Voisin Executors Ltd (as Executor of the moveable estate of John William Neal (Deceased)) v John Daniel Kelleher (former Curator of John William Neal (Deceased)

JurisdictionJersey
CourtRoyal Court
JudgeMatthew John Thompson,Master Thompson
Judgment Date29 February 2016
Neutral Citation[2016] JRC 51
Date29 February 2016

[2016] JRC 51

ROYAL COURT

(Samedi)

Before:

Advocate Matthew John Thompson, Master of the Royal Court

Between
Voisin Executors Limited (as Executor of the moveable estate of John William Neal (Deceased))
Plaintiff
and
John Daniel Kelleher (former Curator of John William Neal (Deceased)
Defendant

Advocate S. J. Young for the Plaintiff.

Advocate N. L. M. Langlois for the Defendant.

Authorities

Neal -v- Kelleher [2014] JRC 233.

Bagus Investments Limited v Kastening [2010] JLR 355.

Daisy Hill Real Estates Limited v Rent Control Tribunal [1995] JLR 176.

Crociani v Crociani [2015] JRC 177.

Campbell v Campbell [2015] JRC 249.

Representation of Anthony Investments (Esplanade) Limited and others [2015] JRC 056A.

Freeman v Ansbacher [2009] JLR 1.

Goode v Martin [2001] EWCA Civ 1899.

Vezier v Bellego [1994] JLR 75.

Human Rights (Jersey) Law, 2000.

Royal Court Rules 2004.

MacFirbhisigh (Ching) v CI Trustees and Executors [2015] JRC 014.

Curatorship — reasons in relation to application by the plaintiff to re-amend order of justice and application by the defendant to re-amend answer.

CONTENTS OF THE JUDGMENT

Paras

1.

Introduction

1

2.

Background

2–5

3.

Subsequent procedural history

6–14

4.

The re-amendments sought by the plaintiffs

15–22

5.

Decision on 14 th and 15 th October 2015.

23–29

6.

Events subsequent to the hearing on 14 th and 15 th October 2015.

30–35

7.

The hearing on 25 th November 2015

36–48

8.

Events subsequent to the hearing on 25 th November 2015

49–51

9.

The parties' contentions

52–55

10.

Decision

56–78

11.

Conclusion

79

THE MASTER:

Introduction
1

This judgment represents my detailed reasons in respect of an application by the plaintiff to re-amend its order of justice and an application by the defendant to re-amend its answer. How these applications developed is complex and resulted in hearings on 14 th and 15 th October, 25 th November, 2015, and 27 th January, 2016. This judgment therefore represents my reasons in respect of the orders I made at the conclusion of each of those hearings.

Background
2

The background to the present proceedings was set out in my earlier judgment reported at Neal -v- Kelleher [2014] JRC 233 at paragraphs 3 to 16 which I adopt for the purposes of this judgment as follows:-

“The proceedings arise out of the appointment of the defendant as curator of the plaintiff's late husband John Neal (“Mr Neal”). The defendant was appointed curator because Mr Neal suffered a severe stroke in February 1999. After his stroke Mr Neal was incapacitated and needed extensive care for the rest of his life, until he passed away earlier this year.

Prior to his stroke, Mr Neal was a businessman who had accumulated substantial wealth, principally through commercial property. The commercial property business was operated through a trust and company structure referred to in the draft amended order of justice as the J.C.N. Group. The first trust was established by a deed dated 5th April, 1979, which owned the share capital of a Jersey company called Evreux Holdings Limited (“EHL”). EHL in turn owned 100% of J.C.N. Investments (Jersey) Limited (“JCN”). JCN had two wholly owned subsidiaries Anthony Investments (Esplanade) Limited (“AIEL”) and J.C.N. Properties Limited (“JCNP”). EHL also owned a trading company known as J.C.N. Trading (Jersey) Limited (“JCNT”). I refer to these entities as the Companies.

At the date of the appointment of the defendant as curator, EHL was owned by the John Neal Family Trust which had been settled in 1997 (the ‘Trust’). Royal Bank of Scotland Trust Company (Jersey) Limited (“RBST”) was the trustee. Mr Neal was a director of EHL, JCN and AIEL.

The most significant property owned by the JCN Group through AIEL was a block of commercial buildings located at 44 The Esplanade/17–19 Seaton Place, St Helier, Jersey. At this point, I record that no party had any objection to me deciding in relation this matter, notwithstanding I was an equity partner in the Ogier Group which ultimately leased 44 The Esplanade once it was developed.

The Trust also owned other commercial property in Jersey at the time the defendant was appointed.

The plaintiff and Mr Neal had four sons, Mark, Simon, James and Stephen. Following Mr Neal's stroke, Simon played a more active role in relation to the Trust and Companies. On 31st January, 2000, the defendant, the plaintiff and Simon were appointed as new trustees in place of RBSI. Simon also became Managing Director of the JCN Group in 1999.

As at the date of the defendant's appointment, by reference to an inventory produced by the defendant in accordance with his obligations, Mr Neal's property was said to comprise the following as set out at paragraph 25 of the order of justice:-

“Immovable Property

Chateau Vermont, Jersey (jointly owned with spouse) 10,000,000.00

La Corona, Spain (jointly owned with spouse) 2,000,000.00

Kilmorie, Torquay 50,000.00

Movable Property

Midland Bank Current Account with spouse 40,000.00

Beneficiary of the Trust

Contents of Chateau Vermont (Insured Value) 700,000.00

Contents of La Corona (Insured Value) 150,000.00

Jewellery 50,000.00

Liabilities

Mortgage on Chateau Vermont 2,250,000.00

Mortgage no security with RBS 275,000.00

Mortgage no security with RBS 125,000.00”

Mr Neal was also a beneficiary of the Trust. It was accepted by the defendant in 2000 that the balance on the Midland Bank current account was a debit balance not a credit balance.

When the defendant resigned as curator, the assets of the Curatorship were La Corona, furniture and jewellery. Chateau Vermont had been sold in 2005 for £3.1 million. According to the defendant's answer, Mr Neal received £436,996 being half the share of the proceeds of sale of Chateau Vermont after deduction of the mortgage and estate agent and professional fees. In addition, as part of the basis upon which the Royal Court approved a sale of Chateau Vermont, JCN agreed within thirty-six months of the sale to transfer cash and/or Spanish property to the plaintiff and Mr Neal (acting through the defendant) to an aggregate value of £900,000 referred to as the Compensation Payment. This was to reflect that Chateau Vermont was being sold at a lower price than its estimated value. The Compensation Payment has never been paid, and JCN is now in liquidation.

In relation to the JCN Group, according to the plaintiff, the value of the commercial property portfolio held within the JCN Group in November 1998 was in excess of £17 million with a combined estimated annual rental value of over £1.8 million. In January 1999, according to Simon Neal, the indebtedness of the JCN Group was around £8.5 million. For the purposes of this application I am assuming, in the plaintiff's favour, that assets held by the JCN Group within the Trust were of this magnitude. It was not disputed by the defendant in its answer that the JCN Group held a significant asset in the form of its interest in 44 The Esplanade.

The plaintiff also alleges that on 26th November, 1980, Mr Neal entered into a series of agreements with EHL pursuant to which he transferred ownership of various companies, which became part of the JCN Group, in return for loans totalling £2,357,070 to be paid over a twenty year period in equal instalments. In this judgment I shall refer to these loans as the EHL loans.

In 1984, as EHL had not paid any of the instalments due under the EHL loans, the amounts due were instead agreed to remain as outstanding loans due from EHL to Mr Neal which loans were recorded in the accounts of the JCN Group as having no set repayment date and therefore were repayable on demand.

In relation to AIEL, the plaintiff asserts that, by reference to accounts of AIEL for the years ended 31st December, 1997, and 1998, a further loan was shown as being due to Mr Neal. The accounts for the year ended 31st December, 1998, record this loan as being in the sum of £909,904.

In relation to the Trust, the defendant, the plaintiff and Simon all retired as trustees on 16th July, 2006.

In or around January 2007 the Dandara Group offered to purchase 44 The Esplanade from AIEL for £11 million on purchase and a further £3 million on completion of the build assuming planning permission for another floor was granted. This offer was not accepted but is said to have been known to the defendant.”

3

In that judgment I also considered the applicable legal principles on an application to amend at paragraphs 31 to 39. For the purposes of the application before me the relevant paragraphs are 33 and 36 to 38 which provide as follows:-

  • “33. Insofar as a party seeks to introduce a new cause of action which is arguably time barred, the party seeking to introduce such a cause of action has to establish that a defendant has no reasonable prospect of success on the limitation argument. If the party seeking to introduce the amendment cannot establish that a defendant has no reasonable prospect of success then leave to amend should be refused (see Bagus Investments Limited v Kastening [2010] JLR 355).

  • 36. In relation to applications to amend, I considered the relevant legal principles in MacFirbhisigh & Anor v C.I. Trustees and Executors Limited [2014] JRC 033 at paragraphs 28 to 29.

  • 37. At paragraphs 28 to 29 I considered the principles as to whether a new cause of action arose out of the same facts or substantially the same facts as an existing cause of action by reference to the judgment of Page, Commissioner in Alhamrani v Alhamrani [2007] JLR 44 (see paragraphs 28 to 29 of MacFirbhisigh).

  • 38. Advocate Langlois also referred me to the judgment of the Royal Court in Freeman v Ansbacher Trustees (Jersey) Limited [2009] JLR 001. ...

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