Jersey Unreported Judgments

Companies - costs.

[2017]JRC148

Royal Court

(Samedi)

15 September 2017

Before     :		Advocate Matthew john Thompson, Master of the Royal Court
Between	CMC Holdings Limited		First Plaintiff
And	CMC Motors Group Limited		Second Plaintiff
And	Martin Henry Forster		First Defendant
And	RBC Trust Company (International) Limited		Second Defendant
And	The Regent Trust Company Limited		Third Defendant
And	Martin Henry Forster Jeremiah Kiereini Charles Mugane Njonjo The Estate of Jack Morejay Benzimra The Estate of Prahlad Kalyani Jani RBC Trust Company (International) Limited The Regent Trust Company Limited		Third Parties

Advocate S. J. Alexander for the Second and Third Defendants.

Advocate J. S. Dickinson for Amrita Prahlad Jani.

judgment

the master:

1.        This judgment represents my detailed written reasons for ordering the second and third defendants to pay the costs of Amrita Prahlad Jani on the standard basis in relation to the costs of and occasioned by the third party claim made against the estate of Prahlad Jani, including the costs of this costs application.

2.        The general background to these proceedings is set out at paragraphs 2 to 6 of an earlier decision given by me in this matter reported CMC-v-Forster, RBC and Regent [2016] JRC 149.  I adopt those paragraphs for ease of reference.

3.        On 17^th January, 2017, in a decision reported at CMC Holdings Ltd-v-Forster and Others [2017] JRC 014A, I granted an application permitting the second and third defendants to convene the third parties, including the first plaintiff, to seek a contribution or an indemnity in respect of the claims brought by the plaintiff against the second and third defendants.  I also permitted the first defendant to seek a contribution from the second and third defendants.

4.        The ground upon which the third party relief was permitted was on the basis of an arguable case in unjust enrichment, seeking to apportion liability between alleged wrongdoers.

5.        Following judgment being handed down, I ordered service of the third party proceedings to be effected on the estate of Jack Benzimra by service on a Mr Oyatsi as executor and on the estate of Prahlad Jani by service on Malcolm Le Boutillier in his capacity as executor of the estate of Prahlad Jani outside Kenya and on Amrita Prahlad Jani and three other individuals in their capacity as executors and trustees of the estate of Prahlad Jani within Kenya.

6.        These orders were made on the basis of information supplied in an affidavit of Christopher James Vincent an employee of Mourant Ozannes on behalf of the second and third defendants.

7.        In relation to the estate of Prahlad Jani outside Kenya, subsequent to the act of 23^rd January, 2017, it emerged that Mr Boutillier had not acted as executor which in due course led to Advocate Clarke on behalf of Le Gallais & Luce Executors Limited being served with the third party proceedings in relation to the estate of Prahlad Jani outside Kenya.

8.        In relation to service of the proceedings within Kenya, by an affidavit sworn by Julia-Anne Dix dated 7^th March, 2017, it was deposed that Mrs Jani appeared to now live in London having left Kenya and emigrated to the United Kingdom (see paragraphs 22 and 23).

9.        The affidavit at paragraph 19 further stated that a physical search was being made for the grant of probate because no grant of probate existed in Kenya.

10.      On the basis of this affidavit, on 9^th March, 2017, I gave permission for Amrita Prahlad Jani to be served by personal service at an address in London or elsewhere in the United Kingdom.

11.      I further varied the return date from Friday 10^th March, 2017, to Friday 31^st March, 2017.

12.      On 13^th March, 2017, Mrs Jani was served with a summons and various pleadings and the judgment issued in January of this year and the act of court of 23^rd January, 2017.  The summons served required her to appear before the Royal Court on 10^th March, 2017.  By the time service took place however, the return date had been varied by my Act of Court of 9^th March, 2017, to 31^st March, 2017.  This act of court was not however served on Mrs Jani on 13^th March, 2017.

13.      On 20^th March, 2017, Mrs Jani wrote to Mourant Ozannes complaining that she had been provided with court papers in relation to court hearings which had already taken place and therefore fully reserved her position.

14.      In response, by a letter dated 23^rd March, 2017, Mrs Jani was provided by Mourant Ozannes with the act of court dated 9^th March, 2017, confirming that she was summonsed to appear on 31^st March, 2017.

15.      On 25^th March, 2017, Mrs Jani replied saying she had not been personally summonsed to appear on the 31^st March, 2017, and therefore reserved her rights.

16.      When the matter came before the Royal Court on 31^st March, 2017, Dickinson Gleeson nevertheless appeared for Mrs Jani, and the proceedings were adjourned to enable the parties to consider who might represent the estate of Prahlad Jani.  By this time, Le Gallais & Luce Executors Limited had also issued a summons to be heard on 31^st May, 2017, seeking to strike out the proceedings brought against them in relation to the estate of Prahlad Jani outside Kenya.

17.      On 31^st May, 2017, I ordered that the application to request Le Gallais & Luce Executors Limited to represent the Estate of Prahlad Jani be refused and that the third party proceedings in relation to the estate of Prahlad Jani should proceed in the absence of any person to represent the estate.  I further ordered that the second and third defendants should pay the costs of Le Gallais & Luce Executors Limited on the standard basis.

18.      The principal basis for this decision was that administration of the estate of Prahlad Jani outside Kenya had been completed.  Absent allegations of fraud or dishonesty there was no basis to convene Le Gallais & Luce Executors Limited against their will and they were not willing to represent the estate of Prahlad Jani otherwise.

19.      Subsequent to the hearing on 31^st May, 2017, correspondence took place between Mourant Ozannes and Dickinson Gleeson.

20.      By a letter dated 19^th June, 2017, Dickinson Gleeson invited Mourant Ozannes to agree that Mrs Jani was not required to file an answer, to agree to an order releasing Mrs Jani from any further involvement in the proceedings, and asked for their costs on the indemnity basis.

21.      Mourant Ozannes by a letter dated 29^th June, 2017, agreed that it was not necessary for Mrs Jani to file any answer in these proceedings, and that they did not expect her to participate further in the proceedings.  On behalf of their clients, they offered to pay Mrs Jani's costs with effect from the date when Mourant Ozannes were notified that Mrs Jani's Kenyan estate had not existed.  This notification took place on 22^nd May, 2017, by a letter from Dickinson Gleeson and Mourant Ozannes therefore offered to pay costs from 29^th May, 2017.

22.      By the time the matter came before me Dickinson Gleeson sought costs on the standard basis only.

The parties' submissions

23.      Advocate Dickinson for Mrs Jani contended as follows:-

(i)        Firstly, his client was 76 years old; following the death of her husband, she had sold the house she owned in Kenya, had closed relevant bank accounts and had moved to the United Kingdom.

(ii)       Secondly, she had never taken part in the administration of the estate, had not intermeddled, had not taken out any grant of probate and was not even aware that she had been had been named as executor until she was convened to the present proceedings.  There was therefore no basis whatsoever to appoint her as a representative of the estate.

(iii)      RBC could have engaged with Mrs Jani before service and could have sent a letter before action.  Had they done so, Mrs Jani's position could have been explained.

(iv)      RBC had adopted a heavy handed approach.  They knew from enquiries carried out by their Kenyan lawyer that no grant of probate had been taken out in Kenya in respect of the estate of Mr Jani.  Yet they still sought to convene someone named as executor in the Will only.

(v)       RBC had also not thought through what orders should be made to require someone to represent the estate. 

(vi)      The method of service adopted by reference to the matters set out at paragraphs 12 to 15 was not justified.  This was both in terms of the volume of the materials served and the fact that Mrs Jani was served without the return date having been varied.  She was therefore served with proceedings to appear on a date which had already passed.  This was distressing and led her to take advice.

(vii)     Her position was also stronger than Le Gallais & Luce who had received a costs order in its favour.  Le Gallais & Luce had taken out a grant of probate and dealt with the estate outside Kenya.  Their defence was based on the administration of the estate having been completed.  Mrs Jani had by contrast had never been involved in her husband's estate in Kenya.  This justified a costs order in her favour.

24.      Advocate Alexander in response argued that his clients should only pay Mrs Jani's costs once they were given evidence of renunciation of her appointment as executor of the Kenyan estate.  This was only received on 22^nd May, 2017, and only took place in 2017 after Mrs Jani had been convened as a third party.  Until receipt of this information it was reasonable for his clients to have proceeded with a third party claim against the named executors of the Kenyan estate of Mr Jani to seek an allocation of responsibility between the estate and the second and third defendants if the second and third defendants were found liable in dishonest assistance.

25.      It was not necessary to engage with Mrs Jani because there was an urgency to progress the third party proceedings generally.  It was also not necessary to send a letter before action. 

26.      Even if a letter before action had been sent, there was no certainty that Mrs Jani would have engaged with his clients.  The position of Le Gallais & Luce was different because there was an argument where Le Gallais and Luce were found ultimately to have prevailed and where the Court made a particular costs order as a consequence.  Mrs Jani has not made such an application.

27.      In relation to how service was effected ultimately Mrs Jani received notice of the proceedings and was able to take legal advice.

28.      Having considered those submissions, I decided to order costs in Mrs Jani's favour without any limitation as to time as contended for by Advocate Dickinson for the following reasons.

29.      Firstly, Mrs Jani was convened to these proceedings by the second and third defendants who have since decided (in view of my decision in respect of Le Gallais & Luce) not to continue the proceedings against Mrs Jani.

30.      Secondly, while the position in respect of Le Gallais & Luce was that they had a defence based on the administration being complete, Mrs Jani had a parallel defence namely that she was never executor (see paragraph 63-18 of Williams Mortimer and Sunnucks Executors, Administrators and Probate).

31.      Thirdly, the fact that no grant of probate had been taken out in Kenya appears to have been known to the second and third defendants from enquiries made by their advocates in Kenya.  In a letter dated 19^th October, 2016, from Oraro and Company to Mourant Ozannes, one of the partners, Mr Odero, reported that the investigator had not located details for the estate of Mr Jani in Kenya.  By contrast executors for the estate of Jack Benzimra had been identified.  Likewise a grant of probate had been identified for Mr Jani's estate outside Kenya.  The second and third defendants were therefore on notice that a grant of probate may well never had been taken out by Mrs Jani in Kenya.  This should have been raised with the Court expressly rather than simply being referred to in correspondence exhibited to an affidavit.

32.      Fourthly, the manner in which Mrs Jani was served in particular the fact that she was served to appear on a date which had already passed, led her to take legal advice.  I am also not surprised that being required to appear on a date that had already passed is said to have caused confusion and distress.

33.      Fifthly, the fact that Mrs Jani chose to make it clear that she never acted as executor and she took steps to renounce any appointment as executor does not affect the position.  She was simply making it clear that she had never had and did not intend to have any involvement with her late husband's estate in Kenya.

34.      Sixthly, I also regarded the position of Mrs Jani as being at least as strong as, if not stronger than, the position of Le Gallais & Luce Executors Limited.  The latter had administered the estate outside Kenya.  They therefore had to satisfy the second and third defendants that the administration of that estate had been completed.  By contrast Mrs Jani had never acted as executor which was clear from no grant of probate being found.  There was therefore never any basis to appoint her to represent an estate in respect of which she had played no role.

35.      Finally, I did not regard it as just to limit the costs order to the point in time when the second and third defendants including Mourant Ozannes were made expressly aware that Mrs Jani had never acted as executor, in circumstances where that information appeared to have been available to them some time previously.

36.      For all these reasons I granted Mrs Jani's application that she recover her costs from the second and third defendants on the standard basis.

Authorities

CMC-v-Forster, RBC and Regent [2016] JRC 149.

CMC Holdings Ltd-v-Forster and Others [2017] JRC 014A.

Williams Mortimer and Sunnucks Executors, Administrators and Probate.