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Jersey Unreported Judgments |
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You are here: BAILII >> Databases >> Jersey Unreported Judgments >> CMC & Ors v Forster & Anor [2017] JRC 141 (06 September 2017) URL: http://www.bailii.org/je/cases/UR/2017/2017_141.html Cite as: [2017] JRC 141 |
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Striking out - decision in respect of an application to strike out third party proceedings
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Before : |
Advocate Matthew John Thompson, Master of the Royal Court. |
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Between |
CMC Holdings Limited |
First Plaintiff |
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CMC Motors Group Limited |
Second Plaintiff |
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And |
Martin Henry Forster |
First Defendant |
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RBC Trust Company (International) Limited |
Second Defendant |
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The Regent Trust Company Limited |
Third Defendant |
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And |
Martin Henry Forster |
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Jeremiah Kiereini |
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Charles Mugane Njonjo |
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The Estate of Jack Morejay Benzimra |
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The Estate of Prahlad Kalyani Jani |
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RBC Trust Company (International) Limited |
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The Regent Trust Company Limited |
Third Parties |
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Advocate J. M. Dann for the First Defendant.
Advocate J. P. Speck for the Second and Third Defendants.
Advocate N. G. A. Pearmain for Jeremiah Kiereini.
Advocate D. S. Steenson for Mr Charles Njonjo.
CONTENTS OF THE JUDGMENT
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Paras |
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1. |
Introduction |
1 |
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2. |
Background |
2-8 |
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3. |
The applicable legal principles |
9-12 |
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4. |
Mr Njonjo's submissions |
13-20 |
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5. |
The second and third defendants' contentions |
21-28 |
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6. |
Decision |
29-46 |
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7. |
Conclusion |
47 |
judgment
the MASTER:
1. This judgment represents my decision in respect of an application by Mr Charles Njonjo ("Mr Njonjo") seeking to strike out the third party proceedings against him on the basis that the third party proceedings contain no reasonable cause of action.
2. Mr Njonjo's application follows on from two earlier judgments issued by me in this matter reported at CMC-v-Forster RBC and Regent [2016] JRC 149 dated 26th August, 2016, ("the August judgment") and CMC Holdings Ltd-v-Forster and Ors [2017] JRC 014A dated 17th January, 2017, ("the January judgment").
3. It was pursuant to the January judgment that I decided to convene Mr Njonjo as a third party (along with other individuals) on the basis that there was a prima facie case in unjust enrichment. Mr Njonjo was of course not a party to that decision.
4. The general background to the present proceedings was set out by me at paragraphs 2 to 6 of the August judgment which I adopt for the purposes of this judgment for ease of reference.
5. The background to the second and third defendants' application to join Mr Njonjo (and others) as third parties is set out at paragraphs 3 to 8 of the January judgment which I also adopt for ease of reference.
6. In view of Advocate Steenson's criticisms of the third party claim which I set out in more detail below, it is necessary to set out the third party claim. The second and third defendants' third party claims are set out at paragraphs 86 to 93 of their answer as follows:-
"86. This is the third party claim by RBC and Regent against:
a. Martin Forster, the First Defendant in the present proceedings
b. The Estate of Jack Mordejay Benzimra
c. The Estate of Prahlai Kalyani Jani
d. Charles Njonjo
e. Jeremiah Kiereini
(together, the "Third Parties" or "Core Defaulting Directors")
87. The Third Parties are the individuals named in paragraphs 17 to 21 of the Order of Justice and defined collectively in paragraph 22 thereof as "the Core Defaulting Directors".
88. Paragraphs 1 to 85 above are repeated.
89. Without prejudice to RBC and Regent's case as set out in their Answer denying that they are liable to the Plaintiffs or either of them, if, which is not admitted, the Plaintiffs or either of them is entitled to the relief sought or to any relief against RBC and/or Regent on the basis that RBC and/or Regent dishonestly assisted the Core Defaulting Directors in breaches of duty or breaches of trust, the Core Defaulting Directors are the persons primarily liable for the said breaches of duty (which are not admitted).
90. In the premises, if and insofar as any liability is established by the Plaintiffs against RBC and/or Regent, the Core Defaulting Directors are likewise liable to the Plaintiffs in respect of the same losses.
91. Further or alternatively, any payments received individually by each of the Core Defaulting Directors pursuant to the alleged Scheme are held by such director on constructive trust for the Plaintiffs.
92. By reason of the above, each of the Core Defaulting Directors is liable to account for any sums actually received by him pursuant to the alleged Scheme, and to repay the same to the Plaintiffs, with compound or alternatively with simple interest calculated for the date of each payment.
93. By reason of the above, RBC and Regent jointly and severally claim an indemnity from the Core Defaulting Directors and each of them, or alternatively a contribution to be assessed by the court. RBC and Regent rely on the inherent jurisdiction of the court.
IN THE PREMISES THE THIRD PARTY PLAINTIFFS, RBC AND REGENT, HAVE SUFFERED A WRONG
IN THE CIRCUMSTANCES, THE THIRD PARTY PLAINTIFFS, RBC AND REGENT, PRAY FOR THE FOLLOWING RELIEF AGAINST THE THIRD PARTIES:
(1) An order permitting service out of the jurisdiction on the Third Parties, such service to be effected personally in accordance with Jersey law and that they be convened to these proceedings;
(2) An order that the Third Parties jointly and severally indemnify RBC and/or Regent in respect of such sums, if any, as RBC and/or Regent are ordered to pay to the Plaintiffs;
(3) Alternatively an order that the Third Parties pay RBC and/or Regent such contribution as the court thinks just towards the sums, if any, that RBC and/or Regent are ordered to pay to the Plaintiffs;
(4) Further or other relief;
(5) Costs.""
7. I also refer to paragraph 99 of the January judgment where I stated as follows:-
8. This led to the form of the summons served on the third parties including Mr Njonjo to state at paragraph 2a. as follows:-
"a. An order that you indemnify RBC and Regent against the Plaintiffs' claim and the costs in this action or alternatively an order that you make a contribution towards the same, on the grounds that, at the time of the alleged breaches of trust in respect of which RBC and Regent are alleged to be liable as accessories, you were a director of one or both of the Plaintiffs who knew of and/or fiduciary duty to the Plaintiffs and/or on the further grounds that you were the recipient of such payments."
9. There was no dispute between the parties on the applicable legal principles where an application is made to strike out a case on the basis that it discloses no reasonable of cause of action. In particular, it was accepted that an order to strike out a claim may only be made in plain and obvious cases for actions which cannot succeed or which in some way are an abuse of process or where a case is unarguable (see e.g. Lazard Bros-v-Bois & Bois [1987] JLR 639 cited by Mr Njonjo).
10. The Lazard Brothers judgment approved the judgment of Lord Pearson in Drummond-Jackson-v-British Medical Assn. [1970] 1 All E.R. 1101 which stated:-
11. The skeleton argument filed on behalf of the second and third defendants was consistent with the above approach citing Trant-v-AG [2006] JLR 531 at paragraph 21 and Lapidus-v-Le Blancq [2013] (2) JLR 308 at paragraphs 20 to 23.
12. These are the legal principles I have applied in reaching my decision.
13. Advocate Steenson's main submission on behalf of Mr Njonjo arose out of the following matters pleaded in the order of justice:-
(i) At paragraph 20, it was set out that Mr Njonjo was a director of the first plaintiff between 1985 and 1987, and from 1990 until 2011, and that he received significant sums of money from a scheme totalling at least £572,000.
(ii) The claim brought by the plaintiffs in relation to the scheme at paragraph 27 of the order of justice alleged that those who benefitted under the scheme received payments in two phases. Phase 1 concerned payments from 1977 to the late 1990s and with phase 2 relating to payments received from the late 1990's until 2007.
(iii) The distinction between phase 1 and phase 2 is that the claims against the second and third defendants for dishonest assistance only relate to phase 1 of the scheme and not to phase 2.
14. This distinction, according to Advocate Steenson, was significant because, by reference to the order of justice, the benefits received by Mr Njonjo were only during phase 2. At paragraph 111 it is alleged that Mr Njonjo received £250,000; at paragraph 112 it is alleged that he received £175,000 and at paragraph 117 it is alleged that he received £145,000. These sums total £570,000. While it was also alleged at paragraph 118 that Mr Njonjo may have received other sums, this was still during phase 2 of the alleged scheme.
15. On the plaintiffs' pleaded case therefore Mr Njonjo received no or a very small benefit during phase 1 of the scheme. This therefore led Advocate Steenson to contend that there was no unjust enrichment for which Mr Njonjo was required to account to the second and third defendants in relation to phase 1, if the second and third defendants were found to be liable for dishonest assistance, because Mr Njonjo had not received anything or very little under phase 1.
16. Advocate Steenson also argued that the prospective third parties should have been convened to the summons in January so that the position could have been analysed at that stage. The rationale for seeking to convene the third parties was to require them to account for any benefit they had received. That rationale did not apply to Mr Njonjo however as he had received no benefit during phase 1.
17. According to Advocate Steenson, this was not a case that was capable of being saved by an amendment; there was simply no basis to make a claim against Mr Njonjo where he had received either no benefit or only a benefit of a very small amount.
18. Advocate Steenson was also critical of the third party claim because:
(i) It conflated dishonest assistance on the part of the defendants with breaches of duty or breaches of trust on the part of the third parties;
(ii) The alleged breaches of duty or breach of trust of the third parties were unparticularised;
(iii) It referred to the concept of primary liability without explanation or particularisation;
(iv) It failed to explain which alleged breaches of duty or breaches of trust were committed by which of the directors; and
(v) In particular, it failed to particularise what alleged breaches of duty or breaches of trust were committed by Mr Njonjo.
19. Advocate Steenson also criticised paragraph 90 of the second and third defendants' answer which states:-
"In the premises, if and insofar as any liability is established by the Plaintiffs against RBC and/or Regent, the Core Defaulting Directors are likewise liable to the Plaintiffs in respect of the same losses."
He argued that this pleading was deficient because:-
(i) The use of the word likewise was misguided; and
(ii) Any alleged liability attaching to the Core Defaulting Directors for breaches of duty or breaches of trust was not identical to any alleged liability attaching to the second and/or third defendants.
20. This led Advocate Steenson at paragraph 19 of his skeleton to state:-
"As against, Mr Njonjo, therefore, the Defendants have failed to particularise what cause of action they have against him; how that arises; how a loss to the Defendants follows; and for how much their claim is.
In other words, the Defendants have failed to explain what it is that Mr Njonjo, specifically, is said to have done that is wrong and how that has, or may, cause a loss to the Defendants."
21. The starting point for Advocates Speck's contentions for the second and third defendants was that any liability, if established against his clients, was a liability that was accessory to breaches of duty by the Core Defaulting Directors. This was clear from paragraph 5 of the order of justice which stated:-
"The secret commissions paid into the Scheme and their proceeds were the result of breaches of fiduciary duty and breaches of trust by directors of the Plaintiffs, including the First Defendant."
22. The order of justice therefore required the first defendant, as one of those directors, to account for all sums paid into the alleged scheme as a consequence of his breaches of fiduciary duty and breaches of trust, as well as accounting to the plaintiffs for any profit he received from the alleged scheme. What was sought against the first defendant was not just what the first defendant had received personally but also an account of all sums said to have been wrongly paid into the alleged scheme.
23. Paragraph 6 of the order of justice required the second and third defendants to account to the plaintiffs for all sums paid pursuant to phase 1 of the alleged scheme on the grounds they had dishonestly assisted breaches of fiduciary duty and breaches of trust by the directors.
24. What the second and third defendants were seeking against Mr Njonjo was therefore exactly the same as was sought by the plaintiffs against the first defendant; namely Mr Njonjo should account for all sums paid into the scheme as a consequence of his breaches of fiduciary duty and breaches of trust.
25. The fact that Mr Njonjo only received benefits during phase 2 of the scheme did not matter. He could still be required to account for breaches of duty committed by him as a director and breaches of trust during phase 1 of the scheme even if he received no personal benefit. Any benefit received by Mr Njonjo during phase 2 of the scheme was simply an additional factor to be taken into account by the Jurats in deciding where responsibility for any losses found to be established by the plaintiffs should ultimately fall. As it was put in the final sentence at paragraph 94 of the January judgment, "Any other result at this stage might be otherwise lead to responsibility for a loss ultimately falling on the entity with the deepest pockets or the best insurance cover not the ultimate wrongdoer."
26. The position of the second and third defendants was that, even if Mr Njonjo had received no benefit under any part of the scheme, the second and third defendants, on the basis of unjust enrichment and the January judgment, were entitled to seek an allocation of responsibility between the second and third defendants and Mr Njonjo based on breaches of duty by Mr Njonjo, and a finding of dishonest assistance against the second and third defendants.
27. The second and third defendants approach was also consistent with the reasoning contained in the January judgment, in particular paragraphs 44, 49, 50, 54, 74, 79 to 81, 84 to 98 and 93.
28. If the Court felt that the third party notice required more detail, then Advocate Speck had no difficulty with providing such detail by way of amendment to the existing third party notice. However, the position had been clearly set out at paragraphs 35.1 and 35.2 of the skeleton as follows:-
"35.1 The Plaintiffs' claim (as can be clearly discerned from the existing pleadings) may be summarised as follows:-
(a) The Plaintiffs (CMCH and CMCG) are long-established Kenyan companies. They import vehicles from overseas vehicle manufacturers and supply them to the East African market. The Second Plaintiff, CMCG, is a wholly owned subsidiary of the First Plaintiff, CMCH.
(b) The Plaintiffs seek relief in respect of the Defendants' participation in a secret scheme (i.e. the Scheme) which operated from 1977 to 2011. Under the Scheme, funds properly due to the Plaintiffs were diverted at the instruction of certain directors of the Plaintiffs, in breach of fiduciary duty and in breach of trust. The directors responsible included the First Defendant (and Mr Njonjo).
(c) The Scheme was funded by secret commissions paid by vehicle manufacturers that supplied vehicles to the Second Plaintiff. They were paid directly to bank accounts in Jersey operated by entities unconnected with either of the Plaintiffs and without the knowledge or authorisation of the Plaintiffs. Funds paid into the Scheme were transferred between those entities, invested, and over time substantially distributed to a small group of people, including the First Defendant and other of the Plaintiffs' directors who were privy to the Scheme (including Mr Njonjo).
(d) Mr Njonjo was a director of CMCH between 1985 and 1987 and from 1990 to 2011. Mr Njonjo was also a director of CMCG. Mr Njonjo received significant sums of money from the Scheme while in office as a director of the Plaintiffs, totalling at least £572,000.
(e) At all material times during the life of the Scheme there was at least one director of the Plaintiffs who was central to the operation of the Scheme. From 1977 to approximately 1996, Mr Benzimra was the principal figure, though it is to be inferred that Mr Forster also had knowledge of the Scheme. From approximately 1996 to 2011 the principal figure was Mr Forster, who controlled the Scheme together with Mr Kiereini, Mr Jani and Mr Njonjo.
(f) In their capacity as directors and agents of the Plaintiffs, Mr Forster, the other Core Directors (including Mr Njonjo) and other directors of the Plaintiffs owed the Plaintiffs the general fiduciary duties set out at paragraph 120 of the Order of Justice.
(g) Further or alternatively, as directors and agents of the Plaintiffs, Mr Forster, the other Core Directors (including Mr Njonjo) and other directors of the Plaintiffs were trustees of such of the Plaintiffs' property as was in their possession or under their control and in relation to that property owed the Plaintiffs the fiduciary duties set out at paragraph 121 of the Order of Justice.
(h) Between 1977 and 2011, the Core Directors (including Mr Njonjo) who received sums from the Scheme obtained a secret profit at the Plaintiffs' expense from their fiduciary position, thereby putting them in a direct conflict of interest with the Plaintiffs.
(i) Between 1977 and 2011, the Core Directors (including Mr Njonjo), being on notice that these receipts were irregular as they did not come from the Plaintiffs, failed to make proper enquiry as to the provenance of the funds received by them from overseas entities, and kept the sums paid to them.
(j) Between 1977 and 2011, the Core Directors (including Mr Njonjo), knowing the provenance of the funds in the Scheme, failed to take steps to protect the Plaintiffs' interests in relation to the Scheme, for example by returning any sums received or by satisfying themselves that the Plaintiffs were fully aware of the circumstances of the payments.
(k) In breach of fiduciary duty and in breach of trust, between 1977 and 2010 the Core Directors (including Mr Njonjo) deliberately withheld from the Plaintiffs and/or failed to inform the Plaintiffs about the Scheme and matters, entities and individuals connected with the Scheme.
(l) The Core Directors (including Mr Njonjo) were dishonestly assisted by the Second and Third Defendants, who were at all material times fiduciary and corporate service providers in Jersey. In the alternative, the Second and Third Defendants are vicariously liable for the dishonest assistance rendered by their employees and agents in the breach of duty by the Core Directors (including Mr Njonjo).
(m) The Plaintiffs seek orders that the Second and Third Defendants account to the Plaintiffs for all the sums paid into the Scheme on the grounds of their dishonest assistance in the breaches of fiduciary duty and/or breaches of trust by the Core Directors (including Mr Njonjo), or in the alternative on the basis that they are vicariously liable for the dishonest assistance provided by their agents and employees.
35.2 Accordingly, it is the Second and Third Defendants' claim that:-
(a) If (which is not admitted) the Plaintiffs or either of them is entitled to the relief sought or to any relief against the Second and/or the Third Defendant on the basis that the Second and/or the Third Defendant dishonestly assisted the Core Directors (including Mr Njonjo) in breaches of duty or breaches of trust, the Core Directors (including Mr Njonjo) are the persons primarily liable for the said breaches of duty (which are not admitted).
(b) If and insofar as any liability is established by the Plaintiffs against the Second and/or the Third Defendant, the Core Directors (including Mr Njonjo) are likewise liable to the Plaintiffs in respect of the same losses.
(c) Further or alternatively, any payments received individually by each of the Core Directors (including Mr Njonjo) pursuant to the alleged Scheme are held by such director on constructive trust for the Plaintiffs.
(d) By reason of the above, each of the Core Directors (including Mr Njonjo) is liable to account for any sums actually received by him pursuant to the alleged Scheme, and to repay the same to the Plaintiffs, with compound or alternatively with simple interest calculated for the date of each payment.
(e) By reason of the above, the Second and Third Defendants jointly and severally claim an indemnity from the Core Directors (including Mr Njonjo) and each of them, or alternatively a contribution to be assessed by the Court. The Second and Third Defendants rely on the inherent jurisdiction of the Court."
29. The starting point for my decision is those parts of the January judgment where I found that a prima facie case existed in unjust enrichment against the Core Defaulting Directors, including Mr Njonjo.
30. At paragraph 44 where I set out the final ground relied on by the second and third defendants, I stated as follows:-
31. This ground is clearly not limited to only requiring directors to account for sums actually received during phase 1 of the scheme.
32. I also recorded Advocate Speck's submissions at paragraphs 49 and 50. The final sentence at paragraph 49 states:-
"The third parties were responsible for those losses because liability could only be established against the second and third defendants consequent upon a finding of breach of duty by the third parties."
33. Paragraph 50 then continued as follows:-
"50. This enrichment would be unjust because the third parties orchestrated the scheme and were the primary beneficiaries of it with the result that it would be therefore be inequitable not to hold such individuals to account."
34. The submissions of Advocate Speck in January were not therefore limited to requiring the third parties to account for the benefits they had received. It is clear that his case was put on a much broader basis, namely that the third parties were responsible for those losses because they had acted in breach of duty and so should be held to account.
35. I accept that the point now raised by Advocate Steenson was not considered expressly and that it was not explored how far any benefits received was a factor to take into account in deciding how liability between wrongdoers might be allocated. However, the decision to convene the third parties was not made on the basis that they alone had received benefits but was also on the basis that they were alleged to have orchestrated the scheme.
36. I also accept that the January judgment did not explore that Mr Njonjo is only alleged to have benefited during phase 2 of the scheme, whereas the second and third defendants are only sought to be made liable for phase 1 of the scheme. Again, however in my judgment, this distinction does not matter. It is clear that the second and third defendants always sought to hold the third parties to account because the third parties are said to have acted in breach of duty. The second and third defendants did not seek to hold the third parties to account (including Mr Njonjo) simply because the third parties had received benefits. This is clear from the extracts from the January judgment I have set out above and paragraph 2a of the summons convening the third parties, including Mr Njonjo.
37. What Advocate Steenson's application has led to is a further clarification of the second and third defendants' case that, in relation to benefits received during phase 2 of the scheme by Mr Njonjo or indeed any other third party who acted as a director; these benefits are said to be relevant to how any apportionment or allocation of liability might take place between the second and third defendants and the third parties in relation to phase 1 of the Scheme, if the plaintiffs are successful in establishing liability against the second and third defendants for dishonest assistance.
38. I should add of course that in any event the Royal Court will be reviewing the operation of phase 2 of the scheme in deciding whether or not the first defendant has acted in breach of duty. The analysis required in respect of this issue is therefore likely to draw out how far the other third parties were involved in the operation of phase 2 of the scheme and therefore whether they have benefited from it unjustly.
39. My conclusion in relation to the case put by the second and third defendants is also consistent with the authorities cited in the January judgment. Paragraph 79 cited the following extract from Dubai Aluminium Company Ltd-v-Salaam [2002] 2 AC 366 "the object of contribution proceedings under the Contribution Act is to ensure that each party responsible for the damage makes an appropriate contribution to the cost of compensating the plaintiff, regardless of where that cost has fallen in the first instance. The burden of liability is being redistributed. But of necessity, to the extent to which it is just and equitable to redistribute the financial burden cannot be decided without seeing where the burden already lies. The court needs to have regard to the known or likely financial consequences of orders already made and to the likely financial consequences of any contribution order the court may make."
40. Where the burden lies in this case will follow from an analysis of who has acted in breach of duty, who has assisted such a breach (dishonestly) and who is responsible for any damage found to have been suffered by the plaintiffs arising from any breach or act of dishonest assistance.
41. I also noted at paragraph 85 of the January Judgment, having reviewed the decision of the English Court of Appeal in Niru Battery Manufacturing & Co-v-Milestone Trading Limited (No.2) [2004] EWCA 487 at paragraphs 82 to 84, that it did not matter in that case that the liabilities of the two defendants were quite different in nature. The Court of Appeal was still prepared to decide who was liable to pay the plaintiff. This led me to conclude at paragraph 86 that the second and third defendants had a prima facie case for contribution in the sense that their claim was one that was arguable and might represent how the law of unjust enrichment should develop. Nothing I have heard from Advocate Steenson alters that view. In the present case any liability that might be established against the second and third defendants is different in nature from any liability that might be established against the first defendant and the third parties. The former requires dishonesty; the latter does not. This difference, however, does not mean that there is not an arguable claim in unjust enrichment against Mr Njonjo.
42. Finally to accede to Advocate Steenson's argument would lead to the concern expressed in the final sentence at paragraph 94 of the January judgment namely "any other result at this stage might otherwise lead to responsibility for a loss ultimately falling on the entity of the deepest pockets or the best insurance cover not the ultimate wrongdoer".
43. I should make it clear again that my conclusion does not mean that a remedy in unjust enrichment will be granted. In relation to the plaintiffs' opposition to the third parties being convened, I noted at paragraph 96 of the January judgment that the Royal Court, either as a matter of law or knowing all the facts might not be persuaded to order any contribution or indemnity. Those observations apply equally to Mr Njonjo (or indeed any of the third party directors). What I concluded then and that conclusion remains my position is that these were matters for trial. All I concluded in January at paragraph 96 was that:-
44. In relation to Advocate Steenson's criticism that I should have convened the prospective third parties to allow them to address me at the hearing which led to the January judgment, I am not persuaded by this submission. Firstly, all the second and third defendants had to do was establish a prima facie case. Any third party convened was always entitled to argue that in fact no prima facie case existed, whether as a matter of law or fact. Secondly, to require a third party to appear at a hearing before they had been convened in my judgment as a matter of general practice is likely to cause delay and complexity. While there may be exceptions to this general approach, in most cases, I consider the right course to be for a party seeking to convene a third party to make the application to see whether there is a prima facie case and, if there is a prima facie case, the third party convened can then decide whether it wishes to challenge the order made. That might be on jurisdiction grounds, on the grounds of forum or on the merits using a strike out or summary judgment application (as is now permitted in the case of a summary judgment under Rule 7 of the Royal Court Rules).
45. Where I do have sympathy with Advocate Steenson is that the case in unjust enrichment as both put in the January judgment and in this application has advanced significantly from the second and third defendants' answer. While I have summarised in this judgment the second and third defendants' case, as set out in paragraph 35 of the skeleton referred to at paragraph 28 above, I consider that the second and third defendants should amend their pleading so that it reflects the submissions made on their behalf both in the January judgment and recorded in this judgment.
46. I consider there is a timing issue as to when this amendment should occur. While the submissions recorded above in general terms identify why each of the Core Defaulting Directors acted in breach of duty, the third party notice does not distinguish between the actions of each of the Core Defaulting Directors (or indeed any other directors). Ultimately, I consider that each of the third parties is entitled to know what actions or failures to act by each of them amounted to a breach of duty. This might extend to identifying individual meetings of directors where it is said that a particular action or failure to act is in breach of duty. In my judgment, however, this analysis will only be completed after discovery. Therefore, rather than requiring the second and third defendants to amend at this stage and to amend again after discovery, the requirement for the second and third defendants to amend their pleading is best carried out after receipt of discovery from all parties. In the meantime, any directions required will be on the basis that the second and third defendants case against the third parties, including Mr Njonjo, is as recorded in paragraphs 35.1 and 35.2 of the skeleton argument cited at paragraph 28 above. Directions will therefore be given at a later date as to when such an amendment should be produced. Any such amendment will be on the usual basis as to costs and will include directions permitting Mr Njonjo to file an amended answer to any amended third party notice.
47. In conclusion, for the reasons set out above I am satisfied that the second and third defendants have a reasonable cause of action against Mr Njonjo and it is not appropriate to strike out the third party notice. The application is accordingly dismissed.
