[2003]JRC190A
royal court
(Samedi Division)
24th October 2003.
Before: |
M.C. St. J. Birt, Esq., Deputy Bailiff, and Jurats Le Breton and Allo. |
Between |
Robert Andrew Brown |
Representor |
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And |
HSBC |
First Respondent |
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And |
Paul Scally |
Second Respondent |
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And |
The Viscount |
Third Respondent |
Representation by the Representor, seeking the appointment of an administrator for William Guy Brown.
The Representor on his own behalf.
Advocate R. MacRae for the First Respondent.
The Second Respondent on his own behalf.
Advocate F.J. Benest for the third Respondent.
judgment
the deputy bailiff:
1. This is an application by the Representor, Robert Andrew Brown, for the appointment of an administrator for the affairs of his brother William Guy Brown, whom I will call William.
2. William has left the island and cannot now be traced. William undoubtedly owes money to HSBC which has a security interest over the shares which represent a flat which William used to occupy. The bank is in the process of selling that flat by way of realisation of its security interest, having exercised its rights under the Security Interest (Jersey) Law.
3. The Representor is concerned that there is no one looking after the interests of William. He is not asserting that anything wrong has occurred but he says that there should be someone looking at what is happening from William's perspective in order to ensure that the flat is not being undersold. He points out that the flat is being sold for £60,000, which is well below the market value, he says, for a flat of this nature, although he accepts that it is in very poor condition which may or may not account for the low price.
4. Mr MacRae has appeared for the bank. There seems some uncertainty as to whether it is legally committed to a sale for £60,000 to a third party. There is apparently no conventional agreement but there have been exchanges of letters, some of which were written 'subject to contract' and others were not.
5. We think that justice demands that someone should look at this matter on behalf of William. As was put during the course of argument, if - and we emphasise that we are not making any finding to this effect - the flat were to be sold at an undervalue, there is at present no one who would hold the secured party, the bank, to account.
6. Mr MacRae very properly accepted that if the holder of a security interest undersells the security, he is liable to make good to the debtor the amount by which it has been undersold.
7. In the absence of an administrator there is simply no one to look at the position to see whether, in fact, a realistic market price is being obtained. Furthermore, it seems highly likely that there are other creditors, but there is no one, on behalf of William, to establish who they are, how much is owed and whether anything can be done to settle their claims.
8. All in all we think that the interests of justice suggest that this is a case for the appointment of an administrator and in so doing we are not purporting to say to the bank that it may not proceed with the sale. We do not think we have the power to say that. It is a matter for the bank. The bank, of course, has to bear in mind its duty to obtain the best possible price.
9. The steps, it seems to us, which an administrator could take would include seeing whether the brother in South Africa might come up with a higher price and generally satisfy himself that the flat is being sold for a proper price.
10. Perhaps the administrator therefore should obtain his own valuation and no doubt the legal aid fund could contribute to that. We therefore propose to appoint Mr Scally, who has acted previously for William, and therefore has some knowledge. He has kindly agreed to act and we will recommend to the Bâtonnier that he be given a legal aid certificate to that effect. As I say, he will no doubt consider what steps are open to him. The bank has very properly agreed that it will disclose to the administrator details of the correspondence with the proposed purchaser, and although I did not ask for this specifically, we would expect it also to disclose the valuations that it has obtained in order to satisfy the administrator on that score or help him to decide whether he will obtain his own valuation. We think that it is then up to the administrator to take all the steps he thinks best to establish the position and to make sure that William's interests are being adequately protected. We would like to suggest that the administrator should report to us in, say, six weeks. By then matters should have clarified.
11. This is not an open ended appointment; a désastre is always a possibility in which case the administrator's appointment will end. We think it would probably be helpful to all parties if the administrator were to present a report to us and we can consider whether to extend the appointment or whether to call a halt at that stage. Does that seem satisfactory to you Mr. Scally? On that basis, we appoint Mr. Scally as administrator and it is over to him.
No Authorities