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You are here: BAILII >> Databases >> Jersey Unreported Judgments >> MacFirbhisigh and Ching -v- CI Trustees and Others [2017] JRC 057 (04 April 2017) URL: http://www.bailii.org/je/cases/UR/2017/2017_057.html Cite as: [2017] JRC 057, [2017] JRC 57 |
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Trust - reasons for decision of 23 March 2017.
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Before : |
David Roderic Notley Hunt, Q.C., Commissioner, sitting alone. |
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Between |
(1) Niall Iain MacFirbhisigh (as Curator of Barry Lional Ching) (2) Barbara Mary Marvell Ching |
Plaintiffs |
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And |
(1) C.I. Trustees and Executors Limited (2) Steven Gidley (3) Gary Killmister |
Defendants |
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Advocate J. Gleeson for Sinels.
Advocate C. J. Scholefield for the First and Third Defendants.
reasons for decision of 23 MARCH 2017
the COMMISSIONER:
1. At the conclusion of the hearing of Sinels' application on 23 March 2017, I announced my decision (the "March decision") refusing the relief sought in paras. 1 and 3 of Sinels' amended Summons issued on 3 March. I indicated that I would provide the reasons for the March decision, and my reasoned decision on para. 2 of Sinels' amended Summons, as soon as possible thereafter. That is the purpose of this judgment.
2. On 12 January 2017, I heard the application of the First and Third Defendants (respectively "CITE" and "Mr Killmister"), represented by Viberts, in relation to potential third party and/or wasted costs orders in these proceedings. The other parties to that hearing were the first Plaintiff ("Mr MacFirbhisigh"), then represented by Carey Olsen, and Carey Olsen itself. I gave my written decision (the "January decision") on that application on 13 January, under cover of a short explanatory email of the same date. I gave the reasons for the January decision in my judgment dated 15 January 2017 (the "January 2017 judgment"). Paras. 1 to 9 of the January judgment set out the background to the current stage of this long-running litigation, and I do not, therefore, repeat it in this judgment.
3. By para. 1 of my January decision, I ordered Mr MacFirbhisigh to serve an affidavit of discovery or witness statement setting out the Plaintiffs' funding arrangements in this litigation. By para. 2, I gave CITE and Mr Killmister leave to convene Mr MacFirbhisigh and Sir David Kirch for the purposes of applying for non-party costs orders, and Sinels and Carey Olsen for the purposes of applying for wasted costs orders. Because Sinels had not appeared or been represented at the January hearing, I gave directions (in para. 4) for the service on Sinels of the documents used at that hearing, of my January decision and explanatory email, and of my January 2017 judgment. I also gave Sinels (in para. 5) liberty to apply generally, and in particular to apply to discharge any wasted costs summons served on it in accordance with such leave.
4. I record at the outset of this judgment that Mr Scholefield informed me at the March hearing that in the light of the documents made available to them pursuant to para. 1 of my January decision, CITE and Mr Killmister will not issuing any summons against Sir David Kirch.
5. In due course Sinels was served with the documents which I had directed. On 2 February Advocate Philip Sinel wrote to the Royal Court objecting to the January 2017 judgment being published "in its current state" and taking issue with para. 47 of the skeleton argument of Viberts for the January hearing. By an email to Viberts, Carey Olsen and Sinels dated 15 February the Court relayed a message from me in which I stated, inter alia, as follows:
"(iv) I note Sinels' objections to the Reasons being published in their current form. I do not propose to respond to these objections in correspondence. If Sinels wishes to make any formal objection to my Reasons being published in their current form, it must make the appropriate application to the Royal Court. I am prepared temporarily to suspend publication of the Reasons (if they have not been published already) until 24 February to enable Sinels to make such application. If no such application has been made by 4.30 pm on Friday 24 February 2017, that temporary suspension will cease to operate. If Sinels does make such application by that time and date, the temporary suspension will continue until the application is determined."
6. Sinels' response was to send to the Royal Court on 24 February a draft summons, para. 1 of which simply asked that
"Sinels be heard in relation to the terms of Commissioner Hunt's draft judgment".
The hearing of Sinels' summons was fixed for 23 March but I directed that by 3 March Sinels was to issue an amended summons setting out the substantive relief that it sought. On 3 March Sinels duly issued an amended summons seeking the following orders:
"1. The [January 2017 judgment] made in the absence of Sinels and without Sinels having had an opportunity to be heard on the matters raised be set aside insofar as it relates to Sinels.
2. The [January 2017 judgment] shall not be published in its present form pending the hearing of this Summons and any amendments to be made upon hearing Sinels on the matter of their being convened for the purposes of wasted costs.
3. Sinels be removed as a convened party to these proceedings for the purposes of wasted costs (and any other purpose)."
In the meanwhile the terms of the Acte of Court reflecting my January decision, and laying down a timetable for the service of any summons issued by CITE and Mr Killmister and of the answer to any such summons, had been finalised.
7. On 6 March Sinels proposed that skeleton arguments and other documents for the 23 March hearing should be exchanged by 5pm on Friday 17 March. Viberts agreed with this timetable and, in accordance with the timetable, served its skeleton argument on the afternoon of 17 March. Sinels' skeleton argument was not served until lunchtime on Monday 20 March. Finally, on Wednesday 22 March Dickinson Gleeson, which firm had only just been approved by Sinels' underwriters to represent Sinels, served further written submissions on Sinels' behalf without objection from Viberts.
8. At the hearing on 23 March, CITE and Mr Killmister were again represented by Advocate Scholefield of Viberts. Sinels were represented by Advocate Gleeson of Dickinson Gleeson. No other parties were represented although Mr Gidley and Advocate Garrood attended as observers.
9. I take in turn the issues of
(1) leave to convene Sinels; and
(2) the January 2017 judgment.
10. Advocate Gleeson confirmed that he did not take issue with the legal principles that had been common ground between Advocate Scholefield and Advocate Garrood during the January application, as recorded at paras.12 and 13 of the January judgment. He also accepted that to all intents and purposes the law of Jersey followed that of England when it came to the substantive principles regarding wasted costs. Thus he endorsed the three stage test applied in In re A Barrister (Wasted Costs Order) (No.1 of 1991) [1993] QB 293, as reformulated in Ridehalgh v Horsefield [1994] EWCA Civ 40, [1994] Ch.205 (at p.11), namely:
11. Advocate Gleeson's essential contention was that it would be an abuse of process if the leave which I gave in January to convene Sinels were allowed to stand, on the ground that the case on wasted costs which CITE and Mr Killmister might be expected to make against Sinels simply did not fit within the parameters of the Royal Court's jurisdiction to make a wasted costs order. Advocate Gleeson recognised that he was having to make his submissions in, so to speak, a factual vacuum, since CITE and Mr Killmister had yet to issue any summons against Sinels, although in his skeleton argument Advocate Scholefield had recorded that they fully intended to do so. This, of course, was the result of Sinels choosing to exercise, as it was entitled to do, the liberty given to it in para. 5 of my January decision at this juncture, rather than waiting until any summons was served on it.
12. Advocate Gleeson framed his submissions by reference to the judgment of the Court of Appeal in Ridehalgh, as delivered by the Master of the Rolls, Sir Thomas Bingham. He began by citing the following important passage (at pp.3-4):
13. The headings in Ridehalgh on which Advocate Gleeson particularly relied were the following.
(a) pursuing a hopeless case;
(b) immunity;
(c) privilege;
(d) causation;
(e) reliance on counsel;
(f) procedure;
(g) "show cause"; and
(h) discretion.
I take each heading in turn.
14. AdvocateGleeson described this heading as apposite given the Court's conclusions in our main judgment of 17 November 2015, and in my costs judgment of 6 January 2016. He cited and relied on the following passage from Ridehalgh (at p.13):
Advocate Gleeson pointed, by way of example, to the fact that the accusations of dishonesty on the part of CITE and Mr Killmister which we deprecated in both our main judgment and my costs judgment reflected the state of mind of Mr MacFirbhisigh as discussed at para. 84 of our main judgment.
15. Whilst I recognise the general force of Advocate Gleeson's submission under this heading, the question which may arise in any individual case, including this case, is who was responsible for the decision to run the hopeless case, or the hopeless point. Was it the client, in the face of advice from his lawyers to the contrary? Or did the lawyers, for example, wrongly advise that the case or the point should be run? This question, should it arise in this case, does not arise at this stage.
16. Under this head Advocate Gleeson referred to the following passage in Ridehalgh (at p.16):
17. This point has clear links to the preceding heading. But given that Sinels were not involved in the conduct of the trial of this case, references to the allowances to be made for decisions made by an advocate in the course of court proceedings seem to me to be of little, if any, relevance to Sinels' position.
18. In Ridehalgh the Court of Appeal said as follows (at p.16):
In this context Advocate Gleeson also relied on the decision of the House of Lords in Medcalf v Weatherill [2002] UKHL 27 and of the Royal Court in Percynski v Percynski [2005] JRC 084.
19. I have no hesitation in accepting Advocate Gleeson's submission that the issue of privilege is important in the present case. It was the subject of some preliminary discussion at the January hearing, as I recorded at para. 10 of my January 2017 judgment. I was informed at the hearing on 23 March that, as matters then stood, there had been no waiver of privilege on the part of either Mr MacFirbhisigh or Mrs Ching. But it also emerged that no enquiry had even been made of either of them as to whether they were prepared to waive privilege in respect of Sinels. I note in this regard that in his Representation dated 6 June 2014 (one of the documents disclosed pursuant to para. 1 of my January decision) Mr MacFirbhisigh described (at para. 5) how shortly after the issue by the Defendants of their strike out application dated 16 May 2013 the relationship between the Plaintiffs and Sinels began to break down. He went on to say (at para. 15) that Sinels had raised invoices in excess of £375,000. He continued as follows:
"Potential action against Messrs Sinels
18. At the meeting with Jurat Olsen, the Representor raised that he was minded to bring Sinels' conduct to the attention of the Jersey Law Society. As explained to Jurat Olsen, the Representor is reluctant to fight a war on two fronts; accordingly, the Representor does not intend to pursue Sinels until after the conclusion of the substantive litigation."
Any such action on the part of the Plaintiffs would necessarily have involved their waiving privilege as against Sinels, although I was informed by Advocate Gleeson that no action had in fact been taken against the firm.
20. In those circumstances I consider that it would be wrong for me to assume for the purposes of Sinels' application that there will be no waiver of privilege as between it and the Plaintiffs. For that reason I am not persuaded by Advocate Gleeson's reliance on the privilege issue at this stage. I add for good measure that even if I had thought it right to conclude that privilege would not be waived, I would not have regarded that as a ground for rescinding the leave to join Sinels. The consequences would be a matter which fell to be considered at the wasted costs hearing itself.
21. Finally I record that in his response Advocate Scholefield also made a number of interesting suggestions as to how this privilege issue would not prove to be as much of an obstacle as might at first appear. It seems to me, however, that all these additional suggestions were too speculative for me to place any reliance on them.
22. As Ridehalgh makes clear (at p.17), demonstration of a causal link between the conduct complained of and the alleged wasted costs is essential. While I accept Advocate Gleeson's reliance on this point, I fail to see how it could afford a ground for setting aside the leave I granted in January. It will be up to CITE and Mr Killmister to establish the necessary causal link in due course; if they fail to do so, their wasted costs application will fall at that hurdle.
23. In Ridehalgh the Court of Appeal said as follows (at p.17):
Advocate Gleeson pointed to the following passage from para. 17 of Mr MacFirbhisigh's Representation of June 2014:
"The claims brought by the Representor and Mrs Ching are strong with Victor Joffe QC having previously provided an Opinion to the Learned Jurats confirming a very good chance of success."
24. I can well see that Sinels may in due course wish to place reliance on this Opinion of Leading Counsel. This is one of the points which may be affected by the privilege issue; indeed the wording of para. 17 itself may, it seems to me, itself give rise to arguments about waiver. I do not, however, see that the existence of this Opinion assists Advocate Gleeson at this stage of the proceedings.
25. Advocate Gleeson's starting point under this heading was the following passage in Ridehalgh (at p.18):
He also relied on the decisions of the Royal Court in Skinner v Myles [1990 JLR 98], of the House of Lords in Myers v Elman [1940] A.C. 282 and in Medcalf, and of Laddie J. in Robertson Research International Ltd v ABG Exploration BV [1999] C.P.L.R. 756 for the proposition that the jurisdiction is to be regarded as summary. More particularly, in Medcalf Lord Bingham said (at para 24):
26. I entirely accept the statements of general principle in those cases. But how summary is summary will necessarily depend on the facts of the individual case. Thus in Re Freudiana Holdings Ltd (The Times, 4 December 1995), Millett L.J. appears (at p.9) to have envisaged a two or three day hearing as acceptable in an appropriate case against the opposing lawyers. Be that as it may, I do not regard any of the authorities relied on by Advocate Gleeson as ruling out in limine claims for wasted costs against the other side's lawyers. Again, therefore, this heading does not justify the setting aside of the leave that I granted in January.
27. In Ridehalgh the Court of Appeal said as follows (at p.18):
28. I accept that the initial burden is on CITE and Mr Killmister to establish a strong prima facie case against Sinels before Sinels can be called upon to defend itself. But whether CITE and Mr Killmister are able so to do will not emerge until, at the earliest, the service of their summons (if any) against Sinels. Again, therefore, this heading does not assist Sinels at this stage.
29. The final passage from Ridehalgh on which Advocate Gleeson relied was as follows (at p.18):
We are presently at the first of those two stages. I accept, of course, that the discretion which I was called upon to exercise in January, and again at the March hearing, was to be exercised judicially and I have sought to do so.
30. Advocate Scholefield criticised Advocate Gleeson's submissions as amounting to the sort of preliminary assessment on the merits which had been deprecated by Etherton J. in Dranez Anstalt v Hayek [2005] EWHC 2435 (Ch) (at para. 24) and by Morgan J. in PR Records Ltd v Vinyl 2000 Ltd [2008] 1 Costs L.R. 19 (at para. 47). I reject that criticism. It seems to me that Advocate Gleeson was fully entitled to deploy the points that he did in support of his abuse of process argument and that he was not attempting to undertake a preliminary assessment on the merits.
31. Although Advocate Scholefield did respond to certain of the detailed points made by Advocate Gleeson, for instance in relation to legal professional privilege, the main thrust of his submissions was to amplify the approach which he had taken during the January hearing and to rely on the criticisms made by Master Thompson of the conduct of the Plaintiffs' case in his judgment of 5 February 2014 MacFirbhisigh and Ching-v-CI Trustees and Others [2014] (1) JLR 244. This hearing effectively marked the stage at which Carey Olsen had taken over the conduct of the case on behalf of the Plaintiffs from Sinels. Master Thompson's criticisms included the following.
(a) He said (at para.12):
(b) He recorded (at paras. 31(iv), (vi) and (vii), and 32) that the allegations of undue influence, knowing receipt and conspiracy contained in the amended Order of Justice as drafted by Sinels were now withdrawn.
(c) As he commented (at para. 42):
(d) He said (at para.45):
As we commented at para.74 of our main judgment, the effect of Master Thompson's judgment was to allow the Plaintiffs to start again.
32. Advocate Gleeson submitted that it would be wrong to view Master Thompson's criticisms as directed towards Sinels. Thus he contended that the criticism at (a) above was a criticism of the case, not of Sinels; that so far as any suggestions of inordinate delay were concerned, defendants were not allowed to let sleeping dogs lie and that CITE and Mr Killmister must therefore share part of the blame for any delay; and that funding was an issue. As for this last point, I can readily understand that funding may have been an issue given the sums that Sinels had invoiced the Plaintiffs by way of fees. Leaving that point aside, I was not persuaded by Advocate Gleeson's attempts to deflect the Master's criticisms away from his clients. Reading his judgment as a whole, it is clear to me that his criticisms were directed fairly and squarely at Sinels.
33. I accept that the replacement Order of Justice produced in due course by Carey Olsen adopted a number of the themes originally pleaded by Sinels. I am also prepared to accept, albeit without detailed investigation, that Sinels had done the work listed by Mr Sinel in para. 30 of his Affidavit sworn on 23 March 2017. But it seems to me that the broad thrust of Advocate Scholefield's submissions was correct. On the basis of the documentation and information deployed at the January and March hearings, Sinels had, during the four years from June 2009 to May 2013 while they were instructed by the Plaintiffs, at best achieved little in terms of progressing the litigation while invoicing the Plaintiffs for fees in excess of £375,000.
34. As I stated at para. 13 of my January judgment, the bar which CITE and Mr Killmister have to overcome at this preliminary stage is not high. In reaching the decision that I did in January in the exercise of that first stage discretion, I did not of course have the benefit of Advocate Gleeson's submissions. Despite Advocate Gleeson's cogent argument at the hearing in March, I was not persuaded on any of the grounds which he put forward that it was an abuse for me to have granted in January leave to join Sinels. I remain of the view that the matters relied on by Advocate Scholefield are more than sufficient to justify my grant of leave to join Sinels.
35. I record that Advocate Gleeson expressed the hope that even if he did not succeed in setting aside the leave which I had initially granted, his submissions might cause CITE and Mr Killmister to think again before issuing any summons against Sinels. He also warned that Sinels would firmly rebut any allegations made against them; I suspect that that warning came as no surprise to Advocate Scholefield or his clients.
36. As I have already indicated, the passage in my January 2017 judgment with which Sinels took issue was para. 39, in which I recited para 47 of Viberts' skeleton argument for the January hearing. More particularly Sinels complained of the suggested implication that it "achieved nothing" for the Plaintiffs.
37. At the March hearing Advocate Scholefield accepted that it would have been a more accurate summary of his case to have said that Sinels had achieved little, rather than nothing. Since little and nothing are not the same thing, it seems to me that I should recognise that and amend my January judgment accordingly. That said, I do not regard the change from nothing to little as affecting in any way the conclusions that I reached in January.
38. Accordingly I accede to para 2. of Sinels' amended Summons to the extent that I will revise my January judgment so to mention the revision and to add immediately after the quotation in para. 39 the following single sentence:
"I record that at the March hearing Mr Scholefield accepted that the word 'nothing' should be replaced by the word 'little'".
39. I will produce an amended version of the January judgment in the immediate future, at which point the suspension of publication to which I referred in para. 5 above will cease to have effect.
40. After I had announced my Decision, Advocate Scholefield asked for the costs of the hearing. I refused his request and ordered that the costs of the March hearing should be reserved.