Jersey Unreported Judgments

Disposal of assets - reasons for adjourning trial

[2024]JRC086

Royal Court

(Samedi)

12 April 2024

Before     :

Sir Timothy Le Cocq, Bailiff, sitting as a single judge

 

Advocate W. A. F. Redgrave for the Plaintiff.

Advocate D. S. Steenson for the First Defendant.

Advocate A. Kistler for the Second to Fifth Defendants.

judgment

the bailiff:

1.        The substantive hearing of the above captioned proceedings was scheduled to start on Monday 22 January with a time estimate of five days.  On Friday 19 January I acceded to an application made by the First Defendant to adjourn the proceedings.  In brief ex tempore remarks I gave my reasons for doing so and indicated that I would give further reasons in due course.  These in brief are those reasons.

2.        The essence of the proceedings may be encapsulated by reference to the first two paragraphs of the Plaintiff's Skeleton Argument prepared for trial.  It reads as follows:

"1. The Plaintiff bank...seeks orders setting aside certain transactions made by the First Defendant, Rashad Almakhawi (RAM).  RAM owes a lot of money to [the Plaintiff].  In these transactions he disposed of valuable assets to the Second to Fifth Defendants, which are Jersey companies.  Those assets have been frozen by the Royal Court pending the resolution of this case.

2. This type of claim is known as a Pauline action.  It is sought on the basis that a substantial purpose of RAM disposing of the assets was to defeat his creditors, including [the Plaintiff], and that the disposals have in fact prejudiced [the Plaintiff's] ability to enforce a judgment debt against him."

3.        It is apparent that the nature of the claim is such that, amongst other things, the purpose that RAM, the First Defendant, had in making any transfers will be of key importance.  His credibility will accordingly be a major consideration and that, of course, is a matter to be assessed primarily by the Jurats sitting in the case. 

4.        I am informed that the Plaintiff's case relies to a significant extent on documentation and in fact the only live witness in relation to the transactions, their nature and their underlying purpose, will be the First Defendant, RAM. 

5.        The application is made on the basis that the First Defendant is too unwell to attend trial next week.  That submission is supported by a letter dated 16 January from Dr Kenneth McKinnon Mitchell who is a consultant psychiatrist with First Psychiatry Clinic in Dubai where the First Defendant resides.

6.        The report comprises some two sides of writing and in brief confirms:

(i)        That on the date of the letter Dr Mitchell had examined the First Defendant by video link having previously examined him for the purposes of a report in February 2023.  At the time of the earlier report, the First Defendant had severe depression which has since resolved. 

(ii)       The assessment of the First Defendant was augmented by information provided by the First Defendant's daughter which corroborated Dr Mitchell's assessment of the First Defendant's mental condition.

(iii)      Dr Mitchell opines that the stress of the Court appearances has taken a serious toll on the First Defendant's mental health and wellbeing and indeed has impinged upon his physical health.

7.        I do not need to set out the detail as the report has been seen by all of the parties but, in essence, in the opinion of Dr Mitchell by reason of the conditions with which the First Defendant suffers, Dr Mitchell advises the Court of the First Defendant that:

"He is currently mentally and physically unfit to appear in Court.  All the above mental health conditions and symptoms, would be significantly exacerbated at the very high stress of Court appearances and detailed questioning.  His testimony would be inaccurate and unreliable for the above medical reasons.  He often forgets his train of thought."

8.        Dr Mitchell then recommends assessments for the First Defendant and gives the following estimate:

"I estimate that [the First Defendant] will require six weeks of treatment to recover sufficiently that he comes to appear in Court."

9.        It is put, on the First Defendant's behalf, that he is a vital witness.  He has claimed in an affidavit that the transactions that are impugned by the Plaintiff were part of his succession planning and it would be wrong to proceed with a trial when the only live witness would not be present.

10.     It is, so the First Defendant argues, essential that he is seen by the Jurats who can form a view as to whether his evidence is to be believed.  If he is not given the opportunity to appear then, inevitably, he will need to appeal any adverse finding of the Court and, so it is argued, there is no significant prejudice other than that of delay to any of the other parties as the assets are frozen and the evidence is preserved.  It is, so it is argued, in the interests of justice to adjourn.  The First Defendant is a seventy-six year old man with health issues.  As little as a week ago it had been understood that he could appear, but now that was not the case and hence the application is made.

11.     The Plaintiff argues strenuously against an adjournment claiming that the evidence justifying it is inadequate and should be rejected.  This was not the first time that the First Defendant had submitted last minute medical evidence just before trial.  He did so in proceedings in England and the current application should be seen as an attempt to avoid giving evidence.  There was no sufficient explanation in the medical report as to the treatments that he has undergone, and it is apparent that Dr Mitchell is formulating his report largely on what he has been told by the First Defendant's daughter.  This matter had been left to the last minute and the Court should not proceed to adjourn a trial on such a flimsy basis.  The trial date had been fixed as early as August of last year.  There would be an interpreter involved in any event and there was plenty of time for breaks.  It should be possible were the First Defendant to attend for him to be cross-examined effectively and to give his evidence.

12.     The Second to Fifth Defendants had taken a neutral stance, merely putting the Plaintiff to proof of the claim.  It is for the First Defendant to advance substantive defences.  They argue that the evidence needs to be tested and a refusal to adjourn will inevitably lead to an appeal. 

13.     A number of cases of a late adjournment were put before me.  The first was Dick-Stock v GB Trustees Limited [2019] 1 JLR Note 6 which reads:

"On an application to adjourn hearing dates, the following matters should be considered: the importance of the proceedings and the likely adverse consequences to the parties seeking an adjournment; the risk that that party might be prejudiced in the conduct of the proceedings if an adjournment were refused; the risk of prejudice or other disadvantage to the other party if it were granted; the convenience of the Court; the interests of justice generally in the efficient dispatch of Court business; the desirability of not delaying future litigants by adjourning early and thus leaving the Court empty; and the extent to which the party seeking an adjournment has been responsible for creating the difficulty which led to the application...  The power to adjourn should be exercised with great care and only when there was a real risk of serious prejudice which might lead to injustice; in practice this test was difficult to satisfy...."

14.     In the English case of Bilta (UK) Limited (In Liquidation) v Tradition Financial Services Limited [2021] EWCA Civ 221, the Court of Appeal stated:

"30.  In those circumstances we were taken to a number of authorities, dating back to long before the introduction of the CPR, and received much more extensive submissions on the law that it appears the judge did.  I consider the authorities below, but it may be helpful if I indicate my conclusions on the relevant principles at the outset.  These are that Mr Scorey is right that the guiding principle in an application to adjourn of this type is whether if the trial goes ahead it will be fair in all the circumstances; that the assessment of what is fair is fact-sensitive one, and not one to be judged by the mechanistic application of any particular checklist; that although the inability of a party himself to attend trial through illness will almost always be a highly material consideration, it is artificial to seek to draw a sharp distinction between that case and the unavailability of a witness; and that the significance to be attached to the inability of an important witness to attend through illness will vary from case to case, but that it will usually be material, and may be decisive.  And if the refusal of an adjournment would make the resulting trial unfair, an adjournment should ordinarily be granted, regardless of inconvenience to the other party or other Court users, unless this were outweighed by injustice to the other party that could not be compensated for."

15.     I do not think it necessary to explore the authorities further.  Bilta was a decision in 2021 and those principles apply equally in this jurisdiction as they do in England.

16.     I accept that the evidence contained in Dr Mitchell's medical report is not wholly satisfactory and is untested.  Its conclusions are however entirely clear, and I must, I think, at this point take at face value what they say.  The fact that there may have been a not dissimilar report produced in English proceedings a year ago does not seem to me to tip the balance against accepting at face value in these circumstances what the medical report says. 

17.     It was clear that if the First Defendant does not attend the trial, then there will be no positive case made on the part of all of the defendants and if as a result the Plaintiff prevails, I must anticipate that an appeal would follow.  I understand why the Plaintiff is sceptical, but applying the test of fairness and justice as I must, and taking into account the consequences for the defendants of an adjournment, I was satisfied, with some reluctance, that the trial must be adjourned.  The First Defendant is not only a party but is in effect the only witness - all other defendants are neutral - and there would potentially be a huge prejudice to him were I not to agree to an adjournment which would outweigh by some measure any prejudice to the defendants. 

18.     In my ex tempore remarks given on 19 January I made it clear that there will not be any further adjournment other than in the most compelling of circumstances properly and fully evidenced.  If an application is to be made again by the First Defendant for an adjournment on health grounds, the Court will require cogent evidence with sufficient opportunity for it to be tested and with full information about not only what the examinations were that gave rise to the evidence, but what treatments the First Defendant had undertaken before making the application.  In other words, a much more significant explanation of the First Defendant's medical history and precise problems and prognosis provided well in advance would be expected.

19.     I repeat those ex tempore remarks herein:

"Within any evidence that might underpin a further application (for an adjournment) we would expect to have detailed evidence of precisely what ails the First Defendant, what treatment he has undergone and have evidence from his treating psychiatrists or physicians, and there should be the opportunity for that evidence to be tested by the other parties.  In other words, it may be necessary for the First Defendant to make himself available for examination by other parties' medical experts as well.

Any medical evidence which should be susceptible to being tested is not simply to be a document, it is to be if necessary examined over a video link, the doctor himself giving evidence but it should cover what the doctor understands that the First Defendant will be doing in this Court and the circumstances and conditions under which he will be giving evidence and the kind of evidence he will be expected to give."

20.     Given that the application and adjournment was not in any sense occasioned by any failure or fault on the part of the Plaintiff or indeed the other defendants, I ordered that the First Defendant should pay the costs thrown away by the other parties regarding both the adjournment application and any costs of re-preparation for trial when it resumes.

Authorities

Dick-Stock v GB Trustees Limited [2019] 1 JLR Note 6.

Bilta (UK) Limited (In Liquidation) v Tradition Financial Services Limited [2021] EWCA Civ 221.