Chvetsov -v- BNP Paribas [2009] JCA 157 (11 August 2009)

COURT OF APPEAL th August 2009 Before : G. C. Vos, Esq., Q. C., sitting as a single Judge. Between Oleg Chvetsov APPLICANTS/Plaintiff And (1) BNP Paribas Jersey Trust Corporation Limited RESPONDENTS/Defendants And (2) Maison Anley Property Nominee Limited Application for leave to appeal.

JUDGMENT Before Vos JA: 1. This is an application for leave to appeal a decision by the Deputy Bailiff (as he then was) dated 19 th June, 2009, allowing an appeal from the Master of the Royal Court on 24 th February, 2009. I have received written arguments from both sides, for which I am grateful, and have dealt with the application without an oral hearing.

2. The Deputy Bailiff struck out the plaintiff's claim against the second defendant, Maison Anley Property Nominee Limited ("MA") under RCR 6/13(1) on the grounds that the order of justice disclosed no reasonable cause of action against MA. As MA's name suggests it is simply a nominee company for the first defendant, BNP Paribas Jersey Trust Company Limited ("BNP").

3. On 22 nd July, 2009, the Bailiff (as he had by then become) delivered a separate judgment refusing leave to appeal on the grounds that none of the possible gateways for leave to appeal to be granted (as laid down in Glazebrook-v-Housing Committee [2002] JLR N 43) was satisfied. He decided that (i) there was no clear case that something had gone wrong in his decision, (ii) the proposed appeal raised no general principle which was being decided for the first time, and (iii) the case raised no important question of law upon which further argument and a decision of the Court of Appeal would be to the public advantage.

4. In a case of this kind, the Court of Appeal is in as good a position as the Judge at first instance, because there is no evidence upon which either side can rely. The simple question is whether the order of justice discloses a reasonable cause of action against MA. The test to be applied was aptly summarised in Re Esteem Settlement [2000] JLR 119 at page 127 as follows:- "It is only where it is plain and obvious that the case cannot succeed that recourse should be had to the summary jurisdiction to strike out. To quote from para 18/19/10 of 1 the Supreme Court Practice 1999, at 349: "so long as the statement of claim or the particulars disclose some cause of action, or raise some question fit to be decided by a Judge or jury, the mere fact that the case is weak, and not likely to succeed, is no ground for striking it out." This is particularly so in an uncertain and developing field of law." 5. The burden of the plaintiff's argument is, in essence, that, to strike out a claim before discovery, the Court needs to be certain that the claim cannot succeed (per Lord Browne-Wilkinson in Barrett-v-Enfield LBC [2001] 2 AC 550 at page 557). In the somewhat unusual circumstances of this case, the plaintiff says that it may become apparent on discovery that there is a gap between the duties owed by MA to BNP on the one hand, and by BNP to the beneficiaries on the other hand. If such a

gap emerged, it would prove to have been wrong to strike out the claim at this early stage in the litigation. Moreover, the plaintiff says, in effect, that there is no harm in allowing the action to proceed against MA, since MA and BNP are, in reality, one and the same, so that no additional costs will be incurred. Finally, the plaintiff asks why BNP and MA are going to such lengths to release MA from the action, if the plaintiff's fears are in fact unfounded.

6. The background and the pleaded allegations are set out with clarity in paragraphs 4-8 and 21 of the Deputy Bailiff's judgment. I will not repeat them here. The question is whether the Deputy Bailiff was right to conclude that, on the facts pleaded, it was impossible as a matter of law that MA could owe the pleaded duties to the plaintiff. The alleged trust duties 7. It is noteworthy that the plaintiff has pleaded the same trust duties as being owed to him by both BNP and MA. In my judgment, this provides the key to the plaintiff's misunderstanding of the legal position. MA is, as the plaintiff acknowledges, simply a nominee of the appointed trustee, BNP. MA acted as agent or bare trustee for BNP for the sole purpose of holding the legal title to the freehold property concerned, and may indeed have had an express contract with BNP, details of which may be disclosed on discovery. But MA cannot have owed any duties under an express trust (the Metric Trust) to which it was never a party.

8. It follows that MA cannot, as pleaded in paragraph 10 of the order of justice, have owed the plaintiff any duties "in the management of the [Metric Trust]". The fact that MA was BNP's subsidiary and nominee and was managed by the same persons as BNP, cannot affect that legal position.

9. Over many years, equity has developed remedies to deal with problems of the kind the plaintiff fears may arise in this case: they are, as identified by the Deputy Bailiff, the administrative action and the derivative action. But each has its own procedural and legal requirements. The plaintiff does not seek to advance either claim in this action.

10. I do not rule out the possibility that one could conceive of facts that might allow it to be pleaded that certain duties were owed directly to the plaintiff, but no such facts are pleaded in this case. It is for this main reason that I think the Deputy Bailiff was right to hold that the pleaded trust claims against MA, wholly reliant as they were on the duties in paragraph 10 of the order of justice alleged to arise under the Metric Trust, cannot possibly succeed as a matter of law. The alleged duties in tort 11. In paragraph 38 of the plaintiff's skeleton argument, he argues: "By accepting to act in place of BNP, and with knowledge (from the community of management) of the duties owed to the beneficiaries by BNP, MA must necessarily be taken to have accepted a duty of care directly towards those to whom BNP itself owed a duty of care, exactly as had BNP".

12. First, none of the above is pleaded. More importantly, however, there are no facts pleaded or relied upon which in any way supports the proposition that MA must have accepted a duty of care to the beneficiaries of the Metric Trust - or, as required on authority, assumed responsibility to them. The facts pleaded in fact indicate the reverse, namely that MA agreed only to act as nominee to hold the property as bare trustee for BNP alone. The purpose of BNP's arrangements was to provide a measure of confidentiality for its clients, not to provide a substitute trustee owing the same duties to the beneficiaries.

13. Again, however, I do not rule out (for the reasons given by the Deputy Bailiff in paragraph 26 of his judgment) that there may be circumstances in which beneficiaries may have a claim against the agent of a trustee for economic loss suffered by the beneficiaries. The order of justice, however, pleads no facts which, in my judgment, could possibly support the existence of a duty of care in tort owed directly by MA to the beneficiaries in this case. Conclusions 14. For the reasons I have given, and for the reasons the Deputy Bailiff himself gave, I am entirely satisfied that the requirements set out in Glazebrook for leave to appeal to be granted are not satisfied here. There is no clear case that something has gone wrong. There is no question of general principle that is to be decided for the first time. And there is no important question of law upon which further argument and a decision of the Court of Appeal would be to the public advantage.

15. I should perhaps conclude by saying that the plaintiff's arguments are reminiscent of the optimistic sentiments expressed by Mr Wilkins Micawber in Charles Dickens's David Copperfield, when he hopes that "something will turn up". The sub-text to the plaintiff's submissions is that they accept that they have no present basis for the pleaded duties, but they hope that, on discovery, something may be revealed that will allow them to plead a sustainable claim.

16. In short, there is no present 'gap' as they fear. The existing pleading is certainly unsustainable. And the Deputy Bailiff was, in my judgment, right to strike out the present claim against MA.

17. I, therefore, dismiss the plaintiff's application for leave to appeal with costs. Authorities Glazebrook-v-Housing Committee [2002] JLR N 43. Re Esteem Settlement [2000] JLR 119 . Barrett-v-Enfield LBC [2001] 2 AC 550 . Page Last Updated: 29 Jul 2016 BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII