Joan Mary Nolan; Richard James Nolan; Seamus Patrick Nolan; Patricia Mary Nolan; Ann Mary Nolan; Elizabeth Mary Nolan; Raymond John Nolan; John Martin Nolan; Brendan Joseph Nolan; Sally Ann Nolan; Oliver Nicholas Nolan; Kevin Patrick Nolan; Noel Patrick Nolan; Serene Investments Ltd; Bilberry Investments Holdings Ltd; Nolan Transport Retirement Benefit Scheme v Minerva Trust Company Ltd; Michael Thomas Cordwell; Peter James Nicolle; Stephen Andrew Morgan

JurisdictionJersey
CourtRoyal Court
Judgeand
Judgment Date25 March 2014
Neutral Citation[2014] JRC 78A
Date25 March 2014

[2014] JRC 78A

ROYAL COURT

(Samedi)

Before:

D. R. N. Hunt, Q.C., Commissioner andJurats ClaphamandOlsen

Between
(1) Joan Mary Nolan
(2) Richard James Nolan
(3) Seamus Patrick Nolan
(4) Patricia Mary Nolan
(5) Ann Mary Nolan
(6) Elizabeth Mary Nolan
(7) Raymond John Nolan
(8) John Martin Nolan
(9) Brendan Joseph Nolan
(10) Sally Ann Nolan
(11) Oliver Nicholas Nolan
(12) Kevin Patrick Nolan
(13) Noel Patrick Nolan
(14) Serene Investments Limited
(15) Bilberry Investments Holdings Limited
(16) Nolan Transport Retirement Benefit Scheme
Plaintiffs
and
(1) Minerva Trust Company Limited
(2) Michael Thomas Cordwell
(3) Peter James Nicolle
(4) Stephen Andrew Morgan
Defendants

Advocate N. M. Santos-Costa for the Plaintiffs.

Advocate M. L. Preston for the Defendants.

Authorities

Three Rivers District Council v. Bank of England [2003] 2 AC 1 .

Cunningham v. Cunningham [2009] JLR 227 .

Flynn v Reid [2012] (1) JLR 370 .

Selby v Romeril [1996] JLR 210 .

Professor Nicholas' The French Law of Contract (2nd ed).1999.

Westdeutsche Landesbank Girozentrale v. Islington London Borough Council [1996] A.C. 669 .

Bagus Investments Limited v Kastening [2010] JLR 355 .

Brown's Jersey Law of Trusts (4th ed).

Halley v The Law Society [2003] EWCA Civ 97 .

Twinsectra Ltd. v Yardley [2002] 2 AC 164 .

Republic of Brazil v Durant International Corporation [2012] JRC 211 .

Orix Australia Corporation Ltd. v. Moody Kiddell and Partners P/L [2005] NSWSC 1209 .

Barrett & Sinclair v McCormack [1999] VUCA 11 .

Bieber v Teathers Ltd. [2012] EWCA Civ 1466 .

Royal Brunei Airlines Sdn. Bhd. v Tan [1995] 2 A.C. 378 .

Barlow Clowes International Ltd v Eurotrust International Ltd. [2006] 1 WLR 1476 .

Financial Services (Jersey) Law 1998.

Financial Services (Trust Company Business (Assets — Customer Money)(Jersey) Order 2000.

Re H (Minors) [1996] A.C. 563 .

Aktieselskabet Dansk Skibsfinansiering v Brothers [2001] 2 BCLC 324 .

Civil Evidence (Jersey) Law 2003.

Challinor v Juliet Bellis & Co. [2013] EWHC 347 .

In the matter of Epitome Investments Limited [1996] 98 JLR 579 .

Browne v Dunn (1894) 6 R. 67 , Markem Corp v Zipher Ltd [2005] R.P.C. 31.

Rahme v Smith & Williamson Trust Corporation Ltd [2009] EWHC 911 .

Trusts (Jersey) Law 1984.

Law Reform (Miscellaneous Provisions)(Jersey) Law 1960.

Attorney-General v Sangan (1897) 24 PC 193 .

English Limitation Act 1980.

Taylor v Davies [1920] A.C. 636 .

Halton International Inc. v Guernoy Ltd [2006] EWCA Civ 801 .

Peconic Industrial Development Ltd v Lau Kwok Fai [2009] HKCFA 17 .

Dubai Aluminium and to Statec Corporation v Alford [2008] EWHC 32 .

United Capital Corporation Ltd v Bender [2006] JLR 242 .

Central Bank of Nigeria v Williams [2013] QB 499 .

Central Bank of Nigeria -v- Williams [2012] EWCA Civ 415 .

Limitation Act 1939.

Cattley v Pollard [2007] Ch 353 .

Cattley v Pollard [2006] EWHC 3130 (Ch) .

Re Northwind Yachts Ltd. [2005] JLR 137 .

Coulthard v Disco Mix Club Ltd. [2000] 1 W.L.R. 707 .

Knox v Gye (1872) L.R. 5 H.L. 656 .

Public Services Committee v Maynard [1996] JLR 343 .

Boyd v Pickersgill [1999] JLR 284 .

Medcalf v Mardell [2003] 1 AC 120 , [2002] UKHL 27.

Medcalf v Mardell [2002] UKHL 27 .

Trust — recovery of losses sought by the plaintiffs.

Introduction

1

The parties

3

(1) The Plaintiffs

3

(2) The Defendants

6

The background

11

(1) Mr Walsh's companies

11

(2) Mr Walsh

13

(3) PTCL's dealings with Mr Walsh and his companies

14

(4) The way in which the Nolans conducted their financial affairs

25

(5) Mr Walsh and the Nolans

27

The Nolans' claims

28

(1) First Elision

30

(2) Columba

47

(3) Echemus

56

(4) First German nursing homes

63

(5) Second German nursing homes

78

(6) Big Ferries

84

(7) Irish Bio-Ethanol

89

(8) Second Elision

94

Events after September 2006

99

The English and Jersey proceedings

127

The dishonest assistance claims

141

(1) The existence of a trust

145

(a) Constructive trust

146

(b) Quistclose trust

163

(c) Resulting trust

169

(2) Breach of trust

171

(3) Assistance in that breach of trust

176

(4) Dishonesty

177

(a) The basic principles

178

(b) Proof of dishonesty

188

(c) The distinction between dishonesty and negligence

189

(d) Summary of each party's case

190

The witnesses and other individuals

192

(1) Ms Joan Nolan

197

(2) Mr Robert English

201

(3) Mr Peter Nicolle

214

(4) Mr Michael Cordwell

223

(5) Mr Stephen Morgan

228

Preliminary matters

232

(1) The absence of documents

233

(2) The intentions of the corporate transferors

237

(3) The knowledge of the Buchanan Group companies

242

(4) The Nolans' rights as shareholders in Elision and Columba

255

(5) Cumulative knowledge

264

Dishonest assistance — findings in relation to each of the investments

267

(1) First Elision

269

(2) Columba

310

(3) Echemus

331

(4) First German nursing homes

348

(5) Second German nursing homes

373

(6) Big Ferries

399

(7) Irish Bio-Ethanol

416

(8) Second Elision

427

Events after September 2006

464

Prescription

482

(1) The law

485

(2) Empêchement de fait

502

Damages

512

Conclusion

516

THE COMMISSIONER:
Introduction
1

The claim in this action has its basis in the Plaintiffs' allegation that over a period of some 18 months between March 2005 and September 2006 Mr Gerard Walsh fraudulently induced them to invest substantial sums of money in various schemes, all of which failed. The Plaintiffs' attempts to obtain redress from Mr Walsh himself or from his companies have proved unsuccessful. The Plaintiffs now seek to recover their losses (which they value at £5,257,074.25 and €8,398,000) from the Defendants, on the basis that the Defendants dishonestly assisted Mr Walsh in breach of the trusts arising from the Plaintiffs' investments by complying with Mr Walsh's instructions to pay away the monies which the Plaintiffs had transferred on unrelated expenditure, including expenditure for Mr Walsh's personal benefit. The Defendants all deny any such knowing assistance and further contend that the Plaintiffs' claims are barred by prescription.

2

In the Order of Justice the Plaintiffs pleaded alternative claims against the Defendants for breach of various statutory duties. By the conclusion of the hearing, however, all these alternative claims had, as the Plaintiffs confirmed in their final submissions, been abandoned. Accordingly we say no more about them in this judgment.

The parties
(1) The Plaintiffs
3

The 1st to 13th Plaintiffs, namely Joan, Richard, Seamus, Patricia, Ann, Elizabeth, Raymond, John, Brendan, Sally, Oliver, Kevin and Noel Nolan (“the Nolan family” or “the Nolans”) are all siblings. Together they form the Nolan Family Partnership (“the NFP”) and operate Nolan Transport (Oaklands) Limited (“Nolan Transport”), a successful road haulage business established by their father (“Mr Nolan senior”) in 1980. (For the sake of convenience only, and without intending any disrespect, we refer to the individual Plaintiffs in this judgment by their first names).

4

In about 1993 Mr Nolan senior, with a view to building a pension fund for the family's future, set up a trust called the Portobello Trust (“Portobello”) through a corporate services company based in the Isle of Man called Peregrine Corporate Services (“Peregrine”). Between 2002 and 2006 the trustees of Portobello were provided by an Isle of Man company related to Peregrine called Chancery Trustees Limited (“Chancery Trustees”) and Portobello was administered by another Isle of Man company, again related to Peregrine, called Chancery Trust Company Limited (“Chancery Trust”). Portobello owned both the 14th Plaintiff, Serene Investments Limited (“Serene”), a company registered in the Isle of Man, and the 15th Plaintiff, Bilberry Investments Holdings Limited (“Bilberry”), a company registered in the British Virgin Islands. Both Serene and Bilberry were managed by Chancery Trust which also provided their directors. The main individual at Chancery Trustees and Chancery Trust was Mr Gethin Taylor. Finally, the 16th Plaintiff, the Nolan Transport Retirement Benefit Scheme (“the NTRBS”), also known as the Nolan Transport Pension Fund, was a pension fund with four family trustees (of whom Joan was one) and an independent trustee on the board; the independent trustee at the time was Mr Paul Ryan.

5

The Nolans were represented in this action by Advocate Santos-Costa of Collas Crill.

(2) The Defendants
6

Minerva Financial Services Limited (now Minerva Trust and Corporate Services Limited) (“Minerva Financial”), originally the 1st Defendant, is a wholly owned subsidiary of Minerva Holdings Limited (“Minerva Holdings”). Minerva Trust Company Limited (“Minerva Trust”) originally the 2nd but now the 1st Defendant, Minerva Nominees Limited (“Minerva Nominees”) originally the 3rd Defendant, Minerva Services Limited (“Minerva Services”) originally the 4th Defendant and Minerva Officer Limited (“Minerva Officer”) originally the 5th Defendant, are all in turn wholly owned subsidiaries of Minerva Financial. They are all companies incorporated in Jersey. Save where it is necessary to distinguish between them in this judgment, we refer to these companies (with the exception of Minerva Holdings) collectively as “the Minerva companies” or “Minerva”.

7

In November 2003 Professional Holdings Limited (“PHL”), the parent company of Professional Trust Company Limited (“PTCL”), acquired Mutual Trust Management (Jersey) Limited (“MTML”), which until 1 st August, 2001, had been...

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