was recognised in De la Haye v Walton, following Valpy v Janvrin [1716] 1 CR 66. However, this right appears to be peculiar to Jersey Law (see Morgan v Amy and Ors [1968] JJ 981 referred to in De la Haye v Walton). Accordingly, whilst it may well be that the Jersey court would extend the right to grandchildren the point would seem, on the basis of the authorities presented to us, not to have been determined by the Royal Court. There is the further point as to whether a grandchild who does not benefit under the grandparent's will should be required to bring into account lifetime gifts received from his grandmother. We agree with the Master that these points are arguable and that the amendment should be allowed. The point is a relatively narrow one and ought not to add to the length of the trial.
46. We accordingly dismiss the Third Defendant's appeal against the Master's decision to allow the amendment to paragraph 60 of the Order of Justice.
47. The claims for an account, which would necessitate a derivative claim if the Plaintiff were to pursue them, broadly dealt with the following matters:
(i) Actions relating to the management of Qu-vib (paragraphs 20C, 20D and 23A).
(ii) Moneys paid into/out of the Deceased's bank accounts (paragraphs 23B, 23C, 23D, 23E, 23F and 23G).
(iii) Actions taken by the Third Defendant as the Deceased's attorney (paragraph 38A).
(iv) Loans made by the Deceased (paragraphs 23H, 48A and 49A).
48. It should be recalled that the Plaintiff brings her claim as a beneficiary under a will. Given that a mere beneficiary would ordinarily be unable to bring an action requiring other beneficiaries to account to the estate, that being a matter for the executor, it is unsurprising that she seeks to pursue claims for an account by means of a derivative action. Advocate Sinel argued that if she were given leave to bring a derivative claim this would have the benefit of ensuring that all matters could be dealt with in one trial, the trial could take place without further delay and there would be a saving in costs: the principal argument would be between the Plaintiff on the one hand and the First, Second and Third Defendants on the other, the Fourth Defendant being essentially passive. He argued that whilst the claims for an account were vested in the estate there was no one else to pursue the claims, the executor being conflicted.
49. Whilst superficially attractive this line of argument ignores the fact that the reason why there is currently no executor willing to pursue claims for an account is that the Plaintiff has taken no steps to challenge the executor's appointment. It should be noted that both in front of the Master and before us both the Third and Fourth Defendants confirmed that they would have no objection to an independent executor being appointed.
50. In relation to considering the requirements of the Overriding Objective, were the Plaintiff to be given leave to pursue claims on behalf of the estate by means of a derivative claim, it is likely that the costs and length of the trial would be significantly greater than were such claims to be considered, and if necessary pursued, by an independent executor. That is clear from the wide-ranging enquires that the Plaintiff has sought to make in the amended pleadings. Advocate Sinel made it clear that the Plaintiff wished to investigate the financial dealings of the First to Third Defendants and the Deceased over a period of some years, including prior to the issues of capacity and undue influence arising. Were the Plaintiff to be permitted to bring the claims for an account by way of derivative action it is clear from the conduct of the litigation so far that they would be likely to be pursued in a partisan manner rather than in the objective manner that one would expect from an independent executor.
51. Furthermore, as noted by the Master at paragraph 36 of his judgment, at least one of the claims made against the Third Defendant in the proposed amended pleading appears to relate to alleged duties owed by him not to the Deceased but to Qu-vib: by way of example amended paragraph 20C suggests that "As director of Qu-vib Limited from 16 July 2004 onwards the Third Defendant owed a duty of transparency and communication to other board members which included the Plaintiff, despite which he did not communicate regularly or at all with the Plaintiff relative to Qu-vib". It is difficult to see how such a claim could be pursued by way of a derivative action on behalf of the estate. It is however a matter that could be investigated by an independent executor.
52. The Master's decision in relation to the amendments seeking an account was in the following terms:
"66. For all these reasons I am not satisfied that the plaintiff's pleaded case sets out sufficient circumstances to enable a derivative action claim to be pleaded. Rather the correct approach is for the plaintiff to raise her concerns either with the fourth defendant or an independent executor with all the safeguards that go with the responsibilities of an executor. The present proceedings should not therefore be used to advance such claims at this stage.
67. The plaintiff's approach is also not the most appropriate way to proceed having regard to the overriding objective. This decision does not mean that the plaintiff's concerns are being ignored; that is not the position. Rather the decision is that in respect of requiring the first, second and third defendants to account for how they dealt with the deceased's monies, this issue is a matter for an executor to pursue. The plaintiff's claims seeking an account at paragraphs 6, 20C, 20D, 23A to 23H, 38A, 44A, 44B, 48A and 49A are therefore refused."
53. We agree with the conclusion that the Master reached. Given that in order to pursue a derivative claim the plaintiff requires leave from this Court and given that we regard an independent executor to be the appropriate person to consider the issues that the plaintiff wishes to be investigated we do not find that there are special circumstances such as to justify the granting of leave. Accordingly, we dismiss the appeal against the Master's refusal to allow the amendments at paragraphs 6, 20C, 20D, 23A to 23H, 38A, 44A, 44B, 48A and 49A. For the avoidance of doubt, we do not grant the leave sought by the Plaintiff in her summons.
54. We dismiss the Plaintiff's appeal against the decision of the Master to refuse the amendments to paragraphs 20A and 20B.
55. We dismiss the Plaintiff's appeal against the Master to refuse to allow the amendments at paragraphs 6, 20C, 20D, 23A to 23H, 38A, 44A, 44B, 48A and 49A and refuse leave for the Plaintiff to bring a derivative action on behalf of the Estate.
56. We dismiss the Third Defendant's appeal against the Master's decision to allow the amendment to paragraph 60 of the Order of Justice.
57. The Plaintiff's summons in respect of the appeal against the Master's orders further requested the court to "make such further orders, including directions for discovery and progression to trial generally, as it considers appropriate".
58. In relation to the possible appointment of a new executor we note that the Act of Court of 30 November 2022 recording the Master's decisions included the following:
"6. the issue of who should act as executor in light of the resignation of the Fourth Defendant is referred to the Royal Court for determination at the same time as any appeal by the Plaintiff against this Act of Court.
7. all parties shall file any affidavit they wish to rely in relation to who should act as the executor if the matter is not agreed 14 days prior to any hearing before the Royal Court with skeleton arguments being exchanged and filed seven days before any hearing."
Neither party filed affidavits or skeleton arguments specifically addressing this issue, although Advocate Sinel explained in correspondence that:
"In any event, the Plaintiff considered and addressed the executor issue. For the reasons set out in her affidavit and skeleton argument, her position was that an application for leave to bring the derivative claim was the most sensible way forward. Accordingly, until the derivative claim issue was resolved it was reasonable not to proceed with looking at alternative executors."
If any of the parties wish to pursue that application, we direct that they issue the appropriate summons and that the timescale for filing affidavits and skeleton arguments stipulated by the Master shall apply. We would expect any potential executor put forward to be an independent professional person or entity. The supporting affidavit is to provide details of their qualification and experience and details as to the basis upon which they would charge for their services.
59. In the light of our decision that the matters that are the subject to the proposed derivative claim should be addressed by an executor, the position of the Third Defendant as current executor and the Fourth Defendant as his attorney needs to be addressed. It is regrettable that none of the parties have sought to address this issue since the Master delivered his judgment. There is no application in this respect before us but the Plaintiff's allegations against the Third Defendant place him at the very least in a position of apparent, if not actual, conflict. He should therefore consider his position and, if so advised, resign. We would urge the parties to seek to identify an independent professional executor and if that is not possible a further application to the court may be necessary. Unfortunately, the conduct of the proceedings at present is generating more heat than light. The action without the additional claims for an account ought to be capable of being brought to trial without further delay. If an independent executor is appointed they will be best placed to take an objective view as to what further matters need to be investigated in the course of identifying estate assets and pursuing such claims as they deem necessary.
60. Whilst various comments were made during the course of argument before us as to deficiencies in general discovery there was no specific discovery application before us and we therefore do not find it appropriate to make any orders in that regard. It is however clear that the Plaintiff has certain discovery applications that are contemplated but not yet made and also complains of discovery orders made but allegedly not yet answered. If these issues are to be pursued with a view to ensuring that the parties are ready for trial then the necessary applications should be made to the Master in the usual manner.
Authorities
Cook v Clapham, Le Cheminant and Crapp [2022] (2) JLR 180.
Trico v Buckingham [2019] JRC 163.
Quah Su-Ling v Goldman Sachs International [2015] EWHC 759 (Comm).
Royal Court Rules 2004.
Roberts v Gill & Co [2010] UKSC 22.
De la Haye v Walton [2013] JRC 021.
Basnage, Commentaires sur La Coutume de Normandie, 3rd ed. "Des Donations".
Valpy v Janvrin [1716] 1 CR 66.