ACTION NO. CL 198/2012
IN THE SUPREME COURT
TURKS AND CAICOS ISLANDS
BETWEEN
RBC ROYAL BANK (BAHAMAS) LIMITED
PLAINTIFF
-and-
MR. BERYN DUNCANSON
(by original claim)
MR. BERYN DUNCANSON
-and-
ROYAL BANK (BAHAMAS) LIMITED
(by counterclaim)
Mr. Beryn Duncanson in person
Mr. Neale Coleman instructed by Karram Missick for the Bank
Heard on the 8th and 10th day of April, 2014
BEFORE RAMSAY-HALE J
RULING
DEFENDANT
PLAINTIFF
1sT DEFENDANT
1. This is the decision on the Defendant's application for trial of this action by jury made by Notice
of Demand pursuant to Order 33 r 5 of the Civil Rules 2002.
2. The Plaintiff, Royal Bank (Bahamas ) Limited ("the Bank") instituted proceedings against the
Defendant, Mr. Duncanson, on the 21 September 2012 seeking to enforce to enforce a personal
guarantee allegedly given by the him, in respect of a loan made by the Bank to Flamingo
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Crossing Ltd. ("the Company") a property development company of which Mr. Duncanson is the
principal.
3. The Bank alleges that it made a loan in the sum of USD $2,242,000 to the Company and that, on
or about 8 July 2009, Mr. Duncanson executed a guarantee in favour of the Bank guaranteeing the
loan. The Bank asserts that the Company defaulted on the loan and, in response, it appointed a
Receiver of the assets of the Company pursuant to the powers contained in a Debenture executed
by the Company in its favour. Notwithstanding the exercise of its powers under the Debenture,
the Bank was unable to recover the monies due to it and issued a demand that Mr. Duncanson
repay the Loan pursuant to the terms of the Guarantee. The demand remaining unsatisfied, the
Bank instituted these proceedings.
4. Mr. Duncanson's defends the claim inter alia on the grounds that any default in payment by the
Company was contrived by the Bank which forced the Company into Receivership, that he did
not guarantee the loan to the Company but that if he did, the guarantee was only in respect of
such sums as remained outstanding after the divers securities given for the loan were realised and
that his liability under the Guarantee had not yet crystallised. He counterclaims against the Bank
for tortious interference, negligence, libel, fraud, breach of fiduciary duty and breach of contract.
5. In advancing this application, Mr. Duncanson's relies in particular on the fact that he has
counterclaimed against the bank for libel and fraud. The particulars of the claim for libel are
found in para 14 of the Counterclaim:
"Libel
Further or in the alternative the Plaintiff falsely and maliciously, or negligently made
libelous comments verbally and in writing [in its dealings with certain purchasers in the
Flamingo Crossing development] and in advertising in the TCI Sun newspaper the appointment
of a Receiver.
"e. By those acts and those various comments and words the Plaintiff meant and was
understood to mean that the Company and the Defendant (its sole Director and sole Shareholder)
were in default with the Bank were incapable of completing the Carib Club construction, were
uncreditworthy,, that the Company and the Defendant were persons whose financial standing
were unsound and to whom credit should not be given, and were persons with whom no-one
should have business dealings.
7: By reason of the premises the Company and Defendant have been injured in their credit
and reputation, and in their business and have suffered loss and damage, greater particulars of
which are to be assessed at trial.
6. The particulars of fraud are pleaded by reference to para 8 of Mr. Duncanson's Defence:
Fraud
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By reason of the matters particularized (sic) at paragraph 8 herein the Plaintiff claims
fraud in their accounting for actual LIBOR rates. And by virtue of:fraudulently illegal securities
herein including the illegal contract of Guarantee/Indemnity."
7. Paragraph 8 states:
"The Defendant denies paragraph 7 of the Particulars of Claim aforesaid based on the fact that
the Bank has varied the interest rate with the debtor without the notification to, consultation and
/or agreement of the Defendant. The Defendant will contend that when he issued the Debenture
with Deed of Guarantee the interest rate was based on LIBOR plus a fixed spread of 3 %.
Immediately after the letter of commitment was issued and funds commenced to be disbursed
based on 3 month LIBOR contracts, the debtor and the Defendant have now discovered that the
interest rate being charged and paid and applied to the account was at material times
substantially inflated above true LIBOR At no time was this unilateral increase communicated to
the debtor or the Defendant. During the tenor (sic) of the loan and in particular from the 23rd day
April 2008 when the payment increases came to the attention of the debtor, the debtor queried by
telephone and email with the Bank's Mr. Lester Cox and Ms. Vanessa Richards in the Nassau
office what looked like increased interest over and above 3 month LIBOR as published through
online sources on the internet. The email explanation of the 23rd April 2008 as to calculations of
interest from the Bank's Ms. Vanessa Richards was confusing and avoided direct explanation of
the LIBOR rate being applied, and the Defendant did not suspect fraud so did not press for a
detailed explanation until recently. The Loan Account History provided by the Bank in June 2009
shows a history of substantial relative inflation of LIBOR rates even as LIBOR rates were
dropping month over month to historical lows. Accordingly the Defendant contends that the said
Deed of Guarantee should be discharged having regard to this material variation in the interest
rate and to which there was no notice and/or agreement with the Defendant or the debtor. ..."
8. The Civil Procedure Ordinance provides at Section 15 that:
"15. In every action unless under the provisions of this Ordinance a trial with a jury is ordered
or either party has given notice of demand for a jury, the mode of trial shall be by a judge without
a jwy:
Provided that in any case the Court may at any time order any action, matter or issue to be tried
with a jury "
9. The right of a party to have his matter tried by a jury is qualified by sections 16 and 17 which
state:
"16. Actions or matters which before the passing of the Ordinance No.] of 1876 were under the
jurisdiction of the Court of Chancery, shall be tried by a judge without a jury, unless the Court
shall otherwise order.
"17. The Court may direct the trial without a jury of any action, matter or issue requiring any
prolonged examination of documents or accounts, or any scientffic or local investigations which
cannot in its opinion conveniently be tried with a jury."
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10. Although the English provisions with respect to civil trials by jury are not in identical terms, the
case law on the proper exercise of the Court's discretion when section 17 is engaged is relevant.
In the matter of Aitken v Preston and others [1997] EMLR 415, 421-422 in which Lord Bingham
LCJ set out the principles which the Court should apply when considering applications for jury
trials:
" (i) The basic criterion, viz that the trial requires a prolonged examination of documents, must be
strictly satisfied, and it is not enough merely to show that the trial will be long and complicated
(Rothermere v Times Newspapers Ltd [1973] 1 WLR 448). However, the word "examination"
has a wide connotation, is not limited to the documents which contain the actual evidence in the
case and includes, for example, documents which are likely to be introduced in cross-examination
(Goldsmith v Pressdram Ltd [1988] 1 WLR 64).
(ii) "Conveniently" means without substantial difficulty in comparison with carrying out the same
process with a judge alone. This may involve consideration of several factors, for example:
(a) the additional length of a jury trial as compared with a trial by judge alone;
(b) the additional cost of a jury trial taking into account not only the length of the trial but also the
cost of, for example, additional copies of documents;
(c) any practical difficulties which a trial by jury would entail, such as the handling of or
inconvenient files, the need to examine documents alongside each other, and the degree of minute
scrutiny of individual documents which will be required;
(d) any special difficulties or complexities in the documents themselves (Beta Construction Ltd v
Channel Four Television Co Ltd [1990] 1 WLR 1042 especially per Stuart Smith LJ at page 1047
C - D and per Neill LJ at page 1055 H, referred to and applied in the recent case of Taylor v
Anderton [1995] 1 WLR 447).
(iii) The ultimate exercise of discretion will in each case depend substantially on the
circumstances of each individual case, and it would be idle to attempt to enumerate all the factors
which might arise.
There are, however, four factors which have been identified in the earlier cases, which have some
general application and which are presently relevant, as the judge recognised:
(1) The emphasis now is against trial by juries, and this should be taken into account by the court
when exercising its discretion (Goldsmith v Pressdram (supra) at page 68 per Lawton LJ with
whom Slade LJ expressly agreed). This conclusion is based on section 69(3), which was a new
section appearing for the first time in the 1981 Act to replace section 6(1) of the Administration
of Justice (Miscellaneous Provisions) Act 1933, the provision in force at the date when
Rothermere v Times Newspapers was decided.
(2) An important consideration in favour of a jury arises where, as here, the case involves
prominent figures in public life and questions of great national interest ( Rothermere v Times
(supra)).
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(3) The fact that the case involves issues of credibility, and that a party's honour and integrity are
under attack is a factor which should properly be taken into account but is not an overriding
factor in favour of trial by jury ( Goldsmith v Pressdram (supra) at page 71 H per Lawton LJ).
(4) The advantage of a reasoned judgment is a factor properly to be taken into account (Beta
Construction v Channel Four Television (supra))."
The Defendant's submissions
11. Mr. Duncanson submits that the right to a civil jury trial is absolute upon making demand, subject
to what he refers to as the narrow considerations found in ss 16 and 17. He contends that in the
circumstances where he claims against the Bank inter alia for libel and fraud the case is one
which falls outwith the provisions of sections 16 and that the only question for this Court is
whether the case will require a "prolonged examination of documents".
12. He submits that it was made clear by the UK Court of Appeal, "in the case of Viscount de Lisle v
Times Newspaper Ltd. [1987] 3 AlIER499, that "the Judge really has no discretion at all in
deciding this issue. It is simply a matter of 'weighing up' considerations as to whether the trial
would involve such lengthy examination of documents and accounts as to cause the
administration of justice to suffer if the trial was by a jury rather than by Judge alone, and that
required weighing up the conflicting considerations in light of the pleadings and any other
material put before the judge."
13 He contends that there would be, in fact, no prolonged examination of documents in this case, as
the only documents are the loan documents underlying the Guarantee on which the Bank sues. He
submits further that if the Court were to find that there was such a prolonged examination of
documents as could not be conveniently made with a jury, then given that his claim against the
Bank for libel and bearing in mind the decision of Rothermere and other v Times Newspaper Ltd.
and others [1973] 1 All ER which he submits is authority for the proposition that "generally
where there are matters of credibility, integrity, and honour had to be decided, the history is one
for trial with a jury,"2 the Court should exercise its discretion and order that the matter be tried by
jury.
14. He submits further is that suits against banks are of national importance and that this claim
against the Bank is not important only to him but is, potentially, of regional importance, given the
allegations of fraud, illegality, inflation of interest and of a contrived receivership made against
the Bank and that it is in the public interest that the matter be tried by jury.
The Plaintiff's submissions
15. Mr. Coleman submits that the application is premature as it is made before close of pleadings and
discovery. He submits, however, that on the face of the pleadings it is clear that there would be a
considerable amount of documentary evidence requiring substantial explanation to the jury.
'Para 4 ibid
2 Para 10 of Mr. Duncanson's skeleton
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16. By way of example Mr. Coleman refers to paragarphs 2.a and 2.e of the defence which plead
certain contracts which Mr. Coleman says would have to be disclosed.
17. Paragraph 2. f alleges that "the Bank by its employees and by its agents including its attorneys,
real estate agents and now its appointed receiver.., induced interference in the Company's
business such as caused it not to be able to make any interest or principal repayments to the
Bank" This interference is said to have included making comments which discouraged rent-toown
tenants from continuing their tenancies. Mr. Coleman submits that this paragraph, which he
contends suggests that all those persons conspired to bring the Company down in order to justify
the appointment of a receiver, would require the Plaintiff to obtain numerous witness statements
and necessitate the production of bank documents, leases/sales contracts, emails and notes.
18. He submits further that it is clear that a significant amount of documentation would fall to be
considered with respect to the central allegation in paragraph 8 of the defence - which forms the
basis of the counterclaim for fraud- that the Bank applied inflated interest rates to the loan rather
than the LIBOR rates which were agreed, as the allegation would require proof of the LIBOR
rates throughout the term of the agreement.
19. He asserts that each of the pleaded counterclaims would generate a significant amount of
documentation and that prolonged examination of them would be required and that it would be
costly and inconvenient for the matter to be tried by jury.
20. He submits that there is no compelling reason for the Court to exercise its discretion in favour of
a jury trial and that the case of Rothermere in which Lord Denning said "if a newspaper has
criticised in its columns the great and the powerful on a matter of large public interest -- and is
then charged with libel -- then its guilt or innocence should be tried with a jury... even though it
requires the prolonged examination of documents" is readily distinguishable from the case at
Bar which is a private dispute of between an individual to whom the description " great or
powerful' does not readily apply and a Bank.
21. Finally, he says, there is an overlapping claim for breach of fiduciary duty which sounds in equity
and Mr. Duncanson seeks declaratory relief which is only available in equity and that the action is
caught by section 16 which requires that matters formerly under the jurisdiction of the Court of
Chancery to be tried by judge alone. In support of this submission he relies on the decision of the
Court of Appeal in Salt Cay Devco Ltd and others v Attorney General of the Turks and Caicos
Islands heard jointly with Richardson Arthur v Attorney General of the Turks and Caicos Islands3
in which the Court held that "a substantial issue in equity" will displace the presumption in favour
of a jury trial. Zacca P, construing section 100 of the Civil Procedure Ordinance, now section
16, stated that
"...the section contemplates matters which had to go to Chancery either because of the nature of
the cause of action or because of the remedy sought."
3 Decision of 18 March 2011
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Conclusion
22. In my view, the claim for breach of fiduciary duty in the context of the counterclaim which
alleges both negligence and fraud in addition to breach of contract, and libel, the claim for breach
of fiduciary duty not raise such a substantial issue in equity as to displace the presumption in
favour of a jury trial in section 15. As the arguments of Counsel suggest, the resolution of the
application turns on a consideration the matters set out in section 17: Will there be a prolonged
examination of documents? If so, can it conveniently be made with a jury? If not, should the court
nonetheless exercise its discretion to order trial with a jury?
23. Although I cannot assess with any accuracy the number of documents that will be involved in the
trial of this matter as there has not yet been discovery, it is readily apparent that the case as
pleaded will involve the examination of substantial documentation. Certainly Mr Duncanson does
not accept this but submits that in any event, the volume of documents does not necessarily
equate to a prolonged examination of them and I agree. Neuberger Li in Fiddes case observed at
para 19,
"the number of documents is not the issue when it comes to the first and second section 69
questions. As Slade LJ said in a passage cited by the Judge, "[t]here may be many cases where
numerous documents will be required to be looked at, but no substantial practical difficulties are
likely to arise in their examination being made with a jury" and, by contrast, there can be cases
where "relatively few documents will require examination, but nevertheless long and minute
examination of them is likely to be required".
24. It seems to me that not only will there be a substantial number of documents but also that the
resolution of the issues raised in claim and counterclaim will require detailed examination of the
loan documents and the guarantee upon which Mr. Duncanson is being sued. Further, the pleaded
allegations of fraud and interest rate manipulation will require the sort of prolonged examination
at which section 17 is directed as there will be many documents to consider in order determining
whether the Bank failed to apply the LIBOR rates throughout the period of the loan. While the
legal issue involved is not complicated, a trial by jury would give rise to precisely the sort of
"practical difficulties" to which Bingham LCJ referred in Aitken (supra) as it will involve side by
side comparison of the interest rates applied by the Bank over the life of the loan with the LIBOR
rates for that period to see if they tallied or were indeed inflated. It would be wholly inconvenient
for a jury to be tasked with this sort of minute scrutiny of individual documents.
25. I also consider there is a real risk of the jury not understanding the commercial documents which
will be adduced in these proceedings. This risk was identified by Stuart-Smith LJ in the Beta
Construction Ltd and another v Channel a Four Television Co Ltd and another 4 as an issue
going to the question of convenience. His Lordship stated at p 1017:
"Finally, there is the risk that the jury may not sufficiently understand the issues on the
documents or accounts to resolve them correctly. The judge may also misunderstand them; but he
4 [1990] 2 AlIER 1012
has to give a reasoned judgment and if he is in error it can be corrected in this court. Not so with a
jury; no one can ever know on what grounds they reached their verdict. Where the documents
which require prolonged examination are such that the average juryman cannot be expected to be
familiar with them, such as accounts and commercial documents, this risk is enhanced."
26. Given the volume of documentation which Mr. Coleman suggests is likely to be produced by the
Bank in response to the allegations made against it and its employees and agents, I am satisfied
that a jury trial would prove costly both in terms of the extra costs associated with copying
documents and the extra costs incurred because the trial would necessarily be longer than if it
were by judge alone and would be inconvenient for those reasons as well.
27. I am satisfied that there will be a prolonged examination of documents and that such examination
cannot be conveniently made with a jury and now turn to consider whether " there is a good
reason why, in spite of the inconvenience, the matter should be tried by jury."5
28. Mr. Duncanson submits, inter alia, that as the central cause of action in his counterclaim libel,
then applying the principle in Rothermere, the Court should order that the matter be tried by jury.
29. I would first note that the alleged libel arises indirectly. What is alleged is that the Bank's
advertising the appointment of a Receiver for the Company was libellous as it meant and was
intended to mean that the Company was insolvent and couldn't complete the construction of the
development. Mr Duncanson's case is that, as it is generally known that he is the principal the
Company and he is widely viewed as the developer, the Notice advising of the Receiver's
appointment of the Receiver would be understood to mean that he was a person whose financial
standing was not sound, a person With whom no-one should have business dealings. Leaving
aside the question as to whether a public notice advising of the appointment of a Receiver for a
Company has the meaning and effect for which Mr. Duncanson contends, it is plain that no direct
attack on Mr. Duncanson's honour and integrity by the Bank is alleged as would be a factor in
favour of a trial by jury. At its highest, the allegation is that his fmances are unsound.
30. Secondly, in my view this is not a matter of national importance. It is not being contended that
Mr. Duncanson is a public figure in the Rothermere sense and I note that Lord Neuberger in
Fiddes case sounded a note of caution against construing that decision too narrowly, stating at
para 20 of the judgment that,
'The fact that one party is a public figure may often be a reason for favouring a jury trial, but that
does not mean that the fact that neither party is a public figure is a reason against a jury trial."
But that said, it is is difficult to see how a commercial dispute between a bank and an individual
could be a matter of such national importance as should be tried by a jury.
31. Thirdly, the resolution of the claim will to a large extent turn on the proper construction of the
loan documents which is a matter for the judge. The counterclaim involves consideration of
5 Per Stuart Smith U put it in Beta Construction at p 1018
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multiple causes of action including of fraud, negligence and breach of fiduciary duty which raise
complex legal issues not suited for trial by jury.
32. Finally, having regard to the overall complexity of case, I am of the view that it is in the public
interest and in the interest of each of the parties that this case should culminate in findings for or
against the parties in a reasoned judgment which sets out the tribunal's conclusions on the issues
raised and its reasons for reaching them rather than a jury's general verdict.
33. I can see no good reason, given the inconvenience of trying this matter by jury, to make the Order
sought and I dismiss the application.
34. Costs follow the event, and unless either of the parties notifies the Registrar by Friday the 11 July
at 10 am that it wishes to make submissions to the contrary, I order that Mr. Duncanson shall pay
the Bank's costs of the claim and counterclaim, such costs to be taxed if not agreed.
DATED THE OF JULY 2011
JUDGE OF THE SUPREME COURT
1+'41tUr --
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