Court of Appeal
30 September 1999
Before: R C Southwell, QC, (President);
The Hon M J Beloff, QC, and J PC Sumption, QC
BetweenPhilip William Seawallis ShirleyAppellant.
AndThe Deputy ViscountRespondent.
IN THE MATTER OF an appeal from the Order of the Royal Court of 27 January 1998 [1998.017] dismissing the Appellant’s application for an Order that the Respondent be required to give reasons for his decisions in the Désastre of Jerseycard Limited
Applications by the Appellant for Orders:
The Appellant on his own behalf
Advocate J.G.P. Wheeler for the Respondent.
JUDGMENT
THE PRESIDENT: The principal facts material to the matters now before the Court (most being clearly set out in the Deputy Viscount’s Representation to which I will refer later) are the following:
Jerseycard Ltd, was incorporated in Jersey on 16 January 1989 to conduct a credit card issue business and other activities. Mr P.W.S Shirley was one of the promoters of Jerseycard and served as its Managing Director until October 1994 and as a Director until August 1995. On 6 March 1996 Mr Shirley obtained judgment in default against Jerseycard for £18,086. 86, plus interest and costs. On 2 August 1996 judgments were obtained in default against Jerseycard in favour of:
On 9 August 1996 Jerseycard was declared en désastre at the instance of Mr Shirley.
The Viscount therefore assumed administration of the désastre of Jerseycard, and duly published a notice requiring creditors to file their claims and prove their debts. I will for convenience refer to the Deputy Viscount and to the Viscount simply as "the Viscount". The claims included the following:
By letter dated 4 October 1996 Mr Shirley notified the Viscount of his opposition to the claims referred to in (2)-(6) above. His opposition to (6), Ernst & Young’s claim, was subsequently withdrawn.
The background to Mr Shirley’s opposition in respect of Roberts, Ann Street, and Mr Voisin can be summarised in this way. Their claims and part of Mr Shirley’s ordinary claim related to Convertible Loan Stock issued by Jerseycard. The directors of Jerseycard including Mr Voisin and representatives of Roberts and Ann Street at the Annual General Meeting on 9 January 1996 obtained shareholder approval for the allotment of ordinary shares to enable them to negotiate with the holders of the Convertible Loan Stock for the conversion of that stock into Ordinary Shares. Such conversion did not take place. Mr Shirley alleged that the directors’ failure to achieve the conversion, followed by the obtaining of default judgments against Jerseycard, meant that the directors were giving preference to their own companies (and to Mr Voisin). Pursuant to Article 31 of the Bankruptcy (Désastre) (Jersey) Law 1990 (the 1990 Law) the Viscount examined the filed proofs of debt, in the light also of Mr Shirley’s opposition, and decided whether to admit or reject in whole or in part the filed claims.
The Viscount made the following relevant decisions:
By letter dated 6 June 1997 Mr Shirley was told by the Viscount of these decisions and that if Mr Shirley was dissatisfied with any of the decisions Mr Shirley had the right to notify the Viscount within 21 days that he wished the application to be made to the Royal Court for the reversal or variation of these decisions under Rule 7 of the Bankruptcy (Désastre) (Jersey) Rules 1991 (the 1991 Rules).
One of the questions now to be decided, as I will indicate below, is whether Mr Shirley as an opponent of creditors’ claims had any such right. The reasons given by the Viscount for admitting the claims in respect of the Convertible Loan Stock were that no contractual liability appeared to exist which could have forced the conversion of the Convertible Loan Stock into equity, and that the Viscount could not go behind the judgments which have been obtained in the Royal Court.
The Viscount was asked by Mr Shirley to extend the period of 21 days and the Viscount agreed to extend it to 14th July 1997. By letter dated 11th July 1997 Mr Shirley gave notice to the Viscount of his intention to apply to the Court for a reversal or variation of the Viscount’s decisions. A further extension to 15th August 1997 was granted to Mr Shirley by the Viscount. On 15th August 1997 Mr Shirley’s then advocate gave formal notice of his desire for application to be made to the Royal Court.
Another of the questions now to be decided, as I will indicate below, is whether the Viscount had any power to grant such extensions of time (assuming that Mr Shirley as an opponent had any right to require the Viscount to apply to the Court).
As a result of further concern being expressed by Mr Shirley, an officer in the Viscount’s Department wrote to Mr Shirley on 15th October 1997. He made it clear that the Viscount had not been able to go behind the default judgments made by the Royal Court, and repeated the reason given in the Viscount’s letter of 6th June 1997 explaining that no question of preference arose.
On 14th November 1997 the Viscount made a Representation to the Royal Court seeking a review pursuant to Article 31 of the 1990 Law, to which there were convened Mr Shirley and the other creditors referred to in (2)-(5) above.
On 4th December 1997 Mr Shirley issued a summons seeking an order that the Viscount give "reasons or better reasons, for his decision(s)".
This summons was heard by the Royal Court (the Deputy Bailiff and two Jurats) on 27th January 1998. No evidence was formally adduced before the Court, but it appears that two files of documents were submitted. It has repeatedly been stated by this Court that evidence is to be placed before the Royal Court, either by a witness giving oral evidence and producing relevant documents, or by affidavits. In this matter evidence should have been given by Mr Shirley by affidavit exhibiting relevant documents.
The Royal Court referred to the failure on the part of Advocate Begg to adduce evidence in support of Mr Shirley’s application. Advocate Begg was then appearing on behalf of Mr Shirley. Nevertheless the Royal Court heard all his submissions and considered the documents placed before the Court informally. It concluded that there was nothing more that the Viscount could usefully have done, because he had set out with sufficient clarity what his reasons for his decision were. The Royal Court dismissed Mr Shirley’s application.
It does not appear from the documents before this Court whether Mr Shirley applied to the Royal Court for leave to appeal. The next step which appears from the documents is that Mr Shirley on 17th March 1998 applied to the Court of Appeal for leave. His application for leave was heard by this Court (differently constituted) on 2nd and 3rd April 1998. Mr Shirley was still represented by Advocate Begg. The Court of Appeal, of its own motion, directed that two preliminary jurisdictional points under Article 31 of the 1990 Law had first to be decided.
"(a)whether there is power under the statute for any party other than a creditor, whose proof of debt has been rejected, to notify the Viscount that he wishes application to be made to the Court for the reversal or variation of the decision; and
(b)whether, in the light of the statutory time limit set out in Article 31(4), the extension of time granted to the Applicant (Mr Shirley] by the Respondent (the Viscount] under Rule 10 of the 1991 Rules is ultra vires the statute."
This Court adjourned further consideration of Mr Shirley’s summons sine die to allow these points to be fully argued.
Following this order of the Court of Appeal, no steps appear to have been taken until on 8th January 1999 Mr Shirley, by now acting in person, applied to the Court of Appeal for (1) an order setting aside the Court of Appeal’s order of 3rd April 1998; (2) an order granting leave to appeal from the Royal Court; (3) an order granting leave to Mr Shirley to introduce additional facts; and (4) this Court forthwith to hear his appeal including matters in his "supplementary pleading"; or alternatively (5) to order the Viscount to apply to the Royal Court to determine the two preliminary points.
The first matter argued by Mr Shirley, who appeared on his own behalf, was his application to adduce evidence for the first time in the Court of Appeal. The evidence consisted of an affidavit concerning discussions between the Viscount and a Deputy, and certain correspondence. This Court expressed the preliminary view that such evidence was not relevant to the matters it had to decide, and Mr Shirley did not press his application.
The second matter argued by Mr Shirley was his application for an order from this Court setting aside the Court of Appeal’s order of 3rd April 1998. It became apparent in the course of his submissions that this application was in part founded on Mr Shirley’s belief that the Court of Appeal had on 3rd April 1998 ordered that the two preliminary points be decided in the first place by the Royal Court. This Court expressed the view (from which Advocate Wheeler who appeared for the Viscount did not dissent) that the order had been made on the footing that the two points would be decided by the Court of Appeal at a future hearing, and not by the Royal Court. Mr Shirley agreed and adopted this view as part of his submissions.
Mr Shirley then argued the two jurisdictional points.
The first preliminary point raised the question whether Mr Shirley, as a creditor and an opponent of the relevant claims, had any locus standi under the 1990 Law and the 1991 Rules to notify the Viscount of his wish that application be made to the Royal Court for the reversal or variation of the Viscount’s decisions to admit those claims.
The answer to this point turns on the interpretation of the relevant provisions in the 1990 Law and the 1991 Rules. It is convenient at this point to set out the provisions relevant or argued to be relevant for the purposes of both preliminary points.
"ARTICLE 2
Power to make Rules
(1)Rules may from time to time be made in the manner prescribed by the Royal Court (Jersey) Law 1948 relating to the procedure of the court (including the procedure and practice to be followed by the Viscount under this Law) and to give effect to this Law.
(2)Without prejudice to the generality of paragraph (1), Rules may be made under this Article as to -
…
(f)the notices to be given in connection with any proceedings and by and to whom the same shall be given;
…
(j)such matters as are required for giving full effect to the provisions of this Law and for the due administration thereof.
ARTICLE 30
Creditors to prove
…
(3)Every creditor who has lodged a proof shall be entitled to see and examine the proofs of other creditors at a time fixed by the Viscount in accordance with Rules made under Article 2.
…
ARTICLE 31
Viscount to examine proofs and admit or reject
(1)The Viscount shall have power to admit or reject proofs either wholly or in part, and he shall examine every proof and the grounds of the debt and admit it or reject it in whole or in part, or require further evidence in support of it.
…
(3)If the Viscount rejects a proof, in whole or in part, he shall serve notice of rejection in the prescribed manner.
(4)Where any person to whom notice has been given is dissatisfied with the decision of the Viscount he shall within twenty-one days of the date of such notice notify the Viscount that he wishes application to be made to the court for the reversal or variation of the decision, and the Viscount shall apply to the court for a date to be fixed for the hearing of such applications.
The 1991 Rules
Opposition to claims
6.Where the debtor or any creditor or other interested person wishes to oppose the admission of any claim (including a claim that any amount should rank for payment in priority to any other debt) he shall, within one month from the expiration of the time fixed under Rule 5(1), lodge with the Viscount a statement in writing setting out the grounds on which he opposes the admission of such claim.
Viscount’s decisions
7.Where, after the expiration of the time fixed in pursuance of Rule 6 for the lodging of opposition to any claim, the Viscount, after having examined all proofs and statements of opposition, rejects a proof in whole or part, or a statement of opposition, he shall give notice of his decision to -
(a)every person claiming to be a creditor whose proof or any part thereof has been rejected;
(b)every person whose opposition to the admission of a claim has been rejected;
specifying the reason for such decision, and informing the person to whom it relates of his right, under Article 31 of the Law to apply to the court for the reversal or variation of the Viscount’s decision.
Power to extend and abridge time
10.Notwithstanding any other provision of these Rules, the Viscount may, on such terms as he thinks fit, extend or abridge the period within which a person is required or authorised to do any act in pursuance of these Rules, and such extension may be granted although the application for the same has not been made until the expiration of the prescribed period, or any extension thereof."
In interpreting the provisions of the 1990 Law and the 1991 Rules, I consider that the correct approach to the interpretation includes the following (derived for the most part from the speech of Lord Lowry in Hanlon -v- The Law Society [1981] AC 174 HL (E) at pp.193-194):-
(1)Generally the provisions of a statute are to be interpreted in their context in the statute, and without reference to subordinate legislation made pursuant to the statute.
(2)Subordinate legislation may, however, be used to interpret the parent statute where the meaning of the statute is ambiguous.
(3)Rules made under a statute provide a legislative or administrative contemporaneous exposition of the statute, but do not decide or control its meaning: to allow this would be to substitute the rule-making authority for the judges as interpreter, and would disregard the possibility that the rule relied on was misconceived or ultra vires.
(4)Rules which are consistent with a certain interpretation of the statute tend to confirm that interpretation.
(5)Where the statute provides a framework built on by contemporaneously prepared rules, the rules may be a reliable guide to the meaning of the statute.
The answer to the first question depends on the meaning of Article 31(4) of the 1990 Law. Mr Shirley as an opposing creditor was given notice of the decisions of the Viscount to admit the claims and he was dissatisfied with those decisions. Was Mr Shirley entitled to notify the Viscount that he wished the appropriate application to be made to the Royal Court?
In my judgment the wording of Article 31(4) is apt to include Mr Shirley as a "person to whom notice has been given." It might be argued that the words "notice has been given" in Article 31(4) refer only to a "notice of rejection" of proof of a claim referred to in Article 31(3). The role of Article 31(3) is limited to providing that a notice of rejection is to be served "in the prescribed manner," and that is prescribed in Rule 7. But in my view there is nothing in Article 31(4) indicating that its meaning is limited in this way. Rules 6 and 7 of the 1991 Rules are consistent with the broader meaning of Article 31(4), since they provide not only for persons in the specified categories to be entitled to lodge statements of opposition (Rule 6), but also for such persons to be given notice by the Viscount in relation to the proofs of claim which they have opposed (Rule 7(b)). The meaning of Article 31(4) in this regard is clear: Mr Shirley as an opposing creditor was and is entitled to require the Viscount to make an application to the Court in relation to the proofs of claim opposed by Mr Shirley but admitted by the Viscount. This view was supported by Mr Wheeler on behalf of the Viscount.
The second preliminary point concerns the period of 21 days specified in Article 31(4) as the period within which Mr Shirley was entitled to give notice to the Viscount requiring him to apply to the Court. The Viscount extended time for Mr Shirley who gave notice within the time so extended. The question is whether the Viscount had power to extend the time specified in Article 31(4).
Against Mr Shirley the argument would be, that the Viscount did not have such a power. The period of 21 days specified in Article 31(4) is so specified without any provision for its extension in that Article or otherwise in the 1990 Law. The provision for extending time in Rule 10 appears to empower the Viscount to extend only a "period within which a person is required or authorised to do any act in pursuance of these Rules," and not a period specified in the 1990 Law alone. On this view time for the purposes of Article 31(4) could not be extended; Mr Shirley was out of time; and the whole of the proceedings before the Royal Court and this Court are accordingly otiose. As Mr Wheeler submitted, this question of extension of time is a difficult one, and on behalf of the Viscount he submitted that this approach to the interpretation of Article 31(4) is the approach to be, on balance, preferred.
I do not agree. It seems to me that this approach attributes to the legislature of Jersey an intention in relation to the period specified in Article 31(4) which is at odds with the policy apparent from the broad wording of Rule 10. There is no logical basis for singling out the Article 31(4) period as incapable of extension, while virtually all the other periods (which are specified almost exclusively in the Rules) are to be capable of extension under Rule 10.
Because this point was not argued at any depth by Mr Shirley or on behalf of the Viscount, it is necessary to consider what arguments are available to Mr Shirley on this point.
The first matter is that Article 31(4) does not exclude the possibility that the time limit contained in Article 31(4) of 21 days can be extended by the exercise of a relevant power of extension. The rule making powers in Article 2 of the 1990 Law are wide enough to include a power to make rules providing for the possibility of extending the period laid down in Article 31(4).
The grant of such a discretionary power to extend the Article 31(4) time limit is not inconsistent with the wording of Article 31(4). What it would mean is that the person on whom an Article 31(4) notice is served would have a right to take advantage of his Article 31(4) rights by notifying the Viscount within 21 days. If he failed to do so, then it would be within the discretionary power of the Viscount to decide whether or not the time limit should be extended (if for example the person were abroad or temporarily disabled by illness). Such a discretionary power would naturally have to be exercised fairly and reasonably in accordance with ordinary public law principles.
The possibility for the existence of such a power to extend time does not of itself mean that the power exists. Whether or not the power exists depends on the interpretation of Rule 10 in conjunction with Article 31(4), viewed in the context of the legislative framework of the 1990 Law and the 1991 Rules.
Rule 7 deals with the practicalities of the procedure to be adopted under Article 31(4), including the requirement that the Viscount informs the relevant person, whether creditor or opponent, of his right to apply to the Court under Article 31(4). Thus the 1991 Rules provide, in part duplicating what is set out in the 1990 Law, for the exercise of the right provided for in Article 31(4).
At this stage it is important to bear in mind that pursuant to the guidance given by Lord Lowry in Hanlon (see above ):
(1)the 1990 Law and the 1991 Rules, which came into force at the same date (2nd April 1991) are properly to be interpreted together as one piece of legislation;
(2)it is justifiable, particularly where the statutory provision is ambiguous or uncertain of meaning, to seek to give a consistent meaning to both statute and rules read together;
(3)a purposive interpretation of the statute and the rules together is appropriate where such an interpretation makes better sense of the entire legislation.
As already indicated, Rule 7 requires the Viscount to inform the person on whom Article 31(4) notice is being served, of his rights under that Article. Turning then to Rule 10, the Rule providing for the Viscount’s power to extend time, this gives the Viscount power to extend:
"the period within which a person is required or authorised to do any act in pursuance of these Rules".
One of the acts which such a person is "authorised to do …. in pursuance of these Rules" is to exercise his Article 31(4) right by notifying the Viscount, as provided for in Rule 7. So in my judgment the express words of Rule 10 are apt to include power in the Viscount to extend the 21 days specified in Article 31(4) and included, by reference, in Rule 7. The phrase "in pursuance of" requires some degree of causal connection between the act authorised and the Rule. The degree of connection is, however, unspecified and flexible: see for example the judgment of Scrutton LJ in Edwards -v- Metropolitan Water Board [1922] 1 KB 291 CA at pp.304-305 as to the difficulties in determining what is the requisite degree of causal connection. The provision for notification by the Viscount to the opposing creditor of his Article 31(4) right is an intrinsic part of the overall scheme. It follows that in that sense the exercise of that right is "in pursuance of these Rules".
If I were wrong in concluding that the express words of Rule 10 are apt to include this power, then I would have no hesitation in concluding that such power is included in Rule 10 by necessary implication. The purpose underlying Rule 10 is to give the Viscount a discretionary power to assist a person in exercising his rights in circumstances in which otherwise that person would be prevented from exercising such right by, for example, sickness or absence. There would be no logic in treating the 21 day period in Article 31(4) as the only period not capable of extension (or abridgement) to meet the justice of the circumstances affecting the person with the Article 31(4) right.
The Viscount (who has available to him the best legal advice on the Island) considered that he had power to extend time for Mr Shirley's benefit. The Viscount would not be estopped from contending that he had acted ultra vires. But the fact that the Viscount considered he had the relevant power, which is consistent with a purposive interpretation of the statute and the rules together, is an indication that the interpretation which I have adopted is the correct one.
For my part I am satisfied that the right answer to this second preliminary point is that the Viscount did have the necessary discretionary power to extend time and did lawfully extend it for Mr Shirley’s benefit. Because the power is a discretionary one, it will in future cases be open to the Viscount to refuse to extend except in cases in which an extension is appropriate. It follows that I respectfully dissent from the view to be expressed by Sumption JA in the judgment which he will shortly deliver and of which I have seen a draft.
Having disposed of the preliminary points, I turn to the primary questions for our determination - whether Mr Shirley should have leave to appeal from the Royal Court’s decision of 27th January 1998 refusing to order that the Viscount give further reasons for his decisions, and if so, whether an appeal from that decision should be allowed or dismissed.
Mr Shirley’s case for the Viscount being required to give further reasons was put in this way:-
(1)The statutory right under Article 31(4) to have the Viscount’s decisions considered by the Royal Court involves a judicial review of those decisions on the basis of the principles set out in Associated Picture Houses Ltd -v- Wednesbury Corporation [1948] 1KB 223, i.e. the Court does not consider the merits of the decisions, but only the decision-making process.
(2)One of the Wednesbury requirements for the decision-making process is the giving of reasons in sufficient detail to enable a person in Mr Shirley’s position (inter alia) to challenge those reasons by applying for a judicial review.
(3)Here the Viscount had given either no real reasons at all, or at any rate insufficient reasons to enable Mr Shirley to challenge them.
(4)Mr Shirley wished to know the reasons in greater detail so that he could judge whether or not to pursue an application for judicial review with the risk that he might have to pay the costs of the Viscount and of each of the four creditors as well.
In my judgment the first of these submissions is not well founded. There is nothing in Article 31(4) or in the relevant Rules which limits the review by the Court of the Viscount’s decision to a judicial review on Wednesbury principles. The right given by Article 31(4) is a right to appeal to the Royal Court, and in such an appeal the Court will be able to re-consider fully the merits of the Viscount’s decision, and itself to decide whether or not a particular proof of claim should be admitted. Mr Wheeler for the Viscount accepted that the right under Article 31(4) for claimants or opponents is of this wider kind.
Because this is a right of appeal, not a right to judicial review, little would be served by requiring the Viscount to give a more detailed statement of his reasoning. Whether or not the Viscount had given sufficient reasons, the Court would be able to consider the merits on the basis of affidavit evidence placed before the Court.
The Viscount is not in my judgment required by Article 31(4) to set out his reasoning at any length merely in order to enable a claimant or an opponent to assess more accurately his chances of succeeding on an appeal. This is because the claimant or opponent himself knows the grounds on which as claimant he is promoting his claim, or on which as opponent he is promoting his opposition to a claim, and he does not require detailed reasons of the Viscount to be able to present his case to the Court. The requirement in Rule 7 to give "the reason" (in the singular) for his decision is, in my view, synonymous with a requirement to give the ground for that decision. It is not a requirement to give the "reasons" (in the plural) underlying the ground, a requirement which might have been, but was not, imposed as an obligation to elaborate on the reasoning in support of such ground.
Further, the Viscount’s reasons for allowing the relevant claims opposed by Mr Shirley (which I have already set out) probably suffice in any event to indicate the basis on which the Viscount decided to admit the claims.
Accordingly I would not give leave to Mr Shirley to appeal from the decision of the Royal Court not to order that further reasons be given by the Viscount.
The matter should now go back to the Royal Court for the merits of the Viscount’s decisions on the claims to be considered. For this purpose the Royal Court will need to give directions. Such directions should in my judgment include the following:
(1)One of the claims should be selected as a test case, since the issues in relation to the claims appear to be the same. There is no good reason why the proceedings before the Royal Court should be made longer and more expensive by having all the claims and all the claimants before the Court.
(2)The Viscount, the selected claimant and Mr Shirley should be required to set out their respective cases in brief pleadings.
(3)Orders should be made for the filing of evidence by affidavit by each of the three parties (the Viscount, the selected claimant and Mr Shirley).
Mr Shirley will naturally run the risk of having to pay the costs of the Viscount and the selected claimant of the proceedings before the Royal Court. That is the usual risk which any opponent of a proof of claim in a désastre must run. But he will have the opportunity as the matter proceeds towards a hearing in the Royal Court to assess the likelihood of his success in the light of, first, the brief pleadings, and secondly, the evidence filed by each of the parties.
SUMPTION J. A.: I regret that I disagree with the President on a small but significant point. In my judgment, the Viscount did not have power to extend the 21-day time limit imposed by Article 3l(4)of the Law for requiring a decision on a proof of debt to be referred to the Court.
I can readily accept that rules made under Article 2 of the Law might have empowered him to extend the time limit, notwithstanding that it was written into the Law itself. The time limit, although written into the Law, is procedural, and the rule-making power extends to all procedural matters without distinguishing between those which are dealt with in the Law and those which are dealt with in other rules.
My difficulty is that while the rule-making body might have authorised the Viscount to extend a time limit derived from the Law itself, it has not done so. The only relevant power conferred on the Viscount is the power under Rule 10 to "extend or abridge the period within which a person is required or authorised to do any act in pursuance of these Rules" (emphasis added). The 21 day time limit is not derived from the Rules, but it is derived from the Law. The relevant act (namely the giving of notice requiring a decision to be submitted to the Court) is not provided for by the Rules, but only by the Law. Indeed, the Rules say nothing about these matters at all, except in Rule 7, which provides that in notifying parties of his decision the Viscount must inform them of their right under Article 31 of the Law to apply to the Court to reverse or vary the decision. This serves only to emphasise that the right is indeed derived from the Law.
I do not think that it makes any difference to this analysis whether, for the purposes of construction, the Rules are read together with the Law or separately. Nor do I think that the result arrived at by the President is required by the statutory purpose or scheme of the legislation. The only way that one can arrive at the conclusion that the Viscount had power to extend the time limit in Article 3l(4)of the Law, is to read the reference in Rule 10 to time limits or acts done in pursuance of these Rules as if it read "in pursuance of these Rules or of the Law". Yet it is perfectly clear from the language and scheme of the Rules that their draftsman was well aware of the difference between the two that the reference in Rule 10 to the Rule as opposed to the Law is unambiguous.
I recognise that this is an inconvenient result, because the Viscount has for some years acted on the assumption that he does have power to extend this particular time limit. But I cannot say that it is absurd, undesirable or contrary to the purpose of the legislation so that we must do violence to the language of the Rules in order to avoid it. There are perfectly good reasons why the rule-making body might have wished to confer on the Viscount a power to extend time limits in the Law itself, but there are also perfectly good reasons why it might have preferred not to. It might have considered that it was undesirable to interfere with time limits which had the sanction of the States themselves. It might have considered that there were good reasons of practice for adhering strictly to those time limits. Take the time limit in Article 3l(4) as an example. The exercise of a creditor’s right to object to decisions about his own or other proofs is a time consuming and expensive process which necessarily delays the distribution of the insolvent estate and reduces its value. It also prolongs the uncertainty affecting the relative positions of preferred, secured and ordinary creditors. Yet Rule 10, if it applies to the time limit for exercising that right, would empower the Viscount to extend time even after the 21 days had expired, when other creditors had made their dispositions on the assumption that the proofs were unchallenged. It is by no means obvious that the rule-making body must have intended such a thing.
Whether or not it is desirable the give the Viscount power to extent time limits in the principal legislation and what if any limitations should be imposed on that power if it is to exist at all, are questions which the legislature has referred not to us but to the Royal Court sitting as a rule-making body under Article 2. If we are to hold that Rule 10 in its present form extends to time limits for acts regulated by the principal legislation we are effectively assuming that power for ourselves without being in a position to consider what limitations on its exercise would be appropriate, and without being able to engage in the kind of consultations which would normally precede the making of rules affecting the general body of creditors in a wide variety of cases.
Article 31(4), although it is procedural, goes to the jurisdiction of the Court to review the Viscount’s decision. The right and duty of the Viscount to refer his decision to the Court under Article 31(4) is conditional on there being a relevant objection to it. This means an objection which not only comes from a person on whom notice of the decision has been served, but one in respect of which notice has been given by that person within the prescribed time limit. It follows in my judgment that the Court has no jurisdiction to consider Mr Shirley’s objections under Article 31(4). Like the President I would refuse leave to appeal from the decision of the Royal Court not to order that further reasons be given by the Viscount. I would do so not only for the reasons which he has given but on the ground that there is no jurisdiction to entertain Mr Shirley’s objections to the decision. In my view the present proceedings ought to be dismissed.
BELOFF JA.:
1.I agree with the President that this application for leave to appeal should be dismissed and with the Order that he proposes. I have had the advantage of seeing in draft both the judgment that he has delivered and the judgment that Sumption JA has delivered in which he disagrees about the existence of any power in the Viscount to extend the 21 day time limit imposed by Article 31(4) of the Law for requiring a decision on proof of a debt to be submitted to the Court.
2.The issue is a short one of construction. Is the act of requiring such a decision an act authorised to be done "in pursuance of these Rules?" If it is, then the President’s conclusion is correct: if it is not, such epithet applies only to Mr Sumption’s conclusion.
3.The phrase chosen by the draftsman to link such act in the Rules is "in pursuance of." Like other phrases indicating a connection, for example, "in relation to" it takes colour from its context. In my view, there is no good reason why the rule-making body should not have conferred a power to extend on the Viscount and good reason why it should. Both justice and convenience generally favour the creation of an opportunity in certain circumstances to relax tight time limits.
4.The disadvantages in terms of unreasonable impairment of certainty and finality could be avoided, in my view, by sensible use of any discretion which would, and must, elementarily, take account of all relevant matters. The proper exercise of such discretion would prevent the rule, if construed as the President prefers, from becoming either a charter for the indolent or a recipe for chaos.
5.While the matter is finely balanced, the phrase "in pursuance of" seems to me for reasons articulated by the President, to be elastic enough to achieve a desirable end. Given that the notification by the Viscount which is expected to trigger the doing of the relevant Act is contained in Rule 7 itself, it seems to me that such an act can intelligibly be described as authorised to be done"pursuant to the rules." On the point therefore, which divides the Court, I align myself with the President.
Authorities
Bankruptcy (Désastre) (Jersey) Law, 1990.
Hanlon -v- The Law Society [1981] 174 HL(E).
Edwards -v- Metropolitan Water Board [1922] 1 KB 291 CA pp.304-305.
Associated Picture Houses Ltd -v- Wednesbury Corporation [1948] 1KB 223.