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Jersey & Guernsey Law Review – June 2007

CASE SUMMARIES

The following key indicates the court to which the case reference refers.

JRC - Royal Court of Jersey
GRC - Royal Court of Guernsey
JCA - Jersey Court of Appeal
GCA - Guernsey Court of Appeal
JPC - Privy Council, on appeal from Jersey
GPC - Privy Council, on appeal from Guernsey

CIVIL PROCEDURE

DISCLOSURE – NORWICH PHARMACAL ORDER

Macdoel Investments Ltd. v Federal Republic of Brazil [2007] JCA 069 CA (Bailhache, Smith and Jones JJA)

D. Steenson for the appellants; N. M. Santos-Costa for the first and second respondents.

The appellants appealed against the decision of the Royal Court to order pre-trial discovery under the Norwich Pharmacal principle against certain banks (the "Banks") as innocent parties mixed up in alleged wrongdoing.  The Royal Court had to be sufficiently satisfied (a) that the respondents were the victims of wrongdoing and (b) that the Banks had become mixed up in the wrongdoing.  The Royal Court found that it had prima facie evidence that the respondents were the victims of wrongdoing and that this was sufficient for the purpose of (a); the appellants did not challenge this finding.  However the Royal Court found only that there was "sufficient suspicion" that proceeds had found their way to the Banks in Jersey.  The appellants contended that the evidence had been insufficiently strong to establish that the Banks had become innocently mixed up in the wrongdoing.  The question of the evidential threshold to be satisfied for the purpose of (b) was therefore raised.

Held, dismissing the appellants' appeal –

(1)           In the absence of clear assistance in the authorities, the Court of Appeal had to determine that point.  It may be very difficult to bring even prima facie evidence that a third party has innocently become mixed up in a fraud, even where there is prima facie evidence of wrongdoing by a wrongdoer.  The threshold for innocent involvement should therefore be set lower, so that a "reasonable suspicion" will suffice for the purposes of (b) above.   In this case, the Royal Court had clearly been satisfied that there was a reasonable suspicion that the Banks were innocently mixed up in the alleged wrongdoing.  On that basis it was entitled to hold that the Banks had a duty to make disclosure in order to assist the respondents, and that it had the power to order such disclosure.

(2)           Applying the further test in laid down in Arab Monetary Fund v Hashim (No. 5),[1] the Royal Court concluded that there was a real prospect that the information from the Banks would assist the respondents in locating and preserving the proceeds of fraud and exercising any appropriate remedy. That finding was not challenged. Consequently, the Court of Appeal rejected the appellants' appeal on this ground (as well as the appellants' other grounds of appeal).

LEAVE TO APPEAL TO COURT OF APPEAL – CORRECT TEST

Britannia v Millborn   Royal Ct: (Page, Commissioner, sitting alone) [2007] JRC 001

A.J.D. Winchester for the applicant; D.P. Le Maistre for the respondent.

The plaintiff/applicant applied for leave to appeal against the Royal Court's ruling on costs to the effect that it should pay 85% of the defendant/respondent's costs.  The question arose as to the correct test to be applied on an application for leave to appeal in civil causes under article 13 of the Court of Appeal (Jersey) Law 1961 and in particular as to the resolution of any inconsistency between Glazebrook v Housing Committee[2] and Commissioner Page's previous decision in Macon v Quérée.[3]

Held, refusing leave to appeal -

(1)           The leading statement was now that of the Court of Appeal in Glazebrook.  Thus, following Glazebrook, leave should be granted: (a) where there was a clear case of something having gone wrong; (b) where the question was one of general principle, decided for the first time; and (c) where the case involved a question of importance upon which further argument and a decision of the Court of Appeal would be to the public advantage.  Although Glazebrook was a case of leave to appeal under article 13(e) from an interlocutory order there was no good reason not to treat it as applicable to costs’ cases (under article 13(c)).  It remained acceptable, however, to continue to pose the question set out in Macon – that is, whether there was a realistic chance of success – so long as it was recognised that the criteria by which that "prospect" was to be judged were those set out in Glazebrook.  The suggestion in Macon that leave should normally be granted unless the grounds of appeal had no realistic chance of success should not be invoked in the future.  However, whether there might be circumstances in which leave could be granted where there was no realistic prospect of success was a matter for another court on another occasion. 

(2)           Where (as in this case) leave was sought to appeal from a decision on costs, regard had to be had (a) to the limited grounds on which the Court of Appeal would interfere with a discretion of the Royal Court (Brown v Barclays Bank[4] and (b) to the observations of Birt, Deputy Bailiff in Tomes v Coke-Wallis[5] that where costs are at issue the applicant should have the benefit of any doubt as to whether there is a realistic prospect of success, but where the Court is satisfied that there was no such prospect it has a duty to refuse leave.

(3)           Applying the Glazebrook tests there could not be said to be a clear case of something having gone wrong; nor did the second or third Glazebrook grounds apply.  Even if the Court were to apply the Macon test, in precisely the terms proposed in that case, there was no realistic prospect of success and the answer would be the same.  Leave to appeal was therefore refused.

COMPANY LAW

PRESCRIPTION – ACTION AGAINST DIRECTOR FOR BREACH OF DUTY

See under TRUSTS, infra, Alhamrani v Alhamrani [2007] JRC 026

CONFLICT OF LAWS

FORUM CONVENIENS

Jaiswal v Jaiswal   Royal Ct: (Birt, Deputy Bailiff, and Jurats Allo and Liddiard) [2007] JRC 032

D.M. Cadin for Anand Jaiswal; R.J. Michel for Karamjit Jaiswal; the remaining parties did not appear and were not represented.

Shortly before he died L, a wealthy businessman domiciled in India, executed wills dealing with his Jersey and BVI estates.  The wills had the effect of leaving the bulk of his estate to one son, K, to the exclusion of his other sons, J and A.  A issued proceedings in Jersey (a) seeking a declaration that the Jersey will and the BVI will were invalid on the grounds of lack of testamentary capacity and undue influence and that L died intestate as to his Jersey and BVI estates (the "Will Proceedings"); and (b) seeking the appointment of Advocate Preston as an independent Jersey advocate as administrator pendente lite of the Jersey and BVI estates and as administrator of the worldwide intestate estate (the "Representation").   K issued proceedings in India seeking a grant of letters of administration of the worldwide intestate estate (the "Administration Action") and a declaration that A was not the legitimate son and heir of L (the "Legitimacy Action").  The named executrix of the wills also instituted proceedings in India seeking a grant of probate in respect of the Jersey will and the BVI will (the "Probate Action").  K now issued four summons in Jersey seeking to set aside the orders giving leave to serve K out of the jurisdiction in respect of the Will Proceedings and Representation and a stay of both the Will Proceedings and the Representation pending the outcome of the Legitimacy Action, the Administration Action and the Probate Action.  It was argued for K that (a) the Royal Court did not have jurisdiction to hear the Will Proceedings or the Representation, since, following Dicey & Morris Rule 137, there was no properly constituted representative before the Court; (b) that the Court should not hear the Will Proceedings or the Representation until A had established locus standi to challenge the wills and this could only be resolved by the Legitimacy Action in India; and (c) the High Court in Delhi was the natural forum for resolving the matters raised by both the Will Proceedings and the Representation and accordingly both Jersey proceedings should be stayed on the ground of forum non conveniens.

Held, dismissing K's applications save as referred to below –

(1)           Jurisdiction.  Whatever the position in England (see Dicey & Morris Rule 137) it was not the case in Jersey that it was necessary for there to be a properly constituted representative of an estate in order for the Court to exercise its jurisdiction under the Probate (Jersey) Law 1998.  The present actions raised questions "relating to a testamentary cause or matter" within the meaning of article 2 and the issue raised was a live issue upon which a declaration could be sought.  Where an executor named in a will does not make any application for probate, it was perfectly reasonable for a person interested on intestacy who wishes to challenge the validity of that will to bring proceedings to convene the named executor before the Court so that the validity of the will can be adjudicated upon. 

(2)           Forum non conveniens.  The doctrine of forum non conveniens only came into play where there was another available forum.  Conflicting expert opinions were provided to the Court as to whether the courts of India had jurisdiction to determine the validity of the wills.  For the purposes of the present case the Court determined the law of India to be that the courts of India had jurisdiction to make a grant of probate where the deceased had a fixed place of abode in India although no property covered by the will was situated in India.   The Indian courts had such jurisdiction under Indian law and also for the purposes of enforcement of any judgment in Jersey under the rules of private international law.  Accordingly there was an alternative forum.

(3)           Burden.  In deciding the appropriate forum, the burden varies according to the nature of the action: Spiliada Maritime Corporation v Cansulex Ltd.[6]  Where the plaintiff sues the defendant as of right (for example where the defendant was resident in the jurisdiction) the burden lies on the defendant to show that some other forum was clearly or distinctly more appropriate.  Conversely, where the plaintiff needs leave to serve the defendant out of the jurisdiction, the burden lies on the plaintiff to show that the home forum was the appropriate forum. In the present case, because leave was required to serve K out of the jurisdiction the burden lay on A, as plaintiff, to show that Jersey was the appropriate forum.

(4)           Appropriate forum.  The most natural and appropriate forum for determining the validity of the will was the High Court in Delhi.   L had died domiciled in India and had resided in India for the last year of his life; the underlying business was in India; his family, apart from A, resided in India; the validity of the wills was to be governed by Indian law as the law of domicile (though given likely similarities with Jersey law on the issue, making the application of Indian law by the Jersey courts less problematic, this factor was of lesser weight: Credit Chimique v James Scott Engineering Group Limited);[7] most of the important witnesses resided in India; all the parties apart from A resided in India; and though the estate in question was situated in Jersey and the BVI, this was not a particularly significant matter in the balance (Dicey & Morris Rule 139) and further, the BVI courts were likely to have more regard to a decision of the court of domicile than of Jersey.

(5)           Countervailing interests of justice.  Having decided that the High Court in Delhi was the appropriate forum, the Court would normally stay the Will Proceedings in Jersey.  However it was clear from Spiliada that the Court may nevertheless decide not to grant a stay in favour of the more appropriate forum if there are circumstances by which justice requires that a stay should not be granted.  In this respect the burden lay on A.  The Court had uncontradicted expert evidence before it as the length of time necessary to determine the Probate Action, the Administration Action and Legitimacy Action in India.  The effect was that a trial of the issue of the validity of the wills might be delayed for 6 or 7 years.  This was a matter to be taken into account in deciding the second limb of the Spiliada test.  Such a delay would be contrary to the interests of justice (in particular as a result of its potential effect on the memories and availability of witnesses) and the Court accordingly concluded that the Jersey proceedings should not be stayed. 

(6)           Locus.  It was submitted for K that it would nevertheless be wrong to proceed with the Will Proceedings in Jersey until the issue of A's status was resolved and this could only be determined by the Legitimacy Action which would be heard in India in any event.  This was, however, ultimately a matter of case management.  In ordinary circumstances, the determination of the status of a person to bring an action would be dealt with as a preliminary issue; but such a course was not mandatory.   A delay of six or seven years might ensue if the Wills Proceedings were stayed pending the Legitimacy Action in India. The Court considered that the interests of justice required an early resolution to the issue of the validity of the wills.  A stay on the Wills Proceedings and the Representation was therefore not ordered, save for the Representation in so far as it related to the intestate estate outside Jersey and the BVI, as the courts of India were the appropriate forum for dealing with the intestate estate.

CRIMINAL PROCEDURE

COSTS – UNSUCCESSFUL APPLICATION FOR LEAVE TO APPEAL

Att. Gen. v Michel & Gallichan CA: (Beloff, Smith and Steel JJA) [2007] JCA 009

C.E. Whelan for the Crown; D.F. Le Quesne for Michel; S.E. Fitz for Gallichan.

Pursuant to article 3(1) of the Costs in Criminal Cases (Jersey) Law 1961 the Crown applied for costs in respect of the defendants' unsuccessful applications for leave to appeal against their convictions. A total of £58,566.55 was claimed.  An order was sought for half the total amount against each defendant.  Over one-third of the total claimed related to disbursements by way of fees payable to English counsel engaged by the Crown. 

Held, granting the Crown's application but reducing the quantum -

(1)           There was no relevant Jersey jurisprudence as to the principles to be applied.  It was therefore reasonable to have regard to the English authorities on section 18 of the Prosecution of Offences Act 1985 which provides that the English Court of Appeal may make such order for costs against an unsuccessful appellant or applicant for leave to appeal "as it considers just and reasonable" (section 18(2)), a test which was both appropriate and flexible.  The following three principles set out by Bingham LCJ in R v Northallerton Magistrates' Court, ex parte Dove[8] were equally applicable to the present type of application:

(a)           An order to pay costs to the prosecutor should never exceed the sum which, having regard to the defendant's means and any other financial order imposed upon him, the defendant is able to pay and which it is reasonable to order the defendant to pay.

(b)           Such an order should never exceed the sum which the prosecutor has actually and reasonably incurred.

(c)           The purpose of such an order is to compensate the prosecutor and not to punish the defendant.  Where the defendant has by his conduct put the prosecutor to avoidable expense he may, subject to his means, be ordered to pay some or all of that sum to the prosecutor.

(2)           Taking these principles in reverse order, neither application for leave to appeal raised any novel or important point and the defendants had therefore put the prosecution to avoidable expense.  Accordingly, subject to means, the defendants had to bear the Attorney General's costs of resisting their applications to the extent that those costs were reasonable.  In the present case the amount expended by the Crown in the employment of English counsel was not reasonable, given that the applications did not raise any point of importance; nor did the time expended by the Law Officers' Department in bear a realistic or proportionate relationship to the complexity of the arguments.  In the circumstances the Court of Appeal itself assessed total reasonable costs in the sum of £20,000.  As to the defendants' means, in the case of Michel his assets were subject to a saisie judiciaire and their value had been estimated by the Viscount's advisers at £14,000,000.  Although Michel had disputed this figure he did not disclose data relevant to his financial position which would enable the Court to assess what he could reasonably afford.  It was entitled to draw reasonable inferences as to his capacity to pay: see R v Northallerton Magistrates' Court, ex parte Dove, supra.  On the assumption that he did not concede that all of his assets were liable to confiscation, the Court considered that he had the means to discharge any costs order made against him.  As to Gallichan, she held a share in her matrimonial home but required all her available assets for living expenses.  There was no suggestion that she, unlike Michel, had made any profit out of her criminal activity and it was therefore not appropriate to take the equity in the home into account (R v Julie Durose[9] distinguished).  She did not, therefore, have the means to pay.  The correct approach was for the total recoverable costs to be apportioned equally between the defendants.  An order in the sum of £10,000 was therefore made against Michel, with no order against Gallichan.

SENTENCE – NEWTON HEARING

Att. Gen.  v Carvalho Royal Ct: (Bailhache, Bailiff, sitting alone) [2007] JRC 011

N. Santos-Costa for the Crown; Advocate J. Grace for the defendant.

The question arose as to whether a defendant can be remanded to the Superior Number for sentence in circumstances where a Newton hearing has taken place before the Inferior Number. 

Held, as a matter of principle there was no difficulty in the imposition of sentence by a body different from that which has been the tribunal of fact.  This happened whenever a defendant was convicted by a jury and whenever a trial took place before the Inferior Number sitting sans enquête and the defendant was remanded to the Superior Number for sentencing.  Further, the Court should be able to impose whatever sentence it conceived to be just, and should not be constrained by the decision of the Attorney General to seek a Newton hearing before the Inferior Number.  Whilst as a matter of practice it was certainly desirable that the body which determined the facts at a Newton hearing should be the same body which imposed sentence, this was not a rule of law.  

EMPLOYMENT

TERMINATION – UNFAIR DISMISSAL

Voisin v Brown   [2007] JRC 047 Royal Ct: (Birt, Deputy Bailiff, sitting alone)

M. L. Preston for the appellant; the respondent in person.

The appellant appealed pursuant to article 94 of the Employment (Jersey) Law 2003 against a finding of the Employment Tribunal that he had unfairly dismissed the respondent from his employment.  Questions arose as to the grounds upon which an appeal from a decision of the Tribunal lies to the Royal Court; the correct test to be applied by the Employment Tribunal in a complaint of unfair dismissal; and the manner in which the Royal Court should dispose of a successful appeal.

Held, upholding the appeal and remitting the matter for fresh consideration by a differently constituted Tribunal –

(1)           The wording of article 94 mirrors that of the equivalent English legislation.  Following English authority, an appeal to the Royal Court from the Tribunal lies under article 94: (a) if the Tribunal has misdirected itself as to the law or misunderstood or misapplied the law; (b) if there was no evidence to support a particular conclusion or finding; or (c) if the decision was perverse (i.e. one which no reasonable tribunal, properly directed, could have reached) or (possibly) where the decision was "obviously wrong".

(2)           The Tribunal's role is not to substitute its own opinion for that of the employer but rather to judge the matter in the light of a band of reasonableness test, applied in accordance with article 64 of the Employment (Jersey) Law 2003.  The Tribunal must ask itself: was the decision to dismiss, on the basis of the reason advanced by the employer in accordance with article 64(1), within the band of decisions which a reasonable employer might make? 

(3)           The "procedural" safeguards in the case of dismissal laid down by Lord Bridge in Polkey v A E Dayton Services Limited,[10] although normally required, are not mandatory: the Tribunal has to judge each case in accordance with the Law on the basis of equity and substantive merits.  In this case the Tribunal erred in law in treating those generally applicable safeguards as mandatory requirements without applying the band of reasonableness test.

(4)           Where the Court holds that the Tribunal has erred in law in finding a dismissal unfair, the matter must be remitted to the Tribunal unless no Tribunal, properly directing itself, could come to the conclusion that the employee was unfairly dismissed.  On the facts, it could not be said that the decision was so perverse that no reasonable Tribunal could come to it and the case was therefore remitted to a freshly constituted Tribunal.

FAMILY LAW

DISCLOSURE OF ASSETS – CONSENT ORDER

Manley v Bell Royal Ct: (Bailhache, Bailiff and Jurats Bullen and King) [2006] JRC 195

M. E. Whittaker for the petitioner; P.C. Sinel for the respondent.

In 2001 the Greffier Substitute issued a consent order setting out inter alia agreed financial arrangements upon the divorce between the husband and the wife.  The negotiations between the parties had proceeded on the premise that the husband owed 20% of the business in which he worked.  His shareholding had in fact increased to 27% during the course of the proceedings; but he failed to disclose this to the wife.  Upon becoming aware of the non-disclosure the wife issued a summons seeking to set aside the consent order on the ground of material non-disclosure.  The husband conceded that there had been non-disclosure but contended that it was not sufficiently material or so serious that the consent order should be set aside. 

Held, granting judgment in favour of the wife -

In P-S v C[11] the Royal Court held that material non-disclosure in the context of contested proceedings was a ground for setting aide the court's order.  The principles set out in that case applied equally to consent orders.  On the facts, the husband had been less than honest and highly selective about the information he provided to the wife's legal advisers and in the circumstances the Court had no hesitation in concluding that his failure to disclose the true extent of his business interest was a material non-disclosure.  The consent order was accordingly set aside.

PLANNING LAW

PERMISSION IN PRINCIPLE - ENCOURAGEMENT

McCarthy v Minister for Planning and Environment [2007] JRC 063 Royal Ct: (Bailhache, Bailiff and Jurats Allo and Liddiard)

F. J. Benest for the appellant; S. C. Nicolle, Solicitor General, for the respondent.

The appellant appealed against the decision of the Minister for Planning and the Environment to refuse permission for the development of his land.  The statutory ground of appeal under article 109 of the Planning and Building (Jersey) Law 2002 (“the 2002 Law"), is that the decision of the Minister "was unreasonable having regard to all the circumstances of the case".  The appellant averred in particular that the refusal was unreasonable because it was inconsistent with previous indications given to him by successive officials and Planning and Environment Committees (whose functions the Minister had assumed consequent upon the move to ministerial government) to the effect that development permission would be forthcoming.  The question arose as to the effect of "consent in principle" or other informal indication of consent in a planning application.

Held, dismissing the appeal on this ground (as well as an additional ground) –

(1)           Because of its special insular character and heritage, Jersey needed to develop its own case law on planning matters: Trump Holdings Ltd v Planning and Environment Committee,[12] per Southwell JA.  The time had come to reappraise some of the earlier decisions of the Court.  The judicial approach in the early cases was to regard planning appeals as giving rise to an issue between the appellant and the Committee.  If the Committee had been inconsistent, or had erred procedurally, it would be overruled and the usual result was that development would proceed.  The wider public interest was not given any significant weight. The enactment of the 2002 Law, which came into force in most respects on 1 July 2006, marked a watershed of which the courts should take cognisance.  For the first time the Minister was empowered by statute to grant outline consent.  The 2002 Law also imposed upon the Minister a wide duty of consultation with interested bodies and persons.  An amendment to the 2002 Law recently adopted by the States would provide for appeals against the Minster's decision by third parties in certain circumstances. 

(2)           In Token v Planning and Environment Committee[13] the Court held that in order to allow an appeal on the ground that a decision "was unreasonable having regard to all the circumstances of the case" it was necessary not merely that the court considered the decision mistaken but that it so wrong as to be unreasonable.  This was endorsed by the Court of Appeal in Planning and Environment Committee v Le Maistre[14].  In Trump Holdings Ltd v Planning and Environment Committee[15]the Court of Appeal further endorsed Token and stated that its own decision in Island Development Committee v Fairview Farm Ltd[16] was materially different and should no longer be followed. 

(3)           In Trump the Court of Appeal had adopted a doctrine of substantive legitimate expectation and set out the requirements therefor.  However R (on the application of Reprotech (Pebsham) Ltd) v East Sussex CC[17] and Leicester City Council Ex P. Powergen U.K. Ltd [18] and Powergen UK PLC v Leicester CC,[19] whilst not directly in point, indicated a reluctance of the English courts to apply the doctrine of legitimate expectation to the prejudice of public rights, even if representations have been made by officials of the relevant public authority.  The doctrine of legitimate expectation had only a very limited application in the context of planning appeals.  The question for the Court was whether the decision of the Minister was unreasonable in a Token sense.

(4)           In Binet v Island Development Committee,[20] Coopers & Lybrand Deloitte v Island Development Committee [21] and other cases prior to Token the Court had allowed appeals by applicants for planning permission where the planning authorities had by the issue of a consent in principle or other encouragement encouraged the applicant to believe that consent would be forthcoming.  However if the Token test were applied to the facts in Binet and Coopers & Lybrand the Court found it difficult to see how the appeals could have been allowed and stated that neither Binet nor Coopers & Lybrand should now be regarded as good law.

(5)           Once land is developed, its natural state is almost invariably lost to the community.  Unless there had been a due process, and the Minister had reached a considered decision, he should not be held to indications by officials' or other informal promises or hints that a planning permission would be granted.  This did not mean that the Minister and his department could conduct themselves carelessly with impunity.  If even an outline planning permission is revoked or modified the Minister would be liable to pay compensation.

(6)           As successor to the Committee the Minister had undoubtedly behaved inconsistently with the Committee.  The question was whether this had caused such unfairness to the appellant that the Minister's decision should be regarded as Token unreasonable?  On the facts, the Court was unable to find that the Minister's decision was so unfairly inconsistent with the "permission in principle" or earlier indications that development permission would be granted as to be unreasonable in the Token sense.

TRUSTS

"DOG-LEG" CLAIM – RIGHT OF ACTION AGAINST DIRECTOR OF CORPORATE TRUSTEE FOR BREACH OF DUTY

Alhamrani v Alhamrani  Royal Ct: (Page, Commissioner, sitting alone) [2007] JRC 026

P. D. James for the first defendant; J. P. Speck for the second and fourth defendants; M. Taylor and J. S. Dickinson for the plaintiffs; C. M. B. Thacker for the third and fifth defendants.

The question arose as to whether, following the repeal of article 56 of the Trusts (Jersey) Law 1984 (which provided that directors of corporate trustees could be liable as guarantors in the event of the a breach of trust by the trustee) it remained possible for a beneficiary to introduce an alternative claim on a "dog-leg" basis.  The "dog-leg" claim was founded on certain remarks by Lord Nicholls in Royal Brunei Airlines v Tan[22] (a decision of the Privy Council on appeal from the Court of Appeal of Brunei Darussalem).  In the context of Jersey, this "dog-leg" claim would be to the effect that, in relation to the conduct of the affairs of the relevant trust, a director of the corporate trustee is in breach of his statutory duty of care as a director under article 74(1)(b) of the Companies (Jersey) Law 1991; that the right to damages for such breach is an asset of the trust (rather than a personal asset of the trustee company available to its creditors generally); and that where the trustee company is not in a position to enforce its claim against the director, a beneficiary of the trust is entitled to exercise a direct remedy against the director in place of the trustee.  In the present case the plaintiff beneficiaries issued their Order of Justice before the repeal of article 56 and now sought leave to amend by deleting their claim against the directors under article 56 and replacing it with a "dog-leg" claim.  The question of the appropriate period of prescription for claims under article 74 also arose.

Held, dismissing the application to introduce the "dog-leg" claim -

(1)           Royal Brunei Airlines v Tan was not concerned with the instant problem.  The Guernsey Court of Appeal in Rowe & Rich v Cross & Cross[23] recognised that the "dog-leg" claim still had "some progress to make" before it could be recognised as a binding principle.  Young v Murphy[24](a decision of the Supreme Court of Victoria, Australia) was a carefully reasoned, cogent and specific refutation of the idea that the right to performance of directors' duties in company law could be characterised as an asset of the trust.  Young v Murphy was distinguished by Lindsay J in HR v JAPT [25] (a decision of the English High Court) on the ground that in the latter case the trustee was the trustee of a single trust, the directors were concerned only with the administration of that trust, the trustee was worthless and it had no creditors other than in relation to the particular trust. 

(2)           The notion that the right to performance of directors' duties in company law was a trust asset had a degree of artificiality and awkwardness which was not easy to accommodate unless the imperatives of justice left no other alternative.  Whether something was or was not a trust asset was a question of fact, not high principle, and the Court had considerable scope to grant or withhold a remedy according to where justice lay so long as not too much violence was done to accepted notions of property and ordinary language.  It was not surprising that the "dog-leg" claim was found to be pleadable in HP v JAPT since the beneficiaries might otherwise have been without an effective remedy.  In the present case there were no such exceptional circumstances.  Whilst it was now proper to delete the claim against the directors under article 56, leave to amend to introduce a "dog-leg" claim was accordingly refused.

(3)           Obiter.  As to prescription, if the matter had to be decided now, the Court would rule that the relevant limitation period for a claim that a director was in breach of article 74 of the Companies (Jersey) Law 1991 was ten years: In re Northwind Yachts Ltd;[26] In re Esteem Settlement,[27] at paragraph 257.  

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