Jersey Unreported Judgments

[2003]JRC136

royal court

(Samedi Division)

 

 22^nd July 2003

 

 

 

 

In the matter of the Representation of Jacobus Broere, re Bastiaan Broere Trust and Cornelis Broere Trust

 

Application by the Representor for an order that the Third Respondent comply with an order of the Court of 21st November 2002 for discovery.

 

 

Advocate M.J.Thompson for the Representor

Advocate R.J.Michel for the Third Respondent

 

judgment

the Bailiff:

1.        This is a summons issued by the Representor seeking an order that the Third Respondent comply with an order of the Court of 21^st November 2002 to provide discovery of all relevant documents within 14 days.  As an alternative the Representor seeks an order  -

"that the Third Respondent be required to disclose those documents listed in Schedule 1 Part II paragraphs 2 and 3 of his affidavit verifying his list of documents sworn 1 May 2003 within 14 days of the date of the hearing of this summons in default of which his Answer to the Representation should be struck out and he should be permitted to take no further part in the hearing of this action."

2.        The order of 21^st November 2002 was a consent order in fairly standard form that a list of discoverable documents be produced and verified by affidavit.  Mr. Thompson has drawn attention to Practice Direction 90/4 whereby it was directed that discovery should be given in the form set out in the 1^st schedule to that Practice Direction.  Counsel contends that discovery has not been given in that form because the listing of documents has been qualified.

3.        The list of documents attached to the affidavit of the third respondent reads, so far as material, as follows -

"The following is a list of the documents relating to the matters in question in this application which are, or have been, in the possession custody or power of the Third Respondent, as a Beneficiary of the Bastiaan Broere Trust, and which is served in compliance with the Order of the Royal Court dated 21^st November, 2002.

1.        The Third Respondent has in his possession, custody or power the documents relating to the issues in question in this application enumerated in Schedule 1 hereto.

2.        The Third Respondent objects to the production of the documents specified in Part II of the Schedule 1 on the grounds that:-

           ...............

           (ii)         they consist of documents, correspondence and memoranda which have been prepared by or for him or have come into his possession solely in his capacity as the Settlor of the Cornelis Broere Trust and/or the Broere Charitable Foundation and, as such, are not the subject of, nor relevant to, the issues in this Representation;

           (ii)         they consist of documents correspondence and memoranda which have been prepared by or for him or have come into his possession solely in his capacity as a director and the Chairman of the Broere Corporation Limited and, as such, are not the subject of, nor relevant to, the issues in this Representation".

4.        Counsel submits that it is not open to the third respondent to qualify his response to the order for discovery by restricting it to documents in his possession custody or power "as a beneficiary of the Bastiaan Broere Trust".  Mr. Michel submits in reply that where a person has possession of documents pursuant to separate fiduciary relationships it is not open to another person to gain access to those documents by the route of discovery.  To put it more directly, the representor is not entitled, on counsel's submission, to obtain discovery of documents in the possession of the third respondent in his capacity of settlor of the Cornelis Broere Trust and of the Broere Charitable Foundation or director of Broere Corporation Limited ("BCL") even if such documents are relevant to the issues to be decided in this representation.

5.        Mr. Michel helpfully drew our attention to a passage in the judgment of Brett LJ in Compagnie Financière Du Pacifique v Peruvian Guano Co. (1882) XI qbd 55 at 63 -

"It seems to me that every document relates to the matters in question in the action, which not only would be evidence upon any issue, but also which, it is reasonable to suppose, contains information which may - not which must - either directly or indirectly enable the party requiring the affidavit either to advance his own case or to damage the case of his adversary.  I have put in the words "either directly or indirectly," because, as it seems to me, a document can properly be said to contain information which may enable the party requiring the affidavit either to advance his own case or to damage the case of his adversary, if it is a document which may fairly lead him to a train of inquiry, which may have either of these two consequences".

We adopt the approach set out in that passage.  If a document is relevant to an issue before the Court it must, in general, subject to questions of privilege and confidentiality, be produced.

6.        Can the obligation to produce be avoided if the person ordered to make discovery possesses a document in a capacity other than that in which he has been convened?

7.        Mr. Thompson drew our attention to B v B [1978] Fam 181, a matrimonial case, where an order for discovery was made in relation to a company in which the husband held, indirectly, a substantial shareholdiong.  On appeal Dunn J summarized his findings on the law as follows -

"I will conclude this part of my judgment by summarising my conclusions as to the law.  (1) A party to a suit must disclose all the documents in his possession, custody or power which are relevant to the matters in issue.  The court has a discretion whether or not to order him to make such disclosure, and also has a discretion whether or not to order him to produce the documents for inspection by the other party or the court.  (2)  The documents of a company are in the legal possession of the company.  If they are or have been in the actual physical possession of a director who is a party to litigation they must be disclosed by that director, if relevant to the litigation, even though he holds them as servant or agent of the company in his capacity as an officer of the company.  (3)  Whether or not documents of a company are in the power of a director who is a party to the litigation is a question of fact in each case.  "Power" in this context means "the enforceable right to inspect or obtain possession or control of the document".  If the company is the alter ego of such a director so that he has unfettered control of the company's affairs, he must disclose and produce all relevant documents in the possession of the company.  (4)  Where relevant documents in the possession of a company are disclosed by a director as being in his custody or power, the court has a discretion whether or not to order production of them.  (5)  The discretion is a judicial discretion, and in exercising it the court will have regard to all the circumstances.  The court will balance the relevance and importance of the documents and the hardship likely to be caused to the wife by non-production against any prejudice to the husband and third parties likely to be caused by production.  It has not hitherto been the practice of the court to order production of company documents to which the board of directors objects on affidavit, provided that the court is satisfied that the objection is not contrived for the purpose of frustrating the powers of the court.  The court will not in the exercise of its discretion order parties to do that which they have no power to do.  The court will not order production unless it is satisfied that production is necessary either for disposing fairly of the issues between the parties or for saving costs."

8.        Counsel also referred to a passage from the judgment of Pennycuick J in Buchanan-Michaelson v Rubinstein [1965] Ch 258 at 263 when the learned judge stated -

"[Counsel] relies, in particular, on the terms of R.S.C., Ord. 6, r.3, which is in these terms:  (1)  Before a writ is issued it must be indorsed - (a) where the plaintiff sues in a representative capacity, with a statement of the capacity in which he sues;  (b) where a defendant is sued in a representative capacity, with a statement of the capacity in which he is sued."  That is undoubtedly the practice laid down by R.S.C., Ord. 6, r.3, and it is what one would expect, because where parties occupy a representative capacity their rights against, and liabilities to, another party are conditioned by that capacity.  But I do not think it follows that, where parties are sued in a representative capacity, for all the purposes of the action, including discovery, they must be treated as though there were a cleavage of personality between them in their representative capacity and them in their individual capacity, as if they were two distinct persons.  The fact is that the party to the action is a human person - I am not talking here of corporations - he is one person, and although the claim must be made against him in one or other capacity, or both, he is not, so to speak, two distinct persons, one of whom is not before the court at all.  In relation to discovery the contention advanced by Mr. Francis would lead to the most extraordinary results.  It would follow, for example, that if documents came into the possession of persons as executors and they then handed over those documents to themselves in their capacity as trustees of the same will, the moment they have done so they would be exempt from discovery in an action in which they were sued as personal representatives.  The same position would arise, as it does in the present case, where the executors hand over documents which come to them in that capacity to one of themselves only, either as beneficiaries or on some particular trust, it matters not.  Again, apparently, it would mean that executors were not bound to disclose documents handed over to them by the testator while he was still alive, with a view to their administration of his estate.

I do not think that there is anything in the rules, either R.S.C., Ord. 6 or Ord. 25, which leads me to what I think is such an unreasonable conclusion."

9.        That decision was followed in an Australian case, Szental v Szental [2002] VSC 42 where the question was whether the order for discovery should be limited to documents in the possession power or control of the defendant in his capacity as the executor of the estate.  Balmford J stated at paragraph 14 -

"My view is that the decision of Pennycuick J in Buchanan-Michaelson v Rubenstein is founded on common sense, and that I should follow that decision in the matter here before me."

10.      Finally, although not directly in point because the Court was in that case concerned with compliance with an order to produce documents pursuant to an injunction, there is a recent decision of this Court in Izodia plc v Lynch Talbot Ltd. and others [2003]JRC094,  Birt, DB, stated at paragraph 11 -

"On Friday 13^th June Dr. Smith swore an affidavit to the effect that in his individual capacity he had no information or documents of the nature referred to in the order.  Any information which he had was acquired by him as a director of Orb and/or Lynch Talbot.  The Court finds that this is no response to the order.  The order provides that Dr. Smith must swear an affidavit speaking to his knowledge as to the current whereabouts of the relevant funds paid away from Izodia's account and as to subsequent transfers and the current whereabouts of these monies.  He must disclose such information as he has, regardless of whether he acquired it in his personal capacity or as a director of Orb or Lynch Talbot, or indeed any other capacity.  He must disclose the information which he as a person knows".

11.      In our judgment it is not open to the third respondent to limit the discovery of documents in his possession custody or power to those which he holds "as a beneficiary of the Bastiaan Broere Trust".  He must list the documents which he has and which are relevant to the issues whatever the capacity in which the documents came into his possession custody or power.  We are satisfied on the evidence that he has a sufficiently controlling interest in BCL to produce any relevant documents held by that company.  Mr. Michel submitted that the third respondent no longer had control of BCL, but there is no evidence before us to that effect.  We are satisfied that he could procure access to any relevant documents held by BCL.  We therefore order him to swear a further affidavit within twenty-one days appending a list of documents to include those documents described in paragraphs 2 and 3 of Part II of Schedule I to the list exhibited as 'CB2' to his affidavit of 1^st May 2003.  The mere fact that the documents have come into his possession other than in his capacity as a beneficiary of the Bastiaan Broere Trust is not, of itself, a bar to the inspection of any of those documents.  If it is contended that any of them should not be inspected on some other specific ground, it will be for the third respondent to issue a summons to that effect.  Any such summons should be issued within 28 days of the date of this order.

Authorities

Compagnie Financière Du Pacifique v Peruvian Guano Co. (1882) XI QBD 55.

B v B [1978] Fam 181.

Buchanan-Michaelson v Rubinstein [1965] Ch 258.

Szental v Szental [2002] VSC 42.

Izodia plc v Lynch Talbot Ltd. and others [2003] JRC 094.

Taylor-v-Taylor (née Hayter) (1990) JLR 124.

Béghins Shoes Ltd-v-Avancement Ltd (23^rd April, 1995) Jersey Unreported; [1995/76].

Lonrho-v-Shell Petroleum [1980] QB 358; [1980] 1 WLR 627.

Matthews & Malek: Disclosure (2001) paras 4.39 - 4.54; Index to Chapter 9; paras 9.129-30.

Schmidt-v-Rosewood Trust [2003] 2 WLR 1442.

In re Rabaiotti Settlement [2000] JLR 173.