Enhörning (as Trustee in Bankruptcy of Alsatia Förvaltnings Aktiebolag) v Nordic Link Ltd and Four Others

CourtRoyal Court
JudgeLe Marquand, Judicial Greffier:
Judgment Date20 February 1996
Date20 February 1996
Le Marquand, Judicial Greffier:

N.F. Journeaux for the plaintiff;

J.P. Speck for the defendants;

M. St.J. O'Connell and A.D. Robinson for various third parties.

Cases cited:

(1) Abdel Rahman v. Chase Bank (C.I.) Trust Co. Ltd., 1987-88 JLR 81, considered.

(2) Purdie v. Bailhache & Bailhache, 1989 JLR 111, applied.

(3) Todman v. Black, 1980 J.J. 255, applied.

Additional cases cited by counsel:

Barreto v. Sanguy, 1990 JLR N-11.

Broad Street Invs. (Jersey) Ltd. v. National Westminster Bank PLC, 1985-86 JLR 6.

Tilling v. Whiteman, [1979] 1 All E.R. 737.

Legislation construed:

Royal Court Rules 1992 (R. & O. 8509), r.6/19: The relevant terms of this rule are set out at page 40, lines 27-32.

r.6/21(3): The relevant terms of this paragraph are set out at page 40, line 43 - page 41, line 3.

Text cited:

The Supreme Court Practice 1995, vol. 1, para. 33/4/5, at 592.

Civil Proceduretrial of preliminary issuesetting down for trialJudicial Greffier may make reference under Royal Court Rules 1992, r.6/19 even though action set down for hearing between original parties if not yet set down as against parties joined laterby r.6/21(3), may order separate trial of preliminary issue in relation to parts of action already set down

Civil Proceduretrial of preliminary issueliability issuesmay be appropriate to try question of liability before quantum of damages but rarely appropriate to divide liability question into preliminary and subsequent issues

Civil Proceduretrial of preliminary issuefactors to be considerednormal to hold single trial of all issues unless exceptional circumstances or special grounds for ordering trial of preliminary issuefactors: neither party to gain advantage; length of proposed preliminary issues; possible delay if appeal against preliminary rulingseparability of legal and evidential issues from those of main trial

The plaintiff brought an action against the defendants for their alleged fraudulent transfer of shares in a company.

The plaintiff, the trustee in bankruptcy of a company, alleged that the defendants had conspired to defraud the creditors of the company by causing its shares to be sold to the first defendant at an under-value. He also alleged that the company had suffered further loss in that the value of the shares had fallen while they were owned by the first defendant.

The plaintiff brought an action for damages against the defendants, who then made the present application to treat the question whether the shares had been sold at an under-value as a preliminary issue. At the time of this application, although the action had been set down for hearing as between the plaintiff and certain of the defendants, it had not yet been set down in relation to other defendants and third parties who had later been joined as parties to the action.

The defendants submitted that (a) by r.6/19 of the Royal Court Rules 1992, the Judicial Greffier had a complete discretion to refer any matter raised by the pleadings to the Royal Court prior to the action's being set down for hearing and by r.6/21(3), once it had been set down he could order a separate trial of separate issues raised in the action, and indeed should more readily order a separate trial of a preliminary issue than would the English courts in a similar situation because the small size of the judiciary rendered procedures for the speedy disposal of actions more important; and (b) because the issue of whether the shares were sold at an under-value was central to the plaintiff's case, it was an appropriate preliminary issue, the decision of which in favour of the defendants would result in the failure of the plaintiff's entire case, thus saving time and costs in that the court would not then need to enquire into the remaining issues, including the quantum of damages.

The plaintiff submitted in reply that (a) the normal approach to litigation in Jersey was to hold a single trial of all the issues between the parties unless it were shown that there were exceptional circumstances or special grounds for ordering a separate trial of a preliminary issue and in the present case, such a reason had not been shown; and (b) holding a separate trial of the issue of the share transfer would waste time and costs since if it were established that it had been made at an under-value, there would remain further issues of liability in addition to the question of damages, such as the question whether there had been a conspiracy; these would require the same evidence to be heard again.

Held, dismissing the application:

(1) The court could consider the matters in question as preliminary issues because although the action had already been set down, whereas r.6/19 required that the Greffier refer matters to the Royal Court before the action had been set down for trial or hearing, further parties had subsequently been joined and the action had accordingly not yet been set down in relation to all of them. In any case, by r.6/21(3), the Greffier had power to order the trial of issues...

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