Jersey Unreported Judgments

Court of Appeal - Saisie Judiciaire - application by the First Respondent for a stay.

[2019]JRC222

Court of Appeal

11 November 2019

IN THE MATTER OF SAISIES JUDICIAIRES IN RESPECT OF THE REALISABLE PROPERTY OF ROBERT TANTULAR

Advocate T. V. R. Hanson for the Appellants

Advocate A. J. Belhomme for the First Respondent.

The Viscount for herself.

Advocate M. W. Cook for the Third Respondent.

judgment on the papers

williams JA:

1.        This is the judgment of the Court in relation to the First Respondent's application for a stay of the "effect of [our] decision" in the appeal brought by the Appellants against the decision of the Royal Court of 18 June, 2019.  By Act of Court dated 28 October, 2019 we allowed the Appellant's appeal against the decision of the Royal Court and granted the Appellants the declaration which they had sought by summons dated 16 April, 2019.  Additionally, we laid down a timetable for the filing of written submissions upon the costs issues which arose in consequence of our decision on the appeal.  The First Respondent invites us to impose the stay pending the resolution of an application which he intends to make for permission to appeal to the Judicial Committee of the Privy Council. 

2.        The application for the stay appears to be concerned solely with the substantive relief which we granted i.e. the declaration.  For the avoidance of any doubt, however, we have also considered whether there should be a stay in respect of the filing of written submissions upon the costs issues which have yet to be determined. 

3.        The application for a stay is supported by written contentions on behalf of the First Respondent dated 31 October, 2019.  These contentions and the legislation and authorities cited in support have been provided to us via ecourt.  The application for a stay is opposed by the Appellants.  They rely upon a short email from Advocate Hanson opposing a stay on the ground that the proposed appeal to the Privy Council has no prospect of success and, consequently, a stay is not appropriate.  Advocate Hanson offers to provide more detailed grounds of opposition if required by the court. 

4.        We have considered whether there is a need for an oral hearing.  We have concluded that such a hearing is unnecessary and that we are able to deal with the application on the basis of the written material provided to date.    In this judgment we assume that the reader is fully familiar with the issues raised in the appeal and the background facts as recited in our judgment on the appeal. 

5.        We make it clear that the First Respondent does not ask this court to grant permission to appeal to the Judicial Committee of the Privy Council.  The First Respondent has satisfied himself that he must seek permission from the Judicial Committee; nonetheless in his contentions the First Respondent sets out the grounds upon which he submits that permission to appeal should be granted. 

6.        The First Respondent has also established that the Rules which govern appeals to the Judicial Committee make it clear that a stay of the order of the court below will be made by the Committee only in exceptional circumstances and that if such a stay is sought the application should be made to the court which made the order which is the subject of the proposed appeal.  That is the basis upon which the First Respondent invites us to order a stay. 

The test to be applied when determining whether to grant a stay pending appeal 

7.        Advocate Belhomme submits that the test to be applied is that which was formulated by this court in Veka AG v TA Picot (CI) Limited [1999] JLR 306 at page 309.  At paragraph 19 of the First Respondent's contentions he sets out the relevant passage from that authority which is in the following terms: 

"Where there is an appeal by an unsuccessful party, the usual approach to be adopted in the Courts of Jersey is to make whatever orders, including an order staying proceedings under the judgment appealed from, as will prevent the appeal, if successful, from being nugatory unless the Court is of the view that the appeal is not bona fide, has no realistic chance of success or there are other exceptional circumstances."

8.        We understand the word "nugatory" in this passage to mean a state of affairs in which the appeal would be rendered of no or very little purpose.  With that clarification we agree that this is the test which we must apply.  We are satisfied that this test has been applied consistently in Jersey since the decision in Veka as the later cases identified in paragraph 20 of the First Respondent's contentions demonstrate. Advocate Hanson does not disagree. 

Discussion

9.        The first issue for us to address is whether, in the absence of a stay on the effect of our judgment, a successful appeal by the First Respondent would be rendered nugatory.  

10.      The effect of the declaration which we have granted is that the Bank is entitled to assign its interest in the mortgage to which the Property is subject without seeking the approval of the Court and a variation of the terms of the saisies.  In a sense, therefore, it might be thought that a successful appeal would be rendered nugatory if, before the appeal is heard, the Bank assigns its interest in the mortgage.  In our judgment, however, to determine this application on that basis is too simplistic.  There are a number of reasons why that is so. 

11.      First, the Bank has said unequivocally that it does not intend to assign its interest in the mortgage.  Obviously, that was not its stance when these proceedings commenced.  However, the Bank adopted its current stance in full knowledge of the Appellant's appeal and in full knowledge, we infer, that permission to appeal had been granted by the Royal Court because it considered the point at issue was of general importance.  There is no evidence of any kind which suggests that the Bank proposes to assign its interest in the mortgage in the near future and the correspondence from the Bank's lawyers which was sent shortly before the appeal was heard suggests that no assignment will take place before the litigation in Singapore in which the Bank is seeking possession of the Property and an order for its sale has run its course.  The likelihood is that a decision on permission to appeal will be made by the Judicial Committee of the Privy Council well before any assignment is contemplated.

12.       Second, an assignment of the Bank's interest in the mortgage, in itself, can cause no prejudice to the First Respondent and the Government of Indonesia. The First Respondent and the Government of Indonesia do not argue the purpose of the saisies would in any way be defeated simply by virtue of an assignment of the Bank's interest. 

13.      However, the First Respondent does argue that a foreseeable consequence of the assignment at one time proposed by the Bank is that it will "effectively grant control of the realisable property to a friend of the convicted criminal if not to the convicted criminal himself" - see paragraphs 6 and 23 of the First Respondent's contentions.  This argument is not sustainable for two reasons.  First, as we have said, there is simply no evidence that the Bank intends to assign its interest in the mortgage to Mr. Koswara in the near future.  Second, and much more importantly, the argument ignores the reality that the realisable property of Mr Tantular vested in the Second Respondent upon the making of the saisies.  There appears to be no argument but that the legal estate in the Property has vested in the Second Respondent.  She can be relied upon to take all proper steps to safeguard her interest in the Property whether the mortgagee is the Bank or an assignee of the Bank.  In our judgment, it is simply not right to assert, as does the First Respondent, that the proposed assignee will effectively gain control of the realisable property of Mr Tantular upon assignment.  As we have said the Bank has had to take legal proceedings in Singapore in order to seek to obtain possession of the Property and thereafter exercise its power of sale if possession is granted.  An assignee would be in exactly the same position if it wanted to obtain possession of the Property and sell it against the will of the Second Respondent, the Third Respondent and/or the Appellants.  If there was an attempt by the assignee to reach some agreement relating to the Property either with Mr Tantular or the Third Respondent or the Appellants which was in any way disadvantageous to the interests of the Second Respondent she would have the means to take effective legal action to prevent such an agreement coming to fruition.  Similarly, it would be open to the Government of Indonesia and/or the First Respondent to protect its potential interest in the Property by appropriate legal action.  To guard against the remote possibility that an assignee could take some action with the Appellants, Mr Tantular and/or the Third Respondent unbeknown to the First and Second Respondent which might prejudice their interests we can and will direct that the Appellants and the Third Respondent must notify the First and Second Respondents of any proposed or actual assignment of the mortgage of which they have notice forthwith upon acquiring such information.  It seems to us that such an order would be a proportionate response to the fears expressed on behalf of the First Respondent.  

14.      In any event we are not satisfied that the First Respondent's appeal would be rendered nugatory even if an assignment takes place prior to any appeal before the Privy Council.  It would be for the Privy Council to determine whether or not it had the power to set aside the assignment upon a successful appeal (always assuming it was invited to do so).  Assuming for the purpose of this judgment that the Privy Council has no such power the appeal would still not be nugatory.  It is common ground that the issue which we determined in the Appellants favour may have ramifications going beyond this particular case.  We appreciate that in the instant case the First Respondent is acting at the request of the Government of Indonesia.  However, in his own right the First Respondent has an obvious interest in the outcome of the appeal given Jersey's status as an international financial centre.  

15.      In our judgment the First Respondent has failed to demonstrate that in the absence of a stay this appeal will be rendered nugatory. 

16.      That being so and given our intention to make an order requiring the Appellants and Third Respondent to notify the First and Second Respondents of any proposed or actual assignment of the Bank's interest in the mortgage over the Property we decline to grant a stay on the effect of our judgment. 

17.      We should also make it clear that a further factor may have required very serious consideration had we been of the view that a successful appeal would have been rendered nugatory in the absence of a stay.  A stay upon the effect of our judgment would have had a very severe impact upon the Appellants' ability to defend the Bank's proceedings in Singapore.  Whether or not this would have constituted an exceptional circumstance justifying a refusal of the application is a matter which we now decline to determine but, on any view, it is a powerful factor weighing heavily against the grant of a stay. 

18.      Given that any appeal to the Privy Council must be with the leave of the Judicial Committee it is not appropriate for us to consider whether the proposed appeal has no prospect of success as Advocate Hanson submits.  We can say, of course, that there is no question of a lack of bona fides in First Respondent's desire to pursue this proposed appeal.  

19.      In the light of our decision to decline a stay upon the effect of our decision we do not propose to order a stay on the timetable for filing submissions in relation to the costs issues.  We can think of no good reason why we should not determine the costs issues notwithstanding the possibility of an appeal by the First Respondent to the Judicial Committee of the Privy Council. 

Conclusion 

20.      The application for a stay is refused.  We order the Appellants and Third Respondent to notify the First and Second Respondents of any proposed or actual assignment of the Bank's interest in the mortgage over the Property.  If there are any costs issues which need be addressed as a consequence of this application for a stay they should be included in the written contentions which we have already directed should be filed.  

Postscript

21.      After we had prepared and approved this judgment but before we had handed it down we received further emails from Crown Advocate Belhomme and Advocate Hanson. Both emails are dated 7 November 2019.

22.      The email from Crown Advocate Belhomme attached a letter from the Bank's Jersey lawyers to the Second Defendant together with an Order of Court of the High Court of Singapore dated 24 October 2019. It is clear from those documents that the Bank has obtained a money judgment against Jonzelle for sums owing under the mortgage, an order for possession of the Property against all Defendants to the Singapore proceedings (including the Appellants in this case) and an order that it is entitled to exercise its power of sale under the mortgage. The order for possession and the entitlement to exercise the power of sale are stayed until 2 December 2019. It is also clear that no appeal has been made against these orders and that the time for appealing has now expired. The order contains a "liberty to apply" provision. The letter from the Bank's Jersey lawyers ends by informing the Second Defendant that "the Bank intends to proceed with enforcement of its mortgage, sale of the Property and compliance with the Saisies Judiciares and Act of Court dated 6 August 2018".

23.      Advocate Hanson submits that this information is not relevant to the issues now before us. We disagree. In our judgment the Bank's current intentions are entirely consistent with our conclusions and reasoning at paragraphs 11 and 13 above. Equally obviously, the observations we make at paragraph 17 become irrelevant in all probability.

Authorities

Veka AG v T. A. Picot (CI) Limited [1999] JLR 306