Guernsey Legal Resources

2 The plaintiff says that between July and November in the year 2002, it supplied goods and materials to Concept for the purposes of the project to the total value of £309,499.35. Of this Concept has only paid £116,301.77, leaving £193,197.58 outstanding, which it unfortunately has not paid. Some of the items concerned were incorporated into the fabric of the

3 Advocate Richardson, appearing for the plaintiff company, stated that his client has not sued Concept. Instead it has had recourse to mounting these proceedings against Hochtief, which is a substantial international construction company. The plaintiff claims that as, under its contract with Concept, which contained what is known as a Romalpa clause (so named after the case of Aluminium Indus. Vaassen BV v. Romalpa Aluminium Ltd. (1)), the title to and/or the property in the goods and materials thus supplied had not passed to Concept, Hochtief is guilty of converting the plaintiff’s goods and materials to its own use, either by incorporating them into the building or by failing to return them.

4 The other head of the plaintiff’s claim is that, because Hochtief has received payment for the project under its contract with the States of Guernsey, which payment would necessarily include moneys for the items supplied to Concept by them, Hochtief has been unjustly enriched to the tune of £193,147.58. Thus one head of the claim sounds in tort and the other in that which is often regarded as part of the law of quasi-contract. In view of requests 2 and 3 in the plaintiff’s application for specific discovery, coupled with the interim payment application and the interim valuation certificate, each of which refers to materials on site, it is important at this stage to identify the legal bases for the alleged causes of action, which are pleaded alternatively.

5 The learned authors of 1 Chitty on Contracts, 28th ed. (1999) devote a complete section of chapter 30 to the principle of unjust enrichment. At the commencement of this chapter, which is entitled “Restitution,” they quote (at para. 30–001) from the speech of Lord Wright in Fibrosa Spolka Akcyjna v. Fairbairn Lawson Combe Barbour Ltd. (6) ([1943] A.C. at 61):

“It is clear that any civilized system of law is bound to provide remedies for cases of what has been called unjust enrichment or unjust benefit, that is to prevent a man from retaining the money of or some benefit derived from another which it is against conscience that he should keep. Such remedies in English law are [a] generically different … category of the common law which has been called quasi-contract or restitution.”

6 The facts in Fibrosa were that the respondent, a company based in Leeds, agreed in July 1939 to supply certain specialized textile machinery to the appellant in Gdynia in Poland with delivery in three to four months. The price was £4,800, of which one-third was payable on order, and of this the appellant paid £1,000 on account on July 18th. On the outbreak of war on September 3rd, the contract became frustrated and the appellant sought to recover its £1,000 which was refused. Overruling Chandler v.

7 Another example is Refuge Assur. Co. v. Kettlewell (10), where the plaintiff, who held a policy of assurance on her brother’s life, wished to discontinue paying the premiums but was persuaded to continue to do so by one Cowling, the company’s agent, who promised that if she did she would receive free insurance after five years. This was false but was said without the company’s knowledge. The Court of Appeal held that as the company, though innocent, had benefited during the five years by the amount of the premiums which continued to be paid, the plaintiff could recover the sums so paid.

8 The Fibrosa case (6) differed from the instant one in that the parties had been in a contractual relationship and the decision turned on a total failure of the consideration, whereas here, as Mr. Richardson conceded, privity of contract did not exist between them. However, it seems to be clear from the text in Chitty that the right to recover on the ground of unjust enrichment, notwithstanding that the party who received the benefit may not have intended to enrich itself (see Lord Wright again in the Fibrosa case (ibid., at 61)) does not necessarily depend on the existence, or prior existence, of contractual relationship between the parties. It depends on the principle that one party is obliged, ex æquo et bono, to make restitution (ibid., at 62).

9 While the examples given by Goff & Jones, The Law of Restitution, 6th ed., para. 1–074, at 61–62 (2002) might appear to militate against this view, the general discussion of the topic of unjust enrichment (ibid., paras. 1–012 to 1–015, at 13–16) indicates that this area of the law has received wide judicial recognition. For example, in Craven-Ellis v. Canons Ltd. (5), in which a managing director had performed services for a company without having obtained the qualification shares necessary under the articles of association. Even though the claim under the void contract for his remuneration failed, he was held entitled to recover on a quantum meruit quasi ex contractu ([1936] 2 K.B. at 412, per Greer, L.J.). The foregoing may well open up an area of legal argument later on in this case, but, for the purposes of the present application for specific discovery, I am satisfied that there is an arguable case on the plaintiff’s behalf on the ground of unjust enrichment.

10 In the foregoing paragraphs, I have not attempted to deal with legal issues that might arise in respect of the goods and materials said in para. 11.1 of the cause to have been incorporated into the airport buildings or other structures appurtenant thereto, and thus possibly losing their identity, or whether the maxim quicquid plantatur solo solo cedit might apply. In the Romalpa case (1), the retention of title clause was not dissimilar from that in the contract between the plaintiff and Concept, and the Court

11 A different result was reached in Borden (U.K.) Ltd. v. Scottish Timber Prods. Ltd. (2), where the unpaid seller was held not entitled to trace resin it had sold to the defendant since it had been made into chipboard and was no longer identifiable as resin. Similarly, in Hendy Lennox (Indus. Engines) Ltd. v. Grahame Puttick Ltd. (7), Staughton, J. held that the property in two of the three diesel engines sold to the defendant and subsequently incorporated into generator sets had passed to the defendant, and then to its customers. Only in respect of the third, where the proprietary title had not passed, was the plaintiff held entitled to recover the proceeds of sale from the sub-purchaser. That case, however, depended very much on the fact that at the relevant time the credit period had not expired and it could not be said that the two engines had not been paid for under the terms of the retention clause.

12 Reverting to the position in the instant case, the scenario (this is central to the argument of Advocate Greenfield representing Hochtief) is set against the background of three distinct contracts, namely (a) the contract between the States of Guernsey and Hochtief; (b) the contract between Hochtief and Concept; and (c) the contract between the plaintiff and Concept of July 19th, 2002, which the plaintiff referred to as a supply contract, but which Hochtief insisted was a credit application form with a limit of £10,000, which Mr. Greenfield submitted had been greatly exceeded.

13 Mr. Greenfield said that there was nothing sinister in his client’s reluctance to disclose the first three documents listed in the plaintiff’s application for specific discovery, which is now before me for determination: if there had been, he would not so readily have conceded those sought at No. 4 to 7. There were genuine commercial reasons why Hochtief, an internationally-known company with a world-wide reputation, did not wish the plaintiff to have a kind of roving commission to investigate documents prepared by it for the airport project, which included the risk of disclosure to all and sundry involved in the building industry in Guernsey.

14 Mr. Greenfield contended that the burden rested on the plaintiff to show why it should have discovery of the disputed items. There was no legitimate reason why documents prepared at one level of the structure of contracts involved in the project should be transposed to another level. What the plaintiff was trying to do, Mr. Greenfield continued, was to “drill upwards” to ascertain the details of matters relevant to the main contract between the States and Hochtief, under the guise of drilling down through the documents already discovered to obtain the supporting vouchers.

15 Furthermore, Mr. Greenfield said, it was not enough to cite Mr. Mansell’s report and swear, as Mr. Richardson does in his affidavit of September 24th, 2004, that the documents sought in the letter of June 18th were essential to complete his report. The so-called provisional report had not been exhibited and the mere fact that Mr. Mansell was said to require the documents could not per se render them discoverable. In effect, Mr. Greenfield said, this was a fishing expedition mounted by the plaintiff in the hope that “something helpful to its case” in the documentation relevant to a different layer of the contractual background “would turn up.”

16 Mr. Richardson’s riposte to this suggestion was that the allegation that Mr. Mansell needed the documents sought in the letter of request of June 18th by Collas Day appeared in his affidavit of September 24th, 2004. Paragraph 8 of that affidavit exhibited the correspondence passing between the advocates in June and July of that year, culminating in a letter from Carey Olsen’s of July 20th, which said that the writer would endeavour to have the “documents you requested by the end of this month.” No suggestion there, Mr. Richardson said, of any reason why the documents requested by Collas Day should not be discovered. Why, he said, if there was any objection could there not have been an affidavit responding to his para. 8?

17 I am in full agreement with Mr. Greenfield that it is not enough for the plaintiff to say that Mr. Mansell needed the disputed documents in order to finalize his report and, of course, the letter from Mr. Mansell, if there were such a letter, or, maybe, the transcript of a recorded telephone call, was not exhibited to Mr. Richardson’s affidavit. However, the fact remains that there was, indisputably, no response to that affidavit by the time this application came for directions in November, or even by the date of hearing, some 3½ months later.

18 Mr. Richardson then referred generally to O.24, r.2 of the Rules of the Supreme Court and in particular to the note in The Supreme Court Practice 1999, para. 24/2/11, at 448–450. As I have observed before, the phrase “relating to any matter in question between them in the proceedings” is common to both jurisdictions, in that it forms the concluding words to O.24, r.2(1) of the Rules of the Supreme Court and to r.39(1)(a), which is the relevant provision for discovery in the Guernsey Royal Court Civil Rules 1989. Mr. Richardson analysed paras. 4–10 of the niances in the defences, and submitted that the way in which the defence is pleaded—namely the partial denial in para. 4, coupled with the denial in para. 10, the non-admissions in the intervening paragraphs, and putting the plaintiff to strict proof of the matters alleged in paras. 7–9 of the cause—showed that whether the items supplied to Concept remained Norman Piette’s property, and, indeed, whether it had supplied any goods or materials to Concept, and, finally, whether Hochtief owed any duty to the plaintiff, were all “matters in question between the parties to the action.”

19 Accordingly, Mr. Richardson submitted that that the present application fell within the principles laid down by Brett, L.J. in the early case of Compagnie Fin. du Pacifique v. Peruvian Guano Co. (4), which is still good law. These were recently authoritatively endorsed by Bingham, M.R. in Taylor v. Anderton (12). They also appear in Matthews & Malek on Disclosure, 2nd ed., para. 4.08, at 94–95 (2001), which indicates that the brackets within which documents are regarded as relevant are wide, and that in considering the application for disclosure the courts should adopt a policy of inclusion rather than exclusion.

20 I now come to the passage in the judgment of Brett, L.J., which Bingham, M.R. described ([1995] 1 W.L.R. at 459) as the classical exposition of the meaning of the phrase “documents relating to matters in question in the action.” Having posed the question, Brett, L.J. said (11 Q.B.D. at 62–63):

    “I think it obvious from the use of these terms that the documents to be produced are not confined to those, which would be evidence either to prove or to disprove any matter in question in the action; and the practice with regard to insurance cases shews, that the Court never thought that the person making the affidavit would satisfy the duty imposed upon him by merely setting out such documents, as would be evidence to support or defeat any issue in the cause.

    The doctrine seems to me to go farther than that and to go as far as the principle which I am about to lay down. It seems to me that every document relates to the matters in question in the action, which not only would be evidence upon any issue, but also which, it is reasonable to suppose, contains information which may—not which must—either directly or indirectly enable the party requiring the affidavit either to advance his own case or to damage the case of his adversary. I have put in the words ‘either directly or indirectly,’ because, as it seems to me, a document can properly be said to contain information which may enable the party requiring the affidavit either to advance his own case or to damage the case of his adversary, if it is a document which may fairly lead him to a train of enquiry, which may have either of these twa [sic] consequences . . .” [Emphasis supplied.]

21 Mr. Greenfield also referred to Taylor v. Anderton (12), and the context of the defendant’s submission in that case—that under O.24, r.13 an order for production and inspection of the disputed reports was not shown to be necessary for disposing fairly of the cause or matter or for saving costs. Bingham, M.R ([1995] 1 W.L.R. at 460), citing R. v. Chief Constable of W. Midlands Police, ex p. Wiley (9), described this as the first issue which arose for consideration. In the West Midlands case, Lord Woolf had said that the restriction, which also appears in r.8 in connection

22 Mr. Greenfield also drew to the court’s attention r.8 of the Royal Court (Discovery of Documents) Rules 1998, which, he said, were a direct copy of the latter part of O.24, r.8. That rule only applies to applications for discovery under rr. 1 and 2 of the 1998 Rules. Both those rules apply only in personal injury cases, the first when a claim in respect of personal injuries or death is contemplated, and the second when such a claim is actually made. Those rules therefore have no relevance to the instant case.

23 Nevertheless, although that requirement does not appear in so many words in the Guernsey Rules, I am satisfied that Mr. Greenfield is right in saying that it is a basic principle that the Royal Court, equally, should be satisfied that discovery, as well as production and inspection, of any documents sought is necessary either (1) for disposing fairly of the cause, or (2) for saving costs. It should not make an order under r.39 without addressing that issue. He submitted that the plaintiff’s application failed on both those counts in relation to the three disputed documents.

24 It has to be observed that the issues regarding discovery and production in Taylor v. Anderton (12) arose under very different circumstances. In the first place, the question was as to whether the judge at first instance had been right to reject the plaintiff's application for a jury trial in an action against the former Chief Constable of Greater Manchester Police for misfeasance in office, malicious prosecution and conspiracy under s.69 of the Supreme Court Act 1981. The action, which was commenced by writ in March 1991, had resulted from the plaintiff’s acquittal after a trial, which spread over 2¼ years in the Manchester Crown Court in January 1990, on charges of fraud and dishonesty in relation to his business affairs.

25 In that case, in the course of the discovery process, the plaintiff had listed some 4,500 documents and the defendant’s list contained 6,700 documents. The pleadings alone occupied four substantial ring binders, and 2,900 pages of transcript of the criminal trial had been ordered. The further and better particulars on both sides had totalled over 540 pages. Procedural experts at the local Bar may be encouraged by this. Moreover, the allegations and counter-allegations of fact made pursuant to an order of Owen, J. ran to 462 pages. In those circumstances, Bingham, M.R. held that the judge’s decision to hold that the trial would require prolonged examination of books and accounts was entirely right, and that the prima facie right to a jury trial under the section was displaced.

26 Bingham, M.R. then turned to the issue of whether discovery should be ordered of certain reports dealing with police conduct after the plaintiff’s acquittal. This, in turn, impacted on important issues of public

27 The defendant (in Taylor v. Anderton (12)) disclosed the three reports but resisted inspection of them (a) on the ground of their belonging to a class of documents covered by public interest immunity, and (b) that, under r.13, they were not necessary (i) for disposing fairly of the action or (ii) for saving costs. The judge had rejected the claim to immunity. In giving leave to the defendant and the intervener to appeal against that decision and remitting the issue to the judge for reconsideration, the Master of the Rolls said, as regards (a), that the House of Lords in R. v. Chief Constable of W. Midlands Police, ex p. Wiley (9) had ruled that public interest immunity does not attach to a class comprising statements obtained for the purposes of an investigation under the Police and Criminal Evidence Act 1984 (which these statements were) but left open the question of whether class immunity attached to the reports themselves. Accordingly, that issue was still open for decision.

“The purpose of the rule is to ensure that one party does not enjoy an unfair advantage or suffer an unfair disadvantage in the litigation as a result of a document not being produced for inspection. It is, I think, of no importance that a party is curious about the contents of a document or would like to know the contents of it if he suffers no litigious disadvantage by not seeing it and would gain no litigious advantage by seeing it. That, in my judgment, is the test.”

Turning to (b)(ii), Bingham, M.R. said that the court had not inspected the reports and, since this issue had not been argued before Owen, J., it was appropriate to include this in the matters to be reconsidered by the judge, who was more versed in the minutiae of that exceptionally complicated case.

29 In two recent cases, the question of whether documents sought to be disclosed would lead legitimately to a train of enquiry as propounded by Brett, L.J. arose, namely Smith v. Islands Ins. Co. (11) and in O Co. v. M Co. (8) (cited in the former). Smith v. Islands Ins. Co. was an action on a policy of insurance issued by the defendant company to the plaintiff in respect of interruption of his business in consequence of the loss of or damage to the premises or property thereby insured due to a burglary in April 1994. The property insured included the plaintiff’s computer discs and database recorded thereon.

30 The defendant insurers repudiated liability on the grounds, inter alia, of misrepresentation and a breach of the insured’s duty to disclose all material facts under the first condition of the policy. This was because the plaintiff had previously brought proceedings against the owner of the premises adjoining those occupied by the plaintiff, for the escape of water into his premises some time before the burglary. He also sued his landlord for alleged breach of covenant by him to keep the building in which his premises were situated wind and watertight. This had resulted in damage to the contents, which included the plaintiff’s computer discs and the information stored on them. There was no indication in the earlier cause that the data lost was similar to that lost in the burglary, but at least one of the entities of which particulars of loss were given in the earlier cause was identical to that given in the response to interrogatories administered in the second case.

31 It was obviously reasonable for the insurers to have disclosure and inspection of the documents produced in the earlier case so as to enable them and their legal advisers to see whether the data lost in the earlier case matched, or differed from, that said to have been lost in the later case. I therefore found that the documents in the earlier case were relevant to the issues pleaded by the defendant, in particular as to whether the insured had taken reasonable precautions to prevent loss or damage to his property as required by the policy. Their non-disclosure would have inhibited the defendant in pursuing its case. Accordingly, I held that the documents sought in the defendant’s application for discovery in the second case would yield information which might enable the defendant to pursue a legitimate train of enquiry which might well advance its case.

32 The plaintiff in O Co. v. M Co. (8) had sued for the loss of its cargo while it was being carried on the defendant’s ship which had occurred due to an explosion on board. The defendant relied on exclusion of liability under the Hague-Visby Rules, which exclusion was itself excluded if the cargo owners proved the loss was “due to actual fault or privity of the carrier.” The seaworthiness of the vessel, by reason of the alleged lack of due diligence by the shipowners, was also in issue. The explosion was alleged to have happened due to the escape of crude oil from one hold into another, which, in turn, was said to be caused by corrosion of the intervening bulkhead, due to lack of maintenance.

33 The plaintiff applied for specific discovery of 83 classes of documents, unconnected with the area where the explosion occurred, on the grounds that these would lead to a train of enquiry, in that they might throw light on the shipowner’s general management of the vessel, or on the rate of corrosion in other parts of the vessel, or that they might contain material relevant to whether fire occurred without the shipowner’s fault or privity, and other suggested lines of enquiry. Of the classes of documents sought, Colman, J. allowed only one item. His judgment includes this passage ([1996] 2 Lloyd’s Rep. at 350–351):

 “In a case such as this, where there has been explosion and fire on board the defendants’ vessel but the cause is uncertain . . . One would normally expect to find a spectrum of differing materiality ranging from documents which were central to pleaded issues . . . to documents relating to features of the ship, such as the main engines and their maintenance, not hitherto suggested as being pertinent to the explosion . . . Within that spectrum it may be said of the documents towards one extreme that, although they do not relate directly to any part of the vessel hitherto under suspicion as having been material to the loss, they may, on investigation, reveal or at least suggest by inference unanticipated deficiencies in the shipowners’ conduct on the basis of which their defence could be attacked or their reliance on limitation challenged …

 Although at that end of the spectrum of potential evidential significance it may be said that such documents fall within the letter of Lord Justice Brett’s formulation of relevance for discovery purposes, in as much as such classes of documents might, if disclosed, fairly lead the plaintiffs to a train of enquiry which might have the consequence that the plaintiffs were enabled to advance their own case or damage the shipowners’ defence, that is not what the formulation means or how it ought to be applied. The principle was never intended to justify demands for disclosure of documents at the far end of the spectrum of materiality which on the face of it were unrelated to the pleaded case of the plaintiff or defendant and which were required for purely speculative investigation. The excessively wide application of Lord Justice Brett’s formulation of relevance has probably contributed more to the increase of the costs of English civil and commercial litigation in recent years than any factor other than the development of the photo-copying machine. That formulation must not, in my judgment, be understood as justifying discovery demands which would involve parties to civil litigation being required to turn out the contents of their filing systems as if under criminal investigation merely on the off-chance that something might show up from which some relatively weak inference prejudicial to the case of the disclosing party might be drawn.” [Emphasis supplied.]

The facts alleged in the instant case do not bear any real similarity either to Taylor v. Anderton (12), to Smith v. Islands Ins. Co. (11) or to O Co. v. M Co. It is, in my view, more straightforward than a train of enquiry case. I therefore proceed to consider the three disputed documents seriatim.

34 The first request in the application dated September 27th, 2004, is for “a complete copy of the contract exchanged between the defendant and the States of Guernsey dated June 20th, 2002.” I bear well in mind Mr. Greenfield’s point that this document relates to a different level of the contractual structure involved in the airport project. Clearly there was no

35 In the letter annexing the lists of the defendant’s documents there follows para. 2, which states, in common form, that the defendant objects to the documents enumerated in Part 2 of Schedule 1 of the list. The contract in question was not listed in Part 2 but in Part 1. Not a word was said there, or in the letter of June 17th, regarding any objection to those portions of the contract which are missing. Parts of the contract (presumably those included in the copies sent with the letter of June 17th) appear in Collas Day’s bundle.

[The learned Lieutenant Bailiff then set out the details of which pages were present and where the breaks in the pagination occurred. He continued:]

37 On the assumption that some of the pages are missing, why cannot the plaintiff and, for that matter, the court see the missing pages? Obviously, before any order for discovery can be effective it is necessary to ascertain which parts are missing. In my opinion, the plaintiff’s submission that, if a substantial part of the contract has been divulged, freely and without any order, in a part of the schedule of documents which the defendant does not object to disclosing, and if no valid reason for withholding the remainder has been advanced, the whole of the contract should be disclosed and inspection permitted, is unanswerable.

38 There is another reason why I should accede to the plaintiff’s request as regards the first document included in their application. A substantial part of it has been exposed to the court’s scrutiny. It is impossible to forecast what view the Jurats will form of it at the trial. But one thing is certain. If the court only sees a part of a document, without being allowed to see the whole, there is a risk that it will have a distorted view of that part of the factual evidence, unless the portions that are not revealed are edited, or expurgated, for legal reasons, for example, perhaps, parts of a confession in a criminal trial. On that count also, I consider the plaintiff should have discovery and inspection of the full contract.

39 I turn to Parts 2 and 3 of the application, which seek, in each case, a full breakdown of the documents appearing later in the bundles and their

40 Reverting to the cause, the plaintiff alleges in para. 9 that the goods and materials for which Concept had not paid are listed in Schedule 1 to the cause. The next-but-one paragraph, No. 11, then divides these into goods and materials incorporated into the works and those not yet so incorporated but remaining on site. The bill already mentioned, as I have observed, mentions materials on site. It is a reasonable supposition that the substructure and superstructure items charged for in bills 4 and 5 might well include materials supplied by the plaintiff to Concept.

41 Applying Bingham, M.R.’s test set out at para. 28 above, it seems to me that the plaintiff would suffer a litigious disadvantage by not seeing the details requested and the supporting documents and vouchers. Until the plaintiff does, it cannot tell whether any, and if so, which, of the items set out in Schedule 1 to the cause it alleges were converted by Hochtief to its own use, and which fall into one or other of the classes of goods and materials allegedly converted, described in sub-paras. 1 or 2 of para. 11 of the cause. This may be a material distinction in view of the principles to which I have alluded in paras. 10 and 11. It follows, in my judgment, that the disclosure sought in para. 2 of the application is necessary for disposing fairly of the cause under head (b)(i) in para. 27 above.

42 I take a similar view in respect of para. 3. Very probably, since the number of the interim valuation, No. 11, matches the number in the application letter enclosing the bill summary, the former was in response to the latter. Thus, of the amount applied for, £813,216 was certified by the valuers. Item A of this document states: “Value of work executed and of materials and goods on site.” Once again, in my judgment, the plaintiff is entitled to inspect the supporting documents so as to ascertain if any of the goods and materials it had supplied to Concept, which were not paid for, coincide with any of the items in Schedule 1 of the cause. The requirement at (b)(i) is therefore satisfied as regards this request.

43 Turning to the issue raised by requirement (b)(ii), I do not think it appropriate to decide whether acceding to the plaintiff’s application is necessary for saving costs. The relevant provisions in 1 The Supreme Court Practice 1999, paras. 24/8/2 and 24/13/2, at 475–476 and 479—the

44 For the foregoing reasons, I am satisfied that the plaintiff is entitled to orders as prayed in paras. 2 and 3 of the application of September 27th. As to para. 1, the position is to some extent indeterminate, as it is unclear how much of that document was not disclosed. But I think it is evident that some of it is missing. It follows, therefore, that the plaintiff should have the order as prayed under this paragraph also, namely that the complete contract should be disclosed and be made available for inspection. I consider the most appropriate course is that the costs hereof be reserved, but I will hear counsel if they so wish.