| Return to Contents Case Summaries Bankruptcy DÉGRÈVEMENT: REMISE DE BIENS: CESSION Sparta Investments Ltd. and others v Superseconds Ltd. CA: (Collins, Nutting, and Sumption JJA) April 11th 1997 unreported. R.J.F. Pirie for the appellants; C.M.B. Thacker for the respondent. On 26th June 1996 the respondent obtained an order from the Royal Court for the dégrèvement and réalisation of the real and personal property of the appellants. The first appellant was the debtor of the respondent in three bonds which it was unable to pay. The second appellants had guaranteed the obligations of the first appellant under two of the bonds. The respondent obtained judgment against the first appellant in respect of capital and interest outstanding on the two bonds, and in the same action obtained judgment against the second appellants under the guarantee. The first and second appellants in October 1995 had sought and obtained a remise de biens which was for a term of six months. On 7th June 1996, having concluded that the combined estate of the debtor and guarantors could not be sold for a sum sufficient to satisfy the secured charges on the real property of the appellants, the Autorisés sought and were granted a discharge of the remise de biens, The Royal Court held that the discharge of the remise de biens gave rise to a general cession of the appellants the cession having been conditional until the failure of the remise de biens. Article 5(1)(b) of the Bankruptcy (Désastre) (Jersey) Law 1990 provides that if the debtor has been permitted to make general cession of his property the Court shall refuse to make a declaration of désastre. The Royal Court refused the appellants’ application for a declaration and ordered a dégrèvement and réalisation in the case of the debtor and the guarantors. On appeal to the Court of Appeal two questions were argued: -
whether the discharge of the order allowing a remise de biens gave rise to a general cession; and -
whether a cession occurring in that way fell within Article 5(1)(b) of the 1990 Law. Held, dismissing the appeal: -
that a cession is implied in the grant of the remise de biens and is inherent in its juridical process which is simply to postpone the customary processes of the execution for a limited period while other solutions are attempted. To dispense with the rule that a cession follows on a remise would be to dispense with the only juridical basis on which the debtor can by making a remise obtain a discharge. There was no distinction for these purposes between a remise de biens which was discharged before its term and a remise de biens which went to its full term without the debtor being enabled to discharge the secured debts in full; -
that a cession occurring in that way did fall within Article 5 (11(b)) of the 1990 Law. The three procedures described in sub-paragraphs (a) (b) and (c) of paragraph (1) all had the common characteristic that the property was no longer at the disposal of the debtor. Sub-paragraph (a) precluded a declaration of désastre while a remise de biens was in progress, and paragraphs (b) and (c) dealt with cession and renunciation which were legal procedures leaving the debtor with a "precarious interest" in the property prior to dégrèvement. In all three cases the debtor had the bare title to the property but no valuable interest which could be vested in the Viscount and distributed under the 1990 Law. Arya Holdings Ltd. v Minories Finance Ltd. CA: (Calcutt, Harman, Southwell JJA) July 11th 1996 unreported. R.J. Michel for the plaintiff; A.J. Dessain for the defendant. The appellant had issued proceedings against the respondent claiming damages for an allegedly wrongful declaration of désastre. On the April 24th 1994 (reported at 1994 JLR 149) the Court of Appeal struck out all the causes of action then relied upon by the appellant, save a claim based upon the decision of the Royal Court in ain v de Gruchy [1] . Following re-amendment of the Order of Justice the Royal Court on July 10th 1995, (reported at 1995 JLR 208) struck out the plaintiff’s amended Order of Justice on the ground that the claim was founded on tort and was thus prescribed under Article 2 of the Law Reform (Miscellaneous Provisions) (Jersey) Law, 1960 ("the 1960 Law"). On appeal to the Court of Appeal the appellant argued that such a claim could be classified:- -
as a right of action sui generis; -
as an exercise of the Royal Court’s inherent jurisdiction to regulate its own procedure; Held, dismissing the appeal: -
that a claim based on the principle of the d’Allain case was a cause of action founded on tort; -
that it was subject to a prescription period of three years pursuant to Article 2 of the 1960 Law; -
that it was, at the date when the Ordre de Justice was served on the defendant, already prescribed. DÉSASTRE Blue Horizon Holidays Ltd, en désastre CA: (Collins, Nutting and Sumption JJA) April 11th 1997 unreported. Mr. David Eves on behalf of the appellant; D. F. Le Quesne, amicus curiae; the Viscount. In February 1994 the Royal Court granted an ex parte application by St. Brelade’s Bay Hotel Ltd., a creditor, for a declaration that the property of the appellant be declared en désastre. Five applications were made under Article 79 of the Bankruptcy (Désastre)(Jersey) Law 1990 by the appellant to the Royal Court to recall the declaration and each failed. The appellant appealed on the ground, inter alia, that the appellant had not been notified of the proposed application. Held, dismissing the appeal, that the 1990 law conferred no right on the debtor to receive notice of an application for a declaration en désastre. Per curiam: -
Although no express provision was made in the Rules, the Court had an inherent jurisdiction to hear inter partes any application with which it had dealt ex parte, quite apart from its statutory jurisdiction under Article 7 of the 1990 Law; -
an affidavit sworn in support of an ex parte application should make candid disclosure of all known matters which are adverse to the application; -
if on the ex parte application it appears to the judge that there are adequate grounds on which the making of a declaration might be resisted, he should generally adjourn the application for an inter partes hearing.
Criminal Law Bester v Att. Gen. Royal Ct: (Bailhache, Bailiff and Jurats Potter and Querée) July 24th 1997 unreported. M.P.G. Lewis for the appellant; S.A. Pearmain for the Crown. The appellant appealed against his conviction in the Magistrate’s Court for an infraction of Article 9 of the Children (Jersey) Law 1969 which provides that any person in charge of a child who "wilfully assaults, ill-treats, neglects, abandons or exposes him... in a manner likely to cause him unnecessary suffering or injury to health ...." commits an offence. The appellant was found by the police in an agitated and intoxicated condition sitting or crouching on a narrow wall ten feet in height with his 12 months’ old child cradled in one arm. The appellant argued that he had not "exposed" the child within the meaning of the article because, on a proper construction, that word meant "left without shelter or unprotected from the weather". Held, dismissing the appeal, that the word "expose" in Article 9 should not be given an unduly testuitive meaning; in context it meant "to lay forth to view" and that by carrying the child along a high wall in a drunken state the appellant had "exposed" her in a manner likely to cause her injury to health. DISCLOSURE: PROSECUTION DUTY TO DISCLOSE UNUSED MATERIAL Dowse and Heys v Att. Gen. CA: (Calcutt, Harman and Southwell JJA) July 11th 1997 unreported. R.G. Morris for Dowse; P.C. Harris for Heys; S.C. Nicolle QC, Solicitor General, for the Crown. Both appellants appealed against conviction by the Inferior Number en police correctionnelle of an infraction of Article 77(b) of the Customs and Excise (General Provisions) (Jersey) Law, 1972 [being knowingly concerned in the fraudulent evasion of the prohibition on the importation of a controlled drug] and D appealed against his conviction of an infraction of Article 6(2) of the Misuse of Drugs (Jersey) Law, 1979 [possession of a controlled drug with intent to supply]. The prosecution case had been that D had flown to London on the day in question, collected the drug and brought it back to Jersey where he was to pass it to H who was to pay him a sum of money for it. D had been under surveillance by police officers in the United Kingdom on his arrival at Gatwick and thereafter at Victoria Station and in a café adjacent to Victoria Station. He was not under surveillance for the whole of his time in London. The officers had seen D meet another man at Victoria but had not seen anything pass between them. The statements were not disclosed to the defence by the prosecution on the ground that they were not material, as they proved nothing and disproved nothing. At trial, D gave evidence in his own defence that he had gone from Gatwick to Victoria where he had met a man with whom he had gone to a café. On appeal, the appellants contended that the evidence was material and should have been disclosed. Even if the Crown was right before trial the materiality of the statements became evident during D’s evidence and the duty to disclose was continuous. The miscarriage of justice was substantial. The Crown accepted that the prosecution has a duty to disclose all material evidence, but argued that the evidence which had not been disclosed did not support D’s evidence in any issue which was to be decided by the Jurats. If that decision was wrong it was in any event a case in which the Court of Appeal should apply the proviso to Article 25 of the Court of Appeal (Jersey) Law, 1961, and dismiss the appeal as there had been no substantial miscarriage of justice. Held, -
allowing the appeal in respect of the conviction of both appellants on the importation charge, that whatever the position before the start of the trial the undisclosed evidence had become material during the trial and should have been disclosed, and that the consequent irregularity was the cause of a substantial miscarriage of justice; -
dismissing D’s appeal against conviction for possession with intent to supply, that any credibility D could have achieved through the undisclosed evidence being before the Jurats must have been limited to the issue of D’s having been concerned in the importation. Comment: This decision highlights the need in Jersey or legislation corresponding to the provisions of the Criminal Procedure and Investigations Act, 1996, of the United Kingdom relating to disclosure. The Act prescribes a three-stage process of disclosure; -
primary disclosure by the prosecution, which is disclosure of previously undisclosed prosecution material which in the prosecution’s opinion might undermine the case for the prosecution against the accused; -
on receipt of primary disclosure the accused furnishes a defence case statement to the Court and the prosecutor; -
secondary disclosure following receipt of the defence case statement, which is disclosure of any previously undisclosed material which might be reasonably expected to assist the accused’s defence as disclosed by the defence case statement. Had such a regime been in force the ground of appeal in Dowse and Heys quite simply would not have arisen. On receipt of primary disclosure D would have furnished a statement of his defence which would have enabled the prosecution to make a reasoned reassessment of materiality. As it is, the combination of a duty upon the prosecution to disclose evidence material to a defence of which it may be unaware with an unrestricted ability to indulge in ambush defences will sooner or later give rise to another case where evidence becomes material only during the heat of a trial when its sudden change in status may not be immediately apparent to the prosecutor. Family Law F v S Royal Ct: (Crill, Commissioner and Jurats Le Ruez and Jones) June 30th 1997 unreported. M.P.G. Lewis for the plaintiff; D.G. Le Sueur for the defendant. F, the father of an illegitimate child, actioned the child’s mother, S, to be allowed access to the child. There was evidence that F was subject to violent and threatening outbursts and lacked self-control. Held, that the application would be refused. Obiter: it was a grave step to deprive a father of access to his child even where the child was the issue of an illicit liaison. Corbel v Corbel Royal Ct: (Hamon, Deputy Bailiff and Jurats Gruchy and Herbert) June 4th 1997 unreported. S.E. Fitz for the plaintiff; N.M. Santos-Costa for the defendant. The plaintiff, who had separated from the defendant and agreed that custody of their child would be joint with care and control vested in the defendant, actioned the defendant for an order that the child whom the defendant had started to educate at home, should attend school and receive "mainstream education". The Court heard expert evidence on the quality of education which the child had received at home and the results of his attendance at school for four days as part of an assessment process. Held, ordering that the child commence formal schooling on reaching the age of secondary education, that in Article 20 of the Loi (1912) sur l’instruction primaire the words "au moins égale - at least equal" did not mean that the education received by the child must be the same as that which he would receive at school but must be equal in value to the formal education prescribed by law. What could not be underestimated was "the interaction in learning with other children" and "social interaction with one’s peers and with teachers is also vitally important to the progression to adulthood ....". The Education Committee had a duty to examine the child to assess the quality of education he receives. Comment:Given the courts’ apparent statement of general principle of the importance of interaction of learning with other children and interaction with teachers it is difficult to see how education of an only child solely at home can ever be sanctioned by the Education Committee. Injunctions Krohn GmbH v Varna Shipyard (No. 1), Laurence Graham, 4th party cited Royal Ct: (Bailhache, Bailiff and Jurats Vibert and Jones) June 11th 1997 unreported. R.J. Michel for the 4th party cited; M.J. Thompson for the plaintiff. The plaintiff was an Austrian ship-owning company alleging breach of contract against the defendant Bulgarian shipyard. The dispute between the parties had been opened to arbitration in London. In December 1996 the plaintiff obtained a provisional order for security for its damages’ claim from a German court over funds of the defendant in that country. In February 1997, in apparent reliance upon a defect in the German court order, those funds were moved to an account in Jersey in the name of the 4th party cited who were a firm of English solicitors acting for the defendant. In March 1997 the plaintiff obtained ex parte a Mareva injunction against the defendant and other parties cited freezing those funds and directing the 4th party cited to provide information relating to them. The Judicial Greffier granted leave to serve that order out of the jurisdiction upon the defendant and the 4th party cited under the Service of Process (Jersey) Rules 1994. The 4th party cited applied to set aside the order of the Judicial Greffier. Held, granting the application that the order would be set aside because: -
the 4th party cited was not a defendant and did not fall within Rule 7 (b); -
the 4th party cited was not a necessary or proper party to the action and did not fall within Rule 7 (c); and -
the claim was not brought to "enforce" an arbitral amount, and this did not fall within Rule 7 (m). Krohn GmbH v Varna Shipyard (No. 2), Royal Ct: (Bailhache, Bailiff and Jurats Potter and Querée) July 24th 1997 unreported. R.J. Michel for the defendant; T.J. Le Cocq for the plaintiff. The facts are noted in the summary above. The defendant applied to set aside the Mareva injunction on the grounds: -
that the Court had no territorial jurisdiction over it and that leave to serve the proceedings out of the jurisdiction ought not to have been granted by the Judicial Greffier; and -
that, even if it had jurisdiction, the Court ought not as a matter of discretion to have granted the injunction. Held, dismissing the application: -
that, following the dec of the Court of Appeal in Solvalub Limited v Match Investments Limited [2], the Court did have territorial jurisdiction under Rule 7 (b); and -
that the action of the defendant in transferring the funds from Germany to Jersey was sufficient in the circumstances to justify the conclusion that there was a risk of dissipation. (Editorial Note: this decision is discussed in the article Still no black holes: Krohn GmbH v Varna Shipyard by Paul Matthews on page 240.) Representation of Att. Gen. re Cassin, deceased, Royal Ct: (Bailhache, Bailiff and Jurats Le Ruez and Potter) July 17th 1997 unreported. S. Sharpe, Crown Advocate, for the Attorney General; the Viscount did not appear and was not represented. The Attorney General applied pursuant to Article 16 of the Inquests and Post-Mortem Examinations (Jersey) Law 1995 to quash the finding of an inquest held on 16th December 1993 into the death of the deceased. The deceased had died on 11th December 1993, aged 27, at St. Saviour’s Hospital, the verdict recording "death being due to reflex cardiac arrest consequent to self-induced hanging". At the inquest the Deputy Viscount had heard evidence from medical experts and from a police officer but not from hospital staff who had seen the deceased shortly before her death. Following a request from the mother of the deceased, the Attorney General contended that the failure to call this evidence amounted to an irregularity of proceedings within the meaning of Article 16, and that the finding of the inquest should be quashed. Held, dismissing the application: -
that the failure of the Deputy Viscount to hear evidence from the hospital staff did amount to an irregularity of proceedings; but -
that it was not necessary or desirable in the circumstances of this case to order a fresh inquest. Per curiam: to ask whether it was probable that a fresh inquest would produce a different verdict was to impose too high a threshold. The possibility of a different verdict was an important consideration but the crucial question was whether it was necessary or desirable in the interests of justice that a fresh inquest be held. Tort Dixon, Richardson and Reeb Investments Limited v Jefferson Seal Royal Ct: (Hamon, Deputy Bailiff and Jurats Bonn and Gruchy) July 30th 1997 unreported. M. St. J. O’Connell for the first and second plaintiffs; N.M. Santos-Costa for the third plaintiff; A.D. Hoy for the defendant. The first two plaintiffs were private investors, and the third plaintiff was a company beneficially owned by a private investor, all of whom engaged the services of a firm of stockbrokers, the defendant, for advice in relation to investments in eurobonds. The plaintiffs alleged that the defendant owed duties in contract and in tort to recommend suitable investments and to provide them with information and advice concerning their investments once such recommendations had been made. The defendant recommended the purchase by the plaintiffs, on various dates, of a subordinated eurobond of a Canadian insurance company known as Confederation Life Insurance of Canada. Confederation Life was forced into liquidation in August 1994 and all three plaintiffs lost their respective investments. The plaintiffs alleged, inter alia, that they were cautious investors who did not wish to take any appreciable investment risk. In response the defendant claimed, inter alia, that the Confederation Life Bond was a suitable investment for the plaintiffs, that the first plaintiff was guilty of contributory negligence, that the second plaintiff was not in a position of such proximity to the defendant as to render the defendant liable, and that the third plaintiff had received advice to dispose of the Confederation Life Bond, which advice had been rejected. Expert testimony regarding the practice of investment advisers was heard at length by the Court. Held, in finding for the plaintiffs, that the Confederation Life Bond, on the facts, was not a suitable investment for any of the plaintiffs having regard to the investment criteria which the Court found was applicable to each of them. In the case of the first and second plaintiffs the Court found that the defendant failed in its duty to apprise them of the material facts surrounding the investment history of the bond prior to recommending its purchase. The defence of contributory negligence as against the first plaintiff failed, the Court finding that the defendant was in possession of specialist knowledge which was not accessible to the first plaintiff; thus the defendant could not sustain the allegation that the first plaintiff had contributed to the loss. In the case of the second plaintiff the Court found that she was a client of the defendant which consequently owed duties to her, which duties had been breached. In the case of the Third Plaintiff (which had purchased the bond considerably earlier than the first and second plaintiffs) the Court held that the Defendant was under a duty to keep the third plaintiff apprised of the developing investment information which had emerged during the period in which the investment had been held. The Court confirmed the duty on a reasonable stockbroker to keep an investor apprised of developments relating to an investment held by that investor. The Court accordingly ordered the defendant to pay damages and interest to all three plaintiffs. |