Geoffrey Lynn Randall Willcocks v Joseph E. Wakefield
| Jurisdiction | Bermuda |
| Judge | Hargun CJ |
| Judgment Date | 11 August 2023 |
| Docket Number | 2021: No. 417 |
| Court | Supreme Court (Bermuda) |
[2023] SC (Bda) 62 Civ. 11 August 2023
The Hon. Chief Justice Hargun
2021: No. 417
In The Supreme Court of Bermuda
CIVIL JURISDICTION
Mr Geoffrey Willcocks, Plaintiff in Person (assisted by McKenzie Friend, Ms Judith Chambers)
Mr Warren Bank of Cox Hallett Wilkinson Limited, for the First Defendant
Mr Steven White and Mr John McSweeney of Walkers (Bermuda) Limited, for the Second Defendant
Application to strike out the Re-Amended Statement of Claim on the basis that it does not disclose any reasonable cause of action
This is a further application by Wakefield Quin Limited (“ the Second Defendant”) to strike out the claim by Mr Geoffrey Willcocks (“ the Plaintiff”). The background to these proceedings is set out in the Judgment of this Court dated 11 October 2022 (“ the 2022 Judgment”). For ease of convenience that background is repeated hereunder.
The Plaintiff is a beneficiary of a trust fund established under the will of his father, Mr Peter Willcocks, who died on 11 July 2005 (“ the Testator”). The Testator's will dated 20 April 2005 (“ the Will”), drafted by the Second Defendant, provided for (i) the appointment of “ the Senior Partner of the law firm Wakefield Quin” as executor and trustee of the estate (“ the Estate”); and (ii) the creation of the trust fund in the sum of $480,000 (“ the Trust Funds” or “ the Loan”), to be invested for the benefit of the Plaintiff in the form of an annual payment of $30,000 for the duration of his lifetime.
At the time of the Testator's death, Mr Joseph Wakefield (“ the First Defendant”) held the position of “ the Senior Partner of the law firm Wakefield Quin” and was appointed executor and trustee of the Estate in accordance with the Will. The First Defendant swore an oath of executor on 6 June 2006 and probate was granted by the Supreme Court on 30 June 2006.
On 22 October 2010, the First Defendant emailed the accountant of the Second Defendant indicating that he was going to loan the remaining Trust Funds (now standing at $427,259.47) to a Mr Harold Darrell (“ Mr Darrell”) against the deeds of his property at 12 Cedar Avenue in Hamilton (“ the Property”). Some 7 months after the Trust Funds were transferred to Mr Darrell, Mr Darrell signed a document headed Memorandum of Deposit of Deeds dated 17 May 2011 (“ Memorandum of Deposit”) whereby he agreed that he will deposit the deeds to the Property with the First Defendant when the deeds were received by him from the Bank of Bermuda (“ the Bank”). The intended object of this document was to provide an equitable mortgage of Mr Darrell's Property as security for the repayment of the Trust Funds.
In the event, Mr Darrell defaulted on the Loan and has not made any repayments since 2012. The deeds to the Property were not delivered to the First Defendant because the Bank refused to transfer the deeds to Mr Darrell. The Bank, under an order of this Court, ordered the sale of the Property to satisfy its indebtedness from Mr Darrell and the costs of pursuing legal proceedings against it. It now appears that there is no prospect of recovering any of the Trust Funds from Mr Darrell. The Plaintiff has not received any payments from the First Defendant since 2014 and as a senior citizen is now dependent on Government Financial Assistance for his daily needs.
It is in these circumstances that the Plaintiff commenced the proceedings against the First and Second Defendants seeking damages and other relief, principally for breach of fiduciary duties and duty of care, resulting in the loss of the Trust Funds.
In the 2022 Judgment the Court declined to strike out the claims against the First Defendant on the basis that they were statute barred. The Court declined to strike out the claims against the First Defendant holding that it was plainly arguable that the conduct of the First Defendant in transferring the Trust Funds to Mr Darrell was reckless and accordingly section 23 (1) of the Limitation Act 1974 (“the Act”) applied with the result that no period of limitation prescribed by the Act applied to this action. The Court so held at paragraphs 47-48:
“ 47. Here, the factual allegations made by the Plaintiff are capable of amounting to recklessness on the part of the First Defendant and any considered view on this issue should, in the judgment of the Court, be taken at the trial of this matter after consideration of all relevant evidence. The factual allegations in support of recklessness include the following:
(1) The First Defendant paid the Trust Funds to Mr Darrell when there was no enforceable security in place.
(2) The Memorandum of Deposit was signed by Mr Darrell on 17 May 2011, 7 months after the Trust Funds had been paid to Mr Darrell. During these 7 months, the Loan was entirely unsecured.
(3) The Memorandum of Deposit merely records Mr Darrell's agreement to deposit the deeds in the future when he recovers them from the Bank. There was no enquiry made by the First Defendant as to whether and if so when, the deeds would be released by the Bank. In fact, the Bank did not release the deeds and the Property was auctioned off to satisfy Mr Darrell's indebtedness to the Bank and his liability to the Bank in respect of costs. In the result, the First Defendant transferred the Trust Funds to Mr Darrell without any enforceable security.
(4) The First Defendant failed to disclose to the Plaintiff that despite the recording and registration of the Memorandum of Deposit with the Registrar General in the Book of Mortgages under section 3 of the Registrar General (Recording of Documents) Act 1956, there never existed any security which the First Defendant could enforce to ensure repayment of the Trust Funds transferred to Mr Darrell.
(5) The Plaintiff now understands that at the time the First Defendant transferred the Trust Funds to Mr Darrell, Mr Darrell was a client of the First and Second Defendants. In relation to the Loan transaction to Mr Darrell, the First Defendant was in a position of conflict of interest in that (i) as the trustee under the Will the First Defendant owed fiduciary duties to the Plaintiff; and (ii) as the attorney for Mr Darrell the First Defendant also owed fiduciary and duties of care to Mr Darrell. It was not open to the First Defendant to enter into the Loan transaction without the full knowledge and informed consent of all relevant parties including the Plaintiff.
(6) The Plaintiff now understands that it must have been known to the First Defendant that Mr Darrell was in financial difficulties at the time when the First Defendant transferred the Trust Funds to Mr Darrell.
48. In the circumstances, it is plainly arguable that the conduct of the First Defendant in transferring the Trust Funds to Mr Darrell was reckless and accordingly section 23(1) of the Act applies to the facts of this case with the result that no period of limitation prescribed by the Act applies to this action. Accordingly, it cannot be said, as contended by the First Defendant, that it is “very clear” that the Plaintiff's claim is barred by reason of limitation under the Act. These matters can only properly be determined after full discovery at the trial of this action.”
In relation to the application by the Second Defendant to strike out the Statement of Claim the Court noted that the difficulty in the pleaded case by the Plaintiff was that it made no relevant distinction between the First and Second Defendants. The Court further noted that it may be that the case is so pleaded by the Plaintiff upon the assumption that the Second Defendant succeeded as executor and trustee on the retirement of the First Defendant. However, for the reasons set out at paragraphs 61 to 64 of the Judgment dated 11 October 2022, the Court held that it was not possible, as a matter of law, for the Second Defendant to assume the status of executor and trustee. In the circumstances, the Court held, it was essential that the case against the First and Second Defendants be separately and distinctly pleaded. The Court further held that the Second Defendant is entitled to know (i) in what capacity the action is being pursued against it by the Plaintiff; (ii) what duties the Plaintiff alleges are owed by the Second Defendant to the Plaintiff; (iii) how and when it is alleged that those duties have been breached by the Second Defendant; and (iv) whether and if so what damage flows from the breaches of duty allegedly committed by the Second Defendant. The Court allowed the Second Defendant to file an amended Statement of Claim within six weeks of the date of the Judgment.
In response to the Judgement dated 11 October 2022, the Plaintiff has filed its Amended Statement of Claim dated 22 November 2022. In that pleading the Plaintiff asserts against the Second Defendant the following:
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(1) The Second Defendant in its various capacities as trustee by conduct, constructive trustees, administrators of the Estate, and by providing dishonest assistance to the First Defendant is liable for the loss and damage suffered by the Plaintiff and is vicariously liable for the acts and omissions of its employees, which include its accountant in 2010, Ms Anne Walsh and Mr Richard Horseman, a director (paragraph 6).
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(2) The Second Defendant, after the First Defendant had left its employ, continued to administer the Estate and the trust monies and to provide the Plaintiff with checks representing the annual sum due to him, and this continued until at least August 2012. During this period the Plaintiff relied on Mr Horseman and the Second Defendant (and not the First Defendant) as attorneys for the estate responsible for the provision of his...
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