Best v Ghose

• Jurisdiction: Ireland
• Judge: Ms. Justice Baker
• Judgment Date: 27 June 2018
• Neutral Citation: [2018] IEHC 376
• Court: High Court
• Docket Number: [2016 No. 2326 S]
• Date: 27 June 2018

BETWEEN

MARGARET BEST

AND

CARMEL BEST (AS JOINT COMMITTEE OF THE PERSON AND THE ESTATE OF KENNETH BEST, A WARD)

PLAINTIFFS

AND

PRAMIT GHOSE, NIALL JOSEPH TINNEY, PATRICK THOMAS FINNEGAN, PETER ALPHONSUS COSTIGAN, PATRICK DEMPSEY, RAYMOND DEASY, TADHG FRANCIS GUNNELL, ANGUS MCDONNELL, DAVID HARLOWE, MARTIN HARTE, AIDAN SHEERIN, ARTHUR QUINLAN, JOHN MARTIN MAGUIRE, ANNE BARRETT

AND

LEGACY INVESTMENT HOLDINGS LIMITED, TOGETHER FORMERLY TRADING AS BLOXHAM STOCKBROKERS PARTNERSHIP, BLOXHAM STOCKBROKERS PARTNERSHIP (IN LIQUIDATION)

AND

NORTHERN TRUST (IRELAND) LIMITED

DEFENDANTS

[2018] IEHC 376

Baker J.

[2016 No. 2326 S]

THE HIGH COURT

Documents – Account – Fund – Plaintiffs seeking an account from the defendants in regard to the dealings in a fund – Whether there exited an obligation on the defendants to furnish a full record of transactions in the form of an account or narrative

Facts: Mr Best was a Ward of Court. An action was commenced by way of summary summons on 1 December 2016 by the plaintiffs, his mother and sister, the joint Committee of his Person and Estate, for an account from the defendants in regard to the dealings in the fund invested on behalf of Mr Best. The action was authorised by order of the President of the High Court given on 7 November 2016. The first to fifteenth defendants were, at the relevant times, partners in the firm of Bloxham Stockbrokers Partnership which was wound up by order of Cross J made on 31 May 2012. Mr Wallace was appointed provisional liquidator of the limited partnership on that day and subsequently appointed liquidator by order of Laffoy J made on 25 June 2012.

Held by Baker J that the following was the position: (a) there exited an obligation on the defendants to furnish a full record of transactions in the form of an account or narrative; (b) the documents available at the hearing of the application before Baker J were prima facie not complete; (c) the plaintiffs, with their advisors, were to be permitted to inspect the 504 boxes of documents held by Mr Wallace; (d) the President of the High Court was to be asked for further directions regarding the documents held by the Registry of the Office of the Wards of Court and/or the Accountant of the Courts of Justice or other relevant office; (e) Mr Croft, the financial expert engaged by the plaintiffs, was to further analyse and inspect the documents available and could then offer further assistance with regard to the adequacy of the records for his purpose.

Baker J held that she would make orders against the first defendant only, and would hear counsel with regard to the correct approach to the other defendants.

Application granted.

Judgment of Ms. Justice Baker delivered on the 27th day of June, 2018

1 Kenneth Best is a Ward of Court and this action was commenced by his mother and sister, the joint Committee of his Person and Estate ('the Committee'), for an account from the defendants in regard to the dealings in the fund invested on behalf of Mr. Best, which I will for convenience refer to as 'the Fund'.

2 The first to fifteenth defendants were, at the relevant times, partners in the firm of Bloxham Stockbrokers Partnership which was wound up by order of Cross J. made on 31 May 2012. Kieran Wallace was appointed provisional liquidator of the limited partnership on that day and subsequently appointed liquidator by order of Laffoy J. made on 25 June 2012.

3 The action commenced by way of summary summons on 1 December 2016 was authorised by order of the President of the High Court given on 7 November 2016. Further consideration of the mode of action will appear later in this judgment.

4 The matter came on for hearing before me on foot of a notice of motion issued on 1 March 2017 in which the following relief was sought:

(a) an order that the first to tenth and twelfth to sixteenth defendants account to the plaintiffs for their dealing with the Fund and provide the plaintiffs with all supporting documentation for the account;

(b) an order directing an inquiry as against the first to tenth and twelfth to sixteenth defendants as to the dealings of those defendants with the Fund.

5 An inquiry is not sought at this time, and the sole relief sought is an order for the taking of an account.

6 A letter from the summons server outlines the unsuccessful attempts to effect service on the eleventh defendant, Aidan Sheridan. No orders are sought against him in this application.

7 No order is sought against the seventeenth defendant, Northern Trust (Ireland) Limited, and the plaintiffs accept that all documentation and information it had has been delivered to them.

8 An appearance has been entered by some, but not all of the defendants. Some of them did not take any active role in the hearing of the application and some have indicated through themselves or their solicitors that they have no objection to the making of the order.

9 The motion was grounded on an affidavit of Margaret Best, the first plaintiff and mother of Kenneth Best ('Mrs. Best'), sworn on 1 March 2017.

10 Affidavits were sworn in reply by the first defendant on 23 May 2017 and on 27 October 2017.

11 Affidavits were also sworn by the third defendant on 3 April 2017, by the eighth defendant on 29 November 2017, by the ninth defendant on 15 February 2017, by the tenth defendant on 12 May 2017, by the twelfth defendant on 28 April 2017, by the thirteenth defendant on 15 February 2017, by the fourteen defendant on 29 November 2017, by fifteenth defendant on 12 April 2017, by Mr. Wallace, liquidator of Bloxham, on 7 July 2017, and by Michael O'Sullivan on behalf of Northern Trust, on 11 January 2017.

12 A supplemental affidavit was sworn on 21 September 2017 by Mrs. Best.

13 An affidavit in support of the application was sworn on 14 September 2017 by David Croft, a financial expert.

14 The first defendant, Pramit Ghose, was cross-examined on his affidavit on foot of a notice to cross-examine dated 26 June 2017. A notice to cross-examine Mr. Wallace was served, but the application to cross-examine him was not pursued at the hearing of the application.

15 The matter was then heard on affidavit and the cross-examination of Mr. Ghose, and on written and oral legal submissions.

The mode of action

16 The plaintiffs seek an order that the defendants should give an account of the dealings in the Fund. The claim is one for an account simpliciter, and not by way of an order ancillary to any other form of action against the defendants.

17 This action is not grounded on an allegation that the defendants acted in any wrongful way with regard to the management of the Fund, not for relief 'ancillary to the prosecution by a plaintiff of a substantive cause of action', the language used by Clarke J. in his first judgment in Aforge Finance SAS and others v. HSBC Institutional Trust Services (Ireland) Ltd. [2009] IEHC 565, [2010] 2 IR 688, at para. 14, paraphrasing the words of Delany and McGrath in Civil Procedure in the Superior Courts (2nd ed., Round Hall, 2005) at para. 23-07. The order for the taking of an account as an ancillary order is 'part of the process of determining the legal rights and obligations of parties to litigation rather than an entitlement in itself.'

18 The action being one for the substantive relief of an account is governed by O. 2, r. 1(3) of the Rules of the Superior Courts ('RSC') which provides for the commencement by way of summary summons of an action 'in which the plaintiff in the first instance desires to have an account taken'. Clarke J. considered the mode of action in his second judgment in Aforge Finance SAS and others v. HSBC Institutional Trust Services (Ireland) Ltd. [2010] IEHC 6 and commented that the rules are silent as to how the process is to be conducted thereafter, and that the court is 'at large' as to 'the manner in which any preliminary question validly raised by a defendant is to be determined', at para. 12. In that case, he directed the trial of certain preliminary issues.

19 19. In the present case, I am satisfied that the claim of the plaintiffs to an account is properly brought by summary summons. The affidavit evidence is sufficient to deal with the preliminary question, namely whether the plaintiffs have an entitlement to an account, and as will appear later in this judgment, to deal with some but not all of the questions otherwise arising. There is some difference between the parties regarding the nature of the documentation and information already given to the plaintiffs, and the difficulties arising therefrom will be dealt with later in this judgment.

Material facts

20 Mr. Best was made a Ward of Court by order of the President of the High Court on 14 June 1993. Proceedings were commenced on his behalf in 1978 against the manufacturer of a vaccine he had received as a baby which left him brain damaged, and the sum of IR£2.7 million was paid into court following the approval by the High Court of a settlement of the proceedings. IR£500,000 of the award of IR£2.7 million were paid out to discharge past expenses and the balance of IR£2.25 million became the Fund.

21 Mr. Best is now 49 years of age and lives with his mother who was appointed Committee by the order of 14 June 1993. His sister, the second plaintiff, was appointed joint committee with Mrs. Best by order of 9 December 2005.

22 In the early years, the Fund was administered through the Office of the Wards of Court by Allied Irish Bank Investment Managers, but the administration changed in 2001 and the nature of the new arrangements in broad terms is to be found in the correspondence.

The investment mandate changes

23 Correspondence on 13 July 2001 between Joy Callender of Bloxham and the Office of the Wards of Court shows that at that time it was proposed that the Fund would be transferred to Bank of Ireland Security Services to be held in a 'segregated account in the...