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06 August 2019
The Jersey Royal Court recently ruled on the extent of its powers to restrict a party that withdraws proceedings to start afresh in a judgment that considered, for the first time, the implications of a 2014 English Court of Appeal decision on the public interest in there being finality in litigation.(1)
The procedural history is irrelevant to this article, except that by a representation dated 31 May 2018, A – one of the primary beneficiaries of two Jersey law trusts – applied to the court to remove the trustee as the trustee of the trusts (the removal proceedings). The removal proceedings were opposed by the other primary beneficiary, B.
In April 2019, prior to the removal proceedings, A applied to the court to withdraw the proceedings on the basis that she anticipated the possibility of starting proceedings afresh in the near future for the removal of the trustee of the trusts. B and the trustee did not oppose the withdrawal but asked the court to make certain prohibitory orders – namely:
Therefore, a question arose as to the Royal Court's powers to restrict parties that withdraw proceedings to start afresh.
A argued that the court should not impose a condition requiring her to apply to the court for leave should she wish to start proceedings afresh, as to do so would infringe on her rights as a beneficiary of a Jersey trust pursuant to Article 51 of the Trusts (Jersey) Law 1984. That article allows, among other things, a beneficiary to invoke the court's jurisdiction to determine matters which concern the execution and administration of a Jersey trust or the trustee of a Jersey trust.
The Royal Court rejected that argument. It found that it clearly had jurisdiction pursuant to Rule 6/31 of the Royal Court Rules 2004 (as amended (RCR)), which provides that:
Except with the consent of the other parties to the action, a party may not discontinue an action or counterclaim, or withdraw any particular claim made by that party therein, or withdraw his or her defence or any part of it, without the leave of the Court, and any such leave may be given on such terms as to costs, the bringing of a subsequent action or otherwise as the justice of the case may require.
For the first time, the Royal Court also considered the English Court of Appeal decision of Hague Plant Limited v Hague,(2) which discussed the public interest in there being finality in litigation. In Hague, the Court of Appeal held:
In my judgment there is indeed an analogy between the re-introduction of a claim previously abandoned in the same proceedings and the making of a fresh claim after discontinuance of a similar claim based on the same or substantially the same facts… Both types of conduct, unless closely controlled by the court, tend to undermine the public interest in finality in litigation.
The Royal Court applied RCR 6/31 and Hague, and held that, as part of the condition for withdrawal, A could not commence proceedings against the trustee seeking its removal as trustee or the appointment of any additional trustee without first having the leave of the court to do so. The court also placed, as a condition for any application for leave, that all of A's obligations to pay costs must have been discharged in full.
This is an important decision for maintaining the public interest in the finality of litigation and the efficient administration of justice. In the present case, the removal proceedings had been hanging over the trustee for one year and it was inappropriate for the trustee to administer the trusts going forward under A's inappropriate threat of litigation as to its status.
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