Shane Holmes v Harry James Lingard and HJL Holdings Ltd and Angel Fish Ltd

• Jurisdiction: Jersey
• Court: Royal Court
• Judge: J. A. Clyde-Smith,Jurats Fisher,Grime
• Judgment Date: 29 June 2015
• Neutral Citation: [2015] JRC 141
• Date: 29 June 2015

[2015] JRC 141

ROYAL COURT

(Samedi)

Before:

J. A. Clyde-Smith, Esq., Commissioner, and Jurats Fisher and Grime

Between

Shane Holmes

Plaintiff

and

Harry James Lingard

First Defendant

and

HJL Holdings Limited

Second Defendant

and

Angel Fish Limited

Third Defendant

The Plaintiff appeared on his own behalf.

Advocate M. H. D. Taylor for the First, Second and Third Defendants.

Authorities

Goldtron Limited v Most Investments Limited [2002] JLR 424.

Milner v Milner Laboratories, Leech, Smith and Sim [2000] JLR 266.

American Cyanamid Co. v Ethicon Ltd [1975] AC 396.

Alpha Print v Alphagraphics [1989] JLR 152.

Injunctions — reasons regarding the lifting of interim injunctions.

THE COMMISSIONER:

1 On 27 ^th May, 2015, the Court lifted interim injunctions that had been obtained by the plaintiff (“Mr Holmes”) ex parte on 17 ^th March, 2014, and we now set out our reasons.

2 In his Order of Justice, Mr Holmes alleged that he and the first defendant (“Mr Lingard”) had entered into an agreement in June 2011 to develop the Hotel La Tour, St Brelade, which was owned by the third defendant, Angel Fish Limited (“Angel Fish”), a subsidiary of the second defendant, HJL Holdings Limited (“HJL”) which was in turn beneficially owned by Mr Lingard. As part of that alleged agreement, he asserted that HJL (a bridging finance lender registered with the Jersey Financial Services Commission as such) was to make available what Mr Holmes described as “Side Funding” to enable certain project works to be undertaken on the hotel site, which funding would be secured over a separate development Mr Holmes was undertaking through his company Home Farm Developments Limited (“Home Farm”).

3 The Order of Justice alleges that Mr Lingard breached and repudiated this agreement in October/November 2012 and sought damages inter alia:–

• (i) In the sum of £190,000 in respect of the direct costs and expenses incurred by Mr Holmes in the development.

• (ii) In the sum of £900,000 being the uplift in the value of Hotel La Tour brought about by Mr Holmes as a consequence of his involvement in the development.

• (iii) In the sum of £686,000 being losses in expected sales value in the units being separately developed by Home Farm.

4 The Order of Justice and supporting affidavit sworn by Mr Holmes were presented to the Deputy Bailiff and signed by him on 17 ^th March, 2014, some sixteen months following the alleged breach and repudiation, under which an interim injunction was imposed ex parte effectively restraining Mr Lingard from dealing with his shares in HJL and from either HJL or Angel Fish disposing of their assets or obtaining any mortgage, loan or security over them.

5 The defendants filed an answer on 25 ^th April, 2014, and by an amendment on 27 ^th March, 2015, a counter-claim for the repayment of certain unsecured loans made to Mr Holmes between February and August, 2012, but they did not apply to have the interim injunction lifted until a summons was issued on 26 ^th February, 2015. They filed their affidavits in support of that application in mid-April, 2015, some five weeks or so before the hearing. Mr Holmes applied unsuccessfully for an adjournment on 18 ^th May, 2015, on the basis that he needed more time to prepare his case and he applied again for an adjournment on 27 ^th May, 2015. He reiterated, however, an offer he had made earlier to vary the interim injunctions to allow a mortgage or loan to be secured on Hotel La Tour.

6 The Court declined both applications for an adjournment applying Goldtron Limited v Most Investments Limited [2002] JLR 424, where Birt, Deputy Bailiff, said this at paragraph 36:–

“(b) Readiness of the plaintiff to respond to an application to set aside an injunction.

36 In this case, despite having agreed a hearing date for the defendant's application to set aside the injunctions, the plaintiff applied for an adjournment on the basis that the affidavit filed on behalf of the defendant was lengthy and complex and required a response from the plaintiff's deponent, Miss Minaeva, who was on holiday. The court refused the application to adjourn. We wish to emphasize that, if a plaintiff takes the step of restraining a person from dealing with his assets — a drastic invasion of a person's rights— he has to anticipate that there may be a prompt application to set aside or vary the injunction. The plaintiff must therefore be at the ready to respond to such an application. It is not acceptable for a plaintiff, having set the court's procedure in motion, to then argue that it needs a lengthy period to justify the continuation of the ex parte relief. Of course, the court will not be unreasonable. It is right that a plaintiff should have the opportunity to respond to evidence produced by a defendant in support of an application to set injunctive relief aside. However, it is also incumbent upon the plaintiff to act as a matter of urgency.”

7 Even though the defendants had delayed in bringing their application to lift the interim injunctions, Mr Holmes was under a duty to be ready to respond and had had more than enough time to do so.

8 Two grounds were put forward by the defendants for lifting the interim injunction, which we take in turn.

Failure to give notice

9 It is a basic principle of justice that an order should not be made against a party without giving him an opportunity to be heard. In Milner v Milner Laboratories, Leech, Smith and Sim [2000] JLR 266, Bailhache, Bailiff, cited this extract from the judgment of Hoffmann J in the Times Law Reports, 1991 TLR 439:–

“Mr Justice Hoffmann said that he was firmly of the view that it was wrong for the application to have been made ex parte. It was a basic principle of justice that an order should not be made against a party without giving him an opportunity to be heard. The only exception was when two conditions were satisfied:

First, that giving such an opportunity appeared likely to cause the applicant injustice, by reason either of delay or action which it appeared likely the respondent or others would take before the order could be made and

Second, when damage to the respondent was compensatable under a cross-undertaking or when the risk of uncompensatable loss was clearly outweighed by the risk of injustice to the applicant if the order were not made.

Applicants tended to think that a calculation of the balance of advantage and disadvantage in accordance with the second condition was sufficient to justify an ex parte order.

That attitude should be discouraged. One did not reach any balancing of advantage and disadvantage unless the first condition has been satisfied.

The principle audi alteram partem did not yield to a mere utilitarian calculation and could be displaced only by invoking the overriding principle of justice which enabled the court to act at once when it appeared likely that otherwise injustice would be caused.

Here there was nothing to preclude an inter partes hearing.”

10 In his affidavit, Mr Holmes had given the following reasons for the imposition of an interim injunctions without notice:–

“(c) Hotel La Tour (wholly beneficially owned by Angel Fish Limited) has been demolished in the last few months and the development site has been actively marketed for sale with planning permission. The site could therefore be purchased by a third party imminently;

(d) I am of the belief that the First Defendant came to Jersey in 2005 on a “J” Category licence to own and operate Hotel La Tour. As the hotel ceased operations in 2012 and is now demolished, it is not known if the First Defendant intends to remain in Jersey, or if he indeed is permitted to do so pursuant to the Housing (Jersey) Law 1949; and

(e) The First Defendant's residential address Affaric, La Route Orange, St Brelade, JE3 8GP was purchased on 18th August 2006 by Hotel La Tour Limited. I have conducted company researches (through the medium of my legal advisers) at the Jersey Financial Services Commission, which researches reveal that the entire share capital of Hotel La...