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You are here: BAILII >> Databases >> Jersey Unreported Judgments >> Sheyko v Consolidated Minerals Limited [2020] JRC 182 (14 September 2020) URL: http://www.bailii.org/je/cases/UR/2020/2020_182.html Cite as: [2020] JRC 182 |
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Before : |
R. J. MacRae, Esq., Deputy Bailiff, sitting alone. |
Between |
Mr Oleg Sheyko |
Appellant |
And |
Consolidated Minerals Limited |
Respondent |
Advocate M. C. Seddon for the Appellant.
Advocate W. A. F. Redgrave for the Respondent.
judgment
deputy bailiff:
1. The Respondent is the Plaintiff in proceedings against the Appellant, which were issued in July 2018. The Respondent's claim against the Appellant arises out of the Respondent's employment with the Appellant.
2. On 3rd September, 2020, I dismissed the Appellant's appeal against the case management order of the Master dated 5th August, 2020, which was the subject of reasons issued by the Master in a judgment dated 1st September, 2020.
3. This judgment provides my reasons for dismissing the appeal.
4. I was not provided by the parties with any of the pleadings in the case and accordingly my knowledge of the detail of the disputes between the parties is commensurate with the material that was provided to me.
5. My knowledge of the detail of the dispute is contained in paragraph 2 of the decision of the Master dated 16th April, 2020, reported at Sheyko v Consolidated Minerals Limited [2020] JRC 061. The Master said:
6. The proceedings are heavily contested.
7. The matter that came before me arose by reason of the Respondent's summons dated 24th July, 2020, which seeks an order that the Appellant's Answer and Counterclaim be struck out and that the Appellant be debarred from continuing to defend the Respondent's claim and from prosecuting its counterclaim, with judgment being entered for the Respondent in the sum of $14,316,625 and associated orders.
8. In the alternative, the summons invites the Court to order that the Appellant should be required to remedy every deficiency in its discovery as identified and ordered by the Court within seven days of the said order and in absence of compliance with the same, the Answer and Counterclaim be struck out, it be debarred from defending the Respondent's claim and that judgment be entered in the sum aforesaid.
9. That summons was accompanied by extensive written submissions filed on behalf of the Respondent, running to 84 pages, and supported by two lever arch files of documentation of which I was provided with the index.
10. In summary, the reason that the Respondent seeks the orders which he does from the Court pursuant to his summons dated 24th July, 2020, is that it is argued, and on any view there is a strong foundation for this argument, that the Appellant has repeatedly failed to comply with its discovery obligations. In short, it is said that the Appellant has misled the Court on matters relevant to discovery, failed to comply with Court orders and practice directions including failing to collect documents from important individuals, and withheld substantial quantities of material from inspection without justification. It is not necessary for me for the purpose of this appeal to set out all the complaints made by the Respondent against the Appellant regarding of its conduct, in respect of discovery.
11. Such conduct has been the subject of various hearings before the Master, including hearings on 4th June 2019, 6th November 2019, 15thJanuary 2020, 16th April 2020 and 5th August 2020.
12. The Master has on each occasion made orders and given judgments, some of which were contained in the papers before me.
13. The discovery exercise managed by the Master has been complex, involving documents held in a number of different jurisdictions. The Appellant said on appeal that notwithstanding the allegations made against it, it has already disclosed over 120,000 documents.
14. The Appellant says that it has complied with its discovery obligations and to the extent that it has not done it has been prevented from doing so by restrictions on documents leaving China.
15. The response of the Appellant to the Respondent's summons dated 24thJuly, 2020, was for the Appellant to issue its own summons dated 29th July, 2020, seeking specific discovery from the Respondent. The Respondent says this application is specious and is merely designed to distract attention from the Appellant's failure to make proper discovery and comply with Court orders.
16. On 5th August, 2020, the Master ordered that the Respondent's summons should be listed for hearing on 14th and 15th September, 2020, with the Appellant to file any evidence upon which it wishes to rely in response to the Respondent's written submissions by close of business on 21st August, 2020, the Respondent to file any evidence in reply by close of business on 2nd September, 2020 and the parties to file agreed joint bundles and exchange skeleton arguments by close of business on Monday 7th September, 2020.
17. These directions have, to date, been complied with. The Appellant did file its evidence by close of 21st August, 2020 and the Respondent filed two affidavits in reply to the Appellant's evidence by close of business on 2nd September, 2020.
18. The Master went on to order that the Appellant's summons for specific discovery, which had been listed for hearing on 21st September, 2020, should be adjourned until determination of the Respondent's summons.
19. The Master also ordered that the obligation to exchange witness statements required for 2nd October, 2020, should be stayed until further order of the Court, and that any directions in relation to the Appellant's summons for specific discovery, or in relation to witness statements should be dealt with at the hearing at which the judgment on the Respondent's summons was handed down.
20. The complaint made by the Appellant, which is broken down into four distinct arguments advanced by the Appellant on appeal, is that the Master acted unfairly in permitting the Respondent's summons to be listed for hearing in the absence of sworn evidence in support of the summons and that it was additionally unfair to adjourn the Appellant's summons for specific discovery. It is argued that both summonses should be heard together or at least heard sequentially with the arguments advanced by both parties in relation to the extent to which they had complied with their discovery obligations being borne in mind by the Court when considering what relief, if any, to grant on the summonses before it.
21. Both parties are agreed that the test on appeal is set out in Café de Lecq -v- R A Rossborough (Insurance) Brokers [2011] JRC 011 where, at paragraph 21, Commissioner Clyde-Smith said that the Royal Court will "consider the matter afresh and reach its own conclusion whilst of course taking due account of the decision of the Master and the reasons for his decision".
22. Accordingly, this is a re-hearing, not a review of the decision of the Master. The Royal Court is in no way bound by the decision made by the Master but will, if appropriate, give due weight to the decision of the Master and the reasons for their decision, taking into account, particularly in a case such as this, that the Master has been actively managing this reasonably complicated case for in excess of a year and is familiar with the procedural issues and other requirements of this particular dispute.
23. The reasons for the Master reaching the conclusions which he did, as set out in his order dated 5th August, 2020, are contained in a judgment 11 pages in length. The reasons the Master gave were provided conscious of the fact that the Appellant had sought to appeal his order. It would not be appropriate nor is it necessary to set out the Master's reasons in full. In the Master's judgment, he set out the relevant procedural history, referred to the issuing of the summons by the Respondent on 24th July, 2020, noted that the summons was accompanied by written submissions 83 pages in length and supported by two lever arch files of documentation; and referred to his invitation to the Respondent to file a skeleton argument which summarised why it was said that the Appellant's case should be struck out. Thereafter, on 29th July, 2020, the Appellant had issued its summons seeking specific discovery, but not identifying what specific discovery was sought. The Master recorded that prior to the hearing on 5th August, 2020, he had initially directed that the Respondent's summons be heard on 14th and 15th September and the Appellant's on 21st September, 2020. He did this "in case the Defendant's summons in any way overlapped with or affected the matters raised by the Plaintiff's summons."
24. However, after giving that direction he was provided with additional correspondence and at paragraph 17 the Master records:
25. The Master continued:
26. As to the assertion that the Respondent should file an affidavit the Master said the following:
27. The Master then referred to a previous judgment of his in this case and concluded:-
28. I now turn to consider the Appellant's grounds of appeal.
29. The Appellant's principal argument is that the Respondent is inviting the Court to strike out the Appellant's Answer and Counterclaim pursuant to Rule 6/13(3) and (4) of the Royal Court Rules 2004, as amended.
30. Rule 6/13 provides:
31. The Appellant correctly identifies that the fact that the Rule provides that no evidence shall be admissible on an application under paragraph 1(a) implies that evidence is required in respect of applications under (b) to (d). This would often, perhaps usually, mean affidavit evidence in support of the application to strike out. In Arya Holdings Limited -v- Minories Finance Limited [1991] (Royal Court Unreported), the court held, approving the relevant passage in the Supreme Court Practice, that on such applications "affidavit evidence may be and ordinarily is used".
32. I accept that usually an applicant will file evidence by affidavit in support of an application to strike out, save where the assertion is that the other party's pleading discloses no reasonable cause of action, or defence, as the case may be. This will particularly be the case where the applicant is making allegations on the facts, which might be contested.
33. But this is not such a case. The principal thrust of the Respondent's argument is the Appellant has failed to comply with court orders. That is demonstrated by the orders that have been made and the judgments (none of which have been appealed) given by the Master. This is material that would not normally be exhibited to an affidavit as it is an uncontentious record of what has occurred. Further, the Respondent provided me with the index to the two lever arch files of material which accompanied the Respondent's extensive written submissions in support of the summons dated 24thJuly, 2020. The documents consisted of:
(i) Acts of Court;
(ii) judgments;
(iii) the pleadings of the parties;
(iv) previously filed written submissions and affidavits sworn by or on behalf of both parties;
(v) inter-party correspondence;
(vi) transcripts of court hearings;
(vii) contemporaneous correspondence, the vast majority of which emanated from the Appellant's discovery; and
(viii) authorities.
34. In the circumstances, the Master was quite entitled to conclude that an affidavit in support of the summons to strike out the answer and counterclaim was not necessary on the particular facts of this case.
35. The Appellant criticised the Master for saying that, as he did at paragraph 24, that "the Plaintiff has had raised a serious issue which in my judgment meant that the onus shifted to the Defendant and I was not persuaded that any further evidence was needed from the Plaintiff to support his application". It is suggested that this meant that the Court was in some way holding that the burden of proof in respect of the Respondent's summons had shifted to the Appellant. But it is not my reading of what the Master said. The Master was simply observing that in view of the material that the Respondent had lodged, the Appellant had a case to answer - which of course the Appellant has now answered, principally by way of an extensive affidavit sworn by Advocate Seddon on behalf of the Appellant.
36. Even if it was necessary for the extensive material relied upon by the Respondent to be exhibited to an affidavit, then that has now occurred as the affidavit in reply sworn by Mr Phillip Brown on behalf of the Respondent, dated 2nd September, 2020, does formally exhibit the documents upon which the Respondent relies at paragraph 17 of Mr Brown's affidavit. Mr Brown goes on to exhibit documents in support of certain factual statements made in the submissions which were the subject of complaint by the Appellant.
37. The Appellant also argues that the fact that the Respondent's written submissions in support of the summons jumbled up legal submissions and evidence prejudiced the Appellant, as the Appellant was forced to make a determination as to what allegations were submission and which were evidence and this was unfair on the Appellant.
38. It might have been preferable for the legal submissions and the evidence to be separated out as contended for by the Appellant, but the Appellant has responded to all the allegations made, point by point, and in my judgment no question of prejudice arises.
39. What did concern me was the fact that the summons dated 24th July, 2020, in the alternative to the claim that the Answer and Counterclaim should be struck out, seeks an order that the Respondent should remedy the deficiency in its discovery.
40. The Appellant argued that this was a summons for specific discovery and that such a summons must be supported by an affidavit.
41. The law in this area is clear. As the court held in Irish Nationwide Building Society -v- Volaw Corporate Trustee Limited [2013] (2) JLR 107, following the decision of the Court of Appeal in Victor Hanby Associates -v- Oliver [1990] JLR at 350-351, a party seeking further discovery after an affidavit has been made "must persuade the court that, despite the affidavit, his opponent has not complied with the order. It seems to us that it must be necessary, in those circumstances, for the parties seeking further discovery to show, by evidence on oath, not only a prima facie case that his opponent has, or has had, documents which have not been disclosed, but also that those documents must be relevant to matters in issue in the action."
42. The Court of Appeal in Hanby v Oliver also said:
43. The Court of Appeal went on to say that, by reason of this presumption, it was necessary for every application for specific discovery to be supported by an affidavit.
44. The Respondent argued that this was not in fact an application for specific discovery. It was simply a case of requiring the Appellant to provide material that was, on any view, missing. Further, the Appellant had categorised certain documents as secret as a matter of Chinese law, when they were not secret at all. The Respondent's case, in summary, was recorded by the Master as being set out in paragraphs 9 and 10 of the skeleton argument filed by the Respondent in support of his summons. These paragraphs read:
45. In reply to the Respondent's submissions, counsel for the Appellant said that this was not merely a case of the Appellant being required to produce documentation, which it was contended that on any view it had. He pointed to paragraphs in the Respondent's written submissions dated 24th July 2020 including paragraphs 146, 158 and 167 which criticised him for the affidavits that he had sworn on behalf of his client in respect of discovery. At paragraph 167 it was suggested that Advocate Seddon had "completely failed" to comply with certain of his client's discovery obligations. Indeed the index to the Respondent's written submissions under the title "CML's discovery reads": "A. Misleading statements made by CML to Mr Sheyko and the Royal Court in respect of the position in China. B. Failures in CML's discovery exercise. C. Erroneous and inaccurately particularised reliance on third-party document ownership to withhold documents. D. Failure to establish that material has been properly withheld as a matter of Chinese law and to meet the Jersey law test for withholding inspection of documents. E. Missing material."
46. It seems to me that this was in substance, if not in form, an application for specific discovery that should have been supported by an affidavit. It is said by the Respondent that, to the extent that such an affidavit was required any defect has been made good by the Respondent in his affidavit sworn in reply and filed on 2nd September, 2020. I do not think that that is the case.
47. Nonetheless, I have concluded that the Master was entitled to conclude on the particular facts of this case that an affidavit was not required nor would it add anything to the written submissions and the material already filed. I remind myself that the Master is very familiar with the issues in this case and if I were to direct that a further affidavit be filed that would inevitably mean that the hearing listed in less than two weeks' time would be vacated. That would not be appropriate. The parties need to get on with this case. The principal relief that is sought by the Respondent at the hearing on 14th September is that the Answer and Counterclaim be struck out. I have already determined that it was not necessary for affidavit evidence to be filed on the specific facts of this case in support of the summons and in fact, affidavit evidence has been filed in reply. In the event of the application to strike out failing and the court dealing with the consequential application for further discovery, it is the Respondent that will be prejudiced by the fact that it has not chosen to produce evidence on oath in support of its assertions in relation to discovery, whereas Advocate Seddon has given sworn evidence in response to the allegations that have been made. The advocate for the Respondent accepted this proposition. I do not anticipate that, if the Master does give the Appellant additional time to remedy any deficiency that he finds in relation to the Appellant's discovery, that he will only give the Appellant seven days to do so as envisaged by the summons, but that is a matter for the Master in the exercise of his discretion and not for me.
48. I have dealt with the arguments advanced by the Appellant under this ground above when dealing with ground 1. The Master did not, in my judgment, make an order which had the effect of reversing the burden of proof.
49. This assertion arises by virtue of the fact that the Respondent alleges (which is plainly the case from the discovery) that officers of the Appellant use a form of social media called "WeChat". In doing the hearing on 5th August, 2020, the Master volunteered that he had looked on the internet and had seen that "WeChat" was the largest user in China. He added "There is clearly some evidence from Mr Sheyko in his original affidavit in support of the injunction where he made reference to using "WeChat" so I think he is entitled to make that assertion on the basis of that. You can respond in your evidence and say no we did not use "WeChat", or it wasn't used or Mr Sheyko was wrong and Mr Sheyko can respond in his affidavit in reply".
50. Although as a general principle it is wrong for a tribunal of fact, including a judge at a directions hearing, to carry out their own research in relation to a matter in issue, this was not a central issue nor was this research conducted at trial. Accordingly, nothing turns on it. It certainly cannot be categorised, as the Appellant categorises it, as a "serious procedural irregularity".
51. In short, it is argued by the Appellant that the summonses in relation to discovery issued by the Appellant and Respondent respectively should be determined together, even if they are heard on separate dates. The argument is that the Respondent's own conduct in relation to his own discovery is relevant to the consideration of the relief that he seeks in respect of the summons that he has issued against the Appellant.
52. I reject this argument, which was not supported by authority and is contrary to both principle and good practice.
53. It simply cannot be the case that a party can escape from the consequence of its own failure to comply with its orders and obligations by pointing at the defaults of another party in the same case. If that were the case then the Court would end up treating two plaintiffs in different cases who were guilty of the same misconduct differently if, in one of the cases, the defendant was guilty of similar misconduct. That cannot be the right approach. The rules of court and the obligations imposed upon the parties are to be met, and the assessment of the extent to which they have complied with their obligations must be an objective test in the first instance. The Master was quite right to conclude that these matters could be dealt with separately. Of course, if there were to be a saving of costs and court time arising from them having been dealt together at the same hearing then he would have been equally entitled to direct that they be determined by him at the same time.
54. I reminded myself when reaching my decision of the Overriding Objective set out in Rule 1/6 of the Royal Court Rules. In particular, I note that dealing with a case justly and at proportionate cost, includes saving expense; ensuring that the case is dealt with expeditiously and fairly, allotting to it an appropriate share of the Court resources whilst taking into account the need to allot resources to other cases and enforcing compliance with the rules, practice directions and orders. Further, active case management includes controlling the progress of a case and ensuring that the trial of a case proceeds quickly and efficiently. Allowing the appeal would have not advanced any of those objectives.
55. All the orders that the Master made were ones that he was entitled to make in the exercise of his discretion and I accordingly dismissed the appeal and ordered the Appellant to pay the Respondent's costs on the standard basis, and carried out a summary assessment requiring the Appellant to pay a proportion of these costs on an interim basis prior to taxation.