Jersey Unreported Judgments

ROYAL COURT

(Samedi Division)

12 October 1999

Before: F C Hamon, Deputy Bailiff and

Jurats Le Ruez and Le Brocq

In the matter of the second represention of

David Frobisher Waters (The Representor)

appointed to be Liquidator of

Murco Overseas Properties Ltd

by order of the Court of 11 December 1996

And in the matter of

Murco Overseas Properties, Ltd (the Company)

François Paul Louis JeanFirst Party Joined

Louis Emile Jean JuniorSecond Party Joined

Colin Douglas Murfitt Third Party Joined

Applications by the Representor for an Order:

1. ratifying the steps taken by the Representor in the compulsory purchase proceedings by the States of Alderney of part of the company’s land;
2. giving leave to the Representor to proceed with the sale of the remaining land for not less than £55,000 to Alderney Fuel Services Ltd, and to accept the £5,500 deposit in that respect; or to proceed with the sale of the said remaining land to RTCI Ltd, for £56,000, the moneys to be provided by the Third Party Joined as a result of the winding up of the company, with leave to the Representor to sell the remaining land to Alderney Fuel Supplies, Ltd should the sale to RTCI Ltd not proceed as envisaged; or failing that by public auction with a £55,000 reserve price and;
3. authorising an upper limit on the Representor’s professional fees

Advocate C Deacon for the Representor

Advocate J D Kelleher for the First and Second Parties joined

The Third Party Joined on his own behalf.

JUDGMENT

THE DEPUTY BAILIFF: We have before us the second Representation of David Frobisher Waters, a director of Ernst Young Trust Company (Jersey) Limited and the Liquidator of Murco Overseas Properties Limited, appointed by this Court on 11 December, 1996.

By the terms of the Order the Representor is required to realise the assets of the company, pay its debts, and distribute the balance of the assets to the company’s beneficial owners. The Order was stayed to the extent that the Representor was required not to proceed with the sale of the immovable property belonging to the company - namely two parcels of land situated in Alderney - without the leave of this Court, and to refer the matter of his costs to the Court, should his costs exceed the sum of £12,000.

There was an earlier representation adjourned sine die but matters in Alderney have now crystallised.

When the Liquidator was approached by the States of Alderney to say that they intended compulsorily to purchase the land, he took a professional valuation. The chartered surveyors that he employed reported that the land had a value of £340,000, and that valuation was consistent with earlier valuations. The Liquidator informed the States of Alderney that he would sell for £350,000. He was, because of the compulsory purchase laws of Alderney, under strict time constraints. Mr Murfitt had submitted a valuation in his own name of £6,458,400.00.

There are two beneficial owners of the company, Mr Murfitt on the one side and the Jean family - we shall use that expression for ease of reference in this judgment - with whom Mr Murfitt is ‘at war’.

The land was duly acquired under the compulsory purchase laws of Alderney and is no longer under the control of the Liquidator. In a property within that compulsorily purchased land, there is a cottage on main drains in which reside Mr Murfitt and his lady companion. The first representation required Mr Murfitt to supply details of what he alleged was a ‘pepper corn’ lease that he said he holds. Only today has he produced in Court a letter written by a firm called Rowe & Mitchell Limited, apparently dated 7 May, 1994, which is in these terms:

We also have a distinguished opinion written by Mr de Vic Carey, a Law Officer as he then was, which gives a clear indication that Mr Murfitt was in fact living in this property, but gives no indication whatsoever of any rental.

We are asked this morning, to make three Orders.

First, that we take note of the compulsory purchase proceedings, and ratify the steps taken by the Liquidator in connection therewith. In this regard the Liquidator has filed a complete set of papers with us which has been very helpful.

Second, that the Liquidator be given leave to proceed with the sale of the remaining land - that is the land outside the compulsory purchase area - currently leased to Alderney Fuel Services Limited. We are given a series of alternatives: either by a private treaty to that company for a sum of not less than £55,000, which is what they have offered, and that the Liquidator be authorized to accept £5,500 being a deposit in respect of the purchase of the land. Or alternatively, that there be a private treaty to RTCI Ltd, provided that a formal offer to purchase the leased land is made by that Company for the sum of £56,000 to be met from the moneys payable to Mr Murfitt as a result of the winding up of the company; should the sale of the leased land to RTCI not proceed then the Liquidator should have leave to sell that land to Alderney Fuel Services Limited, or, failing that, by public auction for a sum of not less than £55,000, the reserve sum.

The third order sought is that the Liquidator should have permission to increase his fees to an upper limit of £35,000, from the £12,500 originally ordered.

We have given Mr Murfitt free rein this morning to convince us that we should not make the orders requested. He has made detailed submissions, but in our view, nothing that he has said gives us any indication that the Liquidator has behaved incorrectly at any time. Mr Murfitt, through a company with which he has connections, wishes to purchase the remaining parcels outside that already compulsorily purchased.

The alternatives proposed by the Liquidator, ending with a failsafe public auction, cannot in our view be prejudicial to the company’s interests as a whole, and again we cannot see that the Liquidator has failed, in the compulsory purchase proceedings, to get the best price possible.

The Liquidator has supplied full details of his costs, and we can see no reason why, in the light of his endeavours - which have no doubt been exacerbated by the exhaustive applications of Mr Murfitt - he should not have that upper limit of £35,000 as he proposes.

Mr Murfitt appears to us to be confused as to the events that have occurred in different jurisdictions. If there is no reason for the Viscount in Jersey to continue a distraint on Mr Murfitt’s shareholding, then in our view he should inform the Viscount, in due form, of that fact. Perhaps a meeting with the Viscount or one of his officers might be a useful preliminary while he is in this jurisdiction today.

Finally, we would say this, there appears to be no obligation on the Jean family to sell their shares to Mr Murfitt at all, if they do not wish to do so. The continuing allegation about Mr Jean junior, and his activities in the States of Alderney, are not of concern to this Court in this jurisdiction, and we would hesitate even to comment upon them. If Mr. Murfitt has a genuine complaint he should take it up with Guernsey advocates, who will no doubt know how to deal with the matter.

We therefore grant the terms of the Representation, as requested, but as to the sale of the land, and the way that that should be done, we think that because this Court has expressed its faith in the Liquidator, we will allow the Liquidator to proceed as he thinks fit in the best interests of the company.

No authorities