Mandy Debra Morgan (as executrix on behalf of the estate of Leslie Smith Deceased) v Sydney Charles Financial Services Ltd
| Jurisdiction | England & Wales |
| Judge | Keyser |
| Judgment Date | 19 December 2023 |
| Neutral Citation | [2023] EWHC 3236 (Comm) |
| Year | 2023 |
| Court | King's Bench Division (Commercial Court) |
| Docket Number | Case No: CC-2023-CDF-000003 |
[2023] EWHC 3236 (Comm)
HIS HONOUR JUDGE Keyser KC
sitting as a Judge of the High Court
Case No: CC-2023-CDF-000003
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN WALES
CIRCUIT COMMERCIAL COURT (KBD)
Cardiff Civil Justice Centre
2 Park Street, Cardiff, CF10 1ET
Steven McGarry (instructed by Wynterhill LLP) for the Claimant
Lucy Colter (instructed by Womble Bond Dickinson (UK) LLP) for the Defendant
Hearing dates: 7 December 2023
Approved Judgment
This judgment was handed down remotely at 10.30am on 19 December 2023 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
HIS HONOUR JUDGE Keyser KC
Judge Keyser KC:
Introduction
By an application notice dated 7 September 2023 the claimant seeks permission to serve the claim form on the defendant in Guernsey, out of the jurisdiction, together with various ancillary orders. A similar application had previously been made on a without-notice basis when the case was proceeding in the London Circuit Commercial Court but, after the transfer of the case to this court and the defendant's intimation that it would challenge jurisdiction, the parties agreed that the claimant's application should be dealt with at an inter partes hearing.
The application is supported by a witness statement dated 22 August 2023 by Ms Jennifer Hutchinson, the solicitor with conduct of the case on behalf of the claimant. In response, the defendant filed two witness statements dated 29 November 2023: one from Mr Philip Lepp, the chairman and managing director of the defendant; the other from Ms Joanne Rideout, the solicitor with conduct of the case on behalf of the defendant. Those statements elicited a second statement, dated 5 December 2023, from Ms Hutchinson on behalf of the claimant. Ms Hutchinson produced a third statement, dated 6 December 2023, in response to certain questions raised in the skeleton argument on behalf of the defendant.
I am grateful to Mr Steven McGarry and Ms Lucy Colter, counsel respectively for the claimant and for the defendant, for their helpful written and oral submissions.
Basic Facts
The claimant is the widow and sole executrix and beneficiary of the estate of Mr Leslie Smith (“the deceased”), who died on 30 May 2019. At all material times the claimant and the deceased resided together in England; the claimant still resides there.
The defendant is a company incorporated and located in Guernsey and carrying on the business of the provision of financial services, in which it is regulated by the Guernsey Financial Services Commission (“GFSC”). It has no authorisation or permissions from the UK Financial Conduct Authority (“FCA”) and is not and never has been regulated by the FCA or subject to the regulatory regime in England and Wales for financial services. The defendant is part of the Sydney Charles Group of entities. The holding entity for the group is a company incorporated in Guernsey. The group includes one entity (Sydney Charles UK LLP) that is authorised and regulated in England and Wales by the FCA; however, the deceased had no dealings with that entity, and the evidence of Mr Lepp is that the defendant has no working relationship with that entity.
The deceased first instructed the defendant in mid-2013. He had been referred to the defendant by New Century Consulting Limited (“NCC”), for whom he worked under a consultancy agreement. NCC was registered in St Kitts & Nevis, but its operations were based in Guernsey. Its business involved providing security and intelligence personnel to security agencies in war zones and other high-risk areas of the world. The deceased was one of its consultants, engaged on a series of 12-month contracts that were renewable so long as NCC required his services. (The final such agreement expired in September 2016.) NCC was a client of the defendant, through whom it provided insurance for its consultants in respect of specific work-related risks, such as kidnap and personal accident in war zones. The cover did not extend to death by natural causes; instead, NCC had asked the defendant to source a specialist policy, which the consultants would be able to buy at their own expense if they wished.
The deceased entered into a number of insurance policies with the defendant. This case concerns two Level Term Life Assurance policies arranged by the defendant in 2013 and 2015 respectively. Each Life Assurance Policy was arranged by the defendant through Kiln Life Syndicate at Lloyd's of London on a sum assured of £500,000 for a 12-month term. The claimant's contention is that, on each occasion when he took out the policy, the deceased did not appreciate, because it had not been sufficiently explained to him, that the policy expired after only one year.
The term of the 2013 policy expired on 15 December 2014. In September 2015 the deceased asked the defendant why the direct debit for the policy premium had not been collected. He wrote, “Could you check what has happened as I would like the cover to be in place.” The defendant responded that the policy had matured on 16 December 2014 and the direct debit had been cancelled, the last payment having been taken on 16 November 2014. The email stated, “If you wish to apply for the same type of cover, I can arrange for Kiln to forward me new terms and the proposal form for you to complete.” In due course, the 2015 Life Assurance Policy was arranged by the defendant for a 12-month term expiring on 19 November 2016.
In January 2017 the deceased was diagnosed with a terminal illness. In April 2017 the defendant informed him that no cover was in place for death by natural causes. It was, of course, too late for him to take out a new policy in respect of that risk. In January 2018 the deceased made a complaint to the Channel Islands Financial Services Ombudsman concerning the services provided by the defendant 1. As mentioned above, he died in May 2019. Probate of the deceased's will was granted to the claimant out of the Cardiff District Probate Registry on 14 January 2020.
By the claim form, which was issued on 21 August 2023, the claimant alleges that the defendant was retained by the deceased between 2013 and 2017 in relation to the placement of life insurance policies and that, by reason of the defendant's breach of contract and breach of duty in respect of the advice and explanation it gave to the deceased in relation to the policies he took out, there was no policy of life insurance in existence at the date of his death. Damages are claimed for breach of contract and for “breach of duty”.
The case is set out in very considerable detail in the 32-page particulars of claim attached to the claim form. Paragraphs 119 to 122 aver that the defendant owed duties under the rules of the Guernsey regulatory scheme. Paragraph 123 avers that it owed duties under the UK ICOBS rules “and the equivalent under Guernsey regulations”. Paragraph 124 sets out particulars of the defendant's “breach of duties of reasonable skill and care owed in contract, tort and under the regulatory scheme”. Of the thirteen particulars, twelve consist of failures to do something; one is an allegation of making
“unclear communications” to the deceased. The essence of the particulars is that the defendant failed to assess the deceased's insurance needs, failed to give him proper advice or to procure for him suitable policies, and failed to give him clear advice and information as to the extent of and limitations on his policies. Whereas paragraph 124 focuses on advisory duties, paragraph 126 is concerned with information duties. It lists fourteen particulars of breach of duty, of which thirteen are allegations of failure (to give adequate explanations or information, or to ensure that the deceased had a sufficient understanding of the policies or the terms of the defendant's retainer or the scope of its services) and one is a repetition of the allegation of making “unclear communications” to the deceasedThe defendant has not submitted to jurisdiction and has not filed a defence. In broad terms, its response to the substance of the claim is as follows. It was retained by the deceased on an execution-only basis and was not retained to advise him and owed no duty to do so. It was not and is not now authorised or regulated by the FCA and was not authorised to give regulated financial advice within the UK. If, on the contrary, it committed any breaches of duty, whether on an advisory or a non-advisory basis, those breaches cannot have been causative of any loss. The defendant's position is set out in detail in its pre-action Protocol response in March 2020. That letter said that the applicable law was Guernsey law (it expressed the understanding that the law of tort in Guernsey “largely reflects the law of tort in England and Wales”) and the proper forum was Guernsey. With regard to regulatory duties, it said this:
“62. … Our client is a Guernsey company licensed and regulated by the Guernsey Financial Services Commission. In the context of your client's claim, in relation to which your client appears to accept that our client was acting as an insurance intermediary, the material regulations are contained in the Guernsey Code of Conduct for Authorised Insurance Representatives (‘the Guernsey Code’) which was effective from 1 January 2015. Whether or not the Guernsey Code mirrors the FCA framework is immaterial.
…
65. Paragraph 7.1.4 of the Guernsey Code, which was effective from 1 January 2015, states that in circumstances where a policy is sold on an execution only basis the business is required to confirm to the client in writing that the client did not seek any advice from and was not...
To continue reading
Request your trial