Leeds v Admatch

JurisdictionJersey
CourtRoyal Court
JudgeThe Bailiff
Judgment Date19 January 2011
Neutral Citation[2011] JRC 16A
Date19 January 2011

[2011] JRC 16A

ROYAL COURT

(Samedi Division)

Before:

M.C. St. J. Birt, Esq., Bailiff, sitting alone.

Between
Leeds United Association Football Club Limited
First Plaintiff
Leeds United Football Club Limited (formerly Leeds United 2007 Limited)
Second Plaintiff
and
The Phone-in-Trading-Post Limited (t/a Admatch)
Defendant

Advocate P. C. Sinel for the Plaintiffs.

Mr R Weston as Director of the Defendant.

The Bailiff
1

This is an application by the plaintiffs to strike out the answer of the defendant and seek judgment against the defendant on the grounds that the defendant's continued actions and inactions in these proceedings amount to an abuse of the court's process.

Background
2

There have been numerous interlocutory judgments in these proceedings in which the factual background has been described. For present purposes it can be summarised as follows.

3

The first plaintiff is an English company which once owned and operated Leeds United Football Club. The defendant, which trades under the name of Admatch, is a Jersey company owned and controlled by Mr Robert Weston. In August 2004, the first plaintiff and the defendant entered into an agreement for the defendant to act as agent to the first plaintiff for the purpose of selling match and season tickets by credit card. There is no dispute that the defendant owes the first plaintiff £190,400 under that agreement.

4

In the course of 2005, control of the first plaintiff was acquired by interests associated with Mr Ken Bates. The present proceedings were issued by the first plaintiff in December 2005 seeking payment from the defendant of the sum of £190,400. On 4th May 2007 the first plaintiff went into administration, with net debts reported to be about £40 million. By an agreement of that date, the administrators transferred the assets of the first plaintiff (including the claim against the defendant) to the second plaintiff, and the shares in the second plaintiff were sold to a consortium led by Mr Bates. Subsequently, the first plaintiff went into liquidation. On 26th July 2007, the second plaintiff was joined to the action. Amended particulars of claim (to take account of the addition of the second plaintiff) were filed on 31st July 2007 and an amended answer was filed on 23rd August 2007.

5

As already mentioned, the debt in the sum of £190,400 is admitted. However the defendant contends that the agreement contained at clause 9(f) a set-off clause which entitled the defendant to set-off from any monies it owed to the first plaintiff any sum owed by the first plaintiff (or by any parent, associate or subsidiary company of the first plaintiff) to the defendant (or to any parent, associate or subsidiary company of the defendant). The defendant alleges in its answer that the sum of £1,439,734 is owed by the first plaintiff and/or an associated company of the first plaintiff to Cope Industrial Holdings Limited (“Cope”), which is a company in which Mr Weston has a controlling interest and is said therefore to be an associated company of the defendant.

6

The proceedings have been bedevilled by interlocutory jousting between the parties. It is not necessary to refer to the history in detail. For today's purposes the relevant events would appear to be as follows.

7

In the original pleadings, the plaintiffs admitted the existence of the set-off provision at clause 9(f) of the agreement but denied that it was relevant on the grounds that the debt of £1,439,734 was owed to Mr Levi (an associate of Mr Weston's and a fellow shareholder in Cope) rather than to Cope, that the debtor company was not an associate of the first plaintiff and that Cope was not an associate of Admatch.

8

On 24th April 2007 the Master made an unless order against the defendant in respect of the provision of discovery. That order was not complied with but the matter became entangled with an application by the defendant for a stay of the proceedings pending the hearing of an application for security for costs. On 21st August the Master refused a stay but extended the time for compliance with the unless order.

9

On 4th February 2008 the Master made an order requiring the defendant to give certain discovery and to file further and better particulars of its amended answer. Following a failure by the defendant to comply with that order, the Master made an ‘unless’ order on 18th March to the effect that the amended answer would be struck out if the defendant did not comply with the order of 4th February 2008 within 28 days. That period expired at midnight on 15th April. The defendant sent an e-mail minutes thereafter providing a draft affidavit of discovery but the further and better particulars were not provided at that stage. The Master refused to grant a retrospective extension of time for compliance with the unless order but, for the reasons set out in a judgment dated 30th May 2008, I subsequently allowed an appeal against that decision and granted the required extension of time.

10

A trial date had been fixed for 2nd December 2008 but this was vacated by order of 28th October 2008. On 1st December 2008 the second plaintiff filed an amended reply to the defendant's amended answer which had been filed on 23rd August 2007. For the first time the second plaintiff now conceded that Cope was an associated company of Admatch and that the debtor company in respect of the £1,439,734 was an associated company of the first plaintiff. The sole dispute at that stage therefore appeared to be whether that sum was owed to Cope (as the defendant contended) —in which event it could be set off against the £190,400 —or to Mr Levi (as the second plaintiff contended) – in which event it could not.

11

However, matters changed shortly thereafter. On 29th January 2009, the defendant filed a re-amended answer which alleged that the assignment by the first plaintiff to the second plaintiff of the benefit of the claim to £190,400 was invalid under Jersey law. On 16th February 2009, the second plaintiff filed a re-amended reply joining issue in relation to the issue of the assignment.

12

The proceedings now became side-tracked by an issue as to security for costs. On 21st August 2008 and 4th December 2008, I had made orders requiring the second plaintiff to provide security for costs up to and including trial. On 19th May 2009, the Court of Appeal allowed the second plaintiff's appeal against those orders. On 17th December 2009 the plaintiffs applied for leave to further amend the claim so as to allege that, contrary to what they had admitted previously, the agreement did not in fact contain the set-off provision in clause 9(f). After a contested hearing I granted leave for the plaintiffs to re-amend the particulars of claim and ordered that the defendant file a re-amended answer to the re-amended claim by 1st February 2010, such amendments being limited to those consequential upon the amendments made by the plaintiffs. Various other orders were made including that both parties should file revised affidavits of discovery, including in particular documents relied upon arising out of proceedings for libel in the English High Court between Mr Levi and Mr Bates.

13

When allowing the appeal in respect of security for costs, the Court of Appeal had made an order for standard costs against the defendant. These were subsequently taxed and the Greffier certified total costs in the sum of £63,529.79 on 19th January 2010. The plaintiffs’ advocates wrote to Mr Weston on 20th January 2010 requesting payment of the costs within seven days. On 29th January the matter was placed in the hands of the Viscount's Department for enforcement but no recovery has been possible. On 4th February, Mrs Weston sent an e-mail to the plaintiffs’ advocates stating that the re-amended answer would be filed as soon as Mr Weston was well enough to do so. However, she went on to say that, in view of the fact that the enforcement of the taxed costs had been put in the hands of the Viscount, the intention of the defendant to file the re-amended answer had to be conditional upon the company being permitted to remain in existence (in order to continue defending the action). She said that the situation would be resolved more quickly and more certainly if the plaintiffs were to withdraw the instructions to the Viscount's Department to enforce the claim for costs until after completion of the proceedings as a whole.

14

The plaintiffs filed the present summons on 12th February 2010 referring in particular to the defendant's failure to pay the taxed costs, the failure to file the answer to the re-amended particulars of claim by 1st February (as ordered on 17th December 2009), defending a claim when the defendant had no funds to honour any award and for other unspecified repetitive breaches of court orders and timetables.

15

The hearing of the summons was listed for 8th April 2010. On 1st April, after the plaintiffs had served and filed their bundle for the hearing, Mrs Weston wrote back stating that the defendant would not be able to attend the Royal Court because of illness on the part of Mr Weston. She supplied a redacted medical certificate dated 15th March. On 8th April, having heard from Mrs Weston on behalf of the defendant and Advocate Sinel on behalf of the...

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