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The Jersey Law Review – October 2005
CASE SUMMARIES
This section of the Review contains selected cases from Guernsey as well as Jersey. 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
COSTS
IFS Investments Ltd. v Manor Park (Guernsey) Ltd. and others Royal Ct: (Day, Lieutenant Bailiff) GRC 24/2005.
G. Dawes for the plaintiff; R.I.C.E. Harris, for the first and third defendants; P. Richardson for the second defendant; R.J. Collas for the fourth defendant.
The plaintiff sought leave to amend its cause. Leave to amend was granted. Issues arose as to the proper costs orders to be made.
Held, the relevant principles of Guernsey procedural law relating to amendment of pleadings and costs were to be found at Rule 35 of the Royal Court (Civil) Rules 1989. Although the equivalent provisions at Order 20 of the Rules of the Supreme Court were far more extensive, the material passages of the White Book concerning amendment and the costs consequences were of strong persuasive authority and should be adopted generally as the proper practice in Guernsey. What was at the heart of the matter was the causal link between the amended pleadings and the costs which were directly incurred thereby, or which could be shown to be unnecessarily incurred previously. The normal position, therefore, would be to make an order “on the usual terms as to costs”, the resolution of arguments about causation being left to taxation. It was a matter of discretion, to be exercised judicially.
INTERIM PAYMENT OF DAMAGES
J v G Ltd Royal Ct: (Birt, Deputy Bailiff) [2005] JRC 103.
J. Dickinson for the plaintiff; D. J. Benest for the defendant.
The plaintiff's Order of Justice alleged personal injury caused by the defendant's negligence. The defendant filed an Answer denying liability. The defendant's insurers made four voluntary payments of interim damages but refused to make further payments when it became apparent that the case was more complicated than first thought. The plaintiff sought an order of interim damages under Rule 8/2(c) of the Royal Court Rules 2004. The defendant resisted this and argued that evidence of the previous voluntary payments was inadmissible in the matter as a result of Rule 8/6.
Held, dismissing the plaintiff's application –
(1) In an application for interim damages under Rule 8/2(c), the Court is required to determine whether "if the action proceeded to trial, the plaintiff would obtain judgment for substantial damages against the respondent . . .". For this purpose the Court has to consider whether the defendant is likely to be held liable and whether the plaintiff is likely to be found guilty of contributory negligence. A "question or issue of liability" is therefore raised within the meaning of Rule 8/6. Rule 8/6 makes evidence of interim payments inadmissible at any hearing of "a question or issue of liability". The previous voluntary payments were therefore inadmissible as evidence in an application under Rule 8/2(c). The position is different if the Court has already determined that the requirements of Rule 8/2(c) are met and is assessing quantum of interim damages or if the Court has previously made an order of interim damages, having already determined that Rule 8/2(c) is satisfied.
(2) On the facts, the requirements of Rule 8/2(c) were not met and the application for interim damages was dismissed.
LEAVE TO APPEAL
Al-Suleimany v Standard Chartered Grindlays Trust Corp. Ltd and others Royal Ct: (Bailhache, Bailiff) [2005] JRC 058.
P. C. Sinel for the representors; F. B. Robertson for the first respondent; L. J. Springate for the fourth respondent.
The fourth respondent applied before a single judge for leave to appeal to the Court of Appeal against a costs’ order dated 8 February 2005.
Held, dismissing the application –
(1) Applying the reasoning set out in Macon v Quérée, leave to appeal should normally be granted unless the grounds of appeal have no realistic prospect of success. Furthermore, where the Court's decision is the final word on an application (as in the case of an application for leave to appeal against a costs’ order) the Court should err in favour of the applicant if in any doubt as to whether there is a realistic prospect of success.
(2) However the legal test was laid down by the Court of Appeal in Glazebrook v The Housing Committee. The appeal must be in respect of (a) a clear case of something having gone wrong; or (b) a question which is one of general principle decided for the first time; or (c) a question of law of importance upon which further argument and a decision of the Court of Appeal would be to the public advantage.
(3) The Court was not satisfied that this was a clear case of something having gone wrong. Costs' decisions are inherently an exercise of judicial discretion and the Court of Appeal would generally be loathe to interfere. Alternatively, if one were to apply Macon v Quérée approach, the appeal did not have a realistic prospect of success. The application was accordingly refused.
Comment [TVR Hanson]
The differing tests that have been applied when considering an application for leave to appeal have been considered in an article in this Review Civil Appeals to the Court of Appeal and all that Jazz where at page 177, note 34, a possible basis for reconciling the various tests was suggested. In this particular case, the Royal Court noted the various tests and gave appropriate deference to the “legal test… laid down by the Court of Appeal in Glazebrook v The Housing Committee…”. Having applied each test in turn, the Court ultimately refused leave to appeal. It is unfortunate, however, that the opportunity to clarify this particular area of the law was not taken up on this occasion. This is particularly the case given the subsequent decision in In Re Ports Trading Ltd. where a differently constituted Court appears to have followed the more favourable approach set out in Tomes v Coke-Wallisand granted leave to appeal against an order for costs “bearing in mind that an award of costs is final unless leave to appeal is given.”
STRIKING OUT
The Wessadah Foundation v Barings (Guernsey) Ltd. Royal Ct: (Rowland, Bailiff) GRC 31/2005
J. Greenfield for the defendant applicant; A. Laws for the plaintiff respondent.
The plaintiff had brought proceedings against the defendant complaining that the performance of an investment portfolio did not correspond with the performance of the benchmark index. The defendant applied to strike out the claim alleging that it was misconceived.
Held, that the Court would apply the commentary on RSC O18 r19 (Supreme Court Practice 1999) for guidance as to how it should proceed. The Court identified paragraphs 18/19/6 and 18/19/10 as summing up the applicable principles. The Court also cited Wenlock v Moloney as an important case relating to strike-out and in particular the admissibility or non-admissibility of affidavit evidence when the ground relied upon was, in effect, an allegation that the claim was not one which was likely to succeed. The Court also acknowledged the force of the argument that when a contract was reduced to writing the provisions of the Loi rélative aux Preuves 1865 applied and no evidence was to be admitted from outside of the documents.
TAXATION OF COSTS
Department of the Environment (Paying party) v Barrett & Barrett (Receiving parties) Royal Ct: (Harworth, Lieutenant Bailiff) GRC 21/2005.
R.J. McMahon for the Paying party; the Receiving parties in person.
The Lieutenant Bailiff was taxing the successful parties’ costs in judicial review proceedings. One of the issues was the extent to which research of the law could be included within the bill of costs.
Held, in any ordinary proceedings the taxing judge would readily strike down any costs that related to what could be described loosely as “researching the law”. However, the Court had some sympathy for the Receiving parties given that these were undoubtedly specialist proceedings having regard to the fact that these were probably only the second set of judicial review proceedings heard in the Island. There was provision within the rules for the judge to take into account the specialist knowledge and experience of an advocate. Taking all factors into account the Court allowed an element for “research” on a “broad brush basis”.
TAXATION OF COSTS
Jordan v Att. Gen. Royal Ct: (Birt, Deputy Bailiff) [2005] JRC 061A.
R. Tremoceiro for the appellant; S. Baker, Crown Advocate, for the Crown.
The appellant appealed against a taxation made by the Greffier. The Greffier disallowed, inter alia, costs incurred by the accused's advocate through his being present throughout an interview with Customs, since, in the Greffier's view, advocates acting on legal aid cases did not attend such interviews save in exceptional circumstances and the case was not exceptional. The Greffier also allowed only a qualified advocate's rate, rather than a partner's rate, for the time spent by the accused’s advocate both in the Magistrates Court and the Royal Court.
Held, upholding the appeal in part, inter alia that –
(1) No distinction is to be drawn between a legally aided defendant and a non-legally aided defendant in respect of taxation. If the defendant did not wish to exercise the right of silence, it was reasonable for his advocate to be present during such an important interview. The costs involved are therefore recoverable.
(2) Over-qualified persons should not be sent to the Magistrates Court to do work for which the public have to pay. This, however, was an exceptional case. The accused's advocate was a sole practioner, with no one else to send, and he was therefore entitled to a partner's rate on taxation for time properly spent.
Comment [TVR Hanson]
This case is highly significant for sole practitioners and arguably for small firms of advocates when dealing with the taxation of their costs. In both instances it may not be possible for such practices to field a more junior advocate for particular work in a case. Jordan suggests that such circumstances will lead to the partner rate being allowed upon taxation where a partner or principal has to attend. However, despite the Court stating that there should be no difference between a taxation in a legal aid case with one conducted in a privately paid case, it remains arguable that such dispensation should be limited to legal aid cases where an advocate has no choice but to attend to the matter allocated to him or her by the Acting Bâtonnier. (In re Ogden; In re an Advocate.) It is, further, noteworthy that had the Court penalised the sole practitioner concerned, this might have left the Jersey legal aid system vulnerable to criticism and, more importantly, to a challenge upon human rights grounds. (Consider article 4 of the European Convention on Human Rights.)
TAXATION OF COSTS
IFS Investments Ltd. v Manor Park (Guernsey) Ltd. and others; Royal Ct: (Day, Lieutenant Bailiff) GRC 22/2005.
R.I.C.E. Harris for the applicant; J.E. Roland for the respondents.
The Lieutenant Bailiff was taxing the successful applicant’s costs. Issues arose as to the recoverability of the costs of a lawyer attending the advocate in Court and the recoverability of English barrister’s fees.
Held, disallowing some costs, -
(1) The increasingly prevalent practice of an advocate being attended in Court by a legally qualified assistant was not to be encouraged. Certain fees were, accordingly, disallowed altogether and the hourly rate claimed on behalf of the assistant restricted to £120 given that the maximum hourly rate recoverable for an advocate (on a standard rather than indemnity basis) was £173.
(2) Whilst there might be extraordinary circumstances in which an English barrister’s fees might be allowable on a standard recoverable basis, and could well be allowable in Beddoes applications, the general rule must be that English counsel’s fees are not claimable from the other party. If a party considered that it needs the comfort of advice from English counsel, then so be it. But it could not, in the normal course, be right to be able to claim back that sum from the other party, bearing in mind that the rate of advocates’ fees generally in Guernsey must reflect a great competence on their part.
CONFLICT OF LAWS
RECOGNITION OF FOREIGN JUDGMENT
In Re the Fountain Trust Royal Ct: (Bailhache, Bailiff) [2005] JRC 099
D.F. Le Quesne for C. I. Law Trustees Ltd. and Folio Trust Company Ltd; D.M. Cadin for the wife; W. Grace for the husband; F. B. Robertson for the beneficiaries; J.P. Speck for Standard Chartered (Jersey) Ltd.; S. Sharpe, Crown Advocate, for the Attorney General.
In English matrimonial proceedings, the High Court awarded a substantial lump sum to the wife but none of it had been paid. The High Court also found that the husband had been uncooperative and obstructive in disclosing his financial affairs. Applying English law, the High Court declared that a Jersey trust, which had been established by the husband, was a sham and ordered the Jersey trustees to transfer the trust assets to the wife. Only one of the two trustees was a party to the English proceedings and it had submitted to the jurisdiction of the High Court only as regards the question of costs. The trustees applied to the Royal Court for directions as to how to respond to the English court order.
Held, agreeing that the High Court order should be recognised and enforced to the extent set out in the Royal Court's judgment –
(1) The High Court judgment was not capable of registration under the Judgments (Reciprocal Enforcement) (Jersey) Law 1960. However, where there is a declaration of a competent English court, not appealed, the doctrine of comity requires that effect be given to it, provided the defendant had every opportunity to raise all relevant defences at the hearing: Lane v Lane. The basis of this jurisdiction is équité or fairness.
(2) The proper law of the trust was Jersey law and it was administered by trustees in Jersey. The question whether or not the trust was a sham should be determined in accordance with Jersey law (and in particular In re Esteem Settlement). As a matter of generality, the assumption of jurisdiction by a foreign court to declare a Jersey trust a sham was exorbitant and the court would be reluctant to enforce any judgment based upon any such assumption. The court was not concerned, however, whether the trust was a sham but rather whether it would be fair, as a matter of comity, to enforce the judgment.
(3) Although the trustees submitted to the jurisdiction of the English court only as regards costs, it should have been obvious that a sham was being alleged. No unfairness would therefore result to the trustees if the English order were enforced. It would have been very different if the trustees had not submitted to the jurisdiction of the English court.
(4) The husband's contentions objecting to the enforcement of the order on the grounds, inter alia, that enforcement would be contrary to public policy were rejected. In the particular circumstances, it was not contrary to public policy to recognise and enforce a judgment which sought to do justice in matrimonial proceedings where a husband has flouted his legal and moral obligations towards his wife. Both trustees were controlled by the same person and therefore it did not matter in this context that only one of them had been party to the English proceedings.
(5) Although the beneficiaries were not convened in the English hearing, the trustee was convened and could have made submissions to protect their position but chose not to. In the circumstances it was not a breach of substantial justice to enforce the judgment to the prejudice of any interest of the beneficiaries to the trust fund. It would be an affront to justice to prefer the claims of the beneficiaries to that of the wife.
CONSTITUTIONAL LAW
STATES OF GUERNSEY ORDINANCE
States of Guernsey v Jersey Fishermen’s Association Ltd. and others CA: (Southwell, Smith and Vaughan JJA) GCA 34/2005.
R.J. McMahon for the appellant; G. Dawes for the respondent.
The States of Guernsey appealed the first instance decision that the Sea Fish Licensing (Guernsey) Ordinance 2003 was unlawful and of no effect, the Royal Court having held that (i) the States had exceeded their power in passing the Ordinance and (ii) the States’ power to legislate, independently of the United Kingdom Government, in relation to the licensing of British fishing boats, was limited to Guernsey’s territorial waters of 3 miles, unless such a power was granted to the States by Law approved by Her Majesty in Council.
Held, allowing the appeal and declaring that the Ordinance was intra vires and lawful, -
(1) Such delay as there had been in challenging the Ordinance was relatively short; furthermore, the Ordinance created a criminal offence and the defence of unlawfulness could be raised at any time. It was in the interests of the States and of all British fishermen that this fundamental issue of general importance be decided now;
(2) There was no basis for the contention that leave for judicial review ought first to have been sought given the lack of any such rule at the time. It was, however, open to the Respondents to apply for a summary dismissal of a misconceived application for judicial review or one which had been too long delayed;
(3) The failure of UK Ministers to exercise powers to enable the Guernsey Committee to issue licences was a factor of “no little importance” when considering whether the Ordinance passed in 2003 (some 20 years after the creation of the powers) was or was not lawful;
(4) A lacuna existed as a result of the failure of UK Ministers to exercise their powers, albeit that inaction may have resulted from the imposition of conditions which had proved unacceptable to the States of Guernsey (the Court noting also that no such pre-conditions appeared to have been imposed upon Jersey);
(5) Guernsey was a dependency of the Crown through the Sovereign’s title as Duke of Normandy; it was not a colony. Though the UK Parliament could make statutes affecting Guernsey, this was, by constitutional convention, always after consultation with Guernsey (and usually by agreement with Guernsey). The States of Guernsey was not the equivalent of an English local authority. As a democratically elected parliament, though not a sovereign one, it had power to make provision by statute for the good government of Guernsey. Neither was it a parliament circumscribed by a written constitution or other fundamental law. The customary powers of the States had developed by evolution, and in some respects by statutory development;
(6) The appeal involved the question whether by virtue of either the European Communities (Implementation) (Bailiwick of Guernsey) Law 1994 or the States’ customary powers the States could by ordinance (rather than by Law with the approval of the Privy Council) provide for the licensing of boats fishing within the twelve mile fishing limits round Guernsey but outside the three mile territorial sea limit. This involved consideration of the so-called doctrine of “colonial extraterritorial legislative incompetence”;
(7) Citing, in particular, Australian case-law, the Court concluded that the central question as regards the extra-territorial reach of the Ordinance, was whether there was a sufficiently substantial relationship between the Ordinance and the peace, order and good government of Guernsey;
(8) Section 1 of the 1994 Law empowered the States by Ordinance to “make such provision as they may consider necessary or expedient for the purpose of the implementation of any Community provision”. The section was wide enough to enable the States to make the Ordinance, it was not necessary for the States to reproduce the provisions of the relevant Regulations in detail;
(9) The 1994 Law was intended to and did enable the States to implement Community provisions which the United Kingdom and Guernsey were not bound to implement, when the States considered that to be “expedient”;
(10) Even if the position of Guernsey were to be equated to that of a colony (as opposed to the special kind of semi-dependent territory which it had always been) the Ordinance did not offend the doctrine of extraterritorial legislative incompetence;
(11) If it was necessary to do so the Court would hold that the customary powers of the States were sufficiently wide, in the difficult situation it reached in 2003, to fill the vacuum with appropriate licensing provisions by Ordinance, “at least on a temporary basis pending agreement with and action by UK Ministers”;
(12) All other grounds of challenge by the respondents, and in particular, allegations of abuse of power, bad faith, the right to fish, human rights, irrationality, article 28 of the treaty and severance were considered and dismissed.
Obiter: Although both counsel submitted that Community conservation measures (i.e. the common fisheries policy) were not binding on Guernsey by virtue of Protocol 3 to the Act of Accession to the European Treaties it seemed strongly arguable that such measures were binding.
There was an urgent need for the UK government and the governments of Guernsey and Jersey to meet in conference, and to continue to meet until a sensible agreement, satisfying the overwhelming need for conservation of fish in all the waters near the Channel Islands, had been finally and conclusively agreed.
The Court had the benefit of a number of authorities which were not cited to the Royal Court.
Leave to appeal to Her Majesty in Council was sought and granted, conditional upon the Record being lodged with the Registrar within 6 weeks (this date was later extended by agreement) and the Respondents lodging the (further) sum of £25,000 by way of security for costs for the due prosecution of the appeal.
Editorial note: The Record was subsequently lodged and security for costs given. The case is of obvious importance in determining the extent of the States’ legislative powers, the status of Guernsey and the relationship with the Sovereign and her Government.
CONTRACT
FRAUDULENT MISREPRESENTATION
Steelux Holdings Ltd. v Edmonstone Royal Ct: (Bailhache, Bailiff) [2005] JRC 062.
A. J. Clarke for the plaintiff; O. Blakeley for the defendant.
When sued by the plaintiff for a debt plus interest, which was evidenced by a registered promissory note, the defendant argued that the loan was a fiction and that she had been induced to sign the relevant documents on the basis of misrepresentations. Interest had not been paid or claimed before the present proceedings and the claim for interest was abandoned in argument.
Held, giving judgment for the plaintiff for the capital sum –
(1) Although counsel referred to English law on the subject of misrepresentation, it was necessary to consider the law of Jersey. Fraudulent conduct, including the making of fraudulent misrepresentation, is a moyen de nullité – a cause of the nullity of an agreement. The underlying principle of fraud, which embraces both dol and fraude, is bad faith. Fraud is a vice du consentement which nullifies the apparent consent between the parties and thus if one party knowingly makes a false statement which induces another to enter into a contract there is a defect of consent which allows the innocent party to treat the contract as void. If the false statement is not made knowingly there may still be a vice du consentement in that the contract may have been entered into on the basis of a mistake. In either case the burden of proof lies on the party asserting that there is a defect of consent and it must do so on the balance of probabilities.
(2) Silence can sometimes amount to fraud (réticence dolosive). If one party, particularly one more experienced and wordly-wise, is silent as to material fact, which, if known to the other, would have led to a refusal to enter into the contract, that may well amount to a fraud.
(3) On the facts, the defendant had not discharged the burden of proof upon her and judgment for the capital sum was awarded to the plaintiff.
Comment [TVR Hanson]
This case represents a further example of counsel having agreed that Jersey and English law were the same upon the point in question but only to find that the Court preferred an approach that was closer to Jersey’s roots. Nevertheless, given existing Jersey authority that “misrepresentation” was a good cause of action - Marenko v CIS Emerging Growth Ltd., Channel Hotels & Properties Ltd. v Rice- and the basic ingredients for a misrepresentation were the same as under English common law (McIlroy v Hustler) counsel may feel somewhat surprised that the Court in Steelux decided to deal with the case by considering whether or not there was a vice du consentement as a result of a misrepresentation. This would have been a conventional French approach to such a problem given the absence of “misrepresentation” as a discrete cause of action under French law. (See Nicholas, The French Law of Contract 2nd ed. at p.114.)
The case is also of interest in that the Court appears to have eschewed the reference to French concepts of nullité absolue and nullité relative that had earlier been adopted in Selby v Romeril but questioned in this February’s edition of the Jersey Law Review at page 137. Instead, the Royal Court held that once a vice du consentement had been established, the contract was void ab initio. Given the alleged existence of dol (fraud) in this case, an argument might have been made that this particular moyen de nullité was a claim “founded on tort” and therefore prescribed after 3 years in accordance with article 2 of the Law Reform (Miscellaneous Provisions) (Jersey) Law 1960. However, unless an empêchement d’agir operated in this case (Eves v Le Main), it would appear that the contractual limitation period of 10 years was applied given the contention that the relevant fraudulent misrepresentation occurred as far back as 1991.
The case did not deal with the issue as to whether or not a moyen de nullité can be barred by the occurrence of certain events within the applicable limitation period, such as lapse of time or affirmation of the contract. Such matters would, however, have been relevant when considering rescission of a contract for misrepresentation. For instance, in Channel Hotels & Properties Ltd. v Riceit was suggested by the Royal Court that a lapse of time could prevent rescission of a contract arising out of an innocent misrepresentation but this was as a result of approaching the matter from a different (English) perspective. With the Court in Steelux having concluded that a contract is void ab initio for a vice du consentement, it is possible that only the expiry of the 10 year limitation period would prevent an action based upon such a defect. In contrast, concepts such as lapse of time or affirmation, would be relevant in contracts that are “voidable” only (as opposed to “void”) and which are valid until the right of avoidance is exercised.
The Steelux case therefore presents a number of issues that will require future exploration. However, it provides a good illustration of the ongoing battle in Jersey’s jurisprudence between competing legal rules from different legal traditions.
RÉSOLUTION; IMPLIED TERMS
Grove and Briscoe v Baker Royal Ct: (Bailhache, Bailiff) [2005] JRC 095
J. M. P. Gleeson for the plaintiffs; the defendant on his own behalf.
The written terms of a loan with interest made by the plaintiffs to the defendant made no provision for repayment of capital. The defendant was late in paying interest on two occasions and he was six days overdue with respect to a further payment when the plaintiffs formally demanded repayment of the loan plus interest. The plaintiffs argued that (1) the failure to pay interest when due on three consecutive occasions was a sufficiently serious breach of contract entitling them to treat the contract as terminated (résolu); (2) that there was an implied term that persistent failure to pay interest when due was an "event of default"; (3) that it was an implied term that the loan was repayable on demand.
Held, giving judgment for the plaintiffs, inter alia –
(1) Jersey law of contract is not a battle ground between French and English law. The court is only concerned to apply the law of Jersey. The surest guide is Pothier but "the law is not set in the aspic of the eighteenth century" (Selby v Romeril) and may absorb influences from other jurisdictions which, once applied, become part of Jersey law. These principles may, or may not, be developed in accordance with the law from which they were derived.
(2) A contract may be terminated (résolu) without applying to the court where the breach is sufficiently serious or where the contract itself gives the innocent party that right (Hamon v Webster). The law relating to résolution is not dissimilar to the English remedy of rescisson but it is different in that it is available at the discretion of the court wherever a failure to comply with an obligation is sufficiently serious to justify cancellation of the contract.
(3) A term may be implied if it is a term customarily included in contracts of the kind in question or if it is necessary to ensure that the contract is not futile, inefficacious or absurd (Sibley v Berry).
(4) On the facts, the failures to pay interest on the due dates were not sufficiently serious to justify the plaintiffs treating the contract as terminated.
(5) This was a commercial contract between business partners. In the absence of express provision, it was implied that the capital was repayable on formal demand.
Comment [TVR Hanson]
Whilst the Royal Court deprecated the approach to the Jersey law of Contract as “a battle between legions carrying the flags of French law and English law respectively,” this comment evidences the perception of many in the profession that such a battle does in fact occur. Indeed, such a legal distinction is manifest in the judgments of Rossborough (Insurance Brokers) Limited v Boon and in Hamon v Webster. (See also Du Plessis, The promises and pitfalls of mixed legal systems: the South African and Scottish Experiences; MacQueen, Scots and English Law: the case of contract; Hanson, Jersey’s Contract Law: A Question of Identity? and Comparative Law in action: the Jersey law of contract.
This case of further interest in stating the Hamon v Webster “did not decide that the right to treat a contract as terminated followed the English model or was to be considered in accordance with English law.” Some may feel that such a conclusion rests uneasily with the conclusion in Hamon v Webster at para. 70 that “Jersey law is the same as English law in this area.” (Consider the effect of such a conclusion by analogy with Picot v Crills and the justification for citing English authority.) Moreover, the view in Grove that résolution of a contract is “available at the discretion of the Court” is clearly contrary to Hamon v Webster where at para. 71, the Royal Court stated that the Court’s role is merely to adjudicate (after the event) as to whether or not a party was correct to treat the contract as terminated. According to Hamon v Webster there would be no “discretion” on the part of the Court and this lies at the heart of the distinction between the French and English approaches. (See Jersey’s contract law: a question of identity?
CRIMINAL LAW
AFFRAY
Att.Gen. v Shewan and Peacock Royal Ct: (Birt, Deputy Bailiff) [2005] JRC 049A.
A.J. Belhomme, Crown Advocate, for the Crown; S.A. Pearmain for Shewan; M. J. Haines for Peacock.
Shewan and Peacock were charged with the offence of affray in a private place. The question of the legal requirements for "affray" arose.
Held, as regards the requirements for affray –
(1) In conformity with English common law, affray is (i) unlawful fighting by one or more persons or a display of force by one or more persons without actual violence (ii) in such a manner that a bystander of reasonably firm character might reasonably be expected to be terrified.
(2) Where the affray is committed in a public place it is not necessary for there to be an actual bystander present.
(3) Although the law in England was placed on a statutory footing with the enactment of the Public Offences Act 1986, the common law was sufficiently clear that a bystander had to be present for an affray to be committed in a private place. This also represented the law of Jersey. A person is present for this purpose if within sight or hearing.
(4) There were conflicting authorities in England as to whether the bystander had to be actually terrified. In this respect the views of Lord Reid in Taylor v DPP were to be preferred. The standard is an objective one. It is not necessary that any particular bystander was terrified, rather that a person of reasonable fortitude would have been terrified.
PROVOCATION
Att.Gen. v Holley JPC: (Lords Bingham, Nicholls, Hoffmann, Hope, Scott, Rodger, Walker, Carswell and Baroness Hale) [2005] UKPC 23.
W.J. Bailhache Q.C., Attorney General, and David Perry (of the English Bar) for the Crown; Peter Thornton QC (of the English Bar), and J. C. Gollop for the respondent.
At his jury trial for murder the defendant raised the partial defence of provocation but was found guilty of murder. The Court of Appeal set aside this conviction, and substituted one of manslaughter, on the ground that the Deputy Bailiff had, in not distinguishing between mere drunkenness and the disease of alcoholism, misdirected the jury to ignore evidence of the defendant's alcoholism when adjudging the standard of self-control to be expected of him (Holley v Att. Gen.). The Crown appealed to the Privy Council. The issue before the Privy Council was the correct interpretation of Article 4 of the Homicide (Jersey) Law 1986, which is identical to section 3 of the Homicide Act 1957. Article 4 provides:
"Where on a charge of murder there is evidence on which the jury can find that the person charged was provoked (whether by things done or by things said or by both together) to lose his self-control, the question whether the provocation was enough to make a reasonable man do as he did shall be left to be determined by the jury; and in determining that question the jury shall take into account everything done and said according to the effect which, in their opinion, it would have had on a reasonable man."
A substantial difference had arisen in the case law. In deciding whether the provocation was enough to make "a reasonable man do as he did", can the jury take into account particular characteristics of the defendant which might reduce his powers of self-control, such as an addiction to alcohol, or is the accused to be judged against a purely objective standard?
Held, advising Her Majesty that the appeal should be allowed (Lords Bingham, Hoffmann and Carswell dissenting) but that the order of the Court of Appeal should stand –
(1) Section 3/Article 4 envisages two ingredients:
(i) The first ingredient is whether the defendant was provoked into losing his self-control? This is a factual question. In answering this question all evidence which is probative is admissible, including evidence of mental or other abnormality making it more or less likely that the defendant did lose his self-control.
(ii) The second ingredient is whether "the provocation was enough to make a reasonable man do as he did . . . . [taking] into account everything done and said according to the effect which . . . it would have had on a reasonable man." This is an objective evaluation consisting of two elements. The first element calls for an assessment of the gravity of the provocation. The second element calls for application of an external standard of self-control: "whether the provocation was enough to make a reasonable man do as he did".
(2) The statutory reference to "a reasonable man" was not the best choice of words in this context but the phrase is intended to refer to a person of ordinary self-control. The judge should explain to the jury that "the reasonable man referred to in question is a person having the power of self-control to be expected of an ordinary person of the sex and age of the accused, but in other respects sharing such of the accused characteristics as they think would affect the gravity of the provocation to him; and the question is not merely whether such a person would in like circumstances be provoked to lose his self-control but also whether he would react to the provocation as the accused did": R v Camplin.
(3) The standard of self-control set by the legislation is an objective one. Taking into account the age and sex of the defendant, as mentioned in Camplin, is not an exception to the uniform approach required by the law. The powers of self-control of ordinary people vary according to their age and, more doubtfully, their sex. These features are to be contrasted with abnormalities, that is, features not found in a person having ordinary powers of self-control. The former are relevant to the objective standard of self-control, the latter are not.
(4) A majority of the House of Lords in R v Smith (Morgan) held that the standard of self-control to applied for the purposes of the law of provocation varied according to the particular characteristics of the accused and that the jury should ask themselves whether the defendant exercised the degree of self-control to be expected of someone in his situation. This was not, however, a correct statement of the law. The view of the minority in Smith Morgan, and of the Privy Council in Luc Thiet Thuan v The Queen, was to be preferred. The law of homicide is a highly sensitive and controversial area in which the legislature had altered the common law. It is not open to judges to relax the uniform, objective standard which had been enacted by the legislature. Moreover the legislature had recognised that the objective standard might work harshly against persons suffering from mental abnormality and had simultaneously introduced the partial defence of diminished responsibility which was apt to embrace those cases.
(5) Thus the fact that the accused, as in this case, suffers from the disease of alcoholism is relevant when assessing the gravity of a taunt but it is not a matter to be taken into account when considering whether the defendant exercised ordinary self-control. In setting aside the accused's conviction for murder on the ground of misdirection, the Court of Appeal had applied the reasoning of the majority in Smith Morgan but since Smith Morgan was wrongly decided the Attorney General's appeal should be allowed. In normal course, the defendant's conviction for murder should be reinstated but since the Attorney General had given an undertaking that he would not seek to restore the accused's conviction for murder, the order of the Court of Appeal should stand.
The entire Board noted that the law of homicide is in urgent need of radical and comprehensive reform by the legislature.
EVIDENCE
WITNESSES - SCREENS
Myles v Att. Gen. CA: (Southwell, Smith and Carey JJA) [2005] JCA 065.
C. M. Fogarty for the appellant; A. J. Bellhomme, Crown Advocate, for the Crown.
The appellant appealed, inter alia, against conviction on a not guilty plea at a criminal assize in respect of a count of kidnapping. At trial, the alleged victim of the kidnapping gave evidence behind a screen. The appellant contended that there had been no, or no adequate, grounds for allowing a screen and that no direction was given to the jury regarding the use of the screen before the screened witness gave evidence.
Held, dismissing the appeal –
(1) In dealing with an application of this nature, the judge must be satisfied that, if not screened, (a) the witness may be affected by fear or distress or (b) the quality of his or her evidence may for be adversely affected or (c) for some other reason, applying specially to the witness, the witness may be so affected. If, and only if, the judge is satisfied of this, the judge will need to balance the adverse effect on the witness, if there is no screening, against the potential prejudice to the defendant if there is. In the present case there was no basis for criticism of the Deputy Bailiff's decision to use screens. R v Shraub and Cooper was not followed.
(2) The correct course will usually be for the jury to be given a direction about the screening before the screened witness gives evidence. However counsel had not objected at the time and could not now raise objection to the procedure adopted at trial. In any event, the clear direction given by the Deputy Bailiff in summing up was in this case sufficient to dispel any potential prejudice to the defendant.
JURISPRUDENCE
JUSTICE - RECUSAL OF JUDGES
Baglin v Att. Gen. CA: (Southwell, Smith and Carey JJA) [2005] JCA 064.
R. S. Tremoceiro for the appellant; N. M. Santos Costa, Crown Advocate, for the Crown.
The appellant was convicted by a jury on a count of grave and criminal assault. At an earlier hearing, concerning an unrelated charge, the appellant had spat, made abusive remarks about Jersey law, the Queen and the Bailiff, stating inter alia that the Bailiff was "bent and corrupt". Given this history, the appellant argued at trial that the Bailiff should recuse himself in order to avoid any appearance of bias. The Bailiff ruled against this. The appellant appealed, inter alia, against conviction on the ground that the Bailiff should have recused himself from the trial.
Held, dismissing the appeal –
(1) Where an appearance of bias is alleged, the Court, having ascertained all the relevant circumstances, must ask itself whether those circumstances would lead a fair-minded and informed observer to conclude that there was a real possibility that the tribunal was biased: In re Esteem Settlement; Porter v Magill.
(2) Applying this test, the appeal could not succeed. The appellant's behaviour amounted to gross bad manners but could not have led a hypothetical fair-minded and informed observer to conclude that there was any possibility of the Bailiff being biased. As to the allegation that the Bailiff was "bent and corrupt", a mere assertion cannot of itself require récusation. To give grounds for recusal, an allegation of bias must be accompanied by additional material adding weight to the mere allegation; it must be brought over the "real possibility" threshold.
TRUSTS
CONFIDENTIALITY OF PROCEEDINGS
Representation of Saffery Champness Trust Corporation Royal Ct: (Bailhache, Bailiff) [2005] JRC 052.
L. J. Springate for the representor.
The representor, as trustee of a Jersey settlement, applied for the rectification of a Deed of Appointment and two Deeds of Variation which, as a result of mistakes by professional advisers, did not achieve their intended purpose. In order to maintain the confidentiality of the Settlement, counsel for the representor requested that the Court sit in private.
Held, granting the substantive application –
(1) The principle of "public justice" requires an open sitting but the Jersey courts have nevertheless accorded a greater importance than elsewhere to the need to maintain private trust arrangements confidential: Jersey Evening Post v Al Thani. The application in this case was not an administrative one under Article 47 of the Trusts (Jersey) Law 1984 but rather one for rectification as a result of mistakes by professional advisers. It was not appropriate for the Court to deal with the matter in private but the Court would, nevertheless, refrain from identifying the settlor and beneficiaries by name and the trust itself would be referred to anonymously as "the Settlement".
(2) Applying the principles set out in Re M. M. Patel Settlement and in Re Abacus (CI) Ltd, the Court was satisfied that the tests for an application for rectification were met and granted the application, with costs to be met on an indemnity basis out of the trust fund.
REMUNERATION OF TRUSTEES
In Re The Carafe Trust, Representation of Guardian Trust Company Ltd and Representation of Xavier Louveaux and others Royal Ct: (Birt, Deputy Bailiff) [2005] JRC 063.
L. J. Springate for the representor in the first representation and for the respondents in the second representation; R. J. Michel for the representors in the second representation and the respondents in the first representation.
In 2000 the settlor of the Carafe Trust (a Jersey discretionary settlement) requested Guardian Trust Company Ltd ("Guardian") to resign as trustee in favour Herald Trustees Ltd ("Herald"). The process of transfer proved difficult. Guardian required the accounts for 2000, at least, to be completed before resigning and these were not available until December 2001. Dissatisfied with the delay and fees, the settlor caused the trust's account with its investment manager to be blocked between January and April 2002. Guardian submitted substantial fees notes covering the period 1999 to 2001 only in 2002. Guardian also attempted to pay itself surreptitiously without notifying the settlor, despite having assured him that it would not do so. On 25 April 2002 the settlor proposed to Guardian that the fees in dispute be placed in an interest-earning escrow account; that Herald assume the trusteeship within 7 days thereafter; and that the dispute over fees be referred to expert determination. Guardian rejected this proposal and subsequently incorrectly informed the settlor that it had withdrawn its services as trustee. Both Guardian and the beneficiaries issued Representations to the Court, which were treated as one set of proceedings.
Held, determining the question of fees –
(1) It was reasonable for Guardian not to retire before 31 December 2001 in order to wait for the 2000 accounts.
(2) Guardian's 2001 fees were reasonable, although it is better practice to render invoices on a regular and timely basis.
(3) As to the fees charged for 2002, Guardian was not free from blame:
(i) Guardian was unduly slow in rendering fee notes and in providing a breakdown. It is incumbent on retiring trustees to calculate their fees promptly so that any period of tension is kept to a minimum.
(ii) Guardian's attempt to pay its fees surreptitiously, despite assuring the settlor that it would not do so, was contrary to good practice and to the requirements of transparency expected by the JFSC Code of Practice. A trustee must be open and transparent in relation to fees.
(4) Nevertheless the primary responsibility for the delay between January and April 2002 lay with the settlor. By causing the trust's account to be blocked he prevented the transfer taking place.
(5) Where a trustee is retiring but there is a dispute about fees, the trustee is entitled to arrangements which will ensure that it receives any fees ultimately found due, but not any greater protection than is necessary. An escrow arrangement of the type proposed in this case will usually give a retiring trustee the required level of security. Matters were accordingly transformed on 25 April 2002 when the settlor offered to place all the disputed fees in an escrow account. This arrangement would have given Guardian would 100% security but it rejected this offer. Allowing a period of a few days to put the arrangements in place, Guardian should have retired by 30 April 2002. The fees due to Guardian were accordingly calculated by the Court on this basis.
(6) Guardian's statement to the settlor in May 2002 that it had withdrawn its services as trustee was ill-advised; it would have equally ill-advised to threaten to do so. A trustee is under a continuing duty to monitor and administer trust assets, notwithstanding the existence of a fee dispute.
(7) Time spent defending the trustee's own position against its beneficiaries is not recoverable from the trust fund. Fees which were "legal fees" in this sense should be disallowed, whether incurred before or after 30 April 2002.
SHAM TRUSTS
Mackinnon v Regent Trust Company Ltd. and others CA: (Southwell, Smith and Carey JJA) [2005] JCA 066.
N. M. Santos Costa for the plaintiff/appellant; J. P. Speck for the first defendant/respondent; C. G. P. Lakeman for the second, third, eighth and ninth defendants; M. L. Preston for the fourth, fifth, sixth and seventh defendants.
The Bailiff acceded to a striking out application of the plaintiff's Order of Justice in so far that it alleged that certain settlements were shams. The plaintiff appealed.
Held, dismissing the appeal –
(1) The test to be applied on a striking out application was correctly stated by the Bailiff. It must be plain and obvious that the case cannot succeed.
(2) In order for a trust to be a sham both the trustee and the settlor must have a common intention that the true position should be otherwise than as set out in the trust instrument and this in order to mislead third parties or the courts: Abacus (CI) Ltd v Gruppo Torras and others (approved and followed by the English High Court in Shalson v Russo).
(3) An enquiry whether an act or document is a sham requires careful examination of the facts. In this regard, following the English CA decision in Hitch v Stone, the following principles apply: (i) the court may examine external evidence; (ii) the test of intention is subjective; (iii) the fact that a document is uncommercial or artificial does not necessarily make it a sham; and (iv) the fact that the parties subsequently depart from an agreement does not necessarily mean that they never intended it to be effective and binding.
(4) Since the plaintiff accepted that he could not allege a common intention to give a false impression to third parties, the relevant paragraphs were rightly struck out by the Bailiff.
Obiter: No ruling was required regarding other paragraphs of the plaintiff's Order of Justice which attacked the settlements on the basis of infringing the principle of donner et retenir ne vaut. The Court of Appeal, however, expressed reservations as to the correctness of the decision in Abdel Rahman v Chase Bank (C.I.) Trust Co Ltd. as regards that principle.
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