The Jersey Law Review - February 2002
CASE SUMMARIES
BANKRUPTCY
RECALLING DESASTRE
In re désastre of La Sergenté Farm Ltd. Royal Ct: (Birt, Deputy Bailiff and Jurats Potter and Le Breton) December 12th, 2001 unreported.
A.P. Begg for the trustee; M.J. Thompson for the opposing creditor; D.R. Wilson for the Viscount.
The principal asset of the company was a substantial property occupied by a bankrupt and his family. The company was owned by the trustee of a settlement established by the bankrupt. The company had given a number of guarantees to secure the liabilities of the bankrupt and, after due notice had been given by the opposing creditor, its property was declared en désastre on October 5th, 2001.
The trustee applied, inter alia, to recall the désastre pursuant to article 7 of the Bankrupty (Désastre)(Jersey) Law 1990. It argued that the balance sheet test was satisfied, the company’s property having been valued at £1.85 million whereas the claims amounted to £850,000. The opposing creditor submitted that the company had failed over a period of two years to meet its obligations, that the trustee had failed to fulfil its responsibilities since being appointed in June 2000, and that the bankrupt had been unco-operative with the Viscount. If the désastre were recalled there was no prospect of the creditors receiving their money within a reasonable time.
Held, refusing the application, that
(1) article 7 required the Court not only to apply the balance sheet test but also to exercise a discretion having regard to the interests of the creditors as well as the debtor;
(2) in the exercise of that discretion the Court had no confidence that the trustee would procure a sale of the property within a reasonable time.
CIVIL PROCEDURE
INTERIM PAYMENT OF DAMAGES
Kuwait Oil Tanker Co SAK and Sitka Shipping Inc v Mohsin & ors Royal Ct: (Le Cras, Commissioner and Jurats Tibbo and Le Breton) August 8th, 2001 unreported.
J.P. Speck for the plaintiffs; M.L. Preston for the first to fifth defendants; D. Gilbert for the sixth defendant; K. Lawrence for the seventh defendant.
The plaintiffs made an application under Rule 7(A)/2(1) (c) of the Royal Court Rules 1992, as amended, for an order that the defendants pay the sum of £2,000,000 by way of interim payment on account of damages in respect of the plaintiffs’ claim.
Rule 7 A/2 (1) (c) provides that the Court may make an order for an interim payment where it is satisfied that “if the action proceeded to trial, the plaintiffs would obtain judgement for substantial damages against the respondent.”
Held, granting the application and ordering payment of the sum of £1,250,000,
(1) approving dicta in Shearson Lehman Bros Inc and Ors v Maclaine Watson & Co. Limited & Ors[1]and Gibbons & Anor v Wall[2](“The Times”), the civil standard of proof should be applied in determining whether, on an application for an interim payment, the Court was satisfied that if the action proceeded to trial, the plaintiff would obtain judgement for substantial damages. It was not necessary for the Court to be “sure” that the plaintiff would obtain such a judgement, in the sense of being satisfied beyond reasonable doubt;
(2) on the balance of probabilities, and to the standard of proof set out above, this was a proper case to order an interim payment.
LIMITATION
Riley v Pickersgill & Le Cornu Royal Ct: (Hamon, Commissioner and Jurats Rumfitt and Georgelin) July 26th, 2001 unreported.
M.J. Thompson for the plaintiffs; A.D. Robinson for the defendants.
The plaintiff was the beneficial owner of a company (“the company”) which had the benefit of a nine year paper lease of premises at 1, Peter Street, St Helier (“the paper lease”).
In the course of 1988, the plaintiff entered into negotiations with West of England Newspapers Limited (“WENL”) regarding the sale of the company. As part of these negotiations, the plaintiff agreed to extend the term of the paper lease to twenty eight years, on terms that, on completion of the share sale agreement, WENL would use best endeavours to procure the release of the plaintiff from the guarantee and, if unable to do so, would indemnify him in respect of any liabilities arising therefrom. The defendants made no inquiries regarding the solvency of WENL, nor did they advise the plaintiff to make any such inquiries.
In 1992, the plaintiff discovered that the company was no longer in occupation of the premises. He made inquiries of the defendants as to the whether he was at any risk under the guarantee. The defendants reassured him that he was under no risk because he had the benefit of the indemnity from WENL.
The company subsequently defaulted in its obligations under the lease, and the landlord sued the plaintiff under the guarantee. The plaintiff’s attempts to recover under the indemnity were wholly unsuccessful as WENL was nothing more than a shell company.
The plaintiff claimed against the defendants in contract and tort. The defendants argued that both claims were prescribed, since the cause of action had accrued on the date of the passing of the contract extending the paper lease (2th May 1988) and the Order of Justice had not been served until June 12th, 1998.
Held,
(1) the defendants owed a duty of care to the plaintiff either to have investigated the financial status of WENL, or to have advised the plaintiff of the risks of not doing so.
(2) applying Midland Bank Trust Company Limited v Hett Stubbs & Kemp[3], the defendants were under a continuing duty to advise on the financial adequacy of WENL;
(3) applying dicta of the Court of Appeal in Boyd v Pickersgill & Le Cornu[4], the plaintiff had been prevented by a practical impossibility (“empechement de fait”) from exercising his right to bring proceedings by reason of the discussions that had taken place with the defendants in 1992;
(4) the plaintiff’s cause of action was therefore not prescribed in either contract or tort.
VEXATIOUS PROCEEDINGS
Eves and Eves v Hambros Bank (Jersey) Ltd. Royal Ct: (Bailhache, Bailiff and Jurats Le Breton and Allo) 2001 JLR 499.
A.D. Hoy for the plaintiffs; K. Dixon for the defendants.
The defendant bank made an application for an order enjoining the plaintiffs from commencing any proceedings, or taking further steps in existing proceedings, without the leave of the Court.
On June 19th 2000[5], the Royal Court held that it had jurisdiction to make the order sought. The issue then arose as to whether the relief should, in the exercise of the Court’s discretion, be granted.
Held, dismissing the application,
(1) in considering whether the plaintiffs were “vexatious litigants”, the Court would adopt the interpretation of the phrase “vexatious civil proceedings” in section 42 of the Supreme Court Act 1981 as laid down in AG for England and Wales v Barker[6];
(2) on balance, the plaintiffs had not yet crossed the line into vexatious litigation, although they were in “the last chance saloon”.
CRIMINAL PROCEDURE
CONTEMPT OF COURT
Hall v Att. Gen. Royal Ct: (Bailhache, Bailiff and Jurats Le Ruez and Le Brocq) December 17th, 2001 unreported.
M.L. Preston for the appellant; C. Yates for the Crown.
The appellant pleaded guilty in the Magistrate’s Court to common assault and was sentenced to four months’ imprisonment. As sentence was passed the appellant said “Why don’t you make it five, you prick”. The Magistrate retired for 30 minutes and, the appellant still causing a commotion in the cells, sentenced him in his absence to a further one month’s imprisonment consecutive for his contempt in the face of the court. The appellant’s counsel had indicated that she had not been able to take instructions and could not therefore mitigate on his behalf. The appellant appealed, inter alia, against the sentence imposed for his contempt on the ground that he had not been given the opportunity to apologise which he was now willing to do.
Held, allowing the appeal, and adopting the principles establishedin R v Moran[7], that giving a contemnor the opportunity to apologise was a very important aspect of the summary procedure; the sensible course of action would have been to adjourn the matter overnight so that the appellant could consider with the benefit of legal advice whether he wished to withdraw the offensive remark; this procedure not having been followed, the sentence would be quashed.
Obiter: in the absence of a retraction and apology a sentence of one month’s imprisonment would have been entirely appropriate.
COSTS
Cahours v Att. Gen. Royal Ct: (Bailhache, Bailiff and Jurats Le Ruez and Le Brocq) December 17th, 2001 unreported.
R.Tremoceiro for the appellant; C.Yates for the Crown.
The appellant appealed by case stated against the refusal of the Assistant Magistrate to award him costs following the dismissal of charges of assault and disorderly conduct. There had been a history of delays and adjournments culminating in a further application to adjourn by the prosecution on October 17th, 2001, the day fixed for trial. The application was refused, the prosecution offered no evidence, and the charges were accordingly dismissed. The Assistant Magistrate refused to award costs stating that both prosecution and defence were responsible for the delay and that he would exercise his discretion in a way that favoured neither party. The appellant contended, on the basis of Att. Gen. v Bouchard[8] and Romeril v Att. Gen.[9], that the discretion had been wrongly exercised.
Held, allowing the appeal,
that the discretion to refuse costs following an acquittal or a discharge from the prosecution should be exercised only in exceptional circumstances such as where the accused’s own conduct had brought suspicion on himself and misled the prosecution into thinking that the case against him was stronger than it was.
Per curiam: it was not an appropriate reaction to refuse costs because the Magistrate felt that the accused’s conduct was worthy of criticism in some way notwithstanding his acquittal or discharge.
SENTENCE
Holley v Att. Gen. CA: (Southwell, Smith and Tugendhat JJA) October 25th, 2001 unreported.
R. Juste for the appellant; C.E. Whelan, Crown Advocate, for the Crown.
This case concerned an appeal by the appellant against his conviction at a criminal assize on June 21st, 2001 on one count of murder.
The principal grounds of the appeal were that the Bailiff had misdirected himself by refusing the appellant’s application to exclude certain pieces of evidence which the Crown had relied on at trial, and the Bailiff had failed properly to direct the jury on the defence of provocation. In particular, it was contended that the Bailiff had failed to direct the jury that they were entitled to have regard to the appellant’s personal characteristics in determining whether or not there had been provocation.
Held, allowing the appeal and setting aside the conviction for murder,
(1) although some of the evidence relied upon by the Crown should not have been admitted this ground by itself would not have led to the conviction being set aside;
(2) article 4 of the Homicide (Jersey) Law 1986, which establishes the statutory defence of provocation, should be interpreted in accordance with the majority view of the House of Lords in the case of Reg v Smith (Morgan)[10]and the judgment of Lord Steyn in Luc Thiet Thuan v Reg;[11]
(3) applying the dicta of Lord Hoffmann in the Smith case, where a defence of provocation is raised, the jury should be directed as follows: first, that the defence had to show that the accused had killed while he had lost self control, and that something had caused him to lose self control; secondly, that the circumstances had to be such as to make the loss of self control sufficiently excusable to reduce the gravity of the offence from murder to manslaughter, and that in deciding what should count as sufficient excuse, the jury should apply what they considered to be appropriate standards of behaviour; thirdly, that if the jury considered that there was some characteristic of the accused, whether temporary or permanent, which affected the degree of control which society could reasonably have expected of him, and which it would be unjust not to take into account, the jury were entitled to do so;
(4) the Bailiff had omitted to direct the jury that they were entitled to take the appellant’s particular characteristics into account, and the absence from the summing up of this essential guidance on the law was sufficiently serious to amount to a miscarriage of justice for the purpose of Article 25(1) of the Court of Appeal (Jersey) Law 1961.
SENTENCE
Bonnar v Att. Gen. and Noon v Att. Gen. CA: (Southwell, Smith and Tugendhat JJA) October 26th, 2001 unreported.
M.L. Preston for Bonnar; S. Fitz for Noon; P. Matthews and S. Sharpe, Crown Advocates, for the Crown.
Both appellants were convicted before the Royal Court of being knowingly concerned in the importation of Class A Drugs. Bonnar was sentenced to a total of eight years’ imprisonment, and Noon was sentenced to five years’ imprisonment. Their appeals against sentence were heard together, since both cases raised issues concerning the guidance provided by the Court of Appeal in Campell, Molloy and Mackenzie v Att Gen.[12], and in particular the need for the Court of Appeal to give further guidance in relation to drugs trafficked in tablet form.
Held, allowing the appeals and substituting a sentence of four years’ imprisonment for Noon and seven years’ imprisonment for Bonnar,
(1) adopting dicta of the Court of Appeal in the case of Rimmer, Lusk and Bade v Att. Gen.[13] in relation to guidelines generally, and the guidelines laid down in the Campbell case specifically, the guidelines for sentencing in relation to Class A drugs carried or sold in tablet or pill form should be consistent with Campbell and Rimmer, and should avoid a divergence in approach irrespective of the form in which the Class A drugs were carried or sold;
(2) the primary factors in sentencing were the amount or quantity of the Class A drugs carried or sold, and the role of the defendant;
(3) declining to follow R v Aranguren et al[14]and R v Warren and Beeley[15], the purity of the drugs should be disregarded for the purposes of sentencing, save where the degree of purity was very high, or where the impurities were such as to endanger life or health;
(4) street and wholesale values should continue to be given in evidence, but were factors of less significance than the role of the defendant and the amount of drugs sold or carried;
(5) applying the above principles, the appropriate bands of starting points by reference to the number of tablets, capsules or other units of Class A drugs carried in tablet form should therefore be as follows:
No of Units Starting point in years of imprisonment
1-500 7-9
500-1,000 8-10
1,000-2,500 9-11
2,500-4,000 10-13
4,000-5,500 11-14
5,500 and over 14 upwards
TRIAL BY JURY
Att. Gen. v Davis Royal Ct:(Hamon, Commissioner) September 3rd, 2001 unreported.
M. St. J. O’Connell, Crown Advocate, for the Crown; S.A. Pearmain for the accused.
The accused was indicted on ten counts alleging infractions of the Fire Service (Jersey) Law 1959 and one count of malicious damage. He denied the offences and it was conceded by the Crown that he was entitled to jury trial on the common law offence, viz. malicious damage. His claim to jury trial on the statutory offences was contested by the Crown.
Counsel for the accused contended that the statutory offences contained elements of the common law offence of arson. She relied upon a jugement motivé in P.G. v Nicolle and Harper[16]where the defendant had been presented directly before the Royal Court and where the Greffier had recorded - “Considérant que les faits reprochés aux prévenus, dans les paragraphes desdites préventions, s’il fussent établis par la preuve, constitueraient un crime de droit commun, a jugé que les prévenus ont le droit d’être poursuivis en ce qui concerne lesdits faits en conformité des prescriptions de l’Article 14 de ladite loi.” The statutory provision in question was article 14 of the Loi (1864) réglant la procédure criminelle which provided that an accused person should first be presented before the Magistrate’s Court. Counsel submitted that this case was authority for the proposition that the accused was entitled to jury trial.
Held, rejecting this submission,
that the Attorney General had elected to charge the accused with statutory offences and that, applying Att. Gen. v Pennington[17]and A.G. v Weston[18], there was no right to trial by jury.
EVIDENCE
Watkins & ors v Egglishaw & ors Royal Ct: (Page, Commissioner and Jurats Le Brocq and Tibbo) July 31st, 2001 unreported; 2001 JLR N [39].
M.StJ.O’Connell and F.B. Robertson for the plaintiffs; M.M.G. Voisin and A.D. Hoy for the defendant.
The first plaintiff made an application for leave to adduce evidence by affidavit, on the grounds of his ill health. The defendants objected to the application on the grounds that the evidence of the first plaintiff was “hotly contested”, and that the production of the first plaintiff was therefore “reasonably required” within the meaning of Rule 6/18(3) of the Royal Court Rules, 1992 (as amended).
Held, granting the application,
(1) the question as to the reasonableness or otherwise of a requirement for the production of a witness should not be determined solely by reference to the importance of the issues, or whether the evidence in question was strongly contested. The Court was entitled to take account of all kinds of circumstances, including the personal circumstances of the witness in question, any physical or medical infirmity, and whether the witness was a disinterested third party or a party to the action;
(2) where a witness was infirm, this should also be taken into account in considering whether the witness “can be produced”: the word “can” being circumscribed by some element of what is reasonably practical;
(3) the Court also had power to admit affidavit evidence at trial under its inherent jurisdiction which could exist alongside the same or a similar rule: applying Finance and Economics Committee of the States of Jersey v Bastion Offshore Trust Company Limited[19];
(4) on the facts of this case, including the medical evidence, the Court was satisfied that the ends of justice could only be met by admitting the first plaintiff’s evidence by affidavit.
Matthews v Voisin & Co & ors Royal Ct: (Hamon, Commissioner and Jurats Bullen and Allo) October 23rd, 2001 unreported.
M.StJ.O’Connell for the plaintiff; J.D. Kelleher for the defendant; J. Martin for the third defendant.
The plaintiff and his wife were divorced on January 5th, 2001. Following the divorce, Voisin & Co continued to act for the plaintiff’s wife, Miss Jasper, in subsequent ancillary proceedings. During an exchange of financial questionnaires, the plaintiff’s legal advisers forwarded to Advocate Voisin a bundle of documentation. Due to an error on the part of the plaintiff’s lawyer, this documentation included attendance notes of a conference between the plaintiff’s lawyers and English Counsel.
The documents were subsequently circulated to the plaintiff’s wife and her accountants Ernst & Young LLP by Advocate Voisin, without his having read them. When the privileged nature of some of the documents was brought to his attention, Advocate Voisin notified the plaintiff’s lawyers of the fact that he had received them, and advised them of his intention to use them for the purpose of the ancillary proceedings and other related proceedings.
The plaintiff subsequently issued proceedings seeking the return of the documentation, and an order that both Voisins and Ernst & Young cease to act for Miss Jasper in the ancillary proceedings.
Held, ordering the return of the documents, and restraining the defendants from communicating any information derived therefrom, but declining to order that Voisins cease to act for Miss Jasper,
(1) applying Ridehalgh v Horsefield[20], where there has been an obvious mistake the Court could, in the exercise of its equitable jurisdiction, rectify the mistake and order that documents disclosed to another party in error be returned;
(2) although Voisins had not acted in contravention of guidelines laid down by the Law Society, the Court would, in the exercise of its discretion, order the return of the privileged documents;
(3) distinguishing Les Pas Holdings Ltd v Receiver General & States Greffier,[21] and Ablitt v Mills & Reeve (a firm) & Anor,[22] the consequences in cost and inconvenience to Miss Jasper of having to retain new legal advisers would be enormous, and could result in delays in the ancillary proceedings. The Court would therefore exercise its discretion in favour of permitting Voisin & Co to continue to act on her behalf.
FAMILY LAW
Sim v Thomas Royal Ct: (Carlisle, Commissioner and Jurats de Veulle and Querée) 2001 JLR 460.
N.M. Santos Costa for the plaintiff; R.G.S Fielding for the defendant.
The plaintiff instituted proceedings against the defendant for damages for breach of promise of marriage and, in the alternative, for the return of moneys allegedly lent to the defendant. The plaintiff claimed to have loaned the defendant the sum of £15,000 by way of contribution towards the purchase price of the property Le Chalet, which the defendant had acquired in his sole name in 1988. She also claimed to have loaned the defendant a total of £13,000 for the purpose of assisting him in his business activities.
Held, dismissing the claim for breach of promise, but upholding the plaintiff’s claim for repayment of money loaned,
(1) actions for breach of promise still existed in Jersey law. For such an action to be enforceable, the date for the marriage must have been set, or it must be proved that the marriage would have taken place within a reasonable time, applying Potter v Deboos;[23]
(2) a proposal of marriage which was accepted and mutually binding on the parties, and then left with nothing done to implement the marriage, could not lead to an enforceable action by one party at a later stage. Such inaction lead to the agreement being mutually rescinded;
(3) on the facts, there was no breach of promise to marry by the defendant which could found an action for damages by the plaintiff;
(4) there was a common intention that the plaintiff was to have a share in the property acquired by the defendant, and by the payment of £15,000 she had acquired a beneficial interest which entitled her to a share in the proceed of sale;
(5) the size of the plaintiff’s beneficial interest was a matter for the discretion of the Court. In exercising its discretion, the Court could take into account all relevant facts so as to achieve a fair and equitable result;
(6) taking into account the parties’ respective contributions towards household expenses, the plaintiff was entitled to such proportion of the value of Le Chalet as represented the proportion of her direct contribution to the purchase price of the property;
(7) on the balance of probabilities, it was accepted that the plaintiff had loaned the defendant £10,000 for the purpose of his business. That sum was repayable to the plaintiff from the date of the breakdown of the relationship, with interest from that date.
Per curiam: The Court commented that actions for breach of promise were archaic, and a relic of an earlier age. However the abolition of such claims was matter of public policy, although the Court endorsed the comments of the Royal Court in Anderson v Benjamin[24]in recommending that the Legislation Committee might consider the arguments for and against the retention of such a type of action.
Byrne v Hall Royal Ct: (Birt, Deputy Bailiff) November 2nd, 2001 unreported.
M.M.G. Voisin for the petitioner; M.E. Whittaker for the respondent.
The petitioner applied for an order that the respondent should pay maintenance for their son, aged 24, who wished to obtain a further degree. The respondent contended before the Greffier as a preliminary point that there was no jurisdiction under article 25 of the Matrimonial Causes (Jersey) Law 1949 (“the 1949 Law”) to order maintenance for a “child” who had attained the age of majority. The Greffier ruled against the respondent who appealed.
Counsel for the respondent submitted that the 1949 Law contained no definition of “child” and the presumption was that the word bore its ordinary meaning of a person not of full age; that would be consistent with provisions of the 1949 Law relating to custody of children.
Held, dismissing the appeal,
that the word “child” had different meanings in different contexts and, in the context of article 25 of the 1949 Law, meant a child of the parties to a marriage of any age; the matter would be remitted to the Greffier for consideration, on the facts of the case, whether it was right to make an order.
PLANNING
Token Ltd. v Planning & Environment Committee Royal Ct: (Bailhache, Bailiff and Jurats Quérée and Bullen) November 28th, 2001 unreported.
M.M.G. Voisin for the appellant; S.C. Nicolle Q.C., Solicitor General, for the Committee.
The appellant appealed against a decision of the Committee refusing to grant planning permission to build three bungalows in a small field of no agricultural value in St. Brelade. The grounds of refusal were that the land was in the Green Zone, that the private access road was inadequate, and that development would adversely affect the environment. In 1987, in response to an enquiry, the Committee had sent a letter to the appellant’s predecessor in title advising that it “would not oppose in principle the development for housing purposes” of the field, and would take steps to have the land re-zoned by the States. The Committee took no such steps and no action was taken by the appellant to pursue the matter until 1995.
The appellant argued that the decision was unreasonable on a number of grounds but particularly because the 1987 letter created an estoppel or legitimate expectation that permission would be forthcoming.
Held, dismissing the appeal, that -
(1) on the facts no estoppel had arisen, the appellant’s predecessor in title not having acted to his detriment on the strength of the Committee’s indication;
(2) whether or not the English doctrine of legitimate expectation was to be applied in Jersey was a matter for another day, and the court would approach the matter more broadly by considering whether the Committee had acted fairly, this being a statutory appeal and not an application for judicial review;
(3) the Committee had considered carefully the 1987 letter and other relevant factors such as access, objections from neighbours, and the adverse impact upon the spacious character and appearance of the locality, and its decision was not unreasonable.
Per curiam: the legal test established in Island Development Committee v Fairview Farm Developments Ltd.[25]did not entitle the Court to substitute its own decision for that of the Committee; the Court must form its own view of the merits but intervene only if it considers that the Committee’s decision was unreasonable, rather than merely mistaken.
Janvrin Holdings Ltd. v Att. Gen. CA: (Southwell, Smith and Tugendhat JJA) October 26th, 2001 unreported.
M.M.G. Voisin for the appellant; A.R. Binnington, Crown Advocate, for the Crown.
The appellant company appealed against its conviction by the Royal Court on one count of commencing development of a property without the consent of the Planning and Environment Committee, contrary to article 8 of the Island Planning (Jersey) Law 1964 (the “Planning Law”). The case raised the issue as to whether, as a matter of law, the demolition of a property could constitute “development” within the meaning of Article 5(2)(a) of the Planning Law.
Held, allowing the appeal, (Southwell JA dissenting)
(1) approving Cambridge City Council v Secretary of State for the Environment & Anor[26], demolition of itself was not capable of falling within the scope of the phrase “other operations” in Article 5(2)(a) of the Planning Law, and to hold otherwise would deprive the statutory provision of legal certainty;
(2) applying AG v Ferey[27], the wording of Article 5(2)(a) was penal in nature and therefore fell to be construed strictly, and as having no wider compass than the wording could unquestionably bear.
Per Southwell JA:
(1) approving Coleshill and District Investment Co Ltd v Minister of Housing and Local Government[28], the English authorities did not establish that demolition by itself could not constitute development, and the Bailiff had been right to direct the Jurats that demolition could be an “other operation” within the meaning of Article 5(2)(a) of the Planning Law;
(2) in any particular case it was primarily a question of fact for Jurats or a jury to decide whether any particular demolition operations were within or without the definition of “development”.
Obiter: Southwell JA also commented that, on the particular facts of this case, the Crown had been wrong to concede that the demolition in this case could not be an “engineering operation” and the Bailiff had wrongly directed the Jurats that demolition could not be a “building operation”.
SUCCESSION
Harben (executor of Kenneth Le Rougetel) v Carr-Barbour and others Royal Ct:(Le Cras, Commissioner) November 12th, 2001 unreported.
D. Gilbert for the representor; P.D. Harris for the first respondent (R1); N.J. Chapman for the second respondent (R2); L.J. Kerruish for the third respondent (R3); A.Clarke for the fourth respondent (R4).
The deceased made specific bequests of the shares giving title to two flats to R2 and R4; he bequeathed £1000 to his daughter R1, and left the residue to R3. R1 successfully applied for a reduction of the will ad legitimum modum and the division of the estate was referred to the Greffier. After payment of the substantial debts of the estate, there were insufficient assets to meet the entitlement of R1 to two thirds of the estate without abating the specific legacies of R2 and R4. Counsel for the residuary legatee (R3) contended that, if the creditors had sought repayment prior to the death of the deceased, it would have been necessary to sell both flats and the specific legacies would accordingly have failed, leaving some assets for R3.
Held, rejecting that contention,
that the specific legacies were valid, that the flats should be sold, and the respective values abated pro rata so that R2 and R4 could receive their bequests.
TRUSTS
In the matter of the “S” Settlement Royal Ct: (Birt, Deputy Bailiff and Jurats le Breton and Querée) July 24th, 2001 unreported.
J.A. Clyde-Smith for the trustee; J.P. Speck, C.G.P. Lakeman, A.J.D. Winchester and S.J. Young for the various convened parties.
The trustee applied to the Court for authorisation to enter into certain deeds, on behalf of the Trust.
Held, granting the application,
(1) applying The Public Trustee v Cooper[29] applications of this nature fell into four distinct categories:
(a) applications which raised an issue as to whether a proposed course of action was within the trustee’s powers. This was a question of the construction of the trust instrument, or a statute, or both;
(b) applications which raised an issue as to whether a proposed course of action was a proper exercise of the trustee’s powers, in circumstances where there was no real doubt as to the scope of those powers, and the trustee had decided how it wanted to exercise them, but because the decision was momentous, the trustee wished to obtain the Court’s blessing to the proposed course of action;
(c) applications by a trustee in circumstances in which it had surrendered its discretion to the Court. The court would only accept a surrender of discretion for good reason, such as where the trustees were deadlocked or had a conflict of interest;
(d) applications which arose in circumstances where the trustee had already adopted a particular course of action which had been challenged.
(2) the present application fell within the second of the above categories. In these circumstances there were only three issues for the Court to consider:
(i) was the Court satisfied that the trustee had, in fact, formed the opinion in good faith that the circumstances of the case rendered it desirable and proper for it to carry out the proposed course of action?
(ii) was the Court satisfied that the opinion which the trustee had formed was one which a reasonable trustee, properly instructed, could have arrived at?
(iii) was the Court satisfied that the opinion at which the Trustee had arrived had not been vitiated by any actual or potential conflict of interest which had or might have affected its decision?
Abacus (C.I.) Limited, trustee of the Esteem Settlement and the Number 52 Trust and Grupo Torras S.A v Sheikh Fahad Mohammed Al Sabah & ors C.A: (Gloster, Sumption and Rokison JJA) April 24th, 2001 unreported.
J.A. Clyde-Smith for the trustee; N.F. Journeaux for the plaintiff; P.C Sinel for the second and third defendants
This case concerned an appeal against the judgement of the Royal Court, declining to make an order for a distribution of trust funds to Sheikh Fahad Mohammed Al Sabah (“Sheikh Fahad”) by way of payment to Grupo Torras S.A (“GT”), a judgment creditor of Sheikh Fahad.
The issues which had been determined by the Royal Court were as follows:
(1) whether a trustee (and therefore the Court) could make a distribution for the benefit of a beneficiary to the proposed distribution, against the objections of that beneficiary;
(2) whether, on the facts of the case, a distribution by way of payment to GT would be a payment for the benefit of Sheikh Fahad;
(3) if so, whether the Court, putting itself in the position of the trustee, should exercise its discretion to make such a payment and at what level.
In relation to these issues the Royal Court had found as follows:
(1) as a matter of law, a trustee could make a distribution for the benefit of a beneficiary, contrary to his objections, when such benefit was conferred by means of a payment to a third party;
(2) although benefit was a concept to be construed widely, applying In re Price,[30]a mere reduction of a beneficiary’s debts was of itself not necessarily a benefit to the beneficiary. Some real advantage capable of being enjoyed by the beneficiary had to be identifiable and genuinely thought to be likely;
(3) even if a payment to GT would benefit Sheikh Fahad, such benefit would, in reality be minimal and it was a wholly wrong exercise of discretion to pay out all or most of the trust funds so as to confer an intangible benefit on Sheikh Fahad when this would cause a material disadvantage to the other beneficiaries.
By notice of appeal dated February 6th, 2001 GT appealed the Royal Court’s decision.
Held, dismissing the appeal,
(1) in accordance with well established principles, the Court of Appeal would only interfere with an exercise of the Royal Court’s discretion if it could be shown:
(a) that the Royal Court had misdirected itself with regard to the principles in accordance with which its discretion had been exercised;
(b) that the Royal Court had taken into account matters which it ought not to have done, or had failed to take into account matters which it ought to have done;
(c) that the Royal Court’s decision was plainly wrong;
(2) in relation to the first issue, although the Court of Appeal did not express any concluded view, its provisional view was that the Royal Court’s conclusion on this point was correct in law, distinguishing In re Gulbenkian’s Settlements (No. 2)[31]and applying Pilkington v IRC[32];
(3) the Royal Court’s decision on the second issue was one which it could perfectly properly have reached in accordance with the relevant legal principles. In the particular circumstances of the case, where Sheikh Fahad did not recognise any moral benefit to himself in reducing his debt, and where otherwise there would be no material improvement in his situation as a result of a payment to GT, there could be no sufficient benefit to justify the making of the proposed distribution;
(4) the decision of the Royal Court on the third issue was a decision it was entitled to reach. The Royal Court, exercising the discretion of the trustee, was obliged to balance the needs and interests of all the various beneficiaries under the trust, both actual and prospective, and this it had done.
WILLS
Jersey Society for the Prevention of Cruelty to Animals v Rees and Thomas Royal Ct: (Birt, Deputy Bailiff and Jurats Rumfitt and Bullen) 2001 JLR 506.
C.M.B Thacker for the representor; first and second respondents unrepresented; third respondent in person.
The Jersey Society for the Prevention of Cruelty to Animals brought a representation seeking registration of a photocopy will of immovable property, the original having been mislaid. The application raised the question as to whether the fact that the original will had been lost in the testatrix’s possession raised a presumption that she had revoked it and, if so, whether that presumption could be displaced by appropriate evidence.
Held, ordering registration,
(1) applying Re Hewett[33],there was clear authority for the proposition that the Court could order the registration of a photocopy of a will;
(2) where a will was last traced to the possession of a testator and was lost, there was a prima facie presumption that the testator had destroyed it with the intention of revoking it. This presumption could however be rebutted by evidence: approving Sugden v Lord St Leonard’s[34];
(3) on the particular facts of this case, the Court was satisfied that the presumption had been rebutted.
Return to Contents
[6] February 16th, 2000 unreported
[7] (1985) 81 Cr. App. R 51
[9] March 26th, 2001 unreported
[10] [2000] 3 WLR 654 HL(E)
[11] [1996] 2 All ER 1033; [1997] AC 131 Privy Council
[13] July 19th, 2001 unreported
[15] (1996) 1 Cr App R (S) 233
[22] October 24th,1995 unreported
[26] (1992) 64 P & CR 257
[29] December 20th, 1999 unreported
Return to Contents