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Case Summaries

Bankruptcy

Désastre

Shirley v Deputy Viscount CA: (Southwell, Beloff and Sumption JJA) September 30th, 1999 unreported.

The appellant appeared in person; J.G.P. Wheeler for the respondent.

The appellant applied for orders:

(1)        setting aside the Court of Appeal’s direction of April 3rd, 1998 that the following two jurisdictional points under Article 31 of the Bankruptcy (Désastre) (Jersey) Law 1990 had first to be decided:-

(a)        whether there is power under that Law for any person other than a creditor whose proof of debt has been rejected to notify the Viscount that he wishes an application to be made to the Royal Court for the reversal or variation of that decision; and

(b)        whether, in the light of the statutory time limit set out in Article 31(4), the extension of time granted to the appellant under Rule 10 of the Bankruptcy (Désastre) (Jersey) Rules 1991 was ultra vires the statute;

(2)        granting the appellant’s application for leave to appeal from a decision of the Royal Court of January 27th, 1998 declining to require the respondent to give reasons or better reasons for his adjudications in the désastre of Jerseycard Limited;

Held,   refusing leave to appeal, that

(1)        (a)        the meaning of Article 31(4) was clear: the appellant as an opposing creditor was entitled to require the Viscount to make an application to the Royal Court in relation to the proofs of claim opposed by the appellant but admitted by the Viscount;

(b)        (Sumption J.A. dissenting) the Viscount did have the necessary discretionary power to extend time under Article 31(4) and did lawfully extend it for the appellant’s benefit.

(2)      that the right given by Article 31(4) was a right to appeal to the Royal Court and in such an appeal the Court would be able to re-consider fully the merits of the Viscount’s decision and itself decide whether or not a particular proof of claim should be admitted. Little would therefore be served in requiring the Viscount to give a more detailed statement of his reasoning.  Per Southwell J.A.: the Viscount’s reasons for allowing the relevant claims opposed by the appellant probably sufficed in any event to indicate the basis on which the Viscount had decided to admit the claims.

Désastre

Midland Ship Repairs Ltd v Global Offshore Services Ltd Royal Ct: (Crill, Commissioner and Jurats Le Ruez and Georgelin) July 22nd, 1999 unreported.

J.P. Speck for the plaintiff; M.H.D. Taylor for the defendant.

An application was brought under Article 6 of the Bankruptcy (Désastre) (Jersey) Law, 1990 (“the Law”) by the plaintiff to declare the property of the defendant en désastre.

The application was contested on a number of grounds, but the principal ground was that the defendant had a counterclaim which it stated would extinguish any debt which might be due to the plaintiff.

The Royal Court cited the following passage from the judgment of Southwell JA in re Baltic Partners Ltd and Sparbanken Sverige AB[1]

“The creditor’s claim will usually have been established by a judgment of a competent court, often a summary judgment.  A judgment is not a precondition.  But if the creditor does not have a judgment in his favour, there must nevertheless be a liquidated sum undoubtedly due and payable by the debtor.  The indebtedness must be certain, and not the subject of genuine dispute and arguable defence, set off or counterclaim.  The indebtedness must be such as could form the basis of an immediate summary judgment”.

Held,  applying that dictum, that the Court would decline to grant the application.

Désastre

In re the désastre of Ostroumoff  Royal Ct: (Hamon, Deputy Bailiff and Jurats Le Ruez and Bullen) September 14th, 1999 unreported.

A.J.N. Dessain for the Viscount; R. Renouf for the applicant.

On March 12th, 1998 the Royal Court declared en désastre  the property of Paul Ostroumoff and Angela Ostroumoff, his wife, on the application of Bristol & West plc, whose debt was secured by hypothec on their jointly owned home.

The applicant wife made an application under Article 12 of the Bankruptcy (Désastre) (Jersey) Law, 1990 (the “Law”).

Three issues arose;

(1)                whether the applicant had a right to make a claim for relief under Article 12 being en désastre herself;

(2)                if the answer to (1) was in the affirmative, was she entitled to any relief? and;

(3)                if the answer to (2) was in the affirmative, to what relief was she entitled?

Article 12 of the Law provides an applicant must show that he or she is the spouse of the debtor.

“Debtor”, as defined in Article 1 of the Law,

“(a)      in relation to an application for a declaration means a person who is insolvent;

(b)                in relation to a declaration means the person in respect of whose property that declaration is made.”

The Court considered whether the applicant was the spouse of the debtor.  The applicant was clearly the spouse of Mr Ostroumoff and Mr Ostroumoff was a debtor in the désastre.  On the other hand the applicant was also a debtor.  The Viscount contended that Article 12 was intended to protect a spouse (with or without an interest in the matrimonial home) from the effects of the bankruptcy of the other spouse, and that that consideration did not apply when both spouses were bankrupt.

The Viscount contended that it was the intention of the legislature to strike a balance between the interest of the non involved spouse and the interests of the creditors.

Held,  refusing the application, that a wife who was herself a debtor was not the spouse of the debtor for the purposes of Article 12 of the Law.

Civil Procedure

Appeals

In the matter of a Settlement C A: (Southwell JA) July 27th, 1999 unreported.

P.C. Sinel, J.A. Clyde-Smith, A.P. Begg and M.P.G. Lewis for the different parties.

The case raised the following issues:

(1)                whether the Court of Appeal has power to abridge, as well as to extend, periods of time laid down for the taking of steps relating to a civil appeal or an application for leave to appeal; and

(2)                if so, whether that power is capable of being exercised by a single judge.

Held,   (1)        that prior to 1964 the Superior Number of the Royal Court had had power to abridge time periods in connection with the appeals from the Inferior Number and that this power was now vested in the Court of Appeal pursuant to Articles 12 and 15 of the Court of Appeal (Jersey) Law 1961 (“the 1961 Law”);

(2)        that the Court of Appeal had in any event an inherent jurisdiction to abridge such time periods, and that this was a discretionary power to be exercised where necessary or appropriate to ensure a just determination of an appeal or application for leave;

(3)                that the power to abridge time falls within Article 18 of the 1961 Law and can be exercised by a single judge.

Per curiam:  The Court remarked upon the desirability of amending the 1961 Law to make abundantly clear that any alteration of time periods could be made by the Court of Appeal and to clarify Article 18 to make it clear that an appeal is pending when an application for leave has been lodged.

Tracing

The Royal Bank of Scotland Ltd v Khan and another Royal Ct: (Crill, Commissioner and Jurats Le Ruez and Le Brocq) October 19th, 1999 unreported.

W. Grace for the representor; N. Benest for the first respondent.

The first respondent was the “greedy” victim of a fraud perpetrated by a Nigerian trickster, as a result of which money was paid into an account at the representor bank.  The money had been mixed up with other monies.

Held,   in the application of the equitable jurisdiction recognised in West v Lazard Brothers and others[2], that the first respondent would be allowed to trace his money into the account and recover it.

Companies

Directors – Disqualification

Representation of Att. Gen. re Dimsey Royal Ct: (Hamon, Deputy Bailiff and Jurats Rumfitt and Allo) October 18th, 1999 unreported

P. Matthews, Crown Advocate, for the Attorney General; D.J. Dimsey, the respondent, on his own behalf.

The Attorney General applied, pursuant to Article 78 of the Companies (Jersey) Law 1991, for an order disqualifying the respondent from being a director or being concerned or taking part in the management of a company.  The question was whether he was “unfit” to be concerned in the management of a company.  The maximum period of disqualification under the 1991 law was five years whereas under the Bankruptcy (Désastre) (Jersey) Law 1990 as amended, the period was 15 years.  The respondent, an accountant, had twice been convicted of fraud, the first time in 1981 and the second in 1997 and sentenced to periods of imprisonment.  He had been struck off by his professional body.

Held,   granting the application, that the respondent would be disqualified for three years.

Jurisprudence

Doctrine Of Precedent

The State of Qatar v Sheikh Khalifa bin Hamad al-Thani Royal Ct: (Bailhache, Bailiff and Jurats Potter and Le Brocq) May 28th, 1999 unreported.

P.M. Livingstone for the plaintiff; N.F. Journeaux for the defendant.

The plaintiff had brought attachment proceedings in Switzerland alleging that the defendant, the former Emir of Qatar, had broken an agreement to repay funds which he had allegedly transferred from the State of Qatar during his rule.  In support of the Swiss action, the plaintiff obtained in Jersey a world-wide Mareva injunction over the defendant’s assets including assets held by certain third parties in Jersey.  The plaintiff was granted leave to serve proceedings out of the jurisdiction on, inter alia, the basis of rule 7(b) of the Service of Process (Jersey) Rules 1994 (“the Rule”).  The application was solely concerned with the true construction of the Rule.

Counsel for the defendant argued that the interpretation of the Rule adopted by the Jersey courts in Solvalub Limited v Match Investments Ltd.[3], and subsequently extended in Krohn Gmbh v Varna Shipyard[4]was incorrect.  It was argued that: firstly, the judgement in Krohn did not give sufficient weight to the doctrine of precedent, and that, according to that doctrine, the Court should have held itself bound by the interpretation of the Rule given in The Siskina[5]; secondly, that the Royal Court in considering the scope of its “territorial jurisdiction” in Krohn was not bound by the decision of the Court of Appeal in Solvalub in relation to the question of “power jurisdiction”; and thirdly, that the decision of the majority of the Privy Council in Mercedes-Benz AG v Leiduck[6] was correct in characterising a free-standing Mareva injunction as being outside the scope of the Rule.

Held,   refusing the application, that

(1)                the Court was not bound by a decision of the House of Lords or the Privy Council on appeal from another jurisdiction in relation to the interpretation of legislation common to Jersey and that other jurisdiction;

(2)                the English doctrine of stare decisis did not apply in Jersey for three reasons:-

(i)                  the fundamental jurisprudence of the Island remains of Norman origin;

(ii)                until recently, the Royal Court resolved cases without recourse to previous judgments; and

(iii)               Jersey caselaw has only been professionally reported since 1985 and therefore there is no basis upon which a system of precedent could be founded;

(3)                although the doctrine of stare decisis was not part of Jersey law, in practice, lower courts will generally follow the decisions of higher courts, and it is the rigidity of the English doctrine, rather than the persuasive force of precedent itself, that is alien to Jersey law.  The Royal Court will be “generally bound” by decisions of the Court of Appeal or Privy Council sitting on appeal on matters of Jersey Law, although it would have the freedom to depart from such decisions if the decision were to be subsequently invalidated by legislation or another compelling change of circumstance.  Decisions of the Privy Council on appeals from other jurisdictions concerning legislation common to that jurisdiction and Jersey would be persuasive, but the degree of persuasiveness would depend upon the social and policy considerations particular to Jersey;

(4)                such policy considerations were referred to by the Court of Appeal in Solvalub, and by the Royal Court in Krohn, and provided a sound basis for not following the interpretation of the Rule adopted in The Siskina.  As English and Commonwealth judgments were not binding upon the Royal Court, the Royal Court had a duty to follow Krohn unless convinced that Krohn was wrongly decided.

Limitation Of Actions

Contract Actions

Boyd v Pickersgill & Le Cornu CA (Southwell, Beloff and Sumption JJA) September 30th, 1999 unreported.

The appellant on her own behalf; R.J. Michel for the respondent; P. Matthews, Crown Advocate, amicus curiae.

The appellant appealed against an order of the Royal Court dismissing the appellant’s Order of Justice claiming damages for breach of contract on the part of the respondent for failing to advise the appellant of her right to institute licitation proceedings with regard to the appellant’s former jointly owned matrimonial home.  The basis of the appellant’s claim was that, had she been advised of the right to institute such proceedings, the former matrimonial home would not have been vested in the tenant après dégrèvement on February 13th, 1987 with consequent financial and other loss to her.

For the purposes of the determination of the question of law before the Royal Court the respondent admitted the breach of contract (i.e. that it had failed to give such advice), and the appellant admitted that any cause of action in tort was prescribed.  It was agreed that the latest date upon which the breach of contract could have occurred was February 13th, 1987 (being the date of registration of the tenant après dégrèvement).

Before the Royal Court the respondent submitted that the appellant’s action in contract was prescribed, more that 10 years having elapsed from the latest date upon which the breach could have occurred and the date the Order of Justice was issued (April 21st, 1997).

The appellant had submitted that until about August, 1989, through no fault of her own she was ignorant of her possible cause of action against the respondent.  She had been advised of the existence of licitation and of the maxim “A qui est empesché d’agir la prescription ne court point” (“the maxim”), by the Judicial Greffier in about July, 1989.

The Royal Court had dismissed the appellant’s Order of Justice on the ground that the appellant’s action in contract was prescribed.

The Court of Appeal identified the following issues of law-

(i)                  Is a person to whom a lawyer in breach of contract fails to give advice able to assert that time does not run against him or her in respect of an action against the lawyer for such breach of contract, until such person can reasonably be expected to be made aware, or is in fact made aware, of the lawyer’s breach (“prescription”).

(ii)                Is it relevant that such person does not institute proceedings promptly when he or she should have been aware of the lawyer’s breach (“promptness”).

The respondent acted for the appellant from August 1984 until April 1987.

Held,               applying Maynard v Public Services Committee[7] on the prescription point,

(1)        that the principle underlying the maxim is the practical impossibility of a plaintiff being unable to exercise his/her rights;

(2)        that mere ignorance does not bring the maxim into operation;

(3)        that where there is an impediment creating such a practical impossibility, of which ignorance is a part, then the maxim may come into operation.

(4)        that the maxim can be applied to new circumstances but only when they are consonant with the underlying principle,

(5)        that the epitaph “practical” softens rather than strengthens the concept of impossibility and requires the Court to consider what is in fact, not in theory, possible,

(6)        that a test of “reasonableness” is to be used to establish whether a claimant is ignorant of facts giving rise to a cause of action;

(7)        that prima facie it is practically impossible for a layman to identify that he or she has not been given appropriate legal advice nor would it be reasonable, in ordinary circumstances, to expect him or her to do so;

and, on the promptness point,

(8)        that the effect of a period of time being validly suspended is to exclude that time from counting towards the 10 year prescriptive period in contract.

Obiter per Southwell JA:  the question of whether the law of Jersey should develop along the lines of the decisions in GD Searle & Co v Gunn[8] and in Invercargill City Council v Hamelin[9] remains open to be argued in a future case, namely, whether a cause of action (in contract or tort) only arises when the victim knew or ought reasonably to have known of the existence of facts giving rise to the cause of action (the “reasonable discoverability” test). 

Statues

Interpretation

Crawford v Prison Board Royal Ct: (Bailhache, Bailiff and Jurats Le Ruez and Allo) June 17th, 1999 unreported.

S.E. Fitz for the representor; J.G.P. Wheeler for the respondent.

Following a refusal of applications for leave to appeal, the representor challenged the decision under Article 35 (4) of the Court of Appeal (Jersey) Law 1961 to defer his release date by 6 weeks.  Article 35 (4) provides: “….. six weeks of the time during which any such appellant, when in custody, is specially treated as such in pursuance of the prison rules, or the whole of that time if it is less than six weeks, shall be disregarded in computing the term of any such sentence as aforesaid….”   The representor contended (1) that he was an applicant for leave to appeal and not an appellant and (2) that he was not “specially treated” because he did not in fact benefit from the various privileges available to an appellant under the rules, some of which were in any event available to all prisoners.

Held,   dismissing the representation,

(1)                that a person became an “appellant” once the notice of appeal had been given, and

(2)                that the representor was entitled to the privileges, whether or not he took advantage of them, and was thus “specially treated”.

Obiter: the Prison Rules should be amended so as to accord with current practice.

Succession

Wills

In re Estate Bull Royal Ct: (Crill, Commissioner and Jurats Myles and Georgelin) August 24th, 1999 unreported.

A.D. Robinson for the first representor; M.J. Thompson for the second representor; N.J. Chapman, A.J.D. Winchester and S. Sharpe, Crown Advocate, for certain of the respondents.

            The case concerned two representations relating to the estate of the deceased.  The first representation was brought by the deceased’s principal heir.  By it he sought to obtain a ruling as to whether a copy of a will of the deceased dated January 7th, 1991 (“the 1991 will”) in which he was also named as executor, ought to be admitted to probate.  The original had been lost.  It was accepted by all parties that the 1991 will was valid in form.  By his representation the second representor drew to the attention of the Court a subsequent draft will which appeared to have been prepared by the deceased either in late 1995 or early 1996 (“the draft will”).  All parties accepted that the draft will could not take effect as a will as it was deficient in a number of respects.  Its only legal significance might be that it evidenced an intention on the part of the deceased to revoke the 1991 will.  It was also contended that the deceased lacked the necessary mental capacity at the time to revoke a will.

Held,  ordering the admission of the 1991 will to probate, that:-

(1)                in the absence of medical evidence to the contrary, the deceased was to be taken to have been of sound mind.  The second representor had discharged the onus upon him to show that the deceased did not lack mental capacity at the material time.

(2)        the deceased had not shown a clear intention to revoke the 1991 will.  Whilst the draft will did include words of revocation, the doctrine of dependent relative revocation was relevant.   Applying Beaugie v Beaugie and Beaugie,[10] the deceased intended revocation to be conditional upon the effectiveness of the draft will.  The deceased did not intend to revoke the 1991 will absolutely so as to cause an intestacy.