1. This is an appeal against a decision of the Royal Court (Commissioner Clyde-Smith and Jurats Ramsden and Le Heuzé) given on 30 August 2022, whereby the court dismissed an application by the Appellant for an order for the winding up of, and the appointment of joint liquidators for, the First Respondent. Notice of appeal (naming both respondents) was given on 16 September 2022.

2. The First Respondent’s notice is dated 30 September 2022, though it was replaced by an amended notice of 2 December 2022. Curiously, this refers only to the First Respondent as the “Respondent”. However, the amended “respondent’s written contentions” dated 2 December 2022, on behalf of the First Respondent states that they are the contentions of the Second Respondent “in his capacity as the curateur … of the Respondent … ” It is therefore somewhat unclear whether there are formally two respondents, or only one. But it does not matter, because we are in no doubt that both the company (the First Respondent) and the curateur (the Second Respondent) will be bound by our decision.

Background facts

3. The facts are set out in the decision of the court below at paragraphs 2 to 27. These are largely unchallenged on appeal. For present purposes I summarise the background facts as follows. The First Respondent was incorporated in Jersey (where its parent company is also incorporated) on 8 August 2008. It was then registered as a société anonyme in the Luxembourg Register of Companies and Commerce on 1 September 2008.

4. As a result, the First Respondent was described in the judgment below as a “dual hatted” entity. The precise juridical effect of the entity’s registration under Luxembourg law does not appear from the materials before the court. Indeed, the Royal Court itself noted (at [53]) the absence of any evidence of Luxembourg law on this point. Despite the statement of the Royal Court that the First Respondent was “incorporated in two jurisdictions”, we have seen no evidence that that was indeed the position. Nevertheless, it was common ground that the First Respondent is administered in Luxembourg (where two of its three directors are based), and carries on no economic activity in Jersey.

5. The First Respondent is a member of a group of companies, known as the IWG Group, operating in many countries. The relationship of the Appellant with the First Respondent arises from a guarantee granted by the First Respondent of the tenant’s liabilities arising under a lease dated 24 July 2018 granted by the Appellant as landlord to another company in the IWG Group (referred to in the papers as “RGN”) of a property in San Francisco, in California, USA. The Royal Court found that the lease and guarantee were governed by Californian law and received expert evidence on behalf of the Appellant on the effect of that guarantee under that law. The First Respondent did not file any such evidence.

6. So far as material, the guarantee provides:

“2. Regus plc hereby unconditionally and irrevocably agrees that it will, within 5 business days of a written demand from the Landlord made in accordance with the terms of this Guarantee:

(a) pay to the Landlord any Base Rent (as defined in the Lease Agreement) and other charges or amounts required to be paid by Tenant pursuant to the express terms of the Lease Agreement, including but not limited to any damages resulting from any default beyond all applicable notice and grace periods … by Tenant of any of its obligations, monetary or non-monetary, under the Lease Agreement, any amounts that landlord expends to cure any such default of Tenant under the Lease Agreement and any reasonable attorneys' fees, costs and expenses, including, without limitation, court costs and filing fees, incurred by the Landlord if the Landlord should retain counsel and/or institute a suit against the Tenant to enforce the Lease Agreement or any covenants or obligations of Tenant thereunder, if the Landlord is the prevailing party (collectively, the "Guaranteed Liabilities"), up to a maximum guaranteed amount, in the aggregate, of Ninety Million and 00/100 U.S. Dollars ($90,000,000.00) (the ‘Guaranteed Amount’) …”

7. It is common ground that, in January 2019, the First Respondent made a distribution to its parent company. The First Respondent valued the distribution at £644.6 million, but the court below found that contemporaneous balance sheets showed a value exceeding £3.3 billion. The Appellant asserts that this made the First Respondent insolvent. Whether or not this was so, all parties accept that the First Respondent in fact is now insolvent. Self-evidently, the court is not now dealing with any question arising from that distribution, and I make no comment on the merits of any claims that might hereafter be considered in respect of it.

8. A dispute arose about a purported termination of the lease by the tenant company in September 2019. This dispute was litigated in California. On 11 May 2021 the trial court (the San Francisco County Superior Court) held for the Appellant. That decision was promptly appealed. In the meantime, on 16 August 2021 the trial court made a costs order against the tenant in the sum of just under US$100,000. However, this did not include lawyers’ fees, which at the date of the hearing of the appeal had yet to be assessed. The Royal Court found, on the basis of expert evidence of Californian law, that the pending appeal involved an automatic stay in the meantime of enforcement of the court’s orders, both the original one and also that for costs.

9. At the time of the hearing before us, the appeal against the Californian court’s decision to the Court of Appeal of California had been heard, but the result of that appeal was not known. We were only made aware on 2 February 2023, which was a week after the hearing, that on 23 January 2023 the Californian Court of Appeal had affirmed the decision of the Superior Court of San Francisco County. In its decision of 23 January 2023, the Court of Appeal also affirmed the costs decision of 16 August 2021. We have had regard to those judgments of the Court of Appeal, having allowed in the new evidence on Ladd v Marshall principles, the Respondents having raised no objections.

10. On 10 September 2020, at the First Respondent’s request, the Royal Court issued a letter of request to the Luxembourg court for it to make a bankruptcy order in relation to the First Respondent in Luxembourg. No creditors were convened in that application; and the Royal Court granted liberty to creditors to apply to have the letter of request set aside. The Court refused the First Respondent’s application for an order that no enforcement proceedings could be brought with the consent of the First Respondent or the Luxembourg Court.

11. On 11 September 2020, the First Respondent changed its name from Regus plc to Redox plc SA. On 14 September 2020 the First Respondent applied to the Luxembourg court for a bankruptcy order. That order was made by the Luxembourg court on 9 October 2020, when the Second Respondent was appointed curateur. He is a practising Luxembourg lawyer and managing partner of a law firm. He is subject to the oversight of a supervisory judge who, the Royal Court observed, has a more active involvement than the Court would in equivalent proceedings in Jersey.

12. It is a feature of this case that, whilst the First Respondent is insolvent, the IWG Group of which it forms part is not. It is a further feature that the Appellant has not sought to prove or otherwise take part in the Luxembourg bankruptcy. We were told that that was because the Appellant feared that, by doing so, it might submit to the jurisdiction of the Luxembourg court.

13. On 6 November 2020 the Appellant served a notice on the tenant company (part of the IWG Group) claiming termination of the lease on the basis of an alleged act of default under the lease, namely the application to the Luxembourg court for a bankruptcy order. On 9 November 2020 the Appellant issued a demand under the guarantee given by the First Respondent for a claim of damages of more than US$90 million. This claim has not been admitted by or on behalf of the First Respondent, and nothing has been paid in respect of it.

14. On 9 September 2021, the Royal Court heard an application at the instance of the Appellant, supported by another creditor, inter alia to set aside the letter of request with a view to clearing the way for further applications, including to wind up the First Respondent in Jersey. The Court concluded that it was not appropriate to set aside the letter of request at that time and adjourned the application with liberty to apply for all affected persons, including creditors.

15. In February 2022, the Second Respondent received a proposal from the IWG Group for the réhabilitation of the First Respondent. The Royal Court described this Luxembourg process (reflecting language used by the Second Respondent in his evidence) as the “emergence of [the First Respondent] from insolvency”. The proposal was contingent on the outcome of ongoing negotiations between the IWG Group and certain of the First Respondent’s creditors. It fell into two parts. The first part involved paying the full amount of those creditors’ claims which had been admitted, together with interest.

16. The second part involved the IWG Group making proposals for the funding of the First Respondent after réhabilitation, including proposals for dealing with contingent claims that might crystallise in the future. Such claims (including those now made by the Appellant under the guarantee) would not be covered by the réhabilitation, but could be pursued against the First Respondent if and when they crystallised in future. However, said the Appellant, once the First Respondent was no longer in bankruptcy, it would return to the control of its parent, IWG plc, and the opportunity to bring claims in respect of the 2019 distribution would be lost.

17. The Second Respondent has made a number of confidential affidavits in this application. In his fourth confidential affidavit, dated 11 July 2022, he discussed the réhabilitation, which (as I have said) he called the “emergence”. In dealing with criticisms made of that process on behalf of the Appellant, he said this, amongst other things:

“16 … Mr Weiss asserts that my reassurance that contingent creditors’ claims will not be compromised by the prospect of emergence is of little comfort for reasons that he goes on to develop in the sub paragraphs that follow. I respectfully disagree with Mr Weiss’s analysis. Contingent creditors will not be prejudiced in the event of the company’s emergence for the following reasons:

a) As to paragraph 19.1, Mr Weiss is correct to note that emergence may only be possible if the IWG Group meets any shortfall. …

b) As to paragraph 19.2, I am unable to comment on the main business activities of the Company in the event that it were to emerge from insolvency. The business activities of the Company following emergence are a matter for the IWG Group who would, following emergence, take control of the Company. …

c) As to paragraph 19.3, I am unable to comment regarding whether the Company would be ‘thinly capitalised’ following its emergence. …

d) As to paragraph 19.4 and as noted above, the proposed emergence of the Company would result in all the Company’s creditors being paid in full. In those circumstances, there is no tension between the need to investigate antecedent transactions and the possible emergence as all the Company’s creditors would be fully satisfied …

18. From the material before us, taken as a whole, the Second Respondent’s statement that the proposed emergence “would result in all the Company’s creditors being paid in full” relates only to the admitted creditors whose claims are met as a condition of the réhabilitation. As we understand it, contingent creditors’ claims would not be valued for the purposes of this exercise, and they would accordingly receive no payment prior to the rehabilitation. Whilst a contingent creditor whose claim only crystallises thereafter would be able, at that time, to pursue the First Respondent, the question of whether that contingent creditor’s claim would be met would depend on: (i) the financial position of the First Respondent at that time; and (ii) any legally enforceable commitment which may be given by the IWG Group.

19. During the hearing before us, the Second Respondent tendered a document which contained a proposed basis for the grant of an indemnity which had been offered by the IWG Group in respect of contingent creditors. Advocate Gleeson emphasised that this had not yet been considered by the supervising judge. On the assumption that agreement was, in due course, reached on the proposed terms, this would not give rise to any liability enforceable at the instance of third party creditors such as the Appellant should their claim not be met by the First Respondent. First, the proposed agreement would be between IWG plc and the First Respondent and could therefore be varied by those parties (bearing in mind that, following the rehabilitation, the latter would be in the control of the former). Second, the proposed deed would be subject to an, as yet unspecified, indemnity cap. Third, the proposed terms would expressly exclude enforceability at the instance of third parties, such as a contingent creditor. Whilst I recognise that the terms of any indemnity which may be granted by the IWG Group had, at the date of the hearing before us, yet to be finalised, the material before us would not enable us to conclude that a contingent creditor’s position will be safeguarded by the réhabilitation.

The representation to the Royal Court

20. On 15 March 2022, the Appellant made an application to the Royal Court, by way of representation, for a winding up order under Article 157A of the Companies (Jersey) Law 1991 (“the 1991 Law”). The application was dismissed on 30 September 2022, and this appeal is against that dismissal. In the representation, the Appellant pleaded the lease and guarantee, the application to the Luxembourg court, the notice of termination of the lease, the demand on the First Respondent under the guarantee, the Californian first instance court’s decision in May 2021 and its costs order in August 2021.

21. The representation then proceeded:

“9. The [Appellant] is a creditor of [the First Respondent] and has a claim for a substantial sum of at least USD$91 million. Neither [the First Respondent] nor the Tenant have paid this amount, or any amount, to date, and the amounts are not subject to any genuine dispute, arguable defence and counterclaim. In the circumstances, the [Appellant]’s claim satisfies the requirements of Article 157A of the Companies (Jersey) Law 1991.”

22. The Appellant went on to assert concerns about the distribution made by the First Respondent in January 2019, and further concerns that the curateur in Luxembourg would not be able sufficiently to investigate those concerns or to take any action adequately to restore the position to what it was before the distribution.

23. On 11 April 2022, the tenant purported to tender payment of the liquidated part of the costs order to the Appellant. This was rejected by the Appellant. The tenant sued the Appellant in California for an order to compel it to accept the tender in satisfaction of the whole. On 5 July 2022 the Californian court refused the tenant’s application, and as I understand the matter there has been no challenge to that decision (the “tender” decision). As a result, I understand that what was originally a “tentative” decision has now become “definitive”. I will return to the significance of this later.

The legislative background

24. Before considering the decision of the Royal Court, and the challenges now made to it, it is important to bear in mind the legislative background to the application. Until 2022 there were four procedures which could be deliberately engaged to bring the existence of a Jersey company to an end. The first of these was known as a summary winding up under Articles 145 to 154A of the 1991 Law. To those familiar with UK company and insolvency law, this is similar to a members’ voluntary winding up in the UK. The second was (perhaps confusingly) known as a creditors’ winding up, under Articles 156 to 186 of the 1991 Law. In its original, narrow form, this required that the members of the company should pass a specific resolution to wind up the company, though the creditors then had the choice of liquidator, if there was any dispute between them and the members. The third was a court winding up, under Article 155 of the 1991 Law. This is similar to a winding up on the just and equitable ground or public interest grounds in the UK.

25. Those first three procedures were all provided for in the 1991 Law. What that law did not contain was any procedure equivalent to a creditors’ compulsory winding up petition and order in the UK. Instead, the functionally equivalent process was one of Jersey’s indigenous insolvency procedures, namely désastre, now regulated under the Bankruptcy (Désastre) (Jersey) Law 1990 (the “1990 Law”). If the court made the appropriate declaration, this placed the administration of the company’s assets and liabilities in the hands of the Viscount, the executive officer of the Royal Court, but there was no separate liquidator. This procedure did not provide for insolvency to be established by failure to pay a statutory demand, the application was made ex parte rather than inter partes, and the court appeared to enjoy a wide discretion as to whether or not to make the order sought.

26. Although a company may still be declared en désastre today, a further procedure was added by the Companies (Amendment No 8) (Jersey) Regulations 2022, as from 1 March 2022. Given the arguments over the proper construction of the new provisions, it is legitimate for us to refer to the Report attached to the Projet of these regulations which said this:

“It is considered that the reform will enhance Jersey’s reputation as a leading finance centre which recognises and protects the interests of creditors. By following established concepts and processes, the scheme will be familiar to practitioners and is based on tried and tested and widely understood procedures.”

27. The regulations operate by widening the scope of the existing creditors’ winding-up to include the case where the court makes a winding-up order on the application of a creditor. They make a number of amendments to the 1991 Law, including inserting a number of new Articles into that law. These include Articles 157A and 157C. The first two paragraphs of Article 157A are as follows:

“(1) A creditor may make an application to the court for an order to commence a creditors’ winding up if the creditor has a claim against the company for not less than the prescribed minimum liquidated sum and –

(a) the company is unable to pay its debts;

(b) the creditor has evidence of the company’s insolvency; or

(2) A company is deemed to be unable to pay its debts for the purposes of paragraph (1)(a), if –

(a) the creditor to whom the company is indebted in a sum exceeding the prescribed minimum liquidated sum then due has served on the company, by way of personal service, a statutory demand in the prescribed form on the company requiring the company to pay the sum so due; and

(b) the company has for 21 days after service of the statutory demand failed to pay the sum or otherwise dispute the debt due to the reasonable satisfaction of the creditor.”

28. By virtue of Article 9 of the Companies (General Provisions) (Jersey) Order 2002, the “prescribed minimum liquidated sum” is £3000. The concept of “insolvency” in Article 157A (1)(b) is not itself defined, but “insolvent” is. Article 1(1) provides that “unless the context otherwise requires … ‘insolvent’ means unable to pay debts as they fall due”. Whether “insolvency” should be construed as a cognate of “insolvent”, and whether the context of Article 157A requires a different meaning, are not matters on which we heard any argument, and I do not consider it necessary to express a view on these questions in order to resolve the present appeal.

29. Article 157C(1) provides as follows:

“(1) The court, after considering an application made, and the affidavit required, under Article 157A, may –

(a) make an order that a creditors’ winding up must commence in respect of the company from the date the application is made or such other date as the court deems fit and appoint a person nominated by the applicant or selected by the court as the liquidator; or

(b) dismiss the application and make such order as it thinks fit.”

The decision of the Royal Court

30. It was common ground before the Royal Court that the First Respondent was indeed insolvent. Accordingly, the initial focus of the Royal Court was whether the Appellant in fact had a claim against the First Respondent for not less than the prescribed liquidated sum of £3000. However, despite what is said in the representation, the Appellant did not rely on the demand under the guarantee in respect of damages flowing from the termination of the lease. Instead, it asserted standing to make the application on the basis of the liquidated part of the costs order against the tenant, the amount of which was said to be due by the First Respondent under the terms of the guarantee.

31. In the Royal Court, the First Respondent did not argue that it was not liable for the tenant’s costs order under the terms of the guarantee, but instead argued that this was not for a liquidated sum and that the sum was not due and payable, because it was subject to the automatic stay pending the appeal. The Royal Court nevertheless held that the Appellant was a creditor of the First Respondent in a liquidated sum exceeding the prescribed minimum of £3000.

32. The court therefore went on to consider the merits of the application. It noted and accepted “the importance and primacy of the place of the company’s incorporation”, which is “prima facie the principal forum in which the company should be wound up”. It recognised that this is so even where there are antecedent parallel proceedings in another jurisdiction. At paragraph 54 of its judgment, the Court noted the previous Letter of Request issued to the Luxembourg Court, and stated:

“It was not a case of this Court deferring to the District Court of Luxembourg but a positive decision that it was in the interest of the creditors that bankruptcy proceedings should be commenced in Luxembourg and having made that decision, and with bankruptcy proceedings well advanced in Luxembourg, the starting point must be for this court to act in a manner which is consistent with that decision, for so long as it remains in the interests of the creditors as a whole for it to do so.”

The judgment then gave a number of reasons (to which I shall return) why in the exercise of the court’s discretion the court declined to make a winding up order, “certainly for the time being”, and dismissed the application.

This appeal

33. The Appellant’s Notice of Appeal puts forward three grounds of appeal, which I summarise as follows. The first is that the Royal Court having decided that the Appellant had standing to make the application should have simply made the order sought, rather than considering that it had a discretion to exercise. The second is that the Royal Court was wrong to refuse to make the order winding up the (Jersey incorporated) First Respondent in Jersey. The third is that the court exercised its discretion on a wrong basis.

34. The First Respondent’s Notice of Appeal puts forward one ground of cross-appeal. This is that, although the Royal Court correctly identified the legal test for standing, it then misapplied that test by holding that the Californian costs order was a liquidated claim sufficient for standing under Article 157A of the 1991 Law. Of course, the characteristics of the costs order are a matter of Californian law but whether those characteristics then make it a “claim” within the meaning for the purposes of Article 157A is a matter of Jersey law.

35. Three issues arise on this appeal. First, does the Appellant have standing to make the application at all? As already stated, the Royal Court answered this question Yes. Second, if so, does the Royal Court have a discretion to exercise in deciding whether to make the order or not? Again, the Royal Court answered this question Yes. Third, if so, did the Royal Court go wrong in failing to exercise that discretion in favour of making the order? As stated above, the Royal Court in the exercise of its assumed discretion declined to make the order, and accordingly dismissed the application.

36. The Appellant challenges the Royal Court’s conclusion on the second and third issues. On the second issue, it says that the Royal Court should have made a winding up order without exercising any discretion. On the third issue, it says that, if, contrary to its primary submission, the Royal Court did have a discretion to exercise, then it should have exercised it in favour of making an order for the winding up of the First Respondent. The First Respondent challenges the decision of the Royal Court on the first issue. It says that the Royal Court should have held that the Appellant had no standing to make the application in the first place.

The first issue: standing

37. I turn therefore to the first issue, that of standing. Although the subject of the First Respondent’s cross appeal, it is logically the prior issue, and it makes sense to consider it first.

38. Article 157A requires two conditions to be satisfied before an application may be made for an order to commence a creditors’ winding up. The first relates to the creditor, and the second to the company. As to the creditor, it must have ‘a claim against the company for not less than the prescribed minimum liquidated sum’. As to the company, either it must be unable to pay its debts, or the creditor must have evidence of its insolvency, or it must consent to the application. Given that it was common ground that the company was insolvent, the argument here relates to the first condition, and in particular to the ‘claim…for not less than the prescribed minimum liquidated sum’.

39. The question is whether the terms of Article 157A(1) contemplate that a contingent or unliquidated creditor has standing to bring an application for a creditors’ winding up order.

40. In summary, my conclusions on the law are as follows:

(1) the ordinary and natural construction of Article 157A of the 1991 Law – introduced by the Companies (Amendment No.8) (Jersey) Regulations 2022 – permits an application to be made for a creditors’ winding up both by a creditor with a liquidated claim and by a creditor with a contingent or unliquidated claim against the debtor, as long as the claim can be demonstrated to be of a value exceeding the prescribed amount;

(2) the intention of the legislature in making the changes to the Companies and Désastre legislation has consistently been to harmonise the structural approaches to creditors’ winding up and désastre;

(3) although it would be a matter for the Court on a désastre application, the Désastre legislation and particularly the changes to it in 2006, have affected the relevance of the case law before that date, and therefore the extent to which those cases should subsequently have been relied upon.

41. The reasons for those conclusions are given below.

42. Before the Royal Court, and again before this Court, the Appellant made the point that the present procedure is new, and that, apart from the decision of the Royal Court itself, there is no authority in Jersey which has considered it. However, the Appellant contended that the relevant provisions of the 1991 Law are ‘closely analogous to (and modelled on) the equivalent procedure available in England and other common law jurisdictions. Decisions from those jurisdictions will, therefore, be persuasive when construing the relevant provisions of the [1991 Law]’.

43. In fact, there has been a further decision on an application under Article 157A, made by the Royal Court on 10 October 2022, with reasons given on 28 November 2022, in Vidya AG v Sumner Group Holdings Ltd [2022] JRC 259. Nonetheless, the procedure is still new, and the point argued before us did not arise in that case.

44. There is no doubt that the decisions of the English Courts on statutory provisions which are similar to those which have been adopted by the legislature in Jersey are frequently of assistance. Before placing reliance upon them, however, it is essential to consider both the legislative context of the Jersey provisions and also whether there are provisions in the structure of the legislation in England which are relevant to the English decision but which are missing from the Jersey legislation. In this case, there are two difficulties with the Appellants’ submission. First, the legislative context in which these provisions have been inserted into Jersey law is not the same as that obtaining in the United Kingdom – the new procedure has been grafted on to an existing procedure called ‘Creditors’ Winding Up’ and is located within that part of the 1991 Law which deals with that existing procedure. Furthermore, the provisions for a creditors’ winding up borrow heavily from the Bankruptcy (Désastre) (Jersey) Law 1990 (the “1990 Law”).

45. Secondly, although some concepts have been borrowed from the insolvency law of the United Kingdom, the actual structure of the new Jersey scheme is quite different from that which operates there. In Jersey, under this procedure, it is the creditor having a claim within Article 157A(1) who must apply to the Court and demonstrate either that the company is insolvent (or there is at least evidence of insolvency) or that it consents. Then the Court may make the order. Article 157A(2) introduces an optional ‘statutory demand’ procedure which may deem the company to be unable to pay its debts.

46. In the UK by contrast, the provision for an application to the Court for a winding up order under Section 124 of the Insolvency Act 1986 or under Article 104 of the Insolvency (Northern Ireland) Order 1989 is general, and the application can be made by any number of persons, including a creditor. This and other differences in the statutory scheme in each jurisdiction mean that one must treat with caution any decisions of the UK Courts on what otherwise appears to be simple statutory language before applying such reasoning to a case in this jurisdiction.

47. In construing the requirements of Article 157A(1), we are obliged to identify the legislative purpose, and in doing so one starts with the ordinary and natural meaning of the words used. In the case of the 1991 Law, there is no statutory definition of the words “creditor”, “debtor” or “claim”. We should therefore apply their ordinary meaning unless the context of the legislation requires otherwise. I note that the definition of the word “claim” in the Shorter Oxford English dictionary is “1. A demand for something as due; an assertion of a right to something 2. Right of claiming; right or title…” In the same work, the expression “debt” is described as “ that which is owed or due; anything ( as money, goods or services) which one person is under obligation to pay or render to another something. 2. a liability to pay or render something…”

48. On the face of it, therefore a debtor is someone with one of those obligations and a creditor a person to whom such obligations are owed. In the same way, a creditor has a “claim” if he is owed an obligation. It may be a contingent claim, or a claim for a sum of money which is not yet “due and payable” or it may be a claim for an unliquidated sum, but in the ordinary use of language he still has a claim.

49. In my judgment, the natural meaning of Article 157A insofar as the condition relates to the creditor, is that there is no restriction in the terms of the statute which requires the claim to be for a liquidated amount. The question then is whether any such meaning should be imported into it.

50. It is clear that the 1990 Law contemplates that creditors with unliquidated claims can still prove in a désastre. Article 29 of that Law as enacted provided:

“(1) Except as provided in paragraph (4), all certain debts and liabilities, present or future, certain or contingent, to which the debtor is subject at the time of the declaration, or to which he becomes subject before payment of the final dividend by reason of any obligation incurred before the time of the declaration shall be debts provable in the “désastre”.

(2) Where a debt bears interest, interest to the date of the declaration is provable as part of the debt, except in the case of a debt secured by a hypothec, security interest, or pledge, when interest is provable to the date of payment of the claim and payable out of the proceeds of sale of the secured property to the extent that it is required and able to meet it and is secured thereby.

(3) In the case of a debt which, by reason of its being subject to any contingency or contingencies or for any other reason does not bear a certain value, and a debt provable by virtue of paragraph (4) of Article 15 the creditor shall make an estimate of its value.

(4) Where a declaration has been made in respect of the property of a person before the commencement of this Law, no debt or liability which would not have been provable in the “désastre” if this Law had not been passed shall be provable in the “désastre”. “

51. This has relevance to a creditors’ winding up because Article 166 of the 1991 Law as enacted provided:

“(1) Subject to this Article and Article 165, in a creditors’ winding up the same rules prevail with regard to the respective rights of secured and unsecured creditors, to debts provable, to the time and manner of proving debts, to the admission and rejection of proofs of debts, to the order of payment of debts and to setting off debts as are in force for the time being with respect to persons against whom a declaration has been made under the Désastre Law with the substitution of references to the liquidator for references to the Viscount. “

52. This prompts the question as to why a creditor with an unliquidated or contingent claim should be able to prove in a winding up or désastre by making an estimate of the value of his claim but not apply to the court to have the relevant order made. There seems to me to be no logical reason why that should necessarily be so, although I accept that the contingency might be relevant to the equity of an order for a creditors’ winding up or declaration of désastre in such a case and thus be a factor in the exercise of the court’s discretion.

53. Furthermore, in considering the purpose of the legislation, we should consider its whole structure, including the legislative context in which it sits. The purpose here is to provide a basis for winding up an insolvent company on the application of one or more creditors. There is no obvious reason why the legislature should be presumed to have intended to distinguish between different types of creditor having standing to make an application or to penalise the unliquidated creditor of an insolvent company who might have to sit out the debtor becoming increasingly mired in debt until a liquidated creditor decides to pull the trigger and make the application.

54. It may be thought that the addition of the words ‘then due’ in Article 157A(2)(a) should be imported into Article 157A(1). I do not agree. Paragraph (2) is there to explain one way in which an applicant can meet Article 157A(1)(a) – it is not there to address what type of claim the creditor must have to establish his standing to bring the application. The words ‘then due’ in paragraph (2) are required because one could not deem a company to be unable to pay its debts if a statutory demand was served in respect of a debt which was not actually due at the time of service.

55. Another argument is based on the use of the word “liquidated” in the phrase “for not less than the prescribed minimum liquidated sum”. It is said that this indicates that the claim itself must be for a liquidated sum. In my view, the word “liquidated” belongs in the phrase in which it is found, and would be in the wrong place in the sentence to qualify the “claim” possessed by the creditor. Moreover, if “claim” in fact already meant “liquidated claim”, the use of “liquidated” in the later phrase would be superfluous.

56. The need to focus on the Jersey context for the legislation is emphasised by the Report (P.74/2006) accompanying the proposition to the States in 2006 to bring the amendment to the 1990 Law into force which contains this passage:

“The Bankruptcy (Désastre) Amendment Number 5 (Jersey) Law 2006 was passed by the States in September 2005 and received sanction from Privy Council in May 2006. The Amendment will ensure that provisions in relation to bankruptcy remain up to date, that cells of cell companies can be the subject of bankruptcy proceedings, and that there is no difference in the treatment of a company subject to an insolvent (creditors) winding up under the Companies Law or a désastre under the Bankruptcy Law…” (emphasis added)

and by the Report accompanying the legislation itself (P.175/2005) which had contained this language:

There are 2 procedures that can currently be applied to an insolvent company: it can be subject to a creditors’ winding up under the Companies Law or a désastre under the Law. It is clearly vital to ensure that, whichever procedure is followed, the outcome is the same, both in respect of the treatment of the company’s creditors and in the powers of the court in respect of those who have been directors of the company. In July 2005, the States approved a significant amendment to the Companies Law, and the main purpose of the Draft Amendment is to ensure that the Bankruptcy Law mirrors the changes that were introduced by that amendment.

57. The similarity of language between Article 157A of the 1991 Law and Article 3 of the 1990 Law, the adoption within the creditors winding up regime of the désastre provisions found in Article 166 of the 1991 Law, and the express terms of the Reports to the States cited above all show the intention of the legislature that the same test be applied to both creditors winding up and désastre applications.

58. The facts in the present appeal show that, as a result of judgments of the Californian Courts, the Appellant has an established claim against the First Respondent for damages. The extent of those damages is clearly substantial but is presently unquantified. The Appellant has also the benefit of a liquidated costs order in the sum of $99,158.61, with which should be coupled a claim for unquantified attorney’s fees. It has been contended that, because there was an appeal against the first instance decision of the State Court in California, the costs order was not due and payable because, as a matter of Californian law, the appeal operated as a stay on the effect of that order. Whatever is the position under Californian law, it would be a matter of Jersey law to determine whether the sum was due and payable for the purposes of establishing standing to bring an application under Article 157A, if that be the test, but that does not arise in this case. The appeal in that jurisdiction has been concluded and the First Respondent lost. There is no doubt that the argument that under Californian law the fact of the appeal operated as a stay on the costs order making that sum not due and payable is not available to the First Respondent.

59. However, the First Respondent has tendered payment to cover the liquidated costs order to the Appellant in California but payment has been refused. Since I have concluded that the correct approach to the question of standing does not involve a requirement for a liquidated sum which is due and payable, the argument based on tender does not arise. But in case I am wrong on my approach to standing, I consider it briefly here.

60. The law of tender of performance of a contractual obligation was not argued at the hearing. So I must be cautious in what I say. But, as far as my researches go, it is not a subject of abundant learning in Jersey. The Bank Notes (Jersey) Law 1955 provides in Article 2 that Bank of England notes shall be “legal tender in Jersey” so long as they are legal tender in England. The Currency Notes and Currency Fund (Jersey) Law 1959 provides in Article 3 that Jersey “currency notes shall be legal tender in Jersey”. Article 4 of the Decimal Currency (Jersey) Law 1971 provides for the coins of the new decimal currency to be “legal tender” for certain amounts.

61. But so far as I am aware there is no statutory definition of “legal tender”. Nor are there any decided cases which bear upon the subject, beyond making the point that one of the characteristics of a sovereign state is to issue legal tender. In fact, there are no Jersey laws or cases that I have been able to find which deal with the wider notion of tender of performance, and its effect on contractual obligations, with the sole exception of Rule 6/33(5) of the Royal Court Rules 2004, which deals with the case of payment into court in support of the defence of “tender of performance”.

62. In these circumstances I consider that I may properly look elsewhere for assistance. In England, where party A cannot perform a contractual obligation without counterparty B’s co-operation, and B refuses to co-operate, tender of performance frees A from liability for non-performance. In the case of payment of a debt, the debt is not actually discharged by mere tender, but an action for payment will fail if the money is tendered and then paid into court: Kinnaird v Trollope (No 2) (1889) 42 Ch D 610; see CPR rule 37.2. But tender must be of the precise amount due, and in legal currency. A tender is thus not possible in respect of an unliquidated debt: Davys v Richardson (1888) 21 QBD 202, CA. Nor is the tender of a cheque a legal tender to pay a debt: Blumberg v Life Interests and Reversionary Securities Corp [1897] 1 Ch 171, affd CA [1898] 1 Ch 27. (This latter appears also to be the rule in Scotland: Leggat Bros v Gray 1908 SC 67, 73, 74.)

63. These rules seem to me to be amply justified in Jersey law too. Indeed, the first has the legislative support of rule 6/33 of the Royal Court Rules 2004. The second founds on the distinction between a liquidated and an unliquidated demand, which manifests itself in important ways in Jersey law. The third has the support by negative implication of the laws specifying what is a legal tender for payment of a debt in Jersey. Accordingly, I proceed for present purposes on the basis that the rules represent the relevant Jersey law also.

64. In the present case, a cheque was sent by the debtor to the creditor on 14 April 2022, apparently covering the stipulated amount of non-attorneys fees costs and accrued interest. It was contended that this amounted to a tender which satisfied the ‘full amount of the cost award’ in the amended judgment. The Californian court in its tentative ruling of 5 July 2022 (later confirmed as definitive) held that time had not yet run for the creditor to apply for ascertainment of the amount of its legal fees, and any attempt to satisfy the money part of the amended judgment was premature until the amount of those fees was determined. So there was no sufficient tender according to Californian law.

65. Nor (if this mattered) could there be any legal tender according to Jersey law, because a cheque is not a legal tender to pay a money debt. This means that any sum “due and payable” before such ineffective tender were made remained so “due and payable” afterwards.

66. However, that is not the end of the matter. I do not doubt that even an informal tender will be relevant to the question whether there is a sufficient reason not to order the winding-up of an insolvent company. Where the creditor has been offered the whole debt due by way of a cheque, but has unreasonably refused it, that refusal will in ordinary circumstances amount to such a sufficient reason. But where the tender is of a cheque not for the whole debt, but is nevertheless said to be in satisfaction of the whole, then ordinarily that will not amount to a sufficient reason.

67. That is in fact this case. The debtor tendered the cheque for the liquidated part of the costs, but in satisfaction of the whole. However, if the cheque had been tendered in satisfaction of merely the liquidated part, there might have been argument in those circumstances that a winding-up order should still be made on the basis that it was a purely tactical tender, rather than a genuine attempt to resolve the dispute. A decision in such circumstances will turn on the particular facts of the case. If the tender were unreasonably refused, that would ordinarily be a sufficiently good reason for declining to make the order. In other words, in a case where the debtor had informally offered the whole debt, albeit at a late stage, it would be a rare case where the court nevertheless made a winding-up order.

68. The Respondents submitted that a helpful tool for the construction of Article 157A could be found in Article 3 of the 1990 Law which provides:

“(1) An application for a declaration [i.e. that a debtor’s property has fallen en désastre] may be made by –

(a) a creditor of the debtor with a claim against the debtor of not less than such liquidated sum as shall be prescribed by the Minister…”

69. This language is so similar to the language of Article 157A(1) that it seems to me to be tolerably clear that Article 157A(1) is based on Article 3 of the 1990 Law, rather than on any formulation taken from UK legislation. That approach is also consistent with the expressed intention of those promoting the legislation as described in the extracts from the Reports cited above. For this reason, I will consider the position under the 1990 Law although it is only indirectly relevant to the current appeal.

70. The Jersey law of désastre was a judicial creation which emerged for practical reasons, no doubt closely associated with the law of preferences which then applied, in order to regulate and provide for a seemly administration of bankruptcy. The 1990 Law is expressed in its long title as ‘a law to amend and extend the law relating to the declaration of the property of a person to be en désastre….’. In other words, it is a Law that builds on and amends the existing customary law. If the 1990 Law does not amend the custom, then the custom continues.

71. It is clear that, at customary law, a creditor who did not have a valid liquidated claim against the debtor was unable to obtain a declaration of désastre. The first general set of Royal Court Rules, made in 1963, contained no provision for désastre. That was rectified by Part 12 of the 1968 Rules where the definition of ‘claim’ confirmed the customary law position by expressly excluding claims for an unliquidated sum.

72. There is an interesting provision in Rule 12/12 of the 1968 Rules which permits a creditor with an unliquidated claim, notwithstanding the désastre, to continue process against the debtor in the Royal Court. The intention presumably at that time was to ensure that although the unliquidated creditor was prevented by the Rules from bringing an application for a declaration, he should not be prevented from continuing with his claim in the hope that it could be made liquid before the administration of the désastre had been concluded.

73. Following the passage of the 1990 Law, the Royal Court made the Bankruptcy (Désastre) (Jersey) Rules 1991. Rule 2(1) of those Rules as enacted provided that:

“Except by leave of the Court, an application by a creditor for a declaration in pursuance of Article 3 of the Law may only be made if his claim against the debtor is for a liquidated sum exceeding £1000.” (emphasis added)

74. When making those Rules, the Court appears to have assumed that there had been no change in the underlying customary law introduced in this respect by the 1990 Law, notwithstanding that the definition of ‘claim’ in the 1990 Law was an inclusive one in these terms:

“’Claim’ includes a claim for repossession of goods and a claim for rent.”

75. Whereas previously there had been express provision in the Royal Court Rules that unliquidated claims would not fall within the definition of ‘claim’, the 1990 Law had no such prohibition. Indeed, that remains the position as of today’s date. It was only the rules of court which at one point provided otherwise.

76. Against that customary law and statutory background, it is unsurprising that the case law has emphasised the need for an applicant to demonstrate that he had a valid liquidated claim against the debtor. Indeed, in Minories Finance Limited v Arya Holdings Limited [1994] JLR 149 at page 157, Southwell JA, having referred to the declaration of Arya Holdings Limited en désastre on the application of Minories Finance Limited in January 1986 pursuant to Part 12 of the Royal Court Rules 1982, summarised the position as saying that there were preconditions to a declaration en désastre at the instance of a creditor that (a) the creditor had a valid liquidated claim against the debtor; (b) to the best of the creditor’s knowledge and belief, the debtor was insolvent but had realisable assets; and (c) the creditor verified these matters by affidavit.

77. The Minories Finance judgment was applied by this Court in Re Baltic Partners Limited [1996] JCA 075, 1996 JLR Note 1, where Southwell JA added this to his judgment in the earlier case:

“The creditors claim will usually have been established by a judgment of a competent court, often a summary judgment. A judgment is not a pre-condition. 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.”

78. The statement in Baltic has provided the basis for a paragraph in successive editions of Dessain and Wilkins, Insolvency and Asset Tracking, now to be found in the fifth edition of 2016 at paragraph 5.3. This in turn was relied upon by the Royal Court in Re Representation of Harbour II LP [2016] JRC 171 and In Harbour Fund II LP v Orb a.r.l [2017] JRC 007. In the latter case, the Royal Court said this:

“13. A ‘liquidated claim’ means a certain debt which is undoubtedly due and payable. The indebtedness must be certain and not the subject of a genuine dispute and arguable defence – see the comments of the Jersey Court of Appeal in SO Holding AG v CDS 3 Ltd [2011] JLR 782 at paragraphs 8 and 9 citing Re Baltic Partners [1996] JLR Note 1 and Dessain and Wilkins pages 143 to 144 paragraph 5.3. As a creditor applicant does not need to have a judgment, a creditor with a liquidated claim can apply even if that claim arises from a contract governed by a foreign law with a foreign jurisdiction clause as was the case in Esso Holding.”

79. It is to be noted that in the Baltic Partners case the critical question was whether or not there was a liquidated sum undoubtedly due and payable by the debtor. The Court concluded that the Royal Court had reached the wrong conclusion that the pre-condition of an incontestable liquidated claim had been met. In the circumstances, the declaration of désastre was recalled.

80. A similar approach was taken by the Royal Court (Birt DB sitting with Jurats Georgelin and Newcombe) in Re Ports Trading Limited [2005] JRC 073, when the Court refused to make a declaration en désastre in relation to a company on the application of a creditor whose claim was subject to a cross-claim in a greater sum from the company. The Court said:

“We are quite satisfied that, on the evidence presented to us, it cannot be said that Mr Bridgen’s status as a creditor of Trading is certain. On the contrary, the evidence produced by Mr Smith is sufficient to make the position uncertain. There is clearly an arguable defence which could only be resolved after a full hearing of an action by Mr Bridgen against Trading. In the circumstances, Mr Bridgen has failed to show that the suggested set off is spurious and it would therefore be quite inappropriate for the Court to exercise the draconian power to declare Trading en désastre on the application of Mr Bridgen.”

81. The point in that case was not that there was a claim for a liquidated sum. It was that there was a genuine dispute about whether it was owed at all.

82. It is now relevant to look at the changes in the legislation in 2006. The Bankruptcy (Désastre) Rules 2006 introduced a different definition of the word ‘claim’. It was defined in this way:

“‘Claim’ means a claim made pursuant to Rule 3.”

83. Rule 3 deals with the filing of claims. Creditors are obliged to file their claims with the Viscount with full particulars. By sub-Rule 3(4), a creditor who believes he has a surety, guarantee, hypothec, security interest or other charge affecting the property of the debtor must so claim. It seems to follow inexorably that if a creditor is filing pursuant to a guarantee, the claim may be a contingent claim.

84. Although the Désastre Rules in 1991 had provided that the applicant creditor for a declaration had to have a claim for a liquidated sum in excess of £1,000, it is not at all obvious that the 1990 Law itself required that to be the position. Article 29(1) of the 1990 Law as enacted provided that:

85. One construction of this provision would be that contingent debts or debts which were uncertain could be filed in the bankruptcy. The contrary argument would be the requirement for ‘certainty’ of the debt. The position was clarified by the amendment of Article 29 in 2006 which deleted the expression ‘certain debts’ in Article 29(1) and replaced it with the word ‘debts’.

86. Having regard to the legislative history, it appears to me to be clear that the legislature intended the Royal Court to have a wider discretion as to who would have standing to apply for a declaration of désastre than had hitherto been the case. That is not to say, of course, that it can be anticipated that the Royal Court would be expected to make such a declaration if there was a disputed debt or liability. The outcomes in Baltic Partners and Re Ports Trading Limited would not obviously be any different.

87. The Royal Court in the present case said (at [39]):

“That as a matter of Jersey Law the reference to a liquidated claim in Article 157A of the Companies Law is a reference to a claim that is certain in amount and which is not the subject of a genuine dispute and arguable defence or counterclaim and which has not been paid.”

88. Although it is apparent that as a formulation it is not expressly challenged on this appeal by any party, it is a formulation which in my judgment is not correct for the reasons given. I do not dissent at all from the proposition that the Court would only in exceptional circumstances, the explanation of which should await the occasion, agree to declare a désastre at the instance of a creditor whose claim was the subject of genuine dispute. However, the review of both the statutory and Rules changes is consistent with the approach that the phrase ‘claim against the debtor of not less than such liquidated sum as shall be prescribed by the Minister’ does not mean that the value of the claim must be a liquidated sum. It is enough that the Court is satisfied to the civil standard of proof that the value of the claim, whatever it ultimately turns out to be, must exceed £3,000, or whatever sum may be prescribed in the future.

89. Transposing that issue to claims under Article 157A, it appears to me that the same logic should be applied. If an applicant for such an order fears that those behind the company are taking steps to distribute company assets, or otherwise run the business in such a way that he or she is never to be paid, there is on the face of it no reason why the applicant should not have standing to make an application for the winding up of the company assuming that the other requirements can be met. An obvious illustration would be the case where a plaintiff has successfully sued a Jersey company for damages for personal injury in negligently causing the loss of a limb (or even worse) and has obtained judgment on liability for damages to be assessed. It would surely be obvious that the damages when liquidated will exceed £3,000. These would be circumstances which, if the other conditions are met, would legitimate an application either for a creditors’ winding up or a désastre as the case may be.

90. I am reinforced in these conclusions by the provisions of Article 166 of the 1991 Law, providing as it does that in a creditors’ winding up, the same rules prevail with regard to the respective rights of secured and unsecured creditors, to debts provable, to the time and manner of proving debts and so forth as are enforced with respect to persons against whom a declaration is made under the 1990 Law and the liquidator under the 1991 Law stands in the same position as the Viscount under the 1990 Law.

91. There are three further points to deal with. These are (1) the effect of the automatic stay on the costs order imposed under Californian law by reason of the appeal; (2) the effect of the Californian court’s “tender” decision on the costs order; and (3) whether there was a genuine dispute between the parties for the purposes of the winding-up jurisdiction. I deal with them in turn.

92. As to the first point, the Second Respondent submits that the automatic stay under Californian law pending appeal prevents the liability under the costs order being a claim for a liquidated sum. This argument has now fallen away, because of the decision of the Californian Court of Appeal on 23 January 2023. But we all thought it was live when we heard the appeal, and, since it was argued and I had formed a view, I will nevertheless express it. I accept that under Californian law there is such a stay, but certainly in English law that means only that the costs liability cannot be enforced for the time being by any process of execution. It is still a liability, and any other right or remedy than court execution can still be exercised: Clifton Securities Ltd v Huntley [1948] 2 All ER 283, 284E; Woodley v Woodley (No 2) [1974] 1 WLR 1167, 1178G, 1180G. The presentation of a winding-up petition is not a process of execution or enforcement, because it is for the benefit of all the creditors: Re a Company [1915] 1 Ch 520, 526, CA. In other words, it is a class remedy: Re Southbourne Sheet Metal Company Ltd [1992] BCLC 361, 364.

93. Thus, in the more recent case of Bishopsgate Investment Management Ltd v Maxwell, The Times, 11 February 1993, unreported, a stay of execution of a judgment debt against Maxwell had been made pending an application for leave to appeal. Bishopsgate then served a statutory demand on Maxwell, and Maxwell applied to set it aside. Chadwick J said:

“In my view, there is no doubt that on the true construction of the relevant statutory provisions the Defendant's obligation to pay £500,000 under the order of the 21st December 1992 does constitute a debt for the purposes of Part IX of the Insolvency Act 1986; and that that debt is a debt owed by the Defendant to the Plaintiff. Further, there is no doubt that that debt is a debt for a liquidated sum for the purposes of Section 267(2)(b) of the Act.”

94. The same point appears from Australian authorities, including Re Pollack, ex p deputy Commissioner of Taxation (1991) 103 ALR 133, 143, and Scope Data Systems Pty Ltd v BDO Nelson Parkhill [2003] NSWSC 137, [16], and also from textbooks such as French, Applications to Wind Up Companies, 3rd ed, [7.60]. This seems to me right in principle, and I can see no reason why the law in Jersey on this point should be different.

95. The second point concerns the effect of the Californian “tender” decision. The Second Respondent says that the court said that the costs order was “not payable”. What in fact it held was that it was not possible for the tenant to satisfy the whole costs debt by tendering a sum equal to the liquidated part, at a time when the court had not yet assessed (or the parties agreed) the unliquidated part. (We were, incidentally, not shown any evidence that the First Respondent had attempted to agree the amount of the lawyers’ fees so to liquidate them, and thus be in a position to tender the total sum.) In fact all that has now gone. But, although it is a matter of Californian law to lay down the characteristics of its judgment debts, and to hold that the debt in question was not “satisfied” by the tender made for the purposes of the Californian “tender claim” made by the tenant, it is for Jersey law to say whether a debt having those characteristics is or is not a claim within article 157A(1).

96. The third point originally put forward by the Second Respondent, but abandoned, was that there was a genuine dispute about whether the money was owed at all. The problem with this argument was that the matter had been litigated, and a court of competent jurisdiction had decided that the liability attached. This was not the case of a dispute which had not yet been adjudicated upon. There was indeed an appeal, but, unless and until the appeal was successful, the decision at first instance stood. In fact, we now know that the appeal has been unsuccessful, and that the decision at first instance has been affirmed. If it had not been abandoned, this point would have fallen away anyway.

97. I add only that, as was submitted in pre-hearing written contentions, there is a parallel here in the English caselaw, in the decision of Warren J in El Ajou v Dollar Land (Manhattan) Ltd [2005] EWHC 2861 (Ch). In that case, the High Court had ordered the company to pay the petitioner certain sums of money, and had refused unconditional permission to appeal to the company, although it had given it permission on certain conditions (which however had not been complied with).

98. Warren J held that

“8. The reasoning by which the courts have rejected petitions where the debt is bona fide disputed on substantial grounds is because in such a case the Petitioner cannot be said to be ‘a creditor’ for the purposes of the statutory provisions. …

9. In a case where the Court has ruled in favour of a Claimant that a debt is due, then the Claimant is, in my judgment, unquestionably a creditor, even if the Judgment is the subject matter of an appeal. … ”

99. This statement was recently approved and followed by the Court of Appeal of Guernsey in Re JJW Ltd [2021] GLR 209, [46]-[48]. As a matter of policy, in my judgment this is the right approach also in Jersey.

100. For these reasons, the cross-appeal should be dismissed and, albeit for different reasons than were found by the Royal Court, the Appellant had standing to apply to the Royal Court for an order for a creditors’ winding up.

The second issue – the nature of the Royal Court’s discretion

101. I turn therefore to the second issue, which is whether the Royal Court has a discretion to exercise in deciding whether to make the order or not. First of all, I remind myself that Article 157C(1) relevantly provides that:

“The court, after considering an application made, and the affidavit required, under Article 157A, may … make an order that a creditors’ winding up must commence in respect of the company … ”

102. The choice of the word “may”, rather than “must” indicates that the Court has a discretion to exercise but does not determine the nature of the discretion. Cautiously glancing across the water at UK law, we see that section 122(1) of the Insolvency Act 1986 relevantly provides that

“A company may be wound up by the court if … the company is unable to pay its debts”.

Again, the word “may” is used”. Yet it is clear from the UK caselaw on this provision and its predecessors that, absent exceptional circumstances, the creditor making a compliant application is entitled to a winding-up order as a matter of right. It is sufficient for present purposes to refer to only two authorities.

103. One is the dictum of Bowen LJ in the early case of Re Chapel House Colliery Co (1883) 24 Ch D 259, 270, a case where (as it turned out) there were indeed such exceptional circumstances:

“The power of winding-up was given for the benefit of a particular class, and is entrusted to the Court for their benefit. The words of the Act are in form permissive, but it is not a mere matter of discretion whether the Court will order a company to be wound up or not—it is the duty of the Court to give the creditor that relief which the Legislature intended to give him. But it does not follow from this that if the machinery provided by the Act cannot possibly avail for the purpose of paying debts, the creditor is still entitled to put that machinery in motion for his own delectation. It is an abuse of the procedure to set it in motion when it is shewn that it cannot in any degree accomplish the purpose for which it was established by the Legislature.”

104. The other authority is a much more recent statement in the advice of the Judicial Committee of the Privy Council (on appeal from The Bahamas) in Ebbvale Ltd v Hosking [2013] 2 BCLC 204:

“25. Analysis of the entitlement of an unpaid creditor to a winding-up order should begin with a general proposition, which, in In re Amalgamated Properties of Rhodesia (1913) Ltd [1917] 2 Ch 115 Sargant J articulated as follows, at p 121:

‘the petitioners, as judgment creditors for this very large sum, are prima facie entitled ex debito justitiae to a winding up order, and it seems to me to be impossible to displace that prima facie position without the very strongest proof that the petition is being improperly made use of for some ulterior motive.’

In In re Southard & Co Ltd [1979] 1 WLR 1198 Buckley LJ put the proposition as follows, at p 1203E-F:

‘where the debt is established and not satisfied and there are no exceptional circumstances, the creditor is entitled to expect the court to exercise its jurisdiction in the way of making a winding up order’.”

105. There is no decision yet as to the existence and nature of the discretion in the new Jersey winding-up procedure, except for the decision of the Royal Court under appeal. In Vidya AG v Sumner Group Holdings Ltd [2022] JRC 259, the point did not arise (at any rate expressly) and the court simply made the winding up order sought. In the present case the Second Respondent submitted that (i) the court did have a discretion, and (ii) it was wider than the discretion enjoyed by the UK courts. He submitted that the relevant test was whether there was “anything militating against” making the winding up order. This formulation is taken from one of the decisions in the context of désastre.

106. In Re Ports Trading Ltd [2005] JRC 073, already mentioned above, Birt DB said this:

“26. It is clear that, even where the Court is satisfied that the applicant is undoubtedly a creditor and that the debtor is insolvent, there is a discretion in the Court as to whether to grant a declaration of désastre. Although in the ordinary case the Court is likely to exercise its discretion in favour of granting a declaration where the necessary pre-conditions are met, it retains a discretion not to do so.”

And, in SO Holding AG v CDS 3 Ltd 2011 JLR 782, also already mentioned, having cited that decision, Jones JA for this court said:

“39. In my view, the logic of that approach, which I respectfully endorse, is that where, as here, an applicant qualifies for the grant of a declaration by meeting the criteria specified in the 1990 Law, the question for the court will normally be whether there is anything in the facts and circumstances of the particular case which militates against the grant. If not, it will normally grant the application.”

107. Jones JA’s use of the word “normally” is significant. When he referred to “anything … which militates against the grant” he was not, in my judgment, suggesting that it is enough to find a factor or factors simply to be put in the balance against the grant. Rather, what he meant was that there was something which actually tipped the balance and justified not granting the remedy. I therefore consider that the correct approach to the exercise of the discretion is that an order should be granted unless there is a sufficiently good reason not to grant the order.

108. Looking at the policy behind the new procedure for creditors’ winding up, and the hope expressed in the Report accompanying the Projet for the 2022 regulations, it seems to me that this is a preferable approach for Jersey to adopt in relation to the new procedure. A qualifying creditor of a company incorporated in Jersey is prima facie entitled to the benefits of a creditor’s winding up in Jersey unless there is a sufficient reason not to grant that remedy. If the matter were to involve a general, open-ended discretion of the court, every such application would be fought over on the particular facts. Rather, the right approach is to proceed on the basis that an application by a qualifying creditor should be granted, unless there is a sufficiently good reason not to do so.

The third issue – did the Royal Court err in the exercise of its discretion?

109. What the Royal Court did in the present case was this. First, and as I have already said, at [48] and [49] it accepted the “importance and primacy of the company’s incorporation”, as “prima facie the principal forum in which the company should be wound up … ” It was clearly right to take that view. Indeed, it is clear from the House of Lords in Re HIH Insurance Ltd [2008] 1 WLR 852, especially at [8] (Lord Hoffmann) and [61] (Lord Scott), that a winding up in the place of incorporation is usually the principal liquidation, and a winding up in another place (for example where there are assets) is usually the ancillary winding up.

110. At [53] the Royal Court considered that there might have to be some modification to these principles for “dual hatted companies”, but recognised (at [54]) that it had been referred to no authority on how to do this. Further, since the court had received no evidence of Luxembourg law to establish the status of the First Respondent merely by virtue of registration in Luxembourg, it was not in a position to conclude that it was indeed “incorporated in two jurisdictions”. It went on to note that the Court had itself been persuaded by the First Respondent that it would be in the interests of creditors for bankruptcy proceedings to be conducted in Luxembourg. It observed:

“It was not a case of this Court deferring to the District Court of Luxembourg, but a positive decision that it was in the interests of creditors that bankruptcy proceedings should be commenced in Luxembourg and having made that decision, and with bankruptcy proceedings well advanced in Luxembourg, the starting point must be for this Court to act in a manner which is consistent with that decision, for so long as it remains in the interests of creditors to do so.”

111. In my view, the Royal Court erred in its conclusion as regards the “starting point”. The “starting point” when a qualifying creditor applies for the winding up of a company incorporated in Jersey is that the order should be granted unless there is sufficiently good reason not to do so. This is the case even if there are insolvency proceedings on foot in another jurisdiction, although that may be a factor relevant to considering whether the application should be refused.

112. Nor, in my view, is the fact that the Royal Court had previously issued a letter of request to the Luxembourg Court inviting it to initiate insolvency proceedings a basis, in this case, for altering the “starting point”. Whilst the Royal Court had been persuaded, on the application of the First Respondent, that it would be in the interest of creditors for bankruptcy proceedings to be commenced in Luxembourg, it was concerned that creditors had not been convened and expressly granted liberty to creditors to apply to set aside the order. Significantly, at the time when the letter of request was issued, the option of a creditor’s winding up was not available in Jersey.

113. In my judgment, the Royal Court should have taken, as its starting point, that the order sought should be granted, in the absence of sufficient reason to refuse it. It should have asked itself whether there were a sufficiently good reason to justify not making an order that a creditors’ winding up commence in Jersey, and, if there were not, it should have proceeded straight away to make that order. Since the Royal Court erred in the approach which it took to the exercise of its discretion, it is open to this Court to address the question itself.

114. There are, in my view, further errors in the approach taken by the Royal Court which reinforce that conclusion. It has not taken into account, as factors relevant to the question, certain advantages of a winding up in Jersey in this case. One is that the “lookback” period for pre-bankruptcy transactions is five years in Jersey, as opposed to six months and ten days in Luxembourg. So, the 2019 distribution would fall within the Jersey period, but not that in Luxembourg. Another is that the parent company of the First Respondent is also incorporated in Jersey, and the Jersey court can more easily exercise jurisdiction over it than the Luxembourg court. A third is that any assets of the First Respondent in Jersey (such as any claim which it may have against its parent company) can be secured. It also did not take into account the offer by the Appellant’s parent company to provide funding for the Jersey liquidators, so that the costs of liquidation in Jersey would not require to be met by the creditors as a body.

115. The Royal Court has also, it seems to me, erred as regards the position of contingent creditors. Unfortunately, we do not have evidence before us about the position of contingent creditors in Luxembourg law. However, as I have explained above it is apparent that, at least in the context of the proposed réhabilitation in this case, contingent creditors’ claims will not be valued and paid before the grant of the réhabilitation. At paragraph 55(vi) of its judgment, the Royal Court stated that réhabilitation appears to be not dissimilar to the process for terminating a creditors’ winding up under Article 185A of the Companies Law. But Article 185A(2) provides that the Court shall refuse the application unless it is satisfied that “the company is then able to discharge its liabilities in full as they fall due”. But for the reasons I have explained above, we do not have material before us which would allow us to conclude that the company would in fact, following a réhabilitation, be able to meet contingent liabilities (including the applicant’s claim) in full as they fall due.

116. Finally, it seems to me that the Royal Court has not had regard to one of the purposes of a winding up, in Jersey, of a company incorporated in Jersey – namely, the appointment of a liquidator who has responsibilities not only to administer the insolvent estate but to investigate the causes of the insolvency. As Lord Millett observed in Re Pantmaenog Timber Co Ltd [2004] 1 AC 158, paragraph 64:

“64. … I reject the unspoken assumption that the functions of a liquidator are limited to the administration of the insolvent estate. This is only one aspect of an insolvency proceeding; the investigation of the causes of the company's failure and the conduct of those concerned in its management are another. Furthermore such an investigation is not undertaken as an end in itself, but in the wider public interest with a view to enabling the authorities to take appropriate action against those who are found to be guilty of misconduct in relation to the company. If the investigation yields information material to the Secretary of State's decision to bring or continue disqualification proceedings, it must be reported.”

Likewise, in Article 184 of the Companies (Jersey) Law 1991, a liquidator has the obligation to report misconduct of directors to the Attorney-General, who may undertake director disqualification proceedings, under Article 78 of the same Law.

117. I recognise that the Royal Court referred to, and quoted, observations of Robert Walker J in Re Gordon & Breach Science Publishers Ltd [1995] 2 BCLC 189, 199d-g, where he likewise emphasised the investigative aspect of a liquidation. However, it did so on the basis that this consideration would come into play only if there were “serious concerns as to the conduct of the Luxembourg bankruptcy proceedings”. I do not consider that the point would be of relevance only if there were such concerns. Rather, this is a feature of the regime within which companies incorporated in Jersey operate and this investigative aspect under Jersey law, and accountability to the Jersey courts, is one of the reasons why an application by a qualifying creditor to wind up an insolvent Jersey incorporated company should be granted unless there is sufficient reason not to grant the order.

118. In light of these errors on the part of the Royal Court, it is open to this Court to determine whether the application should be granted.

The third issue – the exercise of discretion

119. As I have explained above, the starting point is that an application by a qualifying creditor of an insolvent company incorporated in Jersey for a winding up order should be granted unless there is sufficiently good reason to refuse the application.

120. The existence of the Luxembourg insolvency proceedings is not, on its own, a good reason to refuse a winding up order in Jersey. There is nothing unusual about opening parallel insolvency proceedings in a second jurisdiction, ancillary to the principal proceeding elsewhere, to deal with matters in that jurisdiction (see eg Re Matheson Brothers Ltd (1884) 27 Ch D 225, 230), or even as the primary jurisdiction where the first deals with local assets (see eg North Australian Territory Co Ltd v Goldsbrough, Mort & Co Ltd (1889) 61 LT 716, 717). This is particularly so in Jersey, where many companies having international connections are incorporated. I observe that, in this case, a winding up in Jersey would be a principal winding up, as this is the place of incorporation of the First Respondent.

121. I do not consider that the Royal Court’s decision to issue a letter of request to the District Court in Luxembourg alters the position in this case. As I have observed above, whilst the Royal Court was persuaded, at that time, that it would be in the interests of creditors for insolvency proceedings to commence in Luxembourg, it was mindful that creditors had not been convened, and protected the liberty of creditors to apply in Jersey. In any event, at the time when the Royal Court issued the letter of request, the option of a creditor’s winding up in Jersey was not available.

122. If it could be said that there were no benefits in a winding up in Jersey which would not be secured through the Luxembourg proceedings, that might be sufficient reason for not granting the application. The onus in that regard is, it seems to me, on the Respondents seeking to resist the application. For the reasons I have set out above, I do not consider that they have discharged that onus here. I found particularly on the position of contingent creditors.

123. The position in Luxembourg would appear to be that the contingent creditors’ interests are left to be dealt with after the réhabilitation (if it takes place) of the First Respondent, which is accepted to be deeply insolvent, without any securing of Jersey assets in the meantime, or, on the basis of the material before us, any meaningful undertakings on the part of the First Respondent’s parent company as to the funding of crystallised claims in future. References to the similarity of the procedure to that in Article 185A are beside the point.

124. I am further struck by the fact that, on the materials available, the curateur apparently does not possess the powers to “lookback” at, and therefore properly investigate, let alone set aside, the 2019 distribution, which the Royal Court itself said should be investigated. The curateur accepted that he will need to engage the assistance of the Jersey court in order to achieve this. And counsel for the Second Respondent accepted at the hearing that, if a winding up order were not made soon, any claim that might after investigation be thought to lie in respect of the 2019 distribution could be lost.

125. No other creditors have joined in this application. But, as a general proposition, the bare fact, without more, even that all the other creditors do not want a winding up order to be made is not sufficient to justify refusing to make one: see Re P&J Macrae Ltd [1961] 1 WLR 235, CA. Here there is a conflict under Luxembourg law between the interests of the admitted creditors, who have to be paid in full for a réhabilitation to go through, and those of the contingent creditors, who are left outside the process and receive nothing at that stage, with no guarantee of receiving anything in future.

126. We were told that, in the event that a winding up order is granted in Jersey, the First Respondent’s parent would withdraw its support for the réhabilitation. In consequence, the grant of such an order by us would prejudice the creditors who would receive payment through that process. The curateur considers that it would be in the interests of the creditors as a whole for the réhabilitation to take place. This is the issue which has caused us the greatest difficulty. I resolve it by reference to first principles. The applicant is a qualifying creditor of a Jersey incorporated company. As I have observed, we cannot be satisfied on the material before us that the réhabilitation will protect the interests of contingent creditors such as the applicant in the way that a winding up in Jersey would. The interests of other creditors in the completion of a process which does not provide such protection to a contingent creditor is not, it seems to us, sufficient reason for depriving such a creditor of the benefit of a winding up in Jersey.

Conclusion

127. For the reasons given, I would allow this appeal, and set aside the order of the Royal Court.

128. The question which would normally then arise for consideration is what order, if any, this court should make instead. On 13 April the Court was advised that the parties had agreed to settle the matters in dispute in the proceedings and as a result we were advised that “as a result, HWA has agreed that it shall discontinue this proceeding, and pursuant to the terms of the settlement agreement (a) withdraw its application for a creditors’ winding up of Redox, (b) file a notice to the Judicial Greffier abandoning its appeal, and (c) sign a consent order for the Court’s approval. We confirm that the parties consent to HWA's withdrawal of its creditors' winding up application and to the discontinuance of the proceedings in the terms of the enclosed consent order”. Accordingly, the court makes no order on the winding-up application.

129. At the time this advice was received by the Court, the present judgment was in the final stages of being settled to be handed down. As a result, we invited the parties to make written submissions as to whether there were any reasons why it should not be handed down. The Appellant took no firm position on this question but the Respondents submitted we should not do so. It was said that while it was accepted that the Court had a discretion to do so – see FG Hemisphere Associates LLC v Democratic Republic of Congo [2010] JLR 484 and Hore v Valmorbida [2021] JRC 242 – the Second Respondent was concerned that the judgment might affect the emergence of the First Respondent from bankruptcy with all the prejudice to other third party creditors that might entail, especially if the judgment might facilitate a further winding up petition from another creditor, and that he might be obliged to seek leave to appeal to the Judicial Committee, the possibility of further litigation being a weighty matter to take into consideration. Thus it was said there were public and private interest reasons why the judgment should not be handed down.

130. I have considered these submissions but I do not accept this assessment of where the public interest lies. I recognise that the wish of the parties that we should not publish the judgment is an important matter and we should obviously not make any order subjecting the debtor to an insolvency process in Jersey, but the judgment is nonetheless to be handed down. The main reasons for this are that it will be an important practical decision on the new insolvency process, setting everyone on the right path, and overturning a first instance decision which will otherwise be followed. As against this, the points against publishing (parties' views, potential dissent, further time to be spent, Viscount not a party, and so on) do not come close to overcoming the advantages in publication.

WOLFFE JA:

131. I have the misfortune to disagree with the President and Matthews JA on the interpretation of Article 157A(1) of the Companies (Jersey) Law 1991 (“the 1991 Law”). I gratefully adopt the narrative which Matthews JA has set out of the circumstances. I agree that the Appellant has standing, but on a narrower ground than the ground set out in his judgment. I concur with Matthews JA’s analysis of the second and third issues which he discusses. We accordingly agree on the result; and, in any event, in terms of Article 10 of the Court of Appeal (Jersey) Law 1961, it is the opinion of the majority which determines the issues before the Court. Nevertheless, I should explain my own approach to the interpretation of Article 157A(1).

132. Article 157A(1) of the 1991 Law provides that:

“A creditor may make an application to the court for an order to commence a creditors’ winding up if the creditor has a claim against the company for not less than the prescribed minimum liquidated sum …”

133. As I read this provision, in order to have standing to make an application, the creditor must have a claim against the company for a liquidated sum which is not less than the prescribed minimum. It follows that a claim which is unliquidated, such as a claim for damages not yet quantified by judgment or agreement, does not give standing to initiate a creditors’ winding up under this provision. This is, in my view, the natural and ordinary interpretation of the provision, when read by an informed reader in its context.

134. In Practice Direction RC 22/01, the Royal Court required an application under Article 157A to be supported by an affidavit which must among other things (emphasis added):

“state that the creditor has a claim against the company for a liquidated sum, that to the best of the creditor’s knowledge and belief is not subject to a genuine dispute and arguable defence or counterclaim, and which has not been paid.”

I do not rely on this Practice Direction, issued I take it under Rule 20/11 of the Royal Court Rules, as an aid to the interpretation of the primary legislation. Nevertheless, I take some comfort from it that the construction of Article 157A(1) which I prefer is an interpretation of the provision which comes naturally to an informed reader.

135. As Matthews JA observes, the word “claim” has a very wide meaning. It is capable of encompassing all types of pecuniary claim, and indeed, as Article 157A(4)(b), to which I shall return, demonstrates, non-pecuniary claims. But the phrase which falls to be construed is “claim … for not less than the prescribed minimum liquidated sum”. These words clearly limit the class of claims which qualify a creditor to apply for an order under Article 157A.

136. The issue of interpretation which arises is whether (as the President and Matthews JA conclude) the qualification is concerned only with the value of the claim, or (as I consider to be the case) whether there is also a requirement that the claim be for a liquidated sum. In my view, the presence of the word “liquidated” in the critical phrase clearly signals that the latter is the correct reading. That interpretation is, further, supported by Article 3 of the Bankruptcy (Désastre) Law 1990 (“the 1990 Law”).

137. Until the Companies (Amendment No. 8) (Jersey) Regulations 2022 (“the 2022 Regulations”) introduced the creditors’ winding up procedure at issue in these proceedings, a creditor who wished to initiate insolvency proceedings against a company could apply for a declaration of désastre under the 1990 Law. That procedure remains available today as an alternative to an application for a winding up order under Article 157A. Article 3 of the 1990 Law provides that an application for a declaration of désastre may be made by:

“a creditor of the debtor with a claim against the debtor of not less than such liquidated sum as may be prescribed by the Minister”.

138. Article 3(1) is part of the context within which the informed reader would construe Article 157A(1). The two statutes are in pari materia and the language, although not identical, is very similar: each of the provisions requires that the creditor has a “claim”, and that the claim be “for” or “of” not less than a prescribed “liquidated sum”. There is no indication in the Report lodged with the States Greffe in support of the 2022 Regulations that concern about the existing law on standing to initiate insolvency proceedings against a company was any part of the mischief against which those provisions were directed. On the contrary, that Report stated:

“By following established concepts and processes, the scheme will be familiar to practitioners and is based on tried and tested and widely understood procedures.”

The application for a declaration of désastre was one of those “tried and tested and widely understood procedures”.

139. As I shall explain, Article 3(1) has hitherto been understood, including by this Court, to require the creditor’s claim to be for a liquidated sum. Indeed, the description of the existing law in the Report lodged in support of the 2022 Regulations (and which was accordingly before the States when they enacted the 2022 Regulations) states (emphasis added): “A creditor with a liquidated debt of over £3,000 can apply to the Royal Court for a declaration that a company be placed en désastre”.

140. The President and Matthews JA take a different view of the interpretation of Article 3(1) of the 1990 Law. In light of their judgments, and of the materiality of the 1990 Law as part of the context for interpreting Article 157A of the 1991 Law, I will explain why I consider that the understanding of Article 3 reflected hitherto in judgments of this Court and of the Royal Court is correct, before returning to consider the terms of Article 157A as a whole. It is perhaps unfortunate that we require to address the meaning of Article 3 of the 1990 Law in proceedings to which the Viscount is not party, and in terms which will apply to personal as well as corporate insolvency proceedings under that Law. But I agree with the President and Matthews JA that, given the relevance of Article 3 to the interpretation of Article 157A(1), this is a task which must be undertaken.

141. Article 3(1), as originally enacted, stated that an application for a declaration of désastre may be made by:

“a creditor of the debtor with a claim against the debtor of not less than such liquidated sum as shall be prescribed”.

Under the 1990 Law, as enacted, it was for the Royal Court to prescribe the relevant sum. Article 3(1) was amended by the Bankruptcy (Désastre) (Amendment No. 5) (Jersey) Law 2006 so that it now refers to:

“a creditor of the debtor with a claim against the debtor of not less than such liquidated sum as may be prescribed by the Minister”.

142. It seems to me to be the natural reading of Article 3(1) that the claim to which it refers must be for a sum of money and must be liquidated in nature. I recognise that the grammatical construction of Article 3(1) could have made the position clearer. It could, for example, have referred to “a claim for a liquidated sum of not less than the prescribed amount”. However, the grammatical structure of the Article is readily explicable once it is appreciated that, as this Court explained in SO Holding AG v. CDS 3 Ltd [2011] JLR 782, the 1990 Law did not replace the customary law of désastre. Rather, the 1990 Law falls to be read in the context of the customary law except so far as the 1990 Law amended or restated the law.

143. As the President explains in his judgment, under the pre-1990 customary law, an unliquidated claim did not give standing to apply for a declaration of désastre. Specifically, an unliquidated claim for damages for breach of contract did not give standing. Against that background, the language and structure of Article 3(1) of the 1990 Law (including the presence and location of the word “liquidated”) is readily explicable. The purpose of the provision was to place a minimum financial limit on claims which would give standing to apply for a declaration of désastre. It did not intend to alter the existing customary law as regards the nature of a “claim” which would give standing.

144. It is true, as the majority of the Court observes, that on this understanding, the word “liquidated” in Article 3(1) might be regarded, strictly speaking, as unnecessary, inasmuch as the provision presupposed the customary law on standing. However, the presence of the word “liquidated” is both consistent with, and may be taken to confirm, that interpretation of the provision. Indeed, in my view, it makes clear that this is indeed the correct interpretation of Article 3(1). Even if, on a strict analysis, it might not have been necessary to include the word, its presence in Article 3 of the 1990 Law has an evident purpose in the context of the interpretation of the provision which I prefer.

145. By contrast, I have been unable to identify any satisfactory explanation for the use of the word “liquidated” in Article 3(1) if that Article was indeed intended to modify the customary law by allowing all creditors with a claim worth more than the prescribed value to initiate proceedings. I have considered whether the use of the word might be read as a direction to the Royal Court (or, after 2006, the Minister) that the sum to be prescribed must be a “liquidated sum” as opposed to some other mechanism of specifying a minimum amount. That does not seem to me to be a persuasive explanation. If that was the intention, it would have been natural, and sufficient, to use the word “sum” or “amount” without the qualification “liquidated”; I find it hard to imagine how a minimum “sum” or “amount” would be specified without doing so by reference to a specific (“liquidated”) amount. Indeed, if the intention of the States in enacting the 1990 Law was to expand standing (by contrast with the customary law) to allow a creditor with an unliquidated claim to apply for a declaration under Article 3, it strikes me that it would be very odd to specify that the unliquidated claim must nevertheless be “of not less than such liquidated sum as may be prescribed”. The more obvious explanation, it seems to me, is that the word “liquidated” was included because Article 3(1) was not intended to abrogate the customary law requirement that the claim be for a liquidated sum.

146. I recognise that Article 3(2) of the 1990 Law states that:

“An application may not be made by

…

(b) a creditor whose only claim is one for the repossession of goods.”

I acknowledge that on my reading of Article 3(1), Article 3(2)(b) is analytically redundant since a creditor whose only claim is one for the repossession of goods would not, in any event, have standing under Article 3(1). It might therefore be said that the terms of Article 3(2)(b) indicate that Article 3(1) should be given an interpretation which would encompass claims for repossession of goods. It is, though, not unusual for legislation to make provision which is unnecessary, but which has the merit of putting the position beyond any doubt, and arguments from redundancy may accordingly not be a particularly compelling interpretive consideration.

147. The President observes that on either reading of Article 3, some of the language used is redundant. The alternative approaches to standing illustrate, though, that there are two different types of “redundancy”. One arises where a statute contains language – even a provision - which accurately states the legal position, and makes that legal position clear, even though the language or provision may be regarded as analytically unnecessary or duplicative. Such is the character (on my analysis) of the redundancy of Article 3(2)(b), or indeed of the word “minimum” in Article 157A(1) itself.

148. It seems to me that to read Article 3 as extending standing to a creditor with an unliquidated claim (who would not previously have had standing under customary law) would involve treating the word “liquidated” as redundant in a different sense. That reading would require the word, in effect, to be written out of the statutory provision. The word “liquidated” would not be analytically redundant (in the sense of being an unnecessary provision which is nevertheless consistent with the other provisions of the statute) but would be unexplained and would, indeed, tend to contradict what, on this view, would have been a purpose of the provision, to extend standing to a creditor with an unliquidated claim. In my view, the need to provide an intelligible explanation of the inclusion of the word “liquidated” in Article 3(1) itself – and the availability of a persuasive explanation in the customary law with which Article 3 requires to be read - is a more powerful interpretive consideration on the present question than an argument from the analytical redundancy of Article 3(2)(b).

149. The interpretation of Article 3(1) which I prefer has, so far as the materials shown to us disclose, been the consistent understanding of the provision. The standard textbook, Dessain & Wilkins, Jersey Insolvency and Asset Tracking, 5th edition, states (paragraph 5.3; see also paragraph 5.2.1.1):

“Before an individual or company is placed en désastre by a creditor … the Royal Court must be satisfied (under Article 3(1)(a) of the Désastre Law) that the applicant creditor has a claim for a liquidated sum.”

I note that this was also the understanding of the Jersey Law Commission, in its 1998 Consultation Paper on Dégrevement, paragraph. 2.8.

150. That encapsulation of the legal position reflects the judgment of this Court in Re Baltic Partners [1996] JCA 075. Under the heading “Preconditions for a déclaration en désastre” Southwell JA, giving the judgment of the Court, stated:

“At common law, the preconditions for such a declaration were that: (1) the creditor had a valid liquidated claim against the debtor; (2) the debtor to the best of the creditor’s knowledge and belief was insolvent, but had realisable assets; and (3) the creditor verified these matters by affidavit … Article 3 of the 1990 Law provides (inter alia) that an application for a déclaration may be made by a creditor of the debtor with a claim against the debtor of not less than such liquidated sum as shall be prescribed. The creditor’s claim will usually have been by a judgment of a competent court, often a summary judgment. 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, set off or counterclaim. The indebtedness must be such as could form the basis of an immediate summary judgment.”

151. Southwell JA clearly intended the last part of this passage to be an explanation of what was required for standing under Article 3(1) of the 1990 Law. Later in the judgment, he stated:

“In summary, before an individual or a company is placed en désastre, the Jersey Courts must be satisfied that there is a clear liquidated claim to which there is no reasonably arguable defence. … at this stage Sparbank has not made out a sufficient case for summary judgment or for the exercise of the even more draconian power to declare Baltic en désastre.”

I recognise that the focus of Re Baltic Partners was the question of whether there was a reasonably arguable defence to the claim, but it is plain that the Court understood Article 3 to require the claim to be for a liquidated sum. That said, the decision of the Court, stating that a declaration should be refused where there is a reasonably arguable defence to the claim – a requirement which does not appear in the statutory provision - supports the view that Article 3 is required to be read in the context of any additional requirements which may be demanded as a matter of customary law.

152. I do not consider that the amendments made to the désastre regime in 2006 changed the position or justify regarding the view of the law in Re Baltic Partners to have been superseded. I have quoted the change which was made to Article 3(1) itself. In my view, that amendment simply transferred from the Royal Court to the Minister the power to specify the prescribed “liquidated sum”. It did not otherwise change the meaning of Article 3(1). Nor, in my view, do the terms of the Bankruptcy (Désastre) Rules 2006 (“the 2006 Rules”), made by the Royal Court, alter the position.

153. Rule 1(1) of the 2006 Rules provides: “In these Rules - ‘claim’ means a claim made pursuant to Rule 3”. Rule 3 is concerned with the filing of claims following a declaration of désastre. It is unsurprising, given the broad terms of Article 29 of the 1990 Law, that claims which may be filed under Rule 3 may include contingent claims.

154. Rule 2 is concerned with the procedural requirements for an application under Article 3 of the 1990 Law. That Rule requires the application to be supported by an affidavit which must, where the application is made by a creditor, inter alia “state that the creditor has a claim against the debtor …”. Although the word “claim” is used in Rule 2 without qualification (and in Rules where the word has been defined, for the purposes of the Rules to mean a claim pursuant to Rule 3), a creditor who presents an application must, it seems to me, still have standing under Article 3 of the primary Law.

155. In fact, this Court has, since 2006, expressed the view that a creditor applying for a declaration under Article 3 of the 1990 Law must show that it has a liquidated claim. In SO Holdings, supra, Jones JA, giving the judgment of the Court of Appeal, quoted (at paragraph 8) Southwell JA’s statement of the law in In re Baltic Partners. He stated (at paragraph 10) that:

“If the court is not satisfied that the person in respect of whose property the declaration is sought is insolvent or that the creditor has a valid liquidated claim against that person, the court has no jurisdiction to make the declaration.”

156. The Royal Court has taken the same view. In Representation of Harbour [2016] JRC 171, the Commissioner (JA Clyde-Smith) stated (paragraph 38) that: “The creditor must show that it has a liquidated claim …”. In Harbour v. Orb [2017] JRC 007, the same Commissioner stated (paragraph 12) that a “creditor must show that it has a liquidated claim which exceeds the minimum threshold of £3,000 …”. Very recently, in Vidya AG v. Sumner Group Holdings Ltd [2022] JRC 259, which concerned an application under Article 157A(1) of the 1991 Law, Sir Michael Birt, sitting as a Commissioner, followed the approach of the Royal Court in the present case; for present purposes, it suffices to note that he quoted (at paragraph 24) Southwell JA’s statement of the law in In re Baltic Partners as the “most authoritative” statement of the law on standing to bring an application for a declaration of désastre.

157. So far as the materials shown to us disclose, no doubts have been expressed about, nor any challenge advanced to, the proposition that Article 3 of the 1990 Law requires the creditor’s claim to be for a liquidated sum. Nor, indeed, did such a challenge form part of the Appellant’s case in the present appeal until the question was raised by the Court with Advocate Dann. Whilst the absence of challenge does not necessarily mean that the received view has, in fact, been soundly based, this feature of the history, like Practice Direction RC 22/01, does give me some comfort that, notwithstanding the contrary view taken by the President and Matthews JA, my reading of Article 3 is one which comes naturally to lawyers experienced in the field.

158. In support of their construction of Article 3, the President and Matthews JA found on Article 29 of the 1990 Law, which is concerned with provable debts. Article 29(1) provides:

“Except as provided in paragraph (4), all debts and liabilities, present or future, or contingent, to which the debtor is subject at the time of the declaration, or to which the debtor becomes subject before payment of the final dividend by reason of any obligation incurred before the time of the declaration, shall be debts provable in the désastre.”

It does not, in my view, follow from a creditor’s right to prove in insolvency proceedings which have been initiated that a creditor has, or should have, standing to initiate insolvency proceedings.

159. On any view of the 1990 Law (or indeed of Article 157A of the 1991 Law) creditors whose claims are worth less than the prescribed minimum sum do not have standing to apply for a declaration of désastre or for a winding up under Article 157A even though, if a désastre or winding up is initiated by another creditor, those creditors would be entitled to prove in the désastre or winding up.

160. The point may be further illustrated by reference to the laws of the various jurisdictions of the United Kingdom. As Matthews JA explains, section 124 of the Insolvency Act 1986, which applies in England & Wales and Scotland, provides that an application for winding up a company may be presented inter alia by “any creditor or creditors (including any contingent or prospective creditor or creditors)”. And a creditor with a claim for unliquidated damages, yet to be quantified, may, for the purposes of section 124, at least if the claim is not disputed on substantial grounds, be regarded as a contingent or prospective creditor.

161. But the personal insolvency regime in England & Wales is different. By virtue of section 267 of the Insolvency Act 1986, a creditor’s petition for bankruptcy may be presented in respect of a debt inter alia only if it is for at least £5,000 and is for a “liquidated sum payable to the petitioning creditor … either immediately or at some certain, future time and is unsecured”. Yet, subject to compliance with the Insolvency Rules, any creditor may prove in a bankruptcy for a “bankruptcy debt”, which is defined in section 382 of the 1986 Act in the widest terms, such as to encompass a claim for an unliquidated sum and a contingent claim.

162. Although the Scots law of personal insolvency takes a different approach, it likewise accords standing to a class of creditors which is narrower than those who may submit claims. By virtue of sections 2 and 7 of the Bankruptcy (Scotland) Act 2016, a petition for sequestration may be presented by a creditor or creditors in respect of relevant debts which amount to not less than £5,000. “Relevant debts” are “liquid or illiquid debts (other than contingent or future debts or amounts payable under a confiscation order) whether secured or unsecured”. The distinction in this context between “liquid” and “illiquid” debts does not map onto the Jersey concept of a “liquidated” debt: the Scottish Law Commission, in its report on Bankruptcy and Related Aspects of Insolvency and Liquidation, Scot Law Com No. 68, explains (paragraph 5.31) that in this context: “A liquid debt is a debt which is admitted or which is so constituted as to admit of immediate diligence [i.e. enforcement measures]. In practice commercial debts are usually illiquid …”. But the relevant point for present purposes is that these provisions, like those in England & Wales, have the effect that there are creditors who would not have standing to petition for sequestration but who may nevertheless, once sequestration has been awarded, submit a claim in the sequestration process.

163. These statutory provisions, like the pre-1990 customary law of this jurisdiction and indeed the exclusion in the 1990 Law of creditors whose claims are less than £3000, illustrate that there is no necessary identity between standing to initiate, and the right to prove in, an insolvency process.

164. I recognise that there are intelligible policy reasons which could justify a wide approach to standing, as provided for in the UK corporate insolvency regime. It may be said, for example, that all classes of creditor have an interest in an insolvent estate and, at least if the debtor is not going to emerge from insolvency, in the orderly administration and distribution of that estate, and that any creditor (even where the claim is contingent) should accordingly have standing. Nor do I doubt that, if Article 3 does have the wide reach given to it by the President and Matthews JA, the Royal Court can be relied upon to reach sound conclusions. But there may also be intelligible policy reasons, reflected in the personal insolvency regimes to which I have referred, for limiting standing to certain classes of creditors, for example those who have claims with an immediately ascertainable value. Southwell JA perhaps alluded to such policy considerations in In re Baltic Partners, when he described a declaration of désastre as an “even more draconian” remedy than summary judgment.

165. For these reasons, I do not consider that Article 29 of the 1990 Law supports the conclusion that Article 3 permits a creditor whose claim is for an unliquidated sum to apply for a declaration of désastre; and for all the reasons I have set out above, I have concluded that Article 3 of the 1990 Law requires that a creditor who applies for a declaration of désastre must have a claim for a liquidated sum which exceeds the prescribed minimum. Nor does it seem to me that the Court should now develop the customary law to extend standing to creditors with unliquidated claims: such a step would involve, in effect, reading the word “liquidated” out of Article 3 of the 1990 Law and would accordingly not, in my view, be consistent with the statutory law enacted by the States.

166. With that analysis of Article 3(1) of the 1990 Law in mind, then, I return to consider the terms of Article 157A of the 1991 Law. It is, after all, the provisions of that Article which are before us, and the provisions of that Article, read as a whole and in their context, which require to be considered.

167. The following considerations support the conclusion that Article 157A(1), like Article 3(1) of the 1990 Law, requires that the claim be for a liquidated sum, exceeding the prescribed minimum:

(i) The word “liquidated” points to that conclusion, whereas, as I have explained above, the alternative reading does not give a persuasive explanation of the inclusion of that word in the provision.

(ii) The structure of Article 157A(1) – which could have made the position clearer - is readily explained as having been modelled on Article 3(1) of the 1990 Law. For the reasons I have set out above, Article 3(1) is part of the context within which Article 157A(1) falls to be read.

(iii) I have concluded that Article 3(1) requires the claim to be for a liquidated sum. In any event, the legislature when enacting Article 157A(1) may be taken to have had – and actually did have – that understanding of the requirements of Article 3(1) before it.

(iv) There is no indication that concerns with the existing law on standing to initiate corporate insolvency proceedings was part of the mischief against which the 2022 Regulations were directed. Against that background, the use in Article 157A(1) of language very similar to the language of Article 3(1) strongly supports the reading which I prefer.

168. There are two textual features of Article 157A which call for comment and consideration.

169. The first is Article 157A(2), which is in the following terms:

“A company is deemed to be unable to pay its debts for the purposes of paragraph (1)(a), if –

(b) the company has for 21 days after service of the statutory demand failed to pay the sum or otherwise dispute the debt due to the reasonable satisfaction of the creditor.”

This provision refers to a “creditor to whom the company is indebted in a sum exceeding the prescribed minimum liquidated sum then due …”. The phraseology differs from the language of Article 157A(1) in two respects. It uses the phrase “is indebted in a sum” instead of the phrase “has a claim”; and it adds the phrase “then due”.

170. It is apparent from the Report which accompanied the 2022 Regulations that one of the key purposes of those Regulations was to establish a procedure by which a creditor could establish the debtor’s deemed insolvency by means of service of a statutory demand. The language of Article 157A(2) is clearly apt to a statutory demand for payment, non-payment of which results in the debtor being deemed insolvent. The debt, payment of which is demanded, must be one which is actually due at the time of the demand.

171. It seems to me that the difference of language between Article 157A(2) and Article 157A(1) signals that a claim for a liquidated sum, giving standing under Article 157A(1), may include a claim for a liquidated sum which is not presently due but will become due at a future date. As the definition of “qualifying debt” in Article 1 of the Debt Remission (Individuals) (Jersey) Law 2016, and the terms of section 267 of the UK Insolvency Act 1986, illustrate, a “liquidated sum” may be due “immediately or at some certain future time”. A claim for a liquidated sum not presently due, but due at some future date, would not provide a foundation for a statutory demand under Article 157A(2), but, on this view of Article 157A(1), would give standing – although the Court might, depending on the circumstances, require to consider the relevance and significance of the fact that the sum is not presently due in deciding whether or not to grant the application. The language of Article 157A(2) accordingly supports the conclusion of the President and Matthews JA that a “claim”, at least for the purposes of standing under Article 157A(1), need not be one which is presently “due and payable”. But the difference in the language between Article 157A(1) and Article 157A(2) is sufficiently explained in this way. It does not, in my view, provide a reason to conclude that, notwithstanding the presence of the word “liquidated”, an unliquidated claim gives standing under Article 157A(1).

172. The second textual feature of Article 157A on which I should comment is Article 157A(4), which provides:

“A creditor must not make an application under paragraph (1) –

…

(b) whose only claim is for repossession of goods.”

This provision replicates, in the context of creditor’s winding up, Article 3(2) of the 1990 Law. Its presence in Article 157A accordingly reinforces the conclusion that the intention was to apply to Article 157A the existing law on standing under Article 3 of the 1990 Law. As I have already explained, in the context of considering Article 3 of the 1990 Law, I find the need to provide a persuasive explanation of the presence of the word “liquidated” in the primary provision dealing with standing to be a more compelling feature than the argument from the analytical redundancy of the provision dealing with claims for repossession of goods.

173. For these reasons, I do not agree with the majority’s interpretation of Article 157A(1). I briefly explain how I would apply my view of the law of standing to the circumstances.

174. As Matthews JA explains, the Appellant did not rely for the purposes of standing on the First Respondent’s obligation under its guarantee of the tenant’s obligations under the lease. Although issues may, in other contexts, arise as to the nature of an obligation under a guarantee, here the claim under the guarantee was in respect of an unliquidated liability for damages for breach of contract. It was not a liability in a liquidated sum, and the Appellant was accordingly, in my view, right not to seek to found on it for the purposes of standing under Article 157A(1).

175. The Appellant relied, as the basis for its standing to bring the application, on the company’s liability to pay non-attorney costs. The amount of this liability had been definitively quantified. It was, accordingly, a claim for a liquidated sum, albeit one which, in terms of Californian law, would become payable only once the attorney costs had also been quantified. As I have explained above, a “claim” for a liquidated sum may found standing under Article 157A(1), even if it will become legally due and payable only at a future date. I agree with the Royal Court, essentially for the reasons which that Court gave, that the liability for non-attorney costs satisfies the statutory test for standing.

176. Because the company is deeply insolvent and there was not, before the Royal Court, any dispute that it would not be in a position to meet that liability when it becomes due for payment, the fact that the liquidated sum would become due only at a future date was not, in this case, a ground for refusing the application. In my view, it will usually be a compelling reason to refuse an application to initiate insolvency proceedings that the creditor has declined an offer of payment of the very claim upon which the creditor founds as the basis for standing. However, as Matthews JA has explained, this will all depend on circumstances. In this case the First Respondent sought to tender the non-attorney costs (plus interest) only in satisfaction of the “full amount of the costs award”, notwithstanding that the award also encompassed attorney costs; and the Californian Court has, on that basis, concluded that the Appellant was justified in rejecting that offer.

177. I accordingly agree that the Appellant had standing to present the application, but on narrower grounds than those articulated in the judgment of Matthews JA. I also agree with Matthews JA’s analysis of the second and third issues which were before the Court. I observe, though, that the broad approach to standing, which is preferred by the President and Matthews JA, may generate cases where the Court will require to consider whether the contingent or unliquidated nature of the claim is relevant to the Court’s assessment as to whether the application should be granted.

THE PRESIDENT:

178. I have had the opportunity of reading the judgment in draft of Matthews JA, with which I agree. In the light of the dissenting judgment of Wolffe JA on the issue of standing, I wish to add a few words of my own.

179. The difficulty for me with the conclusion of Wolffe JA that the majority view leads to the word “liquidated” in Article 157A of the 1991 Law and Article 3 of the 1990 Law becoming superfluous is that whatever conclusion we reach some of the language of the statute is redundant. Thus as Wolffe JA observes, either “liquidated” or the whole of Article 3(2) (b) of the 1990 Law will be redundant, depending on which construction of the legislation is adopted. Furthermore, whichever view one takes, the language “not less than the prescribed minimum liquidated sum” already contains redundant language because the word “minimum” is made unnecessary by using the words “not less than”. In the circumstances, the fact that “liquidated” (which as Matthews JA notes is in the wrong place if it is intended to qualify the word “claim”), is redundant or superfluous on the majority’s construction of the statute is to me of no significant concern.

180. Secondly, the statutory désastre process builds upon the customary law, albeit it is a more formalised process. The custom is not enacted. That is important because the custom involved the effective freezing of actions until the passation des causes when the claims would all be heard and judgments given; and the Viscount, with the more complex rules on preferences than currently exist, would know how to apply the assets of the debtor in order to settle his debts. By Rules of Court, the process emerged into the more recognisable bankruptcy process which we have today, with the Court no longer being troubled by giving a series of judgments but the Viscount advertising for claims and administering the bankruptcy.

181. The customary law requirement for a creditor to have a liquidated claim for standing is explicable by reference to the process of the passation des causes, which continued until the Royal Court (Désastres) (Jersey) Rules 1964. The essence of that process was the adjournment by the declaration of désastre of existing claims to a date, usually two weeks later, when all claims against the debtor could be brought forward for judgment. The declaration of désastre was routinely ordered to be published so that other creditors would have notice of it and have the time to bring their claims. As this procedure emerged at the turn of the 19^th century when the désastre did not operate as a discharge of the debtor from his liabilities but only enabled an orderly realisation of his assets among his creditors, one can see that those with unliquidated claims would not be able to apply for such an order – because they would be no more able then to obtain an acte aux biens sans contredit enabling the sale of the debtor’s goods to discharge the debt at the passation des causes than they would have been at the date of the declaration. Additionally, it would be of reduced importance because they could proceed with obtaining a judgment in due course and enforce that judgment, once obtained, against whatever assets the debtor then had, including of course assets acquired after the désastre. It was no doubt with this understanding of the désastre procedure that Le Masurier, Bailiff, was able to say in Re Désastre Overseas Insurance Brokers Limited [1950-66] JJ 547 at 553:

“ As the purpose of a désastre is to establish a status of equality among creditors and as the procedure for “cession des biens” was only available to a creditor who was in possession of a judgment for a liquidated sum, we conclude that before a creditor can lawfully declare the goods of his debtor “en désastre” he must have a liquidated claim against that person and, in view of the terms of our definition, he must also be possessed of prima facie evidence that his debtor is unable to meet his liabilities.”

182. Because the désastre was a court driven procedure, it was open to the court to develop that process as the cases required. Thus, for example in Brooke v Walker et Hadley (1950) 245 Ex 516 the case which involved a claim for general and special damages was part heard when the defendants were declared en désastre. Although at that stage not liquidated in amount, the claim was adjourned to the passation des causes. That procedure was later adopted in the Royal Court Rules 1982 which anticipated that if a plaintiff could get his claim on and adjudicated before the Viscount had reached the stage of distributing the estate of the debtor, he could prove for the amount in question. Other changes in the process can be seen in the admirable if concise summary of previous cases in Re Overseas Insurance Brokers Limited.

183. At [70] of his judgment Matthews JA describes how the 1990 Law builds on and amends the existing customary law, and if the Law does not amend the custom, the custom continues. In agreeing with that statement, it seems to me to be worth adding that in my judgment the consequence is that the Court does not lose its ability to develop the custom. The custom continues, but in the colourful if slightly puzzling phrase which falls from time to time from the lips of both counsel and the court, the custom is not frozen in aspic. That means that it is open to the court, as it has over the last two centuries, to continue the development of the custom, provided of course that in doing so the developments are not inconsistent with the primary and secondary legislation adopted by the States. To the extent that this court is developing the law by departing from the approach taken in some previous cases – and recognising that the courts in Jersey are not subject to the same rules of binding precedent which apply elsewhere – my own view is that we do so in accordance with two centuries of practice.

184. Recognising the care and thoughtfulness of Wolffe JA’s approach, I am nonetheless firmly of the view that the development of our jurisprudence – which now allows a multitude of actions for general damages and a process by which liability and quantum are frequently disposed of separately, something which would not have occurred when the désastre procedure was first developed – also leads to the conclusion that it would be convenient on policy grounds to adopt the construction of the legislation as adumbrated by Matthews JA. The fact is that today there may well be cases – as envisaged by Matthews JA at [89] of his judgment – where it would be entirely appropriate that an application should be permitted to be made by a creditor with an unliquidated claim. In my judgment, the Royal Court can be trusted to reach a sound conclusion as to whether an unliquidated claim has a value over the prescribed amount; and the unliquidated nature of the claim, if it goes to a lack of certainty as to whether there is in fact a debt at all, is a factor which that court will, as in the past, take into account in rejecting the application for a désastre. Indeed, Rule 2(1) of the Bankruptcy (Désastre) (Jersey) Rules 1991 expressly provided that “Except by leave of the Court …”. That itself indicates that in 1991 the Court considered that it could proceed in circumstances other than those which followed in the Rule.

185. For these reasons, in addition to those advanced by Matthews JA, I would therefore hold that it is not an absolute rule that a creditor with an unliquidated claim cannot apply for a declaration under the 1990 Law or for a creditors winding up under Article 157A of the 1991 Law.

Authorities

Companies (Jersey) Law 1991.

Bankruptcy (Désastre) (Jersey) Law 1990.

Vidya AG v Sumner Group Holdings Ltd [2022] JRC 259.

The Bank Notes (Jersey) Law 1955.

The Currency Notes and Currency Fund (Jersey) Law 1959.

Decimal Currency (Jersey) Law 1971.

Davys v Richardson (1888) 21 QBD 202, CA.

Blumberg v Life Interests and Reversionary Securities Corp [1897] 1 Ch 171, affd CA [1898] 1 Ch 27.

Leggat Bros v Gray (1907) 1908 SC 67, 70, 71.

Royal Court Rules 2004.

Royal Court Rules 1982.