Best v Ghose No.2

• Jurisdiction: Ireland
• Judge: Ms. Justice Baker
• Judgment Date: 09 June 2020
• Neutral Citation: [2020] IEHC 355
• Docket Number: [2016 No. 2326 S]
• Court: High Court
• Date: 09 June 2020

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

No. 2

[2020] IEHC 355

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 the defendants had adequately met the obligation identified in the principal judgment that an account be given of the management of the funds

Facts: This High Court judgment was supplemental to a judgment delivered on 27 June 2018, [2018] IEHC 376, and order of 16 October 2018. The question for determination was whether the defendants had adequately met the obligation identified in the judgment that an account be given of the management of the funds of Mr Best, a ward of the High Court, and on whose behalf the defendants were entrusted with the management of funds lodged in the High Court.

Held by Baker J that in the light of the practical common sense approach advocated in the principal judgment, she was of the view that there was little to be gained from the making of an order for the preparation of further reports or the attempt at reconstructing each movement on the investments for the period. That exercise would be expensive and, as the purpose of this ruling was to adjudicate on the adequacy of the documentation available and whether it was sufficient to meet the obligations identified in the principal judgment, and not to lay blame, Baker J was satisfied that no further order should be made and that the albeit incomplete documentation to hand as supplemented by the narrative and reconciliation carried out by the first defendant, Mr Ghose, at the relevant time managing partner of Bloxham Stockbrokers Partnership, and the supporting documentation taken together amounted to a sufficient compliance with the obligation that an account be provided.

Baker J held that the costs of engaging the experts to carry out this task were to be met by Bloxham Stockbrokers Partnership, as it was its failure that had led to the inability of the plaintiffs, the Committee of the Ward, to understand the transactions or to have otherwise available copies of periodic statements.

Judgment approved.

Judgment of Ms. Justice Baker delivered on the 9th day of June, 2020

1 This judgment is supplemental to a judgment delivered on 27 June 2018, Best v. Ghose [2018] IEHC 376, and order of 16 October 2018. The question now for determination is whether the defendants have adequately met the obligation identified in the judgment that an account be given of the management of the funds of Kenneth Best, a ward of the High Court, and on whose behalf the defendants were entrusted with the management of funds lodged in the High Court.

2 The principal judgment was given after a hearing in proceedings commenced by summary summons by which the plaintiffs, the Committee of Mr Best, sought an order that the defendants were obliged to give account of the funds lodged to the credit of Mr Best in the High Court, and an order directing an inquiry as to the dealings by the defendants with the monies lodged in court on his behalf and to his benefit.

3 The second relief sought in the summary summons was an order for the making of an inquiry, but that relief was not pursued, and the Committee prudently took that approach, as it is likely that the making of a formal inquiry by the court would be time consuming and prohibitively expensive.

4 The first 15 defendants were, at the relevant times, partners in the firm of Bloxham Stockbrokers Partnership which was wound up by order of Cross J. on 31 May 2012. The sixteenth defendant is the firm now in liquidation acting through Mr Kieran Wallace who was appointed liquidator by order of Laffoy J. made on 25 June 2012. No order was sought against the sixteenth defendant.

5 For the reasons set out in the principal judgment the proceedings against the second to fifteenth defendants were struck out. The first defendant, at the relevant time managing partner of Bloxham Stockbrokers Partnership (“Bloxham”), acts as representative defendant and in his personal capacity.

6 The conclusion made in the principal judgment was that Bloxham had, by reason of its role in the management and administration of the fund lodged in court to the benefit of Mr Best, an obligation akin to that of a trustee or fiduciary to furnish a record of transactions in the form of an account and narrative. As is apparent from a reading of the principal judgment, at the time it was delivered the documents then available at the hearing were considered to be incomplete, and further documentation was to be sought and furnished in accordance with the directions then given and supplemented at later hearing.

7 As is apparent too from the principal judgment, the documentation was voluminous as the monies pledged for the benefit of Mr Best had been managed by Bloxham since 2001. It was estimated at the time of the delivery of the principal judgment that the liquidator had in his possession some 504 boxes of documents likely to be relevant to an understanding of the manner by which the fund was managed. There existed or exists also a voluminous amount of documentation in soft form. As is also apparent from the reading of the principal judgment, while some statements of account were given to the Committee of the Ward from time to time in the currency of the management by Bloxham of his funds, these were incomplete, and the view taken in the principal judgment was that the obligation to account existed and had not been met.

8 Throughout this ruling I propose to use the word “documentation”, save where the context otherwise requires, to connote all forms of information, whether in soft or hard copy, whether it contains a narrative, figures and columns listed by reference to date or otherwise, or a combination of these.

The issues now remaining

9 After the principal judgment was delivered, the Committee of the Ward received documentation from the Office of the Wards of Court and from the Accountant's Office of the High Court, some of which had been previously sought by the Committee in order to ascertain whether tax had been withheld from the Ward, which, pursuant to s. 198 of the Taxes Consolidation Act 1997, the Ward would be entitled to reclaim. I was unable to make a final order as it was premature given the circumstances. The matter came back before me on a number of occasions for the purpose of enabling the parties to locate and inspect the documents.

10 Mr David Croft on the instructions of the Committee was given the opportunity of looking into the boxes of documents held by the liquidator. A report from him of 27 November 2018 made it clear that there were documents that would have enabled an account to be created, but that there did not exist what might be properly called “an account” at that stage. Mr Myles Kirby, chartered accountant for Mr Ghose, also produced a report of 11 December 2018. Both Mr Croft and Mr Kirby seemed to agree that the exercise of preparing an account was not particularly complex, although it might have taken time, but also agreed that there were gaps in the information and referred to those gaps: Mr Croft, at para. 17, and Mr Kirby at para 7.11 respectively. Mr Croft pointed out there was no updated record of Irish equities being transacted, and no records of distributions received.

11 Mr Kirby set out certain basic information of what an account should contain, and at the hearing of 13 December 2018 counsel for the plaintiffs expressed the view that there seemed to be “no huge difference” between the experts in that respect.

12 Bloxham had, in fact, provided an account in respect of the Ward's funds to the Wards Office for two years (2002 and 2003) in a form of account or statement that counsel for the plaintiffs accepted was adequate: it dealt with the transactions in terms of stock and bonds sold and purchased; with the cash account, monies received for sale of stocks, dividends received, fees paid, stamp duty paid, etc. Counsel for the plaintiffs said that it may well be that, after 2003, Bloxham changed the format of the account but what matters for the Committee was the availability of the information, and expressed the view that the Committee was happy to get an account in Bloxham's standard format at that time.

13 The issue in contention at that hearing who is to discharge the costs of the preparation of the account. Counsel for the plaintiffs argued that I should take into account that Mr Best is a Ward of the High Court, and has no funds left. His mother, who is in her seventies, is attempting to look after her disabled adult child in these difficult circumstances but wants an account to see where the money lodged in court has gone.

14 Counsel for Mr Ghose submitted that the principal judgment did not draw a distinction between the cost of the making of the account and the subsequent copying and furnishing of copies to the plaintiffs. Reliance was placed in the principal judgment on the decision of Kenny J. in Chaine-Nickson v. Bank of Ireland [1976] IR 393. Counsel for the plaintiffs argued that that was an unusual case which involved the issue as to whether a potential beneficiary, not an actual beneficiary, under a discretionary trust, was entitled to certain information and a copy of an account. He argued that the issue in that case was not so much who had to pay, but whether...