Jersey Unreported Judgments

-‹Matrimonial.

[2024]JRC230

Royal Court

(Samedi)

21 October 2024

Before     :

Advocate David Michael Cadin, Master of the Royal Court.

 

S on her own behalf and for the Second Plaintiff.

judgment

the master:

Introduction

1.        This is my judgment in relation to ("T's") application to strike out ("S's") claim for an enquiry into damages and S's application to amend that claim.

Background

2.        The claim arises out of long-running, matrimonial proceedings between S and T. In January 2019, the Royal Court gave judgment in relation to the parties' substantive claims for ancillary relief. T subsequently applied to set aside that decision for alleged non-disclosure by S.

3.        On 10 May 2021, T obtained from Commissioner Clyde-Smith an ex parte injunction in support of his application to set aside. That injunction was against S as defendant, and (Company I) and ("Company J"), as parties cited, and contained the usual undertaking as to damages. It prohibited S from:

"removing from the Island of Jersey or in any way disposing of or dealing with or diminishing the value of any of her assets in the Island of Jersey or elsewhere whether in her own name or not and whether solely or jointly owned up to the value of £5,000,000."

4.        That injunction was never served. According to S's Particulars of Claim dated 17 March 2024:

"9. A replacement Order of Justice was issued on 17 August 2021, which was heard by the Bailiff ex parte on 17 August 2021 (the "2021 OJ"). The Bailiff signed the 2021 OJ on even date, which contained the WFO [worldwide freezing order]."

5.        The injunction issued by the Bailiff on 17 August 2021 was in similar terms to that granted by Commissioner Clyde-Smith. It prevented S from dealing with her assets up to the value of £5 million. In June 2022, S swore her Fourth Affidavit in which she averred that her assets amounted to £10,232,496.91, a sum significantly greater than the amount injuncted.

6.        T's application to set aside the January 2019 decision came before the Royal Court in December 2022. Commissioner Clyde-Smith, sitting with Jurats, dismissed the application and in so doing, indicated that the Court was minded to lift the injunctions imposed on S. T gave notice that he proposed to appeal and applied for the injunctions to remain in force pending determination of that appeal. According to Commissioner Clyde-Smith's judgment, that application was strenuously resisted by S. The Court held that:

"10. Having weighed up the interests of both parties as best we can, we have decided that the injunctions should remain until the Court of Appeal is seized of the matter but limited to the principal assets, namely: the [Property J'], [Property I], the fleet of cars, subject to the extent we make clear in a moment, and the jewellery currently lodged with the [Court officer] in [Country 1].

11. Accordingly, the injunction in the amended form which we will now set out, will remain in force until the close of business on Friday, 27th January 2023, some six weeks from now, when they will be lifted in their entirety without further order unless the Court of Appeal has before that date ordered their continuation in the same or amended terms..."

7.        The interlocutory injunctions themselves were set out in an Amended Order of Justice signed by the Deputy Bailiff on 12 January 2023.

8.        On 26 January 2023, the Court of Appeal sat to consider T's appeal against the more limited injunctions imposed by the Royal Court, together with an application for the Court of Appeal to make injunctive orders itself. The Court of Appeal dismissed T's appeal and imposed a similarly limited injunction preventing S, and the Parties Cited, from dealing with or diminishing the value of certain, identified physical assets. The Act of Court recited the terms of the injunctions but neither referred to, nor contained, any undertakings by T.

9.        In its judgment dated 31 January 2023, the Court of Appeal (comprising Williams, Wolffe and Matthews JCA) held that:

"16. We have no doubt that it was entirely appropriate for the Court below to time limit the injunction which it had decided to continue. There would have been every reason to ensure that the injunction expired at a definitive point in time, if, for example, the Appellant, on reflection; had chosen not to appeal. Although the court was told on the 16th that an appeal was to be launched, on occasions litigants think better of such a course of action and decide against it. Accordingly, it was entirely proper for the Royal Court to determine that any injunctions which were to continue should continue only for such time as would allow a proper appeal to be made and, that thereafter, for the Court of Appeal to determine whether injunction should be continued...

19. That disposes of the appeal. Now that we are seized of the issue as to whether or not the injunctions are to continue, how should we proceed?... In our judgment the Appellant is only entitled to an injunction freezing assets either in the context of proceedings at first instance or appeal if he can show good reason for the making of such an order. In our judgment, the essential issue for us is whether there is a good, proper and sufficient reason for granting an injunction which has the effect of freezing assets of considerable value.

20. The principal reason put forward, indeed the only reason put forward which would permit of such a course in a case of this type, is that we should be satisfied that there is a proper risk or a serious risk of the Respondent dissipating assets should the injunction not be made. That is the basis upon which we should approach the issue of whether the injunction should be granted.

21. We have reached the clear conclusion that there is a clear and significant risk of dissipation of assets in this case...

24. We are completely satisfied that the injunction should continue in the form that the Royal Court thought was appropriate on the 16th December. That is, we propose to make an order which reflects that made by the Royal Court. We will specify the particular assets which are to be the subject of a freezing order and they will be identical to those assets which were identified by the Royal Court. The fact that we are following the course adopted by the Royal Court is a further reason why we do not think it disproportionate to restrain the Respondent in the manner that we have described."

10.     The issue of the injunctions came back before a differently-constituted Court of Appeal in June 2023 (comprising Storey, McMahon and Furness JCA) when S asked for them to be discharged. In so doing, she drew "attention to what she submits is her parlous financial position, and the large number of creditors which she is now faced with, including her own counsel in Jersey. She also points out the serious effect on her health, and that of her husband, of the continued restrictions on access to her own assets."  The Court of Appeal held that:

"27. Balancing the competing interests of the parties as we must, we think that the correct order to make is to grant a short extension of the freezing order to allow [T] to make a prompt application for permission to appeal to the Privy Council, and to allow the Privy Council to consider for itself whether a further extension should be granted. We think the appropriate extension should be until the end of this legal term, which is to 5pm on 31 July."

11.     The Act of Court made no reference to any undertakings on the part of T and simply extended the freezing order until 5pm on 31 July 2023.

12.     T did in fact seek permission to appeal to the Privy Council and on 29 July 2023, the Privy Council itself considered T's application for an extension of the freezing injunctions. The Order of the Privy Council dated 31 July 2023 records that:

"On 29th July 2023 the Panel considered the Appellant's application for an extension of the freezing injunction in effect in the Court of Appeal of Jersey.

After consideration of the papers submitted by the Appellant, and those submitted by the Respondent, the Panel has ordered that the freezing injunction be extended until further order of the Board."

13.     In October 2023, the Privy Council discharged the injunctions and a month later, T's application for permission to appeal was formally refused as the Court held that it did not raise an arguable point of law.

14.     Thereafter, the matter came back before the Royal Court for determination of numerous summonses issued by S, which culminated in a decision of the Bailiff, sitting with Jurats, on 1 February 2024. Amongst other things, the Bailiff ordered that:

"5. in relation to the Defendant's Damages Summons...:-

i. within eight weeks of the date hereof, the Defendant shall file a full pleading in respect of losses which is alleged to have occurred and, why and include the tests as set out in Morelli -v- Morelli and others [2021] JRC221;

ii. within four weeks of the filing referred to in paragraph 5.i. above, the Plaintiff shall file his reply..."

15.     On 26 March 2024, S filed nearly 300 pages of material on Case Centre in purported compliance with the orders made on 1 February 2024, including a pleading entitled "Particulars of Claim". That document purportedly sets out the claims brought by S and Company J "which she estimates at circa £11 million, including but not limited to losses attributable to the sale of assets, losses for defaulting on credit agreements, reputational damage and loss of credit rating etc, having to downsize businesses, and no funds to provide working capital and expansion capital to both [Company W] and [Company K] businesses."  Those losses are alleged to have been caused by the freezing injunctions and the proceedings were therefore founded upon the undertaking in damages provided to the Court by T. 

16.     T filed an Answer to the Particulars of Claim, alleging, amongst other things, that the Particulars of Claim were susceptible to being struck out, that the freezing injunctions were not "wrongly granted" and even if they were, the alleged damages were too remote and/or not caused by the injunctions.

17.     The filing of that Answer triggered a directions hearing before me. T also issued a summons to strike out the proceedings, relying on all the sub-paragraphs of RCR 6/13. Following a contested hearing in August 2024, I found that the Particulars of Claim filed by S did not address the essential elements of her claim and applying the Overriding Objective, I adjourned the hearing, provided guidance in a File and Parties Judgment as to the matters to be addressed, and directed that:

"[S] shall provide to the Defendant and issue any application to amend her Particulars of Claim by 12 September 2024 and shall append to that application a draft pleading either amending the current Particulars of Claim or restating her claim afresh..."

18.     Under cover of a letter to the Court dated 6 September 2024, S filed a set of Amended Particulars of Claim. She has not issued any summons to amend. In addition, she has also provided a further, unsworn, affidavit in support of her claims. Advocate Sinel, for T, submits that not only has S failed to comply with the Orders I gave, but also that the material now filed is still wholly inadequate.

The Basis of the Proceedings

19.     In Morelli v Morelli [2021] JRC 221, Commissioner Bailhache considered the approach to be adopted by the Royal Court when considering whether to order an enquiry into damages pursuant to undertakings given by a plaintiff in obtaining injunctions ex parte in an Order of Justice and held that:

"12. The starting point is to recognise that a plaintiff obtaining an injunction prior to judgment by which the assets in the hands of the defendant are restrained so as to provide comfort for the plaintiff that, if successful at trial, the judgment can be duly enforced, obtains relief against the defendant before the validity of the claim has been established. That being so, there will be cases where the plaintiff does not succeed at trial: and thus, with the benefit of hindsight, was clearly not entitled to the relief which he obtained. It is because obtaining that relief might cause the defendant loss that the plaintiff is required to give an undertaking in damages. It is to be noted that the undertaking is not given to the defendant. It is given to the court. It follows that there is no contract between the plaintiff and the defendant which the defendant might later claim has been breached by obtaining the orders in question. It is the court which is in the driving seat as to whether the undertaking given by the plaintiff should be enforced.

13. There is a helpful summary of the position in SCF Tankers Limited (formerly known as Fiona Trust and Holding Corporation) and Others v Yuri Privaloy and Others [2017] EWCA Civ 1877 where, giving the leading judgment, Beatson LJ said this:

"40. It is well established that the purpose of the cross-undertaking in damages and liability under it is to protect a party who is subjected to such an injunction preventing him from doing something but who subsequently prevails at the trial of the action from loss caused by the injunction; see Hoffman-La Roche and Co v Secretary of State for Trade and Industry [1975] 2 AC 295 at 361, per Lord Diplock. The court has discretion whether or not to enforce a cross undertaking in damages;

41. If the court decides to enforce a cross-undertaking, the decision of the High Court of Australia in Air Express Limited v Ansett Transport Industries (Operations) Proprietary Limited (1979) 146 CLR 249 has been influential in relation to the approach to causation and the burden of proof. Mason J, stated at 325 that it is for the parties seeking to enforce the undertaking to show that the damage he has sustained would not have been sustained but for the injunction. Although Mason J dissented as to the result, on the burden of proof there was no division of view: see Gibbs and Steven JJ at 313 and 320. The approach in the Ansett case has been followed by a number of decisions in this jurisdiction. They include the decision of this court in Energy Venture Partners Limited v Malabu Oil and Gas Limited [2014] EWCA Civ 1295, [2015] 1WLR 2309, a case concerned with whether a cross undertaking as to damages should be fortified. Referring to the judgment of Gibbs J, in the Ansett case as to what was required to enforce the undertaking itself, Tomlinson LJ stated [at 54] that:

"[a]s to causation, it is sufficient for the court to be satisfied that the making of the order or injunction was a cause without which the relevant loss would not have been suffered."

42. The person who seeks to do must show that the loss would not have been suffered "but for" the order; that is on the facts of this case, that the freezing order and the security undertakings were an effective cause of the Standard Maritime parties' loss...""

20.     Commissioner Bailhache also had regard (at paragraph 19 of his judgment) to Gee on Commercial Injunctions, 7th Ed and in particular, the editors' view that the primary question was whether the injunction was "wrongly granted":

"Thus the initial question is whether the injunction was "wrongly granted" (see Yukong Line Limited v Rendsburg Investments Corp [2001] to Lloyd's Rep 113 at [32]). If the claimant fails at trial then normally it would follow that the injunction was wrongly granted. But this is not always so .....

Whether or not the injunction has been wrongly granted is to be decided by the court and should be dealt with before any inquiry as to damages is directed. Such an inquiry should be concerned only with the quantum of damages to be awarded to the defendant pursuant to the jurisdiction conferred on the court by the undertaking. The inquiry should not be concerned with whether or not the injunction was justified. Nor in principle should it be concerned with whether the court, in the exercise of its discretion, should decline to award damages either wholly or in part. Thus, once an inquiry has been directed it should be concerned only with matters of causation and the quantification of damages..."

21.     If this claim proceeds, the issues which will need to be determined by the Royal Court in due course will be:

(i)        whether the freezing injunctions were wrongly granted;

(ii)       if they were, whether the Royal Court should, or should not, direct an inquiry as to damages and in considering whether to exercise its discretion, the Court will wish to understand:

(a)      the extent of the alleged losses;

(b)      how the injunctions caused the alleged losses; and

(c)      if there are any other specific factors that might inform the exercise of that discretion.

22.     In my judgment, those issues should be encapsulated in the pleadings. As Crow JA held in Financial Technology Ventures II (Q) lP v ETFS [2021] (1) JLR 122:

"42 Turning more generally to the function of pleadings, it is stating the obvious to say that, as between the parties inter se, they are intended to identify the issues in dispute so that each side knows what case it has to meet and what evidence it needs to adduce at trial. As between the parties (on the one hand) and the court (on the other), the function of pleadings is to provide the court with an appropriate tool for understanding the case it has to decide and for managing the proceedings in the run-up to trial, and during the trial process. In order properly to fulfil those functions, it is critically important that pleadings should always avoid (at one extreme) including an unnecessary torrent of detail which may obscure the essential issues, and (at the other extreme) pleading the case in such exiguous terms that the court and the other side are uncertain as to the basis on which the case is being put: Three Rivers D.C. v. Bank of England (No. 3) (66) ([2003] 2 AC 1, at paras. 49-51).

43 That explains the governing provisions of r.6/8 of the Royal Court Rules 2004. Paragraphs (1) and (6) provide as follows:

"(1) Subject to the provisions of this Rule, every pleading must contain, and contain only, a statement in a summary form of the material facts on which the party pleading relies for that party's claim or defence, as the case may be, but not the evidence by which those facts are to be proved, and the statement must be as brief as the nature of the case admits."

"(6) A party may in pleadings raise any point of law." [Emphasis added.]

44 As the italics indicate, we consider it important to emphasize that the Rules require that (i) facts are pleaded, not evidence; (ii) only material facts are pleaded, not all incidental facts; and (iii) points of law may be pleaded, but do not always have to be."

The Issues at the Directions Hearing in August 2024

23.     Notwithstanding that S had filed Particulars of Claim, purportedly in compliance with the Bailiff's Order dated 1 February 2024, the basis of her claim for an inquiry into damages was wholly opaque. The Particulars of Claim did not contain any express averment that any injunction was "wrongly granted".  Given that, as Commissioner Bailhache held in Morelli v Morelli, this is the "initial question" to be answered before the Court proceeds to consider exercising its discretion to order any enquiry into damages, this is a critical and material averment. In my judgment, the Particulars of Claim were, and indeed are, deficient without such an averment as they fail to disclose a reasonable cause of action.

24.     This is not a sterile, arcane point of pleading. Rather than express averments, the Particulars of Claim are based on assumptions that:

(i)        there was, in effect, one freezing injunction, which continued from May 2021 until it was discharged by the Judicial Committee of the Privy Council in October 2023;

(ii)       there was one undertaking in damages underpinning that injunction; and

(iii)      the injunction had been "wrongly granted" as it was eventually discharged.

25.     However, as is apparent from the background set out above, there were a number of separate injunctions granted against S during the currency of the proceedings, namely:

(i)        10 May 2021, by Commissioner Clyde-Smith, ex parte, in relation to assets up to £5 million;

(ii)       17 August 2021, by the Bailiff, ex parte, in relation to assets up to £5 million;

(iii)      16 December 2022, by Commissioner Clyde-Smith, limited to her principal assets and pending appeal;

(iv)     12 January 2023, by the Deputy Bailiff, limited to her principal assets and pending appeal;

(v)      31 January 2023, by the Court of Appeal (Williams, Wolffe and Matthews JCA), limited to her principal assets;

(vi)     19 June 2023, by a differently constituted Court of Appeal (Storey, McMahon and Furness JCA), limited to her principal assets and pending appeal; and

(vii)     31 July 2023, by the Privy Council (Hodge, Leggatt and Stephens LJJ), limited to her principal assets.

26.     In my judgment, if S's claim were to be both comprehensible and manageable in accordance with the Overriding Objective, she had to identify which injunction(s) she alleged were "wrongly granted", particularly given that if she were alleging that all the injunctions were "wrongly granted", this would raise challenging questions as to:

(i)        whether any undertaking in damages was actually given in respect of the injunctions ordered by the Court of Appeal or the Privy Council as none was referred to by either Court; and/or

(ii)       whether the Royal Court's jurisdiction to order an inquiry as to damages was limited to the orders that it itself made or whether that jurisdiction extended to making findings and enquiries about orders made by the Court of Appeal and/or the Privy Council.

27.     In my judgment, it was also necessary for S to plead why she alleged that any injunction had been "wrongly granted" and to plead the material facts relied upon given the comments of Diplock LJ in F Hoffmann La Roche and Co AG v Secretary of State [1975] AC 295, cited with approval in Morelli v Morelli:

"Whether an injunction was "wrongly granted" does not depend on whether the judge made a mistake in granting it. It involves looking at all the facts at the time of the hearing seeking an inquiry with the benefit of knowledge of all those facts and applicable law, and hindsight (Smithkline Beecham PLC y Apotex Europe Limited [2005] EWHC 1655 [2006] 1WLR 872)"

28.     Although the Privy Council ultimately discharged the injunction when it determined T's appeal:

(i)        at no stage has any Court held that the injunctions were "wrongly granted";

(ii)       the weight of judicial consideration would appear to suggest that the injunctions were both justified and appropriate given the independent decisions of:

(a)      Commissioner Clyde-Smith in May 2021, the Bailiff in August 2021 and the Royal Court of Jurisdiction 2 on 3 September 2021 to impose, ex parte, injunctions in relation to assets up to £5 million against S and others; and

(b)      the Court of Appeal in January 2023, and the Privy Council in July 2023, to impose freezing injunctions in similar terms to those imposed by the Royal Court in December 2022.

(iii)      the mere fact that the injunctions were discharged does not necessarily mean that they were "wrongly granted" such as might enable the Royal Court to direct that there be an inquiry as to damages.

29.     Accordingly, I gave a detailed File and Parties Judgment and adjourned the hearing to give S an opportunity to amend her claim.

The Current Applications

30.     Notwithstanding the directions previously given, S has not issued any summons to amend her Particulars of Claim, and nor has she applied in accordance with Practice Direction RC 17/05 to vary the directions. She has, nevertheless, provided the Court with Amended Particulars of Claim, albeit that the amendments are not themselves identified (contrary to the requirements set out in Carmichael v Alderton [2024] JRC 036). In my judgment, notwithstanding these failings, the Court could, and should pursuant to the Overriding Objective, treat S's correspondence as an application to amend the Particulars of Claim and to consider it alongside T's application to strike out the proceedings.

31.     The law in relation to amendments was set out in Cunningham v Cunningham [2009] JLR 227 and succinctly summarised in Financial Technology Ventures II (Q) LP and Ors v ETFS Capital Limited and Tuckwell [2020] JRC 152 (at paragraph 11) as follows:

(i)        The general position is that all matters in dispute between parties should be resolved so far as possible before the Court at trial.  Leave to amend should, therefore, be given if there is no prejudice to the other side which cannot be compensated for by costs (at paragraph 15).

(ii)       Amendments will not be permitted which infringe the rules of pleading or introduce a claim which is so hopeless that it would be liable to be struck out (at paragraph 19).

(iii)      More stringent considerations apply where an application to amend is late (at paragraph 17) and if (and only if) the Court considers that an amendment is 'late'...

32.     The application before me is not a "late amendment" and more stringent considerations do not arise. It is however an application which firmly engages the question of whether the amendment seeks to introduce "a claim which is so hopeless that it would be liable to be struck out".

33.     Royal Court Rules RCR 6/13 provides that:

(1)       The Court may at any stage of the proceedings order to be struck out or amended any claim or pleading, or anything in any claim or pleading, on the ground that -

(a)       it discloses no reasonable cause of action or defence, as the case may be;

(b)       it is scandalous, frivolous or vexatious;

(c)       it may prejudice, embarrass or delay the fair trial of the action; or

(d)       it is otherwise an abuse of the process of the Court,

and may make such consequential order as the justice of the case may require.

(2)       No evidence shall be admissible on an application under paragraph (1)(a).

34.     In Home Farm Developments v Le Sueur [2015] JCA 242, the Court of Appeal set out the test to be applied in relation to striking out:

"27. The Deputy Bailiff in Pike [Channel Islands and International Law Trust Company Limited v Pike [1990] JLR 27] referred further to the meaning of the expression "scandalous, frivolous or vexatious" when he quoted (at p. 38-39) from paragraphs 18/19/14 and 15 of the White Book at pp. 322-323 - being passages which we consider to be relevant to this appeal:-

"The Court has a general jurisdiction to expunge scandalous matter in any record or proceeding ... Allegations of dishonesty and outrageous conduct, etc, are not scandalous, if relevant to the issue ... But if degrading charges be made which are irrelevant, or if, though the charge be relevant, unnecessary details are given, the pleading becomes scandalous ... By [the words frivolous or vexatious] are meant cases which are obviously frivolous or vexatious, or obviously unsustainable ...  For instance, it is vexatious and wrong to make solicitors or others, parties to an action merely in order to obtain from them discovery or costs ..."

28.The test in an application to strike out was considered further by this Court in the case of Trant [Trant v AG [2007] JLR 231] to which we have already referred.  In the course of his judgment, Beloff JA said this:-

"22 The test on an application to strike out is well established. It is only where it is plain and obvious that the claim cannot succeed that recourse should be had to the court's summary jurisdiction to strike out. Particular caution is required in a developing field of law. Provided that a pleading discloses some cause of action or raises some question fit to be decided by a judge, jurats or jury, the mere fact that a case is weak is not a ground for striking it out. These propositions are vouched for by a wealth of Jersey authority embracing principles deployed by the courts of the United Kingdom, see e.g. In re Esteem Settlement...(2000 JLR at 127) (we note en passant that a new regime, arguably more favourable to an application to strike out, has been introduced in England and Wales by the Civil Procedure Rules).

23 On an application to strike out under sub-para. (a) of r.6/13(1) (that there is no reasonable cause of action) evidence is not admissible. The facts alleged in the Order of Justice must be taken as correct. However, where an application is made under sub-para. (b) (scandalous, frivolous or vexatious), or sub-para. (d) (abuse of process), or where the application to strike out is made out under the inherent jurisdiction of the court, evidence is admissible and may be considered by the court. It follows that, on this application, evidence was and is admissible."

It may be observed that the decision of the Deputy Bailiff in Pike was not referred to in Trant but for our part we see nothing in it which could be said to demonstrate an approach which is materially different.

29.      Applying these principles to the circumstances of the present case, the Appellants' Order of Justice should be struck out only if we are satisfied, based upon the conclusions which we can draw from the relevant documents and facts which are not in dispute, that any trial of the issues would be unnecessary because the claim would inevitably fail.  In doing so, we acknowledge that in the particular circumstances of this case a distinction may made between paragraph (1)(b), which refers to a claim or pleading which is "scandalous, frivolous or vexatious", and paragraph (1)(d) which refers to "abuse of process".  Whilst the former expression might, as the Deputy Bailiff referred to in Pike (at p. 37), suggest a degree of opprobrium about what has been pled, for example the making of unjustified allegations of outrageous conduct or the unreasonable inclusion of a solicitor as a defendant, we do not consider that the expression "abuse of process" necessarily carries the same connotation.  In the context of striking out, we consider that a claim or pleading may be said to be an abuse of process where, after applying the test set out in Trant, the conclusion can be reached that to allow the proceeding to continue would be an unnecessary waste of the court's time because at the end of any trial the result would inevitably be that the claim would fail.

35.     I further note that an action may be struck out as an abuse of process if it raises a matter which is res judicata and amounts to a collateral attack on a final decision of a court of competent jurisdiction (Showlag v Mansour [1991] JLR 377) or amounts to an attempt to relitigate matters which could and should have been raised in previous proceedings (Ernest Farley & Sons Limited v Takilla Limited [1992] JLR 54).  In that latter case, the Court of Appeal adopted and applied Wigram V-C's decision in Henderson v Henderson (1843) 3 Hare 100 where he held that:

"In trying this question, I believe I state the rule of the Court correctly when I say that, where a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time."

Discussion

36.     As Commissioner Bailhache identified in Morelli v Morelli, the starting point for any consideration of whether to order an enquiry as to damages following the grant of an injunction should be as to whether the freezing injunction was wrongly granted. In my judgment:

(i)        that is a material fact which must be pleaded; and

(ii)       insofar as S's Particulars of Claim fail so to do, that pleading fails to disclose a reasonable cause of action.

37.     The Amended Particulars of Claim now purport to address this issue specifically by the insertion of paragraphs 19 to 42. These run to some 10 pages of single-spaced, A4, text and contain a mass of interwoven allegations of fact, submissions of law, references to authority, and comment. For the purposes of this judgment, I think it sufficient to note that:

(i)        they expressly plead that "Commissioner Clyde-Smith was incorrect in ordering the injunction in 2021" (paragraph 19) and that "the injunction was wrongly granted" (paragraph 40);

(ii)       the basis of that plea is that, in summary:

(a)      there was no risk of dissipation (paragraph 22);

(b)      the Court failed to consider whether damages would be an adequate remedy (paragraph 23);

(c)      in granting the injunction ex parte the Court breached S's human rights (paragraphs 24);

(d)      the affidavits relied upon by T in support of the injunction were false (paragraphs 25 to 28);

(e)      T did not have "a good arguable case" (paragraph 27); and

(f)       Commissioner Clyde-Smith was conflicted and/or biased against S (paragraphs 30 to 36).

38.     The only injunction granted by Commissioner Clyde-Smith in 2021 was the one he granted on 10 May 2021. In my judgment, if these particular amendments be allowed, S's claim will be limited to the 10 May 2021 injunction and will not be susceptible to being struck out under RCR 6/13(1)(a) for disclosing no reasonable cause of action. By the proposed amendment, the necessary material averments will have been pleaded, and the merits of the claim are irrelevant as for the purposes of RCR 6/13(1)(a) the Court must treat the allegations in the pleading as correct on their face (following Trant v AG).

39.     However, amendments will not be permitted if they introduce a claim so hopeless that it would be liable to be struck out. Such consideration, like T's summons, invokes the other sub-paragraphs of RCR 6/13 in respect of which evidence is admissible. In my judgment, relevant evidence for the purposes of those sub-paragraphs is to be readily found in the judgments and orders of the Royal Court contained within the Case Centre Master Bundle. In particular, I note that:

(i)        although Commissioner Clyde-Smith granted the injunction ex parte on 10 May 2021 (Master Bundle, F188), he varied the terms on 8 July 2021 such that it would "lapse and cease to be of effect" if it was not served on S and the Parties Cited by 23 July 2021 (Master Bundle, F191);

(ii)       on 23 July 2021, following an ex parte hearing, Commissioner Clyde-Smith issued an Act of Court recording that "the said Order of Justice will formally lapse by close of business this day and new proceedings will need to commence should the Plaintiff wish to pursue the matter" (Master Bundle, F282);

(iii)      on 17 August 2021, a new Order of Justice containing injunctions was signed by the Bailiff following an ex parte hearing, and he directed that it be served within 4 weeks (Master Bundle, F283).

40.     Accordingly, if the proposed amendment were to be allowed, S's pleaded claim would be for an enquiry into damages, arising out of an injunction granted by Commissioner Clyde-Smith on 10 May 2021, that was never served, and of which she was wholly unaware until after it had lapsed.  Such a claim is plainly and obviously doomed to fail.

41.     In response to questions from the Court, S recognised this issue and indicated that:

(i)        the injunction about which complaint was actually made, and in respect of which she sought an enquiry into damages, was that granted by the Bailiff in an Order of Justice signed on 17 August 2021; and

(ii)       the grounds upon which she relied to submit that that injunction was "wrongly granted" were as pleaded in the Amended Particulars of Claim, albeit that she could no longer rely upon Commissioner Clyde-Smith's alleged conflict as he did not grant the injunction in August 2021.

42.     Although somewhat unsatisfactory, the parties were in a position to give full argument on the issues presented by the newly intimated amendments.  In my judgment, rather than adjourning for draft Re-Amended Particulars of Claim to be produced, the Court could and should proceed to consider S's intimated amendments. If they were allowed, then a formal document could be produced. Accordingly, the Court proceeded to consider the intimated further amendments.

The 17 August 2021 Injunction

43.     Were S to plead the material averments that the 17 August 2021 injunction was wrongly granted on the basis set out in paragraphs 22 to 27 of the Amended Particulars of Claim, such a pleading would not be capable of being struck out as disclosing no reasonable cause of action. However, evidence is admissible in relation to the other grounds for strike out and in order to consider the application to amend, together with T's summons, I think it necessary to consider the injunction granted by the Bailiff in a little more detail.

44.     The Order of Justice was served on S on 21 October 2021. That same day, there was an inter partes hearing before the Bailiff in relation to the injunction, at which S was represented by Advocate Mistry. The Act of Court records that the Bailiff "adjourned consideration of the matter to the Deputy Bailiff...on 27 October 2021". Advocate Mistry filed a Skeleton Argument for the purposes of that adjourned hearing stating that:

"4.       The orders provided for in the Order of Justice are draconian and the Defendant will be defending the interim injunction as well as the substantive claim.

5.        At the 27 October 2021 hearing, the Defendant seeks three orders...

(i)         [providing] security with an aggregate value of £5,000,000 (detailed below) to release her from the draconian orders contained in the Order of Justice;

(ii)         the immediate release of the assets seized by the [Jurisdiction 1] [Court officer] ordered by the [Jurisdiction 1] Court...

(iii)...an order to vary orders 7, 8 and 9 dealing with disclosure, whereby she seeks 6 weeks to provide the disclosure sought..."

45.     The Act of Court for 27 October 2021 records that the Deputy Bailiff "sat to further consider the undated Order of Justice, signed by the Bailiff on 17 August 2021 ("the Order of Justice")" and that, amongst other things, he ordered S to comply with her disclosure obligations under paragraphs 7 and 9 of the Order of Justice.

46.     The Order of Justice then came back before Commissioner Clyde-Smith in May 2022. The Act of Court dated 19 May 2022 notes that the Court had sat to consider, amongst other things, an application by S "to dismiss the Plaintiff's Order of Justice under which interim injunctive relief has been granted against [her] ("the Injunctive Proceedings")" and the judgment records that:

(i)        her application was dismissed;

(ii)       the grounds relied upon by Advocate Mistry, on behalf of S, to set aside the Order of Justice were that:

(a)      it disclosed no reasonable cause of action and/or was scandalous, frivolous or vexatious and/or an abuse of process;

(b)      the matters raised were chose jugée; and/or

(c)      T had failed to make full and frank disclosure in his ex parte application to obtain the injunctions.

(iii)      of its own motion (as set out in paragraph 41 of the Learned Commissioner's judgment) the Court relisted S's application to review the terms of the injunctions given "the unclear but worrying financial picture that arises from the disclosure made by [S]".

47.     That relisted application came before the Court on 14 June 2022 and S was again represented by Advocate Mistry. The judgment of the Court records that:

"2.  Having heard the submissions of counsel, the Court decided in the end to make no alteration to the terms of the interim injunctions...

3.  Accordingly the Court declined to vary the interim injunctions which can be reviewed again following the substantive hearing on 7th and 8th July, and depending on the outcome of that hearing."

48.     No hearing took place on 7 July 2022 given a deterioration in S's health and the matter eventually came back before the Court in November 2022 for a substantive hearing, with judgment being handed down in December 2022, when the Court refused to set aside the ancillary relief orders and imposed more limited injunctions pending appeal (as noted in paragraph 8 above).

49.     Against that background, I think it appropriate to consider S's individual grounds as to why she states that this injunction was "wrongly granted". 

50.     The first ground relied upon by S is that there was no risk of dissipation at the time and nor was there any actual dissipation or hiding of assets as a matter of fact. In my judgment:

(i)        the existence of a risk of dissipation was conclusively identified by the Court of Appeal in its judgment of 31 January 2023 (referred to at paragraph 9 above).

(ii)       the fact that actual dissipation has not in fact occurred is irrelevant to the question of whether the injunction was "wrongly granted"; the injunction was imposed to address the risk. Whilst the extent of that risk might be informed by whether or not there has been any actual dissipation, once the risk has been identified and the injunction granted, the lack of dissipation thereafter establishes nothing more than compliance with the terms of the injunction.

(iii)      as a matter of fact, this ground of challenge has no prospect of success.

(iv)     moreover, to raise it now amounts to:

(a)      a collateral attack on the decision of the Court of Appeal dated 31 January 2023 referred to above; and/or

(b)      an attempt to relitigate matters which could, and should, have been raised in the previous proceedings as part of Advocate Mistry's challenge to the Order of Justice (referred to at paragraph 46(ii) above) but which were not;

(c)      an abuse of process (following the principles in Henderson v Henderson).

51.     As to the second ground, namely that the Court failed to consider whether damages would be an adequate remedy, this is a matter which could, and should, have been raised in the previous proceedings as part of Advocate Mistry's challenge to the Order of Justice (referred to at paragraph 46(ii) above).  It was not, and to do so now amounts to an abuse of process.

52.     The third ground alleges that in granting the injunction ex parte the Court breached S's human rights. As a matter of fact, this ground is plainly and obviously doomed to fail. Whilst the Court may have granted the injunction ex parte, immediately after it was served, it came before the Court on an inter partes hearing at which S was represented. Moreover, as with the second ground, this is a complaint which could, and should, have been raised in the previous proceedings as part of Advocate Mistry's challenge to the Order of Justice (referred to at paragraph 46(ii) above).  It was not, and to do so now amounts to an abuse of process.

53.     S's fourth ground alleges that the affidavits relied upon by T in support of the injunction were false. There is no evidence to support this extremely serious allegation, and indeed, the highest S's unsworn affidavit puts matters is that "I also believe my son was coerced into given evidence against me in 2021 and his affidavits were presented to sign "fate accompli"". In my judgment, there is no prospect of S successfully establishing this ground.

54.     S's final ground for submitting that the injunction was "wrongly granted" is because T did not have "a good arguable case" in relation to the underlying substantive claim.

55.     Commissioner Birt most recently addressed the meaning of "a good arguable case" in Monteagle International Limited and others v Grocery Market Research Limited and others [2022] JRC 216, when, whilst sitting as a Commissioner in Jersey, he adopted the judgment he gave whilst sitting as a judge of the Cayman Islands Court of Appeal, which itself followed the wording used by Mustill J (as he then was) in The Niedersachsen [1983] 2 Lloyd's rep 600 at 605:

"I consider that the right course is to adopt the test of a good arguable case, in the sense of a case which is more than barely capable of serious argument, and yet not necessarily one which the judge believes to have a better than fifty per cent chance of success." 

56.     It follows that "a good arguable case" may not succeed. Accordingly, the outcome alone of any proceedings will not necessarily determine whether the case was "a good arguable case" or not, albeit that the individual findings of the Court may inform that assessment: 

(i)        T applied to set aside the ancillary relief order in the Royal Court on the basis of alleged non-disclosure by S in relation to a number of assets, which in aggregate he submitted amounted to at least £9.2m. The Royal Court found that there were serious failings on the part of S in relation to disclosure, but notwithstanding those failings, it declined to set aside the orders for a variety of reasons (set out in paragraph 84 of its judgment). At paragraph 84(iii) it held that:

"(iii)  In essence what we have is a suspicion that there has been material non-disclosure and/or undervaluing of assets and/or dissipation of assets on the part of the Respondent but no sufficient evidence upon which to attempt a realistic and reasonable quantification of the amounts involved or to properly justify the making of a substantially different order against the Petitioner..."

(ii)       The Court of Appeal dismissed T's appeal against the decision of the Royal Court. In so doing:

(a)      it accepted that T had "a good arguable case for setting aside the January 2019 Order", noting that "[t]hat was, after all, the basis on which he obtained his freezing order in August 2021" (paragraph 91 of its judgment dated 26 May 2023);  and

(b)      having considered each of the assets in respect of which T had alleged a non-disclosure on the part of S, held (at paragraph 127) that:

"The burden on a party seeking to "add back" assets to the opposing party's estate is a heavy one, as explained by the Court at paragraphs 84(vi) to (viii) of the set-aside judgment...Even so, it is possible that, armed with the material now available, [T] could have secured a substantially different order, but a mere possibility is not enough to justify setting aside a final order. [T] needs to show that a substantially different order would, on the balance of probabilities, have been the likely result. We agree with the Court below that he cannot establish this on the evidence now available."

(iii)      The fact that T's appeal to the Privy Council was dismissed in November 2023 for failing to disclose an arguable point of law does not assist in determining whether T's application itself amounted to "a good arguable case".

57.     In my judgment, S's plea that T did not have a "good arguable case" to set aside the ancillary relief order is plainly and obviously doomed to fail, and amounts to an abuse of process:

(i)        both Commissioner Clyde-Smith in May 2021, May 2022 and in June 2022, and the Bailiff in August 2021 independently determined that T's application was sufficiently arguable to grant injunctive relief;

(ii)       this is a matter which could, and should, have been raised in the previous proceedings as part of Advocate Mistry's challenge to the Order of Justice (referred to at paragraph 46(ii) above).  It was not, and to do so now amounts to an abuse of process;

(iii)      neither the Royal Court in December 2022, nor the Court of Appeal in May 2023, held that T's application was unarguable; quite the contrary. Both found evidence of unsatisfactory disclosure on the part of S but in the end, were not satisfied that had the disclosure been properly provided, any substantially different order would have been made.

(iv)     the Court of Appeal expressly accepted that T had a "good arguable case" and any attempt to assert the contrary at this stage would amount to an impermissible collateral attack on its decision.

58.     Accordingly, not only are the proposed challenges to the Bailiff's order plainly and obviously doomed to failed, but to raise them now amounts to an abuse of process. I therefore decline to give S permission to amend to bring a challenge against the injunction imposed by the Bailiff in August 2021.

The Pleaded Claims for Loss and Damage

59.     Having held that S's Particulars of Claim fail to disclose a reasonable cause of action, that her Amended Particulars of Claim are doomed to fail, and that her intimated amendments to her Amended Particulars of Claim are also doomed to fail and amount to an abuse of process, it might appear somewhat unnecessary to consider the actual pleaded claims for loss (which are largely unaffected by the Amended Particulars of Claim).  However:

(i)        the Particulars of Loss and Damage are set out in paragraphs 19 to 96 of the Particulars of Claim and run to some 13 pages of single-spaced, A4, text;

(ii)       they culminate in a Prayer for relief by S, and S alone, for a variety of things none of which include damages or an enquiry into damages; the closest the Prayer gets to financial matters is a claim for an "interim payment of £1m immediately";

(iii)      they are largely incomprehensible and certainly do not meet the Court's expectations as set out in Financial Technology Ventures II (Q) lP v ETFS (referred to in paragraph 22 above);

(iv)     the claims comprise generic claims for:

(a)      General damages for personal injuries, which seem to have been suffered in the period 1987 to 2016, long before any injunctions were contemplated, let alone granted. Whilst the kernel of the claim might be that the stress of the injunctive proceedings made S's existing symptoms worse, such a claim is both wholly obscured by a torrent of unnecessary and tendentious detail and unsupported by evidence.

(b)      Loss of income and capital, apparently by companies which are not party to the proceedings and/or were not subject to the Jersey injunction and/or in respect of properties which were sold before the injunction was granted. To the extent that S's claim is that as a result of the injunction she could not fund the companies as she had previously, that allegation is wholly obscured by the unnecessary detail. In addition, not only is there no evidence to support such a claim, but there is no evidence to explain how such a claim could arise given that her contemporaneous evidence at the time was that she had assets significantly greater than the amount injuncted.

(c)      Pecuniary losses comprising "out-of-pocket expenses involved in medical and treatment expenses, aids and appliances, domestic and personal care" which according to the proposed amendment at paragraph 55 of the Amended Particulars of Claim, "were not directly caused by the injunction".

(d)      Aggravated damages and exemplary damages, seemingly on the basis of T's and Advocate Sinel's alleged litigation conduct notwithstanding that that conduct appears to have been in accordance with the Orders made by the Court.

(v)      In my judgment:

(a)      the particulars of loss pleaded at paragraphs 19 to 96 of the Particulars of Claim are scandalous, frivolous and/or vexatious and/or amount to an abuse of process such that they should be struck out; and

(b)      the proposed amendments contained in paragraphs 43 to 107 of the Amended Particulars of Claim do not cure the above defects and in fact, compound them.

Disposal

60.     In my judgment:

(i)        The Particulars of Claim fail to disclose a reasonable cause of action in that they fail to plead that any injunction was wrongly granted and/or fail to identify the injunction about which complaint is made;

(ii)       The particulars of loss set out in paragraphs 19 to 96 of the Particulars of Claim are scandalous, frivolous and/ or vexatious and/or amount to an abuse of process such that they should be struck out;

(iii)      The amendments proposed in the Amended Particulars of Claim to identify the injunction about which complaint is made, plead a claim which is so hopeless as to have no prospect of success as they identify an injunction that was never served;

(iv)     The amendments intimated at the hearing to particularise the injunction about which complaint is made as being that granted by the Bailiff on 17 August 2021 would be sufficient to cure the failure in the Particulars of Claim to disclose a reasonable cause of action by identifying the injunction about which complaint is made;

(v)      However, the amendments contained in the Amended Particulars of Claim to support the averment that 17 August 2021 injunction was "wrongly granted" have no prospects of success and amount to an abuse of process.

(vi)     The amendments proposed at paragraphs 43 to 107 of the Amended Particulars of Claim to the particulars of loss do not cure the defects and in fact, compound them.

61.     In my judgment, the defects identified above are not capable of being cured by further amendment.

62.     In such circumstances, I refuse S's application to amend the Particulars of Claim dated 17 March 2024, and strike out the Particulars of Claim for failing to disclose a reasonable cause of action.

Authorities

T v S (Matrimonial) [2023] JCA 102.

Morelli v Morelli [2021] JRC 221.

Gee on Commercial Injunctions, 7th Ed.

Financial Technology Ventures II (Q) lP v ETFS [2021] (1) JLR 122

F Hoffmann La Roche and Co AG v Secretary of State [1975] AC 295.

Carmichael v Alderton [2024] JRC 036.

Cunningham v Cunningham [2009] JLR 227

Financial Technology Ventures II (Q) LP and Ors v ETFS Capital Limited and Tuckwell [2020] JRC 152

Showlag v Mansour [1991] JLR 377.

Ernest Farley & Sons Limited v Takilla Limited [1992] JLR 54. 

Henderson v Henderson (1843) 3 Hare 100

Home Farm Developments v Le Sueur [2015] JCA 242.

Royal Court Rules 2024

Monteagle International Limited and others v Grocery Market Research Limited and others [2022] JRC 216

The Niedersachsen [1983] 2 Lloyd's rep 600 at 605.