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Before : |
Sir William Bailhache, President; |
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Between |
Alan Paul Booth |
Appellant |
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And |
The Viscount of the Royal Court of Jersey |
Respondent |
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The Appellant appeared in person.
Advocate D. R. Wilson for the Respondent.
Advocate M. St J. O'Connell amicus curiae.
JUDGMENT
WOLFFE JA:
1. The Appellant's property was declared en désastre in 2016. He was discharged in 2020. In 2022 he applied to the Viscount seeking an assignment to him of a claim against David O Reynolds Ltd, trading as Reynolds Chartered Surveyors (-Reynolds-) in respect of a valuation undertaken by them in 2013. The Viscount refused that application. The Appellant challenged the Viscount's decision in the Royal Court. On 12 June 2024 the Royal Court refused that challenge. The Appellant has appealed that decision.
2. The appeal raises an important question, not previously determined by the Court, as to whether, in an insolvent désastre administered in accordance with the Bankruptcy (Désastre) (Jersey) Law 1990 (-the 1990 Law-), the Viscount has an absolute duty to return any unrealised asset to the debtor upon and after the latter's discharge. For the reasons explained later, I have concluded that he does not.
3. The property of the Appellant was declared en désastre by an Act of the Royal Court on 16 October 2015. By virtue of Article 8 of the 1990 Law, that declaration vested the Appellant's property in the Viscount. The Viscount proceeded to administer the estate. The Viscount issued an Interim Report to Creditors dated 23 September 2016, and a Second Report to Creditors dated 13 December 2019.
4. The Second Report to Creditors bears to have been made under Article 28 of the 1990 Law which requires the Viscount from time to time to report to creditors on the progress of a désastre. The present Viscount's affidavit sworn for the purposes of the present proceedings explains that the Report was produced pursuant to Article 36 of the Law. The difference between the two is that a report under Article 28 may be an interim report and the report under Article 36 is a final report. Consistent with the present Viscount's affidavit in these proceedings, the Report contained a statement of receipts and payments which is described as -Viscount's Final Statement of Receipts and Payments- and stated that the Viscount intended to apply under Article 40 for the Appellant's discharge.
5. The Viscount made such an application, and the Appellant was discharged by the Royal Court on 3 January 2020. The Act of Court narrates that the discharge proceeded on a representation of the Viscount which stated that the property of the debtor had been realised -so far as possible-. At the date of discharge, the provable debts which had been admitted in the désastre but remained unpaid exceeded £3 million.
6. As the Royal Court observed, this is the latest in a series of disputes between the Appellant and the Viscount. It is unnecessary for the purposes of this appeal to set out the full history. This is summarised in the judgment of this Court in Booth v. The Viscount [2022] (2) JLR 141 (-the 2022 Judgment-), paragraphs 6-32. It suffices to note that the background to the désastre involved the purchase by the Appellant of two properties, King's Oak and Beaumont Hill House, and the Appellant's inability to meet payments due to his secured creditors. The litigation between the Appellant and the Viscount has included two previous applications seeking an order requiring the Viscount to assign claims back to the Appellant.
7. The first of these occurred whilst the désastre was in process. The Appellant sought a direction from the Royal Court that the Viscount re-vest in him certain causes of action. The decision of the Royal Court in that case was appealed, and the Court of Appeal held inter alia that the reasons which the Viscount had given for refusing to re-vest the claims in the Appellant included irrelevant considerations and/or were unreasonable. The Court remitted the matter to the Viscount for reconsideration. The Court of Appeal judgment (-the 2016 Judgment-) is reported at In re Booth (No.2) [2016] (2) JLR 473. Following the issue of that judgment, the Viscount assigned the causes of action in question to the Appellant. Two of these claims were settled; and the Appellant and the Viscount subsequently agreed that a proportion of the settlements (£95,000 in all) be paid to the Viscount for the benefit of the Appellant's creditors.
8. In 2022, after his discharge, the Appellant sought a direction from the Royal Court that the Viscount re-vest in him a cause of action against Reynolds for alleged negligence in the provision of a valuation of King's Oak (dated 10 May 2011) and two valuations in respect of Beaumont Hill House (dated 30 January 2012 and 4 March 2013). It appears that the question of whether the Viscount had a discretion to exercise was identified as a preliminary issue before the Royal Court; but that the Appellant abandoned the point. At all events, the Royal Court proceeded on the basis that the Viscount had a discretion to exercise; and refused the Appellant's application.
9. The Appellant appealed and the Court of Appeal dismissed the appeal. This was the 2022 Judgment. It is apparent from the 2022 Judgment that the Court proceeded on the assumption that the Viscount had a discretion to exercise in respect of property which had vested in her notwithstanding the discharge of the debtor (which is expressly recorded at paragraph 34 of the 2022 Judgment). The list of questions arising from the Notice of Appeal recorded at paragraph 64 of that Judgment does not include any challenge to that proposition. As paragraph 3 of the 2022 Judgment records, the essential question which the Court had to determine in that case was whether, in deciding whether or not to assign a cause of action to a debtor whose property has been declared en désastre, the Viscount was obliged to ignore the merits of the claim.
10. The Court concluded (paragraphs 81 and 87) that the Viscount was not merely entitled, but positively required, to consider the merits of a claim when deciding whether or not to assign it to the debtor. The Court founded that conclusion on an analysis of the options open to the Viscount. This analysis included the observation (at paragraph 82(ii) that -if the litigation appears to be utterly hopeless, then there would plainly be no justification for the Viscount pursuing it. Furthermore, in that situation, the Viscount would also be entitled not to assign the claim, whether to the debtor or to any third party-.
11. The proceedings which culminated in the 2022 Judgment were concluded (save in respect of unsatisfied costs awards) at the end of October 2022. On 1 November 2022 the Appellant emailed a member of the Viscount's staff asking for release to him of a further claim (-the Claim-) against Reynolds for alleged negligence in the provision of a separate valuation of King's Oak dated 4 March 2013 (-the 2013 King's Oak Valuation-). On being requested to provide further information, the Appellant sent the Viscount a copy of the 2013 King's Oak Valuation.
12. According to the Viscount, the Appellant had not previously disclosed this valuation; and the Viscount had been unaware of its existence until 1 November 2022. The Appellant pointed to an email which he had sent to the Viscount's office on 25 November 2015 (and which is quoted in the 2022 Royal Court judgment Booth v Viscount and Anor [2022] JRC 062 at paragraph 37), as placing the Viscount on notice of a possible claim against Reynolds in relation to King's Oak. That email referred to -valuations provided by Reynolds Chartered Surveyors in 2012/2013- and suggested that -an argument arises regarding potential professional negligence by the Chartered Surveyors in having placed higher values on the property than should have applied-. There had, of course, been other valuations by Reynolds, which were the subject of the 2022 litigation.
13. Whilst I recognise that the Appellant sent that email to the Viscount's Department, the generality of that reference and the lack of any other evidence from the Appellant on this point means that we have no reason to doubt the Viscount's evidence that the 2013 King's Oak Valuation had not been provided to his office until the exchange in November 2022. Indeed, when the Appellant responded on 1 November 2022 to the request from the Viscount's officer that he supply her with a copy of the valuation, he did so, without any indication that the Viscount already had the document.
14. The Viscount replied to the Appellant on 2 November 2022. He relied on the 2022 Judgment for the statement that the Appellant's claim against Reynolds vested in the Viscount upon the declaration of désastre made on 16 October 2015 and it did not revert to the Appellant on his discharge and so remained vested in the Viscount. He relied on paragraph 81 of that judgment to the effect that, when considering whether he should or should not assign such a claim back to the Appellant, he was -not only entitled but positively required to consider the merits- of such a claim; and he referred also to paragraph 82(ii) of the 2022 Judgment for the statement that if the litigation in respect of any such claim appeared to him to be hopeless, he would be entitled not to assign it to the debtor. Having reviewed the matter in further detail, the Viscount concluded that the Claim was hopeless, and he declined to assign it to the Appellant. His reasons for doing so were that, if he did assign it, he could be seen to be furthering potentially frivolous and vexatious litigation, which would be in conflict with his role as a public official and an officer of the court.
15. This prompted the Appellant to bring the present proceedings, seeking an order from the Royal Court requiring the Viscount to assign the Claim to him. The Royal Court (MJ Thompson Commissioner and Jurats Averty and Opfermann) concluded, for the reasons which stated in the Court's judgment of 12 June 2024 (Booth v Viscount of the Royal Court of Jersey [2024] JRC 132), that the Viscount had not acted unlawfully, had not reached a decision which no reasonable decision-maker could have reached, and had not breached any of the provisions of the European Convention on Human Rights or the Human Rights (Jersey) Law 2000 to the extent that those applied.
16. The Royal Court relied on the 2022 Judgment. It identified a number of difficulties which any professional negligence claim against Reynolds would face, and then made the following observations (emphasis added) -
-129. ... The financial position of Mr Booth at the time of the 2013 King's Oak Valuation was hopeless. A claim against Reynolds is therefore bound to fail. It was not the 2013 King's Oak Valuation that was the cause of Mr Booth's désastre as he alleges in his claim against Reynolds ... This is so even if we are incorrect in the conclusions we have reached about the reasonableness of the Viscount's other conclusions about the claim against Reynolds that Mr Booth now wishes to assert.-
The Court concluded that the Viscount had not acted unlawfully or irrationally in deciding not to assign the Claim.
17. The Royal Court further concluded that the present request to assign the 2013 King's Oak Valuation should have been raised in the 2022 proceedings. The Court relied both on issue estoppel and on the rule in Henderson v. Henderson (1843) 3 Hare 100. The Court accepted the Viscount's submission that the claim involved a collateral attack on the 2022 Judgment. It rejected various arguments which the Appellant advanced under reference to the Human Rights (Jersey) Law 2000.
18. In paragraph 39 of its judgment, the Royal Court stated -
-Mr Booth also sought to argue that the Viscount was in collusion with Reynolds. He was however prevented from making this submission because it was not pleaded and Mr Booth had elected in a directions hearing before Master Cadin in October 2023 not to seek discovery in relation to communications between the Viscount and Reynolds' advisers, or to challenge any claim that such communications were privileged. The Jurats were therefore directed to ignore this argument as was made clear to the parties in open court.-
19. The Appellant appealed to this Court. His Notice of Appeal challenged, on various grounds, the decision of the Royal Court not to allow him to advance the argument alleging collusion between the Viscount and Reynolds. The Notice also contended that the Royal Court -failed to address the matter of the Viscount's impartiality when arriving at a decision that involved a party with which it shared legal relationship that directly concerned the Viscount's decision-.
20. It is important to record, at this stage, that the Appellant's Notice of Appeal does not otherwise challenge the Royal Court's decision. In particular, he does not challenge the Royal Court's conclusions as regards the reasonableness of the Viscount's assessment of the Claim, the Royal Court's conclusion that the Claim was bound to fail, or the Royal Court's conclusion that he was barred from bringing the application on the basis that it could and should have been raised in the 2022 litigation.
21. The appeal came before the President, sitting as a single judge of this Court, for directions. The President noted that the Appellant had been discharged and that the désastre had accordingly come to an end. He questioned whether the premise upon which the Royal Court had proceeded - namely that the Viscount had a discretion to exercise notwithstanding the debtor's discharge - was correct. He observed (Booth v The Viscount of the Royal Court of Jersey [2024] JCA 273, paragraph 9) -
-It is apparent to me that the question as to whether the Viscount has the discretion to exercise in deciding whether or not to reassign a chose in action to the debtor may not be entirely straightforward and does not seem expressly to have been addressed by the two cases in which the Appellant has challenged similar decisions of the Viscount in this respect in the past. These cases are reported at Booth v. Viscount 2016 (2) JLR 473 and Booth v. Viscount 2022 (2) JLR 141.-
As I will explain, I agree with the President that neither of those two cases addressed the point which he identified. It is also clear from the submissions which we received that his observation that the issue -may not be entirely straightforward- was both prescient and well-founded. It is a mark of the difficulty of the issue that the Court does not have a unanimous view.
22. In the directions issued on 31 October 2024, the President gave the Appellant an opportunity to file an amended ground of appeal raising the point. He also directed that if the Appellant wished to argue that the Viscount's decision had been vitiated by collusion between the Viscount and the lawyers for Reynolds, he should file an application to amend his Order for Justice to make that claim and apply to introduce fresh evidence on appeal insofar as the evidence in support of that claim was not before the Royal Court.
23. The Appellant duly filed an additional Notice of Appeal focusing the issue which had been identified by the President. He also sought leave to be allowed to amend his pleadings so as to -formally make a claim that ... the Respondent's ability to make a decision to assign or surrender its title in the chose in action was prejudiced by the Respondent's association with Reynolds Chartered Surveyors to the extent that the Respondent should have recused himself from making the decision- and to be allowed to introduce the evidence contained in his affidavits which supported that allegation. But he did not file an amended Order of Justice which disclosed the terms of the proposed amendment for which he sought leave.
24. The Court appointed Advocate O'Connell as amicus curiae to ensure that the legal point which had been identified by the President was fully argued. Like the President, I am grateful to Advocate O'Connell for the assistance which he provided to the Court.
25. Three issues arise for determination -
(i) The question identified by the President - whether, in light of the Appellant's discharge, the Viscount has any power to refuse to assign the Claim to the Appellant.
(ii) The original ground of appeal - namely, whether the Royal Court erred in refusing to allow the Appellant to advance an argument alleging collusion between the Viscount and Reynolds.
(iii) The application to amend - namely (on the hypothesis that the second issue is resolved against the Appellant), whether the Appellant should be allowed to amend his Order of Justice to introduce a case alleging collusion between the Viscount and Reynolds.
For the reasons I set out below, I have reached the following conclusions on these issues:
(i) The Viscount has power to refuse to assign the Claim notwithstanding the Appellant's discharge. Put another way, the Claim vested in the Viscount and the Appellant's discharge did not give rise to a duty on the Viscount to assign the Claim to the Appellant. The Viscount retains the power to decide what to do with the Claim; that power being subject to the supervision of the Court in accordance with the 2016 and 2022 Judgments.
(ii) The Royal Court did not err in refusing to allow the Appellant to advance an argument alleging collusion between the Viscount and Reynolds.
(iii) The Appellant's application to amend should be refused.
26. The issue identified by the President arises because this was an insolvent désastre. At the date of the Appellant's discharge, there remained outstanding creditors' claims of over £3 million. Had the creditors been paid in full, the Viscount would have been under an obligation by virtue of Article 37(6)(b) of the 1990 Law to pay the surplus to the debtor, after the various payments provided for in Article 37 made. But that is not the position in this case.
27. Article 36(1) of the 1990 Law envisages that the Viscount is obliged to realise only so much of the debtor's property as, in his opinion, can be realised -without needlessly protracting the désastre-. Once he has done this, the Viscount is required to proceed to pay what is described as a -final dividend-. The 1990 Law envisages that, following the distribution of assets provided for in Articles 36 and 37 of the 1990 Law, the Viscount will apply to the Royal Court under Article 40 to discharge the debtor.
28. As the narrative which I have set out above discloses, in this case, the Viscount applied for the Appellant's discharge on the basis that the Appellant's estate had been realised -so far as possible-, and it was on that footing that the Court granted the application in 2020 and discharged the Appellant. However, as I have explained at paragraphs 12 and 13 above, at the time when the then Viscount applied for the Appellant's discharge, she was unaware of the Claim, or indeed of the 2013 King's Oak Valuation to which it related. It was only in November 2022, following the 2022 Judgment, that the Appellant disclosed that valuation to the Viscount's Department.
29. It is implicit in the terms of Article 36(1) of the 1990 Law that, notwithstanding the decision by the Viscount to declare a final dividend, there may be property of the debtor, which had vested in the Viscount under Article 8, but which remains unrealised. Article 36(1) envisages property vested in the Viscount which he has taken a deliberate decision not to realise because doing so would -needlessly protract the désastre-.
30. It is also possible to envisage situation where property has vested in the Viscount by virtue of the declaration of désastre but of which the Viscount remains unaware until after payment of the final dividend and/or the debtor's discharge. This could happen because the debtor has not fulfilled his duties to assist the Viscount in identifying and ingathering his property - a possibility which the 1990 Law envisages by imposing a criminal sanction on a debtor who, without reasonable excuse, fails to comply with the duties imposed by Articles 18(1) and (2) - see Article 18(2A). But it could also potentially happen without any fault on the part of the debtor.
31. In argument, a gold bar in a previously unidentified safety deposit box discovered only after the debtor's discharge was postulated in order to test the argument. But the issue is not theoretical. It is the very situation which we face in this case, because the Viscount was unaware of the 2013 King's Oak Valuation until the Appellant provided that valuation to the Viscount's Department, long after the Appellant's discharge.
32. I have reached the following conclusions -
(i) Unrealised property (whether known to the Viscount or not at the date of discharge) remains vested in the Viscount regardless of the discharge of the debtor unless and until the Viscount takes steps to convey it to someone else.
(ii) The discharge of the debtor does not give rise to a duty on the Viscount to return unrealised property to the debtor. A fortiori the debtor's discharge does not have the consequence that property which has vested in the Viscount, but which was unknown to him, must be returned to the debtor if it is later identified. It remains open to the Viscount to realise such property for the benefit of the unsatisfied creditors.
(iii) Nevertheless, if the Viscount decides not to realise for the benefit of the creditors property which has vested in him, he must decide what to do with that property. The Viscount's decision as to what to do with unrealised property is subject to the supervision of the Court on the principles set out in the 2016 Judgment and the 2022 Judgment.
(iv) In the case of claims, the analysis set out by the Court in the 2022 Judgment falls to be applied. In particular, if the Viscount properly concludes that a claim is hopeless, that entitles him to decide not to assign that claim to the debtor.
33. Before explaining why I have reached those conclusions, I should deal with two preliminary issues raised by the Viscount. He contends, first, that the issue raised by the President is foreclosed by the 2022 Judgment, and, secondly, that the Appellant is estopped from relying on it. I disagree with the former contention; but I accept the latter.
(i) The 2022 Judgment
34. The claim which was before the 2022 Court of Appeal was on all fours with the present claim. It involved a request by the Appellant, after his discharge, for assignment to him of three claims. The Viscount had refused that request. The Court proceeded on the footing that, notwithstanding the discharge of the debtor, the Viscount had a discretion to exercise and analysed the case on that basis. The Viscount contended that it was of the essence of the 2022 Judgment that the Viscount did not have a duty to assign the claims, and that the 2022 Judgment is accordingly a precedent which we should follow.
35. If the issue had been addressed by the Court of Appeal in the 2022 Judgment, I would have agreed with the Viscount. Although this Court is not bound to follow its own decisions, the interests of consistency and legal certainty will usually justify the Court in doing so unless it has been presented with a good reason to depart from the previous decision. But, although the Court of Appeal in 2022 was well aware that the Appellant had been discharged, the point which the President has identified was not argued before the Court. That is unsurprising, given that the point had been identified as a preliminary issue in the Royal Court, but had apparently been abandoned, and formed no part of the reasoning of that Court. Certainly, as I have noted at paragraph 9 above, the list of issues which the Court identified from the Notice of Appeal did not include any challenge to the proposition that the Viscount had a discretion to exercise. The Court of Appeal accordingly did not address, one way or the other, the issue which has now been focused by the President's question. In these circumstances, in my view, the 2022 Judgment does not present an obstacle to the Court now considering the point.
(ii) Estoppel/Abuse of process
36. It does not follow that the Appellant should be allowed to rely on the argument. There is a strong interest in finality in litigation. That interest is advanced by various doctrines. These include the general principle, borrowed by Jersey law from the doctrine recognised by the courts of England & Wales in Henderson v. Henderson, supra, that a litigant may be barred from raising a point which could and should have been raised in a previous litigation between the same parties. That principle applies here.
37. I recognise that the Claim is a different claim from the three claims which were the subject-matter of the 2022 Court of Appeal decision. I also recognise that the Appellant is a litigant in person, and that the Viscount is a public official who has no legitimate interest other than to give effect to the law, properly construed. I recognise, further, that the issue is an important one, on which there is no previous authority; and that it has been put -in play- by the Court itself. Nevertheless, the fact that the Court has raised the point cannot, in my view, preclude the Viscount from taking any argument which may properly be advanced in response, or the Court from adjudicating on any such argument in light of all the information which is now before the Court about the history of the matter.
38. The issue which the President has identified is a point which, if the Appellant had wished to advance it, could and should have been insisted upon by the Appellant in the 2022 case. It was apparently identified as an issue before the Royal Court in that case, but was abandoned. The Appellant now seeks to revive the point in the context of a request to assign another claim in respect of a valuation which he only disclosed to the Viscount after the conclusion of the 2022 case, and long after his discharge. Even if I had taken a different view as regards the merits of the point, I would nevertheless have held that it would be an abuse of process for the Appellant to be allowed now to rely on it.
39. Against that background, I turn to the substantive question.
(i) The Amicus
40. The amicus contended that the effect of a declaration en désastre was to interrupt and suspend the rights of the debtor in respect of his property for the duration of the désastre process. The law did not contemplate a vacuum in the ownership or control of the debtor's property, and there was in effect a binary position - the property was vested in the Viscount during the désastre process and was vested, at least beneficially, in the debtor before and after that process, the Viscount having no further interest in the property once the désastre had been completed.
41. The amicus relied on the fact that by virtue of Article 15 of the 1990 Law, the exercise by the Viscount of his power to disclaim property had the effect in law that all rights and remedies in respect of such disclaimed property would be extinguished, even so far as concerned a debtor. It was open to anyone who opposed the disclaimer to apply to the Court, which had wide discretionary powers, including the power to vest the property in the hands of any person. These were mechanisms by which the rights in relation to property could be extinguished or in the alternative vested in any person showing justification for such vesting. Absent a positive disclaimer in respect of an item of the debtor's property which had vested in the Viscount, it could not be said that that property had been extinguished, and by implication, the rights in it were capable of being exercised by someone.
42. The Viscount had power during the course of the désastre to take any action in respect of the chose in action which he thought appropriate - he could compromise the claim on payment of such compensation as was suitable; he could apply for directions concerning the merits of a potential claim; he could prosecute it to a conclusion; or indeed he could have assigned it back to the debtor, whether for value or not. Where, however, the Viscount did none of these things, the chose in action was not extinguished and still existed. After the conclusion of the désastre, it could no longer be said to be held on a quasi-trust for the creditors, because the Viscount had expressly or impliedly resolved not to realise the asset for their benefit. It followed that the chose in action must revert to the debtor. Implicit in the argument is the proposition that the désastre comes to an end at some point. Under the 1990 Law, that is on the debtor's discharge.
43. At customary law, the declaration of désastre did not permanently deprive the debtor of his property. That position had not been changed by the statute. The declaration worked as an extreme but temporary judicial intervention in the debtor's enjoyment of his property rights, in part now governed by statute, and administered by the executive arm of the Court.
44. The amicus further submitted that the contention by the Viscount that he is under a duty to protect prospective defendants from meritless claims was incorrect. Putative defendants could and should fend for themselves. It was hard to see where the boundaries of an obligation to have regard to the interests of putative defendants, if it existed, could be found.
(ii) The Viscount
45. The Viscount, for his part, contended that if he has no discretion to decline to assign the claim to the Appellant, he must have a duty to do so. Whilst the Viscount has the power to return unrealised assets to the debtor, he has no duty to do so. We extract the following main points from his submissions.
(i) There was no trace of any such duty in the pre-1990 Law. It was, said the Viscount, unclear whether, as a matter of customary law, a declaration of désastre vested the debtor's property in the Viscount or simply gave the Viscount the authority to ingather and administer the property with title remaining in the debtor. However, he submitted that the better view was that the property did vest in the Viscount. This had been the view of Philip Bailhache, then Solicitor General for Jersey (and subsequently Bailiff), giving evidence to the High Court of England & Wales in In re a Debtor [1981] 1 Ch 384. Yet the suggested duty is not mentioned in any case or textbook or in the Report which preceded the 1990 Law.
(ii) The suggested duty would be inconsistent with the customary law. The désastre process was an investigative process, undertaken by the Viscount in the public interest. The Royal Court had held in Jobas Ltd v. Anglo Coins Ltd [1987-88] JLR 359 that the over-riding objective of the exercise by the Viscount of his functions was -to safeguard the Islands' reputation for commercial integrity and morality-. It could not be any part of the public interest for the Viscount to be obliged to assign to the debtor a claim which the Viscount had concluded to be without merit. It would be no answer that if the debtor pursued the claim, the Court before which the claim was brought could address its merits, particularly where the debtor might be unable to meet any costs award made against him. To oblige the Viscount to assign such a claim to the debtor would undermine Jersey's reputation for commercial integrity and morality.
(iii) The 1990 Law made clear that title to the debtor's property vested in the Viscount. But it contains no provision requiring him to transfer property back to the debtor on his discharge, and there is no caselaw under the 1990 Law which supports the suggested duty. On the other hand, there have been two cases from the Court of Appeal - Eves v. The Viscount 1998/192 (noted briefly at 1998 JLR note 2b) and the 2022 Judgment - which make clear that, when deciding how to deal with a chose in action, the Viscount has both a power and a duty to consider the merits of a claim. The suggested duty would be inconsistent with the ratio of the 2022 Judgment. Although the customary law may develop, it should not be developed so as to require the Viscount to assign to the debtor a claim which he had concluded was meritless, or even malicious. This would not be consistent with the Viscount's duty to protect the public interest, of which the postulated defendant's interest would be part.
(iv) The 1990 Law had innovated on the customary law by providing for the discharge of the debtor. To require the Viscount, in an insolvent désastre, to transfer any unrealised assets to the debtor on the debtor's discharge would, in effect, enrich the debtor at the expense of the unsatisfied creditors. The position under the 1990 Law is, contended the Viscount, the same as in English law where the discharge of the debtor does not prevent a creditor from proving in the bankruptcy. He relied on Law Society v. Shah [2007] EWHC 2841 (Ch) for the English law position. Whilst discharge releases the debtor from liability for any unsatisfied debts, it does not extinguish outstanding creditors' claims. Any assets subsequently found to be of value could be realised by the Viscount to meet those claims.
(v) The suggested duty would incentivise the debtor to seek to hide assets from the Viscount, with a view to increasing the likelihood that such assets would return to him on his discharge.
46. On the facts, the Viscount asserted, as I have noted at paragraph 12 above, that as at 31 October 2022 he was unaware not only of the Claim but of the 2013 King's Oak Valuation. It would be unconscionable, said the Viscount, to permit Mr Booth to gain any advantage from litigation against Reynolds in respect of a claim which had existed at the time of the désastre in circumstances where his creditors had not been repaid in full what they were owed.
47. It will be apparent that both parties set their submissions in the context of the customary law. The 1990 Law bears to -amend and extend the law relating to the declaring of the property of a person to be en désastre-. The customary law, accordingly, persists, insofar as it has not been amended by the 1990 Law and is, as I observed in my separate judgment in Representation of HWA 555 [2023] JCA 085, capable of informing the interpretation of the 1990 Law. At the same time, it is important, when analysing the 1990 Law to recognise the significant respects in which it innovated on and amended the customary law.
48. I gratefully accept the President's description of the customary law which, as Matthews JA observes, is clear and compelling. As he explains, désastre was a judicially introduced process to provide an orderly system for enforcing judgment debts and ensuring equality amongst creditors, subject to any preferences, against the debtor's assets. This was achieved by adjourning all pending applications for judgment against the debtor until the passation des causes. The effect of the declaration of désastre was to deprive the debtor of possession of his goods and to put those goods into the possession of the Viscount, as the executive officer of the Court, with a view to their realisation. By 1990, the procedures were regulated by the Rules of the Royal Court, which, for example, required the Viscount to advertise the désastre, with a view to creditors filing claims, and for the Viscount to adjudicate on claims and to distribute the debtor's moveable assets in accordance with the creditors' rankings.
49. In In re Désastre Overseas Insurance Brokers Ltd (a 1966 case which is quoted in the Projet de Loi which preceded the enactment of the 1990 Law), the Bailiff (Sir Robert Le Masurier DSC) observed that -
-A désastre is a statement of bankruptcy, the effect of which is to deprive an insolvent debtor of the possession of his movable estate and to vest that possession in Her Majesty's Viscount whose duty it is to get in and liquidate that estate for the benefit of the creditors who prove their claims.-
It is notable that, although this dictum speaks of vesting, it is only the possession of the goods, and not the property, which is said to vest in the Viscount. As I have mentioned, the Viscount referred us to In re a Debtor, ex parte Viscount [1981] 1 Ch, which records that the then Solicitor General gave evidence that, at customary law, the property vested in the Viscount. The point was apparently disputed in that case, and the judge did not require to reach a conclusion on it. The report of the case does not disclose the former Solicitor General's reasoning, and it is therefore not possible to assess the cogency of the position which appears, on the face of it, to be at odds with the dictum of Bailiff Le Masurier. I accept the President's analysis to the effect that, at customary law, the property in the debtor's assets did not vest in the Viscount.
50. At customary law, there was, as the President explains in his judgment, a natural conclusion to the proceedings on the payment of a dividend to the creditors from the assets which had been realised. Thereafter, there was nothing left for the Viscount to do and the désastre came to an end. As a matter of course, any goods which had not been realised would be returned to the debtor who, on the view of the law set out by Bailiff Le Masurier, had remained owner. However, the declaration of désastre did not, as the President explains, discharge the debtor from his debts; nor was there any process whereby the debtor could secure a discharge following the conclusion of the désastre. It followed, as the President explains, that the debtor remained exposed to further actions from the unsatisfied creditors.
51. The 1990 Law effected a significant reform of the customary law. Amongst many other changes (including the extension of désastre to immoveable property), were two which are of particular relevance to the present issue - Article 8, which provides for the debtor's property to vest in the Viscount; and Part 9, which provides for the discharge of a debtor who is an individual. There were also new provisions dealing with corporate debtors, notably Article 38(2) which provides that, on notification by the Viscount to the registrar of payment of the final dividend, the debtor is dissolved, subject to an exception in the circumstances mentioned in Article 38(3) where the corporate entity is subject to criminal proceedings.
52. The 1990 Law also contains provisions which deal with the administration of the debtor's estate (Part 6), proofs of debt (Part 7) and the distribution of the estate (Part 8). Part 6 includes Article 26 and 27, which give wide-ranging powers to the Viscount, including, specifically (Article 27) the power to sell -the whole or any part of the property of the debtor-. In Part 8, Article 36(1) provides -
-When the Viscount has realised all the debtor's property, or as much of it as in the Viscount's opinion can be realised without needlessly protracting the -désastre-, the Viscount must -
(a) supply all the creditors of the debtor with a report and accounts relating to the -désastre-; and
(b) pay whatever final dividend is due.-
Article 37 deals with the situation where there is a surplus of assets and expressly obliges the Viscount to pay any surplus to the debtor.
53. I address, first, the question of vesting. Article 8 of the 1990 Law provides that, subject to certain qualifications which are not relevant for present purposes, the debtor's property -shall vest in the Viscount immediately upon the making of the declaration-. It is plain, in my view, that neither the decision to pay a final dividend nor the discharge of the debtor affects the continued vesting in the Viscount of any property which has not been realised (whether that was known to the Viscount or not). There is no provision in the 1990 Law which divests the Viscount of such property on the debtor's discharge. This contrasts with the express provision in Article 7(6) re-vesting property in the debtor in the event that the declaration of désastre is recalled. Any unrealised property of the debtor accordingly remains vested in the Viscount until the Viscount takes steps to divest himself of that property.
54. Article 37(6) of the 1990 Law expressly requires the Viscount to pay the debtor any surplus left after creditors' claims have been met in full. There is no equivalent provision which imposes a duty on the Viscount to transfer unrealised property to the debtor in any other case, whether following the payment of a final dividend or on the debtor's discharge. Specifically, by contrast with the express requirement in Article 37(6), there is no duty imposed by the 1990 Law to transfer unrealised property to the debtor if the creditors have not been paid in full.
55. That does not mean that there are no legal constraints on the Viscount's decision-making in relation to unrealised property. Article 36(1) of the 1990 Law anticipates that there may be property vested in the Viscount which he decides not to realise because doing so would -needlessly protract- the désastre. Although the 1990 Act does not impose a positive duty on the Viscount to transfer unrealised property to the debtor upon the latter's discharge, the Viscount will, as a matter of course, have to address what to with that property. Before us, Advocate Wilson explained that, in relation to items of property which were not of monetary value such as to justify their realisation in the interests of creditors - such as family photographs, household furniture and the like - the Viscount will generally transfer those back to an individual debtor; but he contended that this was a matter of discretion, rather than duty. For reasons which I shall explain, I accept that contention, but it does not follow, by any means, that the discretion is unfettered. The Viscount's decision-making is subject to supervision by the Court on the bases explained in the 2016 Judgment and, in the case of claims, by the 2022 Judgment.
56. It follows that, in practice, at or after the payment of the final dividend, even in an insolvent désastre, the Viscount will likely have realised or otherwise made a decision about how to deal with all of the debtor's property of which he is, at that stage, aware. The 1990 Law does not appear to have anticipated, other than in the criminal sanction in Article 18(2A), that there could be property vested in the Viscount of which he remains ignorant at that stage. But the circumstances of the present case illustrate that this is, at least, possible. The sharp question arises as to whether the Viscount retains the power to realise such property, should it have value, for the benefit of the unsatisfied creditors, or, by reason of the debtor's discharge, is subject to an absolute duty to transfer it back to the debtor by reason of the latter's discharge.
57. In my view, the Viscount retains the power to realise such property for the benefit of the unsatisfied creditors. The 1990 Law creates a regime in which the debtor gives up all his property and this is vested in the Viscount with a view to its realisation for the benefit of the creditors. In return, the individual debtor has the benefit, in due course, of a discharge from liability for the provable debts. As long as there remain unsatisfied creditors, the debtor has no equity in the unrealised property, and it would be inconsistent with the essential purpose of the statutory regime should the Viscount be under a duty in such a case to return unrealised property, however valuable, to the debtor upon and after the latter's discharge.
58. Article 41 of the 1990 Law expressly sets out the effect of an order of discharge. It releases the debtor from all debts provable in the désastre, with the exceptions specified in Article 41(1), and removes the prohibitions and disabilities imposed on an undischarged debtor by Articles 24 and 25 of the 1990 Law. Since the order of discharge is a statutory innovation on the customary law, there is, in my view, no reason to give it a more extensive effect than that expressly stated in the 1990 Law. Specifically, whilst the order of discharge releases the debtor thereafter from liability for provable debts, it does not, in my view, extinguish the creditors' claims in the désastre insofar as those have not been satisfied from the debtor's property.
59. In my view, insofar as property which has vested in the Viscount has not been realised or otherwise dealt with (for example, because the Viscount was not aware of its existence) before the order of discharge, the Viscount may still, if the property has value, realise that property in order to meet those unsatisfied claims. There is nothing in Article 27 (which gives the Viscount the power to realise the asset) which disapplies the exercise of the power of sale after the order of discharge.
60. I recognise, of course, that the 1990 Law specifies a statutory machinery for the orderly administration of a désastre, including, under Article 36, to provide the creditors with a report and accounts of the désastre and to pay -whatever final dividend is due-. In most circumstances, that will bring the administration of the debtor's property to an end. However, it does not seem to me that this would prevent the Viscount from subsequently realising for the benefit of the creditors a valuable asset which has, for some reason, been omitted from the accounting and the calculation of the final dividend, or from then paying a further dividend.
61. To hold that the Viscount has an absolute duty to convey such property to the debtor following the latter's discharge would, in my view, be inconsistent with the statutory scheme which envisages that the whole of the debtor's property vests in the Viscount so as to be administered and realised for the benefit of the creditors. Indeed, as the Viscount suggested, to hold that the Viscount has such a duty would create an incentive on debtors to seek to conceal their assets. That a debtor who does successfully conceal a valuable asset might subsequently be prosecuted, if the prosecutor can establish that a crime has been committed under Article 18(2A) of the 1990 Law, may be of limited comfort to the unsatisfied creditors.
62. I am fortified in this conclusion by recalling that désastre is a procedure which applies, and has always applied, both to natural and to legal persons. The process of discharge, provided for in Part 9, applies only where the debtor is an individual. In the case of a corporate debtor, the Viscount notifies the registrar of the date of payment of the final dividend under Article 36(2) and, as I have mentioned, the debtor is, thereupon dissolved in accordance with Article 38(2), subject only to the particular exception provided for in article 38(3). These provisions are, in my view, difficult to square with the suggestion that the Viscount has a duty to convey unrealised property to a corporate debtor. Whilst there is provision in Article 213 of the Companies Law for the dissolution of a corporate debtor to be declared void, the postulated duty, if applied to a corporate debtor, would, potentially, require the Viscount to apply to the Court under Article 213 in any case where, as envisaged in Article 36(2), the Viscount retains property of a corporate debtor which has not been realised. That would be an odd, and potentially onerous, position, which seems to me to be directly inconsistent with the terms of Article 38(2). It is, in my view, a consideration against the contention that the Viscount is under a positive duty to transfer unrealised property to an individual debtor upon the latter's discharge that it would involve a marked contrast between the obligations of the Viscount vis-à-vis unrealised property in personal and corporate insolvencies.
63. I accept the proposition that the 1990 Law falls to be read in light of relevant customary law and, indeed, that the customary law survives except so far as it has been amended by the 1990 Law. However, I have not found the customary law to be of assistance on the issue before us.
(i) It will be apparent from the discussion at paragraph 49 above that there may be room for debate as to the customary law effect of a declaration of désastre on the property rights of the debtor. As I have stated above, the better view, it seems to me, is the President's view that whilst, at customary law, the Viscount had the power to take possession of, and to realise, the debtor's property, the property did not vest in the Viscount.
(ii) It follows that, at customary law, when the Viscount had exhausted his responsibilities in relation to the désastre, there was no need for any transfer of unrealised property back to the debtor, because the debtor had remained the owner of the property throughout. As a matter of legal structure, the issue with which we are faced - namely, whether the Viscount had a duty to convey property back to the debtor - simply did not arise. It follows that, at customary law, no duty such as that postulated, arose (and no question can arise that such a duty continues to apply because it has not been repealed by the 1990 Law).
(iii) Further, on the footing that, at customary law, the debtor's property did not vest in the Viscount, the 1990 Law amended the customary law in a material respect. It provided for the debtor's property to vest in the Viscount, and it contained no provision which either re-vested the property in the debtor following conclusion of the désastre or imposed a duty on the Viscount to re-convey the property.
(iv) In order to replicate the customary law position, as it has been described by the President, it would accordingly be necessary to impose a specific duty on the Viscount which did not exist (and for which there was no requirement) in the customary law. When the States enacted the 1990 Law, they did not impose such a duty.
(v) If, contrary to our view, but as the Viscount contended, the position at customary law was that the debtor's property did vest in the Viscount, we were shown no customary law authority which would support the existence of the postulated duty. The fact that, as a matter of practice, any unrealised goods would be returned to the debtor does not inform us whether that was because, on the legal analysis of Bailiff Le Masurier, the debtor remained proprietor throughout, or was because the Viscount routinely chose to return such property in the exercise of his discretion, or was because the Viscount considered that he had a duty to do this (or, if that was the position, on what basis such a duty arose). So far as customary law authority is concerned, there is nothing to assist us.
(vi) Under the customary law, the debtor was not discharged of liability to unsatisfied creditors. Accordingly, as the President explains, although the debtor remained free to deal with any unrealised property after the conclusion of the désastre, the debtor also remained liable to unsatisfied creditors. It would, it seems to me, be somewhat paradoxical for reference to the customary law to support the conclusion that the debtor is entitled, under the 1990 Law regime, to the return of his former assets (even valuable assets) whilst also being freed of his liabilities. The analysis which I prefer seems to me to be more consistent with the underlying policy balance which was struck by the customary law, inasmuch as it allows creditors to continue to enforce claims against all of the property which had vested in the Viscount even after the désastre has run its ordinary course.
64. I should address the points made by the amicus.
(i) Whilst the effect of désastre can be characterised as -extreme-, it is, like other collective insolvency procedures, a justified intervention in the property rights of the debtor, in the interests of creditors. As long as the debtor's property is capable of being applied to meet the claims of creditors, that intervention remains justified.
(ii) There is no vacuum so far as title is concerned. The debtor's property vested in the Viscount by virtue of the declaration of désastre and, notwithstanding the discharge of the debtor, remains vested in the Viscount unless and until he disposes of it. The issue is not, in fact, concerned with title, but with the question of whether the Viscount is subject to a duty to convey property back to the debtor on and after the latter's discharge.
(iii) Articles 15 and 16 of the 1990 Law, which give the Viscount the power to disclaim onerous property, do not, in my view, illuminate the question of whether the Viscount has a duty to transfer unrealised property to the debtor on the latter's discharge.
65. Of greater force was the amicus' submission that once the debtor has been discharged the désastre has come to an end and the Viscount is functus. In effect, so the argument runs, the purpose for which the assets have been vested in the Viscount is exhausted and therefore he has no option but to return any unrealised property to the debtor, whether that be property in the Viscount's hands or property which had vested in the Viscount but of which he only becomes aware after the debtor's discharge. The President has accepted that submission. He emphasises the importance of finality in the désastre process and stresses that a désastre must be capable of coming to an end.
66. As I have observed at paragraph 50 above, at customary law, a désastre came to a natural conclusion when the Viscount had fulfilled his administrative responsibilities. The Projet de Loi identified uncertainty as regards the -precise date of termination of a -désastre'- as -undesirable as it is relevant both to after acquired property and also to the status of the debtor-. The 1990 Law addressed both of those specific points by providing, in Articles 41 and 42 for the discharge of the debtor (and fortifying those with the provisions in Article 38 dealing with the status of the debtor following distribution of the assets but prior to discharge), and, in Article 9(2), by providing that, after the debtor's discharge, the Viscount may no longer claim property which devolved on the debtor after the date of the declaration of désastre.
67. It is certainly the case that, so far as the debtor is concerned, and indeed for other purposes under the Law, the discharge of the debtor marks the end of the process of désastre. This is reflected in the definition of the phrase -during the course of a désastre- in Article 1(2), which is used for particular purposes in the 1990 Law. Further, as I have explained above, in the normal course of a désastre under the 1990 Law, the Viscount's administrative responsibilities in relation to the property of the debtor will, likewise, come to a natural end when he has fulfilled the responsibilities set out in Articles 36 and 37 and decided how to deal with any unrealised property.
68. But it does not seem to me to follow that the Viscount is functus if it should turn out that there is property which had vested in the Viscount but which has, for some reason, not been accounted for in the ordinary course of the désastre. After all, that property remains, by virtue of the 1990 Law, vested in the Viscount, and he must do something with it. The Viscount retains his public office, with the responsibilities which attach to it; there is no procedure specified in the 1990 Law whereby he is formally discharged of his responsibilities in respect of the désastre. For the reasons I have explained above, the discharge of the debtor does not affect the subsistence of any unsatisfied creditors' claims, even though it absolves the debtor of liability. The Viscount has, by virtue of the 1990 Law, a statutory power to realise the property, and there is, it seems to me, nothing in the 1990 Law which prevents him from doing so or from then making a further distribution to any unsatisfied creditors.
69. The President takes the view that the possibility that property might emerge after the debtor's discharge could be dealt with by including a condition in any order of discharge to the effect that the discharge is conditional on there being no undiscovered property of the debtor. The imposition of such a condition would have the undesirable consequence that any discharge, far from freeing the debtor from liability and disabilities, would be a -limping- discharge, liable to be defeated if there should be undiscovered or unknown assets which had vested in the Viscount, with potential ramifications for things which have been done in the interim. More fundamentally, since I have concluded that the Viscount is not subject to the postulated duty, there is no need to consider a workaround such as that suggested by the President.
70. For all these reasons, I reject the contention that the Viscount has an absolute duty to assign the Claim to the Appellant because the latter has been discharged. If the Claim had been a valuable one, the Viscount could have pursued the Claim for the benefit of the creditors (subject to any limitation or other bar). Since the Viscount decided not to take that course, he required to address what to do about the Claim. In my view, having reached the view that the Claim was hopeless, he was entitled, applying the guidance in the 2022 Judgment, to decline to assign it to the debtor.
71. The Viscount relied before us on observations of the Royal Court in Jobas Ltd, supra, and in the 2022 Judgment in support of a contention that, when deciding whether or not to assign a claim to the debtor, he must act in the public interest and that this includes the interests of the putative defendant. I do not agree with that analysis. The true position is that the debtor's property is vested in the Viscount, and he has responsibilities to ingather and realise that property for the benefit of creditors (and, in a solvent case, ultimately for the debtor himself). The Viscount serves the public interest, and the reputation of the Bailiwick by fulfilling those responsibilities rigorously and with integrity.
72. The decisions which he is called on to make, as to whether or not to realise particular assets, and how to deal with claims, fall to be made in that context. It is unnecessary, and may lead to misunderstanding and error, to postulate a wider duty to act in the public interest if that is taken to stand apart from, indeed potentially at odds with, his responsibility to maximise the return to the creditors. Specifically, in relation to claims, the Viscount owes no duty to potential defendants. To postulate such a duty would immediately set up a conflict or potential conflict with his responsibility to pursue claims where he judges that to be the appropriate course in the interests of the creditors.
73. Nor do the cases upon which the Viscount relied, on analysis, support the wide proposition which he asserted. In Jobas, the Royal Court recorded, and approved of, the Viscount's submission that - -as part of the evolution of the désastre, he also has an investigative role with responsibilities and duties to protect the public interest and the good name and reputation of this Island. He put it thus - -As Jersey's standing as an international finance centre grows and the volume of offshore business expands, it is necessary for the insolvency service to respond in a manner that will ensure the continued protection of the public interest'.-
74. The Viscount advanced that argument in Jobas in support of a submission, which was accepted by the Court in that case, that he had a responsibility, in the context of the customary law, to investigate the debtor's affairs. It would be a mistake, in our view, to seek to derive from that submission a freestanding duty to -protect the public interest and the good name and reputation of the Island-. As I have observed, the Viscount will achieve that objective by fulfilling the specific statutory responsibilities imposed on him with rigour and integrity.
75. The 2022 Judgment recognised (at paragraph 83) that the Viscount discharges a public duty and that his decisions, accordingly, cannot be judged solely by commercial considerations. The specific point which the Court was concerned to make is that as a public official and an officer of the Court, it is no part of his responsibilities -to facilitate hopeless litigation by a debtor on the basis that it might squeeze some payment from the reluctant hands of a defendant who, if the case went to trial, would be likely to succeed- (paragraph 84), or, indeed -to facilitate malicious litigation, even if it would be likely to result in a recovery for the benefit of creditors- (paragraph 86). In the former case, what the Court had in mind was a -cynical decision- to bring a claim which was objectively hopeless, because this might generate a nuisance payment (paragraph 84).
76. These propositions were not derived by the Court of Appeal in the 2022 Judgment from a postulated duty owed by the Viscount to the potential defendants. They flow, quite simply, from the fact that the Viscount is a public official and an officer of the Court. Indeed, to postulate that the Viscount has a duty to potential defendants would create an inherent conflict of interest and would, potentially, impose an excessive burden on the Viscount. If the Viscount decides, in the exercise of his public functions, to assign a claim (including to assign it to the debtor) and the claim is, or turns out to be, unmeritorious, it is, as the 2016 Judgment observed (paragraph 31), -for the courts before which those claims are brought to make such orders as meet the justice of the case-.
77. For the reasons which I mention at paragraph 35 above, although we are not bound by the 2022 Judgment, I would be slow to depart, without good reason, from that decision on an issue which was expressly argued and decided. For my own part, it seems to me that it would be unsatisfactory for the law to compel the Viscount to assign to a discharged debtor any claim which the discharged debtor may assert - however spurious, ill-founded or malicious the Viscount may consider that claim to be - on the footing that it is for the court before which that claim would be brought to dispose of it. It follows that I do not myself believe that there is a good reason to depart from the analysis in the 2022 Judgment. The present case illustrates the point. The Royal Court has, in these proceedings, concluded that the Claim would be -bound to fail-. The Appellant has not challenged that finding in his Notice of Appeal. It would, in my view, serve no good purpose to require the Viscount to assign that Claim to the Appellant so that the Appellant could litigate the Claim to what, on the unchallenged conclusion of the Royal Court, would be an inevitable outcome.
78. As I have already observed, the Appellant's Notice of Appeal criticises the Royal Court's refusal to allow him to advance a case that there had been collusion between the Viscount and Reynolds. The background to the point appears to be as follows -
(i) On 12 July 2023 Appellant lodged a freedom of information request with the Viscount's office seeking copies of all correspondence and communications between the Viscount or its officers and Reynolds and their appointed representatives that might in any manner relate to the present case.
(ii) The response stated - -At the Viscount's Department we have found one exchange of email correspondence in our records in response to this request. We consider that this is information in respect of which a claim for legal professional privilege could be maintained in legal proceedings and therefore is qualified exempt information by virtue of Article 32 of the FOI Law.-
(iii) The Appellant's Order of Justice filed in August 2023 advanced a generalised challenge to the Viscount's decision, but did not contain any allegation of collusion between the Viscount and Reynolds.
(iv) In his supporting affidavit, dated 10 August 2023, which dealt with other matters, the Appellant stated as follows -
-51. In court case 2021/098 it was apparent that although there were two separate entities involved, i.e., the Viscount and Reynolds, I believed there to be a degree of collusion between those parties to deflect and/or prevent me from being able to take legal action against Reynolds.-
The affidavit narrated the freedom of information request and response. It went on to state that Mr Booth did not believe that there was only one relevant document. He stated (paragraph 57): -It is obvious to me that discussions have taken place between the Viscounts Department and Reynolds et al and I question what legal privilege exists between wholly unconnected parties?- He complained (paragraph 64) that the -Viscount's refusal to provide me with the information I have requested, and its attempts to hide behind legal privilege, prevents me from obtaining whatever information exists to support the Viscount's arguments, especially if that information provides evidence of collusion between Reynolds and the Viscounts Department. I understand that collusion in this regard means where two parties (either directly or through their officers/employees) enter into a deceitful agreement, usually secret, to gain an unfair advantage over a third party-.
(v) In a subsequent affidavit, filed in October 2023, the Appellant provided more detailed information about the freedom of information request. He also referred to a costs breakdown which had been provided by Collas Crill (Reynolds' legal adviser) which disclosed over 100 contacts between that firm and Advocate Wilson, the Viscount's legal adviser, regarding matters said to be covered by Common Interest Privilege. He questioned how Common Interest Privilege could apply and suggested that the number of contacts -must surely raise questions regarding why that degree of contact should have been necessary-.
79. The essential points which the Appellant makes in his Skeleton Argument are as follows.
(i) The Appellant contends that his affidavits, submitted in August and October 2023, were -pleadings- and that the Royal Court should have allowed argument based on those -pleadings-. The Appellant states that he had not considered that there was any need for further discovery since he considered that he had made out a case of collusion on the basis the material upon which he relied and the absence of any response from the Viscount. He complains that he had been given no warning that he would not be allowed to advance his case based on collusion.
(ii) He further contends that the decision to refuse to allow him to argue the point was a breach of his right to a fair trial under the Human Rights (Jersey) Law 2000, contrary to the over-riding objective set out in Rule 1/6(2) of the Royal Court Rules, and irrational. He alleges that the decision exhibited apparent bias and predetermination. The refusal of the Royal Court to allow the alleged conflict of interest in which the Viscount had placed himself to be investigated was indicative, says the Appellant, of bias. He also alleges that the failure of the Royal Court to allow him to amend his pleadings or to order further discovery created an inequality of arms.
80. The Appellant referred us to Michel v. The Queen [2009] UKPC 41, Le Lay v. Attorney General [2022] JCA 278; Associated Provincial Picture Houses v. Wednesbury Corporation [1948] 1 KB 223; Kerley v. Minister for Planning and Environment [2008] JRC 199; Condron v. National Assembly for Wales [2006] EWCA Civ 43; Flaherty v. National Greyhound Racing Club [2005] EWCA Civ 1117; and QX v. Home Secretary [2024] UKSC 26.
81. I am satisfied that the Royal Court was entitled to exclude the line of argument alleging collusion. This was a decision taken by the Royal Court in the exercise of its case management responsibilities. The Court of Appeal will not interfere with a decision of that sort unless the Royal Court can be shown to have gone plainly wrong.
82. The reason which the Royal Court gave for excluding the line of argument which the Appellant wished to advance was that it was not contained in the pleadings. The Royal Court was entitled to exclude the argument on that ground.
(i) A party's pleadings set out the case which he brings before the Court for determination. The pleadings give fair notice to the other party of the case which the latter must meet. In particular, where a party proposes to advance an allegation of dishonesty or impropriety, it is a matter of fairness that this should be clearly specified, and properly articulated, in the pleadings, so that the party against whom the allegation is made knows the case which it must meet. Further, the pleadings of the parties crystallise the issues which the parties are bringing before the Court for determination. If a court permits a party to advance evidence and contentions based upon facts which have not been pleaded, the whole purpose of pleadings is undermined.
(ii) As I understand it, the Appellant does not dispute that his Order of Justice does not contain any reference to collusion. However, he contends that his affidavits, which do refer to collusion, form part of his -pleadings-. That argument proceeds on a misunderstanding of the respective functions of pleadings, on the one hand, and affidavits on the other. Pleadings, as we have observed, give notice of the case which the party seeks to advance. They define the issues upon which the Court is asked to adjudicate. Affidavits, on the other hand, contain evidence. Insofar as an affidavit contains evidence on matters which have not properly been put in issue by the pleadings, that evidence is irrelevant to the issues in the case.
(iii) It is consistent with the over-riding objective for the Court to confine a party to the issues which have been properly put in issue in the pleadings. A decision confining a party to the case which has been pleaded does not, on its own, support an inference of predetermination, bias or apparent bias. Nor does it result in that party not receiving a fair trial, whether by reason of breach of the equality of arms principle or otherwise. Far from being irrational, such a decision, on the face of it, advances the over-riding objective of a fair, proportionate and timely trial by confining argument to the matters which have properly been put in issue.
(iv) Whilst a trial court may properly give a litigant in person a measure of leeway, provided that doing so is not unfair to other parties, the extent to which the trial court decides to do this is itself a case management decision, with which the Court of Appeal will be very slow to interfere. Whilst I can understand why the Appellant should feel aggrieved at the decision of the Royal Court not to allow him to develop the argument which he wished to put forward, I cannot say that the Royal Court was obliged to let him do so, or that it went plainly wrong in failing to allow him greater indulgence than it did.
83. The question arises whether this Court should now grant the Appellant's request to be allowed to amend his pleadings so as to advance the allegation of collusion. The Viscount contended that we should not do so. He contended that the evidence of contact between his office and Collas Crill would not justify any finding of dishonesty or impropriety and in the absence of such a finding, the allegation would not give rise to a cause of action and would be -legally hopeless-.
84. I have concluded that no useful purpose would be served by allowing the amendment. As I have explained, the Royal Court concluded that the Claim was bound to fail. The Notice of Appeal does not challenge that aspect of the Royal Court's judgment. This Court must accordingly proceed on the basis that it is correct. In these circumstances, even if the Appellant were to make good his allegation of collusion (and we should not be taken to suggest that he would or could), no useful purpose would be served by prolonging this litigation.
85. Furthermore, and in any event, no draft amended Order of Justice was put before us which sets out with precision what the alleged facts are which would support the claim of collusion, notwithstanding that the Appellant was clearly informed at the hearing before the President as single judge on 31 October 2024 that he would require to do that.
THE PRESIDENT:
86. The 2022 Judgment concerned an application by the Appellant for a direction that the Viscount revest in him a cause of action against Reynolds for alleged negligence in respect of two valuations concerning Beaumont Hill House. Those proceedings did not concern any allegations of negligence in relation to the preparation of the 2013 Kings Oak Valuation. It is the alleged negligence in relation to that valuation which forms the substratum of the request in this case that the Viscount transfer the benefit of that claim back to the Appellant.
87. On 31 October 2022 the Appellant wrote to the Viscount with a request that he assign to him the claim against Reynolds in respect of the 2013 Oak Hill valuation. The Viscount replied to the Appellant on 2 November 2022. He relied upon the 2022 Judgment for the statement that the Appellant's claim against Reynolds vested in the Viscount upon the declaration of désastre made on 16 October 2015 and it did not revert to the Appellant on his discharge and so remained vested in the Viscount. He relied upon paragraph 81 of the 2022 Judgment to the effect that, when considering whether he should or should not assign such a claim back to the Appellant, he was -not only entitled but positively required to consider the merits- of such a claim; and he referred also to paragraph 82(ii) for the statement that if the litigation in respect of any such claim appeared to him to be utterly hopeless, there would be no justification in the Appellant pursuing it and the Viscount would be entitled not to assign such a claim to him.
88. Having reviewed the matter in further detail, the Viscount reached the conclusion that the Appellant's claim against Reynolds was hopeless, and he did not agree to assign it to him. His reasons for doing so were that if he did assign it, he could be seen to be furthering potentially frivolous and vexatious litigation which would be in conflict with his role as a public official and an officer of the Court.
89. As I indicated when sitting as a single judge [2024] JCA 273 at paragraph 9:
-It is apparent to me that the question as to whether or not the Viscount has the discretion to exercise in deciding whether or not to reassign a chose in action to the debtor may not be entirely straightforward and does not seem expressly to have been addressed by the two cases in which the Appellant has challenged similar decisions of the Viscount in this respect in the past. These cases are reported at Booth v Viscount [2016] (2) JLR 473 and Booth v Viscount [2022] (2) JLR 141.-
90. That issue arises because the 1990 Law vests the debtor's property in the Viscount without making comprehensive provision for what happens when the Viscount determines not to realise its value. It is because that issue arises that the Court decided it would be helpful to have submissions from an amicus curiae and Advocate O'Connell has kindly agreed to help in that respect. I am indebted both to him and to Advocate Wilson for their submissions on this question of law.
91. I gratefully accept the summary of the essential facts as set out by Wolffe JA at paragraphs 1 to 20 of his judgment. I also agree with the majority that this appeal should be dismissed for the reasons set out at paragraphs 36 to 38 (estoppel), 81 to 82 (collusion) and 83 to 85 (no amended pleading) of the judgment of Wolffe JA. However, on the substantive point of whether the Viscount had a discretion to refuse to assign the claim, I take a different view from that of my colleagues on the proper construction of the 1990 Law.
92. I understand the reasoning of the majority to involve these component parts:
(i) Article 8 of the 1990 Law vests all the debtor's property in the Viscount.
(ii) Articles 18, 26-27 and 31 ensure that the Viscount ascertains what that property is, gathers it in and assesses the claims against the debtor, having them resolved by the court if necessary.
(iii) Articles 32-36 provide for the Viscount's report to the creditors and the payment of a final dividend.
(iv) Articles 39-42 provide for the Viscount, after an appropriate period, to apply to the Court for the debtor's discharge.
(v) Although the 1990 Law is silent on the point, the désastre does not come to an end. As a result, if the Viscount becomes aware of assets vested in him of which he was unaware, he can realise them for the benefit of the creditors to the extent they are unpaid and return any balance to the debtor.
(vi) To the extent that, after the discharge, the Viscount retains property of the debtor which he is unwilling to realise or has no value, he has a discretion as to whether this should be returned. That discretion is reviewable by the Court at the instance of any interested party including the debtor in line with the 2016 and 2022 decisions.
(vii) To the extent that a chose in action is in the Viscount's view without merit, his position as a public official justifies him in not returning that to the debtor.
93. I agree with points (i) to (iv) above. The first and fourth points represent changes to the customary position introduced by the 1990 legislation. There is no statutory provision in support of or prohibiting point (v) and in my judgment it should not be implied from the statute, which describes itself as amending and extending the customary law - in other words, save insofar as it does so, the customary law remains. In my judgment, express statutory provision would be necessary to bring about a change to the customary position. It is not as if that would be difficult to achieve. The customary position is that the désastre does come to an end and does not continue indefinitely. The language of the 1990 Law, as we shall see, is consistent with that remaining the position. I accept that that might well be an unsatisfactory outcome where the Viscount discovers assets, vested in him as a result of the désastre but of which he was unaware during its administration, but such problems as there are can easily be met by appropriate steps taken at the time of discharge. On the Appellant's version of events (but not according to the Viscount), it does not arise here because he asserts that the Viscount was so aware. I do not need to decide which of those contentions is correct because I agree that the Appellant is estopped from bringing such a claim. But, on the point of principle, where I depart from the majority is in their conclusion that the effect of the statutory changes is that where the Viscount is vested with an asset of no or uncertain value which he is unwilling to realise, he has a discretion as to whether it is to be returned to the debtor; and in the conclusion that where the asset is a chose in action which is in the Viscount's view without merit, his position as a public official justifies the exercise of that discretion in not returning it to the debtor.
94. My reasons for reaching this position follow.
95. Given the established jurisprudence that the 1990 Law amends and extends the law relating to désastre, and that therefore the custom continues insofar as the amendments and extensions do not expressly or impliedly change it, I need first to examine the customary law.
96. The process of désastre was a judicially introduced process to ensure a practical system for enforcing judgment debts with different degrees of priority against the assets of the debtor - see Le Gros in his Traité du Droit Coutumier de l'Ile de Jersey (1943) at page 75, where he says:
-Le Désastre est une procédure qui a pour but d'établir légalité entre les créanciers d'un débiteur insolvable dans le distribution de ses biens mobiliers après paiement des préférences accordées.-
Which I translate as follows:
-The désastre is a procedure which has as its aim the establishment of equality between creditors of an insolvent debtor in the distribution of his mobiliary assets after payment of agreed preferences.-
97. That had its origins in an Act of the Royal of Court of 4 May 1811 where several actions had been instituted against Thomas Le Maistre.
98. As Le Gros points out at page 76, the decision of the Court in Godfray v Le Couteur on 9 November 1858 emphasised that the declaration of désastre took place with a view to safeguarding the interests of the creditors and also the opportunity for a debtor to make an arrangement if possible with his creditors. The effect of the declaration was to deprive the debtor of the possession of his goods and, the Viscount being the executive officer of the Court, was obliged to take these goods into his possession, realising the perishable effects if necessary and otherwise selling the goods for the benefit of the parties. The désastre had the effect of suspending the Acts of the Court obtained in the previous ten days with an -arrêt confirmé-.
99. A process developed for the advertisement by the Viscount of the désastre in official announcements in the Jersey Gazette in order to bring the existence of the bankruptcy to the attention of creditors so that they could file their claims. These and other developments, as Le Gros concluded, emphasised that the Royal Court would, in reviewing any questions put before it, have regard to the interests of the creditors.
100. The désastre in its earlier development enabled the Viscount to enforce liquidated debts against the assets of the debtor. If there were a claim for an unliquidated amount, even though liability had been established - as for example a claim for general damages in a running down accident where the debtor had been found liable but damages had not yet been assessed - there was no judgment of the Court which could at that stage be enforced and the désastre procedure did not provide a solution for it. The creditor with an unliquidated claim could not therefore prove in the désastre for the amount of his claim - but the Court did permit the action against the debtor to continue on the basis that the creditor who was able to get a liquidated judgment before the conclusion of the désastre would be able to prove that claim thereafter - see Brooke v Walker (1950) 245 Ex 516, Re Désastre Overseas Brokers Limited 1966 JJ 547 at p553 and the later provision to similar effect in Rule 12/12 of the Royal Court Rules 1982.
101. It is to be noted that the judicial creation and development of the law of désastre formed but a part of quite a comprehensive set of other bankruptcy procedures. These were mostly the subject of the customary law until statutes were passed to amend those procedures. The transfer of the immovable property of a bankrupt debtor (whether subject to charges or not though in practice it invariably was) was governed by the Loi (1832) sur les décrets and subsequently by the Loi (1880) sur la propriété foncière (the -1880 Law-); the surrender of a debtor's property to the Royal Court as a form of insolvency procedure under the Loi (1839) sur les remises de biens; the making of cession under the customary law, which allowed the debtor to surrender all his assets in exchange for being absolved from his debts; the liquidation, and subsequently the réalisation of movable property of a bankrupt debtor under the 1880 Law as amended; and the arrangements for agreements between debtor and creditors under the Loi (1867) sur les concordats entre débiteurs et créanciers, which governed movable property only. What one might describe as at least the potentially temporary or provisional bankruptcy provisions in a remise or concordat did not involve the loss of title, although both did involve the loss of practical control over the assets and a freeze on the debtor's capacity to deal with them - in the case of a remise the assets were handed into the control of the court. Cession, at least in the early stages of development, the décret and the dégrèvement, liquidation and réalisation involved the loss of title to the assets but did not provide any discharge from the underlying debt.
102. The development of the désastre as a customary law procedure has been well documented in previous decisions of this Court. Essentially the purpose of the désastre was to establish equality amongst the creditors in the enforcement of their debts, because in the absence of the désastre procedure, creditors obtaining a judgment from the Court would have a preference over creditors obtaining judgment at a later date. Accordingly all claims were adjourned to a later date fixed by the Court (the passation des causes) enabling adjudication then and preferences amongst those creditors to be avoided. It is significant that the debtor was not discharged by this process, albeit as a practical matter, the existing actions against him would fall away because the consequence of the Court procedure was that all his assets had been distrained upon and realised for the benefit of those creditors whose claims were accepted.
103. Nonetheless, any after acquired assets (and any assets successfully hidden by the debtor from the enquiring eyes of the Viscount) could still be available to creditors whose claims had not been paid in full provided that they were able to bring their action against the debtor within the limitation period affecting those claims. Of itself, that illustrates that the désastre procedure had an end date. The claims of the creditors would be assessed, the assets distrained on by the Viscount would be realised and distributed amongst the creditors whose claims had been accepted. That distribution having been made, the désastre was at an end and fresh proceedings could if necessary be taken later. A parallel exists in the law of dégrèvement, where a hypothecary creditor who did not appear at the dégrèvement to declare itself tenant of the debtor's property would lose the benefit of that hypothec, but did not lose the ability to bring a claim against the debtor himself at a later stage - see Birbeck v Midland Bank Limited (1981) JJ 217.
104. At customary law therefore, there was no discharge of the debtor and the désastre came to an end on the payment of a dividend to the creditors from the assets which had been realised. Until relatively recently, the judicial process did not envisage a lengthy delay in realising assets, nor did it envisage payment of interim dividends to creditors pending a final distribution. As is clear from Part 12 of the Royal Court Rules 1982, the Viscount would advertise for claims which had to be filed between forty and sixty days from the date of the act of the Court declaring the movable property of the debtor to be en désastre. On the expiration of that period, the Viscount would fix a time for the various claims which had been filed to be examined by the debtor and by any creditor; within a month, any opposition to the claims filed would need to be lodged with the Viscount in writing, setting out the basis of opposition, following which the Viscount was required to examine the claims and reach a decision on whether or not to admit them. There was provision to refer the Viscount's decision to the Court, but, by Rule 12/13 of the 1982 Rules, the Viscount was to distribute the assets amongst the persons entitled to receive them within fourteen days of his decision or, if applications were made to the Court, of the Court's decision. For my part, notwithstanding the reference in the projet de loi promoting the 1990 Law, to which I refer below, that there was uncertainty as to when the désastre came to an end, it is clear it did so on the distribution of assets to the creditors.
105. The basis for a conclusion that title to the debtor's assets vested in the Viscount under the customary law was uncertain seems to lie in the evidence of the then Solicitor General to the English court in Re a Debtor (1981) 1 Ch 384 and the Viscount's reliance now on that evidence. I note that Goulding J did not pronounce on whether he accepted that part of the evidence of what was, to him, foreign law. In my judgment, the position at customary law was not uncertain at all, and with respect to the views expressed by the Solicitor General in that case, which might or might not be the same as those he might later have expressed as a judge following forensic argument, his conclusions on title vesting in the Viscount are inconsistent first with the development of the judicial procedure of désastre for the historical reasons I have given, and secondly with the authority of one case which does deal with the point expressly.
106. In 1966, the then Bailiff, Sir Robert Le Masurier, D.S.C., in delivering the judgement of the Court' in re Désastre Overseas Insurance Brokers Limited, made the following observations on the ' history of 'désastre' and its nature -
"We conclude that where it may well have been the case that, in its original form, the 'désastre' was invented to consolidate the claims of numerous creditors and to preserve a status of equality between them, its scope has been enlarged over the years and may now be defined as follows -
A désastre' is a declaration of bankruptcy, -the effect of which is to deprive an insolvent debtor of the possession of his movable estate and to vest that possession in Her Majesty's Viscount whose duty it is to get in and liquidate that estate for the benefit of the creditors who prove their claims."
107. The approach taken by the Royal Court was that the declaration deprived the debtor of possession of his movable estate and not title. The Viscount was able to liquidate the estate of the bankrupt because he was acting in accordance with the order of the Court, just as would be the case when enforcing a judgment given to a plaintiff with permission to sell. The explicit permission to sell is now not necessary as it is covered by Rule 11/3 of the Royal Court Rules 2004 but that is, at least to me, a relatively new provision. Rule 8/7 of the 1968 Rules made it plain that the Court's permission was expressly required before the Viscount could exercise any power of sale over movables distrained upon, and indeed it was the practice when seeking judgment in those days that the Court was asked for permission to sell so that that could appear on the face of the Act of Court giving judgment. Thus it was that the issue of title did not arise because both the Viscount and any third party dealing with the Viscount could rely on the Court's permission to sell, coupled with the Viscount's possession of the movables as sufficient authority for the sale to proceed and title to the realised assets was unassailable thereafter.
108. This is to be contrasted with the other bankruptcy procedures which expressly provided, for example, for dégrèvement to follow either the making of cession, which did involve the abandonment of title to property, or the adjudication de la renonciation before the dégrèvement could go ahead. (see Article 2 of the Loi (1904) (Amendment no 2) sur la propriété foncière).
109. In summary therefore, at customary law the declaration of désastre:
· Did not transfer title to the debtor's assets to the Viscount but did enable the Viscount to take possession of them and realise them;
· Lasted for as long as the Viscount needed to collect in and realise the assets, assess the claims, and, subject to any decision by the court on review pursuant to the Royal Court Rules, pay off the accepted claims;
· Did not discharge the debtor from his debts, from which it followed that the debtor was exposed to further actions from his creditors at a later date in respect of any claims including those which existed at the désastre which had not been paid out in full;
· Only gave rise to payment by the Viscount of liquidated debts or such liquidated demands as could be justified at the date of settlement of the claims.
110. In other words, the désastre was a judicially developed mechanism for enabling orderly payment either in part or in full of the liquidated debts of a bankrupt debtor out of the debtor's mobiliary assets. It can be seen as an extension of the rules around the enforcement of judgment debts where the Court had given a successful plaintiff permission to sell, exercised through the Viscount as the Court's executive officer. That was the purpose of conferring the powers on the Viscount - it enabled that orderly payment of creditors to take place.
111. The provisions of the 1990 Law, to which I turn in more detail later, follow the judicially developed structure of désastre albeit with several amendments and extensions of the désastre procedure. I do not attempt to set out all the changes, but perhaps the most notable, some of which we will consider in more detail below, are these:
(i) After 1990, the désastre extends to real estate owned by the debtor, which hitherto had not been the case, and there are special provisions in relation to jointly owned property and the matrimonial home.
(ii) Whatever might have been the position in the customary law, there is a statutory prohibition on pursing alternative remedies against the debtor after the date of the declaration.
(iii) Whereas previously the power of the Viscount, as the executive officer of the Court, to distrain upon and realise property in settlement of a judgment debt where the Court so authorised was impliedly extended as a matter of course where there was a declaration of désastre, the effect of Article 8, which vested title to the debtor's property in the Viscount ensured a more complete protection for the creditors and a more comprehensive power of realisation in the Viscount. This was particularly important, as we shall see, for the purposes of collecting assets of the debtor abroad.
(iv) Express duties were imposed on the debtor, e.g. by Article 18, which enabled the Viscount to collect and realise the debtor's property more conveniently without seeking further orders from the Court.
(v) Similarly, Article 26 and Article 27 provided statutorily explicit powers which were conferred on the Viscount. These probably existed previously, but it might have been necessary for the Viscount to seek the express authority of the Court in this respect.
(vi) Similarly, there was then express provision in Part 8 of the 1990 Law for the distribution of assets to the creditors, and new provision in Part 9 for the discharge of the debtor.
112. As has been said, the 1990 Law amends and extends the existing custom. Save insofar as it does so, the existing custom remains the law.
113. What is noticeable is that there is nothing in the 1990 Law which expressly provides for the issues described at paragraph 92 (v) to (vii) above. To reach the majority view requires one to accept that the changes introduced by the 1990 Law must necessarily bring with them the majority's conclusions. In my view, that is a step too far as a matter of statutory construction, even though it might well be an appropriate set of provisions to adopt.
114. I will later consider the issue of the Viscount's discretion, if there is one, to return the assets to the debtor where he does not wish to realise them for the benefit of the creditors, but at this stage will make some comments on the 2016 and 2022 Judgments.
115. In the 2022 Judgment, this Court was concerned with an appeal against the Viscount's decision not to assign to Mr Booth various claims which he asserted could be made but which the Viscount had resolved not to bring. The désastre had by then been concluded, as in my view is the case in the instant appeal. While it is apparent that the Court in 2022 did not share all the views of the Court in the 2016 Judgment, it also interpreted that judgment in a manner that meant it did not have to resolve the question of whether this court was bound by its own decisions.
116. In the 2016 Judgment this Court decided that the Royal Court was wrong to have upheld the decision of the Viscount in the désastre of Mr Booth not to assign to him claims which he had commenced prior to the désastre in circumstances where the Viscount was not prepared to take those claims to trial. That decision was made in respect of a désastre which was in the course of administration and had not concluded. In passing, I note that the Viscount's decision not to proceed with the litigation herself was not the subject of criticism in this Court, although it had been an issue tackled in the court below. The 2022 Judgment did concern a similar potential assignment but in circumstances where the désastre had been concluded. The argument in 2022 was focussed upon whether the Viscount should take into account the merits of the claim in deciding whether or not to assign it and the reasonableness of his conclusion not to do so, and not on the question whether the debtor was entitled to receive unrealised property - including the claim - back from the Viscount on the conclusion of the désastre.
117. We have not had detailed oral argument on whether this court is bound by one of its previous decisions and do not need to resolve that point; however, without reaching a firm conclusion, I can provisionally indicate that in my judgment, were this question to arise in the future, the court is not so bound. There are two principal reasons for this. The first is that the strict English doctrine of precedent does not apply in this island in quite the same form as it does in England. There are many authorities and commentaries on this but for a convenient ingathering of the relevant materials I refer to the article by Advocate Dixon entitled Binding Precedent in the Channel Islands in the Jersey and Guernsey Law Review 2020 at p 58. The second is that appeals to the Judicial Committee from decisions of this court may not always be possible or convenient for the parties to a particular decision, which in turn means that if the court is bound by its previous decisions, a controversial decision in this court will likely stand indefinitely as a statement of the underlying law whether the same be considered correct in law or not. It is desirable that any differences in opinion be expressed so that the Judicial Committee, in an appropriate case, can resolve them.
118. The reason I do not need to reach a final conclusion on this latter question is that the Court in its 2022 Judgment did not address the issue of whether the Viscount has a discretion on reassignment to the debtor of a chose in action on the conclusion of a désastre because it was not required to do so. That discretion was assumed by the Royal Court. In 2016, that discretion undoubtedly lay in the Viscount because the désastre was in the course of administration, but once the désastre had been concluded, that was no longer obviously so although again it was assumed by the Royal Court in 2022. In taking this approach we have noted the decision of the English Court of Appeal in R (Kadhim) v Brent London Borough Council Housing Benefit Review Board [2001] QB 955. The principle which that court adopted - against the stronger rules of precedent in that jurisdiction than apply in Jersey - was that a subsequent court is not bound by a proposition of law assumed by an earlier court that was not the subject of argument before or consideration by that court. In 2022, there was no argument on the issue I now have to consider and so I look to both that judgment and the 2016 Judgment for enlightenment but not shackles.
119. The majority accepts the submission of the Viscount that the result of the 1990 Law is that the désastre stays open and is never concluded. It is said this follows as a consequence of the discharge of the debtor and that it enables the realisation of any assets that may turn up later. I make two points. The first is that in my judgment it is clear that the 1990 Law does not expressly provide for the possibility of the désastre remaining open indefinitely; and in those circumstances the customary position would apply. Under that approach, the désastre would come to an end when the assets have been realised and the creditors paid. The second is that the Viscount's submission is inconsistent with a number of provisions in the 1990 Law, namely Article 36, which discusses the obligation not to have a protracted désastre, and contemplates the payment of a final dividend, and, importantly, Article 1(2) which defines the term -during the course of a désastre-.
120. Article 36 of the 1990 Law provides as follows:
-36 Duty of Viscount to report to creditors and pay final dividend
(1) When the Viscount has realised all the debtor's property, or as much of it as in the Viscount's opinion can be realised without needlessly protracting the "désastre", the Viscount must -
(a) supply all the creditors of the debtor with a report and accounts relating to the "désastre"; and
(b) pay whatever final dividend is due.
....- (emphasis added)
121. If one can ensure that a désastre is not protracted, then it must be capable of coming to an end. That is the natural implication of the language used.
122. Although it does not say so in terms, this Article envisages that the désastre comes to an end either when the Viscount has realised all the debtor's property or when the Viscount has realised as much of it as in his or her opinion can be realised without needlessly protracting the désastre. This provision is consistent with the history of the désastre procedure as we have seen. What is clear, however, from Article 36(1) is that when the point is realised that the désastre is coming to an end, the creditors should be supplied by the Viscount with a report and accounts showing the assets which have been realised and how it is proposed they should be distributed, and they should also receive from the Viscount whatever final dividend is due. It is noteworthy that the legislation contemplates the payment of a -final- dividend. It is not an interim dividend and the désastre, given that it is not to be protracted, is at an end. That is the assumption upon which the Article proceeds. Assets might previously have been distributed amongst the creditors in accordance with their respective claims as is provided by Articles 32 and 33 of the 1990 Law by the distribution of interim dividends, and that is to be distinguished from the payment of a -final- dividend. That envisages there will be nothing more. It is final because the désastre is over. It may be thought that this language, being similar to that of section 330 of the Insolvency Act 1986, carries no such implication because insolvency law in England and Wales does not contemplate the end of the bankruptcy simply because the final dividend has been paid. I do not find that persuasive. Taking language from another statute where the underlying regime is different does not mean that one embraces the whole of that (to us) foreign law. It would in my view be contrary to our independent legal jurisdiction to adopt that approach. One has to assume that there was an intention to adopt the other regime to justify such an approach and there is clearly no evidence of that here because the law builds on the pre-existing désastre procedure which is and was quintessentially Jersey.
123. I note that there is no theoretical problem if the debtor gets his assets back on the conclusion of the bankruptcy, whenever that is. That will only occur if the creditors have had the opportunity to object to the final report of the Viscount under Article 36 of the 1990 Law and the court can resolve what if any steps ought to be taken. What in my judgment is not envisaged by that Article is that there might be assets (of any or no value) which are simply left unrealised on the conclusion of the désastre.
124. Secondly, Article 1(2) of the 1990 Law provides -In this Law, the expression -during the course of a désastre- means the period between the date of the declaration and such date as an order of discharge under Article 41 takes effect.- That expression contemplates that at the date of discharge the désastre ceases to have effect. It obviously refers to the beginning of the désastre because that is the date of the declaration. It must in my judgment refer to the end because the course of the désastre would continue running if it had not come to an end. And that is the date of discharge.
125. In fact the expression does not appear frequently. It does appear in Article 7(1) which deals with the ability of the debtor, during the course of the désastre, to apply to the court for an order recalling the declaration; and in Article 25 which prohibits the debtor from obtaining credit during the désastre without informing the lender of the declaration; and again in Article 31(1) which prohibits any action being taken against the debtor during the course of the désastre. These provisions affect both the debtor and third parties - so if the désastre comes to an end for the debtor but continues for the purposes of third parties, that would seem to provide to the debtor a defence to subsequent action even if the cause of action arose after the discharge. That cannot be right, which again perhaps suggests that the premise - the bankruptcy continues - may not be right. The expression is not used in Article 36 which deals with the payment of a final dividend. Neither is it used in Articles 40 to 42 dealing with the discharge of the debtor. The absence of its use in these Articles may point to the désastre having run its course.
126. The majority consider that the language used shows only that the désastre ends as far as the debtor is concerned but not as far as the creditors are concerned. There is nothing in the 1990 Law in my judgment which justifies that conclusion. It could easily have been provided for, as indeed is indicated from the existence of section 281 of the Insolvency Act 1986, referred to at paragraph 155 below.
127. The conclusion that the désastre never does come to an end is at face value at odds with Article 1(2) of the 1990 Law and that provision weighs strongly against such a construction of the 1990 Law.
128. It is also to be noted that by Article 9 of the 1990 Law, the Viscount cannot pursue the debtor for any property acquired by the debtor after his discharge. That also points to the désastre having come to an end. The question whether the désastre comes to an end is significant because the open ended nature of the procedure after 1990 is in my view an essential building block in the analysis of the majority, without which it is not possible to reach the conclusion they do.
129. Advocate Wilson also submitted that the Article 37 would be circumvented if the debtor recovered any of his assets, but the creditors had not been paid in full. However, this submission overlooks the nature of the désastre process, which is to gather in the assets for the benefit of the creditors through the administration of the Viscount. If the Viscount considers that particular assets have no value, or that the potential value cannot be realised without an investment of the désastre assets which cannot be justified given the risks involved, and the creditors are themselves not willing to indemnify him against such costs, he will explain in his final Report that the asset will be returned to the debtor. There is no circumvention of the Article if the creditors do not want the asset.
130. Of course, there are a number of options available to the Viscount if he should find himself with an asset of dubious value. He can attempt to sell it, return it to the debtor or disclaim it. In the case of a chose in action, he can reassign it to the debtor with an agreement as to the sharing of the proceeds if any of it, as occurred with Mr Booth in 2016; or reach a compromise with the putative defendant in the action which involves some payment into the bankrupt's estate which represents fair value for the spes in question. In all such circumstances during the course of the administration of the désastre the Viscount will of course need to evaluate the merits of the claim as was recognised by this Court in both the 2016 and 2022 judgments because that will enable him to make a decision on what to do with it on an informed basis as to its potential value.
131. It is apparent that four years after the date of the declaration, the Court should consider under Article 41 of the 1990 Law whether to discharge the debtor or whether there should be an extension of the period before the discharge takes effect. None of this prevents the Court from making an order for discharge at an earlier stage on an application being made to it. When the Court considers an application for discharge, it may grant an immediate order or grant an order conditionally or refuse to grant an order. Those provisions ensure that the rules around the discharge of the debtor can be applied flexibly according to the facts of the case. Perhaps surprisingly, however, they do not seem to be directly connected with the duty of the Viscount to report to creditors and pay a final dividend under Article 36. There is nothing in the latter Article which links the obligation to report to creditors and pay a final dividend to the discharge of the debtor.
132. That is surprising on two counts. First of all, in the light of the Report forming part of the projet de loi one might have expected the link between discharge and termination of the désastre to be apparent in the new legislation.
133. At pages 17 and 18 of that Report, one finds this analysis:
-(g) Closure of the 'désastre' and its consequences
(i) The precise date of termination of a 'désastre' is at present uncertain. This is undesirable as it is relevant both to after acquired property and also to the status of the debtor. The proposed Law specifies the date for the termination of the 'désastre', as being the date on which an order of discharge under Article 41 takes effect (Article 1(2)).
(ii) The common law on 'désastre never developed any 'discharge' (in the English sense) of the debtor. The Committee does not believe that any useful social or economic purpose is served by a debtor not obtaining a discharge at the termination of the 'désastre'. Provision has therefore been made for a debtor to be discharged on the application of the Viscount to the Court, in general four years after the declaration (Article 40(1)). There is power for' the Court to shorten or lengthen this period (Article 40(2)). The discharge, once effective, affects both the debts and the status of the debtor. He will be freed from the residue of the debts claimed in the 'désastre', as well as being freed from the restrictions... on his capacity to take part, in local affairs (Article 42). Where the debtor is a company registered in Jersey, the Court shall order that the name of the company be struck off the Register of Companies generally on payment of the final dividend (Articles 38(2) and 36(2)). -
134. The effect of the order of discharge is to release the debtor from all debts provable in the désastre except as set out in Article 42. This was a material change from the pre-1990 position. It can be said, however, that although there is no direct linkage between the duty to report and pay a final dividend and the order of discharge, both sets of provisions have at their heart the notion that there is a finality in the bankruptcy process. That finality is not necessarily at the same point in time for the two different provisions. The absence of statutory clarity might suggest that the final dividend may be paid before or after the discharge of the debtor; put the other way round, the discharge of the debtor may take place before or after payment of the final dividend.
135. I conclude that the payment of the final dividend and the discharge of the debtor may proceed contemporaneously or separately, albeit there must be an expectation that there will have been a final distribution before the discharge of the debtor takes place. On a proper construction of the Law, in my judgment, the désastre comes to an end for an insolvent corporate debtor on the payment of the final dividend, and for an individual debtor on his discharge, which should take place after the final dividend has been paid. If that cannot be achieved within four years, one would expect the Viscount to apply for an order that the discharge should be deferred. That seems to be the clear implication of the provisions in Article 36 and in Article 1(2) to which I refer above. From the point of discharge, the debtor cannot be sued in respect of debts which existed at the date of the declaration, the prohibition against his obtaining credit is removed and he is no longer able to apply for the declaration to be rescinded - because there is nothing left to rescind. For the corporate debtor, it ceases to exist shortly after the payment of the final dividend, and unless restored, cannot be actioned subsequently.
136. The concept of finality in the désastre process is in my judgment an important concept to carry forward in the analysis of the issue which now faces us, there being no other provisions in the 1990 Law which bears upon that question.
137. Given there is not much by way of direct provision in the 1990 Law on when a désastre comes to an end, it is all the more relevant to have regard to the existing custom. That custom was for the Viscount to have possession of the debtor's assets for such period as was necessary to receive claims from creditors, assess them, realise the assets and then make a distribution to creditors, returning the surplus, if any, to the debtor. The désastre was concluded at that point. Having in mind that the 1990 Law sought to build on the custom and amend it where necessary rather than start afresh with a wholly new bankruptcy regime, in my judgment it would be a natural construction of the legislation to conclude that the désastre comes to an end on the discharge of the debtor. To the extent it has not happened already, the sole function of the Viscount thereafter would be to return any assets previously owned by the debtor to him.
138. Although there may be cases where the date of discharge and the date of the final dividend are so far removed from each other that it is unclear when the désastre can be considered as having come to an end, that is not the position here. The Act of the Royal Court of 3 January 2020 shows that the property of the debtor had at that date been realised so far as possible; the Viscount had after an initial delay completed the adjudication process and distributed the available funds to the priority and unsecured creditors; that no creditors had indicated to the Viscount that they wished to be convened for the hearing of his application, nor had any creditor notified him of any objection to the discharge of the debtor. On the request of the Viscount, the Court ordered that:- 1) the debtor be discharged; and 2 ) the costs of the Representation be met out of the debtor's estate.
139. From that point, the Viscount's functions as regards the désastre were complete. There is nothing in the 1990 Law which suggests otherwise.
140. A decision that the désastre comes to an end is relevant to the discussion of any property still held by the Viscount because if it does come to an end, there is a compelling argument that the Viscount is then functus officio, other than for taking such steps as are necessary to enable the practical administration to be concluded. If he has no further part to play in dealing with the assets which have been vested in him, then those remaining assets must either be returned to the debtor or, as the amicus submitted, they would become lost in a vacuum. In my judgment, the law seeks to avoid such a vacuum in ownership, and this strongly supports the view that the asset must be returned to the debtor.
141. I accept, however, that if the désastre does not come to an end, there remains scope for debate as to what the obligations of the Viscount are in relation to assets which he is unwilling to realise or which have no value. I return to that point later.
142. The starting point here is to consider why the Viscount has title to the assets at all. He clearly does. Article 8 of the 1990 Law says so. The assets clearly include a chose in action. Article 1 says so.
143. The purposive construction of the legislation - as indicated by the customary position - is that the provisions are intended to provide for the orderly administration of the affairs of the bankrupt for the benefit of the creditors. That is why the Viscount has title to the assets. He does not hold them for himself. He has no beneficial interest in them. In my judgment, the Court should strain against any construction of his obligations which results in him holding the debtor's assets for any other purpose.
144. On the declaration of désastre, a chose in action, like all the other property of the debtor, vests in the Viscount forthwith. It is held for the benefit of the creditors and if on realisation there is a surplus after payment in full of the provable debts, that surplus is held for the debtor. It might be said that because the obligation to return the assets to the debtor is expressly provided for by Article 37 where there is a surplus, that indicates that there is no such obligation where there is not a surplus. In my judgment, that argument is not persuasive. It is apparent to me from a fair reading of Article 37 that it is only dealing with the position where there is a surplus. It makes provision for ensuring that creditors do not lose out by having to wait for their money. The balance that is to go back to the debtor is established only where all other calls on the surplus have been met. There is no other implication to be drawn from the Article in my view, other than perhaps the recognition that once the creditors have no interest, the debtor is the person entitled.
145. Indeed, that is fundamentally the rationale which appears to me to be relevant to the present discussion. If neither the Viscount nor the creditors have any interest in assets vested in the Viscount primarily for the benefit of the creditors, there is no reason why those assets should not be returned to the debtor. The law of désastre is not there to punish the debtor. It is there to gather in his assets for the benefit of his creditors and if they do not want those assets, then he should have them back.
146. In the present case, the proposed action against Reynolds involves an alleged breach of contract in providing a negligent valuation in 2013. The désastre was declared in 2015, so unless circumstances came about after the declaration of désastre which established a different date for when the cause of action arose, which does not arise here, the right to bring the action against Reynolds in respect of the 2013 Kings Oak Valuation vested in the Viscount when the désastre was declared. There is no doubt that in this case there was no surplus, and the creditors have not been paid in full. Article 37(6)(b) does not therefore apply.
147. There is no dispute that the Viscount did not in fact realise the chose in action. The then Viscount did not commence proceedings in relation to the 2013 Kings Oak Valuation because it is said - and denied by Mr Booth - that she did not know about it and therefore was not able to consider whether the benefit in doing so justified the risk which would be taken on by her but ultimately at the cost of the creditors or the public. She did not compromise with the putative defendant, nor did she disclaim the chose in action for the same reason, albeit it is also true that its continued existence during the désastre did not leave her with any liability. She did not assign the benefit of the claim to the debtor or to anyone else. As the reason for not assigning the claim back to Mr Booth in November 2022 was that the claim was then considered hopeless, the Viscount will clearly not take it forward now.
148. Thus, the present action, commenced by Mr Booth in January 2024 but currently stayed, just sits there in the rolls of the Royal Court. Advocate Wilson submitted that the 1990 Law changed the landscape and the result of the vesting of title in the Viscount was that the debtor lost all his rights. They were not merely suspended for the duration of the désastre. I am not convinced that is necessarily correct, in that the debtor still retains sufficient rights to make application to a court, as indeed the Appellant did in 2016; but whether that is so or not, it does not tackle the underlying rationale for the enacted provisions.
149. The question which then arises is what happens to an unrealised asset if no other steps are taken, the administration of the désastre being apparently concluded. The action has been stayed and is not yet on the hearing list, so Rule 6/25 of the Royal Court Rules 2004 does not apply. Under Rule 6/20 of the Royal Court Rules 1982, the Court could after five years of the case being placed on the pending list strike out a case of its own motion if no steps had been taken to place the matter on the hearing list. This provision has since been repealed and there is no precisely comparable provision but, ultimately, there seems little doubt that Reynolds, as the defendant, can apply for the action to be struck out for want of prosecution or otherwise as an abuse of process if the Appellant cannot take it forward, and no other person is both willing and able to do so. The critical point therefore is whether and if so when the désastre is concluded, and what happens to an asset which vested in the Viscount under Article 8 of the 1990 Law but has not, for whatever reason, been realised for the benefit of the creditors. As is clear from my comments on the customary law, the vesting of title in the Viscount represented a change to the previous position but the 1990 Law contains no provision which tells us what happens to such an asset after the désastre unless the declaration is recalled.
150. It is interesting to see the reasons expressed in the Report forming part of the projet de loi on which the 1990 Law was adopted. These are to be found at pages 10 and 11 in these terms -
-The Island's continuing importance as a finance centre will no doubt necessitate that the Viscount from time to time seeks recourse to the judicial systems of other jurisdictions to recover assets for the benefit of the creditors. Although the English Court was prepared in a case in 1980 to recognise the extra-territorial nature of a 'désastre', and similar rulings have been obtained in France and in Scotland, the Law makes it clear that the Viscount's right to recover property is not limited to assets in the Island, and that the declaration 'en désastre' vests in the Viscount the title to the movable and immovable property of the debtor wheresoever situate (Article 8(2)(a) and the definition of 'property* in Article 1(1)). -
151. In the light of the gap in the legislation, it is permissible to have regard to the intentions of the legislature in providing for title to vest in the Viscount as expressed in the projet de loi. It is apparent that the intention in conferring title on the Viscount was to ensure that any difficulties in extra territorial enforcement of the désastre declaration could be overcome. The Viscount would be able to establish under our law the right to the asset abroad and to ask for the other jurisdiction's assistance accordingly. Title was removed for the better realisation of the debtor's assets for the benefit of the creditors, or indeed, if there turned out to be a surplus, for the benefit of the debtor too. That is entirely consistent with an obligation to return assets of no or uncertain value which are not going to be realised in the bankruptcy.
152. In my judgment the contention of the Viscount that there is nothing in the authorities which suggested there was a duty on him to return assets to the debtor needs to be viewed against this background. The authorities under customary law make it plain the Viscount had a right to distrain on, take possession of and realise the debtor's assets but did not have title. According to the Report to the States, the title to the assets was conferred by Article 8 for a particular purpose - international enforcement of the order of bankruptcy so that the Viscount could collect the debtor's assets out of the jurisdiction. In those circumstances, it is unsurprising that there is nothing in the authorities which refers to a duty to return assets to the debtor at the conclusion of the désastre.
153. The majority are concerned at the unfairness to the creditors of a debtor obtaining a discharge and yet retaining assets and it would be right for me to look briefly at those parts of the 1990 Law which introduced these new provisions for the discharge of a debtor. These are to be seen in Articles 40 to 42 inclusive and it is appropriate to set those Articles out in full:
-40 Application by Viscount for order of discharge
(1) Subject to paragraph (2), at the expiration of 4 years from the date of the declaration the Viscount shall apply to the court for an order discharging the debtor.
(2) The Viscount, the debtor or a creditor of the debtor may apply to the court for an order that the period referred to in paragraph (1) be reduced or extended.
41 Order of discharge
(1) At the hearing of any application for an order under Article 40(1), the court may -
(a) grant an immediate order;
(b) grant an order subject to such conditions as it thinks fit, or suspend an order for such time as it thinks fit;
(c) grant an order with or without such conditions as it thinks fit to take effect at a specified future date;
(d) refuse to make an order.
(2) At the hearing of an application for an order under Article 40(2), the court shall make such order as it thinks fit.
(3) If the court exercises its powers under paragraph (1)(d) the Viscount, the debtor or a creditor of the debtor may from time to time apply for an order under Article 40(1).
42 Effect of order of discharge
(1) An order of discharge shall release the debtor from all debts provable in the désastre except the following-
(a) any debt or liability incurred by means of fraud or fraudulent breach of trust to which the debtor was a party;
(b) any debt or liability whereof the debtor has obtained forbearance by any fraud to which the debtor was a party;
(c) any debt or liability under a maintenance order (as that term is defined by the Maintenance Orders (Facilities for Enforcement) Jersey) Law 2000) that is enforceable in Jersey or elsewhere by virtue of that Law or the Maintenance Orders (Enforcement) (Jersey) Law 1999,71
(2) The prohibitions imposed by Article 24 and the provisions of Article 25 shall, as from the date at which an order under Article 41 takes effect, cease to apply to the debtor.-
154. I recognise that the draftsman of the legislation had to reconcile the discharge provisions with the existing customary law structure and the adoption of some of the language of the UK Insolvency Acts may not have helped in this respect. I agree with the approach taken in Viscount v ACJ Air Conditioning Jersey Limited and others [2019] JRC 165, where Sir Michael Birt, Commissioner, said this when considering the significance of the English Insolvency Rules on the costs issue which he then had to consider:
-I think that limited assistance is to be derived from the English Rules. Désastre is a development of the customary law and the Law is not the same or in similar terms to the general insolvency legislation in England and Wales.-
155. In that connection, it is of interest to note in relation to the Insolvency Act 1986 that not all its provisions have been brought forward in the 1990 Law. In particular, one should note that there is no comparable provision to section 281 which provides that although the discharge releases the debtor from his liabilities, it has no effect on the continuing functions of the trustee in bankruptcy, nor on the right of the creditor to prove in the bankruptcy notwithstanding the release of the bankrupt from that creditor's debt. The absence of such a provision from the 1990 Law would perhaps suggest that the legislature did not contemplate the désastre continuing after the discharge. But whether that be so or not, it demonstrates that the two systems are different.
156. The 1990 Law provides that once the désastre comes to an end, the removal of the restrictions on the debtor's capacity are matched by the removal of some of the powers of the Viscount. Whereas he had power during the course of the désastre to demand that any after acquired property of the debtor be delivered to him for distribution among the creditors, that power cannot be exercised after discharge - see Article 9 (2). This is also consistent with the provision in Article 38(2) to the effect that where the debtor is a company, the company is dissolved on receipt by the registrar of confirmation of payment of the final dividend. As a company cannot be the subject of a discharge application, one has to be careful about any read across of the individual bankruptcy provisions and those affecting companies; but I note that Article 213 of the Companies (Jersey) Law 1991 permits the dissolution to be undone by the court on an application to this effect and the natural trigger for such an application might be the discovery of assets of the company previously not known to exist.
157. Yet here there remains an asset in the hands of the Viscount - the cause of action against Reynolds in respect of the 2013 Oak Hill valuation - in which neither he nor anyone else except the debtor have an interest. He does not hold it for the creditors because they have received their final dividend. He is not expressed by the 1990 Law to hold it for the debtor because there is no surplus. Driven back on the customary law, in my judgment, and subject to any other bars which arise as a matter of law, the effect must be that he held it for the debtor because the purposes for which title vested in him under the 1990 Law cannot be fulfilled and there is no one else for whom the asset could be held. The creditors cannot complain now - if they had wished to take a stance on this, they should have done so at the time of the Viscount's application to the Court for Mr Booth to be discharged, or at the time of receiving the final report or dividend.
158. In the course of argument before us, the question of how the debtor's personal assets - photographs, memorabilia, a favourite old armchair, his clothes and so on - of no intrinsic value should be dealt with arose. My understanding from Advocate Wilson is that these assets are currently dealt with on an entirely sensible and pragmatic basis by the Viscount and at his discretion returned to the debtor. I agree with the result but not the reasoning. If the assets have a value, then one would expect the value to be realised for the benefit of the creditors. If they do not, there is no discretion to be exercised, and they should be returned to the debtor. Title to them does not vest in the Viscount for any purpose other than the administration of the bankruptcy in the interests of the creditors. The absence of a discretion in this connection is not without precedent because under the customary law, it was not possible to realise a workman's tools of his trade because it was recognised that he had to be able to support himself.
159. In my judgment, the treatment of an asset like a chose in action in which neither the Viscount nor the creditors are prepared to invest money to achieve a realisation for the benefit of the bankrupt's estate falls to be handled in the same way as the personal assets just mentioned.
160. I quite see that this analysis is difficult where, at the end of the désastre, the Viscount has assets of the debtor of which the debtor is aware, but the Viscount is unaware. I consider the likelihood of both of them being unaware of such assets is not impossible but is slim. The gold bar example is one such - it is all but unthinkable that the debtor would be the owner of a gold bar and not know it. But the possibility that it might arise supports the conclusion that the legislation merits a review by the States.
161. This is what I understand to be the principal concern of the majority - the potential ramifications of a decision that the Viscount must return unrealised assets to the debtor at the conclusion of the désastre, namely that it would operate as an incentive to the debtor to hide assets from the Viscount. There is no doubt that there will be debtors who will have this possibility in mind, but in my judgment, there is no increased incentive for them which follows from a decision that unrealised assets should be returned. If the debtor has successfully hidden his assets from the Viscount, he will not rely upon the Viscount's obligation to return them on the conclusion of the bankruptcy because the assets are by definition hidden and still in his actual or constructive possession. It is the hiding of them in the first place which evidences the intent to cheat the creditors of them.
162. The debtor is of course required to disclose his assets to the Viscount following the declaration of bankruptcy under Article 18 of the 1990 Law. Failure to do so is a criminal offence under Article 18 (2A) and that will inhibit most debtors even if they were minded to cheat their creditors.
163. In any event, there are workarounds. Regardless of the possibility of criminal process, which would be a disincentive to the debtor coming clean after the discharge of having assets in his possession which had been successfully concealed, there are in any event practical steps which can be taken to deal with the undesirable outcome of a successful attempt hiding his assets and subsequently obtaining a discharge. In particular, the debtor can be required to swear an affidavit as to his assets at the date of the bankruptcy and as to those assets he expects to come into his possession during the bankruptcy.
164. Furthermore, the Viscount can request the Court when ordering the debtor's discharge under Article 41 to make the discharge conditional on a full and frank disclosure by the debtor of his assets such that the bankruptcy can revive if there were to be any material breach of that obligation. It seems to me that this would be a complete answer to the concern raised. For my part, I see no argument as to why this would be beyond the Court's jurisdiction, even if regularly ordered. It would be consistent with the regime envisaged by the statute. That has not happened in the present case but can and perhaps should be routine practice in the future. If the debtor has disappeared, it may be that the Royal Court will hesitate over ordering his discharge at all, or if it still grants it, ties the discharge to some statement of assets as at the date of the declaration where the creditors have not been paid in full. The Viscount and his advisers may well come up with other disincentives to the fraudulent bankrupt and I certainly do not intend to be prescriptive in that respect, but only to indicate that the concern raised with seems to be one which is well capable of being tackled. It is not necessary in my judgment to construe the statute as saying something it does not say in order to meet this concern.
165. For these reasons I do not regard the concerns, that the debtor will be encouraged to hide his assets from the Viscount if there is a rule that requires the Viscount to return unwanted assets, to be significant.
166. In my judgment, for all these reasons, assets vested in the Viscount which he has not realised for the benefit of the creditors must be returned to the debtor on the conclusion of the désastre. He should protect himself from this obligation in the case of assets of which he is unaware by taking one or more of the steps envisaged at paragraphs 161 to 163 above.
167. It will be apparent from my decision on this issue that, like the majority, I do not agree with any expansive construction of the decision of the Royal Court in Jobas Coins that the Viscount owes duties outside his duty to the Court, the creditors and, to a limited extent, the debtor. In particular, in agreement with my colleagues, I do not share the view that he owes any duty to the putative defendant facing a claim by the debtor or indeed by the Viscount having the debtor's title to the claim vested in him. The comments of Tomes DB in Jobas Coins need to be seen in the context of that case. The question then before the Royal Court was whether the court ought to make a costs order against the Viscount in circumstances where, shortly before trial, the Viscount had become aware of other creditors whose interests might require an amendment to the Viscount's pleading in that case and thus had asked for leave to amend and for an adjournment. The Court did not make what might have been considered as the usual order for costs thrown away by the amendment because, as set out in the headnote :
-Allowance should be made for the extended role now played by the Viscount in a désastre, his duties extending to the investigation and protection of creditors' interests so as to safeguard Jersey's reputation for protecting the public interest in such situations; in the present case, he had been informed of the existence of previously untraced creditors shortly before the hearing, which made it imperative to delay the amendment of the first defendant's pleadings. Further, the special relationship which existed between the third parties as beneficial owners of the plaintiff on the one hand, and the third parties as owners and shareholders of the first defendant on the other, when taken in conjunction with the third parties' attempt to gain preference, through the plaintiff, over the first defendant's ordinary creditors also justified departing from the general rule.-
168. It is clear that the wider role ascribed to the Viscount involved the investigation of hitherto unknown creditors - on behalf of the creditors as a whole - and there is no reason to construe the court's conclusion as extending to a different role for the Viscount in protecting the integrity of Jersey's reputation in financial matters as Advocate Wilson has contended. Indeed, such a role is more one for the Jersey Financial Services Commission where registered business is concerned.
169. I wish to add some comments of my own however in relation to the majority view at paragraphs 75 - 77 above that the Viscount's status as a public official and an officer of the Court means that it is no part of his responsibilities to facilitate hopeless litigation. This question will only arise if there is a review of the Viscount's decision, in the exercise of his discretion assuming there is one, not to return an asset to the debtor. The test which will be applied by the court in that review is that identified at paragraphs 8 and 9 of the 2016 Judgment. In assessing whether the Viscount's decision falls within the band of reasonable decisions, and without seeking to establish any exclusive rule to this effect, it appears to me that it is difficult to contemplate circumstances in which it would be a reasonable decision to put one's own status ahead of the jurisdiction of the court to make a judicial decision as opposed to the necessarily executive decision the Viscount would be making in determining not to return the asset. The Viscount is not a court. It is his function to evaluate the merits of a claim to ascertain whether it has a value which can be realised for the benefit of the creditors. But it is not his function to decide the claim. That is for the court, which is well able to protect itself from footling and irresponsible claims. Indeed, that was recognised at paragraph 31 of the 2016 Judgment.
170. In this context, it is in my judgment relevant to distinguish between the evaluation of the merits of a claim to ascertain if it can be realised for the benefit of creditors and the evaluation of the merits of a claim as a reason not to pass it back to the debtor. As to the former, this is absolutely necessary in the interests of creditors. As to the latter, just as one would not expect the Viscount to say of a personal photograph of the debtor of his late mother that it was not a good likeness of her and that he should not therefore have it back, so it is that one would not expect the Viscount to decide the claim was not a very good one and the debtor should not have it back.
171. In the 2022 Judgment, there was much discussion as to whether the Viscount should examine the merits of the claim before deciding whether to assign it. In my judgment, it is clear that he should have evaluated those merits but not for that purpose. If it has a value, it should if possible be realised for the benefit of the creditors, or, possibly, for the benefit of the debtor if it leads to the désastre being recalled. On the hypothesis, contrary to my view, that the désastre continues even past discharge, the Viscount who discovers an asset of uncertain value after discharge will still need to assess that value in order to decide what his next steps should be.
172. Nonetheless, if the asset has no value or is a chose in action the value of which could only be realised by litigation which the creditors are unwilling to fund either themselves or from the bankruptcy, whether before or after the conclusion of the désastre, it is antithetical to the basis of the désastre - which is to realise assets for the benefit of the creditors until they are fully paid - for the asset to he retained by the Viscount. That does not arise in the present case because the Appellant is estopped from bringing his claim. But in any other circumstances, in my judgment, the fact that the Viscount is a public official would not prevent the Court from concluding that the benefit of a chose in action, whatever that may be, ought to be returned to the debtor if those for whom the Viscount holds the asset do not want it. That was the approach of this court in the 2016 Judgment in circumstances where the désastre was continuing and it remains in my view the correct approach.
173. It is apparent from the disagreement between the members of this court that there is scope for argument in some important respects about the construction of the 1990 Law. In my view, it would be highly desirable that the legislature consider whether, and if so how, the 1990 Law might be amended to clarify the issues.
Matthews JA
174. I agree with the judgment of Wolffe JA. But I wish to record my debt to the President's judgment for its clear and compelling exposition of the customary law of désastre before the enactment of the Bankruptcy (Désastre) Law 1990. Those members of this court who, like me, have not practised as advocates in this jurisdiction really value the experience of those who have.
THE COURT
175. The appeal is thus dismissed. As to costs, our provisional view, subject to argument, is not to make any order for costs but if there is to be any further application of any kind, it is to be made within the next 21 days and we shall determine it on the papers.
Authorities
Bankruptcy (Désastre) (Jersey) Law 1990.
Booth v. The Viscount [2022] (2) JLR 141.
In re Booth (No.2) [2016] (2) JLR 473.
Booth v Viscount and Anor [2022] JRC 062.
Booth v Viscount of the Royal Court of Jersey [2024] JRC 132.
European Convention on Human Rights or the Human Rights (Jersey) Law 2000.
Henderson v. Henderson (1843) 3 Hare 100.
Human Rights (Jersey) Law 2000.
Booth v The Viscount of the Royal Court of Jersey [2024] JCA 273.
In re a Debtor [1981] 1 Ch 384.
Jobas Ltd v. Anglo Coins Ltd [1987-88] JLR 359.
Eves v. The Viscount [1998] JLR Notes 2b
Law Society v. Shah [2007] EWHC 2841 (Ch).
Representation of HWA 555 [2023] JCA 085.
In re a Debtor, ex parte Viscount [1981] 1 Ch 384.
Michel v. The Queen [2009] UKPC 41.
Le Lay v. Attorney General [2022] JCA 278.
Associated Provincial Picture Houses v. Wednesbury Corporation [1948] 1 KB 223.
Kerley v. Minister for Planning and Environment [2008] JRC 199.
Condron v. National Assembly for Wales [2006] EWCA Civ 43
Flaherty v. National Greyhound Racing Club [2005] EWCA Civ 1117.
QX v. Home Secretary [2024] UKSC 26.
Le Gros in his Traité du Droit Coutumier de l'Ile de Jersey (1943).
Brooke v Walker (1950) 245 Ex 516
Re Désastre Overseas Brokers Limited 1966 JJ 547.
Loi (1832) sur les décrets.
Loi (1880) sur la propriété foncière.
Loi (1839) sur les remises de biens.
Loi (1867) sur les concordats entre débiteurs et créanciers.
Birbeck v Midland Bank Limited (1981) JJ 217
Loi (1904) (Amendment no 2) sur la propriété foncière.
R (Kadhim) v Brent London Borough Council Housing Benefit Review Board [2001] QB 955.
Viscount v ACJ Air Conditioning Jersey Limited and others [2019] JRC 165.
Companies (Jersey) Law 1991.
Bankruptcy (Désastre) Law 1990