Barclays v Grima
| Jurisdiction | Jersey |
| Court | Royal Court |
| Judge | Deputy Bailiff |
| Judgment Date | 18 November 2003 |
| Neutral Citation | [2003] JRC 212 |
| Date | 18 November 2003 |
[2003] JRC 212
ROYAL COURT
(Samedi Division)
M.C. St. J. Birt, Esq., Deputy Bailiff
and
Advocate M. J. Thompson for the Plaintiff
Advocate P. C. Sinel for the Defendant.
Cheltenham & Gloucester Building Society v Ricketts (1993) 4 All ER 276.
Gee on Mareva Injunction and Anton Piller Relief (3rd Ed'n) at page 124.
Barretts & Baird (Wholesale) Limited v Institution of Professional Civil Servants and Others (15th November 1998) QBD.
Goldman Sachs International Limited v Lyons (22nd February 1995) Court of Appeal (Civil Division).
Yukong Line Ltd (SK Shipping Ltd) v Rendsburg Investments Corporation of Liberia [2001] EWCA Civ 358.
Application for directions.
THE
When we adjourned yesterday I indicated that I wanted to think about this matter overnight. In particular I wished to read all of the cases where I had been referred only to extracts. I also indicated that I would not give reasons, but on reflection I think it would be helpful to explain the thinking behind my decision.
This is an application for directions in connection with a hearing which has been fixed for two days commencing 10 th December.
The background is that the plaintiff bank issued an order of justice on 15 th March 2002 alleging that the defendant had forged her mother's signature in order to transfer monies from an account with the plaintiff in the joint names of the mother, the defendant and her brother Joe ultimately into accounts in her name held with the party cited. A Mareva injunction froze those accounts. The allegation of forgery was based upon an assertion to the plaintiff bank by the defendant's brother Joe supported by a report prepared by an alleged handwriting expert instructed by Joe. The defendant filed an answer denying forgery.
Joe and the mother have died during the course of this year. This means that the assets in the joint account with the plaintiff bank would have accrued by survivorship to the defendant. The plaintiff therefore does not wish to continue the litigation as there is no point. The monies would belong to the defendant in any event. It seeks to discontinue the proceedings with no order as to costs and has already agreed to the lifting of the Mareva injunction. The defendant, on the other hand, wishes the proceedings to be dismissed with costs and also wishes to enforce the undertaking in damages given in support of the Mareva injunction on the grounds that she has suffered loss as a result of its imposition.
On 22 nd July 2003 the Master made an order that the parties should file summonses seeking their respective desired remedies and that this should come before the Royal Court. He also ordered that the parties should file any appropriate affidavits in support. It is that hearing which has been fixed for 10 th December. However the parties disagree on what it should involve.
Mr Sinel, for the defendant, asserts that the plaintiff has raised a serious allegation of fraud, namely forgery, against the defendant. She is entitled to clear her name. Following the Master's order, the defendant has filed several affidavits which, he says, amount to a compelling case that the defendant did not forge the relevant instructions; on the contrary they were given by the mother in order to ensure that the assets went to the defendant and not to Joe. He submits that the Court must ascertain the truth of the allegation of forgery before deciding whether to enforce the undertaking in damages against the plaintiff. He accepts that this requires discovery to take place and Mr Thompson submits that it would also require the production of reports by experts on handwriting following inspection of the documents produced on discovery. Mr Sinel accepts that such a trial cannot take place on 10 th December. He therefore now suggests that that date should be vacated, orders for discovery etc should be made and a new date should be fixed covering a greater number of days, at which time the Court would rule on whether the forgery allegation was true, decide whether to enforce the undertaking in damages and, if so, assess the amount of damages by reference to the usual issues of causation, remoteness and measure of damages.
Mr Thompson, on the other hand, says that the case is now academic because of the death of the mother and Joe. Mr Sinel's suggestion would amount in effect to holding a full trial of the underlying issue in the case merely for the purpose of determining costs and whether the undertaking in damages should be enforced. He accepts that, in the ordinary case, a party who discontinues a claim is to be treated as giving up and must therefore ordinarily pay the costs and expect any undertaking in damages to be enforced against him. But he says that the authorities are clear that this is not invariably the case. He submits that this is one of those cases where, even if it turns out that the forgery allegation was incorrect, the plaintiff should not have to pay the costs nor should it have the undertaking in damages enforced against it having regard to the circumstances in which it instituted the proceedings, the manner in which the respective parties have conducted the proceedings and the circumstances in which the discontinuance is sought, namely because the underlying issue is now academic.
He submits that, on 10 th December, the Court should hear and rule upon the plaintiff's submission that, even assuming for these purposes that the forgery allegation is incorrect, the plaintiff should not be ordered to pay costs and should not have the undertaking enforced against it. That would not require any further factual evidence. He accepts that, if the Court were to hold on 10 th December that the truth of the forgery allegation was crucial to its decision on costs or on enforcing the undertaking in damages, then the case would have to be put off for the sort of hearing which Mr Sinel was arguing for and that this should take place following discovery, etc. But a hearing on 10 th December along the lines submitted for by him would, he said, be decisive of the issue if decided in one particular way. The case ought therefore to proceed in this manner.
I was referred to various cases. The first was Cheltenham & Gloucester Building Society v Ricketts (1993) 4 All ER 276. In that case, the English Court of Appeal made it clear that the court had a discretion as to whether to enforce an undertaking in damages exercisable in accordance with ordinary equitable principles. The general approach of the court is helpfully set out at pages 281 – 282 of the judgment. What is clear from the decision is that the court has two separate decisions to reach. First, should the undertaking be enforced; secondly, if so, what damage has been suffered and should be compensated for? The court went on to say at 282 (b):-
“The court may determine that the undertaking should be enforced but then direct an inquiry as to damages in which issues of causation and quantum will...
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