Jersey Unreported Judgments

Trusts.

[2023]JRC134

Royal Court

(Samedi)

28 July 2023

Before     :

Sir William Bailhache, Commissioner Single judge

 

IN THE MATTER OF THE REPRESENTATION OF SG KLEINWORT HAMBROS TRUST COMPANY (CI) LIMITED, NOCTULE SERVICES LIMITED, PALLAS HOLDINGS LIMITED AND MT SERVICES LIMITED

IN THE MATTER OF THE BELL, ECLIPSE, HELIOS, JUPITER, MARS, MOON, NEPTUNE, PALLAS, SPV CHARITABLE AND SPV (NUMBER TWO) CHARITABLE TRUSTS

AND IN THE MATTER OF ARTICLES 51 AND 53 OF THE TRUSTS (JERSEY) LAW 1984 (AS AMENDED)

Advocate A. Kistler for the Representors.

Advocates N. M. C. Santos-Costa and Advocate S. J. Williams for the First and Second Respondents.

Advocate N. M. Sanders for the Third to the Fifth Respondents.

Advocate J. P. Speck for the Eight Respondent.

Advocate D. P. Le Maistre for the Sixth Respondent.

Advocate R. O. B. Gardener for the Seventh Respondent.

Decision on the papers

judgment

the commissioner:

1.        On 7 July 2023, the Third, Fourth and Fifth Respondents ("G, H and K") lodged a summons seeking sundry relief.  I agreed to deal with paragraphs 1 and 2 of the summons on the papers, the relief claimed by paragraphs 3 to 11 inclusive being listed for hearing on 28 July.  Written submissions in support of paragraph 2 of the summons have been lodged by G, H and K, and the First and Second Respondents ("B and C") have also filed submissions in relation to it.  On behalf of the unborn issue of the Fourth and Fifth Respondents, Advocate Gardner has filed his support for the approach taken by G, H and K.  No other party has filed written submissions.

2.        An affidavit in support of the G, H and K summons has been sworn by Ms Alexandra Schluep.

3.        Having considered paragraphs 1 and 2 of the summons, together with the written material to which I have referred, I reached a decision which is recorded in an Act of Court of 22 July, marked "Draft pending formatting only".  The decision has subsequently been formatted and the Act of Court issued.  As indicated in the Act of Court, reasons were reserved and this judgment contains those reasons. 

4.        Paragraph 1 of the summons sought an abridgement of time.  This was only necessary if there had been any issue over fixing a date for the hearing of the summons in the usual way.  However, no objection was taken to the listing of the summons for hearing on 28 July, and accordingly there was no need for any abridgement of time.  To the extent that it is necessary, it has been so ordered.

5.        Paragraph 2 of the summons was in these terms:

"The Third to Fifth Respondents have permission to share and disclose copies of the documents attached to the letter from Mishcon de Reya to Mourant Ozanne (Guernsey) LLP and Walkers (Jersey) LLP dated 7 June 2023 ("the MdR Documents"), and any information concerning their source, for the purposes of:(1) Further investigating their authenticity, source and legality; and (2) Seeking and receiving advice in relation to possibly pursuing (in any relevant jurisdiction) any complaints or legal actions arising out of the MdR Documents, their provenance, and the circumstances of their acquisition and (3) pursuing (in any relevant jurisdiction) any complaints or legal actions arising out of the MdR Documents, their provenance, and the circumstances of their acquisition, without the need to return to Court for further permission."

6.        As is clear from earlier judgments of this Court and of the Court of Appeal, there is pending litigation over a restructuring of the Trusts involving the Representors as trustees of the SG Trusts and Mirafield (PTC) Limited as trustees of the Mirafield Trusts (together "the Trustees").  One of the factors which will be taken into account by the Trustees in connection with such restructuring is the extent of the assets available to the Third Respondent ("G").  In the course of the work with which the Trustees have been engaged in that exercise, G has made a number of disclosures to them about her assets.  It appears that B and C have not been satisfied with the accuracy of those disclosures, and have instructed Messrs Mishcon de Reya to procure that some investigations into the extent of G's assets are carried out.  Pursuant to those instructions, Mishcon de Reya have instructed an unnamed investigations company, which the firm has described as a reputable company, to conduct lawful investigations into G's financial resources.  That company has produced a number of documents (the MdR Documents) which, taken at face value, would seem to indicate that G has had the benefit of a number of very substantial bank transfers, the extent of which would be inconsistent with the assets which she has disclosed to the Trustees.  For her part, G denies having any knowledge of or benefit from these transfers.  She contends that, whatever be the explanation for the MdR Documents, they do not represent her transactions and are not reflective of her assets.

7.        As indicated in the summons, Messrs Mishcon de Reya sent copies of the MdR Documents to the Guernsey and Jersey lawyers for G on 7 June, seeking her explanation for what appeared to be payments in excess of US$143 million from offshore companies to personal bank accounts in her name.  In order to support her asserted position in relation to these documents, G seeks permission to share both the documents and any information concerning their source for the three purposes set out in the summons above.

8.        In their written submissions, B and C confirm they have no objection to the Court granting permission to share and disclose copies of the MdR Documents for the purposes of investigating their authenticity, source and legality, and seeking and receiving advice in relation to possibly pursuing any complaints or legal actions in any relevant jurisdiction based upon those documents, their provenance or the circumstances of their acquisition.  B and C contend however that the Court should not give permission at this stage to G, H and K to use the documents, their provenance or the circumstances of their acquisition in any complaints or legal actions taken elsewhere without the need to return to Court for a further permission.  In other words, they assert that a two-stage process is appropriate for this latter purpose.

9.        Given that the authenticity of the documents is clearly of potential relevance to the restructuring of the Trusts, there seems to me to be absolutely no doubt that G, H and K should have the relief sought in sub-paragraphs (i) and (ii) of paragraph 2 of their summons, and I consider that B and C were right not to resist this part of the application.  Because this part of the relief has not been contested, I do not find it necessary to resolve the question as to whether or not G, H and K needed a sanction from the Court to use the MdR Documents.  That question seems to me to turn upon the issue of whether the documents can be said to have been produced in the proceedings in the Royal Court which are in private.  The rival arguments might be that as they were sent by B and C's London lawyers to G's lawyers by correspondence absent any application in Court at that time, they were not documents "produced" in the proceedings - and for that purpose, reliance might be placed upon Apricus Investments Limited v CIS Emerging Growth Limited [2004] JRC 038 at [7] - [9]; as against that, there is a line of English authority - SmithKline Beecham Plc v Generics (UK) Ltd [2004] 1 WLR 1479, Tchenguiz v Director of the Serious Fraud Office [2014] EWCA Civ 1409, and Robert Tchenguiz and Another v Grant Thornton UK LLP and Others [2017] EWHC 310 (Comm) which, taken together, might suggest that it is necessary to apply for permission to use such documents in circumstances similar to those which arise in this case.

10.      In my judgment, it would be appropriate that this question, should it arise again, should receive detailed submission in oral argument.  Accordingly, the views which I now express are only tentative.  It appears on my reading of SmithKline that the decision is firmly based upon a construction of the Civil Procedure Rules (the CPR) in England and Wales.  While many of the principles which are contained in those rules are similar to principles which are applied by this Court and decisions of the English courts, especially the higher courts, on the principles involved are extremely persuasive, decisions which are based on the construction of the language of the CPR as opposed to principle fall into a different category. It is obvious that the CPR do not of themselves apply here and routinely to treat English decisions based on them as authoritative would be an affront to the control which the Royal Court, as a Court of inherent jurisdiction, of equal standing to the High Court, exercises over its own process.  Accordingly, decisions elsewhere which are based on principle can be of the highest persuasion, but decisions based on a construction of the rules made by another Court are not, unless the language of those rules is similar to our own. 

11.      Satfinance Investments Limited v Valla Limited [2020] (1) JLR 17 was a case in which the plaintiff had given an express undertaking not to use information obtained pursuant to a Norwich Pharmacal Order for any purpose other than to identify assets which could be the subject of a freezing injunction in England and Wales, and sought permission to use the documents in the English proceedings generally.  In that case, MacRae DB referred to the principles set out in the Civil Procedure Rules, but he made plain that it was appropriate to do so because the principles upon which the High Court in England and Wales operated in this area under the CPR do not differ markedly from the principles that applied prior to their introduction (and are principles already applied in this jurisdiction).  This was an important distinction to make for the reasons which I have given above. 

12.      A similar comment can be made in relation to the decision of this Court in D v E [2020] JRC 049A, where an application was made to the Court seeking permission to use information disclosed pursuant to disclosure obligations in matrimonial proceedings to pursue an application in England for the rectification of a company's share register.  Le Cocq, Bailiff, applied the English Court of Appeal decision in Tchenguiz [supra] having noted first the starting point of Riddick v Thames Broad Mills [1977] QB 881, a case before the enactment of the Civil Procedure Rules which nonetheless established the principle that documents disclosed upon discovery could not be used for any collateral purpose without either the consent of the disclosing party or the leave of the Court, again a principle which has long been applied in this Court.

13.      In the present case, although no order has been made for the delivery of the MdR Documents, which in one sense have been disclosed voluntarily by B and C, and without deciding the principle for the reason I have given, it seems to me that there is a strong argument that the disclosure was so intimately connected with the proceedings which are taking place in private that it was entirely appropriate that G, H and K should seek leave of the Court before they could be disclosed onward and used for the purposes of the investigation contemplated by sub-paragraphs (1) and (2) of paragraph 2 of their summons. 

14.      I have not however made the order requested by G, H and K under sub-paragraph (3) of paragraph 2 of their summons, which sought leave to pursue in any relevant jurisdiction any complaints or legal actions arising out of the MdR Documents, their provenance and the circumstances of their acquisition, without the need to return to Court for further permission.  The order instead is that no party has the right to pursue (in any relevant jurisdiction) any complaints or legal actions arising out of the provenance and the circumstances of the acquisition of the MdR Documents without the express leave of the Court, application for which can, if necessary in the interests of justice, be made ex parte.

15.      The Act of Court provides that all parties have liberty to apply, and it is therefore open to G, H and K to make further application in relation to this issue; as it is open to B and C to make application if so advised as to the opening of the possibility that any further application by G, H and K might be made ex parte.  It is right therefore for me to give my reasons for these various decisions. 

16.      In their contentions, B and C have suggested that in the context of a party's collateral use of documents disclosed to it in English proceedings, the English Courts have applied a two-stage approach to the use of such documents.  In other words, there is a distinction between the use of the documents for the collateral purpose of making investigations and taking advice, for whatever reason (whether to determine if it actually wished to rely upon the documents or to take advice as to the possibility of other proceedings) and the use of the documents for further proceedings.  Those submissions were made in reliance on Tchenguiz v Grant Thornton [supra] and Lakatamia Shipping Company v Nobu Su [2020] EWHC 3201 (Comm).  The two-stage approach was said to be particularly necessary given the burden on an applicant to justify the proposed use of the documents with cogent and persuasive reasons as to why the proposed use should be permitted.  The latter propositions are emphasised by Calver J in Libyan Investment Authority v Societé Generale SA [2020] EWHC 3659 (Comm) at [19].  I have not received full submissions on this issue - hence the provisions for liberty to apply - but I express the provisional view that the two-stage approach is the correct approach to take.  Of itself, that is a sufficient reason for not granting the relief in this respect on the papers at this stage.

17.      There are, however, further reasons why it is inappropriate, in my judgment, to grant leave at this stage.  The first is that, on the assumption that it is correct that the MdR Documents and further information provided have been disclosed within the course of privacy proceedings and are covered by the Court's rules on privacy, it is right in principle that the Court should know precisely to what use the documents are to be applied in any other context.  The Court needs to have that information in order to assess whether the relaxation of the privacy rules can be justified for the purposes in question.  That decision requires a balancing of the different interests which are involved, which on the face of it seems an impossible exercise to complete in the abstract.  Secondly, in a case like the present, with proceedings not only here but in Guernsey and other proceedings elsewhere involving the estate of ("J"), it seems to me that there is always a risk of satellite litigation being commenced in other jurisdictions for purely tactical purposes which might have an impact on the timetabling or the substance of the proceedings in private in Jersey.  In saying that, I wish to emphasise that I am not making the suggestion that G, H and K would in fact indulge in this exercise of using satellite litigation for tactical purposes here.  It is the theoretical possibility of such action being taken by a party against which the Court should protect both its process and the other parties to the litigation.  Thirdly, having reviewed carefully the G, H and K submissions on this issue, it appears to me that strong arguments have been put forward to justify sub-paragraphs (1) and (2) of paragraph 2 of the summons, but very limited arguments indeed have been proposed in support of the claim for relief which would enable action to be taken on the documents in other jurisdictions without further leave of the Court.

18.      Finally, in relation to the conclusion that an application for leave could be made ex parte if necessary in the interests of justice, I wish to add this.  I do not at this stage know what proceedings might be contemplated, not least because the investigations which G, H and K wish to put in hand have not been completed and their advice in this respect has not yet been obtained.  However, I can at least anticipate that there may be circumstances in which proceedings should be commenced in other jurisdictions to protect the integrity of documents in existence before other parties have been notified of the application.  Once again, in making that comment, I emphasise that I am not suggesting that B and C would take any steps in any other jurisdiction which might place the integrity of relevant documents at risk.  It is the theoretical possibility that this might occur which has led me to include the possibility of an ex parte application in the Act of Court.  It will of course be open to the Court receiving an ex parte application to make the determination that it is not necessary in the interests of justice to give any leave ex parte but instead to require that notice be served upon the other parties to the litigation for an inter partes hearing of the application. 

19.      For all these reasons, the Act has been made in the form it has.

Authorities

Trusts (Jersey) Law 1984.

Civil Procedure Rules.

Apricus Investments Limited v CIS Emerging Growth Limited [2004] JRC 038.

SmithKline Beecham Plc v Generics (UK) Ltd [2004] 1 WLR 1479.

Tchenguiz v Director of the Serious Fraud Office [2014] EWCA Civ 1409.

Robert Tchenguiz and Another v Grant Thornton UK LLP and Others [2017] EWHC 310 (Comm).

Satfinance Investments Limited v Valla Limited [2020] (1) JLR 17.

D v E [2020] JRC 049A.

Riddick v Thames Broad Mills [1977] QB 881.

Tchenguiz v Grant Thornton [supra] and Lakatamia Shipping Company v Nobu Su [2020] EWHC 3201 (Comm). 

Libyan Investment Authority v Societé Generale SA [2020] EWHC 3659 (Comm).