Home Farm Developments Ltd; Strata Developments Ltd; Shane Holmes v Jamie Le Sueur; Jamie Le Sueur v Shane Holmes

• Jurisdiction: Jersey
• Court: Court of Appeal
• Judge: Robert Logan Martin,Jonathan Crow
• Judgment Date: 25 November 2015
• Neutral Citation: [2015] JCA 242
• Date: 25 November 2015

Between

(1) Home Farm Developments Limited

(2) Strata Developments Limited

(3) Shane Holmes

Plaintiffs/Appellants

and

Jamie Le Sueur

Defendant/Respondent

Between

Jamie Le Sueur

Plaintiff/Respondent

and

Shane Holmes

Defendant/Appellant

[2015] JCA 242

Before:

Jonathan Crow, QC., President Robert Logan Martin, QC. and Sir Michael Birt, QC.

COURT OF APPEAL

(Unknown)

Debt — Appeal against decision of the Royal Court on strike out application.

Leave to appeal was granted by the Deputy Bailiff sitting as a single judge on the 2 ^nd July 2015

Authorities

Home Farm Developments Limited and Others -v- Le Sueur [2014] JRC 079.

Home Farm Developments Limited and Others -v- Le Sueur [2015] JRC 110.

Court of Appeal (Jersey) Law 1961.

Planning & Environment Committee v Lesquende Ltd [2003] JLR 15.

Planning & Environment Committee v Lesquende Ltd [2003] JLR Note 8.

Home Farm Strata and Holmes -v- Le Sueur [2015] JCA 146A.

Home Farm Developments Limited and Ors v Le Sueur [2014] JRC 241.

Home Farm Developments and Others -v- Le Sueur [2015] JCA 180.

Channel Islands and International Law Trust Company Limited v Pike and others [1990] JLR 27.

Royal Court Rules 2004.

Trant v Attorney General and others [2007] JLR 231.

Royal Court Rules 1982.

The Supreme Court Practice 1988 (referred to as “the White Book”)

Hyams v Russell [1970–1971] JJ 1891.

Bank of Credit and Commerce International SA (In compulsory liquidation) v Ali and others [2001] 2 WLR 735.

Marett v Marett [2008] JLR 384.

Pothier Traité des Obligations.

Leach v Leach [1969] JJ 1107.

Mr Holmes appeared for the Plaintiffs/Appellants.

Advocate M. H. D. Taylor for the Defendant/Respondent.

THE PRESIDENT:

THIS IS THE JUDGMENT OF THE COURT

INTRODUCTION

1 This is an appeal against two decisions of the Royal Court, Commissioner Clyde-Smith sitting with two jurats. The decisions concerned (i) an appeal by the Appellants against a decision of the Master to strike out claims made by them on the basis that the claims were scandalous, vexatious and an abuse of process, and (ii) summary judgment given by the court on a claim brought by the Respondent (“Mr Le Sueur”) against the Third Appellant (“Mr Holmes””).

2 The decisions relate to two separate proceedings. The first is an Order of Justice served by the Appellants dated the 4th February 2013 (Court File 2013/52) in which the Appellants claim awards of special damages and consequential damages against Mr Le Sueur based upon his alleged breach of contract, duty and authority. By Summons dated the 7th January 2014, Mr Le Sueur sought the striking out of that Order of Justice upon the basis that it was scandalous, frivolous or vexatious and otherwise an abuse of process. In a judgment dated the 26th March 2014 ( Home Farm Developments Limited and Others -v- Le Sueur [2014] JRC 079), the Master struck out the Order of Justice. The Appellants appealed against that striking out and in a judgment dated the 21st May 2015 ( Home Farm Developments Limited and Others -v- Le Sueur [2015] JRC 110), the Commissioner sitting with two jurats dismissed that appeal.

3 The second proceeding is an Order of Justice served by Mr Le Sueur (Court File 2014/156) in which he sought judgment against Mr Holmes for payment under a promissory note. On the 21st May 2015, the same Commissioner and jurats gave summary judgment by Act of Court against Mr Holmes in accordance with that Order of Justice, but without giving any reasoned judgment.

4 The Appellants have sought to appeal against the judgments of the Royal Court in terms of what is now an amended Notice of Appeal dated the 9th November 2015.

BACKGROUND

5 The circumstances which have led to these two sets of proceedings are described in the judgments of the Master and the Commissioner. We will not repeat all the detail. In outline, the background may be summarised as follows. In 2009, Mr Holmes decided to undertake a development project on land at Home Farm, Grouville. He established two companies, namely the First Appellant (“Home Farm Developments”) and the Second Appellant (“Strata”). For the purposes of carrying out the development, the property was acquired by Home Farm Developments and the building work was to be undertaken by Strata.

6 Mr Le Sueur was engaged in property development which he pursued through two companies, namely Manor Homes Limited (“Manor Homes”) and Tower Capital Management Limited (“Tower Capital”). In general, Manor Homes was responsible for the construction work involved in such projects and Tower Capital was responsible for providing associated financial and accountancy services.

7 On the 9th September 2010, Home Farm Developments and Manor Homes entered into a Consultancy Agreement under which Home Farm Developments was referred to as the “Customer” and Manor Homes was referred to as the “Consultancy”. Neither Mr Holmes nor Mr Le Sueur was a party to the Consultancy Agreement although Mr Le Sueur was named as the “Executive” upon whom certain responsibilities were placed on behalf of the Consultancy. The nature of the financial arrangements between the parties is described by the Master and the Commissioner in their judgments. In particular, Home Farm Developments had access to loans which were secured on the property at Home Farm and funds were provided under the direction of Mr Holmes to Strata. Payments to creditors in connection with the development were then made out of the bank account of Strata by Tower Capital, who provided signatories for this account. The payments which were made included payments to Manor Homes who were stated in the Consultancy Agreement to be entitled to specified remuneration in respect of the provision of services.

8 The relationship between Mr Holmes and Mr Le Sueur began to deteriorate in about 2011. On the 13th March 2012, Sinels who were advocates acting for all of the Appellants, sent a letter on their behalf addressed to Mr Le Sueur at Manor Homes which described itself as a “pre-action letter” (“the Sinels letter”). The Sinels letter referred to the Consultancy Agreement and it alleged that Manor Homes was in breach of its authority and duty under that Agreement because it had used its authority over the bank account to settle its own fees instead of paying third party creditors. It was said that the Consultancy Agreement did not permit Manor Homes to pay monies to itself. The Sinels letter claimed immediate repayment of the sum of £103,562.70 from Manor Homes to Strata.

9 There were then extended negotiations between the parties leading to a succession of abortive settlement agreements. By that stage, a number of Strata's creditors were represented by a debt collection company, Cashback Limited (“Cashback”). In an email dated the 29th May 2012 addressed to Mr Le Sueur, Mr Holmes confirmed the terms of a “settlement agreement” which provided for payment of £50,000 to be made to Strata in settlement of its claim for “£103k”, which was to be payable in specified proportions to Cashback and to other creditors of Strata. On the 30th May 2012, Mr Le Sueur sent an email to Mr Phil Boots of Cashback which repeated in almost identical terms the agreement which Mr Le Sueur said he had reached with Mr Holmes. On the 31st May 2012, Mr Holmes and Mr Le Sueur signed an agreement (“the Settlement Agreement”) which was expressed to be made by Mr Holmes on his own behalf, and also on behalf of Home Farm Developments and Strata, and by Mr Le Sueur on his own behalf, and on behalf of Manor Homes and Tower Capital. In summary, the Settlement Agreement stated that it replaced in whole a number of specified earlier agreements between the parties and it provided in five clauses for the parties to fulfil certain obligations including payment by Mr Le Sueur of the sum of £45,000 to creditors of Strata (a sum of £5,000 having already been paid). In connection with that payment, it also provided that £20,000 was to be regarded as a loan to Mr Holmes and that Mr Holmes had provided a promissory note dated the 25th April 2012 as evidence of that debt. It is that promissory note which is the subject of the summary judgment dated the 21st May 2015. The existence and terms of the Settlement Agreement and the preceding emails are central to the issues with which this appeal is concerned and we refer to them in more detail below.

LEAVE TO APPEAL

10 The Appellants initiated this appeal by a Notice of Appeal dated the 18th June 2015. Article 13(1)(e) of the Court of Appeal (Jersey) Law 1961 provides that no appeal shall lie “without the leave of the Court … from any interlocutory matter or interlocutory judgment” (subject only to exceptions which are not relevant to this case). In Planning & Environment Committee v Lesquende Ltd [2003] JLR 15, the Deputy Bailiff (Birt DB as he then was) held that a decision was interlocutory if the nature of the application was such that it would not determine the proceedings whichever way it was decided. That decision was upheld by this Court: see the judgment of Southwell JA at Planning & Environment Committee v Lesquende Ltd [2003] JLR Note 8.

11 In this case, it appeared that both the strike-out application and the summary judgment application were interlocutory, which would mean that the rulings of the Commissioner could be appealed only with leave. By a judgment dated the 2nd July 2015, ( Home Farm Strata and Holmes -v- Le Sueur [2015] JCA 146A) Le Cocq DB sitting as a single judge of this Court extended the time for service by the Appellants “of the notice of appeal” and he did so in respect of both the appeal against the strike-out (Court File 2013/52) and the appeal against summary judgment (Court File 2014/156). It appears to us that that judgment may be construed as having impliedly given leave to appeal to this Court. However, in order to avoid any uncertainty, we notified the parties at the outset of the hearing that...