Litigation Review - No. 19 - Ogier

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April 2008Litigation Review - No. 19Trusts - variationImplements new Royal Court Civil RulesCase SummaryIn the matter of the Bruno Sangle-FerrierChildren’s Settlement [2006] JRC 193This concerned an application by the trustees of theBruno Sangle-Ferrier Children’s Settlement seeking theCourt’s approval to the variation of certain provisions ofthe Settlement. The variations were designed to allow forfiscal savings (which were supported by the guardian adlitem for the minor and unborn beneficiaries) and includedinter alia the provision of a power to add beneficiaries.Although in one sense the power to increase thebeneficial class could be said to be contrary to theinterests of the children of the settlor in so far as it couldbe increased potentially to their detriment, the power toadd beneficiaries was subject to the consent of theprotector and was a quite usual power, whose exercisewas subject to the control of the Court. The Court tookinto account the fact that fiscal savings were an importantconsideration which, if in the interests of all thebeneficiaries, may justify a variation. In light of thesefactors, the Court allowed the variation.GUERNSEY CASESFreezing Injunction: disclosure orderGarnet Investments Ltd v BNP Paribas(Suisse) SA, Royal Court, 23 May 2007An interlocutory freezing order had been obtained by theGovernment of Indonesia in respect of funds held by thePlaintiffs at a Guernsey bank, BNP Paribas (Suisse) SA(“BNP”). The Plaintiffs applied for the freezing order to bedischarged on the basis that the Government ofIndonesia did not have a good arguable case but theRoyal Court disagreed and ruled that the freezing ordershould continue.The Government’s case was that the funds over whichthe freezing order had been obtained were beneficiallyowned by Mr Hutomo Putra, one of the sons of the lateformer ruler of Indonesia, President Soeharto. Mattershad come to a head in 2002 when the Plaintiffs issuedpayment instructions concerning the funds (which hadbeen deposited with BNP in 1998). BNP refused toaction these instructions because the Guernsey FinancialIntelligence Service refused to consent to the payment.The Court held that the Government of Indonesia had anarguable case against Mr Putra arising out of allegationsof corruption and furthermore that there was a real risk ofdissipation of the Guernsey funds. The Plaintiffs werealso ordered to give disclosure of its financial transactionssince its establishment.On 4 October 2007 it was announced that with effect from4 February 2008 the existing Royal Court Civil Ruleswould be replaced in their entirety by the Royal CourtCivil Rules 2007. The intention behind the new rules wasto simplify, clarify and streamline Guernsey’s civilprocedure and to give litigants and judges more moderntools to enable the courts to deal with cases justly.Here are details of some of the most significant changes.As before, the plaintiff must table a claim document(“cause”) before the Court containing the material factsrelied on and a statement of the relief sought. The plaintiffmust give 2 days’ notice of the intention to table a cause,by serving a summons on the defendant. A new feature ofthe process is that a defendant is required to table hisdefences to the action 28 days after the action is listed onthe Role des Causes a Plaider (such period can beextended by up to 3 months by agreement between theparties).From 4 February 2008 Exceptions de Forme will bedeemed to be a request by a defendant for furtherinformation. The new rules also contain provisionspermitting both plaintiffs and (for the first time) defendantsto apply for summary judgment. There are also newprovisions for interpleader relief and for therepresentation of interested persons whose identity /whereabouts cannot be ascertained. These will bewelcomed in particular where issues before the courtconcern, for example, the estate of a deceased person, atrust or the meaning of a document.The Rules also introduce a number of case managementpowers, including a long non-exhaustive list of casemanagement techniques. It is anticipated that a casemanagement conference will be held in the majority ofcivil cases. For cases proceeding under the new rules,the Court must consider whether the trial is to be heardby a single judge sitting alone or by a judge sitting withJurats. A pre-trial review will take place in most cases.Any party to an action may at any time make a paymentinto the court in satisfaction of any claim against him oroffer to settle the whole or any part of the claim made byor against him in the action. This is Guernsey’s equivalentto Part 36 of the English Civil Procedure Rules.There are changes too to the disclosure regime.Guernsey has adopted a very wide definition of whatconstitutes a “document” and the disclosure procedure isnow more streamlined. In most cases, disclosure ofdocuments will be limited to “standard disclosure”. A dutyto make a reasonable search is imposed upon parties tolitigation and the duty of disclosure remains a continuingone.The Plaintiffs have appealed against the judgment andthe appeal is likely to be heard in March 2008.Finally, for the first time the court has power to make anorder for payment of costs at the conclusion of a hearingor application at any interim stage.ADMIN-14369297-2
April 2008Litigation Review - No. 19Case SummaryIt is hoped that the new rules will be welcomed byconsumers of the Guernsey legal process and will enablethe court to deal with cases justly.Peremption - Applicable prescription periodfor an action - Building disputeSingleton v Duncan, Royal Court, 24 April2007In this case a doctrine peculiar to Guernsey law was thefocus of attention; the doctrine of ‘peremption’. What is‘peremption’? It is essentially a procedural bar to thecontinuance of a legal process which arises automaticallywhere no action has been taken in that process for aperiod of one year and a day.The claim in this case related to a building dispute valuedat just under £7,000 and which originated in 1996.Peremption occurred (the action became ‘périmée’) on 30September 2004. At that time there were discussionsabout the possibility of mediation. These discussionswere not fruitful so the plaintiff applied on 17 November2006 for a trial date to be fixed. The defendant took thepoint that the action had become périmée.The Court noted that there are generally 5 factors to betaken into account:• the position of the plaintiff;• the history of the action which has led to its becomingpérimée ;• the position of the defendant;• any other special circumstances; and• the general circumstances in Guernsey relating to therelevant class of litigation.It was emphasized that this was not an exhaustive listand that when considering an action which had becomepérimée there was always room to accommodate thefacts of a particular case. In this case the application torestore the case to the court list succeeded, the Courtfinding that there were special considerations in this case.These included notably that discussions had beencontinuing about the possibility of mediation at the time ofand indeed subsequent to the action becoming périmée.Procedure: judge making factual findingsalone; JurisdictionFidelity Management Limited v Royal Bankof Canada (Channel Islands) Limited, RoyalCourt, 20 September 2007This case arose out of a suspicious transaction report tothe Financial Intelligence Service in Guernsey (“FIS”).The Court was asked to decide as a preliminary matterwhether or not payment instructions were validly made.There was a suggestion that the issue should be referredto the courts of the Turks and Caicos Islands as a moreappropriate forum but the Court noted that all partiesbefore the Court were content for the Court to exercisejurisdiction and accordingly the Court considered that itwas able to proceed to a determination.Having done so, the Court then required to consider thecircumstances in which a Guernsey judge can makefindings of fact in relation to preliminary issues, in theabsence of jurats (the body of professional jurors whodecide questions of fact). The Court decided that it wasdifficult to establish any settled practice on this point andtherefore declined to list all circumstances in which itwould be appropriate for a judge to sit alone to determinepreliminary issues. However, the Court did indicate that itwould be appropriate where there were no conflicts ofinterest and no questions of credibility to be considered.On the facts the declaration sought was granted and theFIS is now expected to indicate whether it will issue orrefuse consent to the instructed transfer.Utility Regulation - 3G Licence - Jurisdictionof the Utility Appeals TribunalCable and Wireless Guernsey Ltd v DirectorGeneral of Office of Utility Regulation,Royal Court, 24 May 2007In this case a restrictive analysis of the jurisdiction of theUtility Appeals Tribunal (“UAT”) in Guernsey was adoptedby the Royal Court. Cable and Wireless GuernseyLimited (“CWG”) had submitted a bid to the Office ofUtility Regulation in Guernsey (the “OUR”) seeking thegrant of a 3G licence to operate 3G services in Guernsey.The application was unsuccessful and CWG appealedagainst the OUR’s decision to the UAT. The time limit forfiling all necessary appeal documents under the relevantprimary legislation was tight (and indeed the time limitwas subsequently extended by amending legislation inrecognition of this) and CWG sought an extension of timefrom the UAT.The Royal Court ruled that under the primary legislationthe UAT did not have the power to extend the time limit.The result of this decision was that the appeal was anullity from the outset because the appeal process onlykicked off when an appeal was filed which met the criteriaset out in the primary legislation. Although the rules ofprocedure of the UAT indicated that the UAT could largelydetermine its own procedure, as secondary legislationthese rules could not be used to override time limits setout in the primary legislation.Furthermore, when the extension of time was granted theUAT had not technically come into existence as nomembers had been appointed. It followed that anypurported exercise of the UAT’s powers was null andvoid.ADMIN-14369297-2
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Litigation Review - No. 19 - Ogier

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