LAWS OF GUERNSEY Laws of Guernsey is the first textbook, certainly in modern times, to explain and introduce both Guernsey law and court procedure. Written for anyone concerned with legal issues or business in Guernsey, the book introduces the following principal areas: an introduction to Guernsey law itself, Guernsey constitutional law, planning law, housing law, family law, law of succession, trust law, income tax law, company and commercial law, employment law, health and safety at work, civil procedure, criminal law and procedure, evidence, land law, contract and tort. The book includes various legislative materials and many cross-references to English and French law. It is an invaluable guide for anyone concerned with legal proceedings in Guernsey and is of particular use to lawyers in other jurisdictions with dealings in Guernsey, together with other professionals such as bankers, insurers and trustees.
LAWS OF GUERNSEY GORDON DAWES MA (Oxon), Dip. Law Certificat d’Etudes Juridiques Française et Normande of Middle Temple, Barrister Advocate of the Royal Court of the Island of Guernsey With a foreword written by the Bailiff of Guernsey
OXFORD 2003
Published in North America (US and Canada) by Hart Publishing c/o International Specialized Book Services 5804 NE Hassalo Street Portland, Oregon 97213-3644 USA © Gordon Dawes 2003 Whilst the author has done his best to state and comment on Guernsey law correctly he cannot and does not accept any duty, responsibility or liability to any person in any way arising from or connected with the content of this book. A person concerned with a Guernsey law issue should consult a Guernsey Advocate if that issue is of any significance or if that person is in any doubt as to their rights or obligations. Contact the Guernsey Bar Council for information. The Author has asserted his right under the Copyright, Designs and Patents Act 1988, to be identified as the author of this work; likewise under the Copyright Act 1911 (as extended to the Channel Islands). Hart Publishing is a specialist legal publisher based in Oxford, England. To order further copies of this book or to request a list of other publications please write to: Hart Publishing, Salter’s Boatyard, Folly Bridge, Abingdon Road, Oxford OX1 4LB Telephone: +44 (0)1865 245533 or Fax: +44 (0)1865 794882 e-mail:
[email protected] WEBSITE: http//www.hartpub.co.uk British Library Cataloguing in Publication Data Data Available ISBN 1–84113–396–5 (hardback) Typeset by Hope Services (Abingdon) Ltd Printed and bound in Great Britain by Biddles Ltd, www.biddles.co.uk
Contents Foreword Acknowledgements Abbreviations Table of Cases Table of Laws, Statutes and other Legislative Materials Table of Orders of the Royal Court, Rules, Practice Directions etc. Bailiffs of Guernsey from the Restoration INTRODUCTION 1 SOURCES OF GUERNSEY LAW AND THE FORCE OF PRECEDENT Historical background Customary law Other sources for Guernsey Law The rule of precedent in Guernsey Law
2 THE CONSTITUTION OF THE BAILIWICK OF GUERNSEY The constitutional position of the Channel Islands The Bailiff The States of Deliberation Party politics and the executive The legislative process in Guernsey States and States’ Committees procedural rules The constitution and administration of Alderney The constitution and administration of Sark Sark legislation The Bailiwick of Guernsey and the European Union The Court structure of the Bailiwick The Ecclesiastical Court
xiii xv xxi xxiii xxxvii lxxvii lxxxiii 1
5 5 6 11 13
17 17 23 26 29 30 32 34 37 39 39 41 42
3 THE REVIEW OF ADMINISTRATIVE DECISIONS
45
4 THE HOUSING CONTROL AND RIGHT TO WORK LEGISLATION
51
The Housing (Control of Occupation (Guernsey) Law 1994 The Law in Practice Appeals Other provisions of the Housing Law The Right to Work (Limitation and Proof) (Guernsey) Law 1990
51 53 55 59 60
vi Contents Alderney and Sark Immigration
5 CONTROL OF DEVELOPMENT The Detailed Development Plan Planning Control Ancient Monuments Draft Land, Planning and Development Law Wrecks and military remains Alderney development law Sark development law
6 FAMILY LAW Formation of marriage and aspects of legitimacy Family proceedings in the Magistrate’s Court Financial provision in the Magistrate’s Court Custody and access Domestic violence Miscellaneous powers of the Magistrate’s Court Applications for domestic violence protection in the Royal Court Affiliation proceedings The Separation Maintenance and Affiliation Proceedings (Alderney) Law 1964 The Matrimonial Causes Law 1939 The Matrimonial Causes Division of the Royal Court Ancillary jurisdictions Matrimonial Causes Rules 1952 Married Women’s Property Law 1928 Child Protection: The Children and Young Persons (Guernsey) Law 1967 The Child Protection (Guernsey) Law 1972 The Protection of Children (Bailiwick of Guernsey) Law 1985 The Children and Young Persons (Secure Accommodation) (Guernsey) Law 1997 Adoption Guidance for interim measures in respect of children matters
7 GUARDIANSHIP (TUTELLE AND CURATELLE)
61 62
63 63 64 69 70 76 76 76
79 79 80 80 81 83 86 89 89 91 92 92 99 102 107 108 113 114 114 115 118
123
Tutelle in customary law Statutory guardianship of minors Law Reform (Age of Majority and Guardianship of Minors) (Guernsey) Law 1978 Guardianship of minors in Alderney Care proceedings Curatelle
123 127
8 LAW OF TRUSTS; THE TRUSTS (GUERNSEY) LAW 1989
137
The Guernsey trust Provisions of general application to Guernsey trusts Appointment and retirement of trustees
127 131 131 131
137 140 142
Contents vii Trustee duties Failure, lapse and termination of trusts Variation of trusts Application for directions Orders for the execution, administration or enforcement of a trust Rectification of trust instruments Trustee liability Constructive trusts Innocent recipients The outgoing trustee Directors’ liability Retrospective effect The Public Trustee
9 SUCCESSION LAWS OF THE BAILIWICK Origins of Bailiwick Laws of Succession Meubles and immeubles Governing law Propres and acquêts Preconditions for the making of a valid will Formal requirements in the Island of Guernsey Formal requirements in the Island of Alderney Formal requirements in the Island of Sark Professional fees Guernsey testate succession Guernsey intestate succession Alderney testate succession Alderney intestate succession Sark succession Avoidance Prescription Winding up of estates Rectification of wills and testamentary trusts Conclusion
10 INCOME TAX Introduction Liability to Guernsey Income Tax Double taxation relief Taxation of non-residents via their agents The taxation of partnerships The taxation of persons under guardianship The taxation of trustees Revocable settlements and settlements on children Personal representatives Taxation of spouses Social security
143 148 149 150 152 152 157 161 162 163 164 165 165
167 167 170 172 173 176 177 178 178 179 179 182 186 188 190 195 197 198 198 199
201 201 202 208 210 212 213 213 214 215 215 218
viii Contents 11 INSOLVENCY Désastre The Commissioner The Law relating to Debtors and Renunciation 1929 Powers of the Court to re-schedule debt and interest Saisie
12 SECURITY INTERESTS Introduction The Law of Property (Miscellaneous Provisions) (Guernsey) Law 1979 The Security Interests (Guernsey) Law 1993
13 CONTROL OF BORROWING The Borrowing (Control) (Bailiwick of Guernsey) Law 1946 The Control of Borrowing (Bailiwick of Guernsey) Ordinance 1959 Summary
219 219 221 230 239 240
251 251 252 254
261 261 262 265
14 FINANCIAL SERVICES REGULATION IN THE BAILIWICK
267
Introduction The Protection of Investors (Bailiwick of Guernsey) Law 1987 The Banking Supervision (Bailiwick of Guernsey) Law 1994 The Regulation of Fiduciaries, Administration Businesses and Company Directors, etc. (Bailiwick of Guernsey) Law 2000 The Insurance Laws 2002 The Insurance Business (Financial Guarantee: Special Provisions) (Guernsey) Law 1996 Financial services ombudsman The future The Data Protection (Bailiwick of Guernsey) Law 2001
267 269 272
15 GUERNSEY COMPANY LAW Formation of a Guernsey company The day to day requirements in the life of a Guernsey company Protection of share capital and shareholder rights Directors’ duties and liabilities Minority shareholder protection Ending the life of a company The protected cell company Companies limited by guarantee The amalgamation of companies The migration of companies The Companies (Financial Assistance for Acquisition of Own Shares) Ordinance 1998 The Companies (Purchase of Own Shares) Ordinance 1998 Limited partnerships Partnership Law
274 285 297 297 297 298
299 299 303 310 312 314 317 327 328 329 330 332 333 334 337
Contents ix 16 EMPLOYMENT LAW Introduction Contractual rights Statutory rights: The Conditions of Employment (Guernsey) Law 1985 Statutory rights: The Employment Protection (Guernsey) Law 1998 Procedural fairness Board of Industry advice and codes of practice Compensation for unfair dismissal Private international law and the 1998 Law Proposals for reform Sunday shop working Restraint of trade and the protection of confidential information
17 HEALTH AND SAFETY AT WORK LAW Introduction Sources for Guernsey health and safety law The Health, Safety and Welfare of Employees Law 1950 The Safety of Employees (Miscellaneous Provisions) Ordinance 1952 The Quarries (Safety) Ordinance 1954 The Safety of Employees (First-Aid and Welfare) Ordinance 1954 The Safety of Employees (Growing Properties) Ordinance 1954 The Safety of Employees (Electricity) Ordinance 1956 The Safety of Employees (Woodworking Machinery) Ordinance 1959 The Safety of Employees (Ionising Radiations) (Guernsey) Ordinance 1967 The Safety of Pits Ordinance 1973 The Health and Safety at Work etc. (Guernsey) Law 1979 The Health and Safety at Work (General) (Guernsey) Ordinance 1987 Employers Liability (Compulsory Insurance) (Guernsey) Law 1993 Summary
18 CIVIL COURTS AND PROCEDURE Introduction Sources of Bailiwick procedural law Bailiwick Courts and their civil jurisdiction The Royal Court The Court of Appeal (Civil Division) The Judicial Committee of the Privy Council Prescription Personal injury claims Fatal accidents legislation Loi par rapport aux Tierces Parties (Droits contre Assureurs) 1936 Uninsured drivers, untraced drivers and unsatisfied judgments Royal Court civil procedure Registration of claims Security for costs Affidavits Summary judgment
339 339 340 342 344 357 358 359 361 361 362 362
363 363 363 367 367 367 367 368 368 368 369 369 369 369 373 373
375 375 377 379 384 386 394 396 401 407 409 410 419 429 430 444 445
x Contents Preparing for trial Récusation Trial The Royal Court (Costs and Fees) Rules 1990 The Royal Court (Costs and Fees) Rules 2000 Requête civile Enforcement of judgments Enforcement of foreign judgments in Guernsey Non-contentious applications
19 INJUNCTIONS, ARRÊTS AND THE CLAMEUR DE HARO
457 464 466 474 474 476 476 477 483
485
The Clameur de Haro The arrêt Injunctions Mareva injunctions Anton Piller orders
485 487 494 499 503
20 CONFLICT OF LAWS
507
21 CRIMINAL COURTS AND PROCEDURE
511
Introduction Bailiwick Courts of summary jurisdiction The Administration of Justice (Bailiwick of Guernsey) Law 1991 Mode of trial Guilty pleas and summary trial in Courts of summary jurisdiction Committal Proceedings Plea and Directions Hearing Royal Court trial: The respective rôles of the Bailiff and Jurats Sentencing Rights of appeal Misuse of drugs The Misuse of Drugs (Bailiwick of Guernsey) Law 1974 The Customs and Excise (General ) Provisions (Bailiwick of Guernsey) Law 1972 Drug sentencing The Drug Trafficking (Bailiwick of Guernsey) Law 2000 The Vienna Convention Money laundering and related legislation The Criminal Justice (Fraud Investigation) (Bailiwick of Guernsey) Law 1991 Disclosure of information False documents and domicile The Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law 1999 The Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Regulations 2002 The European Convention on Extradition (Fiscal Offences) (Amendment) Order 2002 Prevention of terrorism legislation
511 512 517 521 522 522 525 527 528 538 545 545 549 552 557 562 567 568 571 572 573 576 577 578
Contents xi The Theft (Bailiwick of Guernsey) Law 1983 Insider dealing General Bailiwick criminal legislation The Criminal Damage (Bailiwick of Guernsey) Law 1983 The Summary Offences (Bailiwick of Guernsey) Law 1982 Offences against police officers Jurisdiction in cases of homicide Rehabilitation of offenders
22 EVIDENCE IN CIVIL AND CRIMINAL PROCEEDINGS IN GUERNSEY Introduction Loi relative aux Preuves 1865 Loi relative aux Preuves au Criminel 1923 The parol evidence rule The hearsay rule in Guernsey law Exceptions to the hearsay rule The Criminal Evidence and Miscellaneous Provisions (Bailiwick of Guernsey) Law 2002 Preservation of testimony Evidence in matrimonial proceedings Evidence of opinion Bankers’ Books Evidence (Guernsey) Law 1954 Electronic transactions The Tribunals of Inquiry (Evidence) (Guernsey) Law 1949 Obtaining Evidence in Guernsey
23 GUERNSEY LAW OF REALTY AND LEASES Introduction Bailiwick conveyancing Guernsey Conveyancing Other forms of conveyancing transaction: The Délaissance Dwellings profits tax Conveyance by way of share transfer Bonds Conveyancing in Alderney Conveyancing in Sark Retrait lignager Lésion ultradimidiaire Co-ownership of Guernsey realty Partage and Licitation Usufruit Horizontal conveyancing in Guernsey (the flying freehold) Servitudes The discharge of covenants Terres à l’amende Landlord and Tenant Law
579 582 582 582 583 585 587 588
589 589 589 592 596 598 600 606 611 613 614 615 615 616 616
619 619 622 622 642 648 650 653 658 660 661 664 666 669 672 674 678 681 682 684
xii Contents 24 GUERNSEY LAW OF TORT AND CONTRACT Tort, contract and customary law The Jersey Law Commission consultation paper Conclusion
691 692 705 706
25 EPILOGUE
709
Appendices
711
The Royal Court Civil Rules 1989 Law Reform (Tort) (Guernsey) Law 1979 The Law Reform (Miscellaneous Provisions) (Guernsey) Law 1987 The Trusts (Guernsey) Law 1989, as amended The Oaths and Articles, Rules of Conduct and Codes governing the Guernsey Advocate Expressions used in Guernsey conveyances drafted in French A basic Guernsey conveyance How to perform the Clameur
Bibliography Biographical note Index
713 729 739 743 763 769 773 775
777 780 781
Foreword By Sir de Vic Carey Bailiff of Guernsey “On first looking into Chapman’s Homer” by John Keats “Much have I travell’d in the realms of gold, And many goodly states and kingdoms seen; Round many western islands have I been Which bards in fealty to Apollo hold. Oft of one wide expanse had I been told That deep-brow’d Homer ruled as his demesne: Yet did I never breathe its pure serene Till I heard Chapman speak out loud and bold: Then felt I like some watcher of the skies When a new planet swims into his ken; Or like stout Cortez, when with eagle eyes He stared at the Pacific–and all his men Look’d at each other with a wild surmise– Silent, upon a peak in Darien.”
It may be thought rather whimsical to preface a foreword by a judge to a new law book with the ecstatic review by one of England’s greatest poets of the work of a seventeenth century dramatist and classicist. It is not however whimsical to suggest that many of those who first look into Dawes “Laws of Guernsey” will experience feelings of excitement and awe, of the kind identified so movingly by Keats. There will be excitement that for the first time since the efforts of Jurat Laurent Carey in the middle of the eighteenth century and the Reverend Thomas Le Marchant in the seventeenth an attempt has been made to review comprehensively the Bailiwick’s Laws and Institutions and awe at the dedication and industry of the Author. The Author has had to start with a blank sheet of paper in front of him and finish up 700 pages later having endeavoured to chart a wide ocean where few hydrographers have sailed before. There will inevitably be the odd uncharted rock, but no one will be able to accuse this author of plagiarism. Some old Guernsey hands may question why a relatively recent arrival at the Guernsey Bar should presume to write a book on Guernsey law, but the Author has for some years been immersed in the law (and before that, like Le Marchant, in theology). More important no one else from the ranks of those who have had more years in practice, has ever got down to the task despite the many expressions of intent heard over the years.
xiv Foreword From Guernsey’s point of view there are a further two good reasons for welcoming this work. The first is that in the modern age people can be suspicious of jurisdictions and legal systems where there are no up to date law books and where information on what the law provides can only be gleaned from practitioners. The second is that a system of laws is rather like a language. If there is no literature a language dies. If no one records the law or tells students where to find it the law of these islands will fall into desuetude. We must preserve an awareness of the special characteristics of the legal systems of Guernsey and the other Islands of the Bailiwick – systems that over the centuries have become so admirably adapted and suited for small jurisdictions with a total population of 63,000 people. Finally, one of the great problems for those who write on the law of small jurisdictions is to persuade publishers to put the work into print. The reason for this is simple – there is a limit on the number of persons who are engaged in the practice of the law of that jurisdiction and wish to refer to and invest in law books. This is however a work of general reference. I hope that libraries in the English speaking world and beyond will decide that Guernsey is a jurisdiction that should be featured on their shelves and so that this book is made widely available. Likewise I am sure that the many financial and other institutions operating in the Islands will find this work a valuable tool. It may even save them a few telephone calls to their advocates. In compiling this Foreword and commending this work I have to adopt the words of caution of Lord Denning M.R. in the preface to his work “The Discipline of the Law” 1979: “But this book is outside my judicial work. All I write now must be treated with reserve. For I am still serving as a Judge: and must and will keep an open mind. Views which are formed in my library may well be found to be wrong. Many a time have I changed my mind after hearing argument. Reasoning has been found to be wrong. Outlook has been distorted by prejudice. All these are swept away in the judgment-seat.”
Bailiff ’s Chambers Royal Court House Guernsey March 2003
Acknowledgements I owe a great many thanks for the help I have received with this book. I am very grateful to the Bailiff, Sir de Vic Carey, for agreeing to write the foreword. I was very conscious of adding to his already considerable workload. His support was a great encouragement. I am very grateful to JN van Leuven QC, former senior partner of Ozannes, and now HM Procureur, for his encouragement at the outset and lively discussions on various topics since. I am grateful to all of my partners and colleagues at Ozannes for the unstinting support they have given me; in particular during the year 2000 when I was studying at the University of Caen and then preparing for the Guernsey Bar exams. This book has its origins with my work during that time. I am very lucky to be surrounded by colleagues of the highest calibre. I should like to thank in particular Advocate St John Robilliard who, for some years now, has endured and answered all of my many questions concerning Guernsey law and practice; he also read a good proportion of a late draft of the text and made a number of suggestions which I adopted readily. I am very grateful to my colleagues Advocates Garth Bainbridge, Gavin Farrell, Jessica Roland and Jeremy Wessels who each read substantial portions of the draft text relating to their specialist areas and who all made helpful suggestions and corrections which again were adopted and incorporated. I thank also Crown Advocate Graeme McKerrell of St James’ Chambers for his very expert help with the sections on criminal law and procedure. I had the good fortune to go to Caen with Graeme. There are a number of individuals who were of great assistance with particular sections of the book. I thank in particular Geoff Mahy, formerly of Ozannes, who helped me enormously with Guernsey conveyancing. I thank Nicholas Le Poidevin of Ozannes, who helped me with various aspects of Guernsey and Alderney conveyancing. I thank Chris Anderson, again of Ozannes, who helped me with insurance regulation law. I thank Vince Bray of Insurance Corporation of the Channel Islands who helped me with various aspects of road traffic insurance law and practice. I am very fortunate to work closely with Vince in a number of substantial insurance matters. I thank André Trebert and John Bradley of PKF for their considerable help with the subject of income tax when preparing for the Guernsey Bar Exams; that help is reflected in this book. Alas, and as is customary, I must take responsibility for the errors which remain (worse luck); and there will surely be errors. This is the first general textbook of Guernsey law in modern times; but it was not written in a vacuum. I derived considerable assistance from various collections of notes written by predecessors studying for the Guernsey Bar. I should like to acknowledge in particular the work of Advocates Russell Clark, David Moore and William Simpson.
xvi Acknowledgements I thank Marilyn Bougourd, my then secretary, who, with unfailing good humour, typed up a great many of my original notes during the second half of 2000. I thank also Claire McNab and Diana Wood for their help with legislative materials. I am deeply grateful to my parents, Maurice and Julia Dawes. I am very fortunate to have parents who gave, and continue to give me, the greatest possible parental support. I received a wonderful education (despite appearances) and, in particular, the opportunity to go to Winchester College, a very special school. They supported me at Exeter College, Oxford, the City University, the Inns of Court School of Law and then during pupillage at Goldsmith Building, Temple. Their love and generosity has known no bounds. I am very grateful also to my father for his example as a professional person attempting, successfully, to maintain the highest standards at all times of his profession of Chartered Accountant. That example made a considerable impression upon me. I am deeply grateful to my parents-in-law, Tony and Yvonne Ozanne, who have supported us above and completely beyond the call of duty. Yvonne, especially, has endured great hardships, including actually coming with us to Normandy for 6 months in order to help with our children whilst studying at Caen University. She occupied a tiny bedroom in the basement of what was in January 2000 a very cold and windswept house on a Normandy landing beach (Sword). It would have been very difficult to have qualified as Advocates without their support. Attending Caen University itself was a tremendous, if near overwhelmingly daunting experience. From very poor schoolchild French one was supposed to get up 5 subjects, including conflicts of laws, to the point where you could survive competently a 15–20 minute oral examination in each topic. I should like to thank the University for its great kindness and generosity in agreeing to take the Guernsey aspirants each year. I thank in particular Mme Sophie Poirey for organising and taking responsibility for our course as well as her friendship. I simply could not have written this book without the education I received in Caen. I value the knowledge I acquired during that time greatly. At Caen I made a very good friend, Sylvain Busnel; we met several times a week for lunch. He was studying English, I needed to learn French in a hurry. We had wide-ranging and very entertaining conversations on all manner of topics. I bored him senseless in mock oral exams towards the end. I am very grateful to you Sylvain. Looking further back I would like to thank Peter Tombling, my understanding and forgiving housemaster at Winchester; I thank also Dr Alvyn Pettersen, my principal tutor and chaplain at Exeter College, who did what he could to maintain my interest in patristic theology. I am very grateful to all my friends and colleagues at my former Chambers in Goldsmith Building Temple where I learnt a great deal; in particular I thank my English pupil masters, Christopher Wilson and John Gallagher, for their patience and good humour. I thank my Guernsey pupil master and governor, Peter Ferbrache, for all his support and guidance since arriving at Ozannes in August 1998. I have been very fortunate.
Acknowledgements xvii I am very grateful indeed to Richard Hart of Hart Publishing for his courage in agreeing to publish this book in the first place; I sincerely hope that his faith is rewarded. Richard has published something in the region of 300 legal texts in 6 years; his achievement and contribution to British law is extraordinary. On a less serious but equally heartfelt note I should like to thank Henry Purcell, George Frideric Handel and Johann Sebastian Bach principally, but amongst many other composers, for their aural support, without which this labour would have been very much more difficult and less pleasant. I thank all of my friends. I have bored them senseless by going on and on about the book, but every kind word in return has helped. I can stop now; well for a moment. I thank Guernsey and her people. The Islands have a remarkable history and a privileged position in the world. Long may the Bailiwick prosper as the 800th anniversary of the events leading to that special status approaches. This book has been a considerable drain, taking most of my so-called leisure time for the last two years; in truth it nearly did me in when combined with a more than full-time daytime workload. My children have not seen very much of me, some might say to their benefit. I thank Emily and Penny for their special support and forbearance. We are now going to go horse riding on Saturdays. Alison is a Guernsey girl and brought me to this Island. We met at University and were married in Exeter College chapel. She is the mother of my children. In addition she is, and always will be, the senior Advocate in our household through her birthright. She has suffered more than anyone in the process of writing this book through my lengthy self-imposed exile within the household. She has taken the strain of looking after our children, our home and matters generally, whilst also providing constant support during the lengthy process of researching and writing this text. I have relied heavily on her endless words of encouragement. I would not and could not have written Laws of Guernsey without her and I dedicate to her this book. G D St Stephen’s Villa St Peter Port 8 February 2003 “Conticescant obsecro et quiescant qui nec sua edunt; nec aliena benigne suscipiunt, nec si quid eis displicet pacifice corrigunt. Discant ea quæ nesciunt, et si discere nequeunt; patiantur saltem sinmatites suos edere quæ sentiunt.” Orderic Vitalis, Ecclesiastical History, iii.2
T A AM O
Abbreviations AC Law Reports: Appeal Cases 1891 All ER All England Law Reports App. Cas. Law Reports: Appeal Cases 1875–1890 BCC British Company Cases BCLC Butterworths Company Law Cases CC Code Civil (all references are to the 102nd edition 2003) Ch. Law Reports: Chancery Division 1891 Ch. D. Law Reports: Chancery Division 1875–1890 CLR Commonwealth Law Reports Crim. App. R. Criminal Appeal Reports Crim. LR Criminal Law Review EGLR Estates Gazette Law Reports EHRR European Human Rights Reports EWHC England and Wales High Court EWCA England and Wales Court of Appeal FLR Family Law Reports GLJ Guernsey Law Journal ICR Industrial Cases Reports IRLR Industrial Relations Law Reports ITELR International Trust and Estate Law Reports JJ Jersey Judgments JLR Jersey Law Reports KB Law Reports: King’s Bench Division Lloyd’s Rep. Lloyd’s Reports LT Law Times LTL Lawtel Med LR Medical Law Reports NCPC Nouveau Code de Procédure Civile NZLR New Zealand Law Reports P Law Reports: Probate, 1891–1971 PIQR Personal Injuries & Quantum Reports QB Law Reports: Queen’s Bench Division RCCR Royal Court Civil Rules RSC Rules of the Supreme Court RTR Road Traffic Reports STC Simon’s Tax Cases TLR Times Law Reports UKHL United Kingdom House of Lords WLR Weekly Law Reports
Table of Cases A v B [1993] 16 GLJ 8 ..............................................................................................90 A v B (a company) [2002] 2 All ER 454 ..................................................................48 A v Bottrill [2002] 3 WLR 1406 ............................................................................700 Abacus (CI) Ltd v Hirschfield et autres (2001) 17th September 2001/195.........151 Abacus Trust Co. (Isle of Man) Ltd v NSPCC [2001] STC 1344 .........................159 Acturus Properties Ltd v HM Attorney-General (2001) 12th January ...............570 Administrator of Taxes v Tremoille Properties Limited (2002) 27th May..........218 Airbus Industrie GIE v Patel [1999] 1 AC 119, [1998] 2 All ER 257 ...................506 Alexander v Arts Council of Wales [2001] 4 All ER 205 ......................................467 Alizadeh v Nikbin (The Times, March 19 1993) ..................................................460 Allan v Nolan LTL (2002) 8th February................................................................159 Aluminium Industrie Vaassen BV v Romalpa Aluminium Ltd [1976] 2 All ER 557............................................................................................262 Alsop Wilkinson (a firm) v Neary [1995] 1 All ER 431................................151, 155 American Cyanamid v Ethicon [1975] 1 All ER 504 ....................................496, 497 Anglo-Eastern Trust Ltd v Kermanshahchi [2002] All ER (D) 321.....................447 Anton Piller KG v Manufacturing Processes Ltd [1976] Ch. 55 ..................503, 616 Aoot Kalmneft v Denton Wilde Sapte (A Firm) (2002) 1 Lloyd’s Rep. 417 ........422 Apollinaris Company’s Trade-Marks, Re [1891] 1 Ch. 1 .....................................431 Armco Financial Services Corporation v Donohue et autres (1999) 1999/185 .................................................................................................501 Armitage v Nurse [1997] 3 WLR 1046..................................................................158 Arthur J S Hall & Co. v Simons [2000] 3 All ER 673............................................696 Aslan v Murphy (No. 1) [1989] 2 EGLR 58 ..........................................................686 Ashton v Ansol Ltd (2002) 16th October .............................................................506 Ashton v Ansol Ltd (2003) 10th January ..............................................................506 Ashurst v Pollard [2001] 1 All ER 75 ....................................................................172 Ashworth Security Hospital v MGN Ltd [2002] 4 All ER 193.............................422 Associated Provincial Picture House v Wednesbury Corporation [1947] 2 All ER 680 ..................................................................................19, 57, 59 Atticday Ltd v Ogier (1997)...................................................................................686 Attorney-General v Ebert [2002] 2 All ER 789.....................................................441 Attorney-General v Hitchcock (1847) 1 Exch. 91 ................................................595 Attorney-General for Hong Kong v Reid & Ors. [1994] 1 AC 324........................13 Australian Safeway Stores (Pty) Ltd v Zaluzna (1987) 162 CLR 479 ..................691 B (a child) (adoption by one natural parent), Re [2002] 1 All ER 641................115 B v B (2001) 21st March ..........................................................................................97 B v B [1994] 4 All ER 1065 ....................................................................................101 B v States Children Board [1996] 21 GLJ 8 ............................................................82
xxiv Table of Cases Babanaft International Co. SA v Bassatne [1989] 1 All ER 433...........................502 Baines v Willey [1985] 2 GLJ 59............................................................................476 Baltic Shipping v Translink [1995] 1 Lloyd’s Rep. 673.........................................502 Bank of China v NBM LLC [2002] 1 All ER 717..................................................502 Bank of Credit & Commerce International SA (in liquidation) v Ali & Ors (2001) LTL 11th December ........................................................................465 Bank of Credit & Commerce International SA (in liquidation) v Ali & Ors [2001] 1 All ER 961.....................................................................................341 Bank of Credit & Commerce International SA (in liquidation) v Ali (No. 2) [2002] 3 All ER 750...............................................................................341 Bankers Trust Co. v Shapira [1980] 3 All ER 353..........................421, 422, 489, 616 Bankway Properties v Pensfold-Dunsfold [2001] 1 WLR 1369...........................686 Banque Financière de la Cité v Parc (Battersea) Ltd. [1998] 1 All ER 737........................................................................................................162 Barclays Bank Plc v Curry [1996] 22 GLJ 40 ................................................174, 668 Barclays Bank Plc v Taylor [1989] 1 WLR 1006 ...................................................570 Barlow v BOC Ltd [2001] 3 WLR 1687 ................................................................618 Baron Shipping Co. Ltd v Le Pelley (1999).............................................................31 Baron v Watts (1994) .............................................................................................659 Bartlett v Barclays Bank Trust Co. Ltd (No. 1) [1980] Ch 515.....................143, 158 Bassington v HM Procureur [1998] 26 GLJ 86...................................45, 46, 47, 570 Beachcomber Hotels Ltd v Beaucette Yacht Marina (Guernsey) Ltd [1989] 7 GLJ 82..................................................................................................137 Beadle v Snell [1999] JLR 1 ...................................................................................664 Beddoe, Re [1983] 1 Ch. 547 .................................................................................151 Bekhor v Bilton [1981] QB 923.............................................................................501 Bell Data Systems (CI) Ltd v William Moffat [1993] 15 GLJ 35..........................224 Bentley v John Harris & Co. [2001] EWCA 1724.................................................467 Berry v Crabb [1988] 6 GLJ 143............................................................................685 Bird Precision Bellows Ltd Re [1984] Ch 419, [1986] Ch 658 .............................316 Birkett v James [1977] 2 All ER 801 ......................................................................449 Bodman v Gorselands Ltd (1991) .........................................................................686 Booilushagg Trust Co. Ltd v Kaye & Miller [1992] 13 GLJ 14 .............................140 Boughton v Knight (1873) LR 3 P&D 64..............................................................177 Bordeaux Vineries Ltd v States of Guernsey (2000) 5th April .............391, 425, 451 Boulbain, Re [1988] 6 GLJ 167 ..............................................................................618 Boyce v Wyatt Engineering (The Times, June 14 2001).......................................467 Boyd v Pickersgill (Jersey Court of Appeal, 30 September 1999)........................399 Brawley v Marczynski [2002] 4 All ER 1067.........................................................472 Braymist Ltd v Wise Finance Company Ltd [2002] 2 All ER 333........................306 Brink’s Mat Ltd v Elcombe [1988] 1 WLR 1350...................................................498 Bristol & West Building Society v Mothew [1996] 4 All ER 698 .........................158 British Home Stores Ltd v Burchell [1980] ICR 303............................................356 Brocklesby v Armitage & Guest (a firm) [2001] 1 All ER 172 .............................404
Table of Cases xxv Buckton, Buckton v Buckton, Re [1907] 2 Ch. 406 ......................................151, 154 Budgen v Andrew Gardner Partnership [2002] EWCA Civ. 1125.......................473 Bugatti Fashions Ltd v Bugatti Ltd [1985] 2 GLJ 12 ............................................309 Business Online Group Plc v MCI Worldcom Ltd [2001] EWCA Civ. 1399, (2001) LTL 9th August.......................................................................................503 C v C [1997] 23 GLJ 35, [1998] 25 GLJ 24........................................................84, 85 C v C (2002) 29th April .........................................................................................394 C v M [2002] 4 ITELR 548 ....................................................................................151 C & D Holdings Ltd v Brewbuck Ltd (1982) 24th May .......................................249 C & G Developments Ltd v Duquemin (1965) 15th October .............................702 Cachia v Faluyi [2001] 1 WLR 1966........................................................................48 Calderbank v Calderbank [1976] Fam 93.............................................................460 Callis v Gunn [1964] 1 QB 495 .............................................................................586 Caltex Singapore Pte Ltd v BP Shipping Ltd [1996] 1 Lloyd’s Rep. 286...............................................................................................397 Campbell v States Housing Authority (2002) 8th July...........................................59 Campbell Molloy & Mackenzie v Attorney-General [1995] JLR 136..................556 Carpenter v Field Aviation Ltd (1982) 11th January............................................668 Carré, Re [1987] 5 GLJ 39......................................................................................134 Carré, Re [1987] 6 GLJ 104....................................................................................134 Carroll v Highseal Windows Ltd (2002) 18th April .....................................456, 478 Caswell v Powell Duffryn Collieries Ltd [1940] AC 152 ......................................365 Cave v Robinson Jarvis [2002] 2 All ER 641.........................................................404 Chaplin v Boys [1971] AC 356 ..............................................................................503 Chase Bank and Trust Co. (CI) Ltd, Re 1998/112.................................................153 Cherub Investments Ltd v Channel Islands Aero Club (Guernsey) Ltd (Appeal No. 11 (Civil) 1982).............................................................................383 Clarke v Saffrey (1824) Ry. & M. 127 ....................................................................595 Clayton’s Case (1817) 1 Mer. 572 ..........................................................................156 Clibbery v Allan (2001) 2 FLR 819, [2002] 1 All ER 865..........................87, 98, 443 Clough v Tameside and Glossop Health Authority [1998] 2 All ER 971 ............615 Collas v Peet (2001) 20th February.......................................................................436 Commissioners of Customs & Excise v A [2002] EWCA Civ. 1039 ....................562 Compagnie Financière du Pacifique v Peruvian Guano Co. [1882] 11 QBD 55..............................................................................................453 Company No. 002612 of 1984, Re [1984] 1 BCC 262 ..........................................315 Concorde Leasing UK Ltd v B D Properties Ltd [1992] 13 GLJ 42 .....................224 Corbett v Barking Health Authority [1991] 1 All ER 498....................................469 Corbin v Penfold Metallising Co. Ltd [2000] TLR 345 ........................................403 Cosheril v Felix Shipping Ltd (2001) 3rd April ....................................................472 Cowan v Cowan [2001] 3 WLR 684......................................................................101 Cowan v Scargill [1985] Ch 270............................................................................143 Count Lothair Blücher von Wahlstatt (1928).......................................................124 CPS v Compton LTL (2002) 27th November .......................................................561
xxvi Table of Cases Cross v Benitrust International (CI) Ltd [1998] 25 GLJ 47 .........................164, 440 Culture Farms Inc. v Achates Trust Ltd [1989] 7 GLJ 60 .....................................488 Cutts v Head [1984] 1 All ER 597 .........................................................................460 D v D (1986)...........................................................................................................107 Dadd v Guernsey Rifle Club [1993] 15 GLJ 62...............................................15, 701 Daintrey, ex p. Holt [1893] 2 QB 116....................................................................459 Das v Ganju [1999] PIQR P260 ............................................................................403 Davies v Health & Safety Executive [2002] EWCA Crim. 2949...........................371 Davis, Re Norman Francis (dec’d) (1963) ............................................................196 de Carteret v Teale (2002) 27th August.........................................................465, 702 de Havilland v Le Marchant (1781) ......................................................................126 Delaware Mansions Ltd v Westminster City Council [2001] 4 All ER 737 ...........14 Derby & Co. Ltd v Wheldon [1989] 2 WLR 276 ..................................................502 DnB Mortgages Ltd v Bullock & Lees (a firm) [2000] TLR 227..........................390 Doléance of Harbours and Airport Committee, Re [1991] JLR 316.....................47 Domaille v Harbour View Oriental Restaurant Ltd [1996] 22 GLJ 41................686 Domaille v Harris [1987] 6 GLJ 164 380 Donaldson v Upton Ltd (1982).............................................................................436 Donohue v Armco Inc. [2002] 1 All ER 749.........................................................506 Dubai Aluminium Co. Ltd v Salaam [2002] UKHL 48................................337, 405 Dubai Bank Ltd v Galadari (No. 2) [1990] 2 All ER 738 .....................................454 Duncan v Lawson (1889) 41 Ch. D. 394 ...............................................................173 Ebrard v Gassier (1884) 28 Ch. D. 232..................................................................431 El Ajou v Dollar Land Holdings Plc [1994] 2 All ER 685 ....................................162 Elgindata Ltd (No. 2), Re [1992] 1 All ER 232......................................................473 Ellis v Property Leeds (UK) Ltd (2002) 2 BCLC 175 ...........................................313 EMM Capricorn Trustees Ltd v Compass Trustees Ltd (2001) 23rd April, 2001/87 ............................................................................................506 Emmanuel v Symon [1908] 1 KB 302...................................................................478 England v Smith [1999] TLR 850..........................................................................617 English v Emery Reimbold [2002] 3 All ER 385...................................................392 Esso Petroleum Co. Ltd v Milton [1997] 2 All ER 593.........................................447 Esteem Settlement, Re (2000) 10th October 2000/195 ........................................395 Esteem Settlement, Re (2001) 17th September 2001/196 ....................................151 Esteem Settlement, Re (2002) 17th January..................................................156, 162 European Asian Bank AG v Punjab Steel and Sind Bank (No. 2) [1983] 1 WLR 642..............................................................................................446 Eves & Eves v Hambros Bank (Jersey) Ltd [2000] JLR 221..................................441 Factortame v Secretary of State for the Environment [2002] 2 All ER 838 ........462 Fairchild v Glenhaven Funeral Services Ltd [2002] 3 All ER 305 ........................700 Fallaize v Fallaize [1996] JLR 261..........................................................................671 Federal Bank of the Middle East Ltd v Hadkinson [2000] 2 All ER 395.............501 Fellowes & Son v Fisher [1976] 1 QB 122.............................................................496 Flannery v Halifax Estate Agencies Ltd [2000] 1 All ER 373 ...............................394
Table of Cases xxvii Flightline Ltd v Edwards (2003) LTL 5th February..............................................229 Ford v GKR Construction Ltd [2000] 1 All ER 802 .............................................461 Foss v Harbottle (1843) 2 Hare 461 ......................................................................313 Fox v General Medical Council [1960] 1 WLR 1017 ...........................................604 Freke v Carbery (1873) LR 16 Eq 461 ...................................................................173 Fresh Taste Bakery Ltd (en désastre), Re (1984) 11th April .........................222, 226 Fuller v Strum [2002] 2 All ER 87 .........................................................................177 G v G [1985] 2 All ER 225 .....................................................................................393 Galbraith [1981] 1 WLR 1039 ...............................................................................523 Gammell v Wilson [1982] AC 27 ..........................................................................408 Garenne Group Ltd v Falla (2002) 4th January....................................................346 Gates Estate Trust, Re [2000] JLR 66.....................................................................153 Ghaidan v Mendoza [2002] 4 All ER 1162 .............................................................48 Gibbs v Ebbetts (1997) LTL 20th October............................................................341 Giles v Rhind [2002] 4 All ER 977.................................................................313, 441 Gillow (1986) 24th November; ECHR Case No. 13/1984/85/132 ...................56, 59 Gillingham v NRG Benelux BV t/a NRG Distribution (2002) 2nd January.......430 Gold v Administrator of Income Tax (1999) 22nd July .......................................218 Goode v Martin [2002] 1 All ER 620.............................................403, 409, 412, 456 Gramby Ltd v IDC [1996] 21 GLJ 33......................................................................65 Grays Justices, ex p. Graham [1982] QB 1239 ......................................................520 Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd [2002] 4 All ER 689............................................................................................704 Green v Cobham [2002] 4 ITELR 784 ..................................................................160 Green v IDC & Winslow [1993] 15 GLJ 36.............................................................69 Greening v Zabiela [1992] 14 GLJ 40....................................................................670 Greenwood v Nat West Offshore Ltd (2000) 25th February................................135 Gregg v Scott [2002] EWCA 1471 .........................................................................700 Grenestra SA v Oury (2002) LTL 24th June .........................................................139 Grobelaar v News Group Newspapers Ltd [2002] 4 All ER 732 ..........................393 Guernsey Savings & Loan Corp. Ltd v Wallace [1987] 5 GLJ 75 .........................246 Guest v Law Officers of the Crown (2003) 10th January.....................................544 Haas v Duquemin [2002] JLR 27 ..........................................................................671 Hadmor Productions Ltd v Hamilton [1982] 1 All ER 1042...............................393 Hale v Tanner [2000] 1 WLR 2377..........................................................................85 Hamon v Rault (1972)...........................................................................................663 Hardoon v Belilios [1901] AC 118 ........................................................................163 Hastings-Bass (deceased), Re [1975] Ch. 25.........................................................159 Haug v Royal Bank of Canada Investment Managers (Guernsey) Ltd (2001) 5th October ............................................................................................135 Havilland Estates Ltd v Channel Islands Ceramics Ltd (No. 2) [1993] 15 GLJ 51 ........................................................................................395, 472 Hawick Jersey International Ltd v Caplan (The Times, March 11 1988)............459 Heaton v Axa Equity and Law [2002] 2 All ER 961..............................................341
xxviii Table of Cases Henderson v Henderson (1843) 3 Hare 100.........................................................441 HM Customs v Duffy (2002) Crim. LR 583 .........................................................564 Holder v Holder [1968] Ch. 353 ...........................................................................159 Holdright Insurance v Willis Corroon (2000) ..........................2, 127, 156, 400, 403 Holland v HM Procureur (2002) 21st October ............................................569, 571 Hotchkiss v Channel Islands Knitwear Co. Ltd 2001/207................................20, 21 Hotel de France v Chartered Institute of Bankers (1995) 21st December ..........705 Hubert v Circuit Skips Ltd (2001) 24th January ..................................................321 Huck v Robson [2002] 3 All ER 263 .....................................................................457 Hulme v Matheson Securities (Channel Islands) Ltd (Judgment No. 1) [1997] 24 GLJ 79................................................................................................499 Hulme v Matheson Securities (Channel Islands) Ltd (Judgment No. 2) [1997] 24 GLJ 80................................................................................................472 Hulse v Chambers [2001] 1 WLR 2386 ................................................................508 I, an infant, Re [1986] 4 GLJ 12.............................................................................124 Ibrahim v R [1914] AC 599 ...................................................................................586 Iceland Frozen Foods Ltd v Jones [1983] ICR 17 .................................................356 IDC v Portholme Properties Ltd (2002) 20th September ........................45, 69, 386 International Technology Operations Ltd v Silver Falcon Enterprises Ltd [1994] 17 GLJ 61 ..........................................................................................14, 420 Iraqi Ministry of Defence v Arcepey Shipping Co. SA (The “Angel Bell”) [1981] QB 65......................................................................................................502 Islington Borough Council v Panico [1973] 1 WLR 1166 ...................................518 James v East Dorset Health Authority [1999] TLR 856 .......................................403 James v Evans [2000] TLR 592 ..............................................................................448 JA Pye (Oxford) Ltd v Graham [2002] 3 All ER 865 ............................................399 JJ Harrison (Properties) Ltd v Harrison (2002) 1 BCLC 162 ..............................313 Jeand’heur Ch. réunies, 13 février 1930, DP 1930.1.57, note Ripert ...................699 Jeremie v de Havilland (1814)...............................................................................622 Jersey Steel Co. Ltd v Regal Construction Co. Ltd (1971) ...................................439 John Barrett, Re 2001/145..............................................................................153, 154 Johnson v Gore Wood & Co. [2001] 2 WLR 72, [2001] 1 All ER 481 .........313, 441 Johnson v Unisys Ltd [2001] 2 All ER 801............................................................341 J Sainsbury Ltd v Hitt (The Times, November 14 2002) .....................................358 Khan v Falvey & Co. [2002] All ER (D) 361 .........................................................404 Kingsway Ltd v Bell [1987] 6 GLJ 141 ..................................................................679 Kirk (Habeas Corpus)............................................................................................520 Kirk’s Clameur de Haro, Re [1985] 1 GLJ 60........................................................486 Kirk v Blackwell [1986] 4 GLJ 65 ..........................................................................388 Kirk v Law Officers of the Crown (2002) 15th November...................................514 Kitcat v Sharp (1882) 48 LT 64..............................................................................460 Klabin v Technocom Ltd (2002) 20th September ................................................454 Kleinwort Benson Ltd v Lincoln City Council [1998] 4 All ER 513......................10 Konamaneni v Rolls-Royce [2002] 1 All ER 979 ..................................315, 424, 508
Table of Cases xxix Kurzschenkel, Re (2000) 16th March.............................................142, 196, 197, 646 Kuwait Airways Corp. v Iraqi Airways Co. (No. 6) [2002] UKHL 19..................156 Kuwait Oil Tanker Co. v Al Bader & Ors. [2002] 1 All ER (Comm.) 351 ...........508 L, V, M, H, Re [2000] 2 FLR 334 ..............................................................................82 Labedan, 19th June 1939 Grands arrêts nº 18 ......................................................172 La Cloche v La Cloche (1870) LR 3 PC 125....................................................16, 694 Lambert v Lambert [2002] EWCA Civ. 1685........................................................101 Laughton v Main [1995] 20 GLJ 92...............................................387, 400, 401, 472 Laughton v Main (2000) 14th January..........................................383, 384, 419, 457 Law Officers of the Crown v Barron (2002) 9th January.....................................553 Law Officers of the Crown v Benford [1993] 15 GLJ 82 ......................................606 Law Officers of the Crown v Collins (1989) .........................................................545 Law Officers of the Crown v Diment [1993] 16 GLJ 86...............................540, 541 Law Officers of the Crown v Francis (2002) 25th January ..................................552 Law Officers of the Crown v Guest (2002) 3rd December...................................540 Law Officers of the Crown v Heywood (1972) Crim. Rep. No. 6 ........................527 Law Officers of the Crown v Le Billon [1986] 4 GLJ 23 ......................................594 Law Officers of the Crown v Le Prevost (1980)....................................................605 Law Officers of the Crown v McDonald [1995] 20 GLJ 16..................................555 Law Officers of the Crown v Mather & Cooper (1999) 22nd July ......................556 Law Officers of the Crown v Ogier & Le Noury [1989] 7 GLJ 17 .......................544 Law Officers of the Crown v Ogier (2002) 28th January ...............................47, 465 Law Officers of the Crown v Oren [1994] 18 GLJ 13...........................................553 Law Officers of the Crown v Peden [1991] 11 GLJ 28 .........................................531 Law Officers of the Crown v Petit [1990] 10 GLJ 24............................................553 Law Officers of the Crown v Renouf [1994] 18 GLJ 64 .......................................541 Law Officers of the Crown v Ribeyre (2000) 5th April ........................................567 Law Officers of the Crown v Richards (2002) 18th April ....................................553 Law Officers of the Crown v Tilley (1973) Crim. Rep. No. 7...............................527 Law Officers of the Crown v Turner (2002) December .......................................553 Law Officers of the Crown v Warmisham [1995] 20 GLJ 19 ...............................528 Law Officers of the Crown v Whales [1993] 16 GLJ 87 .......................................540 Law Officers of the Crown v White [1993] 16 GLJ 88 .........................................558 Law Officers of the Crown v Williams [1997] 24 GLJ 15.....................................555 Leah and Harry Osias 1980 Settlements, Re [1987-1988] JLR 389..............149, 154 Leitch v Abbott (1886) 31 Ch. D. 374....................................................................453 Le Maistre v Planning and Environmental Committee 2002/129.........................58 Le Moigne v Hargetion (1998) ..............................................................................472 Le Sueur v Le Sueur [1968] JLR 889 .....................................................................671 L F Morgan Ltd [1987/88] JLR 336.......................................................................671 Lesquende Ltd v The Planning and Environment Committee of the States of Jersey (unreported 5 January 1998) ...............................................................45 Leyvand v Barasch & Ors [2000] TLR 223 ...........................................................431 Lipkin Gorman v Karpnale [1991] 2 AC 548 .......................................................163
xxx Table of Cases Liquidators of the Late Shopper Ltd v Barclays Bank Plc [1988] 6 GLJ 204.......247 Liverpool Roman Catholic Archdiocese Trustees Incorporated v Goldberg [2001] 1 All ER 182............................................................................................404 Locabail (UK) Ltd v Bayfield Properties Ltd & Ors. [2000] 1 All ER 65.............465 Long v Tolchard & Sons Ltd [2000] TLR 3...........................................................403 Longden v British Coal Corp. [1998] 1 All ER 289 ..............................................408 Lownds v Home Office [2002] 4 All ER 775.........................................................475 M (An Infant), Re [1955] 2 All ER 911 ...................................................................82 M v M .......................................................................................................................85 M v S (1996) .............................................................................................................82 McGonnell v United Kingdom (2002) 8th February .............................................25 Madeley Children’s Trusts, Re [1992] JLR N13 ....................................................153 Madge’s Settlement, Re [1994] JLR N16 .......................................................153, 154 Malik v Bank of Credit & Commerce International SA (In compulsory liquidation) [1997] 3 All ER 1...........................................................................341 Mannai Investment Co. Ltd v Eagle Star Life Assurance Co. Ltd [1997] 3 All ER 352............................................................................................598 Marcic v TWUL (No. 2) [2001] 4 All ER 326 .........................................................48 Marco (Croydon) Ltd v Metropolitan Police [1984] RTR 24 ..............................518 Mareva Compania Naviera SA v International Bulk Carriers SA “The Mareva” [1980] 1 All ER 213....................................................................499 Marsden v Regan [1954] 1 WLR 423 ....................................................................159 Marshall v Camp [1988] 6 GLJ 142 ......................................................................689 Marshall v London Passenger Transport Board [1936] 3 All ER 83....................455 Masters v Chief Constable of Sussex [2002] EWCA Civ. 1482 ............................467 Matheson v States Housing Authority [1998] 26 GLJ 27.......................................58 Matthews v Ministry of Defence [2002] 3 All ER 513............................................48 Matthews v R G Falla Ltd (2000) ..........................................................................382 Matthews v United Kingdom [1999] 28 EHRR 361...............................................22 Maynard v Public Services Committee [1995] JLR 65.........................................399 Med Vineyards Ltd (in liquidation), Re [1995] 20 GLJ 7.....................................322 Medcalf v Mardell [2002] 3 All ER 721.................................................................472 Medicaments & Related Classes of Goods (No. 2), Re [2001] 1 WLR 700 .........465 Mercantile Group (Europe) AG v Aiyela [1994] QB 366.....................................422 Micropublishing Ltd t/a Hamilton Brooke v Solway (2001) 26th January.........355 Midland Bank (Trustee) Jersey Ltd v Federal Pension Services Ltd [1995] JLR 352 ...................................................................................................158 Milford v Seaward Marine Ltd (2000) 1st December...........................344, 350, 353 Miller v Cawley (The Times, September 6 2002) .................................................467 Moed v Cockram (1999) 23rd July................................................................429, 488 Money Markets International v London Stock Exchange [2001] 4 All ER 223............................................................................................323 Monument Trust Co. Ltd v Gaudion [1996] 22 GLJ 81.......................................445 Moody Jersey “A” Settlement, Re [1990] JLR 264 .................................................153
Table of Cases xxxi Morgan Stanley International v Alfio (1992) .......................................................489 Morrow v Safeway Stores Plc (2002) IRLR 9 ................................................341, 353 Morton v Paint [1996] 21 GLJ 61 ...............................................2, 13, 365, 383, 409, 587, 597, 674, 691, 692, 694 Motorola Credit Corp. v Uzan [2002] EWCA Civ. 989........................................500 Moulin Huet Holdings Ltd v Moulin Huet Hotels Ltd [1995] 20 GLJ 58 ..........245 Mulligan, Re (Deceased) [1998] 1 NZLR 481.......................................................143 Nash v Eli Lilley [1993] 1 WLR 782 ......................................................................402 Nasser v United Bank of Kuwait [2002] 1 All ER 401 ..........................................432 National Westminster Bank Finance (CI) Ltd v Hougue Fouque Property Company Ltd (1972) .........................................................................................596 Naylor v Yorkshire Electricity Board [1968] AC 529............................................409 Nestlé v National Westminster Bank plc [1994] 1 All ER 118 .............................143 Nicholson v Clarke (1984).....................................................................................671 Nigerian Television Authority v Transcom International Ltd [1985] 1 GLJ 48..................................................................................................450 Noel v Leeds Western Health Authority (1990) ICR 585.....................................358 Norris, Re [1995] 19 GLJ 55...................................................................184, 194, 662 Norwich Pharmacal Co. v Customs & Excise Commissioners [1973] 3 WLR 164 ......................................................................421, 422, 503, 616 Novo Nordisk v Banco Santander (Guernsey) Ltd [2000] 2 ITELR 557.............422 O Co. v M Co. [1996] 2 Lloyd’s Rep. 347 ..............................................................453 Official Solicitor v Clore (1993) JJ 43 .....................................................................15 Ogier v Grande Havre Holdings Ltd (1999) 4th May ..........................................455 O’Neill v Phillips [1999] 2 All ER 961...................................................................315 Orford v Rasmi Electronics Ltd (2002) LTL 25th October ..................................448 P v T Ltd [1997] 4 All ER 200................................................................................422 Pagliarone (en désastre), Re (1983)...............................................................221, 222 Palmer v Marks & Spencer Plc [2001] EWCA Civ. 1528, (2001) LTL 9th October.................................................................................................364 Paragon Finance Plc v D B Thakerar & Co. [1999] 1 All ER 400 ........................313 Parker v PFC Flooring Supplies Ltd [2001] EWCA Civ. 1533, (2001) LTL 11th October..................................................................364 Patient, Re (2001) 23rd February...................................................133, 134, 383, 688 Pauling’s Settlement Trusts, Re [1963] 3 All ER 1 ................................................159 Pepin v Bruyère [1902] 1 Ch 24 ............................................................................173 Perkins v States Housing Authority [1995] 20 GLJ 93 ...........................................56 Perczynski v Perczynski (2001) 22nd May............................................................502 Phillips v Air New Zealand Ltd [2002] 1 All ER (Comm.) 801 ...........................407 Phillips v Eyre (1870) LR 6 QB 1...........................................................................503 Phillips v United Kingdom (The Times, August 13 2001) (Application no. 41087/98) ...............................................................................559 Pickett v British Rail Engineering [1980] AC 136 ................................................408 Picot v Crills [1995] JLR 33 ...................................................................................695
xxxii Table of Cases Pirito v Curth (2002) 27th September ..........................................................666, 669 Planet Hollywood Int. Inc. v Mallard Country Club Hotel (1997) ...............12, 505 Polkey v AE Dayton Services Ltd [1987] 3 All ER 974 .........................................357 Polly Peck International Plc v Nadir (No. 2) [1992] 4 All ER 769.......................497 Porzelack KG v Porzelack (UK) Ltd [1987] 1 All ER 1074...................................431 Post Office v John Foley & Ors [2001] 1 All ER 550 ............................................356 Priaulx v Le Ray (1931)..........................................................................................702 Profinance Trust SA v Gladstone [2002] 1 WLR 1024 .........................................316 Public Trustee v Cooper (1999).............................................................................151 R v A [2001] 1 WLR 789 ..........................................................................................48 R v A [2001] 2 WLR 1546 ........................................................................................48 R v Barber (2001) Crim. LR 998 ...........................................................................522 R v Barnett [2002] EWCA Crim. 454....................................................................580 R v Benjafield [2002] 1 All ER 815 ........................................................................559 R v Butterwasser [1948] 1 KB 4.............................................................................518 R v Cakmak [2002] EWCA Crim. 500 ..................................................................583 R (Crown Prosecution Service) v Chorley Justices (The Times, October 22 2002) ..........................................................................520 R v Coll (1889) 25 LR Ir 522..................................................................................604 R v Enfield LBC, ex p. Bernard (2002) 25th October.............................................48 R v Feltham Magistrates Court, ex p. Ebrahim [2001] 1 All ER 831...................520 R v Home Secretary, ex p. Fininvest [1996] 1 WLR 743 ......................................570 R v Galbraith [1981] 1 WLR 1039.........................................................................468 R v Gateway Foodmarkets Ltd [1997] 3 All ER 78 ...............................................371 R v Ghandhi (1986) Cr. App. R. (S) 391 ...............................................................555 R v Gleeson [2001] All ER (D) 22, TLR 30th October 2001................................542 R v Gough [1993] AC 646 .....................................................................................465 R v Hinks [2000] 4 All ER 833...............................................................................579 R v Jones [2002] 2 WLR 524..................................................................................560 R v Kefford (2002) Crim. LR 432 ..........................................................................511 R v Lyons [2002] 4 All ER 1028 .....................................................................293, 583 R v McInerney (2002) LTL 20th December..........................................................579 R v Mills (2002) LTL 15th January........................................................................562 R v Norris [2001] 1 WLR 1388..............................................................................562 R v Pendleton [2002] 1 All ER 524........................................................................545 R v Priestley (1965) 51 Cr. App. R. 1 .....................................................................586 R v Rezvi [2002] 1 All ER 801........................................................................559, 574 R v Sang [1980] AC 402 .................................................................................586, 587 R v Smith (1973) 58 Crim. App. R. 106 ................................................................544 R v Storey (1968) 52 Cr. App. R. 334.....................................................................604 R Settlement, Re [1987-1988] JLR N22 ................................................................153 R A Rossborough (Insurance Brokers) Ltd v Boon & Anor. (2001) 25th July .................................................................................................362 Rabaiotti Settlement, Re (2000).....................................................................145, 158
Table of Cases xxxiii Rahman v Chase Bank (CI) Trust Co. Ltd [1991] JLR 103..................................138 Ratten v R [1972] AC 378 ......................................................................................605 Rea Bros. (Guernsey) Ltd v SEC [1986] 3 GLJ 59, [1986] 4 GLJ 61 ....................570 Rector and Churchwardens of St Saviour v Traisnel & Bougourd [1989] 7 GLJ 51..................................................................................................680 Reid & Ors. v European Internet Capital Ltd (2002) 5th July .............................315 Remorqueur, Arrêt du, Civ. 16 juin 1896, D.1897.1.433, note Saleilles, concl. Sarrut; S. 1897.1.17, note A Esmein. ......................................................363 Representation of John Barbenson Barrett, Re (2001) 12th July, 2001/145 ........154 Richards v Gellatly [1872] LR 7 CP 127................................................................453 Ritson v Slous [1973] JJ 2341 ................................................................................671 Robertson v Slous (2002) 11th June..............................................................315, 316 Roerig v Valiant Trawlers Ltd [2002] 1 All ER 961 ...............................................508 Roger v Roger (2003) 10th January.......................................................................669 Rondel v Worsley [1967] 3 All ER 993 ..........................................................695, 696 Rookes v Barnard [1964] AC 1129........................................................................701 Royal Brompton Hospital NHS Trust v Frederick Alexander Hammond & 15 Ors. [2001] EWCA Civ. 778......................................................................394 Royal Brompton Hospital NHS Trust v Hammond & Ors. [2002] 2 All ER 801 (HL) ..................................................................................405 Royal Brunei Airlines Sdn Bhd v Tan [1995] 3 All ER 97.............................162, 313 Rush & Tompkins v GLC [1989] 1 AC 1280.........................................................460 S (children: care plan) Re [2002] 2 All ER 192 .....................................................119 S settlement, Re (2001) 24th July 2001/154 ..........................................................151 S v S (1990).............................................................................................................107 St Peter’s Trust Company Ltd v St Peter Insurance Company Ltd [1988] 6 GLJ 35..................................................................................................309 Sarnia Marketing Ltd v Normandy Laundries Ltd [1989] 8 GLJ 63 ...................687 Saromaje Ltd v Janet Holdings Ltd (2000) 11th January.....................................472 Savings & Investments Bank Ltd (in liquidation) v K Fincken (2003) 19th February.........................................................................................460 Sayers v Clarke Walker (a firm) [2002] 3 All ER 490 ...........................................391 Scottish Co-Operative Ltd v Meyer [1958] 3 All ER 66 .......................................313 Securities & Investments Board v Lloyd-Wright [1993] 4 All ER 210 ................292 Selby v Romeril [1996] JLR 210 ................................................................................1 Selwood v Madely (2001).......................................................................241, 674, 684 Seray-Wurie v Hackney LBC [2002] 3 All ER 448................................................394 Seymour v McDonald (2001) 5th October...........................................................458 Shaker v Al-Bedrawi [2002] 4 All ER 835 .............................................................313 Shamurin v Base Metal Trading Ltd (2002) 8th October ....................................387 Silvey v Pendragon Plc (2001) IRLR 685 ..............................................................341 Simaan General Contracting Co. v Pilkington Glass Ltd [1987] 1 All ER 345............................................................................................433 Sinclair et autres v Nicholson et autres (2002) 10th January.......................446, 469
xxxiv Table of Cases Singh v Parkfield Group Plc (1996) LTL 14th March...........................................460 Singleton v Le Noury [1990] 9 GLJ 48 ....................................................14, 398, 679 Sir Lindsay Parkinson & Co. v Triplan Ltd [1973] QB 609..................................432 Slawther v Smith [1994] 18 GLJ 30.......................................................................679 Slocock’s Will Trust, Re [1979] 1 All ER 358.........................................................153 Smith v Harvey (1981) 14th May ....................................................13, 400, 401, 696 Smith v Islands Insurance (2001) 11th May.........................................................454 Smith v Islands Insurance (2002) 13th August.....................................................436 Smith v Rang [1987] 6 GLJ 290.............................................................................663 Smith v Slawther [1998] 26 GLJ 79 ...............................................................392, 678 Smith v States of Guernsey Education Council (2002) 5th July..........................407 Smouha Family Trust, Re [1998] N20...........................................................153, 154 Snell v Beadle [2001] 2 WLR 1180 ....................................................................6, 664 Snooks & Dowse v United Kingdom (2002) 8th October ...................................385 Société Aérospatiale v Lee Kui Jak [1987] AC 871, [1987] 3 All ER 510 .............506 Solle v Butcher [1949] 2 All ER 1107 ....................................................................704 Somerset, Re [1894] 1 Ch. 231...............................................................................163 Speight v Gaunt (1883) 2 Ch. 515.........................................................................143 Sparkes v Lancaster [1992] 13 GLJ 44, [1993] 15 GLJ 38 ....................................633 Spiliada Maritime Corp. v Cansulex Ltd, “The Spiliada” [1986] 3 All ER 843 ...................................................................................424, 508 Spillers Milling Ltd v Jayboo Investments Ltd [1987] 5 GLJ 66 ..........................476 States Prison Board v Kirk [1991] 11 GLJ 62 .......................................................421 Stephan Jay Lawrence, Debtor, Re [1999] 2 ITELR 283 .......................................139 Stanley Dawes Will Trust, Re (2000) 7th December.............................................150 Steward v North Metropolitan Tramways Co. (1886) 16 QBD 556 ....................455 Stewart, 14th March 1837 Grands arrêts no 3 ......................................................172 Stoneman v Cummings (1999) .............................................................................451 Stranger (1947) Requêtes (Guernsey) 195............................................................126 Strawn v Hemery Trustees Ltd (2001) 23rd February .........................................430 Strawn v Prism Educational Research Ltd (2001) 18th December .....................458 Stuart, Re [1897] 2 Ch. 583....................................................................................159 Stuart-Hutcheson v Spread Trustee Co. Ltd (2001) 16th March RC ...........................................................................................144, 146 Stuart-Hutcheson v Spread Trustee Co. Ltd (2002) 15th July CoA ..............................................145, 146, 147, 154, 158, 165, 387, 472 Summit Property Ltd v Pitmans (a firm) [2001] EWCA Civ. 2020, (2001) LTL 19th November...............................................................................473 Surcouf v de Carteret (1999) ......................................38, 93, 190, 196, 383, 660, 684 Swain v Hillman [1999] TLR 745..........................................................................448 Swinburne v Carter (1853) 23 LJQB 16................................................................431 Target Holdings Ltd v Redferns [1995] 3 All ER 785 ...........................................158 T Settlement, Re [2002] 4 ITELR 820, (2002) 6th February................................149 T v T (1985)............................................................................................................107
Table of Cases xxxv Tang Man Sit (deceased) (personal representative) v Capacious Investments Ltd [1996] 1 All ER 193 ................................................................161 Taylor v Lawrence [2002] 2 All ER 353 .................................................................394 Taylor v States of Guernsey Board of Health (1990)............................................395 Technocom Ltd v Roscomm Ltd (2002) ...............................................................315 Technocom Ltd v Roscomm Ltd (2003) 11th February.......................................496 Terence Le Sueur, Re 1999/38 ................................................................................153 Thompson v Masterton (2001) 18th May ................................................................2 Thompson v Thompson [1996] 22 GLJ 84 ..........................................................498 Token Ltd v Planning and Environmental Committee [2001] JLR 698................58 Totalise Plc v Motley Fool Ltd (The Times, January 10 2002).............................421 Tournier v National Provincial [1924] 1 KB 461..................................................570 Trevor v Whitworth (1887) 12 App. Cas. 409 .......................................................332 Trinity Investments Ltd & Anor. v Long Port Properties Ltd (2001) 6th July ...................................................................................................446 Trust Agreement dated 19th February 1990, Re (2002) 14th March 2002/61.....149 Turner, Re [1897] 1 Ch. 536...................................................................................159 Twinsectra Ltd v Yardley [2002] 2 All ER 377 ......................................................162 Universal Thermosensors Ltd v Hibben [1992] 1 WLR 840................................504 van Leuven v Nielsen [1993] 15 GLJ 79 ................................................................454 Vardinoyannis v Ansol Ltd & Ors (2001) 31st July ..............................................362 Vardinoyannis v Ansol Ltd & Ors (2001) 20th November .............................................................12, 421, 473, 503, 508, 701 Vardinoyannis v Ansol Ltd & Ors (2002) 23rd May.............................................503 Vardinoyannis v Ansol Ltd & Ors (2002) 24th May No. 1 of 2............................424 Vardinoyannis v Ansol Ltd & Ors (2002) 24th May No. 2 of 2............424, 457, 508 Vaudin v Hamon [1974] AC 569 .....................................................15, 398, 679, 693 Vautier, Re (2000) 12th October....................................................................198, 199 Vidamour v Hood [1993] 16 GLJ 68 ....................................................................408 Waldridge v Kennison [1794] 1 Esp. 142 ..............................................................460 Walkley v Precision Forgings [1979] 1 WLR 606 .................................................404 Walters v States Housing Authority [1997] 24 GLJ 32 .......................57, 69, 75, 295 Ward v States Housing Authority [1995] 20 GLJ 94 ........................................55, 56 Waterman v McCormack (2002) .............................16, 174, 244, 619, 666, 674, 694 Waterman’s Will Trusts, Re [1952] 2 All ER 1054.................................................143 Watson v Chief Constable of Cleveland Police (2001) LTL 12th October ..........596 Watson v Trouteaud [1987] 5 GLJ 16 ...................................................................664 Webber (1949) Requêtes (Guernsey) 349 .............................................................126 Webber v Allied Dunbar Plc (2001) 16th August .........................................................386, 442, 456, 599, 600, 610, 614 Weldon v Neal [1887] 19 QBD 394.......................................................................455 Wells v Wells [2002] 2 FLR 97 ...............................................................................101 Wenlock v Moloney [1965] 2 All ER 871..............................................................449 Westbury Settlement, Re [2001] JLR N16-17 .......................................................153
xxxvi Table of Cases Westdeutsche Landesbank v Islington BC [1996] AC 669 ...................................162 White v White [2001] 1 All ER 1 ...........................................................................101 White v White [2001] 2 All ER 43 .........................................................................413 Whitely, Re (1886) 33 ChD 347.............................................................................143 Whitfield v North Durham HA [1995] Med LR 32 .............................................404 William Place Investments Ltd v States of Guernsey [1995] 20 GLJ 52..............450 William Willoughby-Winlaw Trust, Re (2002) 30th September..........................198 Williams v BASA Surveying Ltd (1999) 14th January .........................................455 Williams v Natural Health Foods Ltd [1998] 2 All ER 577 ..........................314, 335 Wilsher v Essex Area Health Authority [1986] 3 All ER 801 ...............................700 Wilson & Clyde Coal v English [1937] 3 All ER 628............................................364 Witham v Hastings & Rother NHS Trust (2001) LTL 16th November ...............364 WKR Trust, Re [2002] 4 ITELR 487......................................................................138 Woodhouse v Consignia [2002] 2 All ER 737 ......................................................441 Woodward v RG Falla Ltd (2002)....................................................................38, 382 Wright v Nicholson [1970] 1 All ER 12 ................................................................518 Young v Rank [1950] 2 KB 510 .............................................................................466 Younger v Saner (2002) LTL 11th January, 25th July ...........................................159 Yuill [1945] P 15.....................................................................................................466
Tables of Laws, Statutes and other Legislative Materials Access to Neighbouring Land Act 1992 ................................................................691 Administrative Decisions (Review) (Guernsey) Law 1986. ...................................46 Administration of Justice Act 1982. ..............................................................199, 691 s.4 ........................................................................................................................408 s.20 ......................................................................................................................199 Administration of Justice (Bailiwick of Guernsey) Law 1991..............417, 517, 683 s.1 ........................................................................................................................517 s.2 ........................................................................................................................517 s.3 ........................................................................................................................518 s.4 ........................................................................................................................518 s.5 ........................................................................................................................518 s.6 ........................................................................................................................518 s.7 ........................................................................................................................518 s.11 ......................................................................................................................519 s.13 ......................................................................................................................519 s.14 ......................................................................................................................519 Adoption Act 1976. ................................................................................................115 Adoption (Amendment) (Guernsey) Law 2000. ..................................................117 Adoption and Children Act 2002 ..................................................................115, 121 s.1 ........................................................................................................................115 s.50 ......................................................................................................................115 s.51 ......................................................................................................................115 s.115 ....................................................................................................................115 Adoption (Guernsey) Law 1960 ....................................................................115, 117 s.2 ................................................................................................................115, 116 s.4 ........................................................................................................................115 s.5 ........................................................................................................................115 s.6 ........................................................................................................................116 s.7 ........................................................................................................................115 s.8 ........................................................................................................................116 s.9 ........................................................................................................................116 s.11 ......................................................................................................................116 s.12 ......................................................................................................................116 s.15 ......................................................................................................................116 s.16 ......................................................................................................................116 s.21 ......................................................................................................................115 s.23 ......................................................................................................................117
xxxviii Tables of Laws, Statutes and other Legislative Materials Adoption (Guernsey) Law 1966 ............................................................................115 Adoption (Guernsey) Law 1970 ............................................................................115 Age of Majority (Alderney) Law 2001 ..................................................................123 Alderney (Application of Legislation) Law 1948....................................................35 Alderney (Application of Legislation) (Adoption) Ordinance 1974...................117 Alderney Land and Property etc. Law 1949 ..................................................186, 659 s.16 ......................................................................................................................659 s.17 ......................................................................................................................659 s.19 ......................................................................................................................662 s.20 ......................................................................................................................662 s.22 ..............................................................................................................659, 660 s.25 ......................................................................................................................660 s.54 ......................................................................................................................189 s.55 ......................................................................................................................188 s.56 ..............................................................................................................186, 187 s.57 ......................................................................................................................189 s.58 –64. ..............................................................................................................189 Al-Qa’ida and Taliban (United Nations Measures) (Channel Islands) Order 2002 .....................................................................................................578 Amalgamation of Companies Ordinance 1997....................................................329 s.1 ........................................................................................................................329 s.8 ........................................................................................................................330 L’Approbation 1583....................................................................................8, 167, 706 Ancient Monuments and Protected Buildings (Guernsey) Law 1967.....................................................................................................69, 70 s.2 ..........................................................................................................................70 s.3 ..........................................................................................................................70 s.4 ..........................................................................................................................70 Arbitration (Guernsey) Law 1982. ................................................................377, 477 Arbitration (Amendment) (Guernsey) Law 1986. .......................................377, 477 Arbitration (Internal Investment Disputes) (Guernsey) Order 1968 .................477 Bail Act 1976...........................................................................................................519 Bankers’ Books Evidence Act 1879 ........................................................................615 Bankers’ Books Evidence (Guernsey) Law 1954 ...........................................603, 615 Banking Supervision (Bailiwick of Guernsey) Law 1994.............................203, 272 s.1 ................................................................................................................272, 274 s.2 ........................................................................................................................272 s.3 ........................................................................................................................272 s.8 ................................................................................................................272, 273 s.9 ........................................................................................................................272 s.10 ......................................................................................................................273 s.12 ......................................................................................................................272 s.14 ......................................................................................................................272 s.17 ......................................................................................................................273
Tables of Laws, Statutes and other Legislative Materials xxxix s.18 ..............................................................................................................273, 281 s.19 ......................................................................................................................274 s.22 ......................................................................................................................273 s.23 ......................................................................................................................273 s.24 ......................................................................................................................273 s.25 ......................................................................................................................274 s.26 ......................................................................................................................274 s.28 ......................................................................................................................274 s.33 ......................................................................................................................274 s.34 ......................................................................................................................274 s.35 ..............................................................................................................274, 505 s.36 ..............................................................................................................273, 274 s.52 ......................................................................................................................282 sched. 3. ..............................................................................................................272 Bereavement (Variation of Sum) (England and Wales) Order 2002...................409 Bills of Exchange (Guernsey) Law 1958................................................................242 s.1 ........................................................................................................................242 Births, Deaths, Marriages and Legitimacy (Bailiwick of Guernsey) (Amendment) Law 1991. ................................................................................80 Borrowing (Control) (Bailiwick of Guernsey) Law 1946 ....................................261 s.1 ........................................................................................................................264 s.2 ........................................................................................................................261 sched ...................................................................................................................261 Brussels Convention 1968. ....................................................................................507 Building (Guernsey) Law 1956................................................................................70 Building and Development Control (Alderney) Law 1975....................................76 s.21 ........................................................................................................................76 Building and Development Control (Alderney) (Amendment) Law 1997 ..........76 Cadastre Law 1947 .................................................................................................641 Child Protection (Guernsey) Law 1972. .......................................................113, 117 s.9 ........................................................................................................................113 s.25 ......................................................................................................................113 Children Act 1989.....................................................................................79, 109, 128 s.14A–14G. .........................................................................................................115 Children and Young Persons (Guernsey) Law 1967 .............108, 131, 381, 515, 535 s.1 ........................................................................................................................109 s.2 ........................................................................................................................109 s.3 ................................................................................................................110, 111 s.5 ................................................................................................................112, 535 s.6 ........................................................................................................................111 s.7 ........................................................................................................................110 s.8 ................................................................................................................109, 111 s.9 ........................................................................................................................112 s.10 ..............................................................................................................111, 535
xl Tables of Laws, Statutes and other Legislative Materials s.11 ......................................................................................................................110 s.15 ......................................................................................................................515 s.24 ......................................................................................................................112 s.27 ......................................................................................................................112 s.36 ......................................................................................................................113 s.38 ......................................................................................................................108 Children and Young Persons (Amendment) (Guernsey) Law 2000....................109 Children and Young Persons (Miscellaneous Provisions) (Guernsey) Law 1991.....................................................................................595 s.2 ........................................................................................................................606 s.3 ................................................................................................................595, 606 Children and Young Persons (Secure Accommodation) (Guernsey) Law 1997 ........................................................................................................114 Children and Young Persons (Secure Accommodation) Ordinance 1997..........114 Children (Jersey) Law 2002. ....................................................................................79 Children (Leaving Care) Act 2000.........................................................................111 Civil Evidence Act 1968..........................................................................457, 589, 603 Civil Evidence Act 1972. ................................................................................457, 589 Civil Evidence Act 1995..................................................................457, 589, 599, 603 s.1 ........................................................................................................................599 Civil Jurisdiction and Judgments Act 1991...........................................................507 Civil Liability (Contribution) Act 1978 ................................................................405 s.1 ........................................................................................................................405 Civil Procedure Act 1997 .......................................................................................503 s.7 ........................................................................................................................503 Civil Rights of Convicts Act 1828..........................................................................589 Code of 1771 ..............................................................................................................8 Code Civil 1804.......................................................................1, 10, 11, 621, 699, 706 art.7 – 16–13.........................................................................................................49 art. 383 ................................................................................................................123 art. 388–514 ................................................................................................123, 127 art. 451 ................................................................................................................125 art. 488–514........................................................................................................132 art. 544 ..................................................................................................................15 art. 578–624........................................................................................................672 art. 625–635........................................................................................................672 art. 637–710........................................................................................................680 art. 637 ................................................................................................................678 art. 690 ................................................................................................................398 art. 702 ................................................................................................................680 art. 755 ................................................................................................................169 art. 815 ................................................................................................................642 art. 815–842........................................................................................................671 art. 815-1 ............................................................................................................644
Tables of Laws, Statutes and other Legislative Materials xli art. 827 ................................................................................................................671 art. 1101–1369....................................................................................................704 art. 1108. .....................................................................................................704, 705 art. 1109. .............................................................................................664, 704, 705 art. 1110. .....................................................................................................704, 705 art. 1118. .............................................................................................................666 art. 1134. .............................................................................................................700 art. 1142. .............................................................................................................494 art. 1156–1164....................................................................................................598 art. 1165. .............................................................................................................139 art. 1341. .............................................................................................................597 art. 1347. .....................................................................................................597, 598 art. 1348. .............................................................................................................598 art. 1382. .............................................................................................................698 art. 1383. .............................................................................................................698 art. 1384. .............................................................................................363, 698, 699 art. 1674. .............................................................................................................666 art. 1686. .............................................................................................................671 art. 2044–2058....................................................................................................341 art. 2219–2283....................................................................................................396 art. 2242. .............................................................................................................397 art. 2247. .............................................................................................................397 art. 2265. .............................................................................................................399 art. 2282. .............................................................................................................684 Code des Assurances. .............................................................................................410 art. L.124-3 .........................................................................................................410 Code rural ..............................................................................................................610 art. L.323-6 .........................................................................................................644 Commercial Agents (Council Directive) Regulations 1993.................................706 Companies Act 1985. .............................................................................................264 s.143 ....................................................................................................................332 s.151. ...................................................................................................................332 s.459 ....................................................................................................................315 s.461. ...................................................................................................................315 s.651 ....................................................................................................................318 s.653 ....................................................................................................................318 Companies Act 1989 s.141. ...................................................................................................................318 Companies (Guernsey) Law 1994. .........................................228, 299-327, 328, 483 s.2 ........................................................................................................................301 s.3 ................................................................................................................299, 302 s.5 ........................................................................................................................301 s.6 ................................................................................................................302, 307 s.7 ........................................................................................................................306
xlii Tables of Laws, Statutes and other Legislative Materials s.10 ......................................................................................................................306 s.11 ..............................................................................................................306, 314 s.13 ......................................................................................................................307 s.14 ......................................................................................................................307 s.15 ......................................................................................................................307 s.16 ......................................................................................................302, 306, 307 ss.17–20 ..............................................................................................................308 s.19 ......................................................................................................................305 s.21 ..............................................................................................................300, 309 s.22 ......................................................................................................................309 s.23 ......................................................................................................................309 s.24 ......................................................................................................................303 s.25 ......................................................................................................................303 s.27 ......................................................................................................................309 s.28 ......................................................................................................................304 s.29 ......................................................................................................................310 s.30 ......................................................................................................................310 s.31 ......................................................................................................................310 s.32 ......................................................................................................................310 s.33 ......................................................................................................................310 s.34 ......................................................................................................................310 s.35 ......................................................................................................................310 s.36 ......................................................................................................................310 s.37 ......................................................................................................................311 s.38 ......................................................................................................................311 s.39 ..............................................................................................................310, 311 s.40 ......................................................................................................................311 s.41 ......................................................................................................................311 s.43 ..............................................................................................................304, 311 s.44 ......................................................................................................................311 s.44A ...................................................................................................................311 s.45 ......................................................................................................309, 312, 334 s.46 ......................................................................................................................312 s.47 ......................................................................................................................312 s.48 ......................................................................................................................312 s.49 ..............................................................................................................306, 312 s.51 ......................................................................................................................303 s.52 ......................................................................................................................303 s.53 ......................................................................................................................303 s.54 ......................................................................................................................303 s.55 ......................................................................................................................303 s.58 ......................................................................................................................305 s.59 ..............................................................................................................303, 305 s.62 ......................................................................................................................303
Tables of Laws, Statutes and other Legislative Materials xliii s.64 ......................................................................................................................303 s.67A............................................................................................................325, 326 s.67B....................................................................................................................324 s.67C ...........................................................................................................324, 325 s.67D. ..................................................................................................................325 s.68 ......................................................................................................306, 307, 320 s.69 ..............................................................................................................308, 319 s.70 ..............................................................................................................307, 314 s.72 ......................................................................................................................307 s.73 ..............................................................................................................307, 319 s.74 ......................................................................................................................314 s.75 ......................................................................................................314, 315, 316 s.76 ..............................................................................................................304, 317 s.77 ......................................................................................................................318 s.78 ..............................................................................................................318, 319 s.79 ......................................................................................................................319 s.80 ......................................................................................................................319 s.82 ......................................................................................................................319 s.83 ......................................................................................................................319 s.84 ......................................................................................................................319 s.85 ......................................................................................................................319 s.86 ......................................................................................................................319 s.89 ......................................................................................................................319 s.90 ......................................................................................................................319 s.91 ......................................................................................................................319 s.92 ......................................................................................................................320 s.94 ......................................................................................................................320 s.95 ..............................................................................................................320, 321 s.97 ......................................................................................................................321 s.98 ......................................................................................................................321 s.99 ......................................................................................................................321 s.100 ....................................................................................................................322 s.101 ....................................................................................................................322 s.103 ....................................................................................................................323 s.104 ....................................................................................................................323 s.105 ....................................................................................................................323 s.106 ....................................................................................................................324 s.108 ....................................................................................................................323 s.109 ....................................................................................................................324 s.110 ............................................................................................................319, 322 s.111 ....................................................................................................................327 s.112. ...................................................................................................................327 s.113 ....................................................................................................................327 sched. 2 ...............................................................................................................303
xliv Tables of Laws, Statutes and other Legislative Materials sched. 3. ..............................................................................................................326 Companies (Alderney) Law 1994..........................................................................300 Companies (Amendment) (Guernsey) Law 1996. .......................................299, 328 s.10 ......................................................................................................................323 Companies (Enabling Provisions) (Guernsey) Law 1996. ...................301, 327, 328 Companies (Financial Assistance for Acquisition of Own Shares) Ordinance 1998......................................................................................309, 332 s.1 ........................................................................................................................332 s.2 ........................................................................................................................332 s.3 ........................................................................................................................332 s.6 ........................................................................................................................333 Companies (Guernsey) (Amendment) Law 2001. ...............................................311 Companies (Jersey) Law 1991. ..............................................................................315 art. 141 ................................................................................................................315 Companies (Purchase of Own Shares) Ordinance 1998......................................333 s.12 ......................................................................................................................334 s.16 ......................................................................................................................334 Companies (Shares of No Par Value) Ordinance 2002 ........................................301 Company Securities (Insider Dealing) (Bailiwick of Guernsey) Law 1986. .......................................................................................................582 Company Securities (Insider Dealing) (Bailiwick of Guernsey) Law 2001 ........582 Conditions of Employment (Amendment) (Guernsey) Law 1992. ....................342 Conditions of Employment (Amendment) (Guernsey) Law 1994. ............342, 343 Conditions of Employment (Guernsey) Law 1985 ......................................342, 355 s.1 ........................................................................................................................342 s.3A. ....................................................................................................................343 s.4 ........................................................................................................................342 s.5 ........................................................................................................................342 s.6 ........................................................................................................................343 s.7 ........................................................................................................................343 s.8 ........................................................................................................................343 s.9A. ....................................................................................................................343 s.10 ......................................................................................................................343 s.10A ...................................................................................................................343 Congenital Disabilities (Civil Liability) Act 1976.................................................691 Consumer Credit Act 1974. ...................................................................258, 377, 691 Consumer Protection Act 1987. ............................................................................691 Contracts (Applicable Law) Act 1990 ...................................................................507 Contracts (Rights of Third Parties) Act 1999.......................................................691 Control of Borrowing (Bailiwick of Guernsey) Ordinance 1959 (as amended)..................................................................................261, 262, 269 s.1 ................................................................................................................262, 264 s.2 ........................................................................................................................262 s.3 ................................................................................................................263, 299
Tables of Laws, Statutes and other Legislative Materials xlv s.4 ........................................................................................................................263 s.5 ........................................................................................................................264 s.6 ........................................................................................................................264 s.7 ................................................................................................................263, 264 s.7A. ....................................................................................................................336 s.8 ........................................................................................................263, 264, 299 s.8A. ....................................................................................................................265 s.10 ......................................................................................................................265 s.11 ......................................................................................................................265 s.12 ......................................................................................................................265 s.13 ......................................................................................................................262 Control of Borrowing (Amendment) (Bailiwick of Guernsey) Ordinance 1976..............................................................................................263 Control of Borrowing (Amendment) (Bailiwick of Guernsey) Ordinance 1989......................................................................................262, 264 s.1 ........................................................................................................................264 Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances 1988 (the Vienna Convention)..................................................562 art. 4. ...................................................................................................................563 Convention for the Protection of Human Rights and Fundamental Freedoms 1950 .........................................................................47, 292, 583, 593 art. 5 ......................................................................................................................48 art. 6 ......................................................................................48, 119, 267, 344, 559 art.8. ..................................................................................................48, 56, 59, 119 art. 11 ....................................................................................................................48 art. 14. ...................................................................................................................48 art. 35. ...................................................................................................................49 art. 1 First Protocol...............................................................................48, 193, 559 art.2 First Protocol. ..............................................................................................48 Eleventh Protocol.................................................................................................49 Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters 1968 (the Brussels Convention) .........................507 Convention on Limitation of Liability for Maritime Claims 1976 .....................407 Conveyancing (Guernsey) Law 1969.............................................................622, 660 Conveyancing (Guernsey) Law 1996. ...................................................................629 s.1 ................................................................................................................629, 669 Conveyancing (Sark) Law 2002.............................................................................660 Council Regulation 44/2001..................................................................................507 Court of Appeal (Guernsey) Law 1961 .........................................................386, 540 s.14 ......................................................................................................................386 s.15 ..............................................................................................................386, 387 s.16 ......................................................................................................................394 s.18 ......................................................................................................................387 s.19 ......................................................................................................................388
xlvi Tables of Laws, Statutes and other Legislative Materials s.20 ......................................................................................................................388 s.21 ......................................................................................................................388 s.24 ..............................................................................................................541, 543 s.25 ..............................................................................................................540, 541 s.26 ......................................................................................................................542 s.30 ..............................................................................................................539, 542 s.32 ..............................................................................................................542, 545 s.37 ......................................................................................................................542 s.40 ......................................................................................................................542 s.42 ..............................................................................................................543, 545 Court of the Sénéschal (Increase of Jurisdiction and Transfer of Prisoners) Law 1971...............................................................................382, 512 s.1 ........................................................................................................................382 Coutume Reformée/Redigée art. 272 ................................................................................................................168 art. 382 ................................................................................................................187 art. 607 ................................................................................................................678 Criminal Appeal Act 1907 .....................................................................................544 Criminal Appeal Act 1968..............................................................................542, 544 s.11 ......................................................................................................................542 Criminal Appeal Act 1995 .....................................................................................544 Criminal Damage Act 1971 ...................................................................................582 Criminal Damage (Bailiwick of Guernsey) Law 1983..........................................582 s.1 ........................................................................................................................582 s.12 ......................................................................................................................583 s.13 ......................................................................................................................583 s.20 ......................................................................................................................583 Criminal Evidence Act 1898 ..........................................................................518, 592 Criminal Evidence and Miscellaneous Provisions (Bailiwick of Guernsey) Law 2002. ......................................114, 518, 589, 593, 594, 598, 606 s.1.................................................................................................607, 608, 609, 610 s.2.................................................................................................607, 608, 609, 610 s.3 ........................................................................................................................609 s.4 ........................................................................................................................609 s.5 ........................................................................................................................609 s.6 ................................................................................................................609, 610 s.9 ........................................................................................................................610 s.11 ......................................................................................................................611 s.13 ......................................................................................................................607 s.14 ......................................................................................................................518 s.16 ......................................................................................................................611 s.17 ......................................................................................................................611 sched ...........................................................................................................610, 611 Criminal Jurisdiction (Guernsey) Law 1986. .......................................................587
Tables of Laws, Statutes and other Legislative Materials xlvii Criminal Justice Act 1967. .....................................................................................517 s.9 ........................................................................................................................517 s.10 ......................................................................................................................517 Criminal Justice Act 1988 ..............................................................................587, 607 s.25 ......................................................................................................................587 Criminal Justice and Public Order Act 1994 ........................................................592 s.35 ......................................................................................................................592 Criminal Justice (Attendance Centre) (Guernsey) Law 1982 ..............................535 Criminal Justice (Attendance Centre) Ordinance 1983.......................................535 Criminal Justice (Compensation) (Bailiwick of Guernsey) Law 1990. .......................................................................................................537 s.1 ........................................................................................................................537 Criminal Justice (Fraud Investigation) (Bailiwick of Guernsey) (Amendment) Law 2002. ..............................................................................569 Criminal Justice (Fraud Investigation) (Bailiwick of Guernsey) Law 1991.................................................................45, 261, 568, 582 s.1 ................................................................................................................568, 569 s.2 ........................................................................................................................569 s.2A. ....................................................................................................................569 Criminal Justice (International Co-operation) Act 1990.............................587, 618 s.3 ................................................................................................................587, 618 Criminal Justice (International Co-operation) (Bailiwick of Guernsey) Law 2001.................................564, 587, 606, 607, 617 s.3 ................................................................................................................587, 606 s.5 ........................................................................................................................618 Criminal Justice (International Co-operation) (Bailiwick of Guernsey) Law 2001 (Commencement) Ordinance 2001.............................................617 Criminal Justice (Power to Suspend Sentence) (Bailiwick of Guernsey) Law 1972. .............................................................................515, 532 s.1 ........................................................................................................................532 s.2 ........................................................................................................................532 Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) (Amendment) Ordinance 2002 ....................................................................573 Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law 1999 .........................................................................261, 564, 571, 573, 582 s.1 ........................................................................................................................573 s.4 ........................................................................................................................573 s.5 ........................................................................................................................573 s.8 ........................................................................................................................574 s.38 ......................................................................................................................575 s.39 ......................................................................................................................575 s.40 ......................................................................................................................575 s.41 ......................................................................................................................575 s.44 ......................................................................................................................573
xlviii Tables of Laws, Statutes and other Legislative Materials s.45 ......................................................................................................................575 sched ...................................................................................................................576 Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey)(Enforcement of Overseas Confiscation Orders) Ordinance 1999. ....................................574 Criminal Justice (Proceeds of Crime) (Enforcement of Overseas Confiscation Orders) (Amendment) Ordinance 2002. .....................................................574 Criminal Justice (Suspended Sentence Supervision Orders) (Bailiwick of Guernsey) Law 1984 ......................................................................................532 Criminal Justice (Youth Detention) (Bailiwick of Guernsey) Law 1990 .......................................................................................516, 529, 530 s.1 ................................................................................................................529, 530 s.2 ........................................................................................................................530 Customs and Excise (General Provisions) (Bailiwick of Guernsey) (Amendment) Law 1991. ..............................................................................550 Customs and Excise (General Provisions) (Bailiwick of Guernsey) Law 1972.................................................................................................546, 549 s.1 ........................................................................................................................552 s.5 ........................................................................................................................549 s.8 ................................................................................................................549, 550 s.12 ......................................................................................................................549 s.22 ......................................................................................................................549 s.23 ......................................................................................................................551 s.30 ......................................................................................................................552 s.37 ......................................................................................................................549 s.39 ......................................................................................................................550 s.40 ......................................................................................................................549 s.56 ......................................................................................................................550 s.57 ......................................................................................................................550 s.68 ......................................................................................................................550 s.69 ......................................................................................................................550 s.70 ......................................................................................................................550 s.71 ......................................................................................................................550 s.72 ......................................................................................................................550 s.75 ......................................................................................................................551 s.76 ......................................................................................................................551 s.77 ......................................................................................................................552 s.77A ...................................................................................................................552 sched. 1 ...............................................................................................................550 Data Protection (Bailiwick of Guernsey) Law 2001 .............................................298 Defamation Act 1996 .............................................................................................691 De la Prescription Immobilière 1852....................................................................397 Deputy Bailiff (Guernsey) Law 1969 ......................................................................25 Des Exceptions et Fins de Non-Recevoir 1851 .............................................435, 436 Development Control (Alderney) Law 1975 ..........................................................61
Tables of Laws, Statutes and other Legislative Materials xlix Development Control (Sark) Law 1991..................................................................76 Disability Discrimination Act 1995.......................................................................339 Document Duty (Amendment) Ordinance 2000 ................................................647 Document Duty (Amendment) Ordinance 2001 ................................................647 Document Duty (Guernsey) Law 1973.........................................................302, 647 Document Duty Ordinance 1992..........................................................................647 Domestic Proceedings and Magistrate’s Court (Guernsey) Law 1988 .....................................................................................80, 90, 110, 128 s.1 ..........................................................................................................................80 s.2 ..........................................................................................................................81 s.7 ....................................................................................................................81, 82 s.8 ........................................................................................................................110 s.9 ........................................................................................................................110 s.10 ..................................................................................................................80, 82 s.11 ................................................................................................................82, 606 s.14 ..................................................................................................................83, 87 s.15 ........................................................................................................................83 s.16. .......................................................................................................................84 s.17 ........................................................................................................................83 s.18 ........................................................................................................................86 s.22 ........................................................................................................................86 s.23 ........................................................................................................................86 s.25 ........................................................................................................................86 s.29 ..................................................................................................................84, 86 s.30 ........................................................................................................................87 s.31 ............................................................................................................84, 86, 92 s.33 ........................................................................................................................85 Domestic Proceedings and Magistrate’s Court (Amendment) (Guernsey) Law 1992 ..........................................................................................................90 s.2 ..........................................................................................................................90 Domicile and Matrimonial Causes (Amendment)(Bailiwick of Guernsey) Law 1979 ..........................................................................................................95 Drug Trafficking Act 1994 .....................................................................................558 Drug Trafficking (Amendment) (Bailiwick of Guernsey) Law 1992.................................................................................................557, 565 Drug Trafficking (Bailiwick of Guernsey) Law 2000............................557, 570, 572 s.1 ........................................................................................................................557 s.2 ................................................................................................................557, 558 s.3 ........................................................................................................................558 s.4 ........................................................................................................................558 s.5 ........................................................................................................................558 s.6 ........................................................................................................................558 s.7 ........................................................................................................................559 s.9 ........................................................................................................................559
l Tables of Laws, Statutes and other Legislative Materials s.11 ......................................................................................................................559 s.12 ......................................................................................................................560 ss.13–15.......................................................................................................558, 560 s.15 ......................................................................................................................567 s.16 ......................................................................................................................560 s.17 ......................................................................................................................560 s.18 ......................................................................................................................560 s.19 ......................................................................................................................560 s.25 ..............................................................................................................560, 561 s.26 ..............................................................................................................560, 561 s.27 ..............................................................................................................560, 562 s.28 ..............................................................................................................560, 562 ss.29–31 ..............................................................................................................562 s.35 ......................................................................................................................562 s.36 ......................................................................................................................562 s.38 ......................................................................................................................562 ss.40–43 ..............................................................................................................563 s.41 ......................................................................................................................563 s.42 ......................................................................................................................563 s.43 ......................................................................................................................563 ss.44–49 ..............................................................................................................564 s.52 ......................................................................................................564, 565, 575 s.53 ......................................................................................................................565 s.57 ......................................................................................................................565 s.58 ......................................................................................................................565 s.59 ......................................................................................................................565 s.60 ......................................................................................................................565 s.61 ......................................................................................................................565 s.63 ..............................................................................................................565, 566 s.64 ..............................................................................................................565, 566 s.66 ......................................................................................................................566 s.67 ......................................................................................................................566 s.73 ......................................................................................................................566 sched. 2 ...............................................................................................................563 sched. 4 ...............................................................................................................566 Drug Trafficking (Bailiwick of Guernsey) Law 2000 (Commencement) Ordinance 2002..............................................................................................566 Drug Trafficking (Bailiwick of Guernsey) Law (Designated Countries and Territories) Ordinance 2000..........................................................................562 Drug Trafficking (Bailiwick of Guernsey) Law (Enforcement of External Forfeiture Orders) Ordinance 2000. .............................................................564 Drug Trafficking (Designated Countries and Territories) (Amendment) Ordinance 2002..............................................................................................562 Drug Trafficking Offences (Bailiwick of Guernsey) Law 1988 ............557, 566, 573
Tables of Laws, Statutes and other Legislative Materials li s.1 ........................................................................................................................567 Duty on Long Leases (Alderney) Law 1994..........................................................658 Dwellings Profits Tax (Amendment) (Guernsey) Law 1983................................648 Dwellings Profits Tax (Amendment) (Guernsey) Law 1989................................648 Dwellings Profits Tax (Guernsey) Law 1975. ................................................648, 658 s.2 ........................................................................................................................649 s.3A. ....................................................................................................................649 s.4 ........................................................................................................................649 ss.5–8. .................................................................................................................649 s.9 ................................................................................................................649, 650 s.13 ......................................................................................................................650 s.17 ......................................................................................................................650 Ecclesiastical Court (Jurisdiction) (Bailiwick of Guernsey) Law 1994 . ...............43 Education (Guernsey) Law 1970...........................................................................515 Electronic Transactions (Alderney) Law 2001......................................................615 Electronic Transactions (Guernsey) Law 2000 .....................................................615 ss.1–9. .................................................................................................................615 s.1 ........................................................................................................................615 s.8 ................................................................................................................615, 616 s.9 ........................................................................................................................616 Electronic Transactions (Guernsey) Law 2000 (Commencement) Ordinance 2001..............................................................................................615 Electronic Transactions (Sark) Law 2001 .............................................................615 Employer’s Liability (Compulsory Insurance) (Guernsey) Law 1993.................373 Employers’ Liability (Defective Equipment) Act 1969 .................................371, 691 Employment Protection (Guernsey) Law 1998. ...........................................344, 406 s.1 ........................................................................................................................345 s.2 ........................................................................................................................348 s.3 ........................................................................................................................351 s.4 ................................................................................................................351, 353 s.5.................................................................................................346, 348, 353, 355 s.6.................................................................................................352, 354, 355, 358 s.8 ........................................................................................................................355 s.9 ................................................................................................................352, 355 s.10 ......................................................................................................................355 s.11 ..............................................................................................................352, 355 s.12 ..............................................................................................................353, 355 s.15 ......................................................................................................345, 351, 352 ss. 15A–L.............................................................................................................362 s.17...............................................................................346, 348, 349, 351, 360, 406 s.18 ......................................................................................................................349 s.19 ......................................................................................................................359 s.20 ..............................................................................................................359, 360 s.21 ..............................................................................................................359, 360
lii Tables of Laws, Statutes and other Legislative Materials s.22 ......................................................................................................................351 s.23 ..............................................................................................................351, 361 s.24 ..............................................................................................................350, 351 s.27 ......................................................................................................................350 s.29 ......................................................................................................225, 350, 351 s.31 ......................................................................................................................358 s.34.......................................................................................347, 351, 354, 360, 361 sched ...................................................................................................349, 350, 361 Employment Protection (Sunday Shop Working) (Guernsey) Law 2001. .......................................................................................................362 s.2 ........................................................................................................................362 Employment Rights Act 1996. ...............................................................339, 343, 344 Employment Rights (Increase of Limits) Order 2002..........................................359 European Communities (Bailiwick of Guernsey) Law 1973 .................................39 European Communities (Implementation) (Bailiwick of Guernsey) Law 1994 ..........................................................................................................39 European Convention on Extradition 1978 .........................................................577 Second Additional Protocol...................................................................................578 European Convention on Extradition (Fiscal Offences) (Amendment) Order 2002. ............................................................................................571, 577 European Convention on Extradition (Fiscal Offences) Order 2001 ................577 Evidence Act 1843 ..................................................................................................590 Evidence (European Court) Order 1976.......................................................458, 617 Evidence (Proceedings in other Jurisdictions) Act 1975 ..............................458, 618 Evidence (Proceedings in other Jurisdictions) (Guernsey) Order 1980......458, 617 Execution of Wills (Bailiwick of Guernsey) Law 1994.........................................178 Explosives (Guernsey) Law 1905...........................................................................373 Extradition Act 1873. .............................................................................................618 s.5 ........................................................................................................................618 Extradition Law 1848.............................................................................................519 False Documents and Domicile etc. (Bailiwick of Guernsey) Law 1998.............572 s.6 ........................................................................................................................572 s.13 ......................................................................................................................572 Fatal Accidents Act 1976 ..........................................................................................48 s.4 ........................................................................................................................408 Fatal Accidents Law 1900. ..............................................................................402, 407 Fatal Accidents (Guernsey) Law 1960. ..................................................................407 s.3 ........................................................................................................................407 s.4 ........................................................................................................................408 Feudal Dues (General Abolition of Congé) (Guernsey) Law 2002. ....................647 Feudal Dues (Guernsey) Law 1980. ......................................................................646 Financial Services Act 1986. ..................................................................................264 Financial Services and Markets Act 2000......................................................267, 582 Financial Services Commission (Bailiwick of Guernsey) Law 1987 ...................267
Tables of Laws, Statutes and other Legislative Materials liii s.1 ........................................................................................................................268 s.2 ........................................................................................................................267 s.7 ........................................................................................................................278 s.21 ......................................................................................................................268 s.21A ...................................................................................................................268 s.22 ......................................................................................................................268 sched. 1 ...............................................................................................................267 sched. 2 ...............................................................................................................269 Financial Services (Bailiwick of Guernsey) (Amendment) Law 2002.................267 Foreign Limitation Periods Act 1984 ....................................................................397 s.2 ........................................................................................................................397 Government of Alderney Law 1987.................................................35, 377, 381, 513 s.1 ..........................................................................................................................35 s.2 ..........................................................................................................................35 s.4 ..........................................................................................................................35 s.8 ..........................................................................................................35, 381, 513 s.9 ..........................................................................................................................36 s.12 ......................................................................................................................513 s.13 ......................................................................................................................513 s.16 ........................................................................................................................36 s.17 ................................................................................................................36, 383 s.18 ........................................................................................................................36 s.20 ................................................................................................................36, 514 s.41 ........................................................................................................................36 s.42 ........................................................................................................................36 s.43 ........................................................................................................................36 s.45 ........................................................................................................................36 s.46 ........................................................................................................................36 s.47 ........................................................................................................................36 s.49 ........................................................................................................................36 s.52 ........................................................................................................................36 s.55 ........................................................................................................................37 s.56 ........................................................................................................................37 s.57 ........................................................................................................................37 s.58 ........................................................................................................................37 Government of Alderney (Amendment) (No. 1) Law 1995. ...............................513 Guarantee Companies Ordinance 1997................................................................328 s.1 ........................................................................................................................329 s.4 ........................................................................................................................329 s.6 ........................................................................................................................329 Guardianship of Minors (Alderney) Law 1990 ....................................................131 Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters dated 18th March 1970. ........................458, 616 art. 17. .................................................................................................................458
liv Tables of Laws, Statutes and other Legislative Materials art. 23 ..................................................................................................................617 Health and Safety at Work (General) (Guernsey) Ordinance 1987 ......................................................................364, 365, 369, 691 s.1 ................................................................................................................369, 370 s.2 ................................................................................................................369, 370 s.3 ........................................................................................................................370 s.4 ........................................................................................................................370 s.5 ........................................................................................................................370 s.6 ................................................................................................................371, 372 s.9 ........................................................................................................................371 s.10 ......................................................................................................................371 s.13 ......................................................................................................................372 s.18 ......................................................................................................................371 s.19 ......................................................................................................................371 s.21 ......................................................................................................................371 s.25 ......................................................................................................................371 s.27 ......................................................................................................................372 s.28 ......................................................................................................................371 s.32 ......................................................................................................................372 s.35 ......................................................................................................................372 sched. 1 ...............................................................................................................371 sched. 2. ..............................................................................................................371 Health and Safety at Work etc. (Guernsey) Law 1979..........................................369 Health, Safety and Welfare of Employees Law 1950.............................................367 Highways Act 1980.................................................................................................691 Homicide (Guernsey) Law 1965 ...........................................................................529 Housing Act 1988...................................................................................................684 Housing (Control of Occupation and Development) (Alderney) Law 1994 s.1 ..........................................................................................................................61 Housing (Control of Occupation) (Guernsey) Law 1994 .............................................................51, 69, 284, 295, 354, 629, 631 s.2 ..........................................................................................................................53 s.3 ..........................................................................................................................53 s.4 ..........................................................................................................................53 s.5.........................................................................................................53, 54, 55, 56 s.6 ..........................................................................................................................54 s.7 ..........................................................................................................................55 s.10 ............................................................................................................51, 53, 61 s.11 ........................................................................................................................52 s.12 ........................................................................................................................52 s.13 ........................................................................................................................52 s.18 ........................................................................................................................52 s.19–28 ..................................................................................................................52 s.34 ........................................................................................................................60
Tables of Laws, Statutes and other Legislative Materials lv s.35 ........................................................................................................................60 s.54 ........................................................................................................................60 s.56 ..................................................................................................................55, 58 Housing (Control of Occupation) (Amendment) (Guernsey) Law 1998 ..........................................................................................................51 Housing (Control of Occupation) (Amendment) (Guernsey) Law 2001.......51, 60 Human Rights Act 1998.........................................................................................455 Human Rights (Bailiwick of Guernsey) Law 2000. ...........................12, 47, 79, 292, 339, 353, 512, 519, 709 s.3 ..........................................................................................................................47 s.6 ..........................................................................................................................48 s.7 ..........................................................................................................................48 s.8 ..........................................................................................................................48 Husband and Wife (Joint Accounts) (Guernsey) Law 1966. ...............................175 Husband and Wife (Joint Accounts) (Sark) Law 1975.........................................195 Immigration Act 1971............................................................................................537 Immigration (Guernsey) Order 1972. ..................................................................537 Immigration (Guernsey) (Variation) Order 1982................................................537 Income and Corporation Taxes (Amendment) (Guernsey) Law 1989 ...............216 Income Tax (Exemption of Benefits) Ordinance 1995 ........................................205 Income Tax (Exempt Bodies) (Guernsey) Ordinance 1989.................................206 sched. 3 ...............................................................................................................207 Income Tax (Guernsey) Law 1975...........................................................148, 201–18 s.3 ........................................................................................................................205 s.30 ......................................................................................................................213 s.31 ......................................................................................................................213 s.40 ......................................................................................................................205 s.42 ......................................................................................................................212 s.43 ......................................................................................................................215 s.43(A) ........................................................................................................216, 217 s.44 ......................................................................................................................218 s.45 ......................................................................................................................218 s.46 ......................................................................................................................218 s.48 ......................................................................................................................210 s.50 ......................................................................................................................211 s.51 ......................................................................................................................212 s.51(A). ...............................................................................................................212 s.52 ......................................................................................................................213 s.53 ..............................................................................................................213, 214 s.54 ......................................................................................................................215 s.65 ......................................................................................................148, 214, 215 s.66 ......................................................................................................148, 214, 215 s.76 ......................................................................................................................218 s.122 ....................................................................................................................205
lvi Tables of Laws, Statutes and other Legislative Materials s.164 & 165 .........................................................................................................210 Income Tax (International Bodies) (Guernsey) Law 1995. .................................207 Income Tax (Relief on Maintenance Payments) (Guernsey) Law 2002 ......216, 217 Income Tax (Year of Computation) (Guernsey) Law 2000 .................................202 Income Tax (Restriction of Tax Relief on Interest) (Guernsey) Law 2001 .........202 Inheritance (Provision for Family and Dependants) Act 1975............141, 169, 193 Insolvency Act 1986 ...............................................................................................227 s.426 ....................................................................................................227, 480, 616 Insolvency Act 1986 (Guernsey) Order 1989........................................................616 Insurance Business (Guernsey) Law 1986.....................................................274, 285 s.50 ......................................................................................................................292 s.52 ......................................................................................................................281 Insurance Business (Bailiwick of Guernsey) Law 2002........................................285 s.1 ........................................................................................................................286 s.2 ........................................................................................................................286 s.4 ........................................................................................................................286 s.5 ........................................................................................................................286 s.6 ........................................................................................................................286 s.7 ........................................................................................................................286 s.10 ......................................................................................................................286 s.11 ..............................................................................................................287, 328 s.12 ......................................................................................................................287 s.13 ......................................................................................................................295 s.14 ..............................................................................................................291, 295 s.16 ......................................................................................................................292 ss.18–24.......................................................................................................288, 300 ss.25–28 ..............................................................................................................288 s.29 ......................................................................................................................291 s.30 ......................................................................................................................289 s.38 ......................................................................................................................286 ss.40–48 ..............................................................................................................286 s.49 ......................................................................................................................288 s.60 ......................................................................................................................294 s.61 ..............................................................................................................294, 295 s.62 ......................................................................................................................294 s.63 ......................................................................................................285, 294, 295 s.69 ......................................................................................................................289 ss.71 & 72............................................................................................................293 s.73 ......................................................................................................................293 s.75 ......................................................................................................................293 s.76 ......................................................................................................................293 s. 87 .....................................................................................................................293 s.91 ......................................................................................................................295 s.92 ......................................................................................................................286
Tables of Laws, Statutes and other Legislative Materials lvii s.93 ......................................................................................................................289 s.96 ......................................................................................................................293 s.101 ....................................................................................................................285 s.102 ....................................................................................................................285 sched. 1 ...............................................................................................................286 sched. 2 ...............................................................................................................289 sched. 5 .................................................................................................................37 sched. 7 .......................................................................................................287, 291 Insurance Business (Financial Guarantee: Special Provisions) (Guernsey) Law 1996.....................................................................................297 s.25 ......................................................................................................................297 Insurance Managers and Insurance Intermediaries (Bailiwick of Guernsey) Law 2002 ......................................................................................285 s.1 ................................................................................................................286, 290 s.2 ................................................................................................................286, 289 s.3 ........................................................................................................................286 s.4 ........................................................................................................................286 s.7 ........................................................................................................................287 s.8 ........................................................................................................................295 s.9 ................................................................................................................291, 295 s.11 ......................................................................................................................292 ss.13–18 ..............................................................................................................287 s.15 ......................................................................................................................290 s.16 ......................................................................................................................290 s.17 ......................................................................................................................291 s.28 ......................................................................................................................288 ss.30–35.......................................................................................................288, 300 ss.36–39 ..............................................................................................................288 s.40 ......................................................................................................................294 s.41 ..............................................................................................................294, 295 s.42 ......................................................................................................................294 s.43 ......................................................................................................285, 294, 295 s.46 ......................................................................................................................289 ss.48 & 49............................................................................................................293 s.50 ......................................................................................................................293 s.52 ......................................................................................................................293 s.53 ..............................................................................................................292, 293 s.64 .................................................................................................................... 293 s.68 ......................................................................................................................295 s.69 ......................................................................................................................286 s.70 ......................................................................................................................289 s.73 ......................................................................................................................293 s.77 ......................................................................................................................285 s.78 ......................................................................................................................285
lviii Tables of Laws, Statutes and other Legislative Materials sched. 4 .......................................................................................................286, 291 Intérêts et Amerci des Rentes 1870. ......................................................................241 Intoxicating Liquor (Prohibition Orders) (Guernsey) Law 1960.................................................................................................535, 584 s.1 ........................................................................................................................535 s.6 ........................................................................................................................535 Island Development (Exemptions) Ordinance 1997........................................66, 72 Island Development (Guernsey) Law 1966.................................................55, 63, 70 s.7 ..........................................................................................................................64 s.9 ..........................................................................................................................64 s.10 ........................................................................................................................64 s.13 ........................................................................................................................64 s.14.......................................................................................................64, 65, 66, 69 s.15 ........................................................................................................................67 s.16 ........................................................................................................................67 s.17 ........................................................................................................................67 s.18 ........................................................................................................................68 s.19 ..................................................................................................................68, 69 s.21 ..................................................................................................................68, 69 s.22 ........................................................................................................................68 s.26 ........................................................................................................................68 s.27 ........................................................................................................................67 s.30 ........................................................................................................................67 s.35 ........................................................................................................................69 s.40 ..................................................................................................................64, 66 Island Development (Use Classes) Ordinance 1991.........................................63, 72 s.2 ....................................................................................................................63, 65 s.3 ..........................................................................................................................65 s.4 ..........................................................................................................................65 Jersey Double Taxation Arrangement. ..................................................................210 Judgment (Reciprocal Enforcement) (Guernsey) Law 1957................478, 479, 481 s.1 ........................................................................................................................479 s.2 ........................................................................................................................479 s.3 ........................................................................................................................479 s.6 ........................................................................................................................482 s.8 ................................................................................................................478, 482 s.9 ........................................................................................................................482 s.11 ......................................................................................................................483 Judgments (Interest) (Bailiwick of Guernsey) Law 1985.....................................468 s.1 ........................................................................................................................468 s.2 ........................................................................................................................469 Judicial Committee (Fees) Order 1996 .................................................................395 Judicial Committee (General Appellate Jurisdiction) Rules (Amendment) Order 1990 .....................................................................................................395
Tables of Laws, Statutes and other Legislative Materials lix Judicial Committee (General Appellate Jurisdiction) Rules Order 1982 ............395 r.2 ........................................................................................................................395 r.63(1) .................................................................................................................396 r.83 ......................................................................................................................396 Juvenile Court (Guernsey) Law 1989....................................................................515 s.1 ........................................................................................................................515 s.2 ........................................................................................................................516 s.3 ........................................................................................................................515 s.9 ........................................................................................................................516 Landlord and Tenant Act 1954. .............................................................................687 Late Payment of Commercial Debts (Interest) Act 1998. ............................469, 691 Latent Damage Act 1986 ................................................................................399, 691 Law Giving the Court Increased Power to Stay Execution in Actions for Eviction 1946....................................................................................686, 690 s. 2 .......................................................................................................................686 s.3 ........................................................................................................................686 s.4 ........................................................................................................................688 Law Giving the Court Increased Power to Stay Execution in Actions for Eviction 1947............................................................................................686 Law of Inheritance 1954. .......................................................................................179 s.3 ........................................................................................................180, 182, 643 s.4 ................................................................................................................180, 181 s.5 ........................................................................................................................183 Law of Inheritance (Guernsey) Law 1979 .....................................180, 181, 188, 195 Law of Property Act 1925. .....................................................................................258 s.146 ............................................................................................................258, 686 Law of Property (Miscellaneous Provisions) (Guernsey) Law 1979. ........................................................................223, 226, 251, 252, 259 s.1 ................................................................................................................226, 252 s.2 ........................................................................................................................252 s.3 ................................................................................................................226, 253 Law of Property (Miscellaneous Provisions) Act 1989 ........................................629 s.2 ........................................................................................................................629 Law on Wills of Personalty 1847. ..........................................................................177 art. 2 ....................................................................................................................177 art. 3. ...................................................................................................................177 art. 6 ....................................................................................................................177 art. 7 ....................................................................................................................177 art. 8. ...................................................................................................................177 art. 9 ....................................................................................................................177 Law on Wills of Realty 1852 ..................................................................................177 art. 1 ....................................................................................................................177 art. 2 ....................................................................................................................178 art. 3 ....................................................................................................................178
lx Tables of Laws, Statutes and other Legislative Materials art. 5 ............................................................................................................177, 178 Law Reform (Age of Majority and Guardianship of Minors) (Guernsey) Law 1978. ............................................................123, 124, 127, 131 s.1 ........................................................................................................................123 s.4 ........................................................................................................................127 s.5 ................................................................................................................123, 127 s.7 ........................................................................................................................127 s.8 ................................................................................................................124, 129 s. 9 .......................................................................................................................129 s.10 ......................................................................................................................129 s.11 ......................................................................................................................129 s.15 ......................................................................................................................129 s.20 ......................................................................................................................127 s.21 ......................................................................................................................129 s.22 ......................................................................................................................129 Law Reform (Contributory Negligence) Act 1945 ...............................................365 Law Reform (Frustrated Contracts) Act 1943. .....................................691, 704, 706 Law Reform (Miscellaneous Provisions) (Guernsey) Law 1987. ........................................................................131, 242, 428, 487, 739 s.1.................................................................................................292, 489, 495, 506 s.2 ........................................................................................................................495 s.3 ........................................................................................................................495 s.4 ........................................................................................................................495 s.5 ........................................................................................................................495 s.6 ........................................................................................................................488 s.7 ........................................................................................................................488 s.8 ........................................................................................................................131 Law Reform (Personal Injuries) Act 1948.............................................................691 Law Reform (Tort) (Guernsey) Law 1979. ....................365, 378, 400, 401, 691, 729 s.1 ................................................................................................................365, 409 s.4 ................................................................................................................401, 404 s.5 ................................................................................................................401, 402 s.6 ................................................................................................................401, 402 s.7 ........................................................................................................................409 s.8.................................................................................................402, 403, 409, 412 s.9 ................................................................................................................404, 409 s.10 ......................................................................................................................405 s.11 ......................................................................................................................404 s.18 ..............................................................................................................404, 405 Law relating to Debtors and Renunciation 1929 ..................................228, 229, 230 art. 1 ............................................................................................................230, 493 art. 2 ............................................................................................................239, 493 art. 3 ....................................................................................................................493 art. 4 ............................................................................................................230, 493
Tables of Laws, Statutes and other Legislative Materials lxi art. 6 ....................................................................................................................231 art. 7 ....................................................................................................231, 232, 234 art. 8 ....................................................................................................................231 art. 9 ....................................................................................................233, 234, 242 art. 10 ..................................................................................................................232 art. 11 ..................................................................................................231, 232, 234 art. 12 ..................................................................................................................235 art. 13 ..................................................................................................235, 236, 237 art. 14 ..................................................................................................................235 art. 15 ..........................................................................................................234, 236 art. 16 ..........................................................................................228, 231, 232, 233 art. 17 ..................................................................................................................236 art. 18 ..................................................................................................234, 236, 237 art. 19 ..................................................................................................................238 art. 20 ..................................................................................................................236 Law relating to Executors and Administrators 1930 ............................................176 art. 1 ....................................................................................................................179 Law relating to Marriages Solemnized in the Islands of Guernsey, Alderney and Sark 1919 ..................................................................................79 Legitimacy (Guernsey) Law 1966............................................................................80 Limitation Act 1980 .......................................................................................396, 401 s.10 ......................................................................................................................405 s.14 ......................................................................................................................403 s.14A................................................................................................................2, 405 s.32 ......................................................................................................................404 s.33 ......................................................................................................403, 404, 412 Limited Liability Partnerships Act 2000 ...............................................................335 s.1 ........................................................................................................................335 s.15 ......................................................................................................................335 Limited Partnerships Act 1907 ..............................................................................335 Limited Partnerships (Guernsey) Law 1995 .................................................226, 334 s.9A. ....................................................................................................................337 s.9C. ....................................................................................................................337 s.12 ......................................................................................................................335 s.33 ......................................................................................................................335 Limited Partnerships (Guernsey) (Amendment) Law 1997 ................................334 Loi ayant rapport aux Jugements Arbitraux Étrangers 1930 ...............................477 Loi étendant les Droits de la Femme Mariée quant à la Propriété Mobilière et Immobilière 1928..............................................................107, 187 Loi donnant effet à une Protocol sur l’Arbitrage 1925.........................................477 Loi no 85-677 of 5th July 1985 ..............................................................................699 Loi no 91-650 of 9th July 1991 Procédures Civiles d’Exécution..................477, 489 art. 33. .................................................................................................................495 art. 42. .................................................................................................................477
lxii Tables of Laws, Statutes and other Legislative Materials Loi par rapport à l’Assurance Obligatoire contre les Risques dits “Third-Party Risks” s’élevant de l’usage de Véhicules Automobiles 1936 ..................................................................................411, 538 s.4 ........................................................................................................................411 Loi par rapport aux Procédures en Crime 1877. ..........................................515, 594 art. 2. ...................................................................................................................594 Loi par rapport aux Tierces Parties (Droits contre Assureurs) 1936...................409 s.2 ........................................................................................................................410 s.3 ........................................................................................................................410 Loi qui limite dans les Saisies l’Exigibilité des Intérêts et des Arrérages de Rentes 1860 ...............................................................................................246 s.4 ........................................................................................................................246 Loi relative à la compensation qui pourra être accordée aux familles de personnes dont la mort aura été causée par accident 1900 .......................407 Loi relative à la Péremption d’Instance, aux Retraits et à la Prescription 1941...........................................................................................662 Loi relative à la Portion Disponible des Biens Meubles des Pères et Mères 1930 .........................................................................................181, 188 art. 5 ....................................................................................................................181 Loi relative à la Prescription Immobilière 1909............................397, 398, 633, 665 s.1 ........................................................................................................................398 Loi relative à la Probation de Delinquants 1929...................................516, 533, 534 art. 1. ...........................................................................................................532, 533 art. 2 ....................................................................................................................533 Loi relative à la Réforme de Diverses Dispositions de la Loi 1936 ......................................................................................................409 Loi relative à l’Entretien des Enfants Illégitimes 1927................................80, 89, 90 art. 1 ......................................................................................................................90 art. 2 ......................................................................................................................90 Loi relative à l’Examen des Témoins à Futur 1908...............................................612 art. 1 ....................................................................................................................612 art. 2. ...................................................................................................................612 Loi relative au Rachat de Rentes 1929...................................................................623 Loi relative au Rachat de Rentes 1947...................................................................623 Loi relative au Retrait Foncier 1857. .....................................................................662 Loi relative au Retrait Lignager, aux Appropriements, et à la Lecture de Contrats aux Plaids d’Héritage 1924 ...............................................634, 662 art. 1 ............................................................................................................662, 663 art. 2. ...................................................................................................................662 Loi relative au Retrait Lignager, aux Appropriements, et à la Lecture de Contrats aux Plaids d’Héritage (Auregny) 1949 . ..................................662 art. 1. ...................................................................................................................662 art. 2. ...................................................................................................................662 Loi relative aux Bordages 1857. .............................................................................662
Tables of Laws, Statutes and other Legislative Materials lxiii Loi relative aux Huiles ou Essence Minérales ou autres substances de la même nature 1924. ...............................................................................373 Loi relative aux Prescriptions 1889........................................................197, 378, 401 art. 1 ....................................................................................................................401 art. 3 ....................................................................................................................654 Loi relative aux Preuves 1865 .................................................456, 589, 594, 597, 599 art. 1 ....................................................................................................................590 art. 2–8................................................................................................................590 art. 3 ....................................................................................................................595 art. 8 ....................................................................................................................591 art. 11 ..................................................................................................................590 art. 13 ..................................................................................................................590 art. 14 ..........................................................................................................590, 591 art. 15 ..................................................................................................................591 art. 17 ..................................................................................................................593 art. 18 ..................................................................................................................593 art. 19 ..................................................................................................................593 art. 21 ..................................................................................................................593 art. 22 ..................................................................................................................593 art. 23 ..................................................................................................................593 art. 24 ..................................................................................................................593 art. 25 ..................................................................................................................593 art. 26 ..................................................................................................................593 art. 28 ..................................................................................................................594 art. 29 ..................................................................................................................594 art. 30 ..................................................................................................590, 592, 613 art. 31 ..................................................................................................................594 art. 32 ..................................................................................................................596 art. 35 ..........................................................................................................596, 597 art. 36 ..........................................................................................456, 598, 599, 600 art. 38 ..................................................................................................................597 art. 39 ..................................................................................................................597 art. 40 ..........................................................................................................458, 594 art. 56 ..................................................................................................................594 Loi relative aux Preuves au Criminel 1923............................................518, 524, 592 art. 1 ............................................................................................................524, 591 art. 3 ....................................................................................................................591 Loi relative aux Preuves au Criminel 1930 ...........................................................613 Loi Supplémentaire à la Loi relative aux Preuves 1901 ........................................591 art. 1 ....................................................................................................................591 art. 3 ....................................................................................................................590 Loi Supplémentaire à la Loi relative aux Preuves 1924 ........................................612 Loi Supplémentaire à la Loi des Successions 1889 ...............................................182 Loi Supplémentaire à la Loi des Successions 1893 ...............................................188
lxiv Tables of Laws, Statutes and other Legislative Materials Loi sur les Successions 1840 (as amended)...................................................174, 177 art. 2 ....................................................................................................................183 art. 10 ..................................................................................................................196 art. 11 ..................................................................................................................184 art. 12 ..........................................................................................................184, 185 art. 13 ..................................................................................................................174 art. 15 ..................................................................................................................177 art. 16 ..................................................................................................................177 Lugano Convention 1988 ......................................................................................507 Magistrate’s Court Act 1980 ..................................................................................518 s.123 ....................................................................................................................518 Magistrate’s Court (Criminal Appeals) (Guernsey) Law 1988 ............514, 538, 539 s.3 ........................................................................................................................538 s.6 ........................................................................................................................539 s.7 ........................................................................................................................539 Magistrate’s Court (Guernsey) Law 1954 ........................87, 377, 512, 514, 515, 524 s.9 ........................................................................................................................514 s.10........................................................................................513, 514, 521 523, 525 s.11 ......................................................................................................................525 ss.12–14 ..............................................................................................................683 s.12 ......................................................................................................................379 s.13 ......................................................................................................................380 s.14 ................................................................................................................87, 380 s.16 ......................................................................................................................512 s.17 ......................................................................................................................512 Magistrate’s Court and Miscellaneous Reforms (Guernsey) Law 1996.................................................................................................514, 521 Maintenance Orders (Reciprocal Enforcement) (Bailiwick of Guernsey) Law 1984 ......................................................................................108 Marriage (Amendment) Law 1951..........................................................................80 Marriage (Guernsey) Law 1987...............................................................................80 Marriages (Amendment) (Guernsey and Sark) Law 1994.....................................80 Married Women’s Property Law 1928...........................................................107, 187 Married Women’s Property (Sark) Law 1975. ......................................................195 Matrimonial Causes (Assisted Persons) Ordinance 1952. .....................................94 Matrimonial Causes Act 1973. ..............................................................................101 s.24 ......................................................................................................................101 s.25 ......................................................................................................................101 Matrimonial Causes Law 1939...........................................................89, 92, 110, 672 art. 3 ..............................................................................................................96, 106 art. 4 ......................................................................................................................94 art. 7 ......................................................................................................................94 art. 8 ......................................................................................................................95 art. 9 ......................................................................................................................95
Tables of Laws, Statutes and other Legislative Materials lxv art. 12 ....................................................................................................................96 art. 12B................................................................................................................100 art. 16 ....................................................................................................................95 art. 16A .................................................................................................................96 art. 18 ....................................................................................................................97 art. 18A .................................................................................................................97 art. 20 ....................................................................................................................96 art. 21 ....................................................................................................................93 art. 23 ....................................................................................................................98 art. 33 ....................................................................................................................99 art. 34 ....................................................................................................................99 art. 39 ..................................................................................................................105 art. 44 ....................................................................................................................97 art. 45 ..................................................................................................................100 art. 46 ..................................................................................................................100 art. 47 ..................................................................................................................100 art. 52 ..................................................................................................................102 art. 57 ..................................................................................................................102 art. 57A .................................................................................................................93 art. 57B..........................................................................................................93, 674 art. 60(D)..............................................................................................................98 art. 61 ..................................................................................................................613 art. 62 ..................................................................................................................613 Matrimonial Causes (Amendment) (Guernsey) Law 2002 ...................................93 Matrimonial Causes (Costs and Fees) Ordinance 1981.......................................105 Matrimonial Causes (Costs and Fees) Ordinance 1994.......................................105 Matrimonial Causes (Costs and Fees) Ordinance 2002.........................................94 s.2 ........................................................................................................................105 s.3 ........................................................................................................................106 s.4 ........................................................................................................................106 Matrimonial Matters (Evidence) (Guernsey) Law 1953 ......................................613 Mental Treatment Law (Guernsey) 1939. .............................................................131 art. 20. .................................................................................................................132 Mental Treatment (Amendment) (Guernsey) Law 1956 .....................................131 s.2 ........................................................................................................................132 s.3 ........................................................................................................................132 Merchant Shipping (Bailiwick of Guernsey) Law 2002 .......................................406 Migration of Companies Ordinance 1997............................................................330 s.4 ........................................................................................................................331 s.8 ........................................................................................................................331 ss.9–17 ................................................................................................................331 s.22 ......................................................................................................................331 Ministers of the Crown Act 1975 ............................................................................22 Minors’ Contracts Act 1987...................................................................................691
lxvi Tables of Laws, Statutes and other Legislative Materials Misrepresentation Act 1967...........................................................................691, 706 Misuse of Drugs (Amendment) (Bailiwick of Guernsey) Law 1988...................548 Misuse of Drugs (Amendment) (Bailiwick of Guernsey) Law 1995. ..........547, 548 Misuse of Drugs (Bailiwick of Guernsey) Law 1974............................................545 s.2.................................................................................................545, 551, 552, 563 s.3 ........................................................................................................545, 546, 548 s.4 ................................................................................................................546, 548 s.5 ................................................................................................................546, 548 s.7 ........................................................................................................................546 s.8 ........................................................................................................547, 548, 549 s.8A .....................................................................................................................547 s.17 ......................................................................................................................547 s.18 ......................................................................................................................547 s.19 ......................................................................................................................547 s.20 ......................................................................................................................547 s.22 ......................................................................................................................547 s.23 ..............................................................................................................547, 551 s.24 ......................................................................................................................548 s.26 ..............................................................................................................548, 558 s.27 ......................................................................................................................548 sched. 3 ...............................................................................................................548 Misuse of Drugs (Bailiwick of Guernsey) Ordinance 1976 .................................546 Modification à la Procedure en Plaids d’Héritage 1858.......................................241 Money Laundering (Disclosure of Information) (Guernsey) Law 1995 ............571 s.2 ........................................................................................................................571 Money Laundering (Disclosure of Information) (Sark) Law 2001.....................571 s.2 ........................................................................................................................571 Montreal Convention 1999. ..................................................................................407 Motor Vehicles (Passenger Insurance) (Guernsey) Law 1971..............................417 National Minimum Wages Act 1998 .....................................................................339 New Dwellings Profits Tax (Alderney) Law 2001 .................................................658 Nouveau Code de Procédure Civile ..................................................................1, 379 art. 71–126..........................................................................................................437 art. 212 ................................................................................................................488 art. 1211–1231-2. ...............................................................................................123 art. 1232–1263....................................................................................................123 art. 1264 ..............................................................................................................684 art. 1425 ..............................................................................................................494 Oaths and Evidence (Guernsey) Order 1966........................................................617 Oaths and Evidence (Overseas Authorities and Countries) Act 1963..........................................................................................................617 Occupiers’ Liability Act 1957. .......................................................................365, 691 Occupiers’ Liability Act 1984.................................................................................691 Offences Against the Person Act 1861...................................................................521
Tables of Laws, Statutes and other Legislative Materials lxvii Offences Against Police Officers (Bailiwick of Guernsey) (Amendment) Law 1996. ..............................................................................585 Offences Against Police Officers (Bailiwick of Guernsey) Law 1963...................585 s.1 ........................................................................................................................585 s.2 ........................................................................................................................585 Official Publication Ordinances 1936–1973. ................................................222, 231 Ordinance of 1969 .................................................................................................683 Ordinance of 1991 .................................................................................................683 Ordonnance au sujet des termes à écrire 1936 .............................................425, 481 Ordonnance des Biens Meubles et Immeubles 1852 ....................171, 619, 621, 672 art. 1 ....................................................................................................................171 art. 2 ....................................................................................................................171 art. 3 ....................................................................................................................171 art. 4 ....................................................................................................................171 art. 5 ....................................................................................................................171 art. 21 ..................................................................................................................171 art. 22 ..................................................................................................................172 Ordonnance donnant pouvoir à la Cour de Réduire les Intérêts Excessifs 1930 .................................................................................239, 377, 468 Ordonnance of 1636 ......................................................................................251, 252 Ordonnance of 1731 ..............................................................................................475 Ordonnance of 1786 ..............................................................................................683 Ordonnance of 1827 ..............................................................................................226 Ordonnance of 1849 ..............................................................................................428 Ordonnance of 1850 ..............................................................................................428 Ordonnance of 1851 ..............................................................................................428 Ordonnance of 1854 ..............................................................................................428 Ordonnances of 1860 .............................................................................420, 428, 493 Ordonnance of 1930 ..............................................................................................382 Ordonnance of 1933 ..............................................................................................493 Ordonnance of 1938 ..............................................................................................683 Ordonnance of 1969 ..............................................................................................683 Ordonnance of 1991 ..............................................................................................683 Ordonnance réglant la procédure à suivre devant la Cour Supplémentaire de Police Correctionnelle et Pour le Recouvrement de Menues Dettes 1832.....................................................................................................379 art. 1 ....................................................................................................................379 art. 2 ....................................................................................................................379 art. 3 ....................................................................................................................379 art. 4. ...................................................................................................................379 art. 5 ....................................................................................................................379 Ordonnance reglant la procédure à suivre pour l’examen des témoins etc. 1924 ...........................................................................................612 para. 1 .................................................................................................................612
lxviii Tables of Laws, Statutes and other Legislative Materials para. 2 .................................................................................................................612 para. 3 .................................................................................................................613 para. 5 .................................................................................................................612 para. 10 ...............................................................................................................613 para. 11 ...............................................................................................................613 Ordonnance relative à l’Entretien des Enfants Illégitimes 1928............................91 Ordonnance relative à la procédure en Matières Criminelles et Matières d’Enquêtes 1923..........................................................................523 art. 1 ....................................................................................................................523 art. 2 ....................................................................................................................523 art. 3 ....................................................................................................................524 Ordonnance relative à la Renonciation 1929........................................................229 para. 7 .................................................................................................................232 para. 9 .................................................................................................................232 para. 10 ...............................................................................................................232 para. 12 ...............................................................................................................232 paras. 18–26........................................................................................................232 para. 27 ...............................................................................................................232 paras. 28–31........................................................................................................232 para. 32 ...............................................................................................................234 para. 33 ...............................................................................................................231 para. 34 ...............................................................................................................235 paras. 35–37........................................................................................................237 para. 38 ...............................................................................................................238 para. 39–40 .........................................................................................................238 para. 42 .......................................................................................................231, 235 Ordonnance relative aux Biens Meubles 1888......................................................172 Ordonnance relative aux Désastres et au Partage des Biens-meubles en cas de Renonciation ou de Cession..........................................................222 Package Travel, Package Holidays and Package Tours Regulations 1992 ............706 Parole Review Committee (Guernsey) Law 1989.................................................529 Parole Review Committee Ordinance 1991..........................................................529 Partnership Act 1890..............................................................................................337 Partnership (Guernsey) Law 1995.................................................................226, 337 Poisonous Substances (Guernsey) Law 1994........................................................373 Police and Criminal Evidence Act 1984 ................................................................585 s.78 ..............................................................................................................586, 610 s.80 ......................................................................................................................590 Police Powers and Criminal Evidence (Bailiwick of Guernsey) Law 2002..........585 Powers of Attorney and Affidavits (Bailiwick of Guernsey) Law 1995........134, 443 s.1 ........................................................................................................................134 Preferred Debts (Guernsey) Law 1983..................................................................223 s.1.................................................................................................224, 225, 226, 351 s.4 ........................................................................................................................223
Tables of Laws, Statutes and other Legislative Materials lxix Prescription (Amendment) (Guernsey) Law 1997.......................................197, 406 Prison Administration (Guernsey) Law 1949.......................................................528 Prison Administration (Guernsey) Ordinance 1998....................................529, 530 s.22 ......................................................................................................................528 s.64 ......................................................................................................................529 Private International Law (Miscellaneous Provisions) Act 1995.........................507 Proceedings Against Corporations (Guernsey) Law 1951 ...................................519 Proceeds of Crime Act 2002. .................................................................................572 Protected Cell Companies (Amendment) Ordinance 1998.................................327 Protected Cell Companies Ordinance 1997..................................................327, 328 s.11 ......................................................................................................................328 Protection of Children (Bailiwick of Guernsey) Law 1985..........................114, 611 s.2 ........................................................................................................................114 s.3 ........................................................................................................................114 s.5 ........................................................................................................................114 Protection of Depositors, Companies and Prevention of Fraud (Bailiwick of Guernsey) Law 1969 ................................................................272 Protection of Investors (Bailiwick of Guernsey) Law 1987..........................269, 273 s.1 ........................................................................................................................269 s.7 ................................................................................................................269, 271 s.10 ......................................................................................................................270 s.27 ......................................................................................................................271 s.29 ......................................................................................................................269 s.32 ......................................................................................................................271 s.33 ..............................................................................................................271, 505 s.34 ......................................................................................................................271 s.35 ......................................................................................................................271 s.36 ......................................................................................................................273 s.38 ......................................................................................................................271 sched. 2 ...............................................................................................................269 Protection of Investors (Bailiwick of Guernsey) (Amendment) Law 2002.................................................................................................269, 581 Protection of Military Remains Act 1986 (Guernsey) Order 1987 .......................................................................................................76 Protection from Eviction Act 1977........................................................................688 Protection from Harassment Act 1997 .................................................................691 Public Interest Disclosure Act 1998 ......................................................................340 Quarries (Safety) Ordinance 1954 ........................................................................367 s.28 ......................................................................................................................367 s.33 ......................................................................................................................367 s.39 ......................................................................................................................367 Rapport sur le Droit Coutumier à l’Égard de l’Usufruit établi sur les Immeubles 1854.....................................................................................621, 672 para. 1 .................................................................................................................673
lxx Tables of Laws, Statutes and other Legislative Materials para. 21 ...............................................................................................................674 paras. 23–29........................................................................................................673 Real Property (Reform) (Guernsey) Law 1987 .............................674, 677, 681, 684 s.1 ........................................................................................................................675 ss.2–17 ................................................................................................................675 s.3 ........................................................................................................................675 s.4 ........................................................................................................................675 s.5 ........................................................................................................................675 s.6 ........................................................................................................................675 s.8 ........................................................................................................................675 s.9 ........................................................................................................................675 s.10 ......................................................................................................................675 s.12 ......................................................................................................................676 s.13 ......................................................................................................................675 s.14 ......................................................................................................................675 s.16 ......................................................................................................................675 s.18 ......................................................................................................................681 s.19 ......................................................................................................................681 s.20 ......................................................................................................................681 s.21 ......................................................................................................................682 s.22 ......................................................................................................................682 s.23 ......................................................................................................................682 Real Property (Succession) (Sark) Law 1999 ........................................169, 190, 674 s.1 ........................................................................................................................191 s.2 & 3 .................................................................................................................191 s.4 ........................................................................................................................191 ss.5–7...........................................................................................................191, 193 s.8 ................................................................................................................191, 193 s.9 ........................................................................................................................192 s.10 ......................................................................................................................192 s.11 ..............................................................................................................192, 674 s.12 ..............................................................................................................192, 674 s.13 ......................................................................................................................178 s.15 ......................................................................................................................193 ss. 16 & 17 ...................................................................................................193, 384 s.18 ......................................................................................................................194 sched ...................................................................................................................193 Reform (Amendment) (Guernsey) Law 1972 ........................................................29 Reform (Enactment of Ordinances) (Sark) Law 2000 ...........................................39 Reform (Guernsey) Law 1948 s.1 ..........................................................................................................................27 s.3 ....................................................................................................................27, 33 s.4 ..........................................................................................................................27 s.7 ..........................................................................................................................27
Tables of Laws, Statutes and other Legislative Materials lxxi s.8 ..........................................................................................................................28 s.14 ........................................................................................................................27 s.19 ........................................................................................................................28 s.20 ........................................................................................................................28 s.22 ........................................................................................................................28 ss.25–49 ................................................................................................................28 ss.50–62 ................................................................................................................28 s.63 ..........................................................................................................12, 28, 386 s.64...........................................................................................12, 28, 378, 386, 614 ss.65–67 ................................................................................................................29 s.66 ........................................................................................................................31 s.70 ........................................................................................................................29 sched. 1 .................................................................................................................29 Reform (Sark) Law 1951 ........................................................................377, 382, 512 s.21 ......................................................................................................................512 s.23 ..............................................................................................................382, 512 Regulation of Fiduciaries, Administration Businesses and Company Directors, etc. (Bailiwick of Guernsey) Law 2000 (Commencement) Ordinance 2001..............................................................................................274 Regulation of Fiduciaries, Administration Businesses and Company Directors, etc. (Bailiwick of Guernsey) Law 2000. ...............165, 268, 274, 285 s.1 ................................................................................................................275, 277 s.2 ................................................................................................................275, 277 s.3 ................................................................................................................276, 277 s.5 ........................................................................................................................277 s.6 ........................................................................................................................278 s.7 ........................................................................................................................278 s.8 ........................................................................................................278, 279, 281 s.9 ................................................................................................................278, 282 s.10 ......................................................................................................................280 s.12 ......................................................................................................................282 s.14 ..............................................................................................................279, 281 s.15 ..............................................................................................................279, 281 s.17 ......................................................................................................................281 s.18 ......................................................................................................................280 s.19 ..............................................................................................................279, 281 s.20 ......................................................................................................................282 s.21 ......................................................................................................................282 s.22 ......................................................................................................................282 s.23 ..............................................................................................................282, 283 s.24 ......................................................................................................................282 s.26 ......................................................................................................................282 s.32 ......................................................................................................................283 s.33 ..............................................................................................................283, 505
lxxii Tables of Laws, Statutes and other Legislative Materials s.34 ......................................................................................................................283 s.35 ..............................................................................................................278, 283 s.46 ......................................................................................................................282 s.48 ......................................................................................................................283 s.49 ......................................................................................................................284 s.51 ......................................................................................................................284 s.57 ......................................................................................................................284 sched. 1 ...............................................................................................................278 Regulation of Investigatory Powers Act 2000 .......................................................584 Rehabilitation of Offenders (Bailiwick of Guernsey) Law 2002.................................................................................................534, 588 s.13 ......................................................................................................................534 sched ...........................................................................................................534, 588 Renonciation et Cession 1825 ...............................................................................241 Rent Act 1977 .................................................................................................684, 689 Rent Control (Amendment) (Guernsey) Law 1993 .............................................689 Rent Control (Guernsey) Law 1976 ......................................................................689 s.3A .....................................................................................................................690 s.14 ......................................................................................................................689 Restriction of Vexatious Legal Proceedings (Guernsey) Law 1985......................441 s.4 ........................................................................................................................441 Right to Work (Limitation and Proof) (Guernsey) Law 1990.......................60, 354 s.1 ..........................................................................................................................60 s.4 ..........................................................................................................................61 Road Traffic (Compulsory Third Party Insurance) (Amendment) (Guernsey) Law 1958.....................................................................................417 Road Traffic (Compulsory Third Party Insurance) (Amendment) (Guernsey) Law 1979.....................................................................................417 Road Traffic (Compulsory Third Party Insurance) (Amendment) (Guernsey) Law 1983.....................................................................................417 Road Traffic (Compulsory Third Party Insurance) (Amendment) (Guernsey) Law 1989.....................................................................................417 Royal Court of Guernsey (Miscellaneous Reform Provisions) Law 1950.........................................................................................377, 385, 466 s.6 ................................................................................................................385, 527 s.7 ........................................................................................................................527 s.8 ........................................................................................................................528 s.12.................................................................................................12, 386, 600, 614 Safety of Employees (Electricity) Ordinance 1956...............................................368 s.2 ........................................................................................................................368 s.3 ........................................................................................................................368 Safety of Employees (First-Aid and Welfare) Ordinance 1954............................368 Safety of Employees (Growing Properties) Ordinance 1954 ...............................368 Safety of Employees (Ionising Radiations) (Guernsey) Ordinance 1967 ...........369
Tables of Laws, Statutes and other Legislative Materials lxxiii Safety of Employees (Miscellaneous Provisions) Ordinance 1952......................367 s.4 ........................................................................................................................367 s.23 ......................................................................................................................367 s.27 ......................................................................................................................367 s.72 ......................................................................................................................367 s.77 ......................................................................................................................367 Safety of Employees (Woodworking Machinery) Ordinance 1959.....................369 Safety of Pits Ordinance 1973 ...............................................................................369 Saisie (Registration of Rentes after Closing of Register) (Repeal) Ordonnance 1957 ...........................................................................241 Sale of Goods Act 1979 ..................................................................................691, 705 Security Interests (Guernsey) Law 1993 ................................223, 226, 251, 254, 562 s.1 ................................................................................................................254, 255 s.2 ................................................................................................................255, 259 s.3 ........................................................................................................................255 s.4 ........................................................................................................................256 s.5 ................................................................................................................223, 256 s.6 ........................................................................................................223, 257, 258 s.7 ................................................................................................................256, 258 s.10 ......................................................................................................................258 s.11 ......................................................................................................................255 s.14 ..............................................................................................................258, 259 Separation, Maintenance and Affiliation Proceedings (Alderney) Law 1964.....................................................................................................92, 93 s.12 ........................................................................................................................92 s.28 ........................................................................................................................92 Separation, Maintenance and Affiliation Proceedings (Amendment) (Alderney) Law 1964 .......................................................................................92 Share Transfers (Alderney) Law 1994 ...................................................................658 States of Guernsey (Representation of Alderney) Law 1949 .................................35 Statute of Frauds 1677 ...........................................................................................597 Stay of Evictions (Amendment) Law 1954 ...........................................243, 688, 689 Successions (Personal Estates of Married Persons) (Sark) Law 1975..................195 Summary Offences (Bailiwick of Guernsey) Law 1982 .......................................583 s.1 ................................................................................................................583, 584 s.2 ................................................................................................................584, 585 s.3 ........................................................................................................................584 s.4 ........................................................................................................................584 s.5 ........................................................................................................................584 s.6 ........................................................................................................................584 Summer Time (Guernsey) Ordinance 2001 ...........................................................40 Supply of Goods and Services Act 1982........................................................106, 691 Supply of Goods (Implied Terms) Act 1973.........................................................691 Terrorism and Crime (Bailiwick of Guernsey) Law 2002 ....................................578
lxxiv Tables of Laws, Statutes and other Legislative Materials s.12 ......................................................................................................................578 s.15 ......................................................................................................................578 Terrorism (United Nations Measures) (Channel Islands) Order 2001 .....................................................................................................578 Theft Act 1978 ........................................................................................................578 Theft (Bailiwick of Guernsey) (Amendment) Law 1999 .............................579, 582 Theft (Bailiwick of Guernsey) Law 1983.......................................536, 578, 580, 581 s.1 ................................................................................................................578, 579 s.4 ........................................................................................................................579 s.7 ........................................................................................................................579 s.8 ........................................................................................................................579 s.9 ........................................................................................................................579 s.12 ......................................................................................................................579 s.15 ......................................................................................................................579 s.15A ...................................................................................................................582 s.16 ......................................................................................................................579 s.17 ......................................................................................................................579 s.17(2A) ..............................................................................................................579 s.19 ......................................................................................................................580 s.20 ......................................................................................................................580 s.21 ......................................................................................................................580 s.22 ......................................................................................................................580 s.23 ......................................................................................................................580 s.24 ......................................................................................................................580 s.25 ......................................................................................................................580 s.27 ..............................................................................................................580, 581 s.27A ...................................................................................................................582 s.31 ..............................................................................................................580, 582 s.32 ......................................................................................................................580 s.33 ......................................................................................................................580 s.34 ......................................................................................................................581 s.38 ......................................................................................................................581 s.42 ......................................................................................................................580 Third Parties (Rights Against Insurers) Act 1930.................................................410 Torts (Interference with Goods) Act 1977 ............................................................691 Transfer of Functions (Miscellaneous) Order 2001 s.3 ..........................................................................................................................22 s.4 ..........................................................................................................................23 sched. 1 .................................................................................................................22 Transfer of States Undertakings (Protection of Employment) (Guernsey) Law 2001.....................................................................................346 Treaty of Rome art. 227 ..................................................................................................................40 Tribunals of Inquiry (Evidence) (Guernsey) Law 1949 .......................................616
Tables of Laws, Statutes and other Legislative Materials lxxv Trustee Act 1925 s.61 ......................................................................................................................159 Trustee Act 2000.....................................................................................................137 Trusts (Guernsey) Law 1989 (as amended).....................137–66, 199, 403, 405, 743 s.1 ................................................................................................................138, 139 s.3 ........................................................................................................................140 s.4 ........................................................................................................................140 s.6 ........................................................................................................................140 s.7 ........................................................................................................................140 s.8 ................................................................................................................140, 141 s.9 ........................................................................................................................141 s.10 ......................................................................................................................141 s.11 ......................................................................................................................141 s.11A............................................................................................................141, 142 s.12 ......................................................................................................................142 ss.13–17 ..............................................................................................................142 s.18 ......................................................................................................................144 ss.18–25 ..............................................................................................................142 s.19 ..............................................................................................................139, 140 s.21 ......................................................................................................................144 s.22...............................................................................138, 144, 145, 146, 147, 165 s.24 ......................................................................................................................146 s.25 ......................................................................................................138, 146, 147 s.26 ......................................................................................................................147 s.27 ......................................................................................................................147 s.28 ..............................................................................................................141, 147 s.29 ......................................................................................................................147 s.29A ...................................................................................................................147 s.30 ......................................................................................................................147 s.33 ..............................................................................................................146, 147 s.34...............................................................................................139, 157, 158, 270 s.35 ......................................................................................................................159 s.36 ......................................................................................................................160 s.37 ..............................................................................................................160, 161 s.38 ......................................................................................................................161 s.39 ......................................................................................................................163 s.40 ......................................................................................................................141 s.41 ......................................................................................................................148 s.42 ..............................................................................................................148, 149 s.43 ......................................................................................................................148 s.44 ......................................................................................................................148 s.45 ......................................................................................................................148 s.46 ......................................................................................................................140 s.47 ......................................................................................................................148
lxxvi Tables of Laws, Statutes and other Legislative Materials s.48 ......................................................................................................................148 s.49 ......................................................................................................................142 s.50 ..............................................................................................................157, 159 s.51 ......................................................................................................................163 s.52 ..............................................................................................................149, 153 s.53 ......................................................................................................................150 s.54 ......................................................................................................................150 s.55 ..............................................................................................................138, 150 s.57 ..............................................................................................................138, 150 s.59 ..............................................................................................................141, 150 s.62 ......................................................................................................................153 s.63...............................................................................................144, 146, 150, 153 s.64 ......................................................................................................................154 s.65 ......................................................................................................................154 s.66 ......................................................................................................................155 s.67 ......................................................................................................................155 s.68 ......................................................................................................................226 s.69 ......................................................................................................................160 s.70.......................................................................................164, 165, 270, 314, 440 s.71 ..............................................................................................................156, 405 s.72 ......................................................................................................137, 142, 165 s.73 ..............................................................................................................137, 166 s.74 ..............................................................................................................137, 165 Unfair Contract Terms Act 1977. ..................................................................691, 705 Unfair Terms in Consumer Contracts Regulations 1999. ............................691, 706 Uniform Scale of Fines (Alderney) Ordinance 2001....................................513, 533 Uniform Scale of Fines (Bailiwick of Guernsey) Law 1989 .................................512 Uniform Scale of Fines (Bailiwick of Guernsey) (Amendment) Ordinance 1998......................................................................................515, 533 United Kingdom Double Taxation Arrangement 1952 .......................................208 United Nations Convention on the Recovery Abroad of Maintenance 1956 .....108 Vienna Convention on the Law of Treaties art. 29. ...................................................................................................................22 Vienna Convention 1988 (Against Illicit Traffic in Drugs etc.)...........................562 art. 4 ....................................................................................................................563 Wages Act 1986.......................................................................................................343 Warsaw Convention. ..............................................................................................407 Wreck and Salvage (Vessels and Aircraft) (Bailiwick of Guernsey) Law 1986......76 Youth Justice and Criminal Evidence Act 1999. ...................................................590
Table of Orders of the Royal Court, Rules, Practice Directions and Regulations Adoption (Alderney) Rules 1974 ..........................................................................117 Adoption Rules 1961 (as amended) ..............................................................115, 117 r.6 ........................................................................................................................115 r.8 ........................................................................................................................117 r.9 ........................................................................................................................117 Affidavits, etc. (Execution before Advocates) Rules 1999.............................135, 444 r.9 ........................................................................................................................444 Children (Leaving Care) (England) Regulations 2001.........................................111 Civil Procedure Rules 1998.....................................375, 376, 377, 378, 448, 472, 475 Pt. 24 ...................................................................................................................444 Pt. 35 ...................................................................................................................614 Pt. 36 ...................................................................................................377, 457, 460 Codes of Practice for the Detention, Treatment and Questioning of Persons by Police Officers..............................................................................585 Collective Investment Schemes Rules 1988. .........................................................270 Collective Investment Schemes (Class A) Rules 2002 ..........................................270 Collective Investment Schemes (Class B) Rules 1990 ..........................................270 Collective Investment Schemes (Compensation of Investors) Rules 1988 .........270 Collective Investment Schemes (Designated Persons) Rules 1988......................270 Collective Investment Schemes (Qualifying Professional Investor Funds) (Class Q) Rules 1998......................................................................................270 Committal Proceedings (Written Statements) Rules 1983 ..................................524 Committal Proceedings (Written Statements) (Amendment) Rules 1986 .........524 Control of Poisonous Substances Regulations 1995 ............................................373 Conveyancing Order 1969 .....................................................................................622 Court of Alderney (Civil Appeals) Rules 1969 .....................................................381 Court of Appeal (Civil Division) (Costs and Fees) (Guernsey) Rules 1964 .......387 Court of Appeal (Civil Division) (Costs and Fees) (Amendment) Rules 1991 ......................................................................................................387 Court of Appeal (Civil Division) (Costs and Fees) (Amendment) Rules 1999 ......................................................................................................387 Court of Appeal (Civil Division) (Costs and Fees) (Guernsey) Rules 2002 .......387 Court of Appeal (Civil Division) (Guernsey) Rules 1964......................................96 r.2 ........................................................................................................................388 r.3 ..................................................................................................................96, 388 r.4 ........................................................................................................................389 r.5 ........................................................................................................................389
lxxviii Table of Orders of the Royal Court Rules r.7 ........................................................................................................................389 r.8 ........................................................................................................................389 r.10 ......................................................................................................................390 r.11 ......................................................................................................................390 r.12 ......................................................................................................................390 r.13 ......................................................................................................................390 r.15. .....................................................................................................................390 r.16.......................................................................................................387, 390, 391 r.17 ......................................................................................................................391 r.18. .....................................................................................................................391 r.20 ......................................................................................................................389 Court of Appeal (Criminal Division) (Guernsey) Rules 1964.............................543 r.2 ........................................................................................................................543 r.3 ........................................................................................................................543 r.4 ........................................................................................................................543 r.6 ........................................................................................................................543 r.7 ........................................................................................................................543 r.10 ......................................................................................................................543 r.12 ......................................................................................................................543 r.13 ......................................................................................................................543 r.17 ......................................................................................................................543 Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Regulations 2002............................................................................................575 reg. 1 ...................................................................................................................575 regs. 3–7 ..............................................................................................................576 reg. 9 ...................................................................................................................576 Curatelle Rules 1989 ..............................................................................................132 Domestic Proceedings and Magistrate’s Court Rules 1989 ...................................88 r.4 ..........................................................................................................................88 Domestic Proceedings and Magistrates Court (Amendment) Rules 1993 ........................................................................................................88 Electronic Transactions (Exemptions) (Alderney) Order 2002...........................615 Employment Protection (Appeals and References) Order 1999..................361, 378 Eviction Procedure Rules 1989..............................................................................688 Financial Services Commission (Fees) Regulations 1997. ...................................270 Health and Safety (Display Screen Equipment) Regulations 1992. ....................366 Insurance Business (Annual Return) Regulations 2002 ......................................296 Insurance Business (Approved Assets) Regulations 2002 ....................................296 Insurance Business (Asset and Liability Valuation) Regulations 2002................296 Insurance Business (Duties of General Representatives) Regulations 2002............................................................................................296 Insurance Business (Licensing) Regulations 2002................................................296 Insurance Managers and Insurance Intermediaries (Annual Return) Regulations 2002............................................................................................296
Table of Orders of the Royal Court Rules lxxix Insurance Managers and Insurance Intermediaries (Licensing) Regulations 2002............................................................................................296 Investment Exchange (Notification) Rules 1998. .................................................270 Investor Protection (Designated Countries and Territories) Regulations 1989............................................................................................270 Investor Protection (Designated Countries and Territories) (Republic of Ireland) Regulations 1992........................................................270 Judgments (Interest) Rules 1996. ..........................................................................468 Judgments (Reciprocal Enforcement) (Guernsey) Rules 1972............................480 Judgments (Reciprocal Enforcement) (Amendment) (Guernsey) Rules 1975. .....................................................................................................480 r.7 ........................................................................................................................481 r.9 ........................................................................................................................481 r.10 ......................................................................................................................482 Juvenile Court (Criminal Cases) Rules 1990 ........................................................516 Late Payment of Commercial Debt Regulations 2002 .........................................469 Licensees (Conduct of Business and Notification) (Non-Guernsey Schemes) Rules 1994 ......................................................................................................270 Licensees (Financial Resources, Notification, Conduct of Business and Compliance) Rules 1998................................................................................270 Magistrate’s Court (Civil Appeals) Rules 1955.....................................................380 r.1 ........................................................................................................................380 r.6 ........................................................................................................................380 Magistrate’s Court (Civil Appeals) Rules 1956.....................................................380 Magistrate’s Court (Criminal Appeals) Rules 1989......................................510, 538 r.1 ........................................................................................................................538 Management of Health and Safety at Work Regulations 1992 ............................366 Management of Health and Safety at Work Regulations 1999 ............................366 Manual Handling Operations Regulations 1992..................................................366 Matrimonial Causes (Amendment) Rules 2001...................................................104 Matrimonial Causes Rules 1952............................................................................102 r.1A........................................................................................................................98 r.2 ........................................................................................................................104 r.3 ........................................................................................................................102 r.3A......................................................................................................................102 r.5 ........................................................................................................................102 r.6 ........................................................................................................................102 r.7 ................................................................................................................103, 104 r.8 ........................................................................................................................102 r.24 ......................................................................................................................104 r.36 ......................................................................................................................104 r.37 ................................................................................................................97, 104 r.46 ......................................................................................................................613 r.55 ......................................................................................................................104
lxxx Table of Orders of the Royal Court Rules Personal Protective Equipment at Work Regulations 1992 .................................366 Practice Direction No. 1 of 1966 .............................................................................96 Practice Direction No. 5 of 1985 ...........................................................................378 Practice Direction No. 4 of 1988 ...........................................................................483 Practice Direction No. 5 of 1988 ...........................................................................530 Practice Direction No. 4 of 1990 ...........................................................................483 Practice Direction No. 6 of 1990 ...........................................................................447 Practice Direction dated 16th October 1992 ....................................................88, 89 Practice Direction No. 1 of 1992 ...................................................................462, 463 Practice Direction No. 3 of 1992 ...................................................................490, 505 Practice Direction No. 1 of 1993 .............................................................................86 Practice Direction No. 2 of 1993 .............................................................89, 490, 505 Practice Direction No. 1 of 1994 ...........................................................................133 Practice Direction No. 2 of 1994 .............................................................89, 492, 505 Practice Direction No. 4 of 1994 ...........................................................................133 Practice Direction No. 1 of 1995 ...........................................................................318 Practice Direction No. 4 of 1995 ...................................................................462, 463 Practice Direction No. 5 of 1995 ...........................................................442, 462, 463 Practice Direction No. 1 of 1996 ...........................................................................539 Practice Direction 1998 .........................................................................................387 Practice Direction No. 1 of 1999 ...........................................................426, 434, 483 Practice Direction No. 2 of 1999 ...................................................................434, 442 Practice Direction No. 3 of 1999 ...........................................................................426 Practice Direction No. 4 of 1999 ...........................................................................434 Practice Direction No. 6 of 1999 ...........................................................................444 Practice Direction No. 2 of 2000 ...........................................................................443 Practice Direction No. 2 of 2001 ...................................................................442, 443 Practice Direction No. 1 of 2002 ...................................................................130, 463 Practice Direction No. 2 of 2002 ...........................................................................133 Practice Direction No. 5 of 2002 ...........................................................................118 Practice Direction No. 6 of 2002 ......................................94, 427, 433, 434, 683, 688 Practice Direction No. 7 of 2002 ...................................................................434, 442 Practice Direction No. 2 of 2003 ...........................................................................525 Practice Guidance Note 19th September 2000 .....................................................528 Protected Cell Companies (Special Purpose Vehicle) Regulations 2001.............328 Protection of Depositors (Bailwick of Guernsey) Ordinance 1971 ....................206 Provision and Use of Work Equipment Regulations 1992...................................366 Provision and Use of Work Equipment Regulations 1998...................................366 Regulation of Fiduciaries (Accounts) Rules 2001 ................................................284 Regulation of Fiduciaries (Consequential Modifications) Regulations 2001 .....284 Regulation of Fiduciaries (Fees) Regulations 2001 ..............................................284 Regulation of Fiduciaries (Fiduciary Advertisements and Annual Returns) Regulations 2001............................................................................................284 Restriction of Vexatious Legal Proceedings Rules 1986 .......................................441
Table of Orders of the Royal Court Rules lxxxi Royal Court Civil Rules 1989 ...........................................12, 105, 375, 378, 386, 711 r.1–6 ....................................................................................................................422 r.4 ........................................................................................................................422 r.6 ........................................................................................................................423 r.7.........................................................................................................423, 425, 508 r.9 ........................................................................................................................426 r.10 ................................................................................................................87, 427 r.12 ......................................................................................................................427 r.15 ......................................................................................................................433 r.17 ..............................................................................................................444, 446 r.19 ......................................................................................................................445 r.20 ......................................................................................................................445 r.21 ..............................................................................................................438, 446 r.22 ......................................................................................................................447 r.23 ......................................................................................................................447 r.25 ......................................................................................................................447 r.26 ......................................................................................................................447 r.27 ......................................................................................................................438 r.28 ......................................................................................................................441 r.30 ......................................................................................................................440 r.31 ......................................................................................................................440 r.33 ......................................................................................................................439 r.34 ......................................................................................................................440 r.35 ......................................................................................................................455 r.36 ......................................................................................................................448 r.37 ......................................................................................................................434 r.38 ......................................................................................................................457 r.39 ......................................................................................................................452 r.40 ......................................................................................................................454 r.41 ..............................................................................................................453, 454 r.42 ......................................................................................................................452 r.43.......................................................................................441, 457, 458, 600, 614 r.44 ......................................................................................................................462 r.45 ......................................................................................................................460 r.46 ......................................................................................................................476 r.47 ......................................................................................................................443 r.48.......................................................................................105, 471, 472, 473, 474 r.49 ......................................................................................................................458 r.50 ......................................................................................................................450 r.54 ......................................................................................................................444 r.56 ......................................................................................................................424 Royal Court (Costs and Fees) Rules 1990.............................................................473 r.3 ........................................................................................................................473 Royal Court (Costs and Fees) Rules 2000......................105, 387, 419, 461, 471, 474
lxxxii Table of Orders of the Royal Court Rules r.2 ........................................................................................................................474 r.5 ........................................................................................................................475 r.11 ......................................................................................................................475 r.13 ......................................................................................................................476 Royal Court (Criminal Procedure) Rules 1991. ...................................................527 Royal Court (Discovery of Documents) Rules 1998 ....................................378, 420 Royal Court (Despatch of Business) Order 1982 .................................................378 Royal Court (Guardianship Proceedings) (Appeals) Rules 1979 ................129, 130 Royal Court (International Co-operation) Rules 2002........................................617 Royal Court (Non-Contentious Applications) Amendment Rules 1989............483 Royal Court (Non-Contentious Applications) Amendment Rules 1990............483 Royal Court (Non-Contentious Applications) Rules 1988..................................483 Royal Court (Non-Contentious Applications) Rules 1995..................................483 Royal Court (Security for Costs) Order 1957.......................................................430 Rules of Professional Conduct etc.................................................................419, 763 r.30 ......................................................................................................................419 r.31 ......................................................................................................................419 r.34 ......................................................................................................................419 r.49 ......................................................................................................................648 Rules of the Supreme Court...................................................375, 378, 430, 457, 475 O.6 r.8 .................................................................................................................424 O.11 r.1 ...............................................................................................................423 O.14.............................................................................................................444, 446 O.20 r.5 ...............................................................................................................454 O.18 r.19 .............................................................................................................448 O.22 r.14 .............................................................................................................460 O.24 r.7 ...............................................................................................................452 O.24 r.10 .............................................................................................................454 O.26 r.3 ...............................................................................................................457 O.62 r.4 ...............................................................................................................469 Saisie Procedure (Simplification) (Bailiwick) Order 1952. .................................241 para. 1..................................................................................................240, 241, 243 para. 2 .................................................................................................................244 para. 3 .........................................................................................................246, 248 para. 7 .................................................................................................................242 sched. 1 ...............................................................................................................246 Saisie Procedure (Simplification) (Bailiwick) (Amendment) Order 1989 .........241 Workplace (Health, Safety and Welfare) Regulations 1992 .................................366
Bailiffs of Guernsey from the Restoration1
1661 1674 1714 1728 1752 1758 1771 1800 1810 1821 1843 1845 1883 1884 1895 1902 1908 1915 1922 1929 1935 1946 1959 1973 1982 1992 1999
Amias Andros Sir Edmund Andros Jean de Sausmarez Josué Le Marchant Eleazar Le Marchant Samuel Bonamy William Le Marchant Robert Porrett Le Marchant Sir Peter de Havilland Daniel de Lisle Brock Jean Guille Sir Peter Stafford Carey John de Havilland Utermarck Sir Edgar MacCulloch Sir Thomas Godfray Carey Sir Henry A. Giffard Sir William Carey Sir Edward Chepmell Ozanne Sir Havilland Walter de Sausmarez Arthur William Bell Sir Victor Gosselin Carey Sir Ambrose J. Sherwill Sir William H. Arnold Sir John Loveridge Sir Charles Frossard Sir Graham Dorey Sir de Vic Carey
Deputy Bailiffs 2 1969 John Loveridge 1973 Ernest Shanks 1 The list in L. James Marr’s A History of the Bailiwick of Guernsey (Phillimore 1982), begins with Hugh de Trubleville in 1270. 2 The office was created in 1969.
lxxxiv Table of Orders of the Royal Court Rules Deputy Bailiffs contd. 1977 1982 1992 1999 2002
Charles Frossard Graham Dorey de Vic Carey Christopher Day Geoffrey Rowland
Introduction The whole of this book is itself an extended introduction to those subjects relevant to the day-to-day practice of Guernsey law. It is intended for the use of would-be Guernsey Advocates, non-specialist Guernsey Advocates and lawyers, lawyers from other jurisdictions and anyone with an interest in Guernsey law. Given the scope of this work it is inevitable that only an outline of the areas covered can be given. Sometimes only an outline of the outline. This work does not pretend to be the last word on any subject. What appears here is sometimes only a tentative statement of what Guernsey law may be, a first word if you like. Many areas of Guernsey law and practice defy dogmatic statement. The law is not established, tested and developed through a multiplicity of decisions day in day out as in a larger jurisdiction. Any given issue is visited infrequently by the Royal Court and even less so by the Court of Appeal. There are few Privy Council decisions originating from Guernsey. Very often there is little or no indigenous guidance to be obtained. The Guernsey lawyer must look frequently to other jurisdictions for guidance; principally Jersey and England but also common law jurisdictions such as Australia, New Zealand and Canada. The Guernsey lawyer will also look to French law in a number of areas; and ought to look more often. There remain in force whole Ordonnances1 where the Code Civil was copied directly into Guernsey law.2 The Nouveau Code de Procédure Civile is likewise another potentially helpful but under-used source. The extent of Guernsey law’s dependence upon modern French law has yet to be determined. This is particularly relevant to the question of Guernsey contract law. The similarity between much of English and French contract law goes some way to explaining the lack of jurisprudence in this area. However, the Guernsey lawyer must be familiar with at least the key concepts of French contract law, if only to be capable of identifying a potentially different and more beneficial solution when compared with English law. Jersey has itself developed a system of contract law which is heavily influenced by French jurisprudence.3 Certainly in the nineteenth century Guernsey Advocates would cite French and English legal texts as carrying
1 Ordonnances or Ordinances are the near equivalent of statutory instruments; although they may also have the status of primary legislation in certain areas of law, see below. 2 For example the Ordonnances governing first the distinction between movable and immovable property and second usufruit, ie life interests in land (most usually). 3 See for example Selby v Romeril [1996] JLR 210.
2 The Laws of Guernsey equal authority. In the twentieth century a number of French contract law ideas were reaffirmed.4 There is comparatively little primary or secondary legislation in Guernsey. This is a function both of the limited resources to draft and enact legislation as well as distaste for over-regulation.5 As a consequence there is a much greater area in which common law still operates in Guernsey by comparison with, say, a much more regulated English society. Yet again, ironically, in circumstances, where that common law is rarely defined by judgments. Frequently the common law development of a particular issue in English law will have come to an abrupt end with a statute which is rarely a simple codification of existing law. Usually the statute has been prompted by a perceived insufficiency of some kind with the common law. Historically there was a tendency in Guernsey to take that abandoned English common law as defining existing Guernsey common law. Fortunately this is no longer the case.6 Sometimes lacunae are left in what is ostensibly modern Guernsey statute law and remedies found in ancient Guernsey common or customary law principles. A modern day example is that of the empêchement d’agir, literally “obstacle to act”. Originally a means of interrupting prescription when absent on war service or the like this principle is undergoing a revival as a means of avoiding the perceived injustice of the lack of an equivalent to section 14A Limitation Act 1980 in Guernsey law for negligence claims generally as opposed to personal injury actions specifically.7 All of the above means that in the absence of an up-to-date statute the Guernsey Advocate may be required to have regard to what Guernsey case-law there is, ancient customary law, quite possibly eighteenth century French and eighteenth and nineteenth century Channel Island authors, the current law of a number of other jurisdictions, including Jersey, England and France, and then anticipate the solution which the Royal Court and Court of Appeal would adopt. This is set out as much by way of excuse as explanation for the errors and omissions others will doubtless find. Nevertheless it makes the rôle of the Guernsey Advocate an interesting one; researching ancient and modern texts alike, whether in English or in French, and using one’s knowledge and judgement to anticipate the current state of this distinct jurisdiction’s law.8 This book concerns the law of all three distinct jurisdictions within the Bailiwick of Guernsey, ie Guernsey itself (which extends to Herm and Jethou for 4 See The Guernsey Law of Contract—An Explanation, St John A Robilliard, Jersey Law Review February 1998. 5 Save in the context of financial services regulation. 6 Principally as a result of the leading Guernsey case of Morton v Paint [1996] 21 GLJ 61; but see also the more recent case of Thompson v Masterton (2001) 18 May a judgment of the Deputy Bailiff. 7 See the case of Holdright Insurance Company Limited v Willis Corroon Management (Guernsey) Limited (2000); a first instance decision of the Deputy Bailiff. 8 The profession of Advocate of the Royal Court of Guernsey is a fusion of the traditional roles of the English solicitor and barrister. See appendix 5 for the Oath and Articles, Rules of Conduct and Codes governing the Guernsey Advocate.
Introduction 3 these purposes), Alderney and Sark. Inevitably the focus is upon Guernsey law given the relative size of its population. The problems of defining Guernsey law become even more acute in the other jurisdictions. There are a number of citations and quotations in French; a translation is usually provided. Note also that, like the English language, French has evolved over the centuries. If some of the words seem strange it is because French language has moved on; this is most noticeable in the use of accents to replace the letter “s”. The law is stated as at 6 January 2003. G D St Peter Port 6 January 2003
1 Sources of Guernsey Law and the Force of Precedent HISTORICAL BACKGROUND
M
ODERN GUERNSEY HISTORY, its constitution and place in the world are defined by reference to her Norman antecedents. The early tenth century AD incorporation of the Islands now comprising the Bailiwick of Guernsey1 into the near-sovereign Norman state established in 911 by the Viking Rollon, first Duke of Normandy2 led indirectly to Guernsey’s political links with England via the Conquest of 1066 and the creation of what has been described as the Norman Empire.3 In 1204 John4 King of England and Duke of Normandy was dispossessed of his Norman lands by King Philippe Auguste of France; all that is, save the Channel Islands. Because of their loyalty, or else to ensure it, the Islands were granted privileges by John which have survived to this day. Those privileges were confirmed by King Henry III in 1248, by the Grand Charter of Queen Elizabeth I of 1559, by King Charles II in 1660 and from time to time ever since. These essentially Norman Islands maintained their distinct laws and customs, fortified by frequent contact with a mainland which was now incorporated fully into the Kingdom of France, but influenced also by English notions of law and
1
Principally Guernsey, Alderney, Sark, Herm, Brecqhou and Jethou. The formal title of Duke was not used until the time of Duke Richard II (996–1027). Rollon himself was said to be so large that no horse could bear him. An unreconstituted Viking raider he nevertheless founded a dynasty which changed fundamentally the course of history, most clearly in the shape of his Great-great-great grandson, William the Conqueror or “the Bastard”. Normandy was formed essentially from three successive grants of land made to Rollon and his son William Longsword after him, commencing with the Treaty of Saint-Clair-sur-Epte in 911 AD made between Rollon and Charles the Simple, King of France. The second and third grants followed in 924 and 933 respectively; Guernsey was most likely acquired in the last tranche. 3 JH Le Patourel, The Norman Empire (OUP 1973). For a general history see Marjorie Chibnall, The Normans (Blackwell 2000), see also Trevor Rowley, The Normans (Tempus Publishing 1999). An introduction to the surprisingly detailed and entertaining primary sources for Norman history is to be found in Leah Shopkow, History & Community (CUA Press); see for example The Ecclesiastical History of Orderic Vitalis, edited and translated by Marjorie Chibnall, 6 vols. (OUP 1969–80). The word Normandy itself means “land of the Northmen” (terra Normannorum) ie the Vikings; see Else Roesdahl, The Vikings (Penguin). 4 Known either as Lackland (Sans Terre) or Soft-sword. See generally Sir Maurice Powicke, The Loss of Normandy 1189–1204 2nd edn 1960 (re-printed by MUP in 1999) for an authoritative account of this period. 2
6 The Laws of Guernsey government. It is that balance of influence which has been maintained over the centuries ever since; albeit a balance which in the nineteenth, twentieth and now twenty-first centuries has leaned increasingly more towards England than France.5 This was given added impetus after the Second World War during which time a substantial proportion of Guernsey’s population, particularly children, was either living in England, or else serving with British armed forces.6
CUSTOMARY LAW 7
The Norman origins of these Islands are still felt strongly in Guernsey law. The foundation of modern Guernsey law remains Norman customary law or “coutume”.8 Coutume is defined by de Ferrière in his 1779 Dictionnaire de Droit et de Pratique as follows: “Coutume est un droit non écrit, un droit municipal de quelque lieu, de quelque ville, de quelque contrée & de quelque pays, introduit par l’usage, du tacite consentement de ceux qui s’y font volontairement soumis; & cet usage, après avoir été observé pendant un temps considérable, a force & autorité de Loi. . . . La Coutume imite la Loi, elle l’interprete, & quelquefois même elle la corrige & l’abroge. Elle imite la Loi, en ce qu’il lui arrive souvent d’introduire un droit nouveau. Elle interprete la Loi, lorsqu’elle lui donne des extensions ou des modifications convenables pour la conserver autant qu’il est possible. . . . Enfin, elle abroge la Loi quelquefois par un non-usage de la Loi & par un usage contraire qui lui succede, quoiqu’elle ne soit pas rédigée par écrit.”
Which translates as follows: “Coutume is unwritten law, a municipal law of some place, town, region or country, introduced by usage, by the tacit acceptance of those who submit themselves to it voluntarily; and this usage, after having been observed for a considerable time, has the force and authority of Law.9. . . . Custom imitates Law, interprets Law and on occasion even corrects or annuls Law. Custom imitates Law, in that it often introduces new law. Custom interprets Law when it extends or modifies Law as appropriate in order to conserve the Law in so far as may be possible. . . . Finally Custom annuls Law, sometimes by non-usage 5 It was not until 1926 that English became the official language of Guernsey. Much of the legislation up to and including the 1920s was written in French. A Guernsey lawyer must still be able to read French to an advanced level. 6 17,000 people, 40% of the then population of Guernsey, were evacuated to the United Kingdom in June 1940; see generally John Utley, The Story of the Channel Islands (Faber & Faber) ch. 11. For an introductory general history of Guernsey see Peter Johnston’s A Short History of Guernsey (Guernsey Press Co.). See also Jonathan Duncan’s History of Guernsey (1841). 7 See the Privy Council case of Snell v Beadle [2001] 2 WLR 1180 for general dicta concerning Jersey customary law, much of which has equal application to Guernsey customary law; see also the section on the rule of precedent in Guernsey law below. 8 Pronounced “cootoome”, literally “custom”. 9 Ie distinguishing between formally made Law (whether by statute or some other instrument of governmental authority) and law originating in the popular custom of a place.
Sources of Guernsey Law and the force of Precedent 7 of the Law and sometimes by a contrary usage which succeeds the Law regardless of the fact that it is not reduced formally into writing.”
Just how long a usage must have been observed before acquiring the status of custom is necessarily uncertain; de Ferrière refers to a “considerable” time. In the context of Anglo-Saxon customary law, Plucknett noted the following: “. . . the remarkable feature of custom was its flexibility and adaptability. In modern times we hear a lot too much of the phrase ‘immemorial custom’. In so far as this phrase implies that custom is or ought to be immemorially old it is historically inaccurate. In an age when custom was an active living factor in the development of society, there was much less insistence upon actual or fictitious antiquity. If we want the view of a lawyer who knew from experience what custom was, we can turn to Azo10 (d.1230), whose works were held in high respect by our own Bracton.11 ‘A custom can be called long’, he says, “if it was introduced within ten or twenty years, very long if it dates from thirty years, and ancient if it dates from forty years’ ”.12
Although a feature of customary law is that it is unwritten, the coutume of Normandy was in fact collated first in the Très Ancien Coutumier13 dating from the early years of the thirteenth century, and, more importantly, in the Grand Coutumier of a few decades later. It is the Grand Coutumier which is the principal source for Norman customary law in the Islands.14 This document remains an important and living part of the modern law of the Bailiwick of Guernsey notwithstanding the fact that it is approaching 800 years old and reflects customs which evolved over the decades and centuries even before then.15 At a time when Normandy itself was embarking on a thoroughgoing revision of what was even then perceived to be a rather dated Grand Coutumier (a mere 350 years old), Guernsey defined its own laws by reference to that same document. Commissioners appointed by Elizabeth I took the work of the last and greatest commentator on the Grand Coutume, Terrien,16 and hastily went through it 10 c.1150–1230, Italian Jurist, professor of civil law at Bologna; his exposition of Roman law was deeply influential. 11 d.1268. A leading medieval English jurist and author of De legibus et consuetudinibus Angliae (“On the Laws and Customs of England”). 12 A Concise History of the Common Law 5th edn (Little, Brown & Co.) at p 307. 13 Ie “Very Old Customary”, “coutumier” being used in the sense of a publication collating established customs, a collation of established common law. A number of regions of France had their own coutumes until swept away by the Napoleonic code early in the 19th century. The coutume of Normandy influenced the Code Civil which in many respects was an evolution of the former coutumes as opposed to a fundamental break with what went before; the most influential of the codes was the Coutume de Paris. 14 The formal title of the Grand Coutumier is the Summa de Legibus Normannie in Curia Laicali. It dates from c. 1245. 15 See generally Stephanie Nicolle QC HM Solicitor General, The Origin and Development of Jersey Law, An Outline Guide Rev edn (1999). The book contains a valuable and much fuller account of general customary law and customary law principles than is possible here. A good proportion of the book is equally relevant to Guernsey law; note in particular the extracts selected from evidence given before the Civil Law Commissioners 1861. 16 The other notable commentator of the Grand Coutumier was Le Rouillé.
8 The Laws of Guernsey saying what was and was not Guernsey law and how it differed. The result was a document called L’Approbation des Lois. L’Approbation itself acquired the status of law when it became an Order in Council on 27 October 1583. The timing was unhappy given that commissioners appointed by Charles VII of France had completed the work of revising the Grand Coutume on 1 July 1583. It was on this date that the new Coustumes du Pays de Normandie, anciens ressorts et enclaves d’iceluy, or la Coutume redigée or reformée, came into force notwithstanding the fact that it was not registered until 11 December 1585. It follows that Guernsey law was fixed by reference to a law superseded in its jurisdiction of origin some 17 weeks before.17 There is a powerful argument to suggest that L’Approbation had a stultifying effect upon Guernsey law; an effect which is still felt today in those areas most heavily influenced by customary law, ie land law and inheritance. Because L’Approbation had become an Order in Council it was treated as a largely immutable statement of Guernsey law. By contrast Jersey law was freer to develop.18 Given that even L’Approbation itself was a somewhat rushed and flawed work the net result was unfortunate. Matters were partially addressed by the commentary of Thomas Le Marchant (1650–1714) Remarques et Animadversions sur L’Approbation des Lois et Coutumier de Guernesey, not published in book form until 1826. The preface to this two volume work describes Le Marchant as: “. . . un homme sage, désintéressé, et sûr de son fait; qui, néanmoins, ne concluait rien sans démonstration préalable. Nous trouvons dans son ouvrage, un catalogue raisonné, très-ample, des erreurs légales de son siècle.”19
A further comparatively short general work was written by Laurent Carey (1723–1769) Essai sur les Institutions, Lois et Coûtumes de l’Île de Guernesey, again not published until 1889. The text runs to 232 pages and deals concisely and accessibly with a great many areas of Guernsey public and private law in the mideighteenth century. It is a helpful starting point with many topics.
17 Jersey’s equivalent of L’Approbation is the much later Code of 1771. All of Jersey’s laws and ordinances were collected into a single work which was approved by way of Order in Council dated 28 March 1771 (the Order was signed by one W Blair). It is alphabetical in format, beginning with L’Ancrage and ending with Vraics. Laws not included in the code and not having previously received Royal assent and confirmation were henceforward of no force or validity. There was also imposed a requirement to renew every three years ordonnances of the States made pursuant to its inherent power (ie not parented by Orders in Council); this requirement has no equivalent in Guernsey. 18 Note in particular Les Lois et Coutumes de l’île de Jersey by Jean Poingdestre, Lieutenant Bailiff of Jersey 1668–1676, note though that the work was not published in printed form until 1928. See p 28 et seq. for a discussion of the development of Jersey laws and customs, note in particular what is said at p 30. 19 “A wise man, disinterested and sure of his subject, who nevertheless concluded nothing without prior demonstration. We find in his work an ample, reasoned catalogue of legal errors in his century.” (In the sense of debunking such.)
Sources of Guernsey Law and the force of Precedent 9 More specialist texts followed from Josué Le Marchant, Ébauche du Style de Procéder Devant la Cour Royale de l’île de Guernesey, 180420 and in particular the works of Peter Jeremie, An essay on the laws of Real Property in Guernsey, 1841 and James Gallienne, Traité de la Renonciation par Loi Outrée et de la Garantie, 1845.21 Gallienne is particularly helpful for saisie22 and Jeremie for inheritance. A Royal Commission prepared a report on Guernsey Criminal Law in 1848.23 Jeremie himself gave evidence to Commissioners appointed to inquire into the civil, municipal and ecclesiastical laws of Jersey in 1861. The minutes of his evidence at paragraph 14,057 and following are both interesting and even dramatic, having an immediacy which text-books fail to attain. They also show Jeremie to have been a very knowledgeable and impressive figure who, by that time, had been practising some 30 years. The Coutume reformée may itself be cited, but without the necessarily greater authority in Guernsey law of the earlier Grand Coutume, Terrien and L’Approbation. The more eminent commentators of the Coutume reformée are also looked to; these comprise authors such as Bathelier, Bérault, Basnage, Pesnelle, Routier and Flaust. Another valuable if slightly eccentric source is Hoüard’s four volume encyclopaedia of Norman Law and Customs. French jurists generally may be cited, for example Domat,24 author of Les lois civiles dans leur Ordre Naturel.25 In the 1866 edition of Real Property Jeremie adopted D’Aguesseau’s26 opinion that “Domat may be styled the juriconsult of judges; and whoever was thoroughly acquainted with his works, though he might not be the profoundest of jurists, would be the soundest and safest of judges”.27 In practice Pothier28 is by far the most influential French jurist through his Traité des 20 Yet again the original text dates from earlier, c.1756. Josué Le Marchant was Comptroller in 1756 and the son of Eléazar Le Marchant, Bailiff from 1752 to 1758. The word ébauche can be translated approximately as “outline”. 21 The full title of the work is : Traité de la Renonciation par Loi Outrée et de la Garantie; avec Quelques Remarques sur les Changements Apportés dans ces Branches de la Législation, par l’Ordre du Conseil du 20 Décembre, 1825, ainsi que les Formules de la Procédure et les Ordonnances de la Cour Royale qui y ont Rapport. As the title suggests, the work is in French (although with English citation from time to time); contrast Peter Jeremie’s work mentioned below. Gallienne observes in the opening line of his preface that “celui qui devient auteur doit être préparé à en subir les conséquences”. 22 The law relating to the enforcement of debt against realty. 23 Nicolle observes of this commission and its Jersey equivalent that the commissioners appear at times to have been “handicapped in their task by an inability to adjust to the fact that they were in a different jurisdiction from their own” (para 18.11). 24 1625–1696. 25 There were a number of editions; for example a “new” edition in 1777 published by Knapen of Paris “reviewed, corrected and added to” by M. de Hericourt, Avocat au Parlement. 26 1668–1751; himself a great French jurist and responsible for significant ordonnances on gifts and testaments. 27 “On peut appeller Domat le jurisconsulte des magistrats; et quiconque possèderait bien son ouvrage, ne serait peut-être pas le plus profond des jurisconsultes, il serait le plus solide et le plus sûr de tous les juges.” See Jeremie’s Real Property and Taxation in Guernsey (1866) p 5. 28 1699–1772. Eminent French jurist, professor of law at the University of Orléans and magistrate. There is still a Rue Pothier in Orléans, running approximately in a line extending from the South transept of the Cathedral.
10 The Laws of Guernsey Obligations, a work which itself contributed a great deal to the development of modern French law.29 Although these other French jurists were not writing about Norman customary law there were many common strands between, say, Norman coutume and the coutume of Orléans. Pothier produced a comprehensive edition of the coutume of Orléans before going on to produce his more widely influential Treatise on Obligations. Pothier had, in addition to these two works, already produced an extraordinary work by, in effect, re-editing the Pandects, itself a flawed compilation of Roman law made on the order of the Emperor Justinian. Pothier, in particular, stands at the junction of Roman and customary law with modern French law emerging as a synthesis of the two.30 Certainly the authors of the Code Civil were heavily influenced by his work.31 The Code Civil itself and present day French text-books are also persuasive in determining issues of Guernsey law, once it has been established that Guernsey law in the area under examination is either Norman or French leaning.32 It follows that modern French law will have nothing to contribute in the context of trusts but is likely to be determinative where, say, the issue relates to the obligations of the
29 For those who cannot face the prospect of reading the Traité des Obligations in French, Sir William Evans produced a translation together with comprehensive notes and his own contribution by way of appendix in 1806. This two volume work was helpfully reprinted by The Lawbook Exchange Ltd of Union, New Jersey in 2000. Evans was himself a well respected jurist, being cited with approval by Lord Goff as recently as 1998 in the case of Kleinwort Benson Ltd v Lincoln City Council [1998] 4 All ER 513 as an author who had (correctly in his view) supported the idea that a mistake of law was not a bar to restitution. Lord Goff quotes from volume 2 of the work and Evans’ own writing; Pothier had taken the contrary view. Another helpful Lawbook Exchange publication is a reprint of a translation of Pothier’s Treatise on the Contract of Sale. There is likewise a 1994 reprint of Pothier’s Treatise on the Contract of Partnership (William S Hein & Co. Inc., New York). See generally Lawbook Exchange’s excellent website. The Treatise on the Law of Obligations was the foundation for a series of more specialist monographs written by Pothier on specific forms of obligation. 30 Thus Pothier opens his Coutume d’Orléans by defining customary law as “. . . Lois que l’usage a établies, et qui se sont conservées sans écrit par une longue tradition” (“. . . laws which usage has established and which are maintained unwritten by long usage”) and supports that definition with a citation from Justinian’s Institutes of AD 533, (Lex non scripta, diuturni mores consensu utentium comprobati. Instit., de Jure Naturali, gentium et civili, §9. The full Latin sentence translates: “Unwritten law is that which usage has established; for ancient customs, when approved by the consent of those who follow them, are like statutes”). It is interesting to note that Justinian’s Digest was cited in the Royal Court of Jersey in a judgment dated 12 March 2002 in the Esteem Settlement and the Number 52 Trust litigation. 31 Likewise English courts and jurists. In the eulogy to Pothier delivered after his death and found at the beginning of Evans’ translation it was said as follows: “Wherever the science of jurisprudence shall be known and cultivated; wherever man shall engage in contracts, and have occasion to appeal to the principles of justice for deciding the controversies that may arise from them; the name of Pothier will be known; his works will be studied and consulted.” 32 Or even potentially so; see below for the essential freedom of Guernsey courts to make their own law. The Code with updated annotations is published annually by Dalloz. All references in this text are to the 102nd edition of 2003; see www.dalloz.fr. An interesting work that stands just over the threshold between customary law and the Code is the Répertoire Universel et Raisonné de Jurisprudence by M. le Comte Merlin, Procureur-Général Impérial à la Cour de Cassation 4th edn (1813). The Code itself was first promulgated on 21 March 1804.
Sources of Guernsey Law and the force of Precedent 11 holder of a life interest in realty.33 Given that the Code Civil is, at one level, an evolution and consolidation of “French” customary law in general it is appropriate to resort to the Code as illustrating how Guernsey customary law might or should itself evolve in the absence of more compelling authority. It is also worth recalling that notwithstanding the political separation of the Islands from mainland Normandy in 1204 a strong cultural influence continued through trade, travel and, if nothing else, geographical proximity. It is clear also that Guernsey Advocates were influenced by mainland34 law and practice. Quite apart from customary law as referring to the ancient customary law of Normandy and Guernsey there is also the sense of Guernsey customary law as contempoary Guernsey common law; ie an evolving jurisprudence based upon custom and case-law, ancient or not. In this context Azo’s comments as to what makes custom still hold good. In areas such as civil procedure there may often be no authority for a practice save that it has always been done that way. Guernsey customary or common law has as great a scope as English common law; greater when one considers that there is substantially less primary and secondary legislation in most areas. Guernsey customary or common law is free to evolve in the way best suited to Guernsey society, having regard to any legal principles already established and drawing upon such sources, if any, as its tribunals deem fit in all the circumstances of any given case. Again these sources may range from ancient texts through Pothier to modern French, English or other law. Guernsey case-law is made comparatively inaccessible in practice through the failure to introduce a proper system of law reporting,35 only partly remedied by the Guernsey Law Journal. Additional sources for Guernsey law are considered in the next section.
OTHER SOURCES FOR GUERNSEY LAW
As with Guernsey society generally it has become increasingly common for Guernsey law to be influenced by English example and authority. A high proportion of statutes containing legal principles are essentially copied from English Acts, albeit with local variations. No recent legislation has been based upon French Laws or Codes. Where an English statute is largely incorporated into Guernsey law it is inevitable that English case-law concerning that same statute is looked to. The influence of English statute and case-law in the area of Guernsey’s statutory commercial law is almost total.36 By contrast Pothier and French law would continue 33 A usufruit; from the Latin “usus” and “fructus”, literally the right to the use of the fruits of land without the third right of an absolute owner of “abusus” ie the right to dispose of the land itself. The Guernsey legislation in this context was copied from the Code Civil. 34 Ie French. 35 Unlike Jersey; however, a Guernsey law website is in the course of construction. 36 The Code de Commerce would be of very limited assistance to a Guernsey lawyer, with the possible exception of provisions concerning insolvency; likewise the Code Monétaire et Financier.
12 The Laws of Guernsey to affect the development of Guernsey’s customary or common law of contract.37 Apart from this, and in the absence of local statute Guernsey’s general common law is heavily influenced in practice by English common law, save where there has already emerged a distinct local solution usually based on Norman customary law or more recent French law. The influence of English Common Law is particularly strong in the context of tort.38 There is again no reason at all why Guernsey law should not develop more freely out of customary principles or by reference to modern French law and practice. Equally the Guernsey courts are free to look to other common law jurisdictions in the search for the best and most appropriate solution for Guernsey consistent with its needs and such legal constraints as there are. What is sometimes overlooked is the essential freedom Guernsey enjoys within the generous boundaries of what constitutes good government39 to arrive at her own solutions for any given legal issue. Obviously Guernsey’s own legislation is a fundamental source for Guernsey law. Guernsey statutes are known as Laws. A typical title would be the Drug Trafficking (Bailiwick of Guernsey) Law 2000. The name of a Guernsey Law indicates the extent of its application within the Bailiwick. The Drug Trafficking Law therefore applies to all the Islands comprising the Bailiwick. Contrast the Electronic Transactions (Guernsey) Law 2000, the Tattooing, Piercing, Acupuncture and Electrolysis (Guernsey and Alderney) Law 2000, and the Reform (Enactment of Ordinances) (Sark) Law 2000. Secondary legislation takes the form of Ordinances (in French Ordonnances); these being the broad equivalent of an English statutory instrument, although, confusingly there are also statutory instruments in Guernsey, albeit comparatively few. The Ordonnance perhaps occupies a position somewhere between a statute and a simple statutory instrument. It is sometimes more ambitious than a statutory instrument and reflects the wish to avoid, where possible, going through the more elaborate procedure of making a Law, with the attendant need for an Order of Her Majesty in Council.40 Prior to 1948 the Royal Court itself had power to legislate by way of ordonnance. The power was restricted effectively to Royal Court procedure by sections 63 and 64 of the Reform (Guernsey) Law 1948 (as amended).41 The Royal Court Civil Rules 1989 were themselves made pursuant to these powers. The limits of the powers are untested. Certainly they could be used to introduce, say, a system of interim payments on account of damages where currently none exists. 37
Jersey contract law is heavily influenced by French contract law. With the probable exception of nuisance, where French and customary law would be relevant. By way of contrast the English law of passing off was adopted almost entirely in the case of Planet Hollywood International Inc. v Mallard Country Club Hotel (1997); likewise English law concerning conspiracy in the case of Vardinoyannis v Ansol Limited et autres (2001) 20 November. It is easy to imagine that the law relating to the still emerging economic torts would be adopted wholesale. 39 Which limits will be more closely defined by the Human Rights (Bailiwick of Guernsey) Law 2000, not yet in force, although imminent. 40 Ie an Order in Council. 41 See also s 12 of the Royal Court of Guernsey (Miscellaneous Reform Provisions) Law 1950. 38
Sources of Guernsey Law and the force of Precedent 13
THE RULE OF PRECEDENT IN GUERNSEY LAW
An understanding of the rule of precedent is fundamental to the understanding of Guernsey law. The clearest recent statement of these rules is to be found in what can fairly be regarded as Guernsey law’s leading case, Morton v Paint, reported fully at [1996] 21 GLJ 61. This judgment of the Guernsey Court of Appeal42 is essential reading for an understanding of Guernsey common law and its potential for future development. The plaintiff had suffered terrible injuries when she fell through a window on the common staircase of rented premises. No legislation equivalent to the English Occupiers Liability Act 1957 was ever introduced in Guernsey. The defendant sought to argue that the plaintiff failed by reason of the pre-Act English law distinction made between the duties owed to a licensee and invitee; distinctions sufficiently artificial and with such potentially unjust consequences as to lead to the reform of English law by enactment of the 1957 statute. In Morton Southwell JA stated as follows:43 “In Guernsey the hierarchy of the Courts and the doctrine of precedent requires the Royal Court and the Court of Appeal to follow the decisions of the Privy Council, when hearing appeals from the Courts of Guernsey. Privy Council decisions on appeals from other commonwealth jurisdictions are not binding, but are persuasive authority on the common law where relevant circumstances in Guernsey do not differ markedly from those in the other jurisdictions. The decisions of the House of Lords are not binding on the Guernsey Courts, but insofar as the Guernsey Courts follow English decisions on the common law, the decisions of the House of Lords carry considerable weight and it would only be in rare cases that the Guernsey Courts would not follow such a decision of the House of Lords. The decisions of the Guernsey Court of Appeal (and of its precursor the Cour des Jugements et Records) are binding on the Royal Court but not binding on the Court of Appeal itself. Smith v Harvey 14 May 1981, Guernsey Court of Appeal. As regards the decisions of the English Court of Appeal, while the Guernsey Courts always treat them with due respect, they are not bound by them and are free to review them and to depart from them if they are considered to be wrong or not appropriate in the particular circumstances of Guernsey. Compare the decision of the Privy Council on appeal from New Zealand in AttorneyGeneral for Hong Kong v Reid & others [1994] 1 AC 324 Per Lord Templeman at pages 338 to 339.” The Coutume and the common law of Guernsey has always developed by judicial decisions, supplemented by statutes passed by the States44 of Guernsey and approved by the Privy Council. There are fundamental parts of Guernsey common law that have been
42
Comprising Blom-Cooper, Southwell and Sumption JJA At 55E. The Guernsey parliament, after the French word état. Note that an accent in French often indicates where an “s” will be found in the English equivalent—hence écureuil (squirrel), écuyer (squire or rather gentleman), île (isle), forêt (forest), and so on, although the rule is by no means absolute. 43 44
14 The Laws of Guernsey recognised as not being capable of alteration by judicial decision. In Singleton v Le Noury (5 June 1990) 9 GLJ 48, the Court of Appeal of Guernsey considered questions relating to alleged rights of way arising from a Clameur de Haro raised by the Le Noury respondents. In their Judgment, the Court of Appeal said this: ‘The Court is of the opinion that under Guernsey Law a servitude cannot be acquired by prescription. The Court accepts that the Coûtume does develop over the centuries. The maxim ‘coûtume fait loi et la meilleure loi est la coûtume du pays’ refers to such development. That such development cannot change the fundamental and substantive common law and the principle of ‘nul servitude sans titre’ and ‘Droit de servitudes de vues, égouts de maisons, et autres choses semblable par la Coûtume generale de Normandie ne peut être acquise par possession ou jouissance, fut-elle de cents ans, sans titre’ as set out in the writings of Laurent Carey, Basnage and Berault are part of our coûtume or fundamental common law and cannot be altered by judicial decision.’ That case concerned the property law of Guernsey. Long-standing and fundamental principles of property law could not be overturned by judicial decision today. That would not prevent judicial development of the Guernsey Law of tort which has long been founded to a large extent on English Judicial decisions on the common law, and has followed English developments by such judicial decisions—see for example the Guernsey Court of Appeal judgment in International Technology Operations Limited v Silver Falcon Enterprises Limited (1994) in which strong reliance was placed on the developments by the English courts in the field of economic torts.”
This statement summarises concisely the large boundaries inhabited by Guernsey common law and its influences. The only controversial element is the extent to which Southwell JA credits the strength of influence of English common law. What may happen in day to day practice where English solutions appear reasonable and there is broad consensus between lawyers is not determinative where there is dispute as to the legal principles to be applied. There is no reason why Guernsey as an independent jurisdiction should ever adopt flawed or otherwise unsatisfactory English common law. The House of Lords case of Delaware Mansions Ltd v Westminster City Council [2001] 4 All ER 737 illustrates well the various issues involved. This important English authority concerning nuisance and its relationship with the tort of negligence blurs yet further the distinction between the two wrongs in English law. Lord Cooke commended “working out the fair and just content and incidents of a neighbour’s duty rather than affixing a label and inferring the extent of the duty from it”. The case confirms the tendency to move way from strict liability for nuisance embracing instead the dual standards of reasonableness and reasonable foreseeability, ie fault. This decision is bound to influence Guernsey law; but whether it should be determinative is for the Guernsey courts to decide. While Lord Cooke’s observations are, at one level, non-controversial it may be that for policy reasons a Guernsey Court would prefer to adopt or retain stricter liability between landholders. In this it might be influenced by modern French law where the criteria is exclusively that of whether the activity complained of exceeds the level of incon-
Sources of Guernsey Law and the force of Precedent 15 venience between neighbours which, in all the circumstances of the case, must be accepted as a normal incident of living in proximity to others.45 It is noteworthy also in passing that Lord Cooke himself drew upon Australasian and United States jurisprudence to bolster his conclusion, citing in particular Fleming’s The Law of Torts (9th edn. 1998). A Guernsey Court would operate in the same way. It would consider the state of its own common law and look to other influential jurisdictions where appropriate or necessary. In the Jersey case of Official Solicitor v Clore (1993) JJ 43 it was held that: “The Royal Court has consistently said that its duty in considering the law applicable to any particular case before it is first of all to see if there is any established Jersey law which should be applied. If there is not, then it casts it net in the widest possible way to see what law is the nearest applicable one which could be fairly applied”.
With the caveat that mere proximity of a foreign law solution would not be determinative of applicability, the same holds good for Guernsey law. The Royal Court looks first to Guernsey law and in default may look as widely as possible to find an appropriate and just means of resolving the dispute at hand. However, the requirement to consider Guernsey law first is paramount and was emphasised strongly by the Privy Council in the case of Vaudin v Hamon [1974] AC 569 where Lord Diplock stated: “Their Lordships were referred to a number of authorities under various systems of law relevant to prescription, its nature and its effect. These were said to be applicable, or at least relevant, by analogy to the present case. This argument appears to their Lordships to be too widely stated. If an argument based on analogy is to have any force, it must first be shown that the system of law to which appeal is made in general, and moreover the particular relevant portion of it, is similar to that which is being considered, and then that the former has been interpreted in a manner which should call for a similar interpretation in the latter. While it may be true, in a very general sense, that there is some basic similarity between Roman Law, at various periods, the various customary laws applicable in different parts of France, the Civil Napoleonic Code, the law applicable in Jersey and that which governs in Guernsey, this similarity is of a too general sense and approximate character to be of much assistance in a particular case: it covers, quite clearly, large differences in matters not only of detail but of principle. Examination of the various laws of prescription in fact shows examples, within these supposedly analogous systems, of purely extinctive prescription, prescription extinguishing the remedy but not the right, prescription defined purely in terms of acquisition, and prescription effective both to confer title and to extinguish adverse claims. . . .
45 Liability arises where there is “un trouble anormal de voisinage” regardless of fault; see the notes to Art 544 Code Civil. French law is therefore concerned alone with what it is reasonable for a neighbour to endure. Equally, note the Deputy Bailiff, now Bailiff ’s direction in the case of Dadd v Guernsey Rifle Club [1993] 15 GLJ 62 to the effect that Guernsey law relating to the tort nuisance was similar to English law.
16 The Laws of Guernsey Thus, although as this Board has pointed out in La Cloche v La Cloche (1870) LR 3 PC 125, it is proper to look at related systems of law, and commentators on them, in order to elucidate the meaning of terms, the particular legal provision under examination in any case, in this case the Guernsey law as to prescription, must in the end be interpreted in the light of its own terminology, context and history.”46
The emphasis is therefore Guernsey law within its own context, as governed by its own rules of precedent but with the essential freedom, where appropriate, to consider the laws and solutions of related jurisdictions or its own original solutions.47
46 The case concerned the law of prescription in relation to realty in Sark. It could be said with some force that Lord Diplock underestimated the closeness of aspects of Roman, customary, Jersey, Guernsey and modern French law; English law could just as well have been added to his list. This is, in effect, what the Guernsey Court of Appeal did when applying the same dictum in the case of Waterman v McCormack (2002). 47 See ch. 24 for a more detailed discussion of Guernsey tort and contract law together with their respective hierarchies of authority.
2 The Constitution of the Bailiwick1 THE CONSTITUTIONAL POSITION OF THE CHANNEL ISLANDS
T
O UNDERSTAND GUERNSEY law it is important to know something of the Constitution of the Bailiwick by way of background both to substantive law and the law-making process. The Channel Islands enjoy a unique constitutional position. Geographically and politically a part of the Duchy of Normandy the Islands remained loyal to the English Crown after the conquest of Normandy by King Philippe Auguste of France in 1204. English efforts to regain the Duchy failed ultimately but the Channel Islands were retained, more by the King of France’s default than any initial conscious effort on the part of John. By the Treaty of Paris of 1259 Henry III surrendered his claim to mainland Normandy, although the Islands themselves were never incorporated effectively into the Kingdom of England. They were, in some sense, attached to the wearer of the Crown of England2 but continued to be ruled as if the King were Duke. It was only by the Treaty of Brétigny in 1360 that the King of France abandoned his right of suzerainty.3 Initially Guernsey remained an important harbour en route to what lands the Crown retained in Gascony. The French made periodic attacks on the Channel Islands with a particularly murderous attack on Guernsey in 1294 which left 1,500 dead. The French even succeeded in taking Guernsey from time to time before being dislodged on each occasion. The English re-occupied mainland Normandy between 1417 and 1450 when again it was lost to the French. A Papal Bull of neutrality was granted to the Islands in 1480 which heralded a period of peace and stability. Even so, the last French attempt to take the Islands was as recent as 1781 when Baron de Rullecourt was defeated in St Helier by Major Francis Peirson and the Jersey Militia. 1 For an entertaining 19th century account of the constitution of Guernsey see Jonathan Duncan, The History of Guernsey (1841). 2 Most explicitly by Henry III in 1254. See Sir Maurice Powicke, The Thirteenth Century 1216–1307 pp 318–321 in the Oxford History of England series. Note that to this day the Islands are not a part of the United Kingdom. 3 See Edith Carey, The Channel Islands 2nd edn (1924) p 22. See also Professor John Le Patourel’s paper of 14 February 1959 on the Treaty. In essence England was to retain (with full sovereignty) the Channel Islands and Gascony and acquire also Aquitaine, Calais, its environs and divers other territories. Edward III undertook to renounce his claim to the Crown of France and to all other parts of the realm. In the event neither King (Edward and Jean II le Bon of France) effected the necessary renunciations of sovereignty to give final effect to the Treaty and hostilities in the Hundred Years’ War resumed in 1369.
18 The Laws of Guernsey The strategic importance of the Islands was re-affirmed throughout the centuries. The extraordinarily long breakwater in Alderney dating from the mid nineteenth century was not built for pleasure, but to accommodate the English fleet if ever the need arose to deal with the French fleet at Cherbourg. The number and extent of fortifications around the shores of each of the principal Islands is testament to the importance attached to them. Although abandoned militarily by Britain after the German invasion of France in 1940 the massive German fortification of the Islands merely added to the preceding centuries of such works.4 The Islands have always been sufficiently important to merit attention and a degree of competition to retain or attract loyalty.5 As a result a series of Royal Charters were granted to the Islands by successive English monarchs granting privileges and immunities concerning the right to maintain their own laws and customs, freedom from the jurisdiction of English Courts, autonomy in tax matters, freedom of trade with Britain and limited obligations as regards military service. The special position of the Islands owes everything to their historic importance geographically, politically and strategically. Duncan summarised matters eloquently as follows: “. . . the Kings of England became sovereigns of Guernsey, because William the Conqueror had subdued the former country, and united it to his Norman dominions under one common sceptre. But the island did not, in consequence of that arrangement, become dependent on England to the extent of being one of its provinces; it is not one of her conquests, and has never been formally by act of parliament, or even tacitly, annexed to it; it has always remained a remnant of those dominions which the Conqueror held in Normandy at the time he reduced England, and consequently it cannot be deemed part and parcel of that country, because Normandy never was an English province. It is not the efflux of time, or the limited territory of this island, that can change the nature of things. The principle must ever remain the same, and Guernsey continue to be a remnant of the ancient duchy of Normandy, distinct and detached from the kingdom of Great Britain and Ireland, though governed by the same sovereign, yet under different titles; for, in Guernsey, he is more properly duke, than king.”6
Press releases would seem an unlikely source for documents of constitutional importance; however, when responsibility for the Channel Islands was passed from 4 Although employing slave labour in often brutal conditions. Great crimes were committed by the Germans at this time, particularly in Alderney. The pre-war population had been evacuated prior to the arrival of the Germans, who proceeded in effect to turn the Island into a work camp. As to the fortifications generally see George Forty, Battleground Europe: Channel Islands published by Leo Cooper. 5 And still are, albeit for different reasons today. 6 Ibid at p 422. See also Laurent Carey, who expresses himself similarly and goes further by saying: “. . . on peut dire, en toute vérité, que l’Angleterre est le Païs conquis, les Normans (nos anciens compatriotes) avoient plus le droit d’y commander que les Anglais de commander en Normandie”; “. . . one could say, in all truth, that England is the conquered country, the Normans (our ancient compatriots) had more right to rule there than the English to rule in Normandy” see pp 2–3 of his Essai sur les Institutions.
The constitution of the Bailiwick 19 the Home Office to the Lord Chancellor’s Department in June 20017 the Department issued a press release which summed up the constitutional position of the Islands as follows: “1 The Channel Islands . . . are not part of the United Kingdom. They are dependencies of the Crown, each with its own legislative assembly. 2 Her Majesty’s Government is responsible for the Islands’ defence and international relations and the Crown is ultimately responsible for their good government. 3 In fulfilling its responsibilities towards the Islands, the Crown operates through the Privy Council, of which the Lord Chancellor will now (be) the member with particular responsibility for the Islands. 4 The Lord Chancellor’s Department will be the formal point of communication between the United Kingdom and the Island authorities. 5 In support of the constitutional relationship, the Department will: — co-ordinate the administrative procedures involved in the grant of Royal Assent to the Island legislation, including consultation with interested UK government departments; — consult with Island legal draftsmen to clarify areas of difficulty, and submits (sic) the legislation to Ministers with a recommendation on the grant of Royal Assent; — consult the Island authorities and UK Government departments on the possible extension to each Island of UK legislation, European Community (EC) legislation and other international conventions and treaties; and — provide advice and assistance to the Islands on policy issues across the whole range of Government business.”
What is set out in this document must necessarily be accepted by Her Majesty’s Government, given its source. The areas with most potential for discord are (a) the extent to which Westminster can interfere with Islands affairs in the name of good government and (b) the question of whether legislation can be extended to the Islands without the consent of Islands authorities. As to the power to interfere, it is suggested that the boundaries of what is “good government” are generous. By analogy with the notion of Wednesbury 8 unreasonableness in the context of judicial review HM Government9 would have to demonstrate that an Island authority had gone beyond the bounds of what reasonably and objectively could be called good government. It would certainly not be sufficient that the Westminster government of the day took a different view of any given issue, even a fundamentally different view. Take for example the issue of euthanasia. There is now a European Union country with legalised euthanasia.10 It 7 Without prior notification; this again prompted complaints about the high-handed treatment of the Channel Islands by Westminster, as when the Edwards enquiry into financial regulation was foisted upon the Islands (although backfiring if the intention had been to shame the Islands). 8 After the 1947 case Associated Provincial Picture House v Wednesbury Corporation. 9 However formulated, ie whether acting via the Queen in Council (eg by withholding consent to legislation passed by Island assemblies), through the exercise of the Royal prerogative or otherwise. Again the point is made that the Islands are possessions of the Crown qua successors of the Dukes of Normandy, and not possessions of the United Kingdom government. 10 The Netherlands, now joined or about to be joined by Belgium also.
20 The Laws of Guernsey would be difficult to say in such circumstances that if Guernsey chose to introduce euthanasia the bounds of good government would be exceeded. By contrast if the Island authorities proposed to legalise heroin11 Westminster might be justified in seeking to intervene, subject to what is said below. In another document originating with the Lord Chancellor’s Department the position was described as follows:12 “. . . in the circumstances of a grave breakdown or failure in the administration of justice or civil order, the residual prerogative power of the Crown could be used to intervene in the internal affairs of the Channel Islands or the Isle of Man.”
Again there is acknowledgement of how extreme the circumstances would have to be to justify intervention. As to whether the United Kingdom Parliament may legislate for the Islands directly, by constitutional convention Westminster does not extend legislation or other (international) obligation to the Channel Islands without first consulting with and obtaining the consent of the Island authorities. Given the lack of representation of the Islands at Westminster there are fundamental democratic imperatives informing this convention. The same Lord Chancellor’s Department document says this: “Acts of Parliament do not normally extend to the Islands. If they do, they may do so either by virtue of the Act itself (this may be expressed on the face of the Act or by necessary implication) or by Order in Council made with the Island’s agreement under an enabling provision contained in the Act. For an Act to extend otherwise than by an Order in Council is now very unusual. The Insular Authorities would be fully consulted in the rare event that the former approach was under consideration.”13
Earlier in the same document it is observed rightly that: “. . . the Islands are known to be particularly sensitive to the need to obtain their consent, in accordance with democratic principle, to any decision taken in the United Kingdom which has legal implications for them.”14
Sir de Vic Carey, Bailiff of Guernsey, summarised the constitutional position of the Royal Courts and the States of Guernsey and Jersey in the Jersey Court of Appeal case Hotchkiss v Channel Islands Knitwear Company Limited 2001/207 as follows: 11 As opposed, perhaps, to cannabis. It is interesting to note that medical trials of cannabis were permitted recently in Guernsey by the Island authorities. 12 Crown Dependencies: A Guide to Government Business involving the Channel Islands and the Isle of Man, August 2002 at para 15. The document may be found on the Lord Chancellor’s Department website at www.lcd.gov.uk/constitution/crown/govguide.htm. 13 Ibid para 36. 14 Ibid at para 3.
The constitution of the Bailiwick 21 “Over the centuries the Royal Courts of Guernsey and Jersey were allowed to develop as autonomous courts, adopting their own procedures for dealing with all causes that arose in their respective Islands subject always to an ultimate right of appeal to the Sovereign in Council. As its name implies the Royal Court of Jersey is a Royal Court deriving authority directly from the Crown with its principal officers appointed by the Crown and not by the States, which . . . itself evolved out of the Royal Court as even by the sixteenth century it was recognised that there was need for wider consultation and representation in respect of the legislative function than was appropriate in respect of the judicial function. The States has evolved like legislatures in other jurisdictions. All its members now are directly or indirectly elected by the people and, as the Island’s legislature, it differs little from Parliament in the United Kingdom and legislatures in other countries that follow in the Westminster tradition of parliamentary democracy. The Crown has let the States get on with its own business of legislating for and overseeing the internal administration of Jersey and has generally not sought to intervene. By convention the States are allowed to propose laws to raise taxes and regulate the governement of Jersey subject always to the approval, where appropriate, of legislation by Her Majesty in Council. However the Island is not a sovereign state and the Crown has retained responsibility for foreign relations and defence and the member of the Privy Council responsible for the affairs of the Islands (until recently the Home Secretary but now the Lord Chancellor) claims to have a right ultimately to interfere in the interests of the good government of the Island (calling in aid if necessary an Act of the Westminster Parliament).”
For Jersey one can read equally Guernsey. Note that the Bailiff does not admit expressly the right to interfere in the interests of good government, observing only that the right is claimed. In practice approval for Channel Islands legislation is not withheld, certainly not without very good reason and then only for a period of consultation which invariably results in agreement. The extent of Westminster’s powers over the Islands were the subject of articles in successive issues of the Jersey Law Review.15 Professor Jowell QC called into question the right of Parliament to legislate for the Channel Islands at all, at least not without consent: “. . . it is clear that democratic principle, rather than force, fact or convenience, does not justify the supremacy of the UK Parliament over the domestic affairs of the Islands. On the contrary, democratic principle insists that the will of the UK Parliament should not prevail over that of the Islands. This is because Island residents do not have any representation in the UK Parliament and indeed have full representation in their own legislatures. The phrase ‘no legislation without representation’ is no mere catchword; it embodies a fundamental tenet which requires, in the words of Article 3 of Protocol 1 of the European Convention on Human Rights, the right to free elections ‘that will ensure the free expression of the people in the choice of the legislature’. For the UK to thwart the expression of a freely elected Island legislature, where no alternative means of political 15 See Richard Young, “The Scope of Guernsey’s Autonomy in Law and Practice” [2001] 5 JL Review 123 and Jeffrey Jowell QC, Professor of Public Law at University College, London, “The Scope of Guernsey’s Autonomy—A Brief Rejoinder” [2001] 5 JL Review 271.
22 The Laws of Guernsey representation of Jersey residents in the UK Parliament is provided, would, in the words of the European Court of Human Rights “undermine one of the fundamental tools by which effective political democracy can be maintained.”16
Professor Jowell challenged generally the assumptions and findings of the Kilbrandon Report (The Royal Commission on the Constitution which reported in 1973) with regard to the Channel Islands and suggested that, even in the context of international agreements: “. . . the UK’s power to bind the Islands to international obligations in the areas of their exclusive constitutional competence would be limited to matters to which the Islands had agreed to be bound.”17
The Lord Chancellor’s Department position is as follows: “Article 29 of the Vienna Convention on the Law of Treaties provides that ‘unless a different intention appears from the treaty or is otherwise established, a treaty is binding upon each party in respect of its entire territory’. The long-standing practice of the United Kingdom when it ratifies a treaty is to do so on behalf of the United Kingdom of Great Britain and Northern Ireland and such (if any) of its overseas territories as wish the treaty to apply to them. Although in most cases it is not possible to include any overseas territories in the instrument of ratification, the scope of the ratification can be extended later to include them. This practice applies equally to the Crown Dependencies. The practice has been acquiesced in by other States and is regarded by the UN Secretary General as establishing a ‘different intention’ for purposes of Article 29 of the Vienna Convention.”18
The transfer of responsibility for the Channel Islands to the Lord Chancellor’s Department was effected by the Transfer of Functions (Miscellaneous) Order 2001, made pursuant to the Ministers of the Crown Act 1975. Section 3 of the statutory instrument transferred the functions listed in schedule 1,19 paragraph 4 of which reads as follows: “Any function of the Secretary of State which— (a) is conferred by Letters Patent or Royal Warrant, and (b) reflects a relationship between the administration of any of the Channel Islands . . . and the Crown or a Minister of the Crown.”
16 Professor Jowell cites the important case of Matthews v United Kingdom [1999] 28 EHRR 361 concerning the right of a Gibraltar resident to vote for the European Parliament. 17 Ibid at p 277. 18 A Guide to Government Business involving the Channel Islands and the Isle of Man at paras 33 & 34. 19 Note that in the schedule the Channel Islands are mentioned between the categories “ceremonial” and “human rights” but long before “access to information”. Make of this what you will.
The constitution of the Bailiwick 23 The Lord Chancellor is therefore the medium for the relationship between the Crown and any Minister of the Crown and the Channel Islands. The legislation was not in fact made until 31 October 2001 and only came into force on 26 November 2001. Section 4 of the Instrument contains transitional provisions as well as substituting the Lord Chancellor for the Secretary of State for the Home Department or Home Office in earlier legislation or orders.
THE BAILIFF
Early in the Channel Islands’ near autonomous history after 1204 they were divided into two separate “Bailiwicks” or political circumscriptions; one comprising Jersey, the other Guernsey and her dependant Islands.20 At the head of the Islands was a single Governor or Lord of the Isles as vassal of the King of England. During the lordship of Otto de Grandison, a Burgundian knight who had found favour with Edward I of England,21 the office of Bailiff evolved as the Lord’s or Governor’s warden at the head of each of the separate Bailiwicks of Guernsey and Jersey.22 Thus in 1279 Edward I sent a common seal to the Bailiffs of Guernsey and Jersey whereas by 1304 the single seal had been replaced by two distinct seals. Likewise a single Governor for the Islands was eventually replaced by a Governor and finally Lieutenant-Governor alone for each of Guernsey and Jersey. The Lieutenant-Governor remains the English monarch’s representative in the Bailiwicks and the official channel of communication between HM Government (itself communicating via the Lord Chancellor’s Department) and the Island authorities. The Bailiff remains the first citizen of each Bailiwick. The title and function as well as the notion of a Bailiwick itself have their Norman origins in the institution of the “Bailli” a twelfth century creation or adaptation of Henri Beauclerc, Duke of Normandy, King Henry I of England.23 Bailiffs had wide responsibilities within 20 Ie Guernsey, Alderney, Sark, Herm, Brecqhou, Jethou, Lihou and other smaller uninhabited islands. The French names for the larger Islands are Guernesey, Aurigny, and Sercq. See also Powicke’s note on the Channel Isles as a Norman Bailiwick The Loss of Normandy 2nd edn (1999 re-print MUP). 21 See James Marr’s unflattering account of his life in Guernsey People, Phillimore 1984. The book amounts to a biographical dictionary of notable figures in Guernsey’s history. Edward I had himself been Lord of the Isles during the reign of Henry III. Another source for biographies of distinguished Guernsey people is to be found in the appendix to Jonathan Duncan’s History of Guernsey (1841). 22 Otto held office during two separate periods, the first from 1275 to 1294, the second from 1298–1328. 23 The word has its origins in the medieval Latin bajulus indicating one who is charged with a mission. Henry was King of England from 1100 until his death in 1135; he was Duke of Normandy from 1106 after defeating his brother Robert, who was imprisoned in Cardiff Castle until his death in 1134. Meanwhile in 1120 there was an immense calamity which changed the course of history. Henry’s son and only legitimate male heir, William Æthling, drowned when the White Ship (La Blanche Nef) sank after striking rocks just out of Barfleur en route for England. The crew was allegedly drunk. William’s wife, Mathilda, daughter of Fulk of Anjou, died with him. The direct consequence of this disaster was civil war after Henry’s death between his daughter, the Empress Mathilda, and his nephew Stephen of Blois, subsequently King Stephen.
24 The Laws of Guernsey fixed geographical limits (the bailliage) for matters as varied as the military defence of their area, the collection of tax and other revenues and the administration of justice. It was this model which appears to have been revived as an institution within the Channel Islands and which is still very much recognisable today.24 The office of Bailiff is mentioned in verse written by Robert Wace, a Jerseyman who lived between c.1100 and 1175. He wrote a history of the Normans called “la Geste des Normanz” or “le Roman de Rou”. Wace relates the murmuring of peasants revolting in 996 against the prévôts, beadles, and bailiz (bailiffs) old and new, who left one not a single hour’s peace by reason of their never ending summonses to pleas of every kind. This complaint of an expansion of burdensome officialdom and judicial office-holding was in fact a feature of Wace’s own time: “Tant i a plaintes e quereles E custummes viez et nuveles, Ne poent une heure aveir pais: Tute iur sunt sumuns as plaiz: Plaiz de forez, plaiz de moneies, Plaiz de purprises, plaiz de veies, Plaiz de biens faire, plaiz de moutes, Plaiz de defautes, plaiz de toutes, Plaiz d’aguaiz, plaiz de graveries, Plaiz de medlees, plaiz de aies. Tant i a prevoz e bedeaus E tant bailiz, viels e nuvels, Ne poent aveir pais une hure, Tantes chose lur mettent sure Dunt ne se poent derainier . . .”25
Which can be translated very loosely as follows: “So many are the plaints and quarrels Not to mention customs old and novel That hardly is an hour free, Every day a summons to a plea; Pleas for forests, pleas for pay Pleas for possession, pleas for ways Pleas for chores, pleas for tithes Pleas for breaches, pleas any wise Pleas for futures,26 pleas in writing Pleas combined and pleas for citing. 24 See generally James Marr, A History of the Bailiwick of Guernsey, p 74 et seq. published in 1982, recently reprinted in paperback. 25 Lines 841–855 part 3 of Le Roman de Rou, as cited by Haskins in Norman Institutions, p 182. See also the recent translation into English prose by Glyn Burgess published by La Société Jersiaise in 2002. Le Roman de Rou contains, amongst other treasures, a vivid account of the Battle of Hastings and the loss at sea of Henry I’s only son and heir. 26 In the sense of executory bargains from marchés à aghais; see de Ferrière.
The constitution of the Bailiwick 25 Provosts and beadles, not half a few So many bailiffs, old and new An hour is hardly free Without something served to see One is hardly able to deny . . .”27
The Bailiff is appointed by the Crown on the recommendation of the Lord Chancellor and today fulfils a number of different rôles, although his primary rôle is judicial. He is President (Presiding Officer)28 of the States of Deliberation, the Island’s parliament, and convenes meetings of that body. He is President of the States of Election, an expanded manifestation of the former body whose sole function today is to elect Jurats, a form of lay magistrate or special juror.29 The Bailiff is President of the Royal Court, the Island’s equivalent of the English High Court, but having also a jurisdiction equivalent to Crown and County Courts. In addition he is President of the Court of Appeal. The Bailiff is also President of the States Emergency Council.30 The Bailiff is supported by a Deputy31 and Lieutenant-Bailiffs.32 When the Queen visits the Bailiwick it is the Bailiff who receives Her Majesty at each engagement and introduces others to Her. The rôle of the Bailiff was called into question in the European Court of Human Rights case of McGonnell v United Kingdom (2002) 8 February. Mr McGonnell complained of a breach of Article 6 of the Convention for the Protection of Human Rights and Fundamental Freedoms in that the then Bailiff had both presided over the States of Deliberation when adopting a development plan for the Island as well as presided over the Royal Court when the Royal Court subsequently granted enforcement applications against Mr McGonnell who had been convicted of being in breach of planning law. The matter was considered initially by the European Commission for Human Rights, shortly before that body was abolished, and referred to the Court. The decision of the Commission concluded that the Bailiff ’s impartiality was open to question as, adopting the writings of an earlier Bailiff, the Bailiff was “head of the Island’s administration”33 and President of a 27
Translated into doggerel by this author. The translation of Mr Burgess is to be preferred. A position equivalent to that of Speaker; note though that the Bailiff is entitled to speak on any matter. He has no original vote but has (at least for now) a casting vote if Members are equally divided. The vote would usually be exercised in order to preserve the status quo. It is said that the Bailiff uses his voice to ensure further investigation into matters where the States are in doubt. Note the proposed changes in this regard (including the change of title to Presiding Officer), see further below. 29 Another institution with clear Norman origins in the form of the recognitio employed by Henry I and most notably Geoffrey Plantagenêt and Henry II. 30 Last employed to introduce measures in the days following the events of 11 September 2001. 31 There is a law dealing specifically with the rôle of the Deputy Bailiff; see the Deputy Bailiff (Guernsey) Law 1969. In short the Deputy Bailiff may discharge any function or power of the office of Bailiff if authorised to do so by the Bailiff. The Deputy Bailiff is authorised by the Law to discharge any function or power of the Bailiff in either his absence or incapacity. 32 A Bailiff ’s warrant authorises him to appoint Lieutenant Bailiffs to assist him; they leave office with the Bailiff, but may be re-appointed. It is partly for this reason that juges délégués drawn from senior members of the Bar are appointed, although the Deputy Bailiff remains in office. 33 Which is not and was not so. 28
26 The Laws of Guernsey number of States Committees. The ECHR (which included as an additional judge Sir John Laws, the permanent British judge Sir Nicholas Bratza having been excluded as he had sat on the Commission) concluded that there had been a breach of Article 6 on the facts of that particular case. However, in principle there was no lack of independence and impartiality simply because the Bailiff happened to preside over the legislature as well as to discharge judicial functions. Following the decision it is noteworthy that the Bailiff withdrew from three of the four committee presidencies he held,34 remaining solely as President of the Emergency Council. Since McGonnell the Bailiff and Deputy Bailiff have been sensitive when dealing with cases involving the States of Guernsey to disclose fully their involvement in the legislative process relating to matters pertinent to the case before them. These disclosures include reference not only to matters that they may have dealt with in their capacity as presiding officer of the States of Deliberation but also as Law Officers of the Crown, namely as Procureur (equivalent to the British Attorney-General) and Comptroller (equivalent to the SolicitorGeneral).35 Whilst the Bailiff may appear to have withdrawn from any executive or political rôle the position remains that he is still part of the channel of communication between Her Majesty’s government and the insular authorities. Official correspondence is addressed to the Lieutenant Governor who passes it on to the Bailiff who then refers it to the relevant States department. The States may also look to the Bailiff for advice on the Island’s constitution. It is traditionally said that in the event of differences between HM Government and the States of Deliberation it is the historic duty of the Bailiff to represent the views of the Island’s people.36 This is by way of contrast to the Law Officers who are both legal advisers to the Crown and to the States but owe allegiance to the Crown in any dispute between the Crown and the States. It is still possible that the Bailiff would be asked to go and speak for the Island on matters of import; although there could be a perception that he was speaking for the Island’s political leadership which might throw into question his impartiality. It is suggested that the historic rôle survives, albeit a rôle which is unlikely to be called upon to be fulfilled very often.
THE STATES OF DELIBERATION
The States of Deliberation comprises the Bailiff as President, 45 peoples’ Deputies, 10 representatives drawn one each from the 10 parish councils or Douzaines,37 HM 34
The Legislation Committee, Rules of Procedure Committee and Appointments Board. Although it is by no means an immutable pattern that a Bailiff or his Deputy will have held either or both of these offices. 36 There was a certain symbolism in the Bailiffs of Guernsey and Jersey attending as observers of the referendum held by Gibraltar on 7 November 2002 on the principle of shared sovereignty with Spain. On a turnout of 87.9%, 17,900 voted No (98.97%) and 187 voted Yes (1.03%). 37 Known as Douzaine representatives. 35
The constitution of the Bailiwick 27 Procureur and HM Comptroller and two representatives of the States or Parliament of Alderney, see generally sections 1(1) and (2) of the Reform (Guernsey) Law 1948, (as amended). The 1948 Law is the single most important piece of legislation concerning the internal constitution of the Bailiwick. The Bailiff as President of the States, has no original vote. Where the States is divided equally on any issue the Bailiff has a casting vote which, by convention, is used to preserve the status ante quo.38 The Law Officers may speak but have no vote.39 The office of Conseiller 40 was abolished with effect from 1 May 2000. Each Deputy is elected for a term of four years, previously three. The Douzaine representatives serve terms of one year.41 Other noteworthy sections of the 1948 Law comprise the following:42 s3
s4
s7
The States of Deliberation is quorate with 20 members and the President (or acting President, usually the Deputy Bailiff). If the vote in favour of a resolution or amendment is thirty or less a resolution shall not be carried or lost unless at least 20 members vote and the majority is at least twice as great as the minority. If these conditions are not met the resolution or amendment must be brought as soon as possible before the States on a subsequent day. On this occasion the resolution may be carried or lost by a simple majority. The scheme is plainly designed to avert legislative ambush in a poorly attended States meeting by giving an opportunity to publicise more widely what has occurred before confirming or rejecting whatever action is proposed. Similar safeguards apply with regard to amendments to the 1948 Law itself with the imposition of an initial 7 day cooling off period where less than a ⅔ majority is obtained and a further possible 3 month delay after which time the matter may be brought back to the States and won or lost on a simple majority; This section concerns the make up of the States of Election, now only relevant for the appointment of Jurats. Note that the ten rectors of the parishes continue to have a vote in this manifestation of the States, having lost their rôle in the States of Deliberation; This gives power to the States of Deliberation to determine its own Rules of Procedure;
38 See s 1(5)(a) of the 1948 Law. It is now proposed to do away with the casting vote; instead a tied vote (other than in an election) would be declared lost; see the policy letter from the President of the States Procedure and Constitution Committee dated 25 September 2002 set out at Article 21 of Billet XXII of 2002. 39 See s 1(5)(b). 40 Conseillers sat in the States for a six year term and were elected by the States of Election as opposed to popular vote. 41 See ss 14(1)(b) and 29(1). 42 A helpful semi-official consolidation was prepared and published by the Constitution of the States Review Committee in October 1998.
28 The Laws of Guernsey s8
This section governs eligibility for the office of People’s Deputy. A candidate must be of full age (18) a British subject, free of any legal disability (as defined in Part IV, essentially unsound mind, there is no bankruptcy as such in Guernsey, its equivalent being employed surprisingly rarely), who has had his place of residence in Guernsey for 12 months prior to nomination and who has not been convicted in the last 5 years of any offence imprisonable for a period of 6 months or more; s 19 Every Member of the States of Deliberation must take an oath before the Royal Court “in the form appropriate to such office, and the oath of allegiance” before entering office; s 20 The acts of persons who are in fact unqualified for membership of the States is nevertheless deemed to have been valid; s 22 This sets out the duties of HM Greffier, HM Sheriff and HM Sergeant vis-à-vis the States. The Greffier (Clerk both to the Royal Court and the States, head of the Royal Court Administration, and keeper of the Island’s laws and many of its records) is a particularly ancient office appointed by HM Queen and held in high regard; ss 25–49 There are set out here the detailed provisions governing the election of People’s Deputies, including eligibility to vote (s 27, essentially), exclusion of prisoners under a sentence of imprisonment (s 27A), the requirement of inscription upon an electoral roll (s 28), the holding of elections every 4 years (s 29), provision for election by secret ballot (s 30 which itself adopts the provisions of the more general Loi relative au scrutin secret43 of 1899 relating to the election of Jurats and Deputies), the appointment of returning officers (s 37), supervision of the ballot by Constables44 and Douzaines (s 38), maintenance of order (s 38B), hours of polling, (s 39), the power for a candidate to demand a recount if the winning margin is less than 2%, such recount to be final (s 41), provision for voting by those physically incapable of recording their vote (s 43), limits upon expenditure by candidates and accounting for such expenditure (ss 44–46); ss 50–62 Provisions governing the election of Constables and Douzeniers. Eligibility is the same as for a Deputy with the additional requirement that the candidate reside in the Parish concerned and may only hold office for so long as he continues to do so, (s 51); note also that an Advocate is disqualified from holding the office of Constable (s 73) presumably on the grounds of possible conflict of interest when enforcing local rules and regulations; ss 63–64 Provisions already noted for the transfer to the States of Deliberation of the Royal Court’s legislative functions, save for Defence Regulations 43
Ie secret ballot. Another elected officer of local government with its origins in Norman institutions, the connétable. 44
The constitution of the Bailiwick 29 and Rules of Procedure. Again the historic enjoyment by the Royal Court of a legislative function most probably had its origins in the Norman institution of the Échiquier which also survives in Britain in the form of the Exchequer; originally the Échiquier was the Norman King-Duke’s treasury which came also to acquire a judicial and legislative function. It evolved after 1204 into the French-style Parlement45 de Rouen before abolition in 1790; ss 65–67 The States Legislation Committee and its functions, which are referred to below; s 70 Provision for the survival of “permanent” ordinances of the Royal Court already existing at the date of transfer of powers to the States of Deliberation; Sched.1 This provides for the distribution of deputies between the various electoral districts; thus St Peter Port has 12 Deputies where the Parish of the Forest has but 1. The Reform (Amendment) (Guernsey) Law 1972 makes unsurprising provision for voting by post. Section 16 is more noteworthy for the provision that a States employee who is elected to the States of Deliberation is prohibited from taking the required oaths before the Royal Court until he or she has ceased to be a States Employee. The effect of this provision combined with section 19 of the 1948 Law is to prevent a States employee from holding office as a Deputy.
PARTY POLITICS AND THE EXECUTIVE
Guernsey has no party politics. Each Deputy is an independent. There is no Prime Minister or Cabinet.46 The executive functions through committees drawn, for the most part, from the elected Deputies. The responsibilities of the committees range from such matters as health to education to highways. The most influential committee is the Advisory & Finance Committee. It is responsible for co-ordinating the day to day government of the Island and advises in respect of all proposed legislation. Its specific role apart from the general is responsibility for the Island’s finances. In December 1998 the States of Deliberation commissioned a review of the machinery of Guernsey’s government by a panel nominated for the purpose. The panel was duly constituted under the chairmanship of Advocate Peter Harwood47 and reported in November 2000. The report48 made no express recommendations, as required by the States, but rather indicated the nature of existing problems and the various options for change. When subsequently asked to make recommendations the 45 46 47 48
As opposed to the British concept of a parliament. But note the proposals for change outlined below. Of Ozannes. Review of the Machinery of Government in Guernsey, November 2000.
30 The Laws of Guernsey panel was in favour of a Cabinet style government supervised by committees and the States. After a consultation process, chiefly distinguished by the disinterest of Guernsey people, the States resolved that the government of Guernsey should comprise a Chief Minister, Ministers, departments and a policy council. Electoral districts were to be based on parish boundaries with the abolition of Douzaine representatives; instead there was to be a parish representative elected by the electorate of the parish from the Douzeniers. The States voted not to reduce the number of People’s Deputies to 35.49 It was also resolved that there be a further public consultation to see whether there was broad support for the proposals and, subject to that support, further reports were to be commissioned to provide more detailed proposals for the future machinery of government; this included a direction to the States Procedures & Constitution Committee to report on, inter alia, the methods of nomination and election of the Chief Minister as well as the title to be used by the Presiding Officer of the States of Deliberation and the incumbent’s voting powers.50 It seems likely that the process will be a long one. It is to be hoped that a more efficient, slimmed down system of government eventually emerges notwithstanding the unpromising start. The office of Bailiff is, fortunately, unlikely to be affected greatly. The Bailiff is likely to remain President of the States51 and, of course, President of the Royal Court. The Bailiff is again likely to remain the Island’s first citizen. There will, however, be an unambiguous and democratically accountable political leader in the form of the Chief Minister52 which will direct attention away from the Bailiff on political issues, which is appropriate. The Bailiff ’s historic rôle as a quasi-head of state at local level is likely to survive and be augmented as guardian of the Islands, their people, interests and constitution. The office has endured so long and symbolises the special status of the Bailiwick to such an extent that those who interfere with the institution do so at the peril of the Islands.
THE LEGISLATIVE PROCESS IN GUERNSEY 53
Guernsey enjoys a considerable degree of autonomy. The States of Deliberation has the right to legislate for all matters save those concerning nationality,54 defence and international relations. The limits of the United Kingdom Parliament’s ability 49 Which is a matter for regret. There were unfair comments at the time concerning turkeys and the undesirability, from their point of view, of the institution of Christmas. 50 See the States’ resolutions for 17 May 2002 relating to Billet d’État No. VII of 2002. The (first) report is at article 21 of Billet XXII of 2002 and dated 25 September 2002. 51 The title is likely to become “Presiding Officer”, albeit the Bailiff will still be addressed as “Mr Bailiff ” in the Chamber. 52 Or whatever title is eventually accorded to this office; as ever, it is to be hoped that Westminster models are not aped either for want of imagination or the ambition to do better. The same applies to legislation and generally. 53 For a detailed account of this subject see EJT Lenfestey’s paper, Legislative Drafting in a Mini State, published in [1989] 7 GLJ; note in particular the section entitled “The Peculiar Difficulties of a Legislative Draftsman in a Mini-State”. 54 Note that Islanders are entitled to full British citizenship under the British Nationality Act 1981.
The constitution of the Bailiwick 31 to legislate for the Islands has been considered already. Essentially the United Kingdom may legislate only with consent. A constitutional crisis would follow swiftly any serious disagreement over legislation for the Islands, whether that legislation had its origin in Westminster or Guernsey. We are concerned here with Guernsey legislation. The States of Deliberation meets monthly, save in August. The meetings generally last two days and are convened to begin on the last Wednesday in each month. Emergency meetings may be convened at any other time. A detailed agenda is produced called a Billet d’État55 containing details of all resolutions to be put to the States together with reports from the committees and draft legislation. The Bailiff alone,56 a committee President or seven or more Deputies acting together may put any matter to the States. The legislative process usually commences with a letter from the relevant committee President to the Bailiff setting out the legislative proposal. This draft policy letter is considered by the Bailiff and the Law Officers. It is considered also by the Advisory & Finance Committee. After any modifications at this stage, and if the matter is to proceed, the letter is published in the Billet d’État for the next meeting of the States accompanied by the comments of the Advisory & Finance Committee. If the proposal has originated with a group of seven or more Deputies then this too will be placed in the Billet, again accompanied by the comments of the Advisory & Finance Committee.57 The States will vote upon the proposal at the meeting. If the proposal is approved it proceeds to the drafting stage. There will also be further consultation. Once the legislation is drafted58 it is put before the States Legislation Committee. The Committee will review the draft (now known as a Projet de Loi) to ensure that it both accords with, and will carry efficiently into effect, the States’ resolution, (see s 66 of the 1948 Law). The draft Law is then attached to the next Billet for approval or otherwise by the States. Generally speaking a draft Law having reached this stage will be approved by the States. Once approved the Projet still lacks the force of law. Royal Assent is required in the form of an Order of Her Majesty in Council.59 Such
55 It is noteworthy that Guernsey Courts are permitted to look at the Billets as an aid to interpretation of Guernsey statutes, see for example the case of Baron Shipping Company Limited v Le Pelley a 1999 judgment of the Guernsey Court of Appeal; “In this jurisdiction it is permissible to refer to travaux préparatoires in the interpretation of a Law” per JM Collins QC. To this extent they may also be regarded as a source of Guernsey law, at least indirectly. 56 As President of the States. The power has not in fact been exercised for many years. 57 The group of Deputies submit what is known as a requête; see further below. 58 The Law Officers are responsible for the drafting of all legislation, assisted by their staff. Consultants are occasionally employed to assist with particularly specialist legislation, eg in the fields of intellectual property or family law. 59 The Council being the Privy Council. The Lord Chancellor is the Council member primarily concerned with the affairs of the Islands. The Order itself is called an “Assenting Order”; see generally the Department’s Guide to Government Business involving the Channel Islands and the Isle of Man. At para 27 it is said that: “The question of whether, and if so when, an Assenting Order may be refused is one of particular sensitivity with the Channel Islands”.
32 The Laws of Guernsey sanction is obtained via the agency of the Lord Chancellor’s Department, being the government department responsible for Channel Island affairs.60 As and when Royal sanction is given the Projet de Loi acquires the status of an Order in Council. In theory an Order in Council can have immediate effect without any further formal requirement. In practice the Order does not have the force of law until it is registered by the Royal Court of Guernsey as being a Law of the Bailiwick. The Law may have set its own commencement date or mechanism for commencement, although a subsequent ordonnance is often required. The new Law is then published. Secondary legislation may be authorised by the Order in Council in the form of Ordinances.61 Once drafted these too are considered by the Legislation Committee and put before the States of Deliberation for approval or otherwise. The Legislation Committee has power to bring into force emergency Ordinances without first putting them to the States; although the States has power to annul such when next it meets. The States of Deliberation also has a common law power to make Ordinances, ie without requiring an authorising Order in Council. This equates to the ancient power of the Royal Court to legislate, transferred to the States in 1948. However, no such Ordinance may affect taxation or alter existing customary or enacted law. An Ordinance is void to the extent that it purports to do so. In practice this limits the power considerably. Statutory Instruments are inferior to Ordinances and are produced by the committee empowered to such effect by primary legislation. Statutory instruments are again required to be put before the States. STATES AND STATES’ COMMITTEES PROCEDURAL RULES
Amended and/or consolidated rules of procedure for both the States and States’ committees were adopted by the States in April 2002.62 The States of Deliberation Rules of Procedure begin by making detailed provision for the convening and opening of meetings together with hours of sitting.63 There are strict deadlines for the circulation of the Billet d’État before a meeting, depending upon the nature of the contents of the Billet or else the degree of urgency. The date of a proposed meeting must, so far as possible, meet the convenience of the Lieutenant Governor who invariably will attend States Meetings, save for good reason.64 60 Although only since the June 2001 general election and re-organisation of Westminster. Prior to this time it was the Home Office which took responsibility for the Channel Islands. 61 The terms “Ordinance” and “Ordonnance” may be used interchangeably, although the English term is more frequently employed these days. 62 See Billet d’État VI of 2002 and the resolutions relating thereto. 63 Usually between 0930 and 1230 and between 1400 and 1700, with power to extend until 1800 or later in exceptional circumstances. As noted already, meetings usually commence on the last Wednesday in each month save for the month of August. 64 Although there is no formal requirement; see rule 3. It is by this means principally that the Lieutenant Governor is the eyes and ears of the United Kingdom government.
The constitution of the Bailiwick 33 The meeting commences with the Lord’s Prayer65 and the calling of the roll of members. A member who is absent when his name is called may not speak or vote until his presence is recorded. There is provision for a form of question time before the commencement of business in the Billet; although the question must be submitted in writing not less than five days before the meting. Typically the question is directed at, and answered by, the President of the States committee concerned. There is a procedure also for questions for written reply. Responsibility for regulating the conduct of business and maintaining good order is that of the President of the States.66 For example, in question time or questions for written reply, the President may decline to allow a question on the grounds of public interest. The President controls also the right to make statements. By rule 10 it is the “. . . duty of every Member to observe decorum and, in particular, to observe the rulings of the President”. This includes the memorable rule 10(4): “. . . The President, after having called the attention of the States to the conduct of a Member who persists in irrelevance or tedious repetition of his own or other Members’ arguments in the debate, may direct the said Member to discontinue his speech.”
The President has power also to move the States to suspend a Member for conduct which he perceives to be “. . . grossly disorderly or offensive”. There are strict rules of debate intended to curtail the length of meetings together with regulation of the use of points of order. There are requirements for disclosure of direct or special financial interest. Again there are strict rules governing the proposal of amendments to States’ business or the proposal of any sursis.67 There is provision for the closure of debates or meetings to be accelerated where there is two-thirds support for the move. The provisions concerning voting procedures are themselves brief. Where voting is carried out otherwise than by a division or by ballot a Member may, before the President of the States rules that the matter was carried or lost, or immediately after such a ruling, claim a division. There is provision also to challenge the accuracy of a result and to demand a fresh division. There are provisions permitting the President to declare resolutions ineffective where less than two-thirds of States Members were present. This corresponds to the safeguards at section 3 of the 1948 Law. As noted already, in addition to the other methods of introducing States business,68 any seven or more States Members may place business before the States by submitting a requête.69 There are time limits to adhere to, the requête must also be submitted to the States Advisory & Finance Committee who will consult with 65
In French. Likewise all public sittings of the Royal Court open with the Lord’s Prayer in French. The Bailiff. 67 Essentially a proposal to adjourn consideration of a matter to a future meeting; a sursis is generally proposed either to block an item of business or else to urge or force re-consideration of whatever is proposed. 68 Ie via the States Committees or the President of the States himself. 69 Literally “request”. 66
34 The Laws of Guernsey relevant committees and set out its opinion in a letter to the President of the States for inclusion within the relevant Billet. The States controls States committees by the ultimate sanction of a motion of no confidence. Such a motion may again be moved by any seven or more States Members. If carried the President and members of the relevant committee are deemed to have tendered their resignations, which resignations are deemed to have been accepted by the States. There are provisions for the election of Presidents of States committees by the States and provision for a register of Members’ interests; here the emphasis is upon directorships, land, shareholdings and family interests generally. The Constitution and Operation of States Committees Rules make similarly detailed provision for the functioning of committees. The rules regulate the size and composition of committees in general and the principal committees in particular. They regulate the office, term and function of the President and VicePresident of committees. It is a feature of the committees that there are members who are not sitting members of the States. The number of these members is again regulated. They cannot occupy any presidential function save for two very limited exceptions in favour of the Dean of Guernsey. It is noteworthy that there is expressly no age limit for retirement as President or member of any States committee. Membership of committees themselves is determined by election by the States. There are provisions fixing the quorum for States committee meetings.70 It is a strict requirement that a Civil Servant be present to keep an “independent record of the decisions made”; this requirement applies also to sub-committees. The only exception is where it would be inappropriate for any of that committee’s officers to be present, eg because the performance of that officer was being discussed. Again there is a requirement for a member to declare any direct or special interest in business being considered by a committee and to withdraw during the consideration of and voting on such matters.71
THE CONSTITUTION AND ADMINISTRATION OF ALDERNEY
Alderney is the second largest and populous of the Islands comprising the political entity known collectively as the Bailiwick of Guernsey. Given the position of Alderney in the immediate aftermath of the Second World War the States of Guernsey assumed direct financial and administrative responsibility for certain key public services. As a consequence, the Guernsey scale of taxes 70 The nearest whole number above one-half of the number of voting members specified in that committee’s constitution; half members not being permitted. 71 Contrast declarations of interest in the States itself which do not prevent a Member from voting, see rule 11(11). The potential mischief of an interest is much reduced in a full States meeting, if only because of the numbers involved. In addition to these two sets of rules there are also Rules relating to Payments to States Members.
The constitution of the Bailiwick 35 and duties now apply in Alderney and accrue to the Guernsey Revenue. Guernsey Laws and Ordonnances in relation to those services may be extended to Alderney with any necessary modifications. Alderney is, as a consequence, represented in the Guernsey States of Deliberation by two members (four members in the States of Election).72 The States of Guernsey can therefore legislate in relation to the so-called transferred services, that is to say, the airfield, education, health services, immigration, Police and social services without the consent of the Alderney parliament, the States of Alderney. Likewise the States of Guernsey may legislate on any criminal matter without consent. The States of Guernsey may legislate on any matter for Alderney with the consent of the States of Alderney. In practice it is unlikely that the consent of Alderney would not be sought to any proposed legislation affecting that Island. The States of Alderney comprises 10 members elected for terms of four years by universal adult suffrage. A President of the States is also elected directly by those eligible to vote for States members, again for a four year term. The President is the first citizen in Alderney, taking precedence over all; save a member of the Royal Family, the Lieutenant Governor and the Bailiff of Guernsey. The States of Alderney, like the States of Guernsey, legislates by way of Projets de Loi which require the sanction of Her Majesty in Council. The States may also legislate by way of Ordonnance within the same confines binding the States of Guernsey. The Court of Alderney comprises Jurats appointed by the Lord Chancellor.73 One Jurat may be (and is) designated Chairman. Any three Jurats constitute a quorum. The Court of Alderney has unlimited jurisdiction in civil matters with a right of appeal initially to the Royal Court in Guernsey. In criminal matters the Court’s jurisdiction is limited.74 The general constitutional provisions for Alderney are set out in the Government of Alderney Law 1987, as amended. The more important provisions are the following: s1
All legislative and executive functions which may be exercised within Alderney are exercisable by the States of Alderney; s2 All judicial functions which may be exercised within Alderney are exercisable by the Court of Alderney; s 4(iii) The customary law in criminal matters is the same in Alderney as Guernsey; s8 The functions of the Court shall be exercised by a full Court consisting of any 2 or more Jurats in addition to the Jurat acting as Chairman. In 72 See generally the Alderney (Application of Legislation) Law 1948 and the States of Guernsey (Representation of Alderney) Law 1949. 73 Since June 2001 when responsibility for the Channel Islands was moved from the Home Office to the Lord Chancellor’s Department. 74 Examined in greater detail in the section concerning Criminal Procedure.
36 The Laws of Guernsey
s 9(i)
s 16 s 17
s 18
s 20 s 41 s 42
s 43
s 45 s 46
s 47 s 49
s 52
determining the opinion of the full Court on any matter, the opinion of the Jurat acting as Chairman shall not be counted, except that if the opinions of the other Jurats are equally divided the Chairman shall determine which opinion shall prevail; The Jurat acting as Chairman at a sitting of the Court shall have the general conduct of proceedings, which shall be conducted in accordance with the rules of natural justice relating to the exercise of judicial functions; Criminal proceedings before the Court may be instituted only by or under the authority of HM Procureur; The Royal Court may from time to time make rules of Court for the Court of Alderney, subject to certain limitations. The Court of Alderney may regulate its own procedure and may for that purpose make rules of Court, subject to the power of the Royal Court to disapprove such rules;75 The costs of and incidental to any proceedings in the Court of Alderney in a civil matter are in the discretion of the Court; the Court may determine by whom and to what extent such costs are to be paid; The Court of Alderney shall from time to time appoint a person to act generally as the Clerk of the Court; Every meeting of the States shall be convened by the President by the publication of a Billet d’État; Before every meeting of the States, a meeting open to the public (the People’s Meeting) shall be held for the purposes of informing those present of the business to be transacted at that meeting of the States; An individual whose name is inscribed in the Register of Electors may bring personally before the States, any matter of public interest which he requests to be considered and may address the States. This right is exercisable at two meetings per annum; This section contains provisions governing quorums for meetings of the States of Alderney; a quorum is 7; The States may from time to time make Ordonnances for the good rule and government of, and for the prevention and suppression of nuisances in, Alderney; An Ordonnance shall be read as subject to any Order in Council having the force of law in Alderney; The States may from time to time appoint a committee of the States. There is a similar division of powers between the States and its Committees as in Guernsey; The States of Alderney shall from time to time, with the approval of the Secretary of State, appoint a person to act generally as the Clerk of the States;
75 No such procedural rules in fact exist, making Alderney litigation a rather uncertain experience. In practice the Court of Alderney follows Guernsey procedure.
The constitution of the Bailiwick 37 s 55 s 56
s 57
s 58
The States shall from time to time appoint a person to act generally as Surveyor or Clerk of Works; The Clerk of the States, as agent for the States, has all powers necessary to give a receipt for property acquired by the States, for the management and control of property vested in the States and for the disposal of property vested in the States of which the States have authorised him to dispose; A contract made on behalf of the States must be expressed to be made by the States but shall be signed by the Clerk of the States or such other person as the States may direct; An annual budget is to be prepared and transmitted to the Bailiff.
The constitution and administration of Alderney bears many features in common with Guernsey albeit with a greater day to day involvement of Guernsey in Alderney’s affairs than, say, the United Kingdom has in Guernsey’s. Equally Alderney is represented in the Guernsey States. It is also not seriously doubted that Alderney could re-take the powers it gave to Guernsey and seek a greater degree of autonomy, if Alderney’s economic circumstances so permitted.
THE CONSTITUTION AND ADMINISTRATION OF SARK
Sark is the third largest and populous of the Islands within the Bailiwick of Guernsey and also has its own independent legislature and Court. Sark is the last remaining feudal constitution in the western world. The Seigneur holds the Island from the monarch in perpetuity with certain rights and privileges, provided that he in turn takes an oath of allegiance, pays his annual rente of one twentieth part of a knight’s fee and maintains forty armed men to keep the Island free of the Queen’s enemies. This last obligation was a precondition of the grant to the original Seigneur in order to colonise the Island effectively and defend it from invasion by the French and pirates. The officers of the Island are: The Sénéschal: The Island’s Judge/Magistrate and President of Chief Pleas, the Island’s parliament; The Prévôt: Sheriff of the Court and of Chief Pleas; The Greffier: Clerk to the Court and to Chief Pleas; The Treasurer: Responsible for general revenue and expenditure; The Constable: Who has both civil and Police duties;76 The Vingtenier: The junior constable. 76 See for example, the definition of “officer of police” at schedule 5 of the Insurance Business (Bailiwick of Guernsey) Law 2002 which places both the Constable and Vingtenier on the same footing in relation to Sark as a member of the salaried police force in Guernsey.
38 The Laws of Guernsey The Sénéschal is appointed by the Seigneur with the approval of the Lieutenant Governor of Guernsey for a term of three years. He takes an oath of office before the Royal Court of Guernsey. The Greffier registers and holds all the Court and Chief Pleas records as well as Orders and Orders in Council which the Royal Court of Guernsey has directed to be registered. He also keeps and updates the electoral role of persons eligible to vote for Sark’s Deputies of the People. Property transactions in Sark are registered through the Court, as are some leases. The Court of the Sénéschal is the sole Court of Justice on the Island.77 The Sénéschal78 sits as Judge in both civil and criminal cases. He is assisted by the Greffier as Clerk of the Court and by the Prévôt to execute and enforce the judgments of the Court. Any fines are paid over to the Treasurer. As with the Court of Alderney the Court of the Sénéschal has unlimited first instance jurisdiction in civil matters with an initial right of appeal to the Royal Court in Guernsey. The Sénéschal’s criminal jurisdiction is restricted, (and more so than in Alderney). The Island’s parliament is called Chief Pleas. Each of the forty (or rather 39 excluding the Seigneur himself) was granted a parcel of land in Sark for his family to hold and defend. Each current owner of these parcels of land (known as tenements) is entitled to a seat in Chief Pleas. In addition there are seats for twelve Deputies of the People elected triennially. The feudal constitution of this parliament is unique. No tenement land may be subdivided by outright sale. However, the Bailiff in the recent case of Surcouf v de Carteret (1999), held on appeal from the Court of the Sénéschal that long leases of Sark “freehold” land could validly be made notwithstanding the terms the material Letters Patent. The effect was that treizième (a duty payable to the Seigneur on transfer of a tenement) would be avoided in such circumstances. There was no power to declare leases void as encumbrances. Revenue in Sark is raised by a number of means. An impôt (excise duty) is levied on alcohol, tobacco and petroleum spirit. A landing tax is charged to each adult visitor. In addition a direct tax is raised. This is sometimes referred to as a “visible wealth tax”. The Douzaine makes an assessment based upon the value of property related to floor area and secondly on “perceived” wealth on a “one inhabitant relative to another” basis. The annual Island budget must receive the consent of the Lieutenant Governor and no subsequent meeting may increase the spending without his sanction. Each 77 But note that the Royal Court has a concurrent unlimited civil jurisdiction for Sark matters if the defendant is Guernsey, as opposed to Sark, resident; see the judgment of the Bailiff in the linked cases of Woodward and Matthews (2000). Subject to any other reason why original jurisdiction might be claimed (eg on normal conflict of fora grounds) Guernsey’s civil jurisdiction is appellate only. 78 The office of Sénéschal is of ancient Norman origin. The last great Sénéschal of the Duchy of Normandy was Guillaume Fils Raoul. From 1177 he served Henry II, Richard Coeur de Lion and John, until dismissed by the last in 1200. Haskins, in his still leading work, Norman Institutions, wrote of his office as follows: “As the alter ego of the King the Sénéschal was the head of the whole judicial system, and in his sovereign’s absence he alone could preside in the judgment of those who had the privilege of appearing only before the duke or his chief justiciar” (p 184).
The constitution of the Bailiwick 39 resident is required to maintain medical insurance. What social security there is goes by the name of Poor Relief. This is administered by the Procureur of the Poor.
SARK LEGISLATION
Chief Pleas may by resolution change rules of procedure or require a committee to investigate a problem or propose formal legislation. Chief Pleas may make laws regulating local affairs and maintaining public order by Ordonnance. These are drawn up under the direction of the Crown Officers in Guernsey. If approved they are sent to the Royal Court in Guernsey for registration. An Ordonnance which the Royal Court considers to be unreasonable or beyond Sark’s power to make may be annulled. In that case Chief Pleas may appeal to Her Majesty in Council. An Ordonnance becomes law as soon as it is registered in Sark.79 Legislation affecting taxation or placing restrictions on individuals, particularly non-residents, requires an Order in Council. This follows the same route in Sark as Orders in Council would in Guernsey, ie a Projet de Loi is drawn up with the assistance of HM Procurer; if approved by Chief Pleas it is transmitted to the Lord Chancellor’s Department and Privy Council.
THE BAILIWICK OF GUERNSEY AND THE EUROPEAN UNION
Guernsey occupies a special position in terms of its relationship with the European Community. It is not a member of the Community, however it enjoys the economic benefits of being within the European Community free trade area without the burden of European legislation or bureaucracy, save insofar as that legislation concerns free trade. The relationship of Guernsey to the European Community is (now) governed by Article 299(6)(c) of the Treaty establishing the European Community and by Protocol 3 to the UK’s Act of Accession to the Community, see also below. The protocol cannot be changed without the unanimous consent of all members of the Community, including the United Kingdom.80 The following is taken from a background report prepared by the European Communities Commission on Overseas Countries and Territories.81
79 Note also the qualified power to make an Ordonnance effective immediately under the Reform (Enactment of Ordinances) (Sark) Law 2000. 80 See generally the European Communities (Bailiwick of Guernsey) Law 1973, as amended by Orders in Council at vol. XXIV p87, vol XXVII p 242, vol XXIX p 127 and p 419; see also Ordinances XIX of 1994, XVII of 1998 and XLVII of 2001. See also the European Communities (Implementation) (Bailiwick of Guernsey) Law 1994. 81 ISEC/B25/85.
40 The Laws of Guernsey Channel Islands and Isle of Man These territories have a special relationship with the UK which affects their relationship with the European Community. Article 227 of the Treaty of Rome (as amended by the UK/EEC Treaty of Accession) lays down the principles to be applied in cases of this kind. The UK is responsible for the foreign relations and external defence of the Channel Islands and the Isle of Man, and has ultimate responsibility for their good government. In domestic affairs, however, the Islands virtually govern themselves, except that laws passed by their legislative assemblies must be validated by Royal Assent. Article 227 relates to the position of European or overseas territories and their association according to Part IV of the Treaty. Article 227(iii) specifically excludes the Channel Islands and the Isle of Man from the provisions of Part IV; instead their relationship with the Community is governed by Articles 25 to 27 and Protocol 3 of the Treaty of Accession. This Protocol requires that there shall be free movement of industrial and agricultural goods between the territories, and that goods imported from outside the Community be subject to the same common Customs, Tariffs and agricultural levies as would apply if imported into the UK. The fiscal independence of the Islands is accepted, and apart from ensuring the proper functioning of free trade, they are excluded from the provisions of the Treaty. The Protocol, however, stipulates (i) that although Treaty provisions relating to free movement of workers and the right of establishment do not apply to the Islanders, nationals of all countries of the Community, including the UK, must receive identical treatment within the territories, while Islanders continue to enjoy the same rights in the UK as they do now (ii) that in order to ensure the maintenance of free trade, the European Commission, under article 93 of the Treaty, has the power to vet local aid schemes to industry as with full members of the Community. Virtual exclusion from Community responsibilities enables the Island authorities to retain proceeds from import duties and agricultural levies raised on imports from third countries from outside the Community, but, as a result, Community funds are not available to their producers, nor are compensatory amounts available for agriculture. Protocol 3 also provides for the application to the Islands of the United Tariff of the European Coal & Steel Community.
The Bailiwick benefits considerably from avoiding the weight of European legislation and bureaucracy. Equally it is willing to adopt European measures on rare occasions. A recent example is the Summer Time (Guernsey) Ordinance 2001 which adopts articles from the material European Parliament and Council directive “as if Guernsey were a member state”. Accordingly from 2002 the summerperiod will begin at 1am GMT on the last Sunday in March and end at 1am GMT on the last Sunday in October; presumably to become European Summer Time although GST might be more appropriate.82
82 Guernsey Summer Time. For those who can never remember, the clocks go forwards one hour at the end of March and back at the end of October. For a detailed assessment of EU-related issues and the relationship between the EU and Jersey see Alistair Sutton’s article, “Jersey and Europe—Taking Stock”, in the Jersey Law Review [2002] 6 JL Review 165. Near identical considerations apply to Guernsey.
The constitution of the Bailiwick 41
THE COURT STRUCTURE OF THE BAILIWICK
Separate detailed sections are devoted to civil and criminal procedure; it is nevertheless helpful to introduce at an early stage the general outline of the Court structure. A number of feudal courts still survive in Guernsey. They are the vestiges of a Norman judicial system based upon land tenure and accompanying rights and privileges existing alongside a ducal system of justice which came to eclipse and all but displace the feudal courts completely. Their practical significance is very small and no more is said about them here. The first layer of courts in the Bailiwick is the Magistrate’s Court in Guernsey, the Court of Alderney and the Court of the Sénéschal in Sark. The Magistrate’s Court is presided over by a professional full-time Magistrate, although you may find yourself before a Jurat acting as an Assistant Magistrate or even the Deputy Bailiff. The Court of Alderney comprises a Chairman and at least two Jurats. The Sénéschal presides over the Court in Sark. All three Courts have jurisdiction to deal with criminal offences up to a certain level of seriousness. In practice this is determined by the level of sentence which these Courts have power to impose. In Guernsey the Magistrate may impose a maximum sentence for a single offence of one year’s imprisonment and/or a fine of £5,000. In Alderney the Court may impose a maximum sentence of three months imprisonment and a fine of £5,000. In Sark the Sénéschal may impose a maximum sentence of one month’s imprisonment and a fine of £500. The maximum sentence for any given offence is often less. There are also limits on the amount of time a prisoner may serve in prison in Sark and Alderney before compulsory transfer to prison in Guernsey (seven days in Alderney and three days in Sark—subject to the weather). Criminal cases which are too serious for the Court of Alderney or Court of the Sénéschal to deal with are transferred to the Royal Court in Guernsey. The Royal Court is either an Ordinary Court or a Full Court according to how many Jurats sit with the Bailiff, Deputy Bailiff or Lieutenant Bailiff. When there are only two (but normally three) Jurats it is the Ordinary Court.83 When seven or more Jurats sit the Court is a Full Court. It is to the Ordinary Court that Alderney and Sark pass more serious criminal cases. The Ordinary Court has the same powers of sentence as the Guernsey Magistrate’s Court. If the offence is still too serious for the Ordinary Court it is sent to the Guernsey Magistrate’s Court for committal proceedings. This is a preliminary examination of the case to see if there is a prima facie case for the accused to answer. If there is, the case is sent for trial by the Royal Court.
83 Although there is also the Cour des Plaids d’Héritage which requires the Bailiff to sit with three Jurats.
42 The Laws of Guernsey Appeal in criminal matters from the Sark, Alderney and the Magistrate’s Court is to the Royal Court (sitting as a Full Court). From the Royal Court there is the possibility of appeal to the Court of Appeal and then to the Judicial Committee of the Privy Council; but only with leave. The Court of Appeal is, for most purposes, constituted by three Judges and drawn from a panel comprising the Bailiff of Guernsey, (President of the Court when he sits), the Bailiff of Jersey and a panel of distinguished lawyers from other parts of the British Islands. Each of the Magistrate’s, Alderney and Sark Courts have a civil jurisdiction. The Sark and Alderney courts have an unlimited civil jurisdiction whereas the Magistrate’s Court deals only with civil claims up to a value of £2,500; it also has jurisdiction for certain family matters. Appeal in civil matters from Sark and Alderney is to the Royal Court sitting as an Ordinary Court. Civil claims in Guernsey exceeding £2,500 in value are brought before the Royal Court sitting as an Ordinary Court. The Bailiff sits with three Jurats. The Bailiff decides issues of law, procedure and costs while the Jurats decide issues of fact. Subject to the Bailiff ’s guidance, the Jurats also determine the amount of damages if a claim succeeds. There is a Matrimonial Causes Division of the Royal Court which administers and hears matrimonial causes, comprising chiefly petitions for judicial separation and divorce and claims after decree relating to maintenance, division of assets and the care of children. Jurats may sit but the invariable practice is for the Bailiff, or Deputy or Lieutenant Bailiff to sit alone. In each case there is a right of appeal from the Royal Court to the Court of Appeal save where the case is worth only a very small sum or concerns an order for costs or an interim order of some kind; leave is then required. Again there is the possibility of an appeal to the Judicial Committee of the Privy Council sitting in London.
THE ECCLESIASTICAL COURT
There is one other Court of note which deserves special mention. The Ecclesiastical Court is a remarkable survival from ancient times. It enjoys an unbroken history of over 900 years.84 Until the reign of Elizabeth I of England, Guernsey fell within the diocese of Coutances in Normandy. It was then transferred to Winchester after briefly forming a part of the diocese of Salisbury. The powers of the Ecclesiastical Court are vested in the Bishop of Winchester who appoints a Commissary General to perform the functions of the Court in Guernsey. This is traditionally the Dean of Guernsey who appoints a Registrar to act as Clerk of the Court.85 The Court is constituted by the Dean sitting with the Registrar. In the absence of the Dean, a Vice-Dean sits. 84 85
It is the last of its kind in Christendom to exercise a probate jurisdiction. Currently Advocate N Ozanne.
The constitution of the Bailiwick 43 Apart from the more usual jurisdiction to grant faculties for work in Churches and special licences for marriage where bans are not to be called, the Ecclesiastical Court still has jurisdiction concerning the inheritance of personalty.86 The Ecclesiastical Court (Jurisdiction) (Bailiwick of Guernsey) Law 1994 limits that jurisdiction to the grant of probate of wills or the grant of letters of administration of the estates of personalty of deceased persons. The Ecclesiastical Court does not have jurisdiction in disputed cases or where an extant caveat has been lodged with the Registrar in respect of a dispute of fact or law. The Royal Court may, in any proceedings before it, give such directions to the Ecclesiastical Court in relation to the Grant of Probate or Letters of Administration as the Royal Court thinks fit.87
86 87
Realty is dealt with separately, see the section on the law of succession. See also the section on succession for an account of Ecclesiastical Court procedure.
3 The Review of Administrative Decisions
J
UDICIAL REVIEW IN Guernsey is in its infancy, having been first recognised by the Court of Appeal in the case of Bassington v HM Procureur [1998] 26 GLJ 86. The issue in this case was whether or not notices issued by HM Procureur pursuant to the Criminal Justice (Fraud Investigation) (Bailiwick of Guernsey) Law 1991 could be challenged before the Royal Court. The judgment is lengthy and contains useful dicta on a number of subjects: the jurisdiction of the Guernsey Court of Appeal, the force of precedent in Guernsey law, the effect of extra-territorial provisions in Guernsey legislation and the office of HM Procureur. After a detailed examination of the history of judicial review in Jersey and the Isle of Man the Court of Appeal stated as follows: “We consider it to be a mark of a modern civilised polity that it is prepared to afford the means whereby the private citizen can challenge those administrative decisions which affect his or her private rights. We adopt the following passage from the judgment of the Court of Appeal in Jersey in Lesquende Limited v The Planning and Environment Committee of the States of Jersey (unreported 5 January 1998) as having equal relevance in this jurisdiction: ‘We for our part endorse the existence of a remedy by way of judicial review in Jersey. The inherent jurisdiction of the Courts to control excess or abuse of power by executive bodies seems to us to be intrinsic to the very judicial process, and vital to the rule of law. To confer upon an administrative authority limited powers only, but to provide no means for confining it within those limits would be paradoxical. There is nothing in the traditions of Norman French law, as developed in Jersey, which appears incompatible, and much appears consistent, with our conclusion. It would be in principle regrettable to deny to a citizen of Jersey a form of relief available to citizens in other parts of Her Majesty’s dominions.’ ”
A little later in the judgment the Court of Appeal continued as follows: “We recognise that this development in England (of administrative law) and elsewhere has in substance occurred since this Court took over the jurisdiction of the Cour des Jugements et Records. However the exercise of the powers of the Court of Appeal, although equated by the Appeal Law of 1961 to the Cour des Jugements et Records, 1 See also the affirming comments of the Court of Appeal in the case of IDC v Portholme Properties Limited (2002) 20 September.
46 The Laws of Guernsey cannot be taken to be limited to the state of the Law as it stood prior to 1964, the year when that Law came into effect; the Law must be free to develop both in the Royal Court and in this Court in order to take into account changing circumstances and perceptions. It was not intended to be a museum piece.”
Accordingly judicial review exists as a potential remedy in Guernsey law, mirroring English administrative law.2 Apart from judicial review itself there is a Law which appears to have been an earlier attempt to provide a remedy against poor administrative decision making. This is found in the seldom used Administrative Decisions (Review) (Guernsey) Law 1986.3 By section 1 any person aggrieved by a decision or action of any States committee may apply to the States Supervisor, or HM Greffier in the case of a complaint against the Advisory & Finance Committee. The application is considered by the Supervisor or HM Greffier and, if satisfied that the circumstances justify a review of the matter, he must refer the complaint to the Review Board. The Board comprises three people drawn from a Panel of Members by the Chairman of that Panel. The States Supervisor or HM Greffier may not refer complaints which are not within the jurisdiction of the Board or where the complainant has known of the matter for more than twelve months or where the complaint is trivial, frivolous or vexatious or is otherwise not made in good faith. Likewise complaints will not be referred if the applicant has not a sufficient personal interest in the subject matter or if there is a judicial remedy which has, unreasonably, not been utilised. This last condition now has potentially very broad application given Bassington. The Panel of Members itself is drawn from Members of the States of Deliberation who have sat for three years or more and the Deans for the time being of every Douzaine.4 The Board has power to call for documents from any committee or officer or employee of any committee and to hear any person in connection with any complaint. The Board must investigate complaints referred to it and their sittings must usually be held in public. After completing its enquiry the Board must report in writing to the complainant and to the committee and/or person concerned. The
2 See an article by Michael Beloff QC, Judicial Review—Is it going too far? Journal of the Commonwealth Lawyers’ Association (vol 11 no 2 August 2002) for an overview of developments in judicial review and possible future steps. He quotes from an earlier lecture and his thesis that: “. . . one of the most profound recent changes in the Constitution results not from the designs, benign or brutal, of Thatcherite Tory or New Labour, but from the activities of the judiciary, which has itself not only to a substantial extent exercised control over the executive but even infringed the sovereignty of Parliament . . .”. 3 See the report of the Review Board for 2001 at Billet d’État IV of 2002 p 251 which suggests little activity. 4 This is likely to change in the light of HM Procureur’s comments at p 120 of the Review of the Machinery of Government in Guernsey 2000 where reference is made to the recommendation of the United Nations Human Rights Committee that an independent body be established to review administrative decisions.
The Review of Administrative Decisions 47 Board must request the committee or person concerned to reconsider the matter complained of if the Board finds that the decision, act or omission was contrary to law or unjust, oppressive or improperly discriminatory, based on a mistake of law or fact or could not have been made (or committed) by a reasonable body of persons after proper consideration of all the facts or was contrary to the generally accepted principles of natural justice. If the Board considers that its findings have been insufficiently considered or implemented it must refer the matter to the States. It is not uncommon for legislation to give an express right to challenge administrative decisions by appeal to the Royal Court; the most common examples are to be found in the housing and development laws. Equally there are express rights of appeal against decisions and actions of the Guernsey Financial Services Commission. It is possible that the customary remedy of doléance5 may still be of use where there is no express right of appeal or other basis for challenge. A complainant would petition the Royal Court for relief from whatever perceived wrong had been suffered. However, the Court of Appeal in Bassington doubted, obiter, whether the remedy still existed in Guernsey jurisprudence, being restricted, if it existed at all, to complaints addressed to the Privy Council. By contrast, in Jersey the doléance appears to have been the vehicle for developing judicial review within that jurisdiction, again see Bassington and the case of In the matter of the Doléance of Harbours and Airport Committee [1991] JLR 316. It seems unlikely that, given the customary origin of the doléance, it should not exist also in Guernsey law; albeit dormantly for many years. As the Court of Appeal implicitly noted in Bassington the point is now largely academic. It seems unlikely that doléance has any greater application than ordinary English principles of judicial review, although there is no reason why Guernsey should not, in the right circumstances, develop its own jurisprudence having regard also to other jurisdictions. With the eventual passing into domestic law of the Human Rights (Bailiwick of Guernsey) Law 20006 other judicial remedies will become available in this context. By section 3(1) of the Law Bailiwick Courts will be required to interpret and give effect to legislation in a way consistent with Convention rights7 or else make
5 Literally a complaint or grievance. See Terrien Livre XI, see also Thomas Le Marchant’s forceful criticism of the Approbation in this context. Again for Jersey customary law on the subject see Poingdestre: Lois et Coutumes de l’île de Jersey, p 235 et seq. Note also more recent Jersey case-law and Halsbury’s Laws. 6 Registered in the Island of Guernsey on 22 January 2001 to come into operation on a date to be fixed (most probably in mid-2003); see s 18(2). In any event Lieutenant Bailiff Talbot QC held in the case of Law Officers of the Crown v Ogier (2002) 28 January that it was “. . . generally appropriate in Guernsey to take account of the jurisprudence relating to the Convention unless either existing Guernsey legislation or binding decisions of the Courts of Guernsey appear to operate to an effect contrary to the article of the Convention in question”. 7 Ie the Convention for the Protection of Human Rights and Fundamental Freedoms 1950, set out at schedule 1 to the 2000 Law.
48 The Laws of Guernsey a declaration of incompatibility.8 By section 6(1) it will, prima facie, be unlawful for a public authority to act in a way which is incompatible with a Convention right. By section 7(1) a person9 claiming that a public authority has acted in a way which is rendered unlawful by section 6(1) will be able to bring proceedings against that authority. By section 8(1) if the Court finds for the complainant it may grant such relief or remedy or make such order (within its powers) as it considers just and appropriate, including damages.10 Other remedies might include an injunction or declaratory relief. Convention rights which are more likely to be litigated than others include the right to liberty and security,11 the right to a fair trial,12 the right to respect for private and family life,13 freedom of assembly and association,14 prohibition of discrimination,15 protection of property,16 and right to education.17 Although the Law has no direct effect on private law rights there is an indirect or horizontal effect through the Court itself being a public authority bound to act compatibly with Convention rights. It follows that the Court must respect and uphold Convention rights in the context of private law disputes, although the precise scope of the obligation has yet to be established.18 The debate is as to whether the Court can impose new Convention-based legal obligations in private law disputes as opposed to applying and interpreting existing private law rights consistently with Convention rights. Note also challenges in England to Crown Immunity provisions, for example in the case of Matthews v Ministry of Defence [2002] 3 All ER 513. 8 Which, of its own, has no further consequence (see s 4(6)) save that it is likely the offending provision will be amended by the States in due course. See the case of R v A [2001] 2 WLR 1546 for an examination of the issues in this context. 9 Who must also be the “victim” of the act complained of. 10 In this last case HM Procureur must be made a party. See the case of Marcic v TWUL (No 2) [2001] 4 All ER 326 for a case in which damages were awarded under the equivalent English legislation, including damages for future wrongs. See also the case of R v Enfield London Borough Council, ex p Bernard (2002) QBD Administrative Court (Sullivan J) 25 October 2002 where the claimants were awarded a total of £10,000 for a 20 month delay on the part of a local authority in providing suitable accommodation adapted to the wife’s disabilities, in breach of its statutory duty and in breach of the claimants’ rights under Art 8, aggravated further by the authority’s failure to act timeously even after judicial review proceedings commenced. The case contains useful dicta concerning the approach of the court in general. 11 Art 5. 12 Art 6. 13 Art 8. See recent English case-law in this context such as the Court of Appeal judgment in A v B (a company) [2002] 2 All ER 454. 14 Art 11. 15 Art 14. 16 Art 1 of the First Protocol. 17 Art 2 of the First Protocol. 18 An example of the indirect effect on procedural law is the case of Cachia v Faluyi [2001] 1 WLR 1966 [2002] 1 All ER 192. A provision of the Fatal Accidents Act 1976 which, on the face of it, barred a claim was construed purposively in order to uphold the article 6 right of three children to a (fair and public) hearing. The extent of the Court’s duty to interpret, if possible, legislation compatibly with Convention rights was emphasised by Lord Steyn in R v A [2001] 2 WLR 1546; see also [2001] 1 WLR 789 and is illustrated by the Court of Appeal’s decision in Ghaidan v Mendoza [2002] 4 All ER 1162.
The Review of Administrative Decisions 49 Certainly this is fertile ground for the evolution of common law and crossfertilisation with other branches of law and the laws of other jurisdictions; in particular France where human rights law is very much more fully developed.19
19 See for example pages 195 to 245 Droit Civil Introduction Les personnes Les biens by Gérard Cornu 10th edn Montchrestien, see also Art 7—16–13 Code Civil. See generally Jacobs & White, European Convention on Human Rights 3rd edn (OUP) for a comprehensive introduction to the Convention and Convention-related topics, including proceedings before the ECHR. Note for example the time limit under Art 35 of 6 months from the date on which the final (domestic) decision was taken, see p 411. Guernsey has adopted only recently the Eleventh Protocol to the Convention concerning, inter alia, the automatic and permanent right of subjects to petition the European Court of Human Rights. Previous declarations were on a renewable basis and in fact lapsed through Foreign and Commonwealth Office oversight; see the letter from LC Morgan, President of the Advisory and Finance Committee to the President of the States of Guernsey, dated 26 June 2002 and published in Billet d’État XIX of 2002.
4 The Housing Control and Right to Work Legislation
T
HE TWO LEADING laws in this context are the Housing (Control of Occupation) (Guernsey) Law 19941 and the Right to Work (Limitation and Proof) (Guernsey) Law 1990 and apply only to the Island of Guernsey. Their purpose is to control the right to live and work in Guernsey.
THE HOUSING (CONTROL OF OCCUPATION) (GUERNSEY) LAW 1994
The key provisions of this Law are as follows: s1
s 10
Subject to the provisions of the Law, nobody may occupy, or cause or permit another person to occupy, a dwelling in Guernsey without a licence granted by the Housing Authority; However, a “qualified resident” does not require a housing licence to occupy a dwelling. Sub-sections (2)(a) and (m) set out the various categories of persons who are qualified residents. These range from people who were ordinarily resident in Guernsey at any time between 1938 and 1957 and were also occupying a dwelling in Guernsey on a certain date in 1968 to those who were born in Guernsey before the commencement of the 1994 Law and who have been ordinarily resident in Guernsey for ten years in any twenty year period with one parent at least who was ordinarily resident in Guernsey at the time of birth. The most important category from the author’s point of view is (g) whereby a person who has been ordinarily resident in Guernsey for a period of not less than ten consecutive years and who has, throughout that period, cohabited with a qualified resident as his spouse is a qualified resident; Generally speaking there is a ten year qualifying period for those with Guernsey connections, otherwise fifteen or twenty years if merely a licensee.
1 As amended by the Housing (Control of Occupation) (Amendment) (Guernsey) Laws of 1998 and 2001.
52 The Laws of Guernsey There are special provisions for surviving spouses and members of the armed forces, likewise providing for the consequences of wartime evacuation. s 11 A person may apply for a status declaration to discover whether or not he is a qualified resident. s 12 The Authority must reach a decision and state its reasons if it decides that the applicant is not a qualified resident. s 13 There is a right of appeal against the status declaration within two months of the decision. The sole ground is that the decision was wrong. Appeal is to the Ordinary Court with a subsequent appeal to the Court of Appeal on a question of law only. There is a similar system of application for a declaration of lawful residence and subsequent appeal, although the ground of appeal initially is that the Authority ought to have issued such a declaration. s 18 The burden of proof as regards the s.10 categories falls upon the accused in criminal proceedings for breach of the Law. Whether this is human rights compliant may come to be tested. ss 19–28 These sections state further circumstances where a housing licence is not required. There are various exceptions for occupiers, alternatively owners, principal tenants, or full-time employees (as appropriate) of dwellings inscribed on the Housing Authority’s Housing Register in parts A, B, C and D. Part A concerns open market2 family houses. Part B concerns hotels and guest houses. Part C is for nursing homes. Part D comprises lodging houses. An important exemption from the requirement for a housing licence is at section 25. A person shall not require a housing licence to occupy a dwelling as a member of the household of a person who is a qualified resident or holder of a housing licence (other than a short-term housing licence). A member of the household is defined as the spouse, father, mother, child, grandchild, father-in-law or mother-in-law of the relevant person. There is a similar exemption for guests; but a guest’s welcome, so far as the Housing Authority, expires after ninety days in any twelve month period. There are various saving provisions for those previously in lawful occupation. s 28 This again places the burden of proof upon the accused to show that he falls within one of the additional categories in criminal proceedings for contravention of the Law.
2 Guernsey’s property market is divided into an “open” and “local” market. Anyone may buy and inhabit an open market property. An open market property dweller may also work in Guernsey. By contrast anyone can buy a local market property but may only inhabit the property and work if they are either a qualified resident or licensed.
The Housing Control and Right to Work Legislation 53
THE LAW IN PRACTICE
It follows that one must first consider whether a person falls within either section 10 as a qualifying resident or any other category of exemption. If so, a housing licence is not required. The opposite applies if they fall outside of all the exempt categories. A licence may be a short-term housing licence issued on a temporary or seasonal basis and lasting no more than three years in any event; see section 4. Short term licences confer less rights than a standard housing licence, the most important difference being the inability to accommodate the licence holder’s household. By contrast a standard housing licence may be granted for such period as the Authority in its absolute discretion think fit; see section 3. In practice the Authority grants such licences for periods of five or fifteen years. An application for a housing licence is made pursuant to section 2. It is noteworthy that the application may be made by the owner of the dwelling to which the application relates as well as by the person or the employer of a person wishing to occupy a dwelling; even a prospective employer may apply. In this last circumstance the person to benefit from the proposed licence need not be identified. There is also provision for obtaining a statement in principle concerning the essentiality of a proposed employee, the relevance of which will become apparent. By section 3(3) the Authority may impose such conditions in respect of a licence as it considers to be necessary or expedient. These may include conditions relating to the person’s employment and conditions as to the dwelling3 or description of dwelling to be occupied. If the Authority decides to refuse to grant a housing licence, or to grant a housing licence subject to conditions, or to vary a condition or revoke a licence, section 5 provides that a notice signed by an authorised person must be served on the applicant stating the fact of the refusal, revocation or invalidity of the licence, or the terms of the conditions, and the reasons for the decision. The Discretionary Housing Licence It is rare that there is a dispute as to whether a person falls within the section 10 or other exempt categories. It is normally clear when the conditions are or are not met. Litigation most often results from the exercise of the Housing Authority’s powers under the Law to grant or refuse what can be called a discretionary housing licence. The Law gives broad powers to the Housing Authority to grant licences notwithstanding the fact that the applicant is neither a qualified resident nor within any other exempt category. 3 Often expressed in terms of a requirement to inhabit a property above a certain rateable value. Licence holders are typically required to occupy more expensive properties.
54 The Laws of Guernsey This discretion is found at section 6 which sets out the procedure for consideration of an application for a housing licence. The process is divided into two stages; although an application may fail after the first stage. The First Stage The first stage itself contains two independent mandatory considerations for the Housing Authority. If the application is made in order to enable a person to occupy a dwelling so that he may undertake employment in Guernsey the Authority must consider the following three matters: (i)
whether the employment is of sufficient essentiality to the community to justify the grant of a licence; (ii) the number of people appearing to be resident in Guernsey and lawfully available to undertake such work; (iii) the number of people entitled to occupy a dwelling under a housing licence of the type concerned, (ie the type of dwelling concerned).
This is therefore the first stage test for what may be called an essential worker licence. In any other case there is a distinct first stage consideration of the following two matters: (i) whether the person who would be licensed has familial or like connections with Guernsey of sufficient strength to justify the grant of a housing licence; and (ii) the periods during which and the circumstances in which that person has been resident in Guernsey or elsewhere. Having considered the appropriate first stage matters the Authority is permitted by section 6(3) to decide to refuse to grant a housing licence. The Second Stage By section 6(4) if the Authority does not decide against the application at the first stage it must proceed to the second stage and consider the application further. It must take into account the number of equivalent dwellings available for occupation and the sufficiency of that supply of housing for qualified residents and licensed persons. At any stage of the consideration process the Authority may take into account any of the matters set out under section 6(5) these comprise the following: 5(a)
In the context of an employment application the Authority may consider any previous criminal convictions, wherever recorded,
The Housing Control and Right to Work Legislation 55 and any previously held licence or period of occupation of a dwelling; 5(b), (c) & (d) any States population or other objectives or policies; 5(e) such other factors as it may deem necessary or expedient. In practice it is this last which provides fertile ground for appeal through alleged failure to take into account material factors or giving the wrong weight to such factors or even taking account wrongly of other factors. Revocation Section 7 contains provisions for the expiry and revocation of housing licences. A housing licence may be revoked if the person concerned ceases to be engaged or employed in the material employment or if a criminal conviction was concealed. The licence may likewise be revoked if any condition is contravened.
APPEALS
The provisions for appeals are set out in section 56. Sub-section 1 provides as follows: “. . . a person aggrieved by any decision of the Authority . . . may appeal therefrom to the Royal Court on the grounds that the decision was ultra vires or was an unreasonable exercise of the Authority’s powers.”
The appeal is by way of summons which must set out the material facts upon which the appellant relies. The appeal notice must be served upon the President of the Housing Authority within two months of the date of the notice appealed against. The appellant has the burden of proof but the final right of reply.4 There is an appeal from the Royal Court to the Court of Appeal on a question of law. A great number of cases have been generated by this legislation. The leading cases include Ward v States Housing Authority [1995] 20 GLJ 94 where an appeal to the Court of Appeal against the refusal of the States Housing Authority to grant a housing licence prompted Le Quesne, V–P to make the following observations: “The Housing Law is a very formidable enactment. Under its provisions the Housing Authority wield unusually extensive powers of control over the rights of many ordinary people. . . . it places great and unusual power in the hands of the Housing Authority. Beside the limited class of qualified residents and the limited circumstances in which a housing licence is not required, nobody can lawfully occupy any dwelling in this Island 4 Contrast the right of appeal under the Island Development (Guernsey) Law 1966, although this is a target of proposed reforms. See further below.
56 The Laws of Guernsey without the Housing Authority’s licence. Subject only to the requirement to act reasonably, the Housing Authority can prevent the owner of a house, who does not belong to that class or fall within those circumstances, from occupying his own property. Subject only to the same requirements, the Housing Authority can even evict from property owners whose occupation has been rendered unlawful, not by anything they have done but simply by the act of third parties. The existence of such power has been judged necessary by the States, and Her Majesty in Council has confirmed this view. It is not the province of the Court to suggest anything to the contrary, and certainly we have no intention of doing so. We wish to emphasise, however, that such drastic power calls for meticulous care in its exercise and scrupulous balancing of the conflicting interests which it affects.”
This 1989 decision was referred to in the case of Perkins v States Housing Authority [1995] 20 GLJ 93 together with an earlier challenge to the then Housing Law which was taken all the way to the European Court of Human Rights. Southwell JA stated: “The Housing Control Laws give the Authority draconian powers to control the occupation of premises in Guernsey. These powers were considered by the European Commission and Court of Human Rights in Gillow (1987) A. 109. The European Court upheld the existence of these powers as being appropriate in the particular circumstances of Guernsey, but held that in the exercise of such powers in the particular circumstances relating to the Gillows there had been a violation of their rights under Article 85 of the European Convention on Human Rights. The existence of powers such as these is unusual in a democratic society and must be exercised with care and sensitivity to avoid any abuse of those powers.”
Southwell JA drew from Ward the following: 1 The Authority is under a statutory duty not only to give a statement of the reasons why the Authority refused to grant the housing licence concerned;6 but also 2 a statutory duty to explain what view it took of the (mandatory) factors set out in the then Law. Southwell JA noted the shift in the burden of proof to the applicant and that this made it even more important that the Authority discharged fully its statutory duties as identified in Ward. Southwell JA went on to hold as follows: “What this means is that the appeal to the Royal Court has effectively to be based on matters of law, so that it will interfere in cases: (a) where the Authority has acted outside its powers as laid down in the Housing Control Law; 5 6
Set out below. Ie the s 5 obligation.
The Housing Control and Right to Work Legislation 57 (b) where in any other respects the Authority has erred in law; including cases in which: (i) the Authority has taken into account irrelevant factors or failed to take into account relevant factors; (ii) the process by which the Authority has reached its decision is vitiated by wrong procedures or by failure to be fair (sometimes described as acting contrary to natural justice); (iii) the Authority has reached a decision on the facts which no body acting reasonably and correctly directed as to the law could have reached. The appeal to the Royal Court is accordingly one on lines similar to an application for judicial review in the English High Court. The appeal to the Court of Appeal is similarly limited to questions of law. Accordingly, it is not for the Royal Court or for this Court to substitute its views for those of the Authority acting within the scope of its powers.”
In the case of Walters v States Housing Authority [1997] 24 GLJ 32 Beloff JA gave authoritative guidance on the possible routes that an appeal to the Royal Court might take and with what result: “It seems to us that there are at any rate five possible views which may be taken on appeal by the Royal Court against an exercise of power by the Housing Authority: 1 it is the Bailiff ’s view that the power was exercised ultra vires, in a way other than Wednesbury unreasonably or irrationally. In such a case the Bailiff would withdraw the matter from the Jurats since, as a matter of vires, that is to say, law, it would fall within his exclusive province. The Court would in consequence allow the appeal. 2 That it is the Bailiff ’s view that the decision was Wednesbury unreasonable or irrational. The same procedural consequences would ensue as in 1. 3 That it is not in the Bailiff ’s view an ultra vires (including Wednesbury unreasonable) exercise of power, in which case the Bailiff would direct the Jurats that it was for them to determine whether the decision was unreasonable, which, in our view, he should emphasise means something other than that they themselves would have come to a different decision had they been the authority.7 In the case of In re W to which I have referred above, Lord Hailsham, LC, said at page 700 between letters D and E: “. . . not every reasonable exercise of judgment is right, and not every mistaken exercise of judgment is unreasonable. There is a band of decisions within which no Court should seek to replace the individual’s judgment with his own . . .” Mutatis mutandis, it seems to us that this is the approach that the Jurats should be directed to adopt towards the decision of the Authority insofar as they are free to consider such decision. If the Jurats then consider, having weighed up all the evidence, that the decision reached by the Authority was unreasonable, they should so say and the Court would in consequence allow the appeal.
7
The emphasis is added and not original.
58 The Laws of Guernsey 4 If, upon such direction by the Bailiff, the Jurats merely consider that they themselves would have come to a different decision but that the Authority’s decision under appeal is not unreasonable, the appeal must be dismissed. 5 If, upon such direction by the Bailiff, the Jurats consider that the Authority’s decision was right, equally the appeal must be dismissed. In cases 1, 2 and 3 which I have identified, the proper order would be to remit to the Authority, as the primary decision maker, the issue in order that they should retake the decision in the light of the observations and, it might be, in appropriate cases the directions of the Court. [As a matter of principle it is not for the Royal Court itself to make a decision under s 6 or other sections of the 1994 Law.] The observations of the Court might in an appropriate case amount to a direction, for example, that a particular condition proposed to be imposed by the Authority on the licence was unreasonable. In consequence of any such direction it would not thereafter be open to the Authority to impose it. In cases 1 and 2 which I have identified, there would be a further right of appeal to the Court of Appeal under s 56(4) of the 1994 Law, because a point of law would be involved, [but not in cases 3, 4 or 5 unless it may be that the Jurats’ decision was itself challengeable on the grounds of being perverse or the product of procedural impropriety or tainted by a misdirection as to any relevant law by the Bailiff.]”
The above was applied and confirmed by the Court of Appeal in the case of Matheson v States Housing Authority [1998] 26 GLJ 27 where Beloff JA again gave the lead judgment holding that: “. . . if the Jurats consider . . . a policy in general or its application in a particular case is unreasonable they have the right, indeed the duty, to override it”.
It was emphasised that the test of unreasonableness in this context was to be distinguished from Wednesbury unreasonableness; Beloff JA referred to the “less strenuous test of reasonableness by which (the Jurats) can assess . . . the decision”.8 The case also suggests that there should be single hearings for section 56 appeals to the Royal Court and not separate hearings split between matters for the Bailiff and matters for the Jurats; save that is where the challenge is restricted to a ground which is plainly for the Bailiff alone, eg that the decision was ultra vires the powers of the authority. What is not clear is the extent or validity of the distinction drawn within the Walters possibility 3. If a decision is within the bounds of reasonableness so as to
8 See also the Jersey Court of Appeal case of Le Maistre v Planning and Environmental Committee 2002/129 where, in a not dissimilar appeal context, the Court approved the requirement for the Royal Court to form its own view of the merits while not going on to intervene unless it also formed the view that the decision appealed against was unreasonable. The Court cited the earlier case of Token Limited v Planning and Environmental Committee [2001] JLR 698 and adopted the Bailiff ’s dictum that “. . . there is a margin of appreciation before a decision which the Court thinks to be mistaken becomes so wrong that it is, in the view of the Court, unreasonable”.
The Housing Control and Right to Work Legislation 59 get past the Bailiff it is perhaps difficult to see how it can properly be struck down by the Jurats on the grounds of unreasonableness.9 In the Gillow case itself 10 the European Court of Human Rights held that it was legitimate for the Guernsey Authorities to try to maintain the population within acceptable limits and also to show a certain preference for persons with strong attachments to the Island or those engaged in essential employment. However, in the application of the then Law the Court found a breach of article 8 of the Convention. Article 8 reads: 1 Everyone has the right to respect for his private and family life, his home and his correspondence. 2 There shall be no interference by a Public Authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.
Although the case had also been put on the basis of a breach of Article 1 of protocol no. 1 it emerged that the protocol had not, as at that date, been extended to Guernsey. This is something to note for the future. The Article reads as follows: “Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No-one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of International Law. The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”
Whether this would be sufficient to defeat the Housing Law remains to be seen. On balance it is suggested not. The State has a right to enforce laws to control the use of property in the general interest. This general interest was arguably recognised in Gillow. OTHER PROVISIONS OF THE HOUSING LAW
The 1994 Law contains various provisions relating to the maintenance of the Housing Register. There are noteworthy provisions concerning the circumstances in which open market property will lose its registration. These include where a single dwelling inscribed in the Housing Register is combined with another 9 The Wednesbury principles may themselves be the origin of the problem in that, although they are well understood, they do not lend themselves easily to application by a Guernsey tribunal. For a recent Royal Court judgment in the context of the Housing Law see the case of Campbell v States Housing Authority (2002) 8 July. The Deputy Bailiff, sitting alone, found a decision of the Authority to be ultra vires. The case concerned the adoption and implementation of policies. 10 (1986) 24th November; ECHR Case No. 13/1984/85/132.
60 The Laws of Guernsey (non-registered) dwelling or, alternatively, whether by alteration or otherwise, used or made useable as two or more dwellings; see sections 34 & 35. Note however section 34(2)11 whereby it is possible to apply for registration of the combined dwelling if another dwelling has been deleted from the Register; likewise under section 35(b) application can be made to register one of the two. Certainly the owner must be very careful when making any alteration to an open market property to avoid deletion from the Register. There are provisions for transfers of open market properties between various parts of the Register and rights of appeal if the owner is aggrieved. There are restrictions imposed by section 54 upon qualified residents who caused their properties to be inscribed on the Housing Register in 1969 or 1975. In general they must continue to occupy open market property unless they cause the registration of a registered property to be deleted. The Housing Authority retains an “absolute” discretion under section 54(7) to grant a qualified resident written permission to occupy a dwelling in Guernsey which section 54 would otherwise prohibit. This allows, say, for the possibility of an elderly person with limited means applying for permission to live in a local market property without deleting the open market registration with a view to selling the property and releasing capital.12 There are various criminal offences and sanctions provided by the Housing Law for breach of its provisions.
THE RIGHT TO WORK (LIMITATION AND PROOF) (GUERNSEY) LAW 1990
This Law is closely connected with the 1994 Housing Law through its definition of a right to work document and follows a similar system of control. Section 1(1) provides that every person who is in employment in Guernsey must be the holder of a currently valid right to work document. Section 1(2) excludes various categories of people from this requirement: (a) persons who have been continuously employed in Guernsey since 1 December 1989 as an employee under a contract of employment entered into on or before that date or as a self-employed person; (b) those working in the course of a visit to Guernsey not exceeding fifteen hours; (c) employees or self-employed persons who have been in employment in Guernsey for no more than ten days during the preceding thirty days and no more than ninety days during the preceding twelve months where there is a non-resident employer.
11 12
Law.
Added by the 2001 Amendment Law. Former restrictions on spouses of owners have all but been removed by the 2001 Amendment
The Housing Control and Right to Work Legislation 61 A “right to work document” is defined by reference to the Housing Law in that a status declaration in favour of the applicant, a housing licence and a declaration of lawful residence all qualify as right to work documents. In addition a tent dweller’s declaration and a temporary exemption certificate also qualify.13 The tent dweller’s declaration extends to workers who live or intend to live in a tent at a specified address whilst engaged in employment with a specified employer in connection with horticulture, tourism, retailing, food manufacture, fish farming or building. The tent dweller’s declaration may only last between 1 April and 31 October in any year. A temporary exemption certificate may be issued pursuant to section 4 with or without conditions. There are powers under the Law to appoint inspectors who may enter dwellings to investigate compliance with the Law. The Bailiff may issue a warrant to authorise entry. Employers have an obligation to keep records showing, inter alia, compliance with the Law. There are various criminal offences and sanctions associated with the Law. It is important to note that for both housing and work purposes once a person has become a locally qualified resident they never lose that right and may come and go as they please.14
ALDERNEY AND SARK
There are different systems of control in Alderney and Sark. No attempt has been made to emulate the blanket controls introduced in Guernsey. In Alderney there is the Housing (Control of Occupation and Development) (Alderney) Law 1994. By section 1 there are strict limits placed upon who may be granted permission under the 1975 Development Control (Alderney) Law to construct a dwelling. The applicant must either be: (a) aged at least 21 years and have been ordinarily resident in Alderney for an aggregate of not less than ten years in the last fifteen years immediately prior to the application date; or (b) ordinarily resident in Alderney and the spouse or surviving spouse of a person described in (a); or (c) a person prescribed by Ordonnance. The Law is not retrospective and specifically states that these provisions do not apply to an application made before 10 December 1992.
13
The category of “boat crew declaration” was added by an Ordonnance of 1990. The sole exception is s 10(2)(c) of the Law which provides that a person born in Guernsey before the commencement of the Law and who, since his birth, has been continuously ordinarily resident in Guernsey is a qualified resident. This is itself a safety net provision; but the qualification is obviously only fulfilled for as long as the person remains continuously ordinarily resident. 14
62 The Laws of Guernsey The occupation of dwellings is governed by similar conditions. No person shall occupy a dwelling in Alderney unless he fulfils either of conditions (a) or (b) above or he has acquired an interest in the dwelling concerned by inheritance or he is occupying the dwelling concerned as a member of the household of another. This appears to be undefined save to the extent that the person whose household it is must be locally qualified in the sense of the Law, not a minor and occupying the dwelling as his principal dwelling. Again it seems that there is power to prescribe a person by Ordonnance who may either be the head of such a household or a member of it. The drafting is not very clear. There are again powers of entry to investigate compliance with the Law and various offences. Again these controls do not apply in respect of a dwelling where application for permission to build was made before 10 December 1992 or the construction of the dwelling was lawfully completed before that date. It follows that the restrictions on occupation are comparatively easy to avoid. A similar Law applies in Sark.
IMMIGRATION
Immigration controls are administered by the Customs and Immigration Department of the Board of Administration. Anyone who wishes to reside in Guernsey and who is not an EC national requires a permit from the Department as well as a Housing Licence and/or right to work document.
5 Control of Development
L
AND USE IN Guernsey is controlled and governed by the Island Development (Guernsey) Law 1966, as amended on a number of occasions since (“the Law”). Once upon a time you could buy a field and build your house upon it. The use of land in Guernsey is now strictly controlled. Given the size of the Island and level of population density the need for such controls is obvious, even if their administration is criticised frequently.1 Part I of the Law established the Island Development Committee (“IDC” or “the Committee”) with authority to exercise the powers and perform the duties conferred upon it by the Law.
THE DETAILED DEVELOPMENT PLAN
Part II concerns the preparation and review of “Detailed Development Plans” (“DDP(s)”). The purpose of these Plans is to set out the IDC’s proposals for land use throughout the whole Island. There are two DDPs. The Urban Area Plan comprises St Peter Port, St Sampsons and the built-up corridor in between. The second is the Rural Area Plan which is itself divided into two. Phase I covers the north of the Island and phase II the South. In reality the two phases are plans in their own right. Each plan is influenced heavily by the States’ Strategic and Corporate Plan which itself gives an overview of the direction it is intended Guernsey should follow as regards most areas of daily concern. These are broader than land use itself and extend to the economy, population and the like. By section 2 of the Island Development (Amendment) (Guernsey) Law 1990 the Committee is required to take into account the provisions of the Strategic and Corporate Plan when preparing and/or reviewing Detailed Development Plans. Each DDP is accompanied by a map which illustrates in diagrammatic form the intended land use. In the Urban Area Plan one finds the following areas: key industrial areas, built-up areas, green areas, areas with potential for enhancement and urban conservation areas. In the Rural Area Plans one finds areas of special environmental importance (Green Zone 1), areas of landscape value (Green Zone 2), areas of rural character (Green Zone 3), conservation areas and built-up areas. The 1 This is another area of Guernsey law currently under review. There are advanced proposals for a new Law and Ordonnances amounting to an evolution of the 1966 Law with, inter alia, more effective enforcement provisions; see Billet d’État XI of 2002, see further below.
64 The Laws of Guernsey DDPs will, in many instances, prove critical in determining the outcome of any planning application. They amount to a text-book for use by the IDC, its staff and any applicant and their professional advisors. By reading the Plans it is easy to see what is more or less likely to gain approval or indeed what will be precluded. Thus the creation of affordable flats in a tumble-down town house in Pedvin Street, St Peter Port is very likely to obtain approval whereas the creation of a light industrial unit in Green Zone 2 land is almost certain to be refused. Detailed Development Plans have effect for a period of five years commencing on the day on which each Plan is approved by the States.2 The Detailed Development Plan must be reviewed at least once in every five years,3 but proposals for review may be laid before the States at any time. It is the adoption by the States of any Detailed Development Plan that gives the document the authority it has. Before a DDP or any alteration to it can be put to the States an Inspector must be appointed to hold a planning inquiry to consider the Plan or proposed alteration and to hear any representation or objection concerning the proposals. Curiously the Inspector is appointed by the States Advisory & Finance Committee at the request of the IDC.4 When an Inspector has been appointed the IDC must publish the proposals in La Gazette Officielle 5 together with details of the place and time at which the Plan or proposed alterations may be inspected, see section 9. Section 10 concerns the planning inquiry process itself. The inquiry must be held in public; representations may be made personally or by an Advocate. An Inspector may summons individuals to answer questions or provide information and may take statements and enter premises. When the inquiry is complete the Inspector reports in writing with his recommendations to the Committee. The DDP, or proposals for alteration of the DDP, together with the Inspector’s report and the Committee’s response are then put to the States.6 By section 13 the States may approve the Plan or alteration without modification, or subject to such modification as it considers necessary or expedient.
PLANNING CONTROL
Part III of the Law concerns control of development itself. By section 14(1) a person shall not, without the permission in writing of the IDC, carry out development of any land. Development is defined in section 40 as:
2
See s 7. In practice the plans have not been reviewed this frequently. 4 The idea appears to be that the IDC should not appoint the inspector in order to preserve his independence; this is also proposed for the replacement Law, see para 4.2.9 of the policy letter dated 13 May 2002 at Billet d’État XI of 2002. 5 To be found at the back of the Guernsey Press. 6 See s 12. 3
Control of Development 65 “. . . the carrying out of any building, engineering, mining or other operation in, on, over or under land and includes the making of any material change in the use of any building or land”.
The prohibition on building, engineering and mining is easy to understand. More subtle is the prohibition of any material change in the use of any building or land. This is however arguably the key provision of the Law; certainly it is the means by which land use in Guernsey is controlled rigorously. Categories of use are set out in considerable detail in the Island Development (Use Classes) Ordinance 1991. Section 2 of the Ordinance provides that where the principal use of any premises falls within a Use Class any other ancillary or ordinarily incidental use to the principal use is regarded as also falling within the principal Use Class. Likewise, by section 3 any other insignificant, temporary or occasional use of the premises is to be regarded as falling within the principal Use Class unless there is a material effect upon the natural beauty, character or amenity of an area. It is important to note that mere change of use within a Class is not development unless it is a material change, see section 4.7 It is specifically provided that no Use Class allows for camp sites, vehicle sale, fuel sale, betting offices, exhibition halls, casinos and the like. All such applications must be dealt with on their individual merits. Examples of the sixty Use Classes are as follows: Residential Use Class 1:
Use of a detached dwelling as a permanent residence for one household. Tourist Use Class 14: Use in accordance with a boarding permit of an hotel licensed for the supply of intoxicating liquor to non-residents. Retail Use Class 21: Sale, or display for sale, to visiting members of the public of live animals. Commercial Use Class 26: Use of any premises as a veterinary clinic. Assembly & Leisure Use Class 36: Use as a dance hall or discotheque. Storage/distribution Use Class 43: Storage of putrescible, offensive or noxious organic material, leather, hide or skin. Industrial Use Class 53: Soap manufacture. Agricultural Use Class 60: Use of land for agriculture, horticulture or forestry (including afforestation), and use for any of those purposes of any building occupied together with land so used. Apart from the blanket ban upon development as defined there are more specific bans found between section 14(1)(b) and (g) of the Law as follows: 7 See the case of Gramby Ltd v Island Development Committee [1996] 21 GLJ 33 for a decision of the Royal Court concerning change of use; note that English case-law was considered.
66 The Laws of Guernsey (i)
(ii) (iii)
(iv) (v)
(vi)
placing, erecting or making structural alteration to the exterior of any movable or immovable structure, whether or not visible from any public place; placing or erecting any structure which will be visible from any part of the territorial waters of the Island of Guernsey; placing, erecting or making any structural alteration to the exterior of any movable or immovable structure on the cliffs or on land adjacent to the foreshore; demolishing any wall, hedge, bank or fence visible from any public place; placing on any site or attaching to the exterior of any movable or immovable structure any sign, poster, bill, advertising banner or flag which can be seen from any public place; painting or otherwise exhibiting on the exterior of any movable or immovable structure any sign which can be seen from a public place where such sign refers to any commercial or industrial undertaking.
There are important exemptions from the requirement for permission. Thus by section 14(2) a movable structure, other than a caravan, with a cubic capacity of less than 400 feet may be erected in a place which cannot be seen by the public. Section 40 exempts from the definition of development (and therefore the need for permission) the following: (a) the carrying out of works for the maintenance, improvement or other alteration of any building, being works which affect only the interior of the building or which do not materially affect the external appearance of the building; (b) change of use within a Class, as noted above; (c) works carried out by Guernsey Gas; (d) the use of any building or land within the curtilage of a dwelling-house for a purpose relating to the enjoyment of the dwelling-house as such; (e) the use of any land for agriculture, horticulture or forestry (including afforestation) and the use of, for any of those purposes, any building occupied together with that land. In addition the Island Development (Exemptions) Ordinance 1997 sets out categories of development and other forms of work also not requiring permission. Many of the categories of exemption are conditional upon carrying out the works in a certain way. For example, permission is not required for replacement doors and windows if the dwelling-house is not in a conservation area and so long as there is no change in the size or shape of the existing door or window opening and any new door or window is of the same design and means of opening as those replaced. Other examples are as follows: installation of one satellite dish antenna, erection of a porch, conservatory or shed, installation of a patio, traffic mirror or cesspit
Control of Development 67 and sale of garden produce within the curtilage of a dwelling-house, but not on a commercial basis. There are broad exemptions for the surfacing or resurfacing of existing pathways and driveways. Dead and diseased trees may be felled with the prior consent of the States Committee for Horticulture. Other trees may be felled or lopped within the boundary or curtilage of a building if they are less than five metres high and do not form part of a hedge visible from a public place. There are general permissions for contractors’ signs, nameplates and signs marking charity and public events. At election time the temporary display of a sign promoting a candidate is permitted. By the same Ordinance change from certain special retail uses to general retail use is also permitted. It is noteworthy that the 1966 Law does not apply to the States itself, which goes some way to explain the appearance of certain buildings it occupies.8 The Application for Planning Permission Assuming therefore that permission is required for the proposed development application must be made to the Island Development Committee in standard form and accompanied by such information, plans and drawings as the Committee requires.9 Rather than make a full-scale application there is the option to apply instead for a preliminary declaration as to whether, in principle, the Committee would be likely to grant permission for the proposed development or works on submission to it of a fully detailed application.10 It is likely to be much more economic to pursue this route if the merits of the application are uncertain. The grant of a declaration is not the equivalent of permission and may not lead to permission being granted, but this is uncommon, all things being equal. When a section 15 application is made to the Committee the IDC may either grant the permission applied for, refuse permission or grant permission subject to conditions. Conditions may relate to the dimensions, design, structure or external appearance of any building; they may also relate to the materials to be employed or the use of any building or other land. There is a general power to impose such conditions as the Committee deems expedient or necessary. The Committee may vary any condition imposed upon written application.11 Any permission granted by the Committee under section 16 or preliminary declaration under section 27 remains in force for three years from the date of grant or issue. The Island Development (Amendment) (Guernsey) Law 1990 gives power to the Committee to grant permission or limit the validity of the declaration for a period of less than three years. By section 17 the Committee is required to take into account the following matters when considering whether or not to grant permission: 8 9 10 11
See s 30. See s 15. See s 27. See generally s 16.
68 The Laws of Guernsey (a) the Strategic and Corporate Plan; (b) the effect of the development or other work on the natural beauty of the area concerned; (c) whether the structure or work applied for would be incongruous with its surroundings because of its siting, design, exterior appearance or materials to be used; (d) in the case of an application for permission to carry out any development of agricultural land, the degree of suitability of the land as agricultural land; (e) the extent to which the development or other work would detract from the character or the amenity of the locality concerned; and (f) the effect of the development or other work on roads, traffic, services, public health, parks, playing fields and other open spaces and the effect on adjoining properties. By section 18 of the Law the IDC may grant permission to carry out development or work involving a departure from the relevant Detailed Development Plan, but only if this departure is of a minor nature. Alternatively, and if the IDC is minded to approve the application, the States Advisory & Finance Committee must be requested to appoint an Inspector for a Planning Inquiry to be held with the matter being put to the States as an alteration to the Detailed Development Plan. The effect of these provisions is to elevate the DDP to near-Law status. Section 19 contains provisions regarding the removal of surface or sub-soil. Save for ordinary domestic garden use, permission must be sought. Powers are given to the IDC to require the restoration of land in default of such approval. If the defaulter fails to obey a notice served by the IDC requiring him to restore the land, application may be made to the Ordinary Court authorising the Committee to effect the restoration at the expense of the person responsible. Section 21 gives the IDC power to serve notices requiring the removal or decoration12 of movable structures and the renovation or removal of dilapidated or out-of-date signs. Section 22 concerns preservation of trees on land where planning permission has been given. They may not be felled without the permission of the IDC. The Law requires a register to be kept of applications available for public inspection. There are general powers to visit sites and a blanket exemption of liability to compensate in the event of the IDC refusing to grant any application. The Right of Appeal Section 26 confers a right of appeal to the Royal Court sitting as a Full Court on the grounds that the decision of the Committee was ultra vires or an unreasonable exercise of its powers. The appeal must be made within four months following the date of the decision. Any “person aggrieved” may exercise the right of appeal. This means a person who has suffered a legal grievance, ie a person against whom a 12
Sic.
Control of Development 69 decision has been pronounced and which has (wrongfully) deprived him of or refused him something, as opposed to a mere disgruntled neighbour. See the case of Green v IDC & Winslow [1993] 15 GLJ 36. The appeal is by way of summons addressed to the President of the IDC. The summons must set out the material facts upon which the appellant relies and require the IDC to show cause why the decision appealed from should not be set aside or varied. The burden of proof is upon the Committee to show that the decision is intra vires or reasonable but the Committee has the final right of reply, ie the Crown Advocate has the right to speak last when submissions are made.13 The real area of contest on an appeal is seldom the question of whether or not a decision is ultra or intra vires but rather whether it is reasonable. What is reasonable is determined by what might be called the Walters test as set out in the housing control case of Walters v States Housing Authority [1997] 24 GLJ 32 and the judgment of Beloff JA. Enforcement Part VI of the 1966 Law contains general enforcement provisions. By section 35 a person who contravenes sections 14 or 19 or who fails to comply with any condition attached to a permission is guilty of an offence and liable to a fine not exceeding twice the amount of level 5 on the Uniform Scale (ie a total of £10,000) and a further fine not exceeding Level 3 for each day during which the offence continues after conviction. There are penalties also for felling trees unlawfully and failing to comply with notices served under section 21. When a person has been convicted of an offence under the Law the Committee may apply to the Ordinary Court for an order requiring that person to make good his offending conduct; ie to demolish the structure to which the conviction relates, to re-build a hedge or bank, to remove a sign, to restore a use or otherwise deal with the land in a manner so as to reinstate the natural beauty of the area and so on. There is the commonly found offence in such legislation of making false statements, together with a separate offence of obstructing those exercising powers or performing duties under the Law.
ANCIENT MONUMENTS
There is a simple but effective Law governing ancient monuments and protected buildings namely the Ancient Monuments and Protected Buildings (Guernsey) Law 1967. This Law provides that the States Ancient Monuments Committee, now 13 Note the similarities and differences between the 1966 Law and 1994 Housing Law appeal rights. Under the Housing Law the burden of proof is upon the appellant, note the proposed reforms of planning law in this regard. See now also the case of IDC v Portholme Properties Limited (2002) 20 September where the Court of Appeal found that there was a right of appeal from the Royal Court notwithstanding the lack of express provision in the 1966 Law.
70 The Laws of Guernsey Heritage Committee, may direct that any building, structure or object which, in the opinion of the Committee, is of historical, traditional, archaeological, architectural or other special interest, be registered by HM Greffier in a Register of Ancient Monuments and Protected Buildings.14 When the registration of any building, structure or object is directed, notice in writing must be given to the owner. In the same way the Committee may make amendments to the Register entry which must also be notified. Each January the Committee must publish additions, deletions and amendments to the Register made in the previous calendar year. Every three years an appendix to a Billet d’État must list all the registered buildings, structures or objects. By section 3 a person must not, without the permission in writing of the Committee, demolish, efface, effect any alteration or addition to, or change the appearance of, any registered building, structure or object. Any permission granted may be (and generally is) subject to conditions, eg materials to be used and architectural details to be retained. By section 4 any person aggrieved by a decision or direction of the Committee may appeal within one month of the service of a notice concerning registration. It would seem also that there is a right of appeal from the refusal of permission under section 3. The grounds are the same as with development, ie that the decision or direction was ultra vires or an unreasonable exercise of the Committee’s powers. Appeal is again by summons setting out the material facts and requiring the President of the Heritage Committee to show cause why the decision or direction appealed from should not be set aside or varied. Again the Heritage Committee bears the burden of proof but with a final right of reply. It is a criminal offence to contravene the provisions of section 3. Where a person is convicted the Committee may apply to the Ordinary Court for an order requiring that person to restore the building to the condition in which it was before the offending works took place, alternatively to comply with any condition breached. In default of compliance with the order the Committee may undertake the works and recover the expense from the defaulter. As with the Development Law there are powers of entry to ascertain compliance with the Law. Again no compensation is payable by the States in respect of any act or decision made in pursuance of the Law.
DRAFT LAND, PLANNING AND DEVELOPMENT LAW
There are advanced proposals to replace the Island Development (Guernsey) Law 1966, the Ancient Monuments and Protected Buildings (Guernsey) Law 1967 and the Building (Guernsey) Law 1956 with a single umbrella Law and (at least) eight ordinances together with regulations. The draft Law itself together with a detailed introduction to the proposed reforms is to be found at Billet d’État XI of 2002. The 14
See s 2(1).
Control of Development 71 States resolutions, essentially approving the proposals, were dated 27 June 2002. The eight intended ordinances will cover the following areas: (i) (ii) (iii) (iv) (v) (vi) (vii) (viii)
Plans; Control of Development (General Provisions); Control of Development (Exemptions); Control of Development (Use Classes); Environmental Impact Assessment; Special Controls; Enforcement; Appeals and Review.
Although there are many differences between the old and new régimes, the new Law is very much an evolution rather than a radical departure from what went before. The philosophical underpinning remains the same. The draft Law begins with what amounts to a mission statement, namely “to protect, enhance and facilitate sustainable development of the physical environment of Guernsey”. The principal features of the draft Law and proposed ordinances are outlined below. Plans A Strategic Land Planning Group will be established in order to draw up a Strategic Land Use Plan15 replacing its predecessor which formed a part of the overall Strategic and Corporate Plan. The Plan would be adopted by the States as the blueprint for land use. Below this big picture further plans would be drawn up by the IDC itself, again to be adopted by the States. These plans will be known as Development Plans, Subject Plans and Local Planning Briefs. Development Plans will replace the existing Detailed Development Plans. Particular issues will be addressed by the other two forms of plan. A similar process of public inquiry is provided, albeit with much clearer intended guidance as to the procedure to be followed. It is intended that Plans would have a maximum lifespan of 10 years but be capable of extension; ie a longer lifetime than the present five years. Control of Development Again the means by which control of planning is exercised is to require permission to be obtained to carry out development. The definition of development is taken even further in the draft law and goes so far as to include “operations normally undertaken by a person carrying on business as a builder”. The intention of the Law appears to be to include all building works of any description and then provide exemptions, rather than limit the potential scope of regulation initially. The 15
The acronym is none too happy.
72 The Laws of Guernsey claimed logic behind this potentially all-controlling approach is that the régime can be relaxed for nondescript dwellings and other buildings yet remain fully and vigorously in force for monuments, archaeological sites, buildings of special interest and conservation areas, all of which also fall within the purview of the proposed Law. As before, a material change of use of land will qualify as development. The broad existing structure of use classes will be retained with the Island Development (Use Classes) Ordinance 1991 being replaced by a more up-to-date and reformed equivalent; likewise the Island Development (Exemptions) Ordinance 1997 will be revised to produce a new Ordinance. Planning permission may again be granted with conditions attached. Again there is the option to apply for outline planning permission (the equivalent of the old preliminary declaration). A particular feature of the new law (which is unlikely to be introduced immediately) is the idea of “planning covenants”; these amount to covenants entered into between the owner of the property to be developed and the IDC. The covenants would run with the land and bind successors. It is another proposed means of more effective and longer-lasting planning control. There are familiar provisions for the listing of monuments, archaeological sites and buildings of special interest. It appears also to be intended to introduce a system of grading for buildings akin to the English system. Again English notions are imported with the proposal for the designation of Sites of Special Significance; likewise with the power to require an Environmental Impact Assessment to be carried out for larger-scale or otherwise significant development environmentally. There is also provision for the making of Tree Protection Orders (TPOs) in order to protect trees “worthy of protection because of their amenity value”. More general provision for the management of trees is also threatened in the future.16 Enforcement The determination to put in place effective means of planning law enforcement is a recurrent theme of the reforms. A shortcoming of the 1966 legislation was that enforcement depended upon a successful prosecution as the springboard for everything else. The threshold for successful enforcement action was therefore set very high in circumstances where it was also defeated (at least in terms of the appearance of the land or property itself) by a change of ownership. The principle underlying the new Law is that the owner for the time being will be liable to enforcement action regardless of whether he or she was responsible for the unlawful development. The quid pro quo will be the provision of a searchable database of planning applications and consents so that purchasers may know whether there is a potential planning liability.17 In addition the IDC may be requested to inspect a property and to certify whether compliance action will be taken in any particular case; a charge will be levied for providing such a service. 16 17
See para 3.4.5 of the Billet. The details of this have yet to be worked out.
Control of Development 73 Compliance is in fact the key word of the new enforcement context. The expressed intention of the IDC is to seek enforcement only where a breach is “of sufficient significance to warrant compliance action”;18 ie they will act proportionately. There are three levels of enforcement action potentially available to the IDC under the draft Law. The first is what will be known as a “challenge notice”. Where it appears that there may have been a (significant) breach of the Law the IDC may serve such a notice on the owner of the property concerned who will be required to respond to the IDC and its investigations. The owner may be required to supply information regarding the use of the land or any operations or activities upon it. It appears that the right against self-incrimination will be guarded against, doubtless along the same lines as the financial services regulatory laws themselves, ie the recipient of the notice must answer but the answers will not be admissible in evidence unless an offence is committed when making the statement itself (ie by making a false statement) or else if inconsistent evidence is later given by the maker.19 The stated aim of the IDC is to resolve whatever planning breach may emerge amicably and by mutual consent; eg by the submission of a retrospective planning application, re-building, demolition or whatever else is reasonably required to satisfy the IDC’s concerns.20 If agreement is not possible or else co-operation not forthcoming the IDC may serve a compliance notice, the second level of enforcement. A compliance notice is, in effect, an order to the property owner to take certain steps to remedy a specified planning law breach. In case of urgency an interim compliance notice may be served in order to bring about an immediate cessation of a particular breach of planning law. This may itself be backed up by an application to the Royal Court for an injunction to prevent (further) breach.21 A quite different type of problem is where a site is left in an unacceptable condition because an approved development has not been completed. Here what will be known as a completion notice may be served. The third level, and ultimate sanction, is that of criminal proceedings for specified offences under the draft Law; these range from carrying out development without permission to failing to comply with planning permission conditions, to failing to comply with challenge, compliance or interim compliance notices.22 The potential criminal penalties are increased substantially with the most serious form of planning law offence carrying up to fully two years’ imprisonment and/or an unlimited fine. Fines themselves expressly may take into account any financial benefit derived from the offence.23 18
See para 3.5.2 of the Billet. It is noteworthy generally that the draft Law appears to owe much to the financial services regulatory laws in the swingeing powers it proposes to bestow; one might even contemplate the establishment of the Financial Services and Development Commission in order to enjoy the resulting economies of scale. 20 See para 4.8.1 of the Billet. 21 See s 52 of the draft Law. 22 See ss 57–60 of the draft Law. 23 See s 66(1) of the draft Law. 19
74 The Laws of Guernsey There are extensive supplementary powers to back up the investigation of planning law breaches and enforcement. These include powers to enter onto the land itself, although a warrant would be required for non-consensual entry of an occupied dwelling. Ultimately the IDC can execute any necessary works itself and recover the cost from the owner. It is also proposed that the IDC will be able to register charges (bonds) against the subject property in order to secure its outlay and/or otherwise secure compliance. The charge would act as a warning/deterrent to a prospective purchaser and would be very effective.24 It is not quite clear whether it is intended that a charge could be registered in effect of the enforcement burden alone, however that should in fact arise, whether through IDC expenditure or future enforcement action. There seems no reason why not; it would compel the owner to remedy the situation prior to any sale, or else reduce the price by the cost of compliance. There is however some counter-balance to this extension of powers in the form of cut-off dates beyond which enforcement will no longer be possible. In the case of building, mining, engineering and other operations the cut-off period will be 4 years, but ten years in the case of change of use, the latter being more difficult to detect than the former. The current Law has no cut-off dates. Appeals and Review One of the most significant differences under the new régime will be the change of appeal procedure. In place of a right of appeal to the Royal Court appeal will instead be to a panel of three adjudicators chaired by a professional with “appropriate qualifications or experience in planning matters”.25 The appeal would take the form of a re-consideration on the merits as opposed to the narrower questions of whether the decision appealed against was either ultra vires or unreasonable. The burden of persuasion in all cases (whether expressly or implicitly) will be on the appellant as opposed to under the existing Law. It is intended that many such appeals will proceed by way of written submission rather than oral hearing, although the latter is provided for.26 Note that an appellant may present his case either in person, through an Advocate or “other professional advisor”. It is intended that costs awards may be made. There will be a right of appeal against not only planning decisions themselves but also against compliance notices, completion notices and decisions concerning the listing and grading of buildings. The adjudicators’ decisions are prima facie final;27 however it is intended that there will be a limited right of appeal from the panel to the Royal Court; indeed it is not characterised as an appeal at all, merely a “review” as to the lawfulness of the adjudicators’ decision. The right of “review” is available to both the individual and 24 25 26 27
See ss 55–56 of the draft Law. Not one adjudicator as proposed in the Billet, see resolution 1. This seems less likely now with a 3 man panel. See s 69(3) of the draft Law.
Control of Development 75 the Committee. The single express ground is that “in reaching the decision in question the Committee or, as the case may be, the Adjudicator acted unlawfully (whether by virtue of exceeding their powers or making an error of law or otherwise)”.28 The Court is put on the spot by being required to specify the respect in which the decision was unlawful. Equally, such attempts to limit the powers of the Court in England are marked by their lack of success and these provisions will prove no exception. The expressed intention to exclude unreasonableness as a ground of appeal/review arguably only prevents the Court going beyond Wednesbury unreasonableness, which itself amounts to an error of law. It follows that of the five steps identified by the Court of Appeal in Walters v States Housing Authority [1997] 24 GLJ 32 only four and five would fall outwith the new régime. It is noteworthy that the new review would be (presumably) conducted by a Judge sitting alone; there being no issue of fact for the Jurats to consider. An express right of appeal is provided in the draft Law to the Court of Appeal, again on a point of law alone. Application of the Draft Law to the States It is laudable that the States is itself to be subject to the new planning law régime; although it is still to remain above the Law to some extent in that appeal from the IDC will not be to the adjudicators but to the States itself. The philosophy is that one Committee’s application to the IDC (another committee) should be resolved by the parent body. Equally there seems no good reason why the adjudicators should not have jurisdiction; subject to the ultimate “sovereign” power of the States to make law authorising a specific project. In any event the States resolved that certain strategically essential developments should be capable of exemption from the new Law altogether. Conclusion In summary there are a number of welcome features in the draft Law; in particular the introduction of cut-off periods, searchable registers, the application of the Law to the States and clearer procedures. The drawbacks are the all-embracing prima facie nature of the Law’s application and the potential to obstruct unobjectionable development activity. Very much will depend upon the attitude of the IDC, for example in determining what is and is not significant, how it prioritises planning issues, and the efficiency with which it discharges its duties.
28 See s 69(4). Note that the Billet expressly contemplates that a point of law would include “a claim that the adjudicator had not addressed the facts correctly”, see para 5.4 at p 901.
76 The Laws of Guernsey
WRECKS AND MILITARY REMAINS
Two pieces of legislation protect wrecks and military remains. By the Wreck and Salvage (Vessels and Aircraft) (Bailiwick of Guernsey) Law 1986 vessels wrecked in territorial waters before 1946 belong to the States. Powers are given to protect sites of historic wrecks but the Heritage Committee may issue licences to carry out exploratory and salvage operations. By the Protection of Military Remains Act 1986 (Guernsey) Order 1987 UK legislation is extended to Guernsey whereby the remains of military aircraft and vessels and human remains are protected from unauthorised interference.
ALDERNEY DEVELOPMENT LAW
Development control in Alderney follows a very similar pattern to its (current) Guernsey equivalent. The principal Law is the Building and Development Control (Alderney) Law 1975. There is a similar scheme imposing a blanket ban upon development or building work without permission and provisions allowing for a system of application and grant or refusal of permission, with or without conditions attached. The criteria to be considered upon the making of an application are the same. There is a similar system of notices, penalties and powers to carry out works in default of compliance. The relevant committee in Alderney is the Building & Development Control Committee. There are rights of appeal to the Alderney Court similar to those in Guernsey to the Royal Court. By section 21 appeals must be brought within 42 days of the decision complained of by the person aggrieved. Unique provisions comprise a restriction on the importation of caravans, the regulation of camping, and the removal of motor cars and boats. By the Building and Development Control (Alderney) (Amendment) Law 1997, provisions were incorporated into the 1975 Law requiring the Committee to prepare Land Use Plans, (the equivalent of Guernsey’s Detailed Development Plans). An identical system of a five year life-span for a Plan, subject to five-yearly or annual reviews with the appointment of an Inspector holding a Planning Inquiry was adopted. Again the Land Use Plan acquires the status of near-Law through the inability of the Committee to permit anything other than a minor departure from the Plan. Power was also given to the Alderney Committee to make preliminary declarations. As in Guernsey, permissions may be given which endure for up to three years.
SARK DEVELOPMENT LAW
Development control in Sark is governed by the Development Control (Sark) Law 1991. This Law takes the form of an enabling Law requiring Chief Pleas to appoint
Control of Development 77 a Development Control Committee. The Law permits Chief Pleas to make such provision by Ordonnance as it deems necessary or expedient for controlling development in Sark. What may be controlled and the considerations to be taken into account mirror Guernsey law. Power is also given to create conservation areas, impose penalties, make preliminary declarations and the like. Appeal is to a tribunal appointed by Chief Pleas for the purpose. Issues may be referred by the tribunal to the Royal Court sitting as a Full Court. Appeal from the tribunal on a question of law is also to the Royal Court. Chief Pleas itself is not bound by the Law.
6 Family Law
G
UERNSEY FAMILY LEGISLATION is derived largely from English family statute law, albeit long since repealed, replaced or amended heavily in the jurisdiction of origin. The most notable omission is the failure to modernise the law relating to children. There is no equivalent of the Children Act 1989.1 Likewise the procedure for obtaining a divorce is needlessly burdensome, even accepting the public interest in refusing to dissolve marriages on demand. Guernsey family law is long overdue for fundamental reform. Happily that process is now under way and it seems likely that new Laws will be in force within a very few years. A policy letter dated 22 August 20022 said this of matrimonial law: “The primary legislation . . . was enacted in 1939. In view of the social and economic changes which have occurred since the 1930s it would seem appropriate for there to take place a thorough review of the law relating to divorce and other matrimonial matters.”
Meanwhile existing legislation will be interpreted in a way most consistent with contemporary family law notions and, in particular, consistent with human rights law. This will not be a matter of choice once the Human Rights Law comes into force. The interim measures and guidelines are considered in the appropriate places in the text below.
FORMATION OF MARRIAGE AND ASPECTS OF LEGITIMACY
The law governing the formation of marriage is found in the Law Relating to Marriages Solemnised in the Islands of Guernsey, Alderney and Sark 1919. The provisions of the Law are unsurprising. They permit solemnisation of marriages by Church of England clergy and by others who are authorised by the RegistrarGeneral of Marriages.3 This same officer may himself solemnize a marriage, likewise his Deputy. There is a system for advanced publication of marriages, whether by banns or by notice. A licence is required for the proposed marriage ceremony; compliance with the Law’s provisions is a pre-condition to grant of the licence. A 1 Note that Jersey sent its Children (Jersey) Law 2002 for Privy Council approval on 13 March 2002. The Law is plainly closely modelled on the Children Act while also reforming and consolidating law relating to children generally. It is a substantial piece of legislation and likely to be of some influence in Guernsey, although other models are being considered actively. The Children Act is not a panacea. 2 Billet d’État XX of 2002. 3 The Greffier.
80 The Laws of Guernsey person opposed to a forthcoming marriage may enter a caveat upon which the Royal Court will adjudicate. There are various fees payable and penalties for false declarations and the like. The provisions of the Law apply, for the most part, to all the Islands of the Bailiwick although it seems that Alderney has its own system of registration. The 1951 Marriage (Amendment) Law sets out provisions concerning consent to the marriage of minors. A schedule sets out the circumstances and the corresponding consent required. Thus if both parents are alive and living together the consent of both parents is required and so on. The Legitimacy (Guernsey) Law 1966 contains various provisions concerning the status of illegitimate children and registry entries in respect of their births. The most important provisions concern the legitimation of children who are the product of adulterous relationships where a marriage subsequently takes place. Likewise there is provision for the legitimacy of children of certain void marriages. There are comparatively minor amendments to these Laws in the Marriage (Guernsey) Law of 1987 and the Births, Deaths, Marriages and Legitimacy (Bailiwick of Guernsey) (Amendment) Law of 1991; likewise the Marriages (Amendment) (Guernsey and Sark) Law 1994. FAMILY PROCEEDINGS IN THE MAGISTRATE’S COURT
As in England the Magistrate’s Court has an extensive jurisdiction in family matters. The Guernsey Magistrate’s Court may grant orders for financial provision, custody of, and access4 to children, and may grant injunctions to restrain domestic violence and the like. As in England the Magistrate’s Court jurisdiction is intended for financial applications of lower value and straightforward applications relating to children. The Magistrate’s Court has no divorce jurisdiction. It is often this that will determine the choice of venue for proceedings, although the speed with which an application can be made to the Magistrate’s Court is also a factor. The principal Law is the Domestic Proceedings and Magistrate’s Court (Guernsey) Law 1988 as amended quite substantially by a 1992 Law and less significantly in 1994 and 1995. The 1988 Law applies only in the Islands of Guernsey, Herm and Jethou. FINANCIAL PROVISION IN THE MAGISTRATE’S COURT
Part I of the 1988 Law concerns principally orders for financial provision and separation and applies only to parties to a marriage (s 1).5 The Magistrate’s Court has power to make an order equivalent to a decree of judicial separation, see section 4 The language used is custody, care and control and access. The language of the Children Act 1989 is not used because no equivalent reforms have been introduced. 5 The unmarried must rely on the Loi Relative à l’Entretien des Enfants Illégitimes 1927 (the Illegitimacy Law) for financial provision subject to the exception at s 10(1), see below.
Family Law 81 2(1)(b). The more usual application is pursuant to section 2(1)(a) for periodical payments or a lump sum order in favour of the applicant and/or a child of the family. Child of the family means either a child of both parties to a marriage or a child of one of the parties who has been treated as a child of the family by both parties. The maximum lump sum that can be awarded under the Law is £1,000. Periodical payments in favour of the applicant may not begin earlier than the date of the application and come to an end either with the remarriage of the applicant or their death, whichever the earlier. Periodical payments in favour of a child cannot extend beyond the age of 18 unless that child continues in education or training or there are special circumstances to justify an extension of the term. In any event the order ceases to have effect with the death of the person liable to make the payments or upon the death of the child concerned. There is a checklist of matters to which the Court is to have regard when considering applications for periodical payments or lump sums. These include the income, earning capacity, property and other financial resources which each party has or is likely to have in the foreseeable future, including any increase in earning capacity which it would be reasonable to expect either party to acquire. This last point is significant in the context of an under-achieving former partner. In practice an order could be made for an amount higher than current earnings would otherwise normally permit or suggest. Other matters to be taken into account are the financial needs, obligations and responsibilities of each party, the standard of living enjoyed by the parties previously, the age of each party, the duration of the marriage, any physical or mental disabilities, and contributions which each party has made in the past and are likely to make in the future—which includes nonpecuniary contributions. The Court may also take into account conduct if it would be inequitable to disregard it. There is English case-law concerning when it is or is not appropriate to take such misconduct into account. Significantly bad conduct is required. There are similar matters to take into account for an application in respect of a child, with appropriate modifications. There are provisions for orders by agreement which are hedged by powers of the Court to intervene if the proposed order would be contrary to the interests of justice. Quite often an applicant is required to act by the States Insurance Authority in order to reduce benefit payments to her. Former partners may seek to evade their obligations by reaching secret agreements between themselves for payments in cash which mean, typically, that the mother continues to draw benefits and the father is not pursued. If the matter reaches Court the proposed order must be a proper one to make.
CUSTODY AND ACCESS
Part II of the Law concerns orders for custody, access and the care of children more generally. By section 7 the Court may make such order concerning the custody of
82 The Laws of Guernsey and access to a child as it thinks fit upon the application of either parent of a child below full age or either party to a marriage in respect of a child of the family below full age.6 Part II therefore applies to unmarried as well as married parents.7 It seems however that only an application by a parent or party to a marriage can trigger the Court’s various powers under this Law. Thus pursuant to section 13 the Court has power to make orders for access in favour of grandparents, but only when making an order for custody or access pursuant to section 7 or at any time while such an order is in force.8 Likewise by section 8 the Court may make an order that the child be placed under the supervision of a Probation Officer or of a person nominated by the Children Board when making an order under section 7 and there are exceptional circumstances. Similar provisions permit the Court to make an order that the care of the child be committed to the Children Board. Whenever the Court exercises its powers under section 7 in respect of custody the Court may make such order for financial provision as it thinks fit, ie a periodical payments or lump sum order; see section 10(1), (as amended by the 1995 Law). It is unclear whether the power is restricted to making orders in favour of the child directly. If custody is not in issue9 the unmarried party seeking financial assistance must again look to the 1927 Law. A married party may apply in any event under Part I. Section 11 of the Law expressly provides that before the Court exercises its powers to make an access, custody, supervision or care order each party must be given an opportunity to make representations. The Court may also request the Children Board or a Probation Officer to make an oral or written report. An important provision at section 11(7) states that the Court may take account of the report and any evidence given by its maker notwithstanding any enactment or rule of law relating 6 See the English Court of Appeal judgment in Re L, Re V, Re M, Re H [2000] 2 FLR 334 for guidance on the question of contact where domestic violence is alleged; see also the expert report prepared for the Court of Appeal and published at [2000] Fam Law 615. A Guernsey Court is very likely to take account of English case-law in a family law context. See also the Children Act Sub-Committee of the Advisory Board on Family Law Report, “Making Contact Work”, which contains various recommendations for ensuring that contact orders are obeyed (by the parent with care and control or “residential” parent). Note that the separate representation of children and appointment of a guardian ad litem is very likely to be put on a statutory basis; albeit only as part of the review being undertaken of child care legislation. See the policy letter of 22 August 2002 at Billet XX of 2002. 7 Although this is not entirely without controversy. A ruling of the Magistrate in September 1996 in the case of M v S stated that the father of an illegitimate child was permitted to apply for an order for custody under s.7(1) of the 1988 Law. By contrast the note of a decision called B v States Children Board [1996] 21 GLJ 8 states that unless a statute clearly indicated otherwise “parent” did not include the putative father of an illegitimate child. Accordingly the father of an illegitimate child had no right in law to apply for a fit person order to be revoked in the context of the Children and Young Persons (Guernsey) Law 1967. The Magistrate cited the case of Re M (An Infant) [1955] 2 All ER 911 which same case had been cited to the Magistrate in the case of M v S. See now also the guidelines concerning interim measures in respect of children matters before the civil courts of Guernsey, discussed below. In any event the technical deficiencies of old legislation are unlikely to be allowed to prejudice the welfare of a child. 8 Non-parent prospective applicants fall into a lacuna which is only clumsily remedied by child protection legislation and the Royal Court’s poorly defined inherent jurisdiction; see the sections on child protection and guardianship respectively. 9 It would be enough for a formal order for custody to be made as part of the order addressing the substantive issues.
Family Law 83 to the admissibility of evidence. This provision goes some way to circumventing the hearsay rule in family proceedings in the Magistrate’s Court. The Court has power to give the custody of the child to more than one person, typically both parents. They may apply to the Court in the event of disagreement as to any matter affecting the welfare of the child. It is expressly stated at section 14 that in deciding any question relating to the custody or upbringing of a child, the Court shall have regard to the welfare of the child as the first and paramount consideration. A 1992 amendment added the requirement that “the Court shall not consider whether from any other point of view the claim of one parent in respect of the custody or upbringing of the child is superior to that of the other parent”.
DOMESTIC VIOLENCE
Part III concerns domestic violence. Either party to a marriage or a co-habitee or former co-habitee10 may apply to the Magistrate’s Court for a domestic violence order. By section 15 of the 1988 Law, as substituted by the 1992 Law, such orders may require the respondent: (a) not to molest or threaten to molest the applicant or any relevant child; (b) to leave and not to enter the matrimonial or shared home or any part thereof or any other specified premises (ie an ouster order); (c) to permit the applicant or any relevant child to enter and remain in such a home or part thereof; (d) not to do any other specified thing likely to cause harm or distress to the applicant or a relevant child; and (e) not to incite a third party to do what the respondent is not permitted to do. The Court may additionally impose any necessary or expedient conditions to the order and make the order for such term as may be specified. The order may contain any combination of possible orders set out in the Law, see section 15(2). It is suggested that reference ought also to be made in any domestic violence order to forbidding any assault by the Respondent upon those to be protected. Every subject has a common law right not be assaulted. The Court may attach a power of arrest to a domestic violence order, although only if the Court considers this necessary for the protection of the applicant or child of the family or child living with the applicant. There is no requirement to prove that actual bodily harm has occurred. The effect of a power of arrest is to permit a Police Officer to arrest the respondent if he has reasonable cause to suspect that the respondent has disobeyed the order in any respect. This is in addition to any general power of arrest which the Police Officer might have regardless of the 10
See s 17.
84 The Laws of Guernsey order. The practical effect is that the Police Officer is given power to arrest in circumstances where he might otherwise be powerless to intervene, eg where the Respondent is simply present in the shared home in breach of an ouster order. See generally section 16 of the 1988 Law, as amended. The Advocate who obtains a domestic violence order with power of arrest attached should ensure that a copy is sent immediately to the Chief of Police under cover of an explanatory letter marked for the attention of the Control Centre and the head of the Domestic Violence Unit. If no power of arrest is attached to the order the Magistrate may order the arrest of the respondent if satisfied by information on oath that the respondent has disobeyed the order. Whether arrested pursuant to the exercise of a power of arrest or by order of the Magistrate the respondent must be brought before the Court within twenty-four hours of his arrest, subject to the usual exceptions for weekends and public holidays.11 Guidance as to the making of an ouster order and the matters to be taken into account is to be found in the note of a Court of Appeal judgment in the case of C v C [1997] 23 GLJ 35. It was held that: (a) an ouster order was an extremely serious and drastic order and would not be made unless it was proved that (it) was impossible for the spouses to live together; (b) such an order should not be made ex parte save in the most exceptional circumstances; (c) in considering whether to make an ouster order, there was no principle of law that the first and paramount duty of the Court was to consider the welfare of the children; (d) the needs of the children were one of the factors which the Court would need to take into consideration but other factors included the conduct of the spouses, the needs and financial resources of the parties, and all the circumstances of the case; (e) the Court in each case must consider each of those factors and give it such weight as it merits; (f) the Court must undertake a balancing exercise and seek to arrive at a solution which was just and reasonable in all the circumstances.12 By section 31(5) a person who disobeys a domestic violence order is liable to a fine not exceeding £500 or imprisonment for a term not exceeding three months or both. As noted above, the respondent may be brought before the Court pursuant to the power of arrest or by arrest pursuant to the Magistrate’s order. Alternatively, the Magistrate may issue a summons to a proposed respondent for any purpose connected with the Law, (see section 29(1)); this would include an 11 12
Once arrested the individual cannot be released until brought before the Magistrate. See also C v C [1998] 25 GLJ 24.
Family Law 85 allegation of breach of the order. How the Magistrate proceeds will depend upon the perceived urgency or immediate risk of further breach.13 Whenever the enforcement of domestic violence orders is contemplated it will be essential to prove that the respondent was served with the order or at least that he knew of the terms of the order before behaving in the way alleged to constitute a breach. Section 33 provides for valid service of any order or notice if “delivered to him, left or sent by registered post or by recorded delivery service to him, at his usual or last known place of abode”. Best practice requires that personal service should in fact be effected via the Sergeant of any order in the nature of an injunction as soon as possible after the order is made. Given the quasi-criminal nature of such proceedings the Court will require to be satisfied of the breach beyond a reasonable doubt or so that it is sure. The Court will also require scrupulous procedural fairness. There is an admittedly difficult balance to be struck between protecting the female partner14 from real danger and respecting the basic rights of the other. It is also the case that applications for domestic violence orders have been abused in the past. Orders have been obtained ex parte in doubtful circumstances with no or no early return date. The male partner is typically excluded from the shared home and either unable to afford or otherwise unwilling to obtain legal advice. It is not unknown for incidents more serious than those originally complained of to be provoked by the order. These are relied upon to cement the ex parte order and may even be used as evidence of “conduct” in any ancillary relief application, all where the original order itself may have been unjustifiable. The Advocate contemplating a domestic violence order must have regard to the guidance of C v C and his or her conscience. In a practice note dated 12 October 2001 the Magistrate expressly stated that future applications would be dealt with in accordance with Court of Appeal guidance;15 ie there would have to be good reasons for proceeding ex parte, orders would not normally extend beyond one week and would provide for an inter partes return date. Genuine emergency cases where physical harm had been suffered or serious threats made would be dealt with ex parte but each case would be considered carefully to determine the most appropriate procedure. In summary the Advocate must exercise his or her judgement. If an Advocate sincerely believes that the client and/or a child is at serious risk then of course action must be taken, but always in such a way as to avoid inflaming the situation any more than is strictly necessary. It is essential also to liaise with the Police Domestic Violence Unit in more serious cases and whenever a power of arrest is granted, always with the knowledge (and consent) of the client. Note that under Guernsey procedure the respondent is not served with an affidavit explaining the complaints against him. The evidence relied upon to obtain the injunction is given 13 The English Court of Appeal case of Hale v Tanner [2000] 1 WLR 2377 contains helpful sentencing guidelines for contempt in the family justice system. 14 And not infrequently protecting the male partner. There is a real risk of prejudice in this context. 15 The case of M v M.
86 The Laws of Guernsey orally; a transcript is prepared later if the need arises. This too is an area due for reform.
MISCELLANEOUS POWERS OF THE MAGISTRATE’S COURT
Part IV of the Law contains various additional powers of the Court. There are powers to make interim orders in respect of maintenance, custody and access. There is a limit of three months for the duration of an interim maintenance or custody order in default of any other express provision or final disposal of the application, although the term may be extended. It is noteworthy that no appeal lies from the making, variation, revocation or extension of an interim maintenance order, see section 18(6). There are unsurprising powers given to the Court to vary orders for periodical payments. These powers include the ability to remit arrears. There are similar powers of variation in respect of both custody and access orders. Separation orders, periodical payment orders and custody orders automatically come to an end if the parties co-habit for any continuous period of six months after the making of the order. There is provision for the Court to adjourn proceedings to afford an opportunity for reconciliation, see section 22. A Court may nominate a person to act as mediator if the parties consent. By section 23 the Court may decline to make any order on an application if it considers that any matter in question would be more conveniently or properly dealt with by the Royal Court. The Royal Court may, however, remit the matter to the Magistrate’s Court with such interim orders that it sees fit to make. Alternatively the Royal Court may revoke any Magistrate’s Court order. Section 25 gives power to the Magistrate’s Court to order that no person shall take the relevant child or children out of the Bailiwick of Guernsey or any part specified in the order. There is a Royal Court Practice Direction (No 1 of 1993) whereby Counsel must appear in Court even when a consent non-removal order is sought.16 By section 31(6) a person who disobeys a non-removal order is liable to a fine not exceeding £5,000 or imprisonment for a term not exceeding three months or both. There are various provisions for mistaken over-payments or adjustments to payments if an appeal succeeds. Section 29 contains an interesting provision. An application under the 1988 Law is made to the Magistrate who then may issue a summons to the Respondent to appear before the Court. The Magistrate may refuse to issue a summons if he
16 The same Practice Direction dispenses with the need for Counsel to attend when a final order in a matrimonial cause is to be made by consent where the application is signed by the Advocates for both parties. There is also provision for evidence of adultery to be given by affidavit, this is for the purpose of proving the necessary fact and thereby (particular) ground for divorce.
Family Law 87 considers that the proposed application is frivolous or vexatious or for any other reason whatsoever. No appeal is said to lie from such order.17 Appeal and Enforcement Part V opens with section 30 which concerns rights of appeal. Where the Magistrate’s Court makes, varies, revokes or revives an order or refuses to do any of those things, an appeal lies to the Matrimonial Causes Division of the Royal Court, (see the 1994 amendment).18 The Matrimonial Causes Division has power to make any order necessary to give effect to its determination of the appeal, including any order which the Magistrate’s Court could have made under the Law. Pending final determination of the appeal it may make any such interim maintenance and custody order as it thinks fit. Section 14 of the Magistrate’s Court (Guernsey) Law 1954 is applied by section 30(6). It is hard to see how this fits happily with appeals concerning custody and access given that section 14 limits the right of appeal to debts or damages above a certain sum or points of law. Section 31 contains provisions for enforcement of orders made under the Law. A person who does not obey a money payment order which has been served upon him may be committed to prison for a period of up to three months. Alternatively a wage arrest may be ordered of up to one half of the Respondent’s wages, either when making the payment order itself or at a later date, see section 31(1)(b).19 Arrears of money payment orders may also be recovered as civil debts in the ordinary way. Miscellaneous Provisions Part VI contains miscellaneous provisions. Chief amongst these are that proceedings in the Magistrate’s Court and the Matrimonial Causes Division under the Law may be heard and determined in camera, which is the norm in practice.20 An exception would be made for the giving of judgment in a case of general importance. Even then the parties would not be identified. Likewise enforcement proceedings for breach of a domestic violence order would be heard in public. 17 The rationale is that a summons would normally have to be signed by an Advocate; see eg RCCR R10(2)(d) for the Royal Court. 18 This appears to contradict the provision just noted at s 29(2). 19 An 1860 Ordonnance limits an arrest of wages to 50% of the gross earnings figure, a 1933 Ordonnance requires Court authority for any arrest of wages; see the section on wage arrest. 20 Note how English practice has evolved in this regard. In the Court of Appeal case of Clibbery v Allan (2001) 2 FLR 819 a distinction was drawn between proceedings heard in open court, proceedings heard in private and proceedings heard in secret. Proceedings remained confidential in the last category. Information about children was indisputably covered by privacy and secrecy; no information could be disclosed after the end of the case without the leave of the Court. By way of contrast there were no grounds to prevent publication of information concerning chambers proceedings relating merely to property, once the case was over.
88 The Laws of Guernsey There is a Practice Direction dated 16 October 1992 concerning applications for domestic violence orders. The Practice Direction summarises the amendments made by the 1992 Laws and states that the Royal Court will not entertain applications for injunctions in circumstances where the application could be made to the Magistrate’s Court under the 1988 Law. It is also said that the parties should appear in person and give oral evidence in support of an application for a domestic violence order. This was despite suggestions from the Bar that applications should be by way of affidavit. The then Deputy Bailiff considered that proofs of evidence could be submitted with the papers, but this would not be mandatory and the applicant would still have to give unled evidence. Rules of procedure are set out in the Domestic Proceedings and Magistrate’s Court Rules 1989 as amended by the Domestic Proceedings and Magistrate’s Court (Amendments) Rules 1993. Note that by paragraph 4 of the Rules a person intending to make an application to the Court (other than for a domestic violence order) must cause a summons to be served on the respondent after filing the form of application. The Rules contain mandatory forms to be used for the summons, application, statement of means and notice of appeal. The summons, with application attached, must usually be served not less than three days before the date upon which it is to be heard. The combined effect is to inform the Respondent of the date and place of the hearing together with the nature of the order or orders sought. An application for a domestic violence order may be made ex parte. If an application is being made for financial provision a statement of means in the prescribed form must also be completed. There are general provisions for appeals and service. The Magistrate’s Court is willing to make periodical payment orders which refer to the Guernsey Retail Prices Index as an automatic means of keeping pace with inflation. Orders are commonly made providing for upward increases only, although with what justification is not clear. Practical Steps to Obtain a Domestic Violence Order An appointment for an ex parte application is obtained by telephoning the Clerk to the Magistrate. There must be justification for making the application ex parte, for example an immediate threat to the safety of the applicant and/or the safety or welfare of any child concerned. In Court the procedure will be determined by whether or not the application is on notice. If the application is ex parte the Advocate will introduce the application to the Magistrate, explain the orders sought and why and give an outline history of the matter to date. The Advocate will then call the applicant who, after being sworn, must be taken through her evidence in chief concerning the matters she complains of before offering the Magistrate an opportunity to raise any questions he may have. The Advocate will then call any other necessary witness21 before requesting that the order be granted and dealing with any further queries the Magistrate might have. 21
Rare in practice.
Family Law 89 Following the grant of the order you require two copies of the notification22 and Magistrate’s Court order (in each case the original and a copy) together with a photograph of the respondent to assist service. These go to the Sergeant for service. The copy will be returned with the Sergeant’s endorsement as to service. A copy of the order should also be given to the applicant.
APPLICATIONS FOR DOMESTIC VIOLENCE PROTECTION IN THE ROYAL COURT (MATRIMONIAL CAUSES DIVISION)
The Royal Court (sitting as the Matrimonial Causes Division23) has power to grant orders the equivalent of domestic violence orders via its general civil jurisdiction. The Court has an inherent common law or customary jurisdiction to grant injunctions prohibiting interference with established common law rights, and on a quia timet basis if need be. However, these powers do not extend to granting powers of arrest. Note again also the terms of the October 1992 Practice Direction; applications should be made to the Magistrate’s Court if possible.24 Assuming that the application is to be made in the Royal Court, the general Practice Directions relating to applications to the Royal Court for an injunction apply. Applications must be made through HM Greffier and supported by a sworn affidavit, oral unled evidence will also be required. The relevant Royal Court Practice Direction is No 2 of 1993 as regards the making of the application and No 2 of 1994 as regards notification of the lifting of an injunction. It is expressly anticipated by the October 1992 practice note that injunction applications between those who have not lived together as husband and wife (in the recent past) must still be brought before the Royal Court. The shortcoming of the Royal Court’s jurisdiction in this context has been identified and the Matrimonial Causes Law 1939 is to be amended to permit the Matrimonial Causes Division of the Royal Court to make interim occupation and ouster orders in Royal Court matrimonial proceedings.25
AFFILIATION PROCEEDINGS
Claims brought by mothers of illegitimate children seeking orders for maintenance from alleged fathers are known as affiliation proceedings. The principal Law concerning such proceedings in Guernsey is found in the Loi Relative à l’Entretien 22
Ie to the Sergeant of the order to be served. Or not as the case may be, we are concerned here with the Court’s inherent powers in whatever form it takes. 24 In the event of the Magistrate declining to make an order under s.23 it is not clear what first instance jurisdiction the Royal Court has to make a domestic violence order under the 1988 Law, the answer appears to be none. 25 See the policy letter dated 22 August 2002 at Billet XX of 2002. Note again however the power to send a matter to the Royal Court under s 23 of the 1988 Law, see above. 23
90 The Laws of Guernsey des Enfants Illégitimes 1927 (the Illegitimacy Law). The Law applies to both Guernsey and Herm. By Article 1 a woman who is the mother of an illegitimate child may apply to the Magistrate’s Court for a summons to be served on the alleged father. The mother must make a deposition on oath before the Magistrate who will then order a summons to be issued to the alleged father. The application may be made during the mother’s pregnancy or at any time after the birth.26 The summons when issued requires the alleged father to attend and must be served so as to give three clear days’ notice, see Article 2(1). By Article 2(2) the alleged father may be judged the child’s putative father if the mother’s evidence at the hearing of the application is satisfactorily corroborated (“in some material particular”). Corroboration may take all manner of form, for example letters written by the alleged father, conversations with the alleged father, promises of marriage after knowledge of the pregnancy, previous payments of maintenance, acts of familiarity between the alleged father and the child and the like. There is no power vested in the Guernsey Courts to order blood or DNA testing; however the refusal to submit voluntarily to such testing may be cited as corroborating evidence, see A v B [1993] 16 GLJ 8. After having adjudged the alleged father to be the child’s putative father the Magistrate may then order the putative father to make periodical payments for such term as the Court thinks fit and/or to pay a lump sum. The payments are to be in respect of the child’s maintenance and education, together with expenses incidental to the child’s birth.27 A costs order may also be made. The order for periodical payments may run from the date of the summons or from the date of birth if the summons was issued within two months of the birth. Material provisions of the Domestic Proceedings and Magistrate’s Court (Guernsey) Law 1988 are adopted by reference, ie provisions relating to orders for financial provision, consent orders, interim orders, variation of orders, revocation of orders by the Royal Court, remission of arrears, and enforcement. There is also incorporated the same right of appeal to the Matrimonial Causes Division of the Royal Court. The Law goes on to make provision for illegitimate children chargeable under the Poor Law. There are articles permitting the Central Board for the Administration of the Poor to make applications for contributions from alleged fathers. Such orders may subsequently be varied in favour of the mother. There are provisions for a proportion of such payments to be made to the Procureur of the Poor. Express provision is made that renunciation,28 cession or composition with creditors does not release a putative father from liability for payment of sums due 26 The original bar on applications brought more than 12 months after birth of the child having been repealed in Guernsey by s 2(1) of the Domestic Proceedings and Magistrate’s Court (Amendment) (Guernsey) Law 1992. 27 The Law also provides for the payment of funeral expenses in the unhappy event of the child’s death before the making of the order. 28 The Guernsey equivalent of bankruptcy.
Family Law 91 under an affiliation order, save to the extent that the Court may expressly order. There are special provisions for members of HM Forces. There are two Ordonnances concerning affiliation proceedings. The first is dated 28 April 1928 and the second 25 October 1930. The former provides that a summons for affiliation proceedings may not be withdrawn and no settlement of the action may be made without the sanction of the Magistrate. See Ordonnance Relative à l’Entretien des Enfants Illégitimes, Tome VI p 178. The 1930 Ordonnance, which is found at p 62 of Tome VIII, provides for the appointment of a Tuteur Spécial or Curateur aux Biens Spécial29 where the respondent is a minor and fatherless and where there is no family council.30 Such a Tuteur or Curateur may also be appointed to bring the action on behalf of a minor in like circumstances. It is noteworthy that an order for maintenance under the 1927 Law may only last until the child is 18, unless extended for educational/training reasons until a maximum of 20.
THE SEPARATION, MAINTENANCE AND AFFILIATION PROCEEDINGS (ALDERNEY) LAW 1964
This single Law combines provisions found in the 1927 and 1988 Guernsey Laws. The Law is expressed in very dated terms. Thus the grounds for applying for maintenance from a husband include the fact that he is a habitual drunkard or that he insisted upon having sexual intercourse whilst knowing he suffered from a venereal disease or that he compelled the wife to submit herself to prostitution. The more straightforward ground of neglect to provide reasonable maintenance is merely a subsidiary part of another ground dealing with persistent cruelty. Separation and maintenance proceedings for married parties are the subject of Part II of this Law. There is nothing surprising in the provisions apart from the outdated expressions noted above. It is not clear what subsequent provisions have been passed to update the very small sums mentioned by this Law as being the maximum amounts payable. Part III of the Law relates to affiliation proceedings. These provisions are very close to the 1927 Law, although care is required to ensure that the application is made within twelve months of the child’s birth, (the application can also be made prior to birth). Unlike in Guernsey law an application cannot be brought after the twelve months have elapsed unless the alleged father made maintenance payments for the child or ceased to reside in Alderney within that time. This last exception still requires affiliation proceedings to be brought within 12 months of the alleged father’s return 29
Forms of guardian. The family council is an institution of customary law and comprises the child’s close relatives or family friends. The council oversees the welfare of a child, typically in the absence of any or any competent parent. The council would be consulted as regards the need for the appointment of any guardian and would also supervise the guardian. See the section concerning guardianship. 30
92 The Laws of Guernsey to Alderney. There seems no obvious provision requiring a sworn deposition to be made prior to the summons being issued unless the child has not yet been born. Maintenance orders for both legitimate and illegitimate children under Part II and Part III cannot be expressed to last beyond the age of 20. Note also that adultery committed by the wife is a bar to recovery of maintenance either for herself or her children, unless the husband has either condoned the adultery or contributed to its occurrence by his wilful neglect. As in the 1927 Law there is power for the relevant authority (the Public Assistance Committee) to apply for an affiliation order, likewise for payments to be directed to the appropriate person with custody. There are powers also to appoint guardians ad litem where any party to the proceedings is an infant. There are various provisions for service of the summons which is normally effected by the Clerk on six days’ notice with special provision for non-resident respondents. It is again important to note the Alderney Law’s identical requirement that the evidence of the mother be corroborated in some material particular by other evidence to the satisfaction of the Court, see section 12(2). Part IV contains familiar enforcement provisions. The Court may imprison a wilful defaulter or attach not more than one half of this wages or arrest his goods. The Court may remit arrears. There are similar offences to Guernsey law in this context committed by those who fail to notify changes of address and the like.31 Part V contains miscellaneous provisions, including a right of appeal to the Royal Court sitting as a Full Court, (see s 28). The 1964 Law was amended slightly by the Separation, Maintenance and Affiliation Proceedings (Amendment) (Alderney) Law 1973. MATRIMONIAL CAUSES LAW 1939 (AS AMENDED)
This remains the principal Law governing divorce, judicial separation, nullity of marriage, dissolution of marriage upon presumption of death and matters ancillary to proceedings in these areas. The basic scheme of the 1939 Law is similar to its 1973 English equivalent, although necessarily many years behind in certain key respects. THE MATRIMONIAL CAUSES DIVISION OF THE ROYAL COURT OF GUERNSEY
The Matrimonial Causes Division of the Royal Court was created by the 1939 Law and has jurisdiction in respect of all suits for divorce, judicial separation, nullity of marriage, decrees of presumption of death and dissolution of marriage together with all other matters triable under the 1939 Law in the Bailiwick of Guernsey; subject only to a residual jurisdiction vested in the Court of Alderney and the Court of the Sénéschal relating to consensual judicial separations and the terms 31
S 31(4) of the 1988 Guernsey Law.
Family Law 93 thereof.32 It follows that the Royal Court has a Bailiwick-wide and exclusive jurisdiction in respect of divorce and most matters under the 1939 Law. The Special Case of Sark Until the Matrimonial Causes (Amendment) (Guernsey) Law 200233 divorce was still unavailable as between those who were domiciled in Sark, see Article 21 of the 1939 Law. It was only if one of the parties to the marriage was Guernsey or Alderney domiciled or else habitually resident in Guernsey or Alderney for a period of one year prior to the issue of proceedings that a divorce could be obtained from the Royal Court as against a Sarkee. The 2002 Law repeals Article 21, which was also noteworthy for its prohibition on the making of any order relating to the vesting, division or occupancy of Sark real property. The policy behind this provision was to protect Sark tenements and to preserve their impartibility. Instead the 2002 Law inserts new Articles 57A and 57B. Article 57A again nullifies any order made under the 1939 Law “to the extent that it derogates from or infringes . . . the rule of the law or custom of Sark relating to the partibility and division of Sark realty”. However, this is moderated by Article 57B which makes provision for statutory leases to be carved out of Sark realty, presumably to allow a spouse to have an interest in the property without ostensibly dividing the tenement itself. The legislation is perhaps influenced by the case of Surcouf v de Carteret (1999) where it was held that there could indeed be leases of Sark freehold land. The scheme of the new Article is to give power to the Court in ancillary relief proceedings to grant to a party to the marriage, if it thinks fit, a statutory leasehold interest in respect of all or part of any Sark realty held by the other or held jointly. The leasehold interest creates the relationship of landlord and tenant between the parties on such terms as to rent or premium, duration, covenants, conditions and other matters, as the Court deems fit. Especially noteworthy is the fact that any right to forfeit the lease is enforceable only pursuant to Court order and, furthermore, provision is made for relief from forfeiture in circumstances where conventional wisdom dictates that relief from forfeiture is no part of Bailiwick common or customary law. Provision is also made permitting the Court to vary the terms of the statutory lease subsequently. One would expect the lease to include an inalienability clause, albeit this is not mentioned expressly. In short the 2002 Law is quite radical; how it will work in practice remains to be seen.34 The burden on the Sénéschal is potentially a heavy one if the Court is, in effect, to adjudicate on the terms of a lease in circumstances where there may be little or no agreement. 32 Note however that the Court of Alderney has jurisdiction to make certain orders for maintenance under the Separation, Maintenance and Affiliation Proceedings (Alderney) Law 1964, see above. 33 Likely to come into force early in 2003. 34 One might anticipate an inalienable lease lasting for the lifetime of the spouse with minimal rent and perhaps modest repairing obligations; everything would turn on the circumstances of the parties. One would expect a statutory lease to be something of a last resort given that it represents anything but a clean break.
94 The Laws of Guernsey Composition of the Court The Court for Matrimonial Causes comprises the Bailiff and any four Jurats of the Royal Court, see Article 4. However the Bailiff sitting without the Jurats has power to exercise concurrently with the Court for Matrimonial Causes the functions and jurisdiction of that Court. Accordingly, and strictly speaking, it is only when the Bailiff sits with four Jurats that the Court for Matrimonial Causes is constituted. There is express power under the Law (Article 4(3)) whereby a person with ten years legal practice in Britain or the Channel Islands may be appointed a Commissioner of the Royal Court with the same power as the Bailiff under the Law. There is a concurrent jurisdiction in the Ordinary Court to pronounce judicial separations by consent. Where parties do not agree regarding the terms of their separation the matter must be referred to the Court for Matrimonial Causes. In practice the Bailiff or his Deputy35 sit alone for matrimonial causes, including the pronouncing of judicial separations by consent. There is, however, power under Article 4(a) to apply for an order that a matter be heard by the Bailiff sitting with four Jurats. There is no appeal from the Bailiff ’s decision in this regard. Again, in practice the Jurats do not sit on matrimonial causes.36 Poor Persons Article 7 of the 1939 Law makes provision for legal assistance to be given to “poor persons” in order that they may pursue matrimonial causes. Regard must be had to the Matrimonial Causes (Assisted Persons) Ordonnance of 1952 which contains detailed provisions regarding the assistance which must be given to such would-be litigants. In summary the more happily named “assisted person” is certified as such by the Magistrate, typically because they are in receipt of benefits. Once certified an Advocate is assigned and strict limits placed upon fees which may thereafter be charged. The current total amount of fees which may be recovered in such circumstances from a poor client amount to £100 plus disbursements. There is the possibility of recovering the true fees incurred depending upon the outcome of the proceedings as regards property recovered or preserved for the client; likewise when the issue of the opposing party’s liability for costs comes to be considered. In practice this legislation has been superseded by the introduction in 2002 of a thoroughgoing civil legal aid scheme extending also to matrimonial causes and family proceedings generally; see also the Matrimonial Causes (Costs and Fees) Ordinance 2002. 35
Or Lieutenants. See now Practice Direction No. 6 of 2002 concerning, inter alia, the business of the Matrimonial Causes Division. This provides for sittings at 10am on specified Tuesdays to deal with Judicial separation/vesting orders by consent, provisional orders, ancillary relief consent orders, all interlocutory matters relating to contested petitions for divorce and judicial separation, including the fixing of dates, as well as directions hearings and contested matters with time estimates of less than 30 minutes. Deadlines for lodging documents are also provided; noon of the preceding Friday for all matters save applications for provisional orders where papers must be lodged 7 days before. 36
Family Law 95 Investigating Officer By Article 8 there are little used provisions permitting the appointment of an Investigating Officer in a case. These provisions also permit the Investigating Officer to intervene in the proceedings, if appropriate. In default of any specific appointment these powers are vested in the Law Officers. Reconciliation Article 9 contains provisions professedly to encourage reconciliation. There is a strong theme throughout the Law that proper opportunities must be given for mediation and reconciliation. The Advocate of a client petitioning for divorce or judicial separation must certify to the Court that he or she has discussed with the Petitioner the possibility of reconciliation and that he or she has given names and addresses of mediators to the unhappy client. In addition there are provisions equivalent to those in English law permitting periods of cohabitation of less than six months to be disregarded when considering if any of the five facts establishing the single ground of divorce are made out. Divorce Jurisdiction The minimum conditions for the Court to accept jurisdiction in divorce causes and (associated) matters is that either of the parties to the marriage is domiciled in the Bailiwick on the date when proceedings are begun or was habitually resident in the Bailiwick throughout the period of one year ending with that date. The Domicile and Matrimonial Causes (Amendment) (Bailiwick of Guernsey) Law 1979 contains provisions amending the 1939 Law and also substantive provisions determining what should happen when there are pre-existing matrimonial proceedings in the United Kingdom, Jersey or the Isle of Man or concurrent proceedings elsewhere. The schedule to the 1979 Law contains detailed provisions providing for obligatory stays in respect of the former and discretionary stays for the latter. There are supplementary provisions concerning the discharge of a stay if the opposing party delays unreasonably in the prosecution of the other proceedings and the effect of such stays upon existing Guernsey orders. In essence orders in stayed proceedings cease to have effect. These provisions are of general application in matrimonial causes. The Single Ground for Divorce It is important to note that there is only one ground for divorce, which is that the marriage has broken down irretrievably, see Article 16. It is only if the petitioner satisfies the Court of one or more of five facts that the single ground may be proved.
96 The Laws of Guernsey These facts are as follows: (a) the respondent has committed adultery and the petitioner finds it intolerable to live with the respondent; (b) the respondent has behaved in such a way that the petitioner cannot reasonably be expected to live with the respondent; (c) the respondent has deserted the petitioner for a continuous period of at least two years immediately preceding the presentation of the petition; (d) the parties to the marriage have lived apart for a continuous period of at least two years immediately preceding the presentation of the petition and the respondent consents to a decree being granted; (e) the parties to the marriage have lived apart for a continuous period of at least five years immediately preceding the presentation of the petition. If the petitioner proves one of these facts the Court must prima facie grant a decree of divorce dissolving the marriage unless (and notwithstanding) it is “satisfied on all the evidence that the marriage has not broken down irretrievably”.37 A petition may, of course, be opposed on the basis that the marriage has not broken down; in the alternative a respondent may cross-petition.38 The majority of petitions are, as one would expect, unopposed. However the Court may still not be satisfied as to proof of breakdown. The divorce decree is itself a two-stage process; initially only a provisional order may be granted. This is the equivalent of a decree nisi under English law. No final order (equivalent to the decree absolute) may be made unless the time for appealing the making of the provisional order has elapsed. The Law appears to state that the time for appeal is seven days only, see Article 3; but there is a Practice Direction of the then Bailiff (No 1 of 1966) stating that no final order will be made until one month and seven days have elapsed from the making of the provisional order. This is said to be the maximum period allowed for lodging an appeal under the Court of Appeal (Civil Division) (Guernsey) Rules 1964. This is again puzzling since those Rules state that every notice of appeal shall be served within one month from the date on which the judgment or order of the Court below was pronounced; see rule 3. It is important to note that either party may apply for a provisional order to be made final.39 It follows that, prima facie, once the provisional order has been made there is potentially great difficulty in protecting a petitioner’s (typically in this context the wife’s) position in the ancillary relief proceedings given the absence of pension ear-marking or splitting provisions in Guernsey law40 or as regards any 37
See generally Art 16A. See Art 20. 39 Note that the application may even be made ex parte; see Art 12(2). 40 Although one might be able to persuade a pension company to make such arrangements where the parties were in agreement. In default one looks to capitalise whatever the wife’s entitlement in this regard would have been. 38
Family Law 97 other property matter affected by the making of a final order. Note for example the loss of a wife’s inheritance rights under Guernsey law upon divorce.41 Equally, no property adjustment or (final) maintenance order takes effect unless and until a final order is made, see rule 37(2) MCR 1952. The 1939 Law itself provides only very limited opportunities for a respondent to avoid a final order being made if, prima facie, irretrievable breakdown and an article 16A fact are made out. Where the sole fact which a petitioner is entitled to rely upon is five years separation, the respondent may oppose the petition on the grounds that dissolution of the marriage would result in “grave financial or other hardship to him” and that it would in all the circumstances be “wrong to dissolve the marriage”.42 The Court may refuse a decree of divorce and dismiss the petition altogether if so satisfied. The Court must have regard to all the circumstances, including the conduct of the parties, their interests and the interests of any children or other persons concerned, in reaching its view. Hardship expressly includes the loss of the chance of acquiring any benefit which the respondent might acquire if the marriage were not dissolved; pension and successoral rights are again the most obvious examples of such potential benefits. Article 18 is complemented by Article 18A. Where a decree of divorce has been granted on a petition based either on two years separation with consent 43 or five years separation, the respondent may apply to the Court to prevent a final order being made. The Court must consider all of the circumstances and must not make a final order on the decree of divorce unless it is satisfied either that the petitioner should not be required to make any financial provision for the respondent, or else that the financial provision made by the petitioner for the respondent is reasonable and fair or the “best that can be made in the circumstances”. The Court may proceed notwithstanding this power if it appears there are “circumstances making it desirable that a final order should be made on the decree without delay” and the Court has obtained “a satisfactory undertaking from the petitioner that he will make such financial provision for the respondent as the Court may approve”. In the first instance case of B v B (2001) 21 March Lieutenant Bailiff Brelsford held that, notwithstanding the terms of Article 12 of the 1939 Law, and: “Although an application for a final order can be made ex parte by either party the law does not state categorically that the application should be granted. It would be wrong for the Court to become a rubber stamp in these matters and I consider that in certain exceptional circumstances and only in those the Court should be able to stay an application for a final order if this is the only way that the rights of either party can be safeguarded.”
On the facts of the case no stay was granted. However, Article 54 of the 1939 Law was also identified as, potentially, providing some assistance to the other party. The 41 See Art 44. The issue of successoral rights ought to be addressed prior to the making of any order for divorce, provisional or final. 42 See Art 18. 43 Which begs the question as to why consent would be given in such circumstances.
98 The Laws of Guernsey article gives the Court broad powers to make property orders after a marriage has been dissolved, but before definitive property orders have been made, notwithstanding the death of either party. There are various amendments making a provisional order of divorce easier to obtain than before; in particular provisions permitting evidence to be given in affidavit form without the need for either party to appear. A 1997 amendment to the 1939 Law added Article 60(D) whereby in any proceedings under the 1939 Law for a petition for divorce, judicial separation or nullity of marriage where a petition is unopposed a petitioner is not to be required by the Court to attend the hearing of that petition. The petitioner may instead prove his or her case by affidavit which must be accepted by the Court as unchallenged evidence upon which the decree or pronouncement sought may be granted. This is all unless the Court otherwise directs. There are helpful provisions also in the Matrimonial Causes Rules concerning agreements or arrangements made between parties in connection with proceedings for divorce or judicial separation which are either contemplated or have begun, see rule 1A MCR 1952. An application under this Rule must be accompanied by an affidavit setting out particulars of the agreement or arrangement.44 The hearing is in camera unless otherwise directed.45 The Court may express an opinion on the reasonableness of the agreement and give such directions, if any, as the Court thinks fit. These provisions would typically be used where there was agreement as to ancillary financial relief; ie division of assets, maintenance payments and the like. Judicial Separation Many of the Law’s provisions relating to divorce are the same for decrees of judicial separation, for example jurisdiction. The chief difference is that judicial separation may be obtained on proof of any one of the five facts capable of founding a decree of divorce alone, see Article 23 (or else by consent). There is no requirement, obviously, to prove the ground for divorce. The legal usefulness of a judicial separation agreement or decree is limited, albeit the problems associated with final orders of divorce noted above are avoided. When a judicial separation is decreed or pronounced it is no longer obligatory for the petitioner to cohabit with the respondent, if indeed it is obligatory at all in current law. Such limited civil liability as a husband still might have under Guernsey law for the acts of his wife qua wife also comes to an end. It is important to note that successoral interests46 do not cease upon mere judicial separation. This must be allowed for in any settlement or agreement made in 44
Although affidavits are not, in practice, filed with applications for consent orders. Again see the English Court of Appeal case of Clibbery v Allan (2001) 2 FLR 819 as to the degrees of confidentiality in family proceedings. 46 Ie rights of inheritance under Guernsey law. 45
Family Law 99 contemplation of or pursuant to the pronouncement of a decree of judicial separation; usually by each renouncing any interest in the estate of the other, if the decree is to be accompanied by an agreement as to ancillary relief matters. As noted already, successoral interests cease when a marriage has been dissolved pursuant to proceedings for divorce, likewise if a marriage is dissolved or declared void following proceedings for nullity. This extends only to any legal successoral share or interest in the real or personal estate of the deceased as opposed to permissible testamentary gifts which, for whatever reason, the deceased chose to make or leave in place notwithstanding the end of his or her marriage. In contrast to England there is a well established practice in Guernsey of applying to the Court for a decree of judicial separation to be pronounced with a comprehensive settlement agreement attached to the application dealing with most, if not all, matters. There is no obstacle to a decree of divorce subsequently being obtained, see Article 17. The divorce may be based on the same fact (if any) as the judicial separation and any subsequent fact. It is important to note both in this context and in the context of a consent order in ancillary relief proceedings that Court orders vesting real property47 take effect when registered and without the need for a separate conveyance. Congé48 is therefore avoided (although not payable on a conveyance between existing co-owners in any event) and document duty49 will be nominal, unless there is provision for the future payment of monies deemed to act as a charge against the real property of the spouse in whose name the property is to be vested. Nullity of Marriage Article 33 and following concern the power of the Court to declare void or voidable a marriage upon any one of nine grounds set out in Article 34. These range from continuing impotency to insanity to annulment by a competent foreign Court. The legitimacy of children born of an avoided marriage is maintained.
ANCILLARY JURISDICTIONS
Children Pursuant to Part VII of the 1939 Law the Court has power to make such orders as appear just with regard to the custody, maintenance, education of and access to children whose parents’ marriage is the subject of a decree of divorce, judicial separation or nullity. There is power also to make interim orders. There are further powers to make orders preventing the removal of a child out of the Bailiwick or a 47 48 49
Known as “vesting orders”. A tax of feudal origin payable on most conveyances of realty. An additional tax payable on conveyances; more closely equivalent to stamp duty.
100 The Laws of Guernsey defined part of it. Note that neither a decree of judicial separation nor a final order on a decree of divorce or nullity of marriage will be made unless the Court has declared that it is satisfied either that there are no children of the marriage or that the arrangements for the welfare of the children are satisfactory or the best that can be devised in the circumstances.50 Financial Provision Article 46 of the 1939 Law confers powers upon the Court to make property orders where a decree of divorce, judicial separation or nullity has been granted. Property orders may be made in respect of any real or personal property in which each or either of the parties to the marriage has an interest, whether that interest is present, prospective or conditional. The Court may order that any property be vested solely in one of the parties or be divided between them. Where such an order is made the Court may also order that one party pay to the other either a gross or periodic sum or both. The idea is to compensate, if need be, a party whose interest is removed or reduced. This lump sum or periodic payment may be secured; typically against the asset transferred. Thus a house may be directed to be vested in the wife exclusively but with, say, a lump sum equivalent to one-third of the value payable to the husband and secured on the house concerned. It is particularly important to note that the Guernsey Court has no direct power to make an order for the sale of property and consequent division of the proceeds. This is again a serious inconvenience to the efficient administration of justice in this area. The closest equivalent is the example of the house just stated; ie vesting property in one party with an order to pay the other a lump sum. This would be expected to trigger the desired sale. Article 47 additionally empowers the Court to make (stand alone) orders for payment of periodic or lump sums for the support of the other party. The orders for payment may be secured in such manner as the Court directs. Note that the 1939 Law is to be amended to make express provision permitting the Matrimonial Causes Division to make wage arrest orders in the same way as the Magistrate’s Court; at present such orders are made on a customary law basis. At the same time the Law will be amended to permit arrears to be remitted in appropriate circumstances.51 Article 45 provides that the Court may (also) make orders cancelling, varying, modifying or terminating the trusts of any “marriage contract, marriage settlement, post-nuptial settlement, or terms of separation subsisting between the parties . . . in any manner which, having regard to the means of the parties the conduct of them or the interests of any children of such marriage appears to the Court to 50 51
There are limited exceptions, see Art 12B. See generally the policy letter of 22 August 2002 at Billet XX of 2002.
Family Law 101 be just”. This provision is of potentially broad application and reference should be made to jurisprudence relating to the equivalent provision in English law.52 In practice the Court has regard to the check list set out in section 25 of the Matrimonial Causes Act 1973 and English case-law when determining how to exercise its powers. The leading English case is now that of White v White [2001] 1 All ER 1. The House of Lords held that a Judge considering an application for ancillary relief should, before making an award, check his tentative views against the yardstick of equality of division, and depart from equality only if and to the extent that there was good reason for doing so. To do otherwise might lead to discrimination. Somewhat inconsistently it was also said that there was no presumption of equal division, it was not even a starting point. It was conceded that, on the facts of a particular case, there might be good reason why the wife should be confined to her needs and the husband left with the much larger balance; presumably whenever there is a short marriage and/or obviously unequal contributions to the joint assets (whether financial or non-financial). Lord Nicholls also distinguished inherited property and property owned prior to a marriage, but only (it seems) if the other’s financial needs could be met without recourse to such property. Equally, the old but non-statutory approach of calculating the reasonable requirements of the spouse was discredited. Rather than confine a wife to her reasonable requirements an English Court will now contemplate providing her with half the net value of the husband (or rather half their net joint value). The burden will be on the husband to show good reason why this should not happen. It will no longer be the case that a high value case turns on assessing the wife’s reasonable needs. The true net worth of the husband (or parties jointly) will have to be established. The very rich man will no longer be able to say that he can afford whatever the wife’s reasonable needs are assessed to be. The overall effect of the case is likely to increase substantially awards to the wife in high value English ancillary relief claims.53 Whether this case-law should be followed in Guernsey is another matter. The speeches reek of fashionably and politically correct reasoning of a kind that is neither necessarily right nor just. Arbitrary equality is as likely to lead to injustice as any historic approach to the problem of asset division. It is perhaps for this reason that Lord Nicholls pulled back from stating any principle of equality, whilst advocating it as an antidiscriminatory yardstick. It seems odd to place a prima facie value on the wife’s non-financial contribution as being equal to whatever the husband has or has not achieved, however great or small. Some recognition of this appears in the case of Cowan v Cowan [2001] 3 WLR 684, a judgment of the English Court of Appeal.54 It is suggested that a Guernsey tribunal would take a more measured and commonsensical view. 52 See s 24(1)(c) Matrimonial Causes Act 1973 and cases such as B v B [1994] 4 All ER 1065 (which related to a pension fund). These provisions are used in English law to target offshore trusts. 53 Although the principles are of general application. 54 See also the cases of Wells v Wells [2002] 2 FLR 97 and Lambert v Lambert [2002] EWCA Civ 1685; the latter in particular develops further the equal division theme, almost regardless of the scale of the achievement of the wealth generator.
102 The Laws of Guernsey There is express power for the Court to sit in private as regards ancillary relief applications; which invariably it will. Article 52 confers a rather ambiguous power on the Court to augment the priority of an hypothèque55 securing such property adjustment or secured order as may be made, although the hypothèque is deemed to be posterior to the rights and interests of existing registered creditors. The Article refers to the loss of successoral rights. It may simply be intended to secure the ex-spouse’s ancillary relief rights against the surviving or even newly acquired successoral rights of others, eg those of a new wife. In any event the order should be registered as swiftly as possible. A useful provision at Article 57 deals with the party who will not comply with the Court’s order. The article permits the Court to order a nominated person to execute any necessary conveyance, assignment, or other document or instrument on behalf of the defaulting party.
MATRIMONIAL CAUSES RULES 1952
These rules contain procedural provisions governing matrimonial causes brought pursuant to the 1939 Law. Appended to the Rules is a series of forms. Rule 3 regulates the contents of a petition. The petition must, for example, disclose the basis of jurisdiction for the Guernsey Court, ie habitual residence or domicile of one of the parties, likewise the existence of children or proceedings relating to the marriage within the jurisdiction or elsewhere. The petition may, and generally does, seek property orders as well as orders in respect of the children. If an interim order is sought rule 3(7) requires the petition to contain a general statement of the husband’s income and property. Rule 3A requires a written statement of the existing and proposed arrangements for children (if any) to be prepared and served with the petition. There are provisions both in the Law and the Rules concerning joinder of a corespondent dealing chiefly with when such joinder will and will not be necessary. An affidavit made by the petitioner must be filed with the petition verifying the facts stated within it. The Advocate must also make and file a certificate with regard to reconciliation if the petition is for divorce or judicial separation. The petition, children statement, and a form called a notice of petition together with a form of acknowledgement of service and a memorandum of appearance in duplicate, all in prescribed form must be served upon the respondent; see rules 3, 3A, 5 and 6. Unless the Court otherwise directs, service is either to be personal or by registered post.56 There are provisions for substituted service and overseas service subject to the provisions of any relevant Convention. The petitioner is not permitted to effect personal service, see Rule 8(1).
55 56
Charge or mortgage. In practice the normal post is used.
Family Law 103 It follows that the petitioner must file the following documents at the Greffe: (a) the original divorce petition with an affidavit as to means if five years’ separation is the fact relied upon; (b) a statement as to arrangements for children; (c) an affidavit in support of the petition sworn by the petitioner; (d) the reconciliation statement; (e) (a certified copy of ) the marriage certificate; (f) the filing fee (£50).57 The documents to be served on the respondent are as follows: (a) (b) (c) (d) (e) (f)
the petition; the statement of arrangements for children; a notice of the petition (form 2); an acknowledgement of service form (form 3); two copies of the memorandum of appearance (form 4); a consent form (where two years’ separation and respondent’s consent is the fact relied upon); (g) a notice to file evidence, (if the petition includes a claim for ancillary relief; the evidence required is an affidavit of means, see rule 7(2)) (h) a confession statement form (if the petition is based on adultery and the adultery is admitted). A co-respondent (ie where adultery is alleged) is served with: (a) (b) (c) (d) (e)
the petition; an acknowledgement of service form (form 3); a memorandum of appearance (in duplicate) (form 6); a notice of the petition (form 5); a confession statement form (again if appropriate).
The respondent has 14 days to file the acknowledgement of service and memorandum of appearance. If the proceedings are contested he has a further fourteen days in which to file an answer and supporting affidavit. Every party to a matrimonial suit is required to provide an address for service within the Island of Guernsey. A respondent may appear under protest in order to challenge a particular aspect of the proceedings, typically jurisdiction. There are unsurprising provisions for amended and supplemental petitions. There are provisions for the respondent to make and file an answer or crosspetition. Again, an affidavit in support is required and must be filed within 14 days. 57 With effect from 4 March 2002 all charges for divorce petitions will be raised on the making of the final order; it follows that no payments should be enclosed with the petition.
104 The Laws of Guernsey Where a party is served with an application for financial provision, whether in the petition or by separate notice, he or she is, in any event, required to file an affidavit setting out full particulars of his or her property and income. The party claiming relief is required to file an affidavit in reply containing full particulars of his or her property within fourteen days after delivery of the first affidavit. It follows that the petition itself may contain an ancillary relief application which will trigger the exchange of affidavits but that provision is made also for a freestanding notice to be drawn and served subsequently, (note the different formal requirements at rule 7(1)). By rule 37 no respondent may make an application for financial ancillary relief later than six months after the making of a final order save by leave of the Court. The Advocate acting on behalf of a respondent must bear this in mind very carefully. There are various provisions for security to be given by the husband for the wife’s costs or indeed for the husband to pay into Court monies on account of the wife’s legal costs. Under rule 24 it is the duty of the petitioner to list the matrimonial suit for trial and to give notice to every party who has entered an appearance, (such notice not to be less than fourteen days). Rule 24(2) contains a useful provision whereby if the petitioner fails to get on and list the suit for trial the respondent may do so if 21 days have elapsed from the earliest date upon which the petitioner could have so acted. In any event a trial date may not be given earlier than before 60 days have elapsed from the filing of the petition. The suit itself will be struck out if it does not come to trial within a year and a day of filing, see rule 2(2). As regards children, rule 36 provides that a petitioner, respondent, any person with custody or control of the children of the marriage or any other person with leave may apply to the Court for an order under Part VII of the 1939 Law, ie orders for custody, care and control and access. There is the usual provision permitting variation of orders to be sought. There are provisions concerning evidence which are of interest. The hearsay rule is abrogated in several important respects. The Court may order that any particular fact be proved by affidavit. It may order that the affidavit of any witness may be read at the hearing on such conditions as the Court may think reasonable. Finally, it may order that evidence of any particular facts be given at the hearing by statement on oath of information and belief, or by production of documents or entries in books or by copies of documents or entries or otherwise as the Court directs. Rule 55 contains provisions relating to the computation of time. Sundays and public holidays are included in any period of time given for the taking of a procedural step, but when time expires on a Sunday or public holiday it extends to the next working day. Rule 55(3), which stopped time running in August and September, was deleted by the Matrimonial Causes (Amendment) Rules 2001, ORC No 1 of 2001.
Family Law 105 Decrees of Presumption of Death and Consequent Dissolution of Marriage Part VI of the 1939 Law sets out the provisions whereby a decree of presumption of death and consequent dissolution of marriage may be obtained. Jurisdiction is based upon the same requirements as for divorce and judicial separation. Article 39 is the key provision. Any married person who alleges that reasonable grounds exist for supposing that the other party is dead may present a petition to the Court to have this presumed and their marriage dissolved. Article 39(2) provides that the continual absence of a party for seven years in circumstances where the petitioner has no reason to believe that the other has been living within that time is evidence that he or she is dead until the contrary is proved. The petitioner may marry again six months after the grant of a decree of presumption of death and dissolution of marriage if the decree has not been rescinded or judicially challenged in that time. If the decree is subsequently rescinded the validity of the further marriage is unaffected. Costs in Matrimonial Causes Before the Matrimonial Causes Division of the Royal Court The Matrimonial Causes (Costs and Fees) Ordinance 2002 replaced existing costs rules with effect from 1 February 2002.58 The 2002 Ordinance is modelled closely on the Royal Court (Costs and Fees) Rules 2000. Note however that the Ordinance goes beyond the 2000 Rules by making substantive provision for the award of costs on either a full or partial indemnity basis. The criteria for making such an award are borrowed directly from RCCR 48.59 The 2002 Ordinance also makes substantive provision for the award of security for costs, again borrowing from equivalent provisions in the RCCR.60 The 2002 Ordinance provides for Court fees to be payable in accordance with the schedule to the Ordinance; note that the cost of an application, including trials of causes or issues, is fixed at £60 per hour or part thereof, unless the hearing lasts less than one half hour in which case the fee is £40. An advance payment of £60 per day or part day is payable on reserving or setting down a hearing. The Court retains a discretion to order that the relevant Court fee shall be waived either in whole or in part in proceedings relating to children.61 The Ordinance deals also with party and party costs62 and, in particular, the rate of recoverable Advocates’ fees. The starting point is that the maximum Advocates’ 58 Ie the Matrimonial Causes (Costs and Fees) Ordinance 1981 and the Matrimonial Causes (Costs and Fees) (Amendment) (Ordinance) 1994. Note that the 2002 Ordinance applies to costs incurred on or after 1 February 2002 regardless of when the relevant proceedings commenced. 59 See s 6. There was no need for the 2000 Rules to make such provision. 60 See s 7. 61 See s 2(4). 62 But not party and own Advocate costs, for which there is no taxation provision. The client’s remedy would be to challenge the bill and negotiate a reduction, alternatively pay what is admitted to be
106 The Laws of Guernsey fees recoverable are those costs of and incidental to the proceedings which have been incurred by the party to whom costs are awarded and which are “reasonable in amount and reasonably incurred”. The maximum recoverable rate is prima facie fixed at £160 per hour,63 unless the Court orders otherwise. Provision is made for the hourly rate to increase each 1 January by an amount equivalent to the annual percentage increase of the Guernsey Index of Retail Prices. Where costs are awarded on a standard basis (although the term is not in fact used) any doubts as to whether costs are reasonable in amount or reasonably incurred are to be resolved in favour of the paying party. However, where costs are awarded on a full or partial indemnity basis “all costs shall be allowed except insofar as they are unreasonable in amount or unreasonably incurred . . . any doubts . . . shall be resolved in favour of the receiving party”.64 Detailed provision is also made for witness’ allowances in respect of proceedings, including expert witnesses. As to the latter it is provided that an allowance may be made “of the amount considered reasonable having regard to the nature and difficulty of the case and the work necessarily involved”. A curious provision which has no equivalent in the 2000 Rules is that “an allowance payable to any person under this section is, unless the Court orders payment by another party, payable by the party on whose behalf that person attends to give evidence”.65 The function of this sub-section is not immediately apparent unless it is to compel a party to make that provision for the witness as opposed to leaving it to be agreed between the party and the witness.66 Part II of the Ordinance deals with taxation of costs, again following closely the 2000 Rules model. The essential point to note is that when an opponent presents a bill of costs to the paying party that party must request taxation within one month if the bill is to be challenged. It is only in exceptional circumstances that time can be extended. The request for taxation is made to the Judge who presided over the material hearing, or else the Bailiff,67 if the Judge is unavailable. Appeals in Matrimonial Causes There is a right of appeal to the Court of Appeal from any award, decree, judgment or order of the Bailiff or of the Judge in Matrimonial Causes (the Commissioner), as the case may be. See generally Article 3. The contradiction concerning time for appeal has been noted above. The 1939 Law states that an appeal must be made within seven days whereas the 1964 Rules due and, if necessary, defend proceedings for the balance relying on the implied retainer term that fees are only payable to the extent that they are reasonable. See by way of illustration the English statute provision at s 15 of the Supply of Goods and Services Act 1982 and the jurisprudence relating thereto. No-one could sensibly question an equivalent implied term as a matter of Guernsey common law. 63 Until 31 December 2002. 64 See generally s 3. 65 See s 4(7). 66 See generally s 4 as to witnesses. 67 Here the request should be addressed directly to the Bailiff ’s Chambers.
Family Law 107 state 28 days. There is a curious provision whereby it seems the appeal must be heard within six months, see Article 3(4). There are various judgments concerning the nature of the right of appeal against a decision of the Bailiff in a matrimonial cause, largely reflecting English principles. In the case of T v T of 1985 Clyde JA, stated the following: “The weight to be put on each of the various considerations before the Deputy Bailiff was essentially a matter for him. It does not seem to me that there was any material and relevant consideration which he ignored or any irrelevant consideration which he took into account. I do not find that he mis-directed himself or erred in law. Apart from grounds of attack of that kind an Appellate Court could only interfere with his decision if he had gone plainly wrong.”
This judgment was cited with approval in the case of S v S (1990) where the Court of Appeal held that: “This Court should interfere with the discretion judicially exercised by the Bailiff only if his judgment disclosed some error of law, or failed to take into account some relevant circumstance or took into account some irrelevant factor.”
The Court also affirmed in this case that the circumstances in which fresh evidence is allowed to be admitted on appeal require to be exceptional. Ordinarily it would be necessary to satisfy the Appeal Court that a basic assumption upon which the trial Judge had proceeded had since been falsified by subsequent matters. Another 1990 judgment in the case of S v S confirmed these broad appeal principles. Likewise, in the case of D v D (1986) the Court of Appeal held that an order for costs was a matter for the discretion of the Court deciding the proceedings and that it was only in the most exceptional circumstances that an Appellate Court would interfere with the exercise of that jurisdiction, (this principle applies to any attempted costs appeal). The Court confirmed also that it was appropriate to take a co-respondent’s income into account when considering financial matters.
MARRIED WOMEN’S PROPERTY LAW 1928
A 1928 Law called Loi étendant les Droits de la Femme Mariée quant à la Propriété Mobilière et Immobilière gave married women in Guernsey for the first time the same property rights as unmarried women of full age. In essence it permitted women to own and deal with their own property separately from their husband’s property where previously all such matters were subsumed to the husband.68 Likewise women were given the right to make and enter contracts on their own 68 Certainly a woman could own no personalty independently of her husband; the position as to realty was more complex. In any event under customary law the husband would have control of the realty, if not ownership.
108 The Laws of Guernsey behalf and to be executors and trustees. With the rights came equivalent obligations. There was a certain liberation of men from responsibility for their wives and obligations incurred by them. Similar legislation was introduced to Alderney in 1949, but not in Sark until as late as 1975. Reciprocal Enforcement of Maintenance Orders There are detailed provisions for the reciprocal enforcement of maintenance orders contained within the Maintenance Orders (Reciprocal Enforcement) (Bailiwick of Guernsey) Law 1984. The Law falls into two parts. Part I concerns socalled reciprocating countries. There is a mutual system between the Bailiwick and reciprocating countries for the making and enforcement of maintenance orders. In the absence of the normal criteria for jurisdiction (ie residence within the Bailiwick or appearance before the Court), maintenance orders made by the Bailiwick are provisional until confirmed by the reciprocating country where the prospective maintenance payer is. Requests are transmitted by the Bailiff to the Lieutenant-Governor and onwards to the relevant authority of the reciprocating country. There are provisions for registration, variation and revocation of such orders. The provisions are mirrored according to whether the payer is resident within the Bailiwick or in the reciprocating country. There is a separate scheme for Convention Countries in Part II of the Law. Convention Countries are the signatory countries of the 1956 New York United Nations Convention on the Recovery Abroad of Maintenance. The scheme here is for an application for the recovery of maintenance to be transmitted to the country with jurisdiction over the prospective payer. The Court of the Convention Country will then proceed with the application as if the requesting party were before it. There are detailed provisions for how the Bailiwick Courts should respond to such a request and the types of order that may be made. Essentially these comprise maintenance orders in favour of wives and children. There are again provisions for registration, variation, revocation and enforcement. There are similar provisions in both parts of the Law to provide for the reception of authoritative documents and evidence; likewise provisions for issuing letters of request for evidence to be taken.
CHILD PROTECTION: THE CHILDREN AND YOUNG PERSONS (GUERNSEY) LAW 1967
The principal Law governing child protection in Guernsey is the Children and Young Persons (Guernsey) Law 1967, as amended by various subsequent laws. The child protection provisions of the 1967 Law have limited application in Alderney and Sark, see section 38.
Family Law 109 Care Proceedings The 1967 Law sets out the provisions whereby care and supervision orders may be obtained in respect of children and young persons and was clearly influenced by English legislation of the time. Again it must be emphasised that no reforms equivalent to the 1989 Children Act have since been introduced, although new legislation is now expected to be in force within two years or so.69 Threshold Criteria for Protection Certain threshold criteria must be established before one of a number of orders may be made in respect of the child or young person70 concerned. By section 2(1) a child or young person is in need of care, protection or control if either any one of six conditions is established and he is not receiving such care, protection and guidance as a good parent may reasonably be expected to give or the child or young person is beyond the control of his parent or guardian. It is noteworthy that this second threshold criteria stands alone. It is enough to prove that the child or young person is beyond control. Two of the six conditions referred to above were amended by the Children and Young Persons (Amendment) (Guernsey) Law 2000 so as to include likelihood of harm as well as the fact of such harm having already occurred. The six conditions are now that the child or young person is: (a) falling, or is likely to fall, into bad associations or is exposed to moral danger; or (b) the lack of care, protection or guidance is, or would be, likely to cause him unnecessary suffering or seriously affect his health or proper development; or (c) any one of certain listed criminal offences has been, or is likely to be, committed in respect of him or another child who is a member of the same household; or (d) he is, or is likely to be, a member of the same household as a person who has been convicted of such an offence in respect of a child or young person; or (e) the child or young person is, or is likely to be, a female member of a household a member of which has committed or attempted to commit an offence of incest; or (f) he has misused a volatile substance by deliberately inhaling, other than for medicinal purposes, that substance’s vapour.
69 For example, there is still provision at s 8(5) of the 1967 Law for the Royal Court to authorise the making of arrangements for the emigration of a child or young person, albeit with some safeguards. 70 By s 1(1) a child is a person under the age of 14. A young person is a person who has attained the age of 14 and is under the age of 17.
110 The Laws of Guernsey Applications are made by HM Procureur or a Crown Advocate (on behalf of the Children Board) to the Juvenile Court.71 HM Procureur may direct the Chief Officer of Police to cause a child or young person to be brought before the Juvenile Court for these purposes, see section 3(1)(a). The range of orders that may be made are as follows: Special Care Order 72 A special care order is defined as an order committing any person to the care of the Children Board and requiring the Children Board to transfer that person to the care of a local authority.73 This form of order is used where it is intended to remove the relevant child from the Island with no short or medium term prospect of rehabilitation to the family of the child or young person. This form of order is used for the most difficult children; whether it is human rights compliant is another matter. A special care order prima facie ceases to have effect when the young person attains the age of 18, unless he was already 16 when the order was made, in which case it ceases at 19; see section 11(8) (as amended). Fit person Order 74 The equivalent of the English care order is known as a “fit person order”. The Juvenile Court, having satisfied itself that the threshold criteria are established, may commit the care of the child or young person to any “fit person”, whether a relative or not. Typically the care of the child is committed to the Children Board itself 75 or to some other relative or even parent. It is more likely however that the parent willing to take care and control of a child or young person would already have pursued an application independently, for example pursuant to the Domestic Proceedings and Magistrate’s Court (Guernsey) Law 1988 or the Matrimonial Causes Law 1939.76 Section 7 contains detailed provisions governing fit person orders made in favour of the Children Board. Section 7(3) provides expressly that the Children Board may allow the child or young person to be under the charge and control of a parent, guardian, relative or friend, notwithstanding the making of a fit person order in its favour, if it appears to the Children Board that it will or may be for the benefit of the child or young person to proceed in this manner.77 The Children 71 Note also the powers under ss 8 and 9 of the Domestic Proceedings and Magistrate’s Court (Guernsey) Law 1988 (as amended) to make child protection orders in exceptional circumstances when considering applications for custody and access. 72 See s 3(3)(a). 73 Ie an English local authority. 74 See s 3(3)(b). 75 The Board is deemed to be a fit person by s 7(1). 76 Although locus is sometimes a problem under Guernsey children law, certainly in the case of nonparents. 77 Eg because the care plan is to rehabilitate the child with the parent(s).
Family Law 111 Board retains the power to determine that a child or young person shall no longer be allowed to remain under the charge or control of any such parent, guardian, relative or friend and may give instructions for the return of the child. An order committing a child or young person to the care of a fit person (whether the Children Board or not) may be varied or revoked by the Juvenile Court on the application of HM Procureur, the Chief of Police on the direction of HM Procureur, or on the application of the parent or guardian of the child or young person concerned; see section 8(2). A fit person order prima facie comes to an end when the young person attains the age of 18, see section 6(3).78 Order to Enter into a Recognisance This is a power more usually found as a condition attached to the grant of bail in criminal proceedings. In this context a parent or guardian may be required to undertake to exercise proper care and guardianship of a child or young person or otherwise forfeit a fixed sum of money. Sureties may also be demanded. This power is seldom used today. See section 3(3)(c). Supervision Order 79 When making a fit person order or an order to enter into a recognisance, or independently of any other order, the Court may make a supervision order for a specified period, not exceeding three years. By section 10 the Probation Officer (or whoever has been appointed supervisor) is under a duty to visit, advise and befriend the child or young person concerned. There is also an obligation, where appropriate, to try to find the young person suitable employment. With the agreement of HM Procureur, and if it appears necessary in the interests of the child or young person concerned, the supervisor may bring the child or young person before the Magistrate’s Court for further orders to be made. These orders may include a fit person order, an order that the parent or guardian enter into a recognisance or an order that the child or young person be sent to an approved school. There is a general power to add such provisions to a supervision order as the Court considers necessary. A supervision order ceases to have effect when the young person attains the age of 18. A supervision order is often used as an intermediate step falling short of a fit person order when this is in the best interests of the child; typically because the parent or parents have some realistic prospect of retaining the child and the concerns for the child’s welfare are not so great as to require the removal of the child.
78 There is no equivalent of the Children (Leaving Care) Act 2000 nor the Children (Leaving Care) (England) Regulations 2001 imposing duties on local authorities to advise, assist and befriend children leaving care. 79 See s 3(3)(d).
112 The Laws of Guernsey Place of Safety Order There are various powers granted by the 1967 Law permitting the removal of a child or young person to a place of safety. The principal power is contained in section 3(1). HM Procureur may direct the Chief of Police to cause a child or young person to be taken to a place of safety. The child or young person may be detained there until he can be brought before the Juvenile Court. Section 27 provides that such detention may last up to 28 days. Given the extreme and draconian nature of these powers their use is intended for serious cases only, where there is real urgency and a serious threat to the welfare of the child or children concerned. The powers are provided in order that children may be protected during the time it takes to bring the matter before the Juvenile Court to obtain whatever substantive or interim order may be appropriate, if any. Interim Orders Section 24 gives the Juvenile Court power to make such interim order as it thinks fit for the detention or continued detention of a child or young person in a place of safety or for his committal to the care of a fit person, whether a relative or not. An interim order must not remain in force for more than 28 days but further interim orders may be made at the expiration of each 28 day period. Children under five need not be brought back before the Court (ie in person) nor children or young persons unable to attend by reason of illness or accident. In practice children do not attend. Criminal Proceedings In addition to the Juvenile Court’s “civil” jurisdiction to make child protection orders a Court by or before which a child or young person is found guilty of an offence punishable in the case of an adult with imprisonment also has the power, in addition to any other powers, to make a special care, fit person and/or supervision order in respect of him, see section 5. Escape From the Care of Fit Persons By section 9 the Chief of Police has power to bring escaped children or young persons back to the person or persons into whose care the child or young person had been committed,80 or if the child had been boarded out by the Children Board,81 to such other person or place as the Children Board directs. There are various criminal offences committed by those who assist or harbour a child or young 80 81
If they are willing to have the escapee back; otherwise he must be taken before the Juvenile Court. Pursuant to a fit person order made in the board’s favour.
Family Law 113 person running away; likewise those who otherwise interfere with the placement of a child or young person. Contribution Orders There are extensive powers contained within the 1967 Law for requiring the parents of a child or young person committed to care to make financial contribution in respect of his or her maintenance. There is power also to require contributions from a young person in work. Appeals Section 36 of the 1967 Law sets out the appeal provisions. Appeal from orders made by the Juvenile Court is to the Royal Court sitting as an Ordinary Court. Appeals may be brought by the child or young person concerned or his parent or guardian. Appeals may also be brought by those required to enter into a recognisance, those who have forfeited all or part of a recognisance, and any person subject to a contribution order. Publicity There are provisions in the 1967 Law forbidding newspaper or television reporting of Court proceedings concerning a child or young person under the 1967 Law or in connection with any offence.
THE CHILD PROTECTION (GUERNSEY) LAW 1972
This Law contains provisions governing foster children and their care. By section 2 it is the duty of the Board to satisfy itself as to the well-being of fostered children. There are powers of inspection and powers to impose conditions upon, as well as prohibitions against, keeping foster children. By section 9(1) a person maintaining a foster child for reward is deemed to have no interest in the life assurance of the child. In addition there are provisions for the regulation of nurseries and childminders. At section 25 there are curious provisions whereby the Children Board may, by resolution, assume all parental rights and powers over any child in its care otherwise than in pursuance of a 1967 Law order. This seems principally to have in mind the situation where the child’s parents are dead and there is no guardian, but the Law extends also to circumstances where a child has been abandoned or the parent or parents suffer from mental disability. Such a resolution may also be passed where the parent is of such habits or “mode of life” as to be unfit to have the care of the child or has failed persistently to discharge his or her parental obligations.
114 The Laws of Guernsey The resolution is served on the relevant parent or parents, who may object. The resolution lapses after fourteen days if objection is made. During this time the Board may apply to the Royal Court for an order that the resolution shall not lapse. Whilst such a resolution is in force, whether through absence of objection or Court order, all rights and powers which the (deceased) parents would have had vest in the Board. The Law is strangely drafted in that it continues to refer to deceased parents in the general provisions without regard to the more specific instances where a resolution can be made. It is clear from the 1972 Law that orders made under the 1967 Law take precedence.
THE PROTECTION OF CHILDREN (BAILIWICK OF GUERNSEY) LAW 1985
This Law contains various offences relating to children. By section 1 any person who commits an act of gross indecency with or towards a child or who incites a child to such an act with him or another is guilty of an offence punishable on indictment by a term of imprisonment not exceeding five years or a fine or both. By sections 2 and 3 there are various offences relating to child pornography. Section 2 concerns the printing, publishing, selling or letting of harmful publications, as defined. Section 3 concerns the taking, distribution, possession or publication of indecent photographs of children. Section 5 extends criminal liability to company officers where offences are committed with their consent or connivance. Powers of arrest, search and forfeiture are given to the Police.82
THE CHILDREN AND YOUNG PERSONS (SECURE ACCOMMODATION) (GUERNSEY) LAW 1997
This Law permits the Board to place a child in its care in secure accommodation. The precise circumstances and limits upon the duration of such accommodation are set out in the Children and Young Persons (Secure Accommodation) Ordonnance 1997. HM Procureur’s approval is required to place a juvenile under the age of thirteen in secure accommodation. The maximum period during which a juvenile may be kept in secure accommodation without the authority of the Court is an aggregate of 72 hours (whether or not consecutive) in any period of twenty-eight consecutive days. Thereafter the maximum period for which the Court may authorise a juvenile to be kept in secure accommodation is eight days, with further eight day extensions up to twenty-eight consecutive days at any one time.
82 See now also the amendments made to the 1985 Law by the Criminal Evidence and Miscellaneous Provisions (Bailiwick of Guernsey) Law 2002 to include pseudo-photographs of children.
Family Law 115
ADOPTION
Adoption in Guernsey follows the English model, albeit an out-dated one.83 The principal Law is the Adoption (Guernsey) Law 1960. There are subsequent Laws concerning additional effects of adoption, see the Adoption (Guernsey) Law 1966 and reciprocal provisions relating to British Island adoptions and overseas adoptions, see the Adoption (Guernsey) Law 1970. The scheme of the 1960 Law is that by section 2 the Court may authorise an applicant to adopt an infant. Such an order is called an adoption order. By section 2(2) an adoption order may be made on the application of a married couple authorising them jointly to adopt an infant but otherwise an adoption order may only be made on the application of one person. It follows that an unmarried couple may not adopt as a couple.84 There are various restrictions upon those in favour of whom an adoption order may be made. The applicant must either be the mother or father of the infant, or a relative aged at least 20, or a person who has attained the age of 25. An adoption order must not be made in favour of a sole male applicant in respect of a female unless there are special circumstances. By section 21 of the 1960 Law the Children Board is given power to make and participate in arrangements for the adoption of infants. It is an offence for any other body of persons to make arrangements for the adoption of an infant. Section 4 requires an infant to have been continuously in the care and possession of an applicant for at least three consecutive months immediately preceding the date of the adoption order. The three month period does not start to run until the infant is six weeks old. By section 5 the Court may not make an adoption order unless every person who is a parent or guardian of the infant or a non-applicant spouse consents to the making of the order. The applicant is necessarily deemed to have consented to the adoption. The Court is concerned to obtain the consent of those most closely connected to the child in the past, as well as the married partner of the prospective adopter. The consent of a parent or guardian may be proved by written consent in the appropriate form; see section 7 and rule 6 of the Adoption Rules 1961, as amended. 83 Note the development of English adoption law in the form of the Adoption and Children Act 2002. The Act received Royal Assent on 7 November 2002 and will replace the Adoption Act 1976 when it comes into force. Particular emphasis is given by the new Act to the welfare of the child throughout his life as the paramount consideration, see s 1(2). By s 1(6) the Court must always consider the whole range of powers available to it in the child’s case and must not make any order under the Act unless it considers that making the order would be better for the child than not to. Unmarried couples are permitted to adopt, see s.50; likewise an unmarried single person, see s 51. The Act provides, inter alia, for the concept of a “special guardian”, an arrangement more substantial than a mere residence order but not so absolute as adoption; see s 115 which inserts new ss 14A–14G into the Children Act 1989. The House of Lords considered the then current English adoption legislation in the context of human rights law in the case of Re B (a child) (adoption by one natural parent) [2002] 1 All ER 641. 84 An area where human rights challenges are likely.
116 The Laws of Guernsey By section 8 the Court must be satisfied that every person who has given their consent understands the nature and effect of the adoption order and, in particular, that the effect will be permanently to deprive him or her of their parental rights. The Court must also ensure that the order, if made, will be for the welfare of the infant and that no unlawful payment either has been or will be made in respect of the adoption. In essence all such payments are unlawful, save for certain Children Board allowances. As in English law there are provisions whereby the Court may dispense with any consent prima facie required for the making of an adoption order, see section 6. The Court may dispense with the consent of a person who has either: (a) abandoned, neglected or persistently ill treated the infant; or (b) who cannot be found or is incapable of giving his consent, or is withholding his consent unreasonably. It is usually the reasonableness of the withholding of consent which is at issue. Alternatively, if the Court is satisfied that any person whose consent is required has persistently failed without reasonable cause to discharge the obligations of a parent or guardian of the infant, the Court may dispense with his consent, whether or not it is satisfied as to the other pre-conditions permitting consent to be dispensed with. Note that all these qualifying conditions are disjunctive. There are additional provisions for dispensing with the consent of the applicant’s spouse if he cannot be found, is incapable of giving his consent or is estranged from the applicant. Likewise there are provisions for dispensing with the consent of a person who has previously consented but subsequently withdrawn that consent if the only ground is that he does not know the identity of the applicant. By section 9 the Court has power to grant interim orders giving the custody of the infant to an applicant for a period not exceeding two years by way of a probationary period. The general rule under the Law is that an adoption order may only be made if the applicant and the infant reside in the Island, see section 2(5). This is modified by section 11 which permits adoptions by applicants not ordinarily resident if certain additional criteria are met. Section 12 provides that upon an adoption order being made all rights, duties, obligations and liabilities of the parents or guardians of the infant in relation to the future custody, maintenance and education of the infant are extinguished and vest in the adopter as if the infant were a child born to the adopter in lawful wedlock. It follows that rights of access and maintenance obligations are extinguished as regards the former parents. The newly adopted child is for all succession85 purposes deemed to be the child of a deceased adopter and not the child of the deceased biological parent; see sections 15 and 16. 85
Ie inheritance.
Family Law 117 There are various provisions for the maintenance by the Greffier of an Adopted Children Register. The principal purpose of the register is to keep a confidential record of adopted children which may be cross-referenced to the Register of Births. Entries in the Register of Births must be made indicating the adoption or readoption or revocation of an adoption order. Once a parent or guardian has consented to the making of an adoption order he may not remove the infant from the care and possession of the applicant save with the leave of the Court, see section 23. By contrast the Children Board may require the return of infants placed by the Board with the prospective adopter. Part V of the 1960 Law contains provisions for the protection of children awaiting adoption or children placed with strangers. The provisions are of general application and not restricted to adoption.86 The Law confers powers upon the Board to ensure that protected children, as defined, are visited by a person authorised by the Board who must satisfy himself as to the well-being of the child and give such advice as to their care and maintenance as is required. There are similar powers to inspect premises where the protected children are being kept. There are criminal offences and penalties to enforce these provisions. The Board may prohibit the placing of a child with certain persons. If the Board is satisfied that a protected child is being kept or is about to be received by any person who is unfit to have his care, the Board may apply to the Court for an order that the child be removed to a place of safety until other arrangements can be made. The same applies as regards any contravention of a prohibition imposed by the Board or where the premises themselves are detrimental to the child’s welfare. There are miscellaneous offences concerning payments for adoption and unauthorised removal of children for adoption outside the British Isles. The Adoption Rules 1961 make detailed provision for the procedure to be followed upon an adoption application. Noteworthy rules are those requiring medical certificates as to the health of the applicant and a report on the health of the infant. There is provision for the appointment of a guardian ad litem and detailed provisions setting out his duties, see rules 8 and 9. There are provisions governing the admissibility of evidence of any relevant foreign law of adoption. There are detailed standard forms appended to the Rules for use in adoption applications. The 1960 Law extends to Guernsey, Herm and Jethou. Most of its provisions appear also to have been applied in Alderney, see the Alderney (Application of Legislation) (Adoption) Ordinance 1974 and the Adoption (Alderney) Rules 1974. By the Adoption (Amendment) (Guernsey) Law 2000 provision is made for disclosure of birth records to an adopted person, the Law came into force on 1 November 2001 and was extended to Alderney.87
86 87
See also the Child Protection (Guernsey) Law 1972. See Ordinances 35 and 36 of the States of Guernsey 2001.
118 The Laws of Guernsey
GUIDANCE FOR INTERIM MEASURES IN RESPECT OF CHILDREN MATTERS BEFORE THE CIVIL COURTS OF GUERNSEY
The shortcomings of existing Guernsey child protection and adoption legislation and procedure is acknowledged and being addressed. Meanwhile guidance notes have been issued in order to ensure, so far as possible, and within the existing framework, that human rights are respected and practice brought up-to-date.88 The principles set out in the notes are intended primarily for public law civil children proceedings but it is stated expressly that the same principles may be of application with regard to certain aspects of private law proceedings;89 eg the possible need for a child to have separate representation in a particular case. The key points of the guidelines are as follows: Commencement of Proceedings and Place of Safety Orders It is emphasised that proceeding urgently and by way of a place of safety order will be the exception rather than the rule. Proceedings will commence with the leave/direction of HM Procureur or HM Comptroller following a written report from the Children Board explaining the need for action and setting out the proposed care plan. The first hearing is to be within seven days of the direction, notice having been given to the parents. A place of safety order will be made by HM Procureur or Comptroller (only) if it is shown to be a “necessary and proportionate response” to the circumstances and will be granted for the shortest possible time, which will not normally exceed 72 hours, again a care plan is required with an emphasis also on written records of reasons being kept. Representation Representation for the child is to be considered at the earliest stage of proceedings, either by HM Procureur or HM Comptroller when directing proceedings to commence or, at the latest, by the Magistrate at the first hearing. Representation must be considered for other possible parties also, and expressly unmarried fathers. In any event the question of representation must be considered at the first hearing. A child may require representation by a guardian or Advocate or both. It is emphasised that unmarried fathers should be invited to participate in the proceedings. Where the father is absent various factors must be taken into account when considering how to proceed, eg whether the child’s relationship with the father 88 The guidelines resulted from a series of training sessions held in the Island by Ernest Ryder QC in late October 2002. They are themselves intended as a stop-gap for a more detailed document . Initially issued in draft form they became Practice Direction No 5 of 2002 dated 22nd December. Unfortunately the helpful context setting introduction present in the draft was omitted from the Practice Direction. 89 At least it was in the introduction to the draft, see the previous footnote.
Family Law 119 amounted to family life90 and the views of the residential parent (albeit adverse views are not to be taken at face value and thereby determinative). Directions are likely to be given as to serving the absent parent, eg through the Guernsey Social Security Authority. There may be other significant adults in the child’s life who the Court would wish to identify and involve. Care Plans The guidelines place a considerable emphasis on the Children Board’s care plan for the child or children concerned. The Court (or HM Procureur/Comptroller) will require a care plan at every stage in the proceedings. The guidelines state the minimum requirements for the content of a care plan which include: the reasons for the order sought; the aim of the plan and timetable; details of any proposed placement; proposed contact with family members; the provision of education and healthcare; the views of the child (if old enough to express a view) and other family members; and details of proposed assessments. The content and length of a care plan will be determined inter alia by the degree of urgency initially and the stage of the proceedings. Final Care Plans and Variation The guidelines contemplate expressly the Court’s continuing oversight of a final care plan once a (fit person) order has been made; this will depend upon a liberal interpretation being adopted of section 8 of the 1967 Law, which itself permits a fit person order to be varied or revoked upon application being made either by HM Procureur or the parent or guardian of the relevant child or young person. By this route the Guernsey Court will have power to review fit person orders in a way not permitted to the English courts in the light of the case of Re S (children: care plan)91 and therefore the ability to act more clearly compatibly with Articles 6 and 8 of the European Convention for the Protection of Human Rights and Fundamental Freedoms 1950. When making a final order the Court will consider whether to identify any aspect of the plan as being fundamental; the guidelines anticipate such matters as contact, placement and whether the aim is rehabilitation of the child or permanent placement outside of the child’s family. It is proposed that major changes to the fundamental aspects of a final care plan should not be made without the consent of the Court; what constitutes a major change will be a question of fact and degree in the circumstances of each case. If there is doubt it will be for the Court to decide 90 To distinguish between, say, the father of a child conceived by an act of rape and the unmarried father who had lived with the mother and child and played an important rôle in the child’s life for a number of years. The Art 8 right is to “. . . respect for his private and family life, his home and his correspondence”. 91 [2002] 2 All ER 192, where the House of Lords overturned the Court of Appeal and Thorpe LJ’s attempt to provide for so-called starred care-plans.
120 The Laws of Guernsey whether the proposed change “goes to the root of the plan”. Applications on behalf of the child himself may be made with the co-operation of HM Procureur, although it is expected that the Children Board will normally take the lead. Care plans following the guideline criteria are to be produced by the Children Board for pre-existing fit person orders no later than May 2003. The child concerned and his or her family are to be involved and an opportunity given to them to take independent advice. Parts of the plan which are not agreed must be noted as such. The resulting care plan will form the basis for any subsequent application to the Court. The Board are required to indicate which parts of the plan are fundamental, although this is ultimately a matter for the Court if disputed. The Board will be required to draw the child’s/family’s attention to the section 8 right to apply to vary the order. Secure Accommodation The Children Board has accepted that the Guernsey secure accommodation unit is unsuitable for anything other than short-term provision; it follows that particular care will be taken with its future use. This will include the making of a place of safety order application where the child is in the voluntary care of the Board and in any event referring the case to the Court at the earliest opportunity, usually within one working day of admission to the unit. The care plan must make proposals for what will follow the detention. Off-island Placements The guidelines emphasise the need to regularise the currently uncertain legal position of children placed off-island. Such placements comprise those reached by voluntary agreement, through a fit person order or via a special care order. The ambition is to put in place a protective legal régime even when the child is not present physically in Guernsey. Whenever possible, off-island placements are to be made only with the sanction of the Court and subject to a tightly drawn care plan. The use of special care orders is to be avoided in civil proceedings. Where offisland placements are intended they should be made pursuant to a fit person order, again if possible. The identification of fundamental conditions of the care plan will be used as a means of safeguarding the interests of the child concerned. It is intended that review hearings be fixed to coincide with the next stage of an approved care plan; ie that there should be active monitoring by the Court. The guidelines provide that the child will normally be represented by an advocate and a guardian or other independent expert. It is also proposed that mirror orders be put in place in the United Kingdom both to clarify the child’s legal status and to provide a foundation for dealing with issues that may arise.
Family Law 121 Adoption It is intended that the Royal Court will adopt a protocol similar to the protocol introduced recently in England and Wales in order to streamline proceedings.92 Case Management The guidelines state that the Court intends to take a more pro-active approach to all family matters. More comprehensive directions are anticipated in proceedings generally together with a practice direction for the conduct of ancillary relief proceedings.
92
Note generally the Adoption and Children Act 2002, see above.
7 Guardianship (Tutelle and Curatelle)
T
HE LEGAL GUARDIANSHIP of those incapable of managing their affairs, whether because of age or other disability, is another area of Guernsey law heavily influenced by customary and French law. There is, in addition, an overlay of English law that finds its expression most clearly in the Law Reform (Age of Majority and Guardianship of Minors) (Guernsey) Law 1978. In the context of minors one talks of guardianship or tutelle. This is the state in which a minor exists until the age of majority, which is 18.1 A young person beneath the age of 18 is incapable2 for many legal purposes. The person prima facie entrusted with the care of a young person is the mother, if the child is illegitimate, otherwise the parents jointly.3 If there is no parent alive or capable of caring for the child a (replacement) guardian or tuteur is required. There is a presumption that every adult has full legal capacity. However, when an adult is incapable, typically because of mental illness or disability, a system of protection is required which is known as curatelle. The person entrusted with responsibility for the adult incapable is known as the guardian or curateur. There is much in common between tutelle and curatelle, particularly in the context of a guardian’s duties. Again assistance could properly be derived from modern French law in appropriate circumstances.4
TUTELLE IN CUSTOMARY LAW
The 1978 Law reformed and supplemented aspects of customary law without displacing customary law altogether. There are substantial gaps left by the 1978 Law
1 At least in Guernsey and Alderney it is 18. See s 1 Law Reform (Age of Majority and Guardianship of Minors) (Guernsey) Law 1978. Note that the age of majority in Alderney was reduced to 18 from 20 only as a consequence of the Age of Majority (Alderney) Law 2001. 2 In French law incapable is the term of art for a person under legal disability. The word is used from this point on in its specialist French as opposed to more general English sense. The minor is an incapable. 3 Where only one parent of a legitimate child is alive total parental authority is prima facie (ie assuming no incapacity or unwillingness on the part of the survivor) vested in that parent without automatic supervision by the Court, see s 5 of the 1978 Law; contrast the position in French law, see Art 383 Code Civil. 4 See the provisions at Art 388–487 Code Civil & Art 1211–1231–2 Nouveau Code de Procédure Civile concerning minors and Art 488–514 CC & Art 1232–1263 NCPC concerning adults. Equally, see also Laurent Carey p 171 et seq. for an account of this topic in 18th century Guernsey law.
124 The Laws of Guernsey which customary law must still fill. Thus if the single parent5 of a child proves unfit to remain the legal guardian of a child6 it would seem that the Royal Court continues to have power to appoint a guardian in place of that parent upon application being made, for example by a grandparent. This continuing customary jurisdiction was alluded to in the case of Re I, an infant [1986] 4 GLJ 12. Here a grandmother had applied to be appointed guardian of her grandchild and for an existing Magistrate’s Court custody order to be varied. The Bailiff directed that the Royal Court had only customary law powers as to custody and no authority to vary the order granted by the Magistrate’s Court. The Bailiff also directed the Jurats that once the grandmother was appointed guardian she would be able to make application in the Magistrate’s Court, albeit under provisions of the 1978 Law since repealed and replaced by the Domestic Proceedings and Magistrate’s Court (Guernsey) Law 1988. The procedure for appointment of a tuteur where the 1978 Law either does not apply or has not been relied upon is to convene a family council comprising up to five close relatives or, in their absence, close friends, to consider what should be done. Assuming the support of the family council, the proposed tuteur would apply to the Royal Court on notice to any surviving and/or allegedly unfit parent, (or whoever else the child has been living with). At the hearing the family council and guardian would be heard, together with any other properly interested party if the application were to be contested. The tuteur, once appointed, has the right, and the obligation, to administer the estate and to take care of the person of the child concerned. The duties of a tuteur (and guardians generally, whether curateurs or tuteurs) were set out by the then Bailiff, Sir Havilland de Saumarez in the matter of Count Lothair Blücher von Wahlstatt of 1928 (Plaids de Meubles Volume XVIII at pp 421–422). They: “. . . ont le devoir de veiller sur le maintien entretien et éducation des dits mineurs selon leur etat et ont tous pouvoirs et autorité de tenir, posséder, gerer et administrer (agissant toujours en ‘bon pere de famille’) et de faire partage et règlement des biens meubles et immeubles des dits mineurs et de placer et de changer les placement des argent des dits mineurs et de passer et signer tous actes et instruments à l’effet que dessus et aussi, s’il est pour le bien et avantage des mineurs selon l’avis de l’autorité compétente dans la juridiction dont il s’agit et en obtenant la sanction de telle autorité lorsque requise les dits tuteurs ont tous pouvoirs d’acquisition pour les dits mineurs et de disposition sur les biens meubles et immeubles des dits mineurs par aliénation, hypotheque, et même par renonciation le cas échéance et tous pouvoirs d’ester en justice, soit en demandant ou défendant et de transiger soit avant ou pendant tout proces judiciare et tous pouvoirs de faire, signer, sceller, passer et enregistrer tous actes et instruments légaux a l’effet que dessus”. (sic)
5 6
Or even both parents. Circumstances falling outside of s 8 of the 1978 Law.
Guardianship (Tutelle and Curatelle) 125 Which translates as: They “. . . have the duty to oversee the maintenance, welfare and education of the said minors, according to their station, and full power and authority to hold, possess, manage and administer (acting always as a prudent head of the family) and to divide and determine the movable and immovable assets of the said minors and to invest and alter the investment of the said minors’ monies and to approve and sign all legal documentation and instruments to the above effect and also, if it is for the benefit and advantage of the minors in the opinion of the competent authority in the material jurisdiction, and after obtaining the approval of the relevant authority when required, the said tuteurs have full power to make acquisitions on behalf of the said minors and to dispose of their movable and immovable assets, whether by alienation or mortgage, and even to renounce an interest, as appropriate in the circumstances, and full power to carry on judicial proceedings, whether as claimant or defendant, and to act before or during every judicial process, together with every power to do, sign, seal, approve and register every legal document and instrument to the above effect ”.
The duties and powers of the guardian can be summarised therefore as follows: (a) a duty to oversee the maintenance, upbringing and education of the minor; (b) the power and authority to hold, possess, manage and administer the minor’s personalty and realty; (c) a duty to act at all times en bon père de famille;7 (d) a duty to obtain the sanction of the family council and the Court prior to selling, charging or otherwise disposing of real property;8 (e) subject to the above, the power to perform any other acts for the proper investment and management of the minor’s personal or real property; (f) the power to bring, defend or compromise litigation on behalf of the minor; and (g) the power to execute any other necessary and proper legal document or instrument. There is a general duty to get in and look after diligently the property of the incapable. There is a general duty likewise to make an inventory of the incapable’s property. If the estate is large this should be carried out before a Jurat. If the estate is insubstantial the inventory should be drawn before the family council. In default the tuteur may be in considerable evidential difficulty if subsequently challenged. Following French legal principle the burden of proof would effectively shift to the tuteur.9 7 Literally, as a good father of a family; note that the phrase is also used at s 18(1) of the Trusts (Guernsey) Law 1989, as amended to describe the general fiduciary duty of a trustee. 8 And probably to obtain the Court’s sanction also for any significant disposition affecting the incapable’s property. Application in either case is made by the guardian, supported by any appropriate valuation evidence, with the family council present in Court. 9 See Art 451 Code Civil.
126 The Laws of Guernsey Arguably there may still survive the right of a child prétendre communauté de biens avec leur mère.10 The mother had a customary law obligation (presumably upon the death of the father) to make an inventory of property which would go subsequently to the children. Otherwise the mother risked being deprived, either wholly or partly, of the income she would otherwise have enjoyed from such property. Other aspects of customary law, which undoubtedly survive, include the bar upon guardians purchasing the chattels of their wards, save with the consent of the family council (and then only by way of judicially supervised public auction). Likewise, any gifts which a minor or incapable purports to give to their guardian will be deemed void unless confirmed by the minor or incapable upon majority. A minor or incapable may only accept or refuse a testamentary gift through his guardian. An incapable may only give a valid receipt after receiving an account of the transaction from the guardian. Arguably the minor can never give a valid receipt. The remuneration of a guardian was set at ten livres tournois11 per annum in the case of de Havilland v Le Marchant (1781); but may be increased above this level as in the case of “commission et peine extraordinaire”.12 Doubtless this case is obsolete but the principle remains good. Prima facie the guardianship is (all but) gratuitous. This might, of course, have consequences for the standard of care to be achieved by a tuteur. It would also not prevent a tuteur employing professional help where appropriate, eg where there are substantial assets to administer. Nor in practice would a tuteur who is a professional person and appointed as such to be tuteur be prevented from charging proper and reasonable professional fees; see also s 8 of the Law Reform (Miscellaneous Provisions) (Guernsey) Law 1987 discussed below. In the event of mismanagement on the part of the tuteur the minor may bring proceedings upon achieving his majority. The claim would have much in common with an action for breach of trust and seek equivalent remedies, notably an account. For the adult incapable it is likely that the family council would intervene;13 alternatively an adult might be rehabilitated if his condition improved sufficiently whereupon he could take legal proceedings himself. The principle of rehabilitation was established in the cases of Stranger (1947) Requêtes (Guernsey) 195 and Webber (1949) Requêtes (Guernsey) 349. At customary law the appointment of the guardian, curateur or tuteur came to an end in the following circumstances:
10
Which translates as: “to claim community of property with their mother”. The tournois was the Guernsey unit of currency before being replaced by the Guernsey pound and, eventually, parity with sterling in 1921; French currency was also used up to 1921. See the section on conveyancing for a fuller account of Guernsey units of measurement and account. 12 Ie actions above and beyond the normal calls of duty. 13 Likewise in tutelle. 11
Guardianship (Tutelle and Curatelle) 127 (a) upon request by the guardian after a period of at least one year and upon provision of accounts; (b) upon the death of the guardian or ward; (c) at the expiration of the term, if the guardianship was for a specified period; (d) fraud perpetrated by the guardian in the administration of the incapable’s estate; (e) resignation of the guardian for good reason; (f) loss of the incapable’s property; (g) marriage or the attaining of the age of majority; (h) rehabilitation in the case of an adult; (i) the remarriage of a widowed guardian, but query whether this remains good law. A person will be excused from acting as a guardian if he is absent in the service of the monarch or country, if he has been promoted to high office, if he has a personal interest in proceedings brought against the ward, if he is illiterate, poor, or incapable of managing his own affairs or if he has reached the age of 70. The tutelle may also be brought to an early close by an acte of enâgement whereby if there is good reason the Court may emancipate the minor from tutelage prematurely. This is to permit him to acquire or otherwise deal with property. Typically this was to allow the son to exercise a right to retrait 14 which might otherwise be lost if he was still in his father’s power. It is noteworthy that security is not required of a guardian for the proper discharge of his duties. This is in contrast to modern French law.15 STATUTORY GUARDIANSHIP OF MINORS THE LAW REFORM (AGE OF MAJORITY AND GUARDIANSHIP OF MINORS) (GUERNSEY) LAW 1978
The Law Reform (Age of Majority and Guardianship of Minors) (Guernsey) Law 1978 contains provisions, inter alia, governing the guardianship of minors. The Law also fixes the age of majority at eighteen. Part II contains general provisions governing the guardianship of minors. As already noted, where express statutory provisions do not apply customary principles would continue to govern.16 Section 4 states the general principle that the 14 The retrait lignager was (and still is in reduced form) a right vested in relatives to buy back family land from a purchaser upon reimbursement of the price. It was a means of ensuring that land remained within a family; see the section on realty. 15 For modern French law in this context generally again see Arts 388–514 CC; see also Louis Bach, Droit Civil 13th edn (Editions Sirey) p. 179 et seq. 16 This proposition finds strong support in the recent case of Holdright Insurance Company Limited v Willis Corroon Management (Guernsey) Limited (2000), a judgment of the Deputy Bailiff. Arguably the customary system of tutelle continues to exist alongside even the express provisions at the option of the applicant.
128 The Laws of Guernsey welfare of the minor is to be the first and paramount consideration whenever the custody or upbringing of a minor or the administration of a minor’s property is in question in proceedings before any Court. This section is therefore of general application in any Court proceedings concerning children directly. Section 5 provides that parents’ rights and authority over their children are equal and exercisable by either without the other. This expressly extends to the administration of any property. The provision does not apply, however, to a minor who is illegitimate. Here, by section 20(1) the mother has the same rights and authority in all matters as the father and mother have of a legitimate minor. The father of the illegitimate child has the right to make application for custody, access and maintenance pursuant to the Domestic Proceedings (Magistrate’s Court) (Guernsey) Law 1988. Section 20(6) makes express provision for the father of an illegitimate child who has custody to be treated as if he were the lawful father of the minor.17 This gives him access to the rights provided by the 1978 Law, but subject to any appointment of guardian he makes being subsequent to the custody order in his favour. Section 5(3) provides that, where a minor’s father and mother disagree on any question affecting the welfare of the child, either of them may apply to the Magistrate’s Court for the issue to be resolved. This is a precursor of the Children Act 1989 application for the determination of a Specific Issue. Again the right of the father to apply does not exist unless the child is legitimate or he has custody pursuant to a DPMCL order.18 In reality it is unlikely that the Court would today refuse to resolve a substantial issue concerning the welfare of a child if the illegitimate’s father had raised a proper concern without the benefit of a custody order. Again, it may be that resort would have to be had to the Royal Court’s customary powers or quasi-wardship jurisdiction. Assuming that the child is legitimate or the father has a custody order, the 1978 Law goes on to deal with the manner of appointment of guardians and the resolution of disputes between joint guardians or between surviving parents and the guardian. On the death of a parent the surviving parent becomes guardian of the minor either alone or jointly with any guardian appointed by the deceased parent. If no guardian has been appointed by the other parent or that person is dead or refuses to act the Ordinary Court may appoint a guardian to act jointly with the surviving parent. Note that a parent must die to trigger this power. A parent may appoint a guardian either by will or by declaration made and signed before two Jurats, see section 7. Any guardian so appointed must act jointly with a surviving parent, unless that surviving parent objects, in which case the parent may apply to the Ordinary Court. The Court may refuse either to make an 17 Although strangely making no reference to s 5; perhaps because this is concerned with putting the mother on an equal footing with the father. Notwithstanding this it would seem that the custody order is sufficient to give the father of the illegitimate child all the rights (and duties) of the father of a legitimate child; this is the purpose of the order. 18 This appears to be the combined (and unfortunate) effect of ss 5(6), 20(1), (5) and (6).
Guardianship (Tutelle and Curatelle) 129 order, in which case the surviving parent remains the sole guardian, or order that the guardian shall act jointly with the surviving parent or even that the guardian shall be the sole guardian of the minor. Guardians may be appointed by both parents and act jointly after the death of the parents. By section 8 where a minor has no surviving parent or guardian the Ordinary Court may appoint an applicant as guardian after receiving the advice of the family council or, if a family council cannot be convened, the advice of HM Procureur. By section 9 the Ordinary Court may remove a guardian from office if the welfare of the minor so requires and may appoint another guardian in his place. By section 10 disputes between joint guardians may be resolved by the Magistrate’s Court. Section 11 is a key provision whereby guardians appointed under the 1978 Law are stated to have: “All the rights, powers and duties of a guardian of the minor’s estate under the customary law of this Island, including in particular the capacity to sue and be sued in the name of the minor and the right to receive and recover in his own name for the benefit of the minor property of whatever description and wherever situated which the minor is entitled to receive or recover.”
The Law therefore expressly adopts customary powers and duties with the result that customary principles necessarily survive even in this statutory context, which is a rare event, certainly by express provision. By section 15 the Court may make such orders as it thinks fit as regards custody, access and maintenance when appointing a person sole guardian to the exclusion of a mother or father under section 7. Similar broad powers are given to the Magistrate’s Court in disputes between guardians where one is the mother or father of the minor. By section 21(2) and (3) proceedings under the Law and, in the Ordinary Court, proceedings relating to the authorisation of the sale and charging of real property of minors, must be heard in camera; subject to a power to give judgment in open Court on points of law and principle, but identities must not be revealed. Section 22 contains appeal provisions. There is a right of appeal from the Magistrate’s Court to the Ordinary Court and from the Ordinary Court to the Court of Appeal. The procedure for appeals to the Ordinary Court is set out in the Royal Court (Guardianship Proceedings) (Appeals) Rules 1979. A notice of appeal must be lodged within seven days following the date of the order to which the appeal relates. The notice is filed at the Greffe and a copy must be served by the appellant on the respondent within seven days of filing. The appellant must obtain transcripts of the relevant proceedings and deliver a copy to the respondent. HM Greffier will then fix a date for the hearing and notify the appellant who must in turn notify the respondent not later than four days prior to the date fixed for the hearing. Good practice would require the Advocate to notify his opponent immediately upon receipt of the hearing date. There are provisions for the respondent to apply for security for costs.
130 The Laws of Guernsey The rules go on to state that the Ordinary Court may by order confirm, reverse or vary the determination of the Magistrate’s Court or make such other order in the matter as it thinks fit. There are general provisions permitting abandonment of the appeal and extension of time limits. The Court of Appeal (Guardianship Proceedings) (Appeals) Rules 1979 contain the rules of procedure to follow on appeal from the Ordinary Court to the Court of Appeal. The contents of the Rules are unsurprising. Appeal is by notice and must specify the grounds of the appeal and the precise form of the order which the appellant proposes to ask the Court of Appeal to make. The notice of appeal must be served upon the respondent within two weeks of the Ordinary Court decision appealed against. Within two days of service upon the respondent the appellant must apply to set down the appeal by leaving with the Registrar19 of the Court of Appeal a copy of the notice. When the appeal has been set down by being placed on the list of appeals the appellant must give notice to the respondent of this step. If the respondent himself seeks a variation of the Ordinary Court order, whether in any event or should the appeal be allowed, or if the respondent seeks to have the Ordinary Court decision upheld on grounds not relied upon by the Ordinary Court, he must serve a respondent’s notice setting out his contentions. The respondent’s notice must be served upon the appellant within 14 days of service of the notice of appeal upon him. Within 21 days of setting down the appellant must lodge with the Registrar four bundles20 containing the notice of appeal, the decision under appeal, the pleadings, if any, the transcript, or in default the Judge’s note, any material affidavits or depositions, exhibits, and a statement of his case together with supporting authorities. A copy must be served on the respondent who in turn has 21 days to serve a statement setting out his case. The hearing date is fixed by a Judge of the Court of Appeal. There are general provisions permitting application to be made to the Court of Appeal prior to the substantive hearing. There are general powers to extend time limits. There are general powers permitting further evidence upon questions of fact to be received, whether by oral examination, affidavit or deposition. The Court has general power to draw inferences of fact and to give judgment and to make any order which ought to have been given or made, and to make such other order as the case may require. (It is exceptional that new evidence is in fact adduced on appeal.) It is important to note that the mere making of an appeal does not operate as a stay of execution. There are curious provisions governing applications either to the Ordinary Court Judge or the Court of Appeal. These permit ex parte applications in socalled appropriate circumstances and also refer to application being made to the Court of Appeal for leave to appeal where none seems to be required by the substantive law itself or even the rules. 19
Yet again the Greffier. Note the requirements of Practice Direction No 1 of 2002; all bundles prepared for Court hearings must be copied double-sided. 20
Guardianship (Tutelle and Curatelle) 131
LAW REFORM (MISCELLANEOUS PROVISIONS) (GUERNSEY) LAW 1987
Quite separate but limited guardianship powers are found in the Law Reform (Miscellaneous Provisions) (Guernsey) Law 1987.21 By section 8 the Court may appoint any person to hold and administer any personalty of the minor. The philosophy behind this provision was to permit the professional holding and management of assets belonging to a minor. The Law empowers the Court to give such directions to achieve this aim as are necessary, subject also to whatever safeguards in the form of the deposit of security, the delivery of an inventory and the provision of accounts as the Court deems fit. Likewise the Court may order the delivery up of books, papers and other documents relating to the property administered by the appointed person. There is provision for the Court to order payment of the appointed person’s expenses and fees. Application may be made by the mother, father or guardian of the child, alternatively one of the two Law Officers or any other interested party.
GUARDIANSHIP OF MINORS IN ALDERNEY
The 1978 Law applies only to Guernsey, Herm and Jethou. Alderney has a very similar Law, namely the Guardianship of Minors (Alderney) Law 1990. The provisions are nearly identical when allowance is made for the fact that there is no division of function between Courts. The Alderney Law also includes general powers to make custody, access and maintenance orders which were repealed and replaced in Guernsey by the 1988 Law.
CARE PROCEEDINGS
There is the potential for overlap between tutelle or guardianship and the child protection régime. Care proceedings under the Children and Young Persons (Guernsey) Law 1967 are more appropriate to situations where there is positive mistreatment or neglect of children and/or real emergency, as opposed to the more measured problems resolved by tutelle and guardianship.
CURATELLE
The Mental Treatment Law (Guernsey) 1939 and the Mental Treatment (Amendment) (Guernsey) Law 1956 govern those suffering from mental illness.22 21
The relevant provisions are set out at Appendix 3. There are again proposals for reform in this area; see the policy letter to the States contained in Billet d’État XXIII of 2002 which will now go forwards to become a projet de loi. 22
132 The Laws of Guernsey By Article 20 of the 1939 Law (as substituted by the 1956 Law), upon the making of an admission or temporary admission order (to hospital) a Law Officer must ascertain whether the patient is under natural or legal guardianship and, if there is no natural or legally appointed guardian (or one that is effective) the Law Officer must make arrangements for the appointment of a guardian at the earliest opportunity. Such a guardian has a duty either personally or by another to visit a certified patient at least once every three months and a temporary patient at least every two months during the period of his detention. Other noteworthy provisions are those whereby a Police Constable has power pursuant to section 2 of the 1956 Law to apprehend a person he finds wandering at large and who he has reasonable grounds to suspect is a person of unsound mind. The Police Officer must take him before a medical practitioner who may examine the person and make enquiries. The practitioner may sign a medical certificate whereupon the Police Officer may remove the person to a mental hospital where the person may be detained for up to seven days. Section 3 provides that the husband, wife or relative of a person may sign what is called an urgency order accompanied by a medical certificate permitting a person of unsound mind to be placed under care or treatment for a period of up to seven days. In addition to this statutory control of mental health the guardianship of adults continues to be dealt with under customary principles.23 Those principles are the same as the surviving customary principles for tutelle. The curateur is, in effect, trustee of the person and possessions of the adult incapable. Typically this will be a person of unsound mind, although curatelle may also be appropriate for, say, an alcoholic or a prodigal (ie a recklessly wasteful person). Applications are most commonly made by a son or daughter to be appointed curateur of an aged or senile parent. The duties of a curateur are the same as the duties of a tuteur, as set out above. There is, however, specific provision by the Curatelle Rules 198924 for the procedure to be adopted for the appointment of a curateur. Where a person wishes to be appointed guardian or curateur aux biens of a person who is unable to manage his affairs for reasons of infirmity of mind or body he25 must apply in person or by Advocate to the Royal Court sitting as an Ordinary Court. Application must be made on not less than two clear days’ notice to the Court by delivering to HM Greffier an application in the form set out in the Rules. This form gives notice to HM Greffier of the intention to apply for a guardianship order and requires the applicant to give details of himself (or in the case of joint guardians, themselves), details of the person in respect of whom the application is to be made (the patient), details of the proposed family council and details of the patient’s estate. The form also requires a statement to be made expressing the proposed guardian’s intention to render a full account of his administration of the patient’s estate, if called upon 23 24 25
See also Arts 488–514 Code Civil by way of comparison and possible guidance. Order of the Royal Court No 2 of 1989. Ie the prospective curateur.
Guardianship (Tutelle and Curatelle) 133 to do so, and a statement that he will keep the family council reasonably informed of his administration. Finally, details of the medical evidence to be adduced must also be given. In practice medical evidence is always adduced. In theory there may be circumstances where it was not required, but these are difficult to imagine; perhaps a case of pure prodigality. Medical evidence may be given either orally or by affidavit. The form of the affidavit is again provided for in the schedule to the Rules. The doctor must state his authority to practise in Guernsey and his professional qualifications. He must state when he became the patient’s doctor and the patient’s date of birth. He must say when he last examined the patient and what symptoms were found. He must then make a statement as to the inability of the patient to manage his affairs to the extent that a guardian is required together with a statement as to whether or not the condition is likely to improve. If the condition is temporary he must estimate the period during which the services of a guardian are likely to be required. The affidavit is attached to the notice of application. At the hearing of the application HM Greffier reads to the Court the form of application. Where the medical evidence is in affidavit form it is adduced, otherwise the doctor must give oral evidence. The family council is also heard orally or by power of attorney.26 Note that the family council may include a cohabitee; indeed such relationships should be drawn to the attention of the Court if a co-habitee is not included on the Council.27 The prospective guardian must attend in order to be sworn as guardian/curateur. The guardian’s oath is as follows: “Do you swear and promise on the faith and truth that you owe to God that well and faithfully you will discharge the office of guardian of [the name of the patient] the whole as to such charge appertaineth. So help you God.”
There are two Practice Directions concerning applications for guardianship. By No 1 of 1994 where a member of the family council of a patient appears by attorney, the attorney (usually an Advocate) should produce a special power of attorney making specific reference to whatever the attorney is being instructed to recommend. A general power of attorney is not sufficient. By the now superseded Practice Direction No.4 of 1994 where an Advocate of the Royal Court was to appear as attorney in an application for guardianship the application had to be presented to the Court by another member of the Bar. This was to avoid Advocates moving from Counsel’s benches to the witness stand in mid-application. This provision has been replaced by Practice Direction No.2 of 2002 which provides instead that the Advocate acting as attorney may lodge the original power of 26 Typically on behalf of a close relative living overseas whose consent to what is proposed would be expected to be given, eg that of an adult child of the incapable. See also the Practice Directions referred to below. 27 See the case of In re a patient (2001) 23 February, a judgment of the Bailiff on appeal from the Court of the Sénéschal. The Bailiff specified a need for the relationship to have been of a “permanent or semi-permanent nature” to qualify the individual as having a right to be heard. The case is considered also below.
134 The Laws of Guernsey attorney on the day before the application is to be heard with a certificate attached asking that the Advocate be recorded as appearing under the power and confirming the instructions given to the Advocate. The Advocate is no longer required to sit through the hearing. In the case of In re Carré [1987] 5 GLJ 39 it was held that the Court had no power to administer the oath of guardianship to an attorney on behalf of a guardian; the Court would dismiss the application in respect of an absent applicant.28 In a further case of the same name, almost certainly the same case brought back later that year, it was held that an application to appoint a guardian jointly with an existing guardian, with power for the survivor to act, constituted a new application requiring medical evidence and the swearing of the guardians jointly.29 Where an order is made it will be, prima facie, of unlimited duration. In In re a patient (2001) 23 February, a judgment on appeal from the Court of the Sénéschal, the Bailiff stated that: “In Guernsey we generally do not provide for guardianships other than in rare cases involving prodigals to be limited in time unless there are very exceptional reasons and we would not regard the medical view that a patient might recover within a fixed period as encouragement to limit the guardianship to that period. The best and most effective course is for the guardianship to be unlimited and for the patient to be free if his health improves to come back and have the guardianship lifted.”
The Bailiff held that to order otherwise might lead to the authority of the guardian being called into question towards the end of the set period, alternatively a person might be restored to full capacity through effluxion of time alone and unaccompanied by any recovery of his faculties. Equally, the discharge of guardianship orders was not unknown, albeit usually made (only) with the support of medical evidence. In the event the case was remitted to the Sénéschal to consider the question of whether the order should be limited in time and, if so, for how long. The Bailiff suggested that a period of no less than one year would be appropriate if there was to be any limitation at all. Powers of Attorney Although by no means specific to Curatelle, powers of attorney are often used in this context, eg on behalf of absent members of a family council. The form of a general power of attorney is the subject of the Powers of Attorney and Affidavits (Bailiwick of Guernsey) Law 1995. A general power of attorney must be executed in accordance with the provisions of section 1 of the Law, ie before a notary public anywhere within the Bailiwick; alternatively in Guernsey, Herm or Jethou 28 This was an application to appoint joint guardians, one of whom appears to have been present, the other represented by attorney. It seems that the application succeeded in respect of the guardian who was present. 29 [1987] 6 GLJ 104.
Guardianship (Tutelle and Curatelle) 135 before a Jurat of the Royal Court; in Alderney before a Jurat of the Court of Alderney; in Sark before the Sénéschal and in a place outside the Bailiwick, before a person empowered to administer oaths or take sworn declarations in that place or in accordance with the rules in force in that place governing the execution or swearing of powers of attorney. These provisions are extended by the Affidavits, etc. (Execution before Advocates) Rules 1999 whereby a power of attorney may be executed before an Advocate of the Royal Court of Guernsey of five years’ standing or more. Note that powers of attorney lapse under Guernsey law when the donor becomes incapable mentally; however enduring powers of attorney made by nonresident donors and effective under the law of the material foreign jurisdiction may be recognised by the Royal Court.30
30 See the cases of Greenwood v Nat West Offshore Ltd. (2000) 25 February and Haug v Royal Bank of Canada Investment Management (Guernsey) Ltd. (2001) 5 October. There are proposals to introduce enduring powers of attorney into Guernsey domestic law.
8 The Law of Trusts: The Trusts (Guernsey) Law 1989
T
HERE WAS DOUBT expressed amongst certain Guernsey lawyers as to whether the trust was a legal concept recognised by Guernsey law. After all, the trust is still essentially unknown even in modern French law.1 However, in the case of Beachcomber Hotels Limited v Beaucette Yacht Marina (Guernsey) Limited [1989] 7 GLJ 82 the Bailiff directed the Jurats that the legal principles of a constructive trust could be applied in Guernsey, the Courts of which had recognised equitable principles over the centuries.2 The Bailiff cited the trust funds held by the Royal Court as an example. The matter was put beyond all possible doubt by the Trusts (Guernsey) Law 1989, as amended by the Trusts (Amendment) (Guernsey) Law 1990.3
THE GUERNSEY TRUST
The 1989 Law is an excellent codification which, for the most part, follows wellestablished English principles.4 The Law is divided into four major parts. Part I deals with preliminary matters concerning the existence, validity and proper law of a trust as well as the jurisdiction of the Royal Court. Part II contains provisions applicable only to a Guernsey trust and is the longest part of the Law. Part III contains provisions applicable only to a so-called foreign trust. Part IV contains provisions of general application to both Guernsey trusts and foreign trusts. It follows that it is essential to know whether you are dealing with a Guernsey trust or a foreign trust. A Guernsey trust is defined at section 735 as a trust, the proper law of 1 A peculiarly Anglo-Saxon legal creation the trust approached the shores of France in the early 1990s in the form of a bill proposing to introduce la fiducie but never became law; although there is a Hague convention of 1 July 1985 on the law applicable to a trust and its recognition, signed but not ratified by France. In essence the convention provides for the loi d’autonomie of the trust to prevail; ie the law chosen by the creator of the trust. 2 This statement is of general importance; there are still some who doubt that the Royal Court has an inherent equitable jurisdiction, which must be wrong, particularly if one considers the common origin of the Royal Court and England’s courts of equity. 3 The consolidated Law is set out at Appendix 4. 4 Note England’s own recent codification and modernisation of a number of aspects of trust law in the form of the Trustee Act 2000, (now in force); in particular a new statutory duty of care and provisions as to investment powers, delegation of functions, use of nominees and custodians, powers to insure and professional trustee remuneration. 5 The interpretation section.
138 The Laws of Guernsey which is the law of Guernsey. A foreign trust is a trust the proper law of which is not the law of Guernsey. By section 72(1) the Law applies to trusts created both before and after its commencement, subject to contrary provisions of the Law itself6 and certain savings and exceptions at section 74. The Trust By section 1 of the Law: “A trust exists if a person (a ‘trustee’) holds or has vested in him, or is deemed to hold or have vested in him, property which does not form, or which has ceased to form, part of his own estate: (a) for the benefit of another person (a ‘beneficiary’), whether or not yet ascertained or in existence; (b) for any purpose which is not for the benefit only of the trustee.”
This workmanlike definition of a trust contains within it a number of fundamental trust law concepts. It lays the foundation for the concepts of express, resulting and constructive trusts as well as the principle of being able to alienate one’s own property whilst remaining its ostensible legal owner. It emphasises the importance of the property being held either for another or for a purpose7 which is not for the benefit only of the trustee. When is a Trust Not a Trust? A problem which has arisen not infrequently with offshore trusts is to know whether a trust truly exists at all.8 It is not uncommon to find that the settlor retains so much control over the settled assets that there is in reality no trust, merely nomineeship. This was the result in the leading Jersey case of Rahman v Chase Bank (CI) Trust Co Limited [1991] JLR 103; an extreme example of its kind but whose principles are of general application.9 The argument that a trust is in fact a sham may arise in a number of different contexts. A trustee who is criticised by beneficiaries for pursuing a course of con6
See for example s 22(2) which is considered in detail below. Thus appearing to permit a non-charitable purpose trust under Guernsey law, but note the problem of enforceability and the omission of a non-public purpose from s.55(1). A different means to achieve the same end is to employ a company limited by guarantee. 8 See chs 1–5 of Willoughby’s Misplaced Trust 2nd edn (2002) and the book generally; although note that it was published before the appeal decision in Stuart-Hutcheson in the different context of obtaining information about a trust, see below. Willoughby identifies no less than 11 essential and inter-locking criteria for the creation of a valid express private trust by inter vivos settlement. 9 See also the case of Re WKR Trust [2002] 4 ITELR 487 where a Zurich District Court applied Guernsey law to hold that a Guernsey trust was a sham given the settlor’s subsequent actions inconsistent with a true intention to create a trust. The Rahman principles were applied. 7
The Law of Trusts: The Trusts (Guernsey) Law 1989 139 duct might allege that the matters complained of were in fact dictated by the settlor in circumstances where the trustee was merely a nominee. Accordingly no trustee duties were owed and none breached.10 Likewise, the heirs of a settlor who would otherwise have inherited property placed in trust might challenge the validity of the trust in order to prove that the assets in fact remained a part of the settlor’s estate. Tax authorities in the settlor’s home jurisdiction are alert to the possibility of sham settlements, likewise creditors.11 Overly cynical asset protection trusts are likely to fail. A recent example of how a United States Court dealt with such an arrangement is the case of Re Stephan Jay Lawrence, Debtor [1999] 2 ITELR 283. The inelegant expression “trust-busting” nevertheless captures the essence of this kind of litigation. The validity of a trust should be considered as a matter of course whenever serious issues arise. By contrast it is important to note (again) the reference in section 1 to a trust existing where a person is deemed to hold property for the benefit of another. This enables constructive trusts to be imposed under Guernsey law in appropriate circumstances. Subject to the Terms of the Trust It is important to note early on how frequently the 1989 Law expresses its provisions to be subject to the terms of the trust. There is broad freedom in the creation of trusts akin to contractual freedom.12 It is comparatively rare that the express terms of a trust cannot overrule or vary what the Law otherwise provides. The liability of a trustee is the leading example of the limits imposed by the Law. Thus by section 34(7) nothing in the terms of a trust may relieve a trustee of liability for a breach of trust “arising from his own fraud or wilful misconduct or gross negligence”. Equally, there are provisions of the Law which are almost always excluded by the professional trustee. These are sections 19(b), (the duty to preserve and enhance, so far as is reasonable, the value of the trust property); 34(1)(b), (liability for any profit which would have accrued to a trust but for a breach of trust); 57(1) (legislative limits upon the permitted range of investments); 22(1), (duty to provide full and accurate information as to the state and amount of the trust property at all reasonable times upon written request); and section 25(1) (duty of impartiality as between beneficiaries).
10 The Royal Court would examine such claims very closely indeed given the prima facie acceptance of the role and duties of trustee; there is unlikely to be much sympathy for a professional person or company in such circumstances. See for example the Cross v Benitrust litigation in 1999. 11 See for example the case of Grenestra SA v Oury LTL 24 June 2002. 12 A trust instrument may be, but by no means need be, a contract; eg the simple declaration of trust. The relationship between beneficiary and trustee is not normally contractual, save where the beneficiary is also a settlor. Strict rules of privity still apply in Guernsey in any event; see also Art 1165 Code Civil.
140 The Laws of Guernsey Taking this last by way of example; if there are beneficiaries with a life interest as well as remaindermen there are inevitable conflicts of interests between the two groups as to the type of investment which should be held by the trust. The holders of life interests look for income whereas the remaindermen seek capital growth. The problem for the trustee is removed if he is expressly authorised to favour one group of beneficiaries over another. Likewise the positive duty to enhance the value of the trust property set out in section 19(b) would place the trustee at considerable risk if not excluded. It follows, if it need be said at all, that the starting point with any trust problem is to read carefully any written instrument creating or evidencing the trust to see what application the 1989 Law will have. Is it a Guernsey trust or a foreign trust? What provisions of the Law have been excluded effectively? Does the Law permit the purported exclusion? Choice of law and jurisdiction By section 3 the settlor is free to choose the proper law of a trust. The choice may be implicit. In the absence of choice the proper law will be that with which the trust had its closest connection when created. There is also express power at section 46 whereby the terms of a trust may permit the proper law to be changed. This allows the trust to be exported effectively should a change in circumstances mean that a Guernsey trust is no longer beneficial. The Royal Court will accept jurisdiction in respect of either a Guernsey trust or a foreign trust, but in the case of the latter only where a trustee is resident in Guernsey or trust property is situated or administered in Guernsey or the terms of the trust give jurisdiction to the Guernsey Court, see section 4. As regards proceedings against third parties to the trust ordinary principles apply, ie the defendant should be sued in his home Court, alternatively the forum conveniens, see the case of Booilushagg Trust Company Limited v Kaye & Miller [1992] 13 GLJ 14.
PROVISIONS OF GENERAL APPLICATION TO GUERNSEY TRUSTS
Part II, comprising sections 5 to 57 inclusive, contains fundamental provisions applicable to Guernsey trusts only, although none of the concepts will be alien to a lawyer familiar with English trust law Creation By section 6 a trust may be created by oral declaration, an instrument in writing, by conduct or in any other manner whatsoever. By contrast a unit trust must be created by an instrument in writing. By section 7 any property may be held on trust. Section 8 requires beneficiaries to be identifiable or ascertainable, although
The Law of Trusts: The Trusts (Guernsey) Law 1989 141 they may be added or excluded pursuant to the terms of the trust. It is expressly provided that a settlor or trustee may be a beneficiary of the trust. The Protective Trust One of the hallmarks of the Guernsey Law is its flexibility. Thus there are provisions permitting the creation of what may be termed a protective trust which is intended to guard against either the prodigality or other incapacity of an intended beneficiary or to protect the trust assets themselves, typically in the event of a beneficiary’s insolvency; see sections 8(3) and 40. See also section 28(2) whereby the terms of a trust may require a trustee to consult or obtain the consent of another person before exercising any function. This allows for the existence of a protector of the trust whose consent may be required before any significant decision or asset disposition takes place. It is noteworthy that by section 10 the interest of a beneficiary under a trust is personal property and, subject to the terms of the trust, may be dealt with or charged accordingly. This is another area where protective trusts operate to remove or limit beneficiary rights which might otherwise exist in realty, but for the trust.13 By section 9 a beneficiary may disclaim his interest in a trust. Disclaimers may be total or partial, temporary or final. Disclaimers are of use where a beneficiary (often the settlor) does not wish to receive trust income or capital because either he has no need of such or it is not tax efficient. This is again a means of protecting the trust assets. Enforceability The enforceability of trusts is the subject of section 11, there is a parallel provision at section 59 governing foreign trusts. The key provisions are that a trust will be unenforceable to the extent that it purports to do anything contrary to the law of Guernsey or is otherwise immoral or contrary to public policy. Subject to this it will be valid and enforceable in accordance with its terms or, in the case of a foreign trust, in accordance with its proper law. Forced Heirship Section 11A contains interesting provisions permitting the avoidance of foreign forced heirship14 provisions by means of a Guernsey trust. In short, neither the 13 Note the importance in Guernsey law of the distinction between personalty and realty and the many substantive and procedural consequences; examples are the manner of taking security, enforcing security, formalities for disposition et alii. 14 This is the idea, alien to English law, of a testator being compelled by law to leave at least a certain proportion of his assets to dependants, typically the testator’s wife and children. These matters are governed indirectly in English law by the Inheritance (Provision for Family and Dependants) Act 1975.
142 The Laws of Guernsey trust nor the transfer or disposition of property to a Guernsey trust is invalidated by any foreign rule of forced heirship or by reason of the fact that the concept of trusts is unknown in the other jurisdiction. Perhaps hypocritically, given Guernsey’s own forced heirship provisions for realty, the 1989 Law does not apply to a trust insofar as there is vested in the trustees any interest in real property in the Bailiwick of Guernsey, save for the Law’s provisions as to variation, approval of particular transactions, cy-près and variation of charitable trusts, see section 72(2).15 Section 11A(1)(b) provides additionally that a settlor shall be deemed to have had capacity to create the trust or to make the disposition if he had capacity to do so under either Guernsey law, the law of his domicile or nationality or the proper law of the transfer or disposition. This section is a private international law measure designed to give the greatest chance of upholding the trust or disposition.16 Perpetuity A refreshingly simple provision at section 12 states that trusts shall terminate on the expiration of 100 years from the date of creation, unless terminated sooner or for a charitable purpose.
APPOINTMENT AND RETIREMENT OF TRUSTEES
Sections 13 to 17 contain provisions for the appointment, retirement and discharge of trustees. Prima facie the number of trustees must not be less than two, unless the terms of the trust provide otherwise or the trustee is a corporate trustee resident in Guernsey.17 There are limitations placed upon the right to resign if this is to facilitate a breach of trust or would result in there being no trustee or less than the required number of trustees. Whether a trustee’s resignation is effective is an important consideration in trust disputes; particularly if the current trustees are entities of straw. Section 49 gives power to a beneficiary to apply to the Court for appointment of a Guernsey resident trustee as an additional trustee where there is none already. The Court has a discretion whether to act or not.
15 See also sections 52–56 inclusive and the chapter on succession. See generally Willoughby’s Misplaced Trust 2nd edn ch 4 for a discussion of provisions such as s 11A and their potentially limited effect. See also the case of In re Kurzschenkel (2000) 16 March, a judgment of the Bailiff; discussed further below. 16 The approach is similar to the Hague Convention of 5 October 1961 on the Conflicts of Laws relating to the Form of Testamentary Dispositions; see www.hcch.net/e/ for the text of all Hague conventions. 17 The Public Trustee will also be excluded from this requirement; see below for an account of the new legislation.
The Law of Trusts: The Trusts (Guernsey) Law 1989 143 TRUSTEE DUTIES
Sections 18 to 25 concern the duties of trustees. One of the central provisions of the Law is at section 18(1) which reads: “A trustee shall, in the exercise of his functions, observe the utmost good faith and act en bon père de famille.”
The adoption of this Customary and French law expression is graphic and effective to convey the sense of responsibility. The obligation is to achieve the standard of a prudent administrator of family wealth.18 English cases are also persuasive in determining what is required of a trustee in any given circumstances; see such leading cases as Speight v Gaunt (1883) 2 Ch 515, Re Whiteley (1886) 33 Ch D 347, Re Waterman’s Will Trusts [1952] 2 All ER 1054, Bartlett v Barclays Bank Trust Co. Ltd (No 1) [1980] Ch 515 and Cowan v Scargill [1985] Ch 270.19 Professor Hayton summarises the English law position as follows: “. . . an unpaid trustee is expected to exercise the objective care and skill that a prudent man of business would exercise in the management of his own affairs, except that he must invest only as a prudent man of business would invest not for himself but for persons for whom he feels morally obliged to provide. . . . In the case of professionally qualified trustees like solicitors, accountants and fund managers who are paid to act as trustees they must exercise that degree of care and skill which could reasonably be expected of such professional people acting as experts in their own particular fields. Persons who carry on business as professional trustees, like bank trust companies, and advertise themselves as having special expertise as such must meet the subjective higher standards they set themselves up as having.”20
By section 18(2) the trustee is required to execute and administer the trust and exercise his functions in accordance with the provisions of the 1989 Law and, subject thereto, in accordance with the terms of the trust and only in the interests of the beneficiaries or charitable purpose of the trust, as the case may be. Again the dangers of obeying the wishes of the settlor without exercising independent judgment should be obvious.
18 See ch 7 and the use of the expression bon père de famille in the context of tutelle and curatelle; see the case of Count Lothair Blücher von Wahlstatt (1928). 19 Other interesting cases in this context include Nestlé v National Westminster Bank plc [1994] 1 All ER 118 and a New Zealand case, Re Mulligan (Deceased) [1998] 1 NZLR 481, where trustees were held liable for deferring to the wishes of a widow life interest holder with the result that inflation substantially eroded the value of the trust assets. It was held that if the widow could not be persuaded (which she could not) application should have been made to the Court. A balance had to be struck between the income and capital beneficiaries. 20 The Law of Trusts 3rd edn (Sweet & Maxwell) p 143.
144 The Laws of Guernsey There are general duties to get in and preserve trust property21 as well as an obligation not to profit from the trusteeship save with the Court’s approval, as permitted by the Law, or as expressly provided by the terms of the trust. Given that most trustees in Guernsey are professional trustees there is nearly always provision for payment of professional fees. Section 21 requires a trustee to keep accurate accounts and records of his trusteeship. Section 22(1) requires a trustee to provide full and accurate information to a beneficiary as to the state and amount of the trust property on written request being made by a beneficiary. This duty is, however, expressed to be subject to the terms of the trust.22 A further caveat at section 22(2) provides that section 22(1) has no application to pre-1989 Law trusts, save for those beneficiaries with interests in trust property which vested before the commencement of the Law, although the sub-section is said not to prejudice any rights which the beneficiary may have had under the trust. The effect of section 22 was considered in a judgment of the Deputy Bailiff in Stuart-Hutcheson v Spread Trustee Company Limited (2001) 16 March. The case concerned a beneficiary of a pre-1989 trust which was silent as to the beneficiaries’ rights to information. The Deputy Bailiff held that the trust law was a selfcontained statement of the rights of the beneficiary to information and that section 22(2) excluded effectively the beneficiary from the rights conferred by section 22(1). However the judgment did not consider the possibility that whatever rights the beneficiary had to information prior to the 1989 Law survived, nor the argument that whatever the obligation or power of the trustee under section 22 the trustee remained subject to the control of the Court under section 63 whereby the Court may make an order in respect of: “(i) the execution, administration or enforcement of a trust; (ii) a trustee, including an order as to the exercise by a trustee of his functions, . . . the keeping and submission of accounts . . .”
In any event the Court of Appeal did not agree with the first instance decision, holding that although trusts did not form a part of the Norman customary Law “. . . from which Guernsey customary law is, in part, derived” nevertheless it was not in dispute that trusts had become a part of Guernsey Law prior to the 1989 Law. Clarke JA held that: “In thus importing, as it were, the English concept of a trust and trustees those concerned must be regarded as having intended to introduce the trust concept with its usual incidents, unless they were inconsistent with some provision of Guernsey customary or
21 Including the commonly excluded provision at 19(b) to preserve and enhance the value of the trust property already referred to. 22 But see below.
The Law of Trusts: The Trusts (Guernsey) Law 1989 145 statute law or otherwise inapplicable. The trustee’s obligation to account for his execution of the trust is characteristic of a trust . . .”.
It followed that he had little difficulty in finding that: “. . . prior to the enactment of the Trusts Law, non-vested discretionary beneficiaries of a Guernsey trust had, under Guernsey customary law, a right to see documents of the trust and to receive information about the trust and its assets commensurate with that enjoyed by such beneficiaries under English law.”
The Court of Appeal was firmly of the opinion that the Trusts Law was: “. . . not . . . a statute codifying the whole law of trusts or even the whole law on disclosure of information. There are a number of documents (such as the trust deed and supplements thereto, documents excluding or adding beneficiaries and documents relating to the appointment or retirement of trustees) which a beneficiary may be entitled to see whether or not they contain information as to the state and amount of the trust assets . . . the purpose of the Trusts Law was to declare and delineate certain basic principles”.
Clarke JA went on to consider the obligation under section 22(1) itself stating as follows: “In my opinion s 22(1) should receive a construction consistent with general English law on the question of disclosure by trustees and not one that artificially distinguishes existing documents from ‘information’. Compliance with the duty to provide full and accurate information on the state and amount of the trust property may require the production of existing documents or fresh information, or both. Nor is information as to the state and amount of the trust property to be limited to the state and amount of the trust property at the time of the request.”
The Court of Appeal allowed the appeal and granted the application for disclosure. It is noteworthy in particular that, arguably, even the express exclusion of section 22 in a post-1989 trust instrument may not be effective to absolve the trustee of the underlying obligation to give information. Clarke JA stated: “To the extent that the Trusts Law modifies the principles of English trust law; those principles must, of course take effect as modified. But there is nothing in the Trusts Law that purports to take away any existing rights of non-vested discretionary beneficiaries to information. On ordinary principles it should be presumed not to do so in the absence of clear provision to that effect. There is no such provision. On the contrary s 22(2) makes clear that it shall not prejudice any rights that a non-vested beneficiary may have under the terms of the trust.”
At first instance in Stuart-Hutcheson the Deputy Bailiff had distinguished the important Jersey case of In re Rabaiotti Settlement (2000) where it was held that the
146 The Laws of Guernsey Court did have power to order disclosure on the basis that the Trusts (Jersey) Law 1984 (on which Guernsey’s Law is closely modelled) has no equivalent to section 22. At the same time he noted the extra provision at Article 25(d) of the Jersey Law: “Subject to the terms of the trust and subject to any order of the Court, a trustee shall not be required to disclose to any person any document which . . . (d) relates to or forms part of the accounts of the trust, unless . . . that person is a beneficiary under the trust.”
Arguably Article 25(d) is indeed the equivalent provision of the Guernsey section 22(1), albeit expressed negatively (“shall not . . . unless”) and without express inclusion of the words “subject to any order of the Court”. Again it is inconceivable that section 22(1) is not implicitly subject to the section 63 powers. It is peculiar also that the (closely linked) provisions at section 33 relating to the more sensitive question of disclosure of deliberations is made expressly subject to any order of the Court. The Stuart-Hutcheson case is again notable for the fact that inspection was permitted of the minutes of meetings of both the shareholders and directors of companies underlying the settlements.23 Likewise, the first instance decision made a helpful distinction between two kinds of duties imposed on trustees under the 1989 Law, ie absolute and conditional duties. The latter were those: “. . . which can be subject to other considerations, and I have specifically in mind duties which are subject to the terms of the trust itself (including s 22(1)).”
The duty under section 24 is such a conditional duty in that all the trustees of a trust shall, subject to the terms of the trust, join in the execution of the trust.24 Likewise, no function conferred on the trustees may be exercised unless they are agreed as to what should be done. The terms of the trust may however permit the trustees to act by a majority, in which case the dissenting trustee may require his disagreement to be recorded in writing. By section 25 trustees must, again subject to the terms of the trust, be impartial as between beneficiaries and not execute the trust for the advantage of one at the expense of another; hence the common exclusion of this duty noted above. General Powers Sections 26 to 33 set out the general powers of trustees. Section 26 states that, subject to the provisions of the law and the terms of the trust, a trustee has all the powers of a beneficial owner as regards the trust property. Thus by section 27 a trustee may sue and be sued as trustee. By section 28 a trustee may consult professional 23 24
See para 38 of the Court of Appeal judgment. Again there will be an exemption for the Public Trustee, necessarily.
The Law of Trusts: The Trusts (Guernsey) Law 1989 147 persons in relation to the affairs of the trust and may be required to consult or obtain the consent of another person before exercising any function, ie a protector.25 There are both general and specific provisions relating to delegation at section 29(1) & (2) respectively, subject to the terms of the trust and subject also to the provisions of the Law. Sub-section 2 contemplates the delegation of management of trust property or else the appointment of a professional person to act in relation to the affairs of the trust. Assuming that the delegation itself does not constitute a breach of the obligation to act en bon père de famille, section 29(3) provides that a trustee is not liable for any loss to the trust arising from delegation pursuant to section 29(2). Sub-section (1) contemplates more general delegation, but only if permitted by the trust instrument. By section 29A the trustee may delegate the performance of any trust function by power of attorney, but remains liable for all acts or defaults of the donee of the power during the material period which may, in any event, not exceed twelve months. Although expressed negatively, section 30 permits the terms of the trust to provide for the remuneration of the trustee.27 The trustee may also pay from trust property and reimburse itself for all expenses and liabilities “properly incurred in connection with the trust”, see section 30(2). It is very likely that issues will arise as to the limits of the proper use of this power by a trustee, particularly when in dispute with beneficiaries. There is a general power to act by resolution in the case of a corporate trustee. There is power to appropriate trust property to the satisfaction of any beneficiary interest as the trustee sees fit. By section 33 a trustee is not, subject to the terms of the trust and any order of the Court, obliged to disclose documents revealing his deliberations or reasoning as to the exercise of his functions. This is an important safeguard for the trustee against the disgruntled beneficiary, but note the discussion above concerning the linked provisions under section 22 and the case of Stuart-Hutcheson. Sections 34 to 39 contain provisions governing a trustee’s liability and are considered separately below. Class Interests Section 41 states three rules (subject to the terms of the trust) helping to define class membership and what should happen to income if no member of a class exists.
25
See the section on protective trusts. The Public Trustee will have enhanced powers of delegation. 27 This too is a section which will be amended as a result of the Public Trustee legislation; here to permit the Trustee to pay his fees. 26
148 The Laws of Guernsey Power of Accumulation and Advancement Section 43 contains important provisions permitting the accumulation and advancement of trust income.28 In default of express provision income which is not accumulated must be distributed. The implied power of accumulation provided by section 43(3) of the Law applies only to minors. These provisions have led to applications being made to the Court to vary the terms of trusts so as to include a power to accumulate income otherwise payable to an adult beneficiary where distribution is either not desired or tax inefficient. Section 43(5) provides that the receipt of a guardian of a beneficiary under legal disability is sufficient discharge to trustees making payments for the benefit of the beneficiary. Power of Appointment: Section 44 permits a trust to confer power on the settlor, trustee or any other person to appoint or assign all or any of the trust property to any person. If the settlor is the donee of such powers the tax efficiency of the trust structure is likely to be affected. It is unlikely in practice that a power to appoint would be given to a person other than a trustee. Power of Revocation Section 45 permits a trust or trust power to be expressed as capable of revocation or variation. This last provision overlaps with section 42 which permits the terms of a trust to be varied in any manner provided by the trust terms. Note however the provisions of sections 65 and 66 of the Income Tax (Guernsey) Law 1975 whereby income arising under revocable settlements (as defined) is deemed to be the income of the settlor and taxable as such.
FAILURE, LAPSE AND TERMINATION OF TRUSTS
Where an interest lapses or the trust fails for whatever reason then, subject to the terms of the trust and Court order, a statutory resulting trust arises in favour of the settlor absolutely or his personal representative; see section 47. Where a trust terminates the assets must be distributed to those entitled under the terms of the trust. This is subject to section 48(2) whereby trustees may require to be provided with reasonable security for existing, future or contingent liabilities before distributing trust property.
28
Subject to the s 12 perpetuity provisions.
The Law of Trusts: The Trusts (Guernsey) Law 1989 149 Section 48(3) enacts the well-established principle that where all the beneficiaries exist and are of full capacity they may require the trustees to terminate the trust and distribute the trust property among them.
VARIATION OF TRUSTS
Section 42 permits a trust to be varied pursuant to the trust’s own terms to that effect. This provision is in addition to the powers set out between sections 52 and 56. It is not uncommon to find a trust instrument with an insufficiently broad section 42 power for whatever need has arisen. In those circumstances the trustee must look to the Court to make good the power deficit, whether by permitting a variation of the trust terms or enabling a specific transaction to take place. A common form of application is to vary a trust so as to make it more tax efficient.29 Section 52 gives power to the Court to approve any arrangement which varies or revokes the terms of a trust or enlarges or modifies the powers of management or administration of any trustee on the application of either HM Procureur, a trustee, a settlor, a beneficiary, a protector or any other person with leave, on behalf of a minor or other person under legal disability or any other unascertained or potential discretionary beneficiary. This group of potential applicants is in fact the usual class of persons with locus under the Law to make application to the Court in respect of a trust. It is important to note that the section 52 power is restricted to specific circumstances. It is not a general power.30 In addition no arrangement on behalf of a minor, or a person under legal disability or an unascertained beneficiary may be approved unless it appears to be for their benefit. In practice one would seek separate representation for ascertainable beneficiaries and separate representation amongst beneficiaries with conflicting interests. The Court will be concerned to know that any alteration which is not manifestly for the benefit of all has been properly considered and advised upon and, ideally, agreed to by those affected.31
29 Although note the Jersey case of In re the T Settlement [2002] ITELR 820, where variation was permitted to allow the settlor’s liability to United Kingdom Capital Gains Tax to be discharged, albeit with the consent of the adult beneficiaries. The case is also noteworthy because the Court doubted (obiter) the enforceability in Jersey of the UK resident settlor’s English statutory right to reimbursement. 30 The general powers are to be found at Part IV; note in particular the general use to which s.63 can be put. 31 See the Jersey case of In the matter of the Leah and Harry Osias 1980 Settlements [1987–1988] JLR 389 for helpful guidance concerning the equivalent provision of the Trusts (Jersey) Law 1984 and the procedural and other requirements (in particular the need to convene all parties who have an interest or potential interest). See also the Jersey case of In the matter of the T Settlement (2002) 6 February 2002/33. In the case of In re a Trust Agreement dated 19th February 1990 (2002) 14 March 2002/61 the application was to insert a clause permitting the trustees to charge for their services. The Court adopted the test of considering whether a prudent adult motivated by self-interest and having regard to the potential risks would be likely to accept the variation proposed.
150 The Laws of Guernsey Section 53 contains a useful provision whereby the Court may confer upon the trustee any necessary power to effect a transaction where otherwise the trustee’s capacity to act would otherwise be questionable or absent altogether. Sections 54 and 55 concern variations to charitable trusts. The cy-près doctrine is adopted at section 54 together with a more general power to vary any trust for charitable or public purposes. For a recent case concerning the application of section 5432 in practice see In re Stanley Dawes Will Trust, a judgment of the Bailiff handed down on 7 December 2000. Permitted Investments Section 57 gives power to the States Advisory & Finance Committee to prescribe the securities and investments which may be held by trustees. No such order has been made. In any event the trust terms may, and invariably do, exclude the provisions of any such order and themselves regulate freely the range of investments which trustees may make. Provisions Applicable Only to a Foreign Trust Part III of the 1989 Law contains provisions with application only to a foreign trust. There is in fact only one; the provision at section 59 providing that a foreign trust is governed by its proper law and unenforceable in Guernsey to the extent that it purports to do anything contrary to Guernsey law or declared to be immoral or contrary to public policy.33 Provisions of General Application The provisions at Part IV comprising sections 60 to 71 inclusive apply both to a Guernsey trust and, where the context permits, to a foreign trust.
APPLICATION FOR DIRECTIONS
By section 62 a trustee may apply to the Court for directions as to “. . . how he should or might act in any of the affairs of the trust, and the Court may make such order as it thinks fit”. This is an important provision of great usefulness to trustees who find themselves in difficult positions. An application for the direction of the Court is a means not only of obtaining guidance as to the course a trustee should follow in order best to discharge his duty but also of avoiding future potential lia32 33
And s 63. Ie akin to the droit international privé concept of being contraire a l’ordre public.
The Law of Trusts: The Trusts (Guernsey) Law 1989 151 bility, assuming that the Court’s direction is followed. Equally a balance must be struck between a trustee seeking help and taking responsibility for the proper discharge of his duties. There is a risk of overburdening the Court with applications which have more to do with obtaining insurance cheaply than truly requiring the Court’s assistance.34 Where the Court does exercise its discretion the Court of Appeal’s rôle on appeal will be limited in the usual way whenever the exercise of discretion is challenged; see In re the Esteem Settlement (2001) 17 September 2001/196. The direction of the Court is particularly useful if the trustee finds himself either contemplating or concerned in litigation affecting the trust property other than a claim against the trustee himself for breach of trust (where different principles apply). Trustees may (and in practice will) seek to protect themselves against the possibility that they may be held to have acted unreasonably in litigation or in their own interests by applying at an early stage for directions as to whether to bring or defend proceedings, see the case of Re Beddoe [1983] 1 Ch 547 at 557 which gave its name to this type of application. The leading case concerning the appropriate response of trustees to litigation is that of Alsop Wilkinson (A Firm) v Neary [1995] 1 All ER 431. Lightman J defined the three kinds of dispute in which a trustee might be involved as follows: “Trustees may be involved in three kinds of dispute. (1) The first (which I shall call ‘a trust dispute’) is a dispute as to the trusts on which they hold the subject matter of the settlement. This may be ‘friendly’ litigation involving, for example, the true construction of the trust instrument or some other question arising in the course of the administration of the trust; or ‘hostile’ litigation, for example, a challenge in whole or in part to the validity of the settlement by the settlor on grounds of undue influence or by a trustee in bankruptcy or a defrauded creditor of the settlor, in which case the claim is that the trustees hold the trust funds as trustees for the settlor, the trustee in bankruptcy or creditor in place of or in addition to the beneficiaries specified in the settlement. The line between friendly and hostile litigation, which is relevant as to the incidence of costs, is not always easy to draw (see Re Buckton, Buckton v Buckton [1907] 2 Ch 406. (2) The second (which I shall call ‘a beneficiaries dispute’) is a dispute with one or more of the beneficiaries as to the propriety of any action which the trustees have taken or omitted to take or may or may not take in the future. This may take the form of proceedings by a beneficiary alleging breach of trust by the trustees and seeking removal of the trustees and/or damages for breach of trust. (3) The third (which I shall call ‘a third party dispute’) is a dispute with persons, otherwise than in the capacity of beneficiaries, in respect of rights and liabilities, for
34 See the Jersey case of In the matter of the S settlement (2001) 24 July 2001/154, which in turn relied upon the English case of Public Trustee v Cooper, an unreported English High Court judgment from 1999, in identifying the different situations in which directions might be sought and the rôle of the Court generally. See also the Jersey case of Abacus (CI) Limited v Hirschfield et autres (2001) 17 September 2001/195 and Hayton AJ’s judgment in the High Court of the Bahamas case of C v M [2002] 4 ITELR 548.
152 The Laws of Guernsey example in contract or tort, assumed by the trustees as such in the course of administration of the trust. Trustees (express and constructive) are entitled to an indemnity against all costs, expenses and liabilities properly incurred in administering the trust and have a lien on the trust assets to secure such indemnity. Trustees have a duty to protect and preserve the trust estate for the benefit of the beneficiaries and accordingly to represent the trust in a third party dispute. Accordingly their right to an indemnity and lien extends in the case of a third party dispute to the costs of proceedings properly brought or defended for the benefit of the trust estate. Views may vary whether the proceedings are properly brought or defended, and to avoid the risk of a challenge to their entitlement to the indemnity (a beneficiaries dispute), trustees are well advised to seek Court authorisation before they sue or defend. The right to an indemnity and lien will ordinarily extend to the costs of such an application. The form of application is a separate action to which all the beneficiaries are parties (either in person or by a representative defendant). With the benefit of their views the Judge thereupon exercising his discretion determines what course the interests of justice require to be taken in the proceedings . . . so long as the trustees make full disclosure of the strength and weaknesses of their case, if the trustees act as authorised by the Court, their entitlement to an indemnity and lien is secure. A beneficiaries dispute is regarded as ordinary hostile litigation in which costs follow the event and do not come out of the trust estate . . . The role of trustees in the case of a trust dispute . . . where the dispute is between rival claimants to a beneficial interest in the subject matter of the trust . . . is to remain neutral and (in the absence of any Court direction to the contrary . . .) offer to submit to the Court’s directions, leaving it to the rivals to fight their battles. If this stance is adopted, in respect of the costs necessarily and properly incurred, for example in serving a defence agreeing to submit to the Court’s direction and in making discovery, the trustee will be entitled to an indemnity and lien. If the trustee does actively defend and succeeds, for example in challenging a claim by the settlor to set aside for undue influence, he may be entitled to his costs out of the trust, for he has preserved the interest of the beneficiaries under the trust . . . But if he fails, then in particular in the case of hostile litigation, although in an exceptional case the Court may consider that the trustee should have his costs . . . ordinarily the trustee will not be entitled to any indemnity, for he has incurred expenditure and liabilities in an unsuccessful effort to prefer one class of beneficiaries (eg the express beneficiaries specified in the trust instrument) over another (eg the trustees in bankruptcy or creditors) and so has acted unreasonably and otherwise for the benefit of the trust estate. . . .”
It follows that trustees must consider carefully the true nature of any dispute or litigation which has arisen and the part they should play; whether to act positively or maintain neutrality and, in any event, whether the direction of the Court is required. In the case of a beneficiaries dispute of sufficient seriousness it may be appropriate for the trustees to resign. There are potentially disastrous outcomes for a trustee in trust litigation quite apart from being found in breach of trust. There are more subtle calamities which may occur; for example if it is found that there was no trust at all or that the trust assets were in fact held on constructive trust for another. There is scope for a trustee to be compelled to reinstate whatever fees have been taken
The Law of Trusts: The Trusts (Guernsey) Law 1989 153 or assets lost, together with interest and compensation for lost investment opportunity.
ORDERS FOR THE EXECUTION, ADMINISTRATION OR ENFORCEMENT OF A TRUST
Section 63 of the 1989 Law confers broad powers upon the Court to make orders in respect of the execution, administration or enforcement of a trust. Power is expressly given to make orders concerning trustees, (including their appointment, removal or control generally35), beneficiaries and any trust property. There is power to make declarations as to the validity of a trust also. Applications may be made by the usual group of interested parties. It is these powers which are used to seek a variation in the terms of a trust where the more specific provisions of sections 52 to 55 do not apply. In practice the trustee will apply to the Court pursuant to both sections 62 and 63 together with whatever more specific provision is relevant, if any.
RECTIFICATION OF TRUST INSTRUMENTS
It is not uncommon for an application to be made to the Guernsey Court for the rectification36 of a trust instrument. As noted above, the Court has broad powers in relation to trust matters culminating in the section 63 provision. In determining whether to allow rectification the Guernsey Court would be influenced by English case-law and particularly Jersey case-law.37 The leading Channel Island case is that of In re Moody “A” Settlement [1990] JLR 264 where the principles to be applied were stated in the head note as follows: “The discretion to rectify a trust must be cautiously exercised, especially when rectification is sought for the purpose of obtaining a UK tax advantage. In view of the relationship between the two jurisdictions the Jersey Courts should not appear to be facilitating the evasion of UK tax laws. A guiding principle in determining such an application is to ask whether an English Court in similar circumstances relating to an English settlement would grant the rectification sought. The general principles to be followed are that:
35 For a recent article on the removal of trustees see St John Robilliard’s “Getting rid of Unwanted Trustees” in Trusts & Trustees vol 8 issue 8 for July & August 2002. 36 As opposed to mere variation, rectification has retrospective effect. The distinction has particular importance in a taxation context. 37 See for example the English case of Re Slocock’s Will Trust [1979] 1 All ER 358 and the Jersey cases of In re R Settlement [1987–1988] JLR N22; In re Moody Jersey “A” Settlement [1990] JLR 264; In re Madeley Children’s Trusts [1992] N13; In re Madge’s Settlement [1994] JLR N16; In re Smouha Family Trust [1998] N20; In re Chase Bank and Trust Company (C.I.) Limited (unreported) 1998/112; In re Terence Le Sueur (unreported) 1999/38; In re Gates Estate Trust [2000] JLR 66; In re Westbury Settlement [2001] N16–17; In re John Barrett (unreported) 2001/145.
154 The Laws of Guernsey (a) the Court has a discretion to rectify a trust document where it is satisfied that the document did not carry out the intentions of the parties; (b) parties are entitled to enter into any transaction which is legal, and in particular are entitled to arrange their affairs to avoid the payment of tax if they can legitimately do so. Accordingly, if a mistake is made in a document legitimately designed for that purpose, there is no reason why it should not be corrected; and (c) the Court is not obliged to refuse rectification where the sole purpose of seeking it is to obtain a legitimate fiscal advantage for the parties, if that was their common intention at the time of the execution of the document. The Court would therefore exercise its discretion to grant the rectification sought, since it was satisfied that the deed of appointment did not give effect to the true intention of the settlor, notwithstanding that that intention was to avoid the payment of tax.”
It follows that there is a comparatively heavy burden of proof upon the applicant to show that due to a genuine mistake the trust instrument does not represent the intention of the parties. That burden of proof becomes more difficult to satisfy with the passing of time.38 The power is, in any event, discretionary. Note also that where the governing law is not Guernsey law and there is an overlapping jurisdiction with another Court, the Guernsey Court will have a discretion whether or not to hear the application.39 Non-compliance with Court Order by an Individual Section 64 confers power on the Court to bypass the failure of a person to comply with a Court order concerning a trust by causing whatever is required to be done by alternative means, eg permitting a document to be executed by a nominated person on behalf of the defaulter. Costs The Court has a general discretion as to the costs and expenses of proceedings brought pursuant to the Law, see section 65. This has particular relevance in the context of applications to vary the terms of a trust or for directions. English principles as enshrined in cases such as In re Buckton [1907] 2 Ch 406 at 414 would be followed.40 Note in particular the judgment of Clarke JA in a separate judgment on costs in Stuart-Hutcheson v Spread Trustee Company Limited.41 The appellant 38
See Madge and Smouha. See the Jersey case of In the matter of the Representation of John Barbenson Barrett and Rathbone Jersey Ltd as the Trustees of the CH Walmsley Will Trust (2001) 12 July 2001/145. 40 See also the case of In the matter of the Leah and Harry Osias 1980 Settlements [1987–1988] JLR 389. 41 Ibid. 39
The Law of Trusts: The Trusts (Guernsey) Law 1989 155 beneficiary’s costs were ordered to be paid on a full indemnity basis out of the trust fund. Criticism was made of the inadequacy of recoverable costs under the Court of Appeal (Civil Division) (Costs and Fees) Rules 1991, although the decision did not turn on this. Clarke JA instead identified in particular the need to decide a question of Guernsey law which previously had been unresolved, the fact that resolution of the issue was sought by both appellant and trustee, and the fact that the case fell within the appropriate class identified by Lightman J in Alsop Wilkinson (A Firm) v Neary.42 The nature of a trustee’s interest Section 66 takes care to state expressly that the interest of a trustee in trust property is limited to what is necessary for the proper performance of the trust. It is expressly provided that the trust property does not form part of the trustee’s estate.43 There are potentially interesting arguments as to the consequences of these provisions. It may follow, for example, that where a trustee is not acting for the proper performance of a trust he has no interest in the trust property and therefore cannot act effectively; a trust law equivalent of the principle nemo det quod non habet.44 Tracing Section 67 provides for a general tracing remedy45 permitting the recovery of trust property which has been dealt with in breach of trust, save where it is no longer identifiable or is in the hands of a bona fide purchaser for value without notice of the breach of trust. The extent to which this simple provision avoids all of the fine distinctions made by English law remains to be seen. As with Guernsey law generally there is no good reason why unhelpful English common law should be adopted; particularly where, as here, there is recent Guernsey statutory provision. In any event there is sure to be litigation concerning the true effect of this section, most probably to determine the limits of this prima facie broad remedy and
42
Ibid. See now the Court of Appeal (Civil Division) (Costs and Fees) (Guernsey) Rules 2002. See also s.68 where the same point is made in the context of bankruptcy. This is the Guernsey statutory equivalent of the “insolvency ring fence” referred to by Professor Hayton and his co-authors in an article entitled the Use of Trusts in International Financial Transactions BJIBFL January 2002; the article highlights in particular the use of trusts in the context of managed funds, structured finance transactions, bond issues, securitisation transactions and the CREST electronic securities settlement system. The authors suggest that in euroland a form of generally accepted euro-trust will arise. 44 The principle taken from sale of goods law that you cannot give what you do not have, ie you cannot pass good title to goods you do not own. 45 Strictly speaking tracing is merely a process as opposed to a remedy in its own right; it determines the assets which are potentially the subject of remedy in whatever form that may take. 43
156 The Laws of Guernsey whether it is qualified in any way, eg because of the conduct of the would-be tracer or any change of position of the person to be traced against.46 Prescription of Actions Section 71 sets out the “limitation or prescription” period applying to an action brought against a trustee. As with the Law Reform (Tort) (Guernsey) Law 1979 there is unhappy reference to limitation where only prescription is known in general Guernsey (and Customary) law. Although both concepts are concerned to restrict the time within which proceedings must be brought there is an important distinction between the two. In essence limitation is a part of procedural law whereas prescription is substantive law; one bars the remedy the other extinguishes the right itself. In a foreign jurisdiction local procedural law might displace a mere limitation defence in the “home” or proper law, whereas prescription would, prima facie, withstand the foreign procedural law, subject to local legislation, (eg the Foreign Limitation Periods Act 1984 in England). By section 71 no prescription period applies to an action brought against a trustee in respect of any fraud to which he was party or privy; likewise to recover trust property or its proceeds from the trustee (or former trustee), whether currently held or controlled by the trustee or received previously and converted to his use. Subject to this an action founded on breach of trust must be brought against a trustee by a beneficiary within three years from delivery of the final accounts of the trust to the beneficiary or within three years of the date on which the beneficiary first had knowledge of the breach of trust, whichever period first begins to run. Time does not run against a beneficiary who is either a minor or under other legal disability until the minority or disability ceases. Whether time can stop running if an adult suffers a disability during the prescription period is unclear. The provision refers only to time beginning to run. In such circumstances appeal might also be made to the customary principle of empêchement d’agir.47 46 See in particular the Royal Court of Jersey judgment of 17 January 2002 in the Esteem litigation (In re the Esteem Settlement and the Number 52 Trust) concerning tracing in Jersey law and the independent approach there adopted in not following the rule in Clayton’s case in favour of the apportionment method (see para. 196). It was held also that the right to trace may itself be lost if it would be inequitable to permit the claimant to trace (see para 221). Again see what is said about change of position as a defence to tracing and claims based on alleged unjust enrichment. Note in particular the willingness to grant remedies against a fault-free recipient no longer in possession of trust assets in certain circumstances; chiefly where no change of position defence would be available (see paras 240–242). A distinction was drawn between liability on the basis of unjust enrichment as opposed to constructive trusteeship (see para 242). Finally note the discussion of Pauline actions in Jersey law; ie the “. . .ability, in certain circumstances, to set aside a transfer undertaken in fraud of creditors” (see para 247 et seq.) and reference to modern French law (para 277) with a summary at para 346 et seq. See also the 12 March judgment in the same litigation concerning the Pauline action. The possibility of an action in conversion could be considered as an alternative; although one would have to establish that conversion was a part of Guernsey law; see generally Kuwait Airways Corp. v Iraqi Airways Co (No 6) [2002] UKHL 19. 47 See the section on prescription in civil procedure and the case of Holdright Insurance Company Limited v Willis Corroon Management (Guernsey) Limited (2000). This is the idea that certain obstacles to a prospective plaintiff bringing proceedings stop time running.
The Law of Trusts: The Trusts (Guernsey) Law 1989 157 TRUSTEE LIABILITY
By section 34(1) a trustee who commits or concurs in a breach of trust is liable for any loss or depreciation in value of the trust property resulting from the breach and any profit which would have accrued to the trust had there been no breach, subject to the provisions of the Law or the terms of the trust. There is no simple joint and several liability amongst trustees in Guernsey trust law; fault is required. This is made explicit by section 34(4) whereby a trustee is not liable for a breach of trust committed by a co-trustee unless he becomes or ought to have become aware of the breach and actively conceals the breach or fails to take proper steps within a reasonable time to protect or restore the trust property or to prevent the breach. Where there is liability it is joint and several. Section 34(3) further provides that a trustee is not liable for a breach of trust committed by another person prior to his appointment. The provision is unnecessary in itself but will be a comfort to replacement trustees where it is known there has been a breach of trust. However, section 34(6) imposes a positive duty to take all reasonable steps to remedy the prior breach once it becomes known by the successor trustee. Section 34(2) provides that a trustee may not set off a profit accruing from one breach of trust against a loss or depreciation in value resulting from another. The trustee must make good the loss regardless of the profit, although this may be a matter to take into account if application is made under section 50;48 see below. Exclusion of Trustee Liability Typically a trust instrument will give, or attempt to give, the greatest possible exclusion of trustee liability consistent only with the limits imposed by the 1989 Law and, more generally, what has been described as the “irreducible core of obligations” owed by a trustee to a beneficiary.49 Running in tandem with frank exclusion clauses are (typically) very broadly drawn powers for the trustee to deal with trust property as if he were the absolute beneficial owner. It is common to find, for example, a provision to the effect that there is no obligation to diversify investments. This is to guard against the circumstances where shares in a company established by the settlor form the principal trust asset and, some years later, the company goes into liquidation. Prima facie there is a duty to maintain a prudent and balanced investment policy as regards trust assets requiring diversification to some degree, eg a balanced portfolio of blue-chip shares, Treasury stock and, say, land. It is not prudent to have all one’s eggs in a single investment basket. Likewise there is a prima facie duty to oversee, to some extent, the activities of such a company. The problems are illustrated by 48
The Court’s power to relieve a trustee from personal liability. See Professor Hayton, “The Irreducible Core Content of Trusteeship” (1996) JITCP vol 5 no 1. Note that the terms of the trust instrument may go beyond what can be excluded lawfully and will be ineffective to the extent that they do. 49
158 The Laws of Guernsey the English case of Bartlett v Barclays Bank Trust Co Limited 50 where the bank was held liable to beneficiaries when a company, the trust’s principal asset, failed. For these reasons if a settlor wishes to establish a trust holding undiversified assets care is required to permit the trustee to do so without risk of liability.51 This again discloses the tension afflicting very many Guernsey trusts; viz the practical and commercial need for the professional trustee to bear in mind the wishes of the settlor whilst at the same time discharging the true obligation imposed by the Law and the trust instrument in favour of the beneficiaries themselves. There are uncomfortable realities which are likely increasingly to manifest themselves as time passes in the form of disputes with subsequent generations of beneficiaries. The letter of wishes highlights these problems. This document, which is typically drawn up at about the time the trust deed itself is executed, purports to contain the settlor’s non-binding wishes as to how the trustee should exercise his discretion. Very often trustees follow the settlor’s wishes slavishly, thus jeopardising the existence of the trust itself and exposing themselves to possible claims for breach of trust.52 The leading English case on trustee exclusion clauses for breach of trust is Armitage v Nurse [1997] 3 WLR 1046. This Court of Appeal judgment upheld a trust clause exempting a trustee from liability for loss or damage save that caused by the trustee’s own dishonesty, no matter how indolent, impudent, lacking in diligence, negligent or wilful he might have been. Furthermore, the clause was found not to be void for repugnancy or on the grounds of public policy. Although these principles would have equal application in Guernsey law there is an important distinction in that (in addition to fraud) liability for wilful misconduct or gross negligence cannot be excluded in Guernsey law;53 see also the Jersey case of Midland Bank Trust Co. (Jersey) Ltd v Federated Pension Services [1996] JLR 352 where it was held that “there is no general principle of Jersey law (apart from statute) preventing a trustee from protecting himself against liability for breach of trust by clear words, save in the case of fraud”. A further qualification was that: “Under Jersey law, clauses relied on by trustees as exculpating them from liability for breach of trust are to be construed at least as narrowly and strictly as such clauses would be construed under English law”; likewise such clauses were subject to the Law’s own statutory restrictions. Gross negligence was itself defined as a “serious or flagrant degree of negligence”. Where loss is caused by a wrongful transfer of trust property it is important to note that issues of remoteness or foreseeability do not arise, whereas they may do so if the allegation is merely one of failure to exercise due care.54 50
Ibid. Also reported at [1980] 1 All ER 139. Typically by insertion of what is known as a Bartlett clause. 52 Note what is said about disclosure of letters of wishes in the Rabaiotti and, by implication, StuartHutcheson cases. 53 S 34(7). Note also that the relationship between s 34 and s 18(1) has yet to be ascertained. 54 See the English cases of Target Holdings Ltd v Redferns [1995] 3 All ER 785 and Bristol and West Building Society v Mothew [1996] 4 All ER 698. 51
The Law of Trusts: The Trusts (Guernsey) Law 1989 159 Relief from Liability By section 35 a beneficiary of full age and no legal disability with knowledge of the material facts and acting freely may relieve a trustee of liability for breach of trust. As a matter of general trust law, if a beneficiary consents to or acquiesces in a breach of trust there may be no liability in the first place, depending upon the circumstances of the case.55 By section 50 the Court may relieve a trustee wholly or partly of liability for a breach of trust where it appears that the trustee has acted honestly and reasonably and ought fairly to be excused, whether for the breach or for omitting to obtain the directions of the Court in the matter.56 The burden of proof is upon the trustee; every case will turn on its particular facts. This is the Guernsey law equivalent of section 61 of the Trustee Act 1925 and the Court would have regard to English case-law generated by the section.57 An interesting recent case which approaches the problem of avoiding trustee liability rather more directly is that of Abacus Trust Company (Isle of Man) Ltd and Another v National Society for the Prevention of Cruelty to Children [2001] STC 1344 where the rule in Re Hastings-Bass (deceased) [1975] Ch 25 was applied. In this earlier case Buckley LJ had held that: “Where by the terms of a trust a trustee is given a discretion as to some matter under which he acts in good faith, the Court should not interfere with his action notwithstanding that it does not have the full effect which he intended, unless (1) what he has achieved is unauthorised by the power conferred upon him, or (2) it is clear that he would not have acted as he did (a) had he not taken into account considerations which he should not have taken into account, or (b) had he not failed to take into account considerations which he ought to have taken into account.”
In Abacus it was held that the fiscal implications of an appointment by trustees for one or more beneficiaries of a trust were relevant considerations for the purposes of the rule in Hastings-Bass. Accordingly, where trustees had executed a deed of appointment three days too early,58 contrary to the advice of leading counsel
55 See cases such as Re Pauling’s Settlement Trusts [1963] 3 All ER 1 and Holder v Holder [1968] Ch. 353. See Allan v Nolan & Ors. LTL 8 February 2002 for a recent English Court of Appeal decision applying these principles. 56 Note the implicit expectation that directions should be sought when in doubt. 57 See cases such as Re Stuart [1897] 2 Ch 583, Re Turner [1897] 1 Ch 536, Royal Brunei Airlines Sdn Bhd v Tan [1995] 3 All ER 97, Re Pauling’s Settlement Trusts [1963] 3 All ER 1, and Marsden v Regan [1954] 1 WLR 423. An interesting and recent case in this context is that of Younger v Saner (2002) LTL 11 January 2002, a first instance decision of Michael Briggs QC. The case concerned a solicitor who was alleged to have breached his duties as administrator of an estate. The claim in fact failed for lack of causation but it was found that the s.61 application would not have succeeded, although unnecessary in the event. The finding of failure to achieve the professional standard of care was fatal to the contention that the solicitor had acted reasonably. The appeal was dismissed, see LTL 25 July 2002. 58 And therefore in the wrong tax year.
160 The Laws of Guernsey and with prima facie seriously adverse tax consequences for the settlor, the Court allowed an application for a declaration that the deed was void ab initio.59 Notice of Matters Affecting a Trust Section 36 provides that a trustee is not, in the absence of fraud, affected by notice of any matter in relation to a trust if such notice was obtained by reason of his having acted for another trust. Conflicting interests as between trusts must, however, be disclosed. These provisions protect the corporate trustee who might otherwise be taken to have knowledge of all matters affecting all of the trusts of which it was trustee, and requiring it to act accordingly. Liability to Third Parties Section 37 covers dealings by a trustee with third parties and imposes rules equivalent to those governing an agent. Thus the trustee incurs personal liability to the third party if he fails to inform the third party that he is acting as trustee and the third party is otherwise unaware. Even so the trustee retains a right of indemnity against the trust property, unless he acted in breach of trust. It follows that if the trust property is insufficient the trustee must make good the deficit from his own estate. Where his role as trustee is revealed the trustee’s liability extends only to the trust property. This is an important provision which affords potentially substantial protection to the Guernsey trustee. Section 37(1) also raises the possibility that a third party would have a right to claim against the trust property even in the hands of the beneficiaries, they not being bona fide purchasers for value.60 In any event nothing in section 37 affects the trustee’s potential liability for breach of trust or breach of warranty of authority. The latter is a general principle of liability if a person purports to act on behalf of another in circumstances where they do not in fact have authority. The third party may sue on the implicit warranty of authority. Note that the section 37 provisions should be read with section 69 which gives additional protection to those dealing with trustees as bona fide purchasers for value without notice of whatever breach of trust might otherwise invalidate the transaction under consideration. Such a purchaser deals with the trustee as if he were beneficial owner of the trust property and unaffected by the trust.61
59
See also Green v Cobham [2002] 4 ITELR 784 for a similar case. See Matthews & Sowdon, Jersey Law of Trusts 3rd edn at p 120. Thus striking a balance in circumstances equivalent to the French perception of the conflict between the public interest in maintaining la sécurité des droits et la sécurité des transactions, or between sécurité statique et sécurité dynamique. 60
61
The Law of Trusts: The Trusts (Guernsey) Law 1989 161
Election Note also in the context of section 37 the possible application of the doctrine of election.62 This English common law doctrine, which may also form a part of Guernsey law,63 provides that if you have a choice of defendants you may lose the right to proceed against one if you act against the other. The best example is where an agent is sued as principal in circumstances where the principal was undisclosed. The right to pursue the principal may be lost if the agent is pursued as opposed to the now disclosed principal. There is another trust context in which election arises, as demonstrated by the Privy Council case of Tang Man Sit (decd) (personal representative) v Capacious Investments Limited [1996] 1 All ER 193. Here it was held that there was an inconsistency between an account of profits, whereby a plaintiff took the money the defendant received from the use he made of the property, and an award of damages, representing the financial return the plaintiff would have received for the same period had he been able to use the property. The remedies were alternative, not cumulative. Faced with alternative and inconsistent remedies a plaintiff had to elect between them when judgment was given in his favour. However, a Court might order disclosure of further information to enable the plaintiff to make his decision, if fairness so required.
CONSTRUCTIVE TRUSTS
Section 38 contains express provision whereby any person who profits from a breach of trust, or who obtains property in breach of trust, shall be deemed to be a trustee of the profit or the property unless the profit or property was derived or obtained in good faith and without notice of the breach.64 The section has general application and expressly does not exclude any other circumstances in which a constructive trust may arise. The notion of constructive trusteeship is of fundamental importance to trust law, providing a particularly flexible and effective remedy in a great range of different circumstances.65 Equally, constructive trusteeship is less likely to be an everyday issue in Guernsey law given the predominance of express trusts. Disputes are more likely to revolve around the distinction between trusteeship and nomineeship or whether there has been a breach of trust duties themselves. 62
See generally the leading work of Bowstead & Reynolds on Agency. There is no case-law either way. Again there seems no reason why the less flexible aspects of the English doctrine should be incorporated; particularly those liable to cause injustice. It is frequently the case that English law principles are assumed to apply, if only to avoid the material pitfalls and expensive litigation as to whether the principles are a part of Guernsey law or not. 64 Note that no reference is made to giving value; but equally s 38 is non-exclusive. 65 Without overlooking the resulting trust, which also has a great many uses, particularly against innocent volunteers. 63
162 The Laws of Guernsey Note that language is used inconsistently in trust law jurisprudence. The correct sense of the term “constructive trust” describes the proprietary remedy whereby a trust is imposed upon property not already held on express trust in circumstances where, for whatever reason, (typically wrongdoing of some kind) equity or law so requires or determines. However the language of constructive trusteeship is sometimes used to describe what may more properly be called “accessory liability”. The leading case in this context is the Privy Council case of Royal Brunei Airlines Sdn Bhd v Tan [1995] 3 All ER 97 where it was re-affirmed that a person who dishonestly procured or assisted in a breach of trust or fiduciary obligation was liable in equity to make good any resulting loss. Although dishonesty was both a necessary and a sufficient ingredient of accessory liability it was held that the breach of trust which was a prerequisite for accessory liability need not itself be a dishonest and fraudulent breach of trust by the trustee. Accordingly, in order for liability to attach to the accessory it was not necessary that, in addition, the trustee or fiduciary was acting dishonestly; although this would usually be so where the third party assisting him was acting dishonestly.66
INNOCENT RECIPIENTS
An innocent recipient of trust property who is not a bona fide purchaser for value is not a constructive trustee but is nevertheless liable to return the property to the trust as a mere volunteer.67 The recipient will also owe trustee duties as from the moment he has the requisite degree of knowledge that the property is in fact trust property.68 The recipient will be liable personally to account for all dealings with trust property from that time on, not before.69 Transactions entered into by the innocent recipient prior to acquisition of this knowledge may in any event give rise to potential remedies for the dispossessed beneficiary, for example by way of subrogation to whatever right has been discharged or acquired, eg if the innocent recipient has paid off a secured debt the beneficiary may be subrogated to security equivalent to that discharged by the payment of trust property.70
66 See also the more recent case of Twinsectra Limited v Yardley & Ors [2002] 2 All ER 377; a House of Lords decision where the majority view was that, notwithstanding Lord Nicholls’ speech in Royal Brunei Airlines, the individual concerned must additionally have realised that his acts were dishonest for accessory liability to attach (a combined objective and subjective test). A Guernsey Court would be free to choose between the authorities. 67 And possibly liable regardless of whether he is still in possession of the trust assets, unless a change of position defence is available. See generally the important Royal Court of Jersey judgment In re the Esteem Settlement and the Number 52 Trust (2002) 17 January, see above under the heading Tracing. 68 Or simply that of another. See generally cases such as El Ajou v Dollar Land Holdings plc [1994] 2 All ER 685, see also Westdeutsche Landesbank v Islington BC [1996] AC 669. 69 Although being required in a more general sense to explain what has happened to the property; and again note the Esteem judgment. 70 See, for example, Banque Financière de la Cité v Parc (Battersea) Ltd [1998] 1 All ER 737.
The Law of Trusts: The Trusts (Guernsey) Law 1989 163 Equally an innocent recipient may defend a restitutionary claim successfully if his position has changed sufficiently before the claim is notified. The leading case is Lipkin Gorman v Karpnale [1991] 2 AC 548 where Lord Goff stated: “Where an innocent defendant’s position has so changed that he will suffer an injustice if called upon to repay in full, the injustice of requiring him so to repay outweighs the injustice of denying the plaintiff restitution. . . . the defence is available to a person whose position has so changed that it would be inequitable in all the circumstances to require him to make restitution, or alternatively to make restitution in full. I wish to stress, however, that the mere fact that the defendant has spent the money, in whole or in part, does not in itself render it inequitable that he should be called upon to repay, because the expenditure might in any event have been incurred by him in the ordinary course of things.”
THE OUTGOING TRUSTEE
By section 39 an outgoing trustee is under a duty to surrender trust property; however the trustee may require that he be provided with reasonable security for any existing, future or contingent liabilities before handing over the trust assets. A trustee complying with these provisions is relieved of future liability to any beneficiary or trustee, save as regards a breach of trust which has already occurred or liability to surrender any trust property or proceeds which have not in fact been surrendered already. The possible future personal liability of a trustee apart from these limited circumstances is an issue requiring close attention whenever a trustee contracts or otherwise commits himself to a course of conduct with future consequences. Assuming no breach of trust the trust assets may be insufficient to indemnify the trustee who will have personal liability in the absence of any of the saving provisions of the Law; hence the importance of provisions such as section 37. Alternatively a trustee may seek a personal indemnity from the beneficiary; see the Privy Council case of Hardoon v Belilios [1901] AC 118. Indemnities are often sought from the incoming trustee. Some express doubt as to whether the protection of exoneration or indemnity clauses survive the trustee’s retirement. Again this would be another reason to seek the new trustee’s indemnity. It seems unlikely that such protection would not in fact survive. Another route to indemnity once litigation has arisen is found in section 51 whereby the Court is permitted to impound all or part of the interest of a beneficiary by way of indemnity to the trustee or any person claiming through him where the trustee has acted in breach of trust “at the instigation, at the request or with the concurrence of a beneficiary”.71 One would expect the trustee to seek this remedy whenever a settlor who is also a beneficiary bore or shared responsibility for the actions complained of. 71
See for an example of the application of these principles the case of Re Somerset [1894] 1 Ch 231.
164 The Laws of Guernsey
DIRECTORS’ LIABILITY
Where a breach of trust is committed by a corporate trustee which is a trustee of a Guernsey trust or which is resident in Guernsey or is carrying on business in Guernsey or from an address in Guernsey, section 70 provides that every person who, at the time of the breach, was a director of the trustee shall be deemed to be a guarantor of the trustee for any damages and costs awarded by a Court against the corporate trustee itself. The concept of director is broadly defined to include a person in accordance with whose directions or instructions the directors are accustomed to act and a person who alone or with or through an associate is entitled to exercise or control the exercise of one-third or more of the voting power of the corporation or of a corporation of which it is a subsidiary. The Court again has power to relieve a director of all or part of his liability as a guarantor if he satisfies the Court that he ought fairly to be relieved because he was not aware of the breach of trust or of the intention to commit it and was neither reckless nor negligent, alternatively that he expressly objected and exercised what rights he had over the company so as to try to prevent the breach.72 The case of Cross v Benitrust International (CI) Ltd (1998) gives guidance as to the procedure to be adopted when a section 70 claim is made against directors. The Guernsey Court of Appeal held that the potential liability under section 70 was contingent upon the finding of a breach of trust as against the corporate trustee. Directors were nevertheless proper parties to the substantive proceedings having regard to their potential liability and the desirability of dealing with inevitably common questions or issues between all parties, likewise to ensure that findings would be res judicata as against the directors.73 In order to establish a liability under section 70 it was necessary for a plaintiff to satisfy the following criteria: (1) a breach of trust committed by a corporate trustee, the identity of that trustee being such as to satisfy the requirements of section 70(1), ie a Guernsey trust trustee, a Guernsey resident trustee or a trustee carrying on business in Guernsey or from a Guernsey address; (2) the person to be held liable as a guarantor was a director of the trustee at the time of the breach; (3) the fact and amount of the damages and costs awarded by the Court against the corporate trustee in respect of the breach. Although proper parties the Court of Appeal further held that the claim against the directors joined to proceedings against the corporate trustee should be restricted to a claim for determination of (i) the issue of breach of trust as between the beneficiaries and the directors, (ii) the status of the trust company as satisfying 72
S 70(2). The Court raised as a possible exception to this principle the circumstances where a trust company appeared likely to be able to meet any potential liability. 73
The Law of Trusts: The Trusts (Guernsey) Law 1989 165 the description required by the section and (iii) the position of the directors at the material time, (ie their status at the time of breach). In addition the claimants could seek a declaration that there was a liability under the guarantee, contingent only upon the giving of judgment for damages or costs. It is not clear why the line should be drawn so close to, yet short of, the point where a full remedy is obtainable against the directors in a single set of substantive proceedings. No guidance is given as to the manner in which a claimant should proceed after obtaining judgment against the corporate trustee. There seems no reason why the claimants should not immediately seek to have judgment entered against the directors personally. If met by an application by the directors under section 70(2) the claimants could respond by demanding that the application be dealt with immediately or as soon as possible. If injunctive measures have not already been taken to preserve the directors’ assets an application should be considered at this point. The risk of dissipation will have increased substantially.
RETROSPECTIVE EFFECT
It is noteworthy, finally, that the Law prima facie applies to trusts created before as well as after the commencement of the Law, see section 72; albeit with limited exceptions and saving provisions found mostly at section 74.73 Thus nothing affects the validity of anything done in relation to a trust before the commencement of the 1989 Law, (s 74(1)(c)). It is also expressly provided that nothing in the Law “derogates from the powers of the Court which exist independently of this Law” in respect of, inter alia, trusts, trustees or trust property. It is a mute point what those powers are.74
THE PUBLIC TRUSTEE
By a policy letter in Billet d’État XIX of 2002 the Advisory & Finance Committee proposed the establishment of the office of Public Trustee. The legislation is likely to be in force in the very near future, if it is not already in force by the time of publication. It had been recognised for some time that there was a lacuna should the Guernsey Financial Services Commission exercise its various regulatory powers in such a way as potentially to leave trust assets without a trustee.75 In any event there was a need for a Public Trustee whenever trust assets were put at risk because there was no trustee. The Trustee will be able to act whenever certain conditions are fulfilled in relation to a trust of which: 73
See also s 22(2). See again the case of Stuart-Hutcheson and in particular the Court of Appeal judgment. Principally through the use of its powers under the Regulation of Fiduciaries, Administration Businesses and Company Directors, etc (Bailiwick of Guernsey) Law 2000, see below for an account of this legislation. 74 75
166 The Laws of Guernsey (a) the proper law is that of any part of the Bailiwick; (b) a trustee is resident in the Bailiwick or is a company incorporated in the Bailiwick or, if there is no trustee, the last trustee was such a person or company; (c) any property is situated or administered in the Bailiwick; (d) the terms provide that a court in the Bailiwick is to have jurisdiction; or (e) a trustee has been a fiduciary licensed by the Commission or has applied for and been refused a fiduciary licence.76 The pre-conditions for appointment are likely to be that: (a) there is no trustee lawfully able to act; or (b) where the proper law of the trust is Guernsey law, the provisions of the 1989 Law concerning the minimum number of trustees are not satisfied; or (c) it is necessary or desirable for the Public Trustee to act for the purposes of preserving the trust assets or otherwise in the interests of the beneficiaries of the trust, or for the protection or enhancement of the reputation of the Bailiwick. The intention of the policy letter is that the Public Trustee will delegate many of his day-to-day functions to professional trustees; ie that he will intervene and make new arrangements for the proper trusteeship of assets whilst remaining responsible for actions taken in his name. Note however that this last statement of intention sits uneasily with a later proposal to exclude liability for any act or omission in the discharge of his functions, unless done in bad faith. It is also intended that the Public Trustee charge fees and therefore self-finance his office to a certain extent; equally it was recognised that the actions of the Trustee would require public subsidy where either the assets or circumstances did not permit recovery of fees, whether immediately or at all. The legislation will contain detailed provisions for appeals, enforcement and various criminal offences following the usual regulatory models. It is further intended that the legislation extend to the Bailiwick generally. Note that the definition of trustee at section 73 of the 1989 Law will be amended to include the Public Trustee.
76
The conditions all appear to be disjunctive.
9 Succession Laws of the Bailiwick
T
HIS SUBJECT IS to be approached cautiously. Deep breathing exercises are recommended at regular intervals. It is remarkable to have to narrate that in a comparatively small community there should be three distinct laws governing inheritance,1 each being both complex and unsatisfactory in some greater or lesser degree. A special case can perhaps be made for Sark given its special circumstances and the fact that new legislation has helped remove certain historical excesses. As regards Guernsey the principal Law of modern times is that of 1954, itself intended as a stop-gap measure. Even allowing for the slowness with which new Guernsey legislation can progress, succession is an area long overdue for sympathetic reform.2 Given the impending entry of European human rights law into Guernsey’s domestic law it seems likely that the laws of succession will have to be revised sooner rather than later. The exclusion of illegitimate children upon intestacy is a particular problem in the succession laws of Guernsey and Alderney.3
ORIGINS OF BAILIWICK LAWS OF SUCCESSION
The Bailiwick laws of succession have their origins firmly rooted in Norman Customary law. For Guernsey law one would go to Livre VI of Terrien’s Commentaire du Droit Civil Observé au Pays et Duché de Normandie, first published in 1578. One would then look to L’Approbation des Lois, the statement of Guernsey law made by reference to Terrien. There followed the late seventeenth century critique of Thomas Le Marchant in his Remarques et Animadversions sur L’Approbation des Lois et Coutumier de Guernesey.4 Useful guidance is also to be found in works such as Warburton’s Treatise on the History, Laws and Customs of Guernsey of approximately 1680, Laurent Carey’s Essai sur les Institutions et Coutumes de l’île de Guernesey of the mid-eighteenth century,5 and Peter Jeremie’s An Essay on the Laws of Real Property in Guernsey of 1841. Advocate William Foote wrote a clear and authoritative account of the Guernsey law of 1
Ie the succession laws of Guernsey, Alderney and Sark. Sometimes that slowness is a positive virtue. It is almost inconceivable that knee-jerk measures could be passed; the heat of the moment would never last long enough. Most legislation is carefully considered, often in the light of many years of English experience. 3 Contrast the reforming provisions at s.3 of the Real Property (Succession) (Sark) Law 1999. 4 See vol 1 p 155 et seq. 5 See p 142 et seq. 2
168 The Laws of Guernsey succession as it then stood in about 1920.6 A fine hand-written copy made by Advocate Percy Ozanne survives. So far as legislation is concerned, a succession of nineteenth and early twentieth century laws altered Guernsey’s and Alderney’s laws of succession quite fundamentally and removed some of the grosser inequalities between the sexes; but it was not until 1954 that the droit de préciput 7 was abolished in Guernsey.8 Aids to Navigation Although the Bailiwick’s laws of succession have undergone substantial changes over the centuries there are still common underlying features of customary origin. Identifying and understanding these features provides a helpful overview before attempting to grapple with the detail of the laws taken individually. Each of the laws is biased firmly in favour of the family and each distinguishes between realty and personalty. Whether the succession is testate or intestate a surviving spouse and children have minimum protected rights to fixed proportions of the deceased’s9 estate. These proportions vary across the Bailiwick. The wife will have a protected right of enjoyment of between one-third and one-half of a deceased husband’s realty or its proceeds until (death or) re-marriage and between one-third and one-half of his personalty absolutely depending on whether there are also surviving children (or their issue). The husband will likewise have a protected right of enjoyment of between one-third and 100 per cent10 of a wife’s realty or its proceeds until death or re-marriage and between nothing and one-half of the personalty absolutely. Children11 are given varying degrees of protection by the limits placed upon the freedom to dispose of realty by testamentary disposition. In addition they have a right to between one-third and one-half of the personalty. Beyond these restrictions there is generally testamentary freedom. If there is intestacy there are successive classes of beneficiaries which will be called to inherit in the absence of a surviving member (or surviving issue of the member) in a prior
6 He was called to the Guernsey Bar on 20 January 1908, see the end of Tome V of the Recueil d’Ordonnances. 7 The right of the eldest son to take from his parent’s estate what amounted in practice to the family home and its enclos without giving any credit to his co-heirs. The right still survives for undivided pre-1954 estates, of which there will be very few by now, if any at all. 8 But note how ancient customary notions were; cross-refer for example Art 272 Coutume Reformée and Numbers ch 27 vv 1–11. See for interest only the even more ancient Babylonian Code of Hammurabi dating from c 1750 BC; again one sees a system of feudal tenure, inalienation and successoral supremacy of male descendants over female, albeit without any apparent supremacy of the eldest son over the male siblings. 9 The deceased is still commonly referred to as the de cujus from the Latin de cujus successione agitur or celui dont la succession est pendante, literally (the person) of whom. . . . 10 Because of the survival of franc veuvage in Alderney; see below for an explanation. 11 Legitimate children of a first marriage of the deceased count equally with legitimate children of the deceased from a subsequent marriage. Take special care with illegitimate children, step-children and adopted children in each of the three systems.
Succession Laws of the Bailiwick 169 class. Typically those classes are: descendants, brothers and sisters, ascendants, and other collaterals with some variation of order in the three systems. In all three systems heirs are potentially eligible up to, but excluding, the seventh degree of relation from the deceased calculated by the canonical as opposed to the civil method.12 This sounds complex but is in fact straightforward. By the canonical method you count the number of steps back to the common ancestor from the deceased and from the potential heir. The longest number of steps is the degree of proximity. By the civil method you count the steps up to the common ancestor but also add the amount of steps back down to the prospective heir. Thus if the deceased’s grandfather is the common heir then by the canonical method an uncle is related in the second degree whereas by the civil method he is related in the third degree.13 Representation is generally permitted unless expressly excluded. Representation in this context means that descendants of a pre-deceased heir (or rather once prospective heir) take the share that would have come to the heir had he or she survived. Thus if a deceased has two brothers who are his heirs but one dies the day before the deceased, any issue of the pre-deceased brother will prima facie share what would have been the pre-deceased brother’s share. Guernsey law talks of representation per stirpes or par souches. Note that there is no equivalent of the English Inheritance (Provision for Family and Dependants) Act 1975 in Bailiwick law. The protection given is restricted to the limits imposed upon testamentary freedom in favour of the surviving spouse and descendants. The extent to which those limits will be enforced under modern Bailiwick law, if not respected during the deceased’s lifetime, has yet to be worked out fully. Preliminary Matters There are a number of matters to consider before any one of the three succession laws can be applied to the facts of a given case. You must know whether the asset
12 There is some confusion because certain customary sources suggest that succession is up to and including the 7th degree; see for example the Articles Placités, a 1666 gloss on the revised coûtume of 1583. Article 106 reads as follows: “À faute de parents de la ligne de laquelle sont venus les héritages dans le septième degré, soit paternels ou maternels, ils retournent au fisc ou seigneur féodal, au préjudice du mari et de femme.” Ie in default of relatives in the 7th degree (not the 6th) the property is bona vacantia; it follows that if there are relatives in the 7th degree the assets are not bona vacantia. Article 41 is even more explicit: “on succède en Normandie, jusqu’au septième degré inclusivement”. Whereas Terrien at Book VI, ch II 6 & 7 states “Le Septième degré est hors de tout lignage”. “Likewise it is persuasive that the former alinéa 1 of Article 755 of the Code Civil which dated from 1917 began “Les parents collatéraux au delà du sixième degré ne succèdent pas . . .”. The replacement provision at Article 745 came into force on 1st July 2002 and is to the same effect. The Real Property (Succession) (Sark) Law 1999 also excludes the 7th degree. The better view for Guernsey law is that the 7th degree is excluded. It is very rare indeed that this issue will be tested, given the overwhelming likelihood that an heir will be found within 6 degrees of the de cujus. 13 See p 201 Terrien.
170 The Laws of Guernsey you are concerned with is a meuble or an immeuble. You must know which system or systems14 of law govern the succession, (ie whether one (or possibly more) of the three Bailiwick laws of succession and/or a foreign law). You must know what the estate comprises.
MEUBLES AND IMMEUBLES
The distinction between meubles and immeubles is essential to a proper understanding of the succession laws; in particular for the purpose of identifying the proper law or laws governing the succession. The terms translate literally as movables and immovables. Whether a thing is a meuble or an immeuble accords for the most part with common sense. However, the distinction ought not to be equated with the division made between personalty and realty because the dividing line is not drawn always in the same place. Equally, the similarity of the distinctions is closer in Guernsey law than in English law where, for example, although leasehold interests are personalty for the purposes of domestic law they are treated for conflicts of law purposes as immovables, together with all other interests in English land.15 In Guernsey law leasehold interests are personalty and meubles for all purposes, ie for domestic law and conflicts of law purposes.16 At its basic level an immeuble is immovable by nature, eg a field or a house. By contrast a book is a meuble, together with any other ordinary household content, as opposed to fixture. The distinction becomes more subtle with other types of property. Thus shares are meubles, but notwithstanding the fact that leases are meubles, other meubles can be so closely associated with an immeuble as to be reckoned immeuble also.17 In modern French law one finds not only immeubles par nature but also immeubles par destination, ie by purpose. Take the machines and livestock of a farm by way of example. In French law such objects cannot be seized by a creditor independently of the land they serve. Equally there are other objects which are meubles par anticipation; ie objects which are destined to be detached from an immeuble and are deemed to be meubles from a certain time onwards. All these ideas find their counterpart in Guernsey law. 14
There may be more than one, as we shall see. With the result, as explained further below, that English leasehold interests devolve according to English inheritance law as the lex rei sitae under English private international law; literally the law of the location of the thing (not very snappy and hence the justifiable use of Latin on the grounds, as noted elsewhere, that it is all Greek anyway). The notion of conflicts of law concerns problems that arise when a legal issue crosses jurisdictional boundaries; eg in this context, a person lives and dies in one country but has assets in another where the rules of succession are different to the home jurisdiction. The law relating to conflicts of law, otherwise known as private international law or droit international privé, provides the solution; each jurisdiction has its own notions of private international law, albeit there are international conventions which attempt to harmonise such provisions. 16 The logic is that a lease is a personal right dependant ultimately upon a contract as opposed to a true right of ownership of the land itself. Again see below. 17 And hence the danger of equating meubles and immeubles with personalty and realty; although note that it is a different danger to English law. 15
Succession Laws of the Bailiwick 171 In 1851 the Royal Court sought guidance from the Guernsey Bar as to the distinction in Guernsey law between biens meubles18 and immeubles. The Guernsey Bar responded in January 1852 with what became the Ordonnance des Biens Meubles et Immeubles.19 The first five provisions are as follows: 1 Les Biens sont Meubles ou Immeubles. (Property is either movable or immovable.) 2 Les Meubles suivent la personne, et les Immeubles le territoire. (Movables follow the (law of) the person and Immovables the (law of) the land). 3 Est appelé Immeuble, ce qui ne peut être remué d’un lieu à un autre. (What cannot be moved from one place to another is Immovable.) 4 Sont appelés Meubles ou Chattels, les corps qui peuvent être remués d’un lieu à un autre, soit qu’ils se meuvent par eux-mêmes, comme un cheval, soit qu’ils puissent changer de place que par l’effet d’une force étrangère, comme robe, or, argent, et autres chose inanimes. (Things which can be moved from one place to another, whether because they move by themselves, like a horse, or because they can be moved from place to place by external force, like a dress, gold, silver and other inanimate objects, are Movables or Chattels.) 5 Les Fonds de terre sont Immeubles par leur nature. (Land is Immovable by its very nature.) The rest of the Ordonnance contains provisions stating what is or is not, alternatively what is or is not deemed to be, an immeuble or meuble. Thus every thing incorporated into the soil is an immeuble, whether a house, a cider press, a greenhouse or trees or shrubs, (save in a nursery). By contrast certain crops are deemed to be meubles from set dates of the year. Grapes and carrots are deemed to be meubles from 1 September. Other objects which might be taken for meubles are deemed to be immeubles if used for the exploitation of a premises; these include kitchen tables, window shutters, boilers and manure heaps. The whole Ordonnance has a thoroughly rural flavour reflecting Guernsey’s then economy. In addition certain rights over land were deemed to be immeubles such as usufruits,20 servitudes, and rentes.21 By way of contrast, arrears of rentes were meubles, likewise rent (in the English sense) which had fallen due. Paragraph 21 provides as follows: 21 Est aussi réputé Meuble, le droit qui compète à un Locataire à l’égard des Immeubles qui lui ont été loués. (The right which a tenant has with regard to Immovables which has been let to him is also held to be movable.) Hence leases are movables. 18
“Bien” in this context simply means “property”. Recueil D’Ordonnances Tome III 231. See also Livre 5 Terrien and pp 128 et seq. vol 1 Thomas Le Marchant. 20 Life interests. 21 A form of mortgage. 19
172 The Laws of Guernsey An 1888 Ordonnance made further provisions for tomatoes and potatoes.22
GOVERNING LAW
Of course, while contemplating the mysteries of what is meuble and immeuble you might find that you do not have to consider Guernsey law at all. As noted above, one of the first tasks when dealing with matters of succession is to identify the governing law, which is itself determined by the material jurisdiction’s private international law, a topic which actually eclipses Guernsey’s law of succession in the terror stakes.23 It is here that the accurate distinction between meubles and immeubles is essential. Succession to immeubles will be governed by the law of the jurisdiction(s) where the immeubles are located, ie the lex rei sitae.24 In contrast, succession to meubles is governed by the law of the last domicile of the deceased.25 The succession is also opened in the jurisdiction of the last domicile. It follows that an estate comprising realty in England with a Guernsey resident, but French domiciled, deceased will not concern Guernsey law at all, at least not substantive law. This principle is elegantly reflected in the 1852 Ordonnance referred to above, les meubles suivent la personne, et les immeubles le territoire, which is reinforced by the final paragraph: 22 Sont censées Immeubles, toutes choses situées hors du Bailliage qui sont Immeubles d’aprés la Loi du pays où elles sont situées. (All things situate outside of the Bailiwick which are Immovables according to the Law of the country where it is situate is deemed to be Immovables.) This is a pure conflicts of law provision confirming classification according to the lex rei sitae as regards property located outside of the Bailiwick. This would be particularly relevant to, say, determining the succession to English leasehold interests of a deceased person whose last domicile was Guernsey. The interests would 22
Ordonnance relative aux Biens Meubles Recueil D’Ordonnances Tome IV 299. Especially when studied for the first time in French at the University of Caen commencing halfway through the (Masters) course. Learning curves take on attractive qualities when compared to such an escarpement. 24 Note however that in other contexts a Court may exercise the jurisdiction it has over an individual to make orders in personam concerning foreign land where there are no factual, legal or procedural issues to be determined by the foreign Court; see the case of Ashurst v Pollard [2001] 1 All ER 75. This case concerned bankruptcy proceedings and turned on the proper interpretation of Art 16(1) of the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters 1968. Although the 1968 Convention has not been incorporated into Guernsey domestic law the same principles would most likely be applied, should the opportunity present itself. 25 These principles are common to English, French and Guernsey law. See for example the French cases Stewart, 14 March 1837 Grands arrêts nº 3 and Labedan, 19 June 1939 Grands arrêts nº 18 and generally ch 4 of Bernard Audit, Droit International Privé 2nd edn. See also chs 22 & 27 Dicey and Morris, The Conflict of Laws 13th edn. Domicile would itself be determined according to the law of the Court considering the issue; ie the lex fori or Guernsey law for our purposes. 23
Succession Laws of the Bailiwick 173 devolve according to the English law of inheritance because of the classification made by English private international law, as noted above.26 By contrast, Guernsey leasehold interests will devolve according to the law of the last domicile of the deceased; whether that law is Guernsey law or not. Again note that once Bailiwick law is deemed to apply, the material assets are in fact dealt with according to whether they are personalty or realty.
PROPRES AND ACQUÊTS
Bailiwick law makes a further important, but more alien, property distinction between what are called propres and acquêts.27 There is a third term which may also be met, conquêt. All three words indicate realty or immeuble. A single piece of land or a house might be either a propre, acquêt or conquêt.28 The distinction between the three categories is nothing to do with the land itself but rather its history of ownership. In pure customary law a propre is inherited real property; ie property truly imprinted with the quality of being land belonging to the family and synonymous with another expression, héritage. Land is also a propre if acquired after exercise of the retrait lignager,29 likewise if the land has been given to the putative heir in advance of the owner’s death. In contrast an acquêt is real property acquired by the individual, ie not inherited. Such land has a non-familial quality by reason of this fact. A conquêt was what would otherwise have been an acquêt save for the additional fact of acquisition after marriage. At customary law the rules of succession to conquêts again differed. Fortunately this additional category has no practical consequence in Bailiwick law; we are concerned only with propres and acquêts (whether acquired before or after marriage). An important limitation preventing land from remaining a propre was stated in the Guernsey case of Re Norris.30 Here it was held that property the subject of a specific bequest by will was an acquêt in the hands of the recipient, regardless of the fact that on an intestacy the heir would have received the land as a propre. It is hard to understand the logic as to why this should be so and indeed the new Sark Law has not followed this case. The significance of the distinction between propres and acquêts lies in the different rules governing their devolution upon intestacy in Guernsey and Sark31. Where there are no descendants and no privileged collaterals32 propres are 26 Ie that leases are immovables for such purposes. See old English cases such as Freke v Carbery (1873) LR 16 Eq 461; Duncan v Lawson (1889) 41 Ch D 394 and Pepin v Bruyère [1902] 1 Ch 24. 27 Pronounced “props” and “akays”. 28 Pronounced prop, akay and conkay. 29 The right of a vendor’s relative to step into the shoes of a purchaser of family land within a limited period from the date of sale upon paying to the purchaser the purchase price and his costs; another customary means of family protection. 30 Plaids de Meubles 7 April 1995 noted at [1995] 19 GLJ 55. 31 Alderney has a different mechanism whereby real property is held by the Clerk and prima facie sold with the proceeds being held in orders of priority which still have customary echoes. 32 Ie brothers and sisters and their descendants, who take before parents, except in Alderney.
174 The Laws of Guernsey inherited by an ascendant, ie parent or grandparent or even great-grandparent. Because of the customary attachment to the family and family wealth a propre may only be inherited by ascendants in the line through which the land concerned was itself inherited. Land inherited via the paternal line returns to the paternal line and vice versa. This principle is expressed by the Latin phrase paterna paternis, materna maternis. By contrast, in a Guernsey intestate ascendant succession of acquêts the father is preferred to the mother and the paternal line to the maternal line.33 This is the strongest surviving echo of customary law’s bias towards the male line. The family imperative was all; customary law intended that family land holdings should be kept intact and remain in the same family over generations. Land was regarded as going out of a family if taken by a daughter since the family name could not be preserved if she married. Hence the treatment of propres and the historical preference of the eldest son. This protection extended to acquêts in so far as wealth was to be concentrated in the male line. Such customary principles will not long survive the coming into force of human rights legislation. What Does the Estate Comprise? Assuming one of the Bailiwick laws34 applies and that there are assets to be considered the next question is to determine which of the assets actually fall into the estate. Where there is a surviving spouse these may in fact be very limited, the principal reason being that jointly owned property will very often pass directly into the ownership of the survivor. The principal example is the family home. Guernsey real property may be owned jointly with a right of survivorship or in undivided shares. If property is owned jointly with a right of survivorship the survivor automatically acquires ownership of the whole upon the joint owners’ death. Where property is owned in undivided shares each owner has a distinct interest in the property, albeit undivided. Upon death the share falls into the deceased’s estate. Where there is to be joint survivorship property is conveyed to the survivor and the heirs of such survivor whereas for undivided shares property is accepted for themselves and their respective heirs in undivided (half) shares. Of course it is possible subsequently to sever the joint ownership so that the right of survivorship does not continue, this is particularly important where relationships have ended.35 Other jointly held assets also pass to the survivor without entering the deceased’s estate. Thus household effects purchased during the marriage are generally presumed to be jointly owned and accruing to the survivor, unless there is evidence to the contrary. The whole of the contents of a house might pass in this way unless there are objects of particular value. 33
See Art 13 of the Inheritance Law 1840. More than one of the three laws might apply; for example, if the deceased was domiciled in Guernsey and had land in Sark. 35 See generally on this topic the case of Barclays Bank Plc v Curry (1996) a decision of Sir Graham Dorey, the then Bailiff. See now also the Court of Appeal case of Waterman v McCormack (2002). 34
Succession Laws of the Bailiwick 175 There is express legislation governing deposits in any bank or post office, annuities, sums of money generally, shares, stocks, debentures or other interests standing in the joint names of a husband and wife at the time of the death of either of them. Unless and until the contrary is proved all such assets are deemed to be the absolute property of the survivor.36 The proceeds of a life assurance policy will normally be held on trust for, or be payable directly to, nominated beneficiaries without the policy proceeds ever comprising a part of the deceased’s estate. There is a customary right of the surviving wife to have what is called her paraphernaux.37 Traditionally this comprised the widow’s bed, clothes, linen and personal effects; for example her everyday jewellery. Today this is generally included within property which is owned by the wife independently of the husband,38 alternatively jointly owned property which she acquires by survivorship. The customary right had greater significance when wives had no right to own personalty independently of their husbands. There are substantial assets which may still fall into the estate of the deceased even where there is a surviving spouse. These may comprise the following: any outstanding earnings, any realised inheritance rights of the deceased himself, premium bonds and other investments in the deceased’s sole name, shareholdings in the deceased’s sole name or held on trust for the deceased by nominees, business assets, aircraft, boats, and cars. If there has been a fatal accident the deceased’s estate may have a substantial claim due to the failure to introduce legislation abolishing lost years claims. This is considered in greater detail elsewhere. Having identified what is and is not comprised within the estate there remains the issue of debts and expenses to be considered. It is only net personalty which is distributed to the heirs, save where a specific bequest expressly bears a pre-existing charge of some kind. Administration of Estates An important feature of Guernsey law is the fact that there is no administration as such of the deceased’s realty. The customary principle that le mort saisit le vif 39 still holds good. Ownership of real property passes automatically on death either by operation of law if there is intestacy or according to the terms of any valid will.
36 See the Husband and Wife (Joint Accounts) (Guernsey) Law 1966 and its Alderney equivalent of the same year; Sark adopted the same provisions in 1975. 37 Literally her paraphernalia. 38 The surviving spouse’s own property being the most obvious category of assets not falling into the deceased’s estate. 39 Ie death seises or seizes the living, in the sense that death automatically vests ownership in the heirs as determined by operation of law. Note that the English seize may also be spelt seise from the old French seisir, now saisir.
176 The Laws of Guernsey What administration is required is effected by the executor40 where there is a will and the administrator where there is no will or no surviving or consenting executor. The Guernsey Ecclesiastical Court has jurisdiction for the whole of the Bailiwick to grant letters of probate to an executor and letters of administration to an administrator, (with the will attached if all that is lacking is an executor). The obtaining of probate or letters of administration is relatively straightforward and one of the most efficient aspects of Guernsey’s legal system. The general practice is to give the will, together with death certificate and valuation, to the Registrar. The name and address of the executor or administrator must also be supplied. No evidence is necessarily required in straightforward matters. The Registrar recognises English and French grants of probate and letters of administration without the need for an affidavit concerning the validity of either the will or the grant of administration. The client pays fees to the Court determined on a sliding scale by reference to the value of the estate. The executor/administrator must go to the Ecclesiastical Court at 11.30am on a Friday to take the executor’s or administrator’s oath before the Dean. The Registrar has standard forms of oaths to be sworn by overseas based executors and administrators to avoid the need to attend in person. An attorney administrator may be appointed in Guernsey for a limited purpose where the administration or execution of an estate is largely being carried out overseas; this is typically the case for Guernsey bank deposits of a deceased. Bonds are required to be given by administrators, save where the administrator is a Guernsey resident chartered accountant or an Advocate of the Royal Court. Note that the Ecclesiastical Court is only concerned with assets within its jurisdiction. Separate applications will be required overseas, subject to the requirements of the local law.
PRECONDITIONS FOR THE MAKING OF A VALID WILL
Apart from the specific formal requirements for the making of a valid will under Bailiwick law there are also more general requirements that the maker of the will have the necessary legal and mental capacity to make a will.41 The testator must be at least 18.42 A person is not capable of making a will, (or of revoking a will), unless of sound mind, memory and understanding. His mind must be sound to be capable of forming the testamentary intentions set out in the will. His memory must be sound to remember those persons who ought to be considered as possible 40 Note in particular the Law Relating to Executors and Administrators of 1930 setting out (some of) the duties of an executor or administrator under Guernsey law. 41 See pp 109–110 Jeremie on Real Property 1866. Jeremie also makes a distinction between those for whom a guardian has been appointed on account of drunkenness or prodigality as opposed to habitual imbecility or madness. The former prima facie have testamentary capacity as opposed to the latter. 42 At customary law a son might be “emancipated” prior to attaining the age of majority, typically for specific purposes such as to exercise the right to retrait. Emancipation also took place by operation of law if he married. An emancipated son had testamentary capacity.
Succession Laws of the Bailiwick 177 beneficiaries. His understanding must be sound so that he may comprehend their various ties with him and their claims upon his testamentary bounty.43
FORMAL REQUIREMENTS IN THE ISLAND OF GUERNSEY
By Article 15 of the Loi sur les Successions 1840, as amended, a will of realty must be made separately from a will of personalty. By Article 16 a will of realty must be signed by the testator in the presence of two Jurats of the Royal Court. Both the Jurats must be present at the same time, see Article 1 of the Law on Wills of Realty 1852. By Article 5 of the 1852 Law no person to whom a legacy or bequest is made by a will of real property should be an attesting witness, nor the husband or wife of any such person; otherwise the gift is rendered void. The formalities required for the making of a will of personalty are found in the Law on Wills of Personalty of 1847.44 The 1847 Law permits a will of personalty to be made in one of two forms. The will may be holographic, ie entirely in the handwriting of the testator, but must also be dated and signed at the foot or end by the testator, see article 2. Alternatively a will of personalty must be signed by the testator at the foot or end of the will with the signature written or recognised in the presence of two witnesses who must be both present at the same time and who must, in the presence of the testator and each other, attest the testator’s signature by signing their own names near his at the foot or end of the will.45 There are alternative provisions permitting an illiterate testator to make his mark or even for a signature or mark to be made on his behalf. Article 7 of the 1847 Law again provides that no person to whom any legacy or bequest is made should be an attesting witness nor the husband or wife of any such person or else the gift will be rendered void. Article 16 of the 1840 Law states that a will of realty may be changed or modified at any time by another similar instrument and may be destroyed without any formality by the testator, (subject of course to his state of mind). Article 8 of the 1847 Law provides that if an instrument is used to revoke a will then it must comply with the formalities required of a will itself. Codicils are likewise subject to will formalities.46 Surprisingly, a 14 year-old is competent under Guernsey law to be a witness of a will of personalty.47 In practice one would choose substantially older witnesses. 43 See the English case of Boughton v Knight (1873) LR 3 P&D 64. See generally the recent English case of Fuller v Strum [2002] 2 All ER 87 concerning the burden and standard of proof where a person has been instrumental in procuring a will under which he takes a benefit. 44 Special provision for both wills of personalty and realty of soldiers, sailors, (and airmen), was made by Art 1 of the 1847 Law and the Loi relative aux testaments de militaires et de marins 1919. 45 Art 3. 46 Art 9. 47 Art 6 of the 1847 Law.
178 The Laws of Guernsey By the Execution of Wills (Bailiwick of Guernsey) Law 1994 it is possible to make a will of both realty and personalty if the execution of the will conforms either to the law of the territory where it was executed, or of the territory where the testator was domiciled or had his habitual residence, or of the territory of which he was a national or, as regards realty, the law of the territory where the property is situated. These disjunctive means of validating a will conform with common policy aims of private international law. The 1994 Law applies throughout the Bailiwick. By these provisions it is possible to avoid the prohibition of a combined will of personalty and realty. It is, however, more prudent to comply with the strict formality provisions if at all possible, if only to spare unnecessary litigation of bad points later. There are few areas of law where the adage the simpler the better holds more true than with wills.
FORMAL REQUIREMENTS IN THE ISLAND OF ALDERNEY
By section 12 of the 1841 Alderney version of the 1840 Guernsey Law a will of realty must be made separately from that of personalty.48 By Article 2 of the Law on Wills of Realty 185249 a will of real property drawn up in Alderney must be signed by the testator in the presence of two Jurats of the Court of Alderney, as in Guernsey. Again by Article 5 of the 1852 Law a gift is void if the intended recipient or their husband or wife is an attesting witness. The formal requirements for a will of personalty in Alderney are the same as for Guernsey.
FORMAL REQUIREMENTS IN THE ISLAND OF SARK
By Article 3 of the Law on Wills of Realty 1852 a will of real property drawn up in Sark must be signed by the Sénéschal and Greffier of Sark, both present at the same time.50 These provisions are repeated by section 13 of the Real Property (Succession) (Sark) Law 1999 as regards wills of Sark realty proper. A will of realty made in the Island of Sark must be made in writing and signed by the testator in the presence of the Sénéschal and the Greffier, both present at the same time, who must attest the signature of the testator. The formal requirements for a will of personalty in Sark are the same as for Guernsey. 48
Subject again to the 1994 Law. Which contained provisions affecting Guernsey, Alderney and Sark. 50 Although of course Sark realty itself could not be disposed of by will until the Real Property (Succession) (Sark) Law 1999 came into force. Succession to real property followed customary principles exclusively with total ab intestat forced heirship. The provision is therefore concerned with wills of realty situate off Sark. 49
Succession Laws of the Bailiwick 179
PROFESSIONAL FEES
It is noteworthy that fees payable by the terms of a will to a professional executor or trustee of the will are deemed to be gifts in order to avoid the ban imposed by Article 1 of the Law Relating to Executors and Administrators of 1930.51 A partner of the firm concerned should not therefore witness the will. Typically a clerk or secretary will witness the instrument.
GUERNSEY TESTATE SUCCESSION
Realty Under Guernsey law there is prima facie testamentary freedom as regards realty. That right is circumscribed whenever there is a surviving spouse or descendants. The principal Law is the Law of Inheritance 1954 and opens by abolishing a number of ancient rights, namely the droit de préciput, the droit de douaire, the droit de franc veuvage and the droit d’aînesse. The droit de préciput was the right of the eldest son (or his eldest son) to take a first portion of a parent’s estate without having to make any recompense to his coheirs. A préciput could be taken from both the estates of the mother and the father, but credit would then have to be given to the co-heirs for the value of the first préciput, (the eldest son of an eldest pre-deceased son was permitted to represent his late father to exercise these rights also). Typically the eldest son would take the family home as his préciput; ie the most valuable portion of the estate. The préciput comprised an amount of land of between 14 and 22 perches;52 the eldest son traditionally planted a stake in the location where he wished to take his préciput53 with the responsibility then falling upon the Douzeniers to determine the composition of the préciput; ie precisely how many perches were to be given, which outbuildings and the like. The préciput could not extend beyond a single enclosure. If the enclosure was less than 14 perches there was prima facie no additional entitlement. What was a single enclosure was a question of fact; fields linked by gaps in hedges or banks would form one enclosure. If the préciput was exercised over the family home then by custom the stables and farm buildings would go with it, wherever situate. The préciput was taken free of charges; if there were outstanding rentes the value of these would have to be made up to the eldest son out of the rest of the estate. It is important to note that the préciput was a right in addition to the 51 “L’Exécuteur du testament d’une personne décédée et l’administrateur de la succession avec ou sans testament d’une personne décédée respectivement n’aura aucun droit à titre d’exécuteur ou d’administrateur de faire appropriation à son profit personnel des biens de la succession de telle personne décédée ni des fruits, profits ou revenus d’icelle, mais aura droit seulement aux bénéfices et avantages dont il pourra être légataire par disposition testamentaire en sa faveur.” 52 17 in Alderney. 53 Presumably not through the living room rug.
180 The Laws of Guernsey eldest son’s right to share the balance of the estate equally with the other (male) heirs. The eldest son could take the whole estate if it formed a single enclosure, although giving credit for the excess of value over the préciput. By contrast, if the préciput did not amount to one-third of the realty the eldest son was entitled to additional land to make up the difference. This extra land would be allotted by the Douzeniers and the value brought into account. The Douzeniers were themselves appointed on application being made to the Royal Court by the eldest son. There was a right of appeal from the actions of the Douzeniers, but only for errors of law. The right of préciput still survives54 where the deceased died before the 1954 Law came into force and no partage (division) of the estate has taken place between the heirs; eg because a then young widow was given a life enjoyment over the whole and has not yet died. The droit d’aînesse comprised rights of eldership to administer the estate pending division (partage); additional rights such as the vingtième and septième had already been abolished. The first of the restrictions upon testamentary freedom is set out at section 3 of the 1954 Law. A surviving spouse is entitled to the “enjoyment until re-marriage”55 of one half of the real estate of the deceased spouse which remains after payment of the debts and funeral expenses which have not been satisfied out of the personal estate. The section is curiously worded in that there is no mention of death, although the provision is universally understood to mean that a life interest is conferred, terminating on earlier re-marriage.56 This protection replaced its customary precursor in the droit de douaire and franc veuvage.57 By section 4(1) (which is made expressly subject to section 3) it is declared to be lawful for every person to dispose testamentarily of any interest he has in real estate save that a person leaving descendants must exercise his testamentary powers in favour of any one or more of the following: his surviving spouse, his descendants, his illegitimate children and their descendants, his step-children and their descendants and the illegitimate children of his descendants, of his illegitimate children or of his step-children. These last categories were inserted by the Law of Inheritance (Guernsey) Law 197958 and permit the illegitimate offspring of legitimate or illegitimate children or step-children to be the objects of gifts of realty. There is testamentary freedom across these broad categories. It follows that you could leave all your realty (subject to the surviving spouse’s interest) to the illegitimate child of your step-child and to the exclusion of your legitimate child. 54 55
Albeit mostly in the form of exam questions. Not many widows of intestates will re-marry as a consequence, unless the deceased’s estate is pal-
try. 56 There is an obsolete provision permitting the spouse to enjoy property with an annual (rental) value of £100 regardless of the proportion this bears to the whole of the real estate. Rent inflation has long eclipsed such figures. The sums were not intended to refer to Cadastre values. 57 Douaire being the customary right of a widow and franc veuvage that of a widower to an interest in the deceased spouse’s realty. Typically the wife’s interest would be a ⅓ life interest. By contrast the husband would be entitled to a 100% interest in the realty, reducing to ⅓ if he re-married, but with a pre-condition that a child of the relationship should have been born alive, (no matter how short-lived). 58 Which does not, as we shall see, extend to Sark.
Succession Laws of the Bailiwick 181 Equally, no realty can be left outside of these groups where there are descendants; thus realty could not be left to a brother or parent. Section 4(2) provides for representation per stirpes 59 where the intended heir has left issue but pre-deceased the testator, but only in the absence of a contrary provision in the will. In summary, a person with no surviving spouse and no descendants has complete testamentary freedom as to realty. A surviving spouse has a protected right of enjoyment of one-half of the deceased’s realty until re-marriage or death. If there are descendants the Law requires that the realty be left to one or more heirs drawn from a restricted class comprising chiefly the surviving spouse and descendants, whether legitimate or not, and step-children and their descendants. Personalty There is likewise prima facie freedom under Guernsey law to make a will disposing of personalty. However, that freedom is again subject to protected rights of inheritance given by law to a surviving spouse and any legitimate children of the de cujus. The right of the surviving spouse is called the droit du conjoint and the right of the surviving children the légitime. The principal Law is the Loi Relative à la Portion Disponible des Biens Meubles des Pères et Mères 1930.60 If the deceased leaves a surviving spouse, any child or children of the deceased are entitled absolutely between them to one-third of the personal estate. If there is no surviving spouse the children’s entitlement is one-half. It follows that where there are surviving children the right of the surviving spouse is one-third and onehalf if there are none. A common feature of Bailiwick law is the ability of the spouse to renounce any legal entitlement over the estate of the other, whether by initial marriage contract or subsequently.61 The renounced portion is added to the freely disposable portion. All such rights of the spouse are extinguished with the making of a final order of divorce in any event.62 By Article 5 of the 1930 Law the definition of children is extended to descendants in whatever degree (in practice unlikely to extend much beyond grandchildren) with the proviso that such descendants are considered only in respect of the child they represent in the succession (to personalty), ie per stirpes.63 In order to permit illegitimate and step-children to share in the légitime the Law of Inheritance (Guernsey) Law 1979 allows a testator in his will of personalty to 59 Ie where there are children they may represent the deceased parent in the succession; they will share equally the entitlement of their parent. 60 Translated as the Law Relating to the Disposable Portion of Fathers’ and Mothers’ Personalty. 61 Most commonly where a decree of Judicial Separation is obtained by consent. 62 Care is required in the period between a provisional and final order of divorce; it is generally prudent to seek a renunciation of succession rights depending upon the parties’ circumstances. The same concerns require the early severing of property interests held jointly with a right of survivorship. 63 Thus the grandchildren share equally a predeceased parent’s entitlement to a share in the légitime of a grandparent’s estate. Children of an earlier marriage of the deceased share equally with children of a subsequent marriage; they are all descendants, see again Art 5 of the 1930 Law.
182 The Laws of Guernsey direct that any step-child or illegitimate child of his or of his child shall be treated for the purposes of the 1930 Law as a child born in lawful wedlock. By the Loi Supplémentaire à la Loi des Successions 1889 parents may provide by their will that the légitime of all or any of their children be held on trust for the child or children concerned. The trust may permit a life interest, but upon the death of the child the capital must be disposed of as if it had not been placed in trust, ie according to the provisions of the child’s will or the rules of intestacy. There are no restrictions on the ability of a testator to make a trust of the freely disposable portion of personalty, (which will amount to one-half of his personalty if there is no surviving spouse but only children). Subject to the above there is testamentary freedom as to personalty.
GUERNSEY INTESTATE SUCCESSION
Realty If the deceased leaves no valid will he is intestate.64 The law determines the heirs in place of the de cujus. The principle that le mort saisit le vif has the clearest application where there is intestacy; the realty of the de cujus vests automatically upon death in the heirs selected by law. It follows that the critical date is the date of death of the deceased.65 It is by reference to this day that a successoral dispute is determined.66 It is here also that the distinction between propres and acquêts has meaning. What protected rights there are in testamentary succession are reflected by positive grants of the same rights in intestate succession, whether as to realty or personalty. Thus the rights of the heirs on intestacy are again subject to the right of any surviving spouse to enjoy one-half of the realty until the earlier of either their death or re-marriage; see again section 3 of the 1954 Law. The surviving spouse may exercise this right over whatever one half portion of the realty he or she may reasonably choose. The right is akin to a life interest or usufruit which will be determined earlier if the spouse re-marries. It follows that the whole of the legal title to the realty vests immediately in the heirs at law, even if they will not have full enjoyment of the property until one or other of the determining events. It is important to note from the outset that illegitimate descendants are excluded from intestate succession in Guernsey.67 Although the deceased may leave all of his realty to an illegitimate child (subject to any surviving spouse’s interest) the same child would receive nothing if no valid will was made, even if he were the only descendant of the deceased. 64
There may also be partial intestacy; eg because of an invalid disposition. This is true for all three Bailiwick laws of succession whether the succession is testate or intestate, although with lesser significance in Alderney given the nature of the system there. 66 Eg to establish whether property vested in an heir who has also died. If representation is not permitted the answer will be of fundamental importance to determining the true heirs. 67 Both as to realty and personalty. A popular examination trap which the author fell head first into. 65
Succession Laws of the Bailiwick 183 The heirs at law are identified according to whether or not they are members of pre-determined classes. These classes are themselves ranked according to the order in which the class membership is “called” to the succession; although within each class there is equality of rights.68 In Guernsey succession the classes are as follows, starting with the highest and ending with the lowest ranked class, ie that with the slenderest chance of inheriting: 1 2 3 4
Descendants; (children, grandchildren and remoter issue); Privileged collaterals; (brothers and sisters of the deceased); Ascendants; (parents and grandparents of the deceased); Other collaterals up to, but excluding, the seventh degree; (cousins and more distant relatives generally).
The general scheme is that where one or more member of a class survives all lower classes are excluded from the succession. Within a class representation is usually permitted.69 Thus where a deceased leaves surviving legitimate issue there are members of class 1 and nobody from classes 2, 3 or 4 will inherit. Within class 1 representation is permitted per stirpes and à l’infini, ie without limitation. Likewise there is no distinction drawn between propres and acquêts. Both pass to the descendants per stirpes à l’infini. No distinction is made between male and female offspring.70 Equal shares are taken in parity of degree. This principle applies also between full and half siblings where it is the common parent who is the deceased; see generally Article 2 of the 1840 Law. No distinction is made between propres and acquêts in this context because the ancient customary imperative is fulfilled. The property remains within the immediate descending family. Ancient preferences in favour of the eldest son and males generally have (all but) been abolished. An exception is that by section 5 of the 1954 Law, where real (or personal) estate devolves in direct succession lots are chosen according to seniority, first by sons and then by daughters, with the lots being made by the heir last entitled to take, (ie the youngest daughter71). Where there are no descendants the next class called to the succession comprises brothers and sisters of the deceased. Here the distinction between propres and acquêts is relevant. Representation per stirpes à l’infini is again permitted for propres. It is also permitted for acquêts (and personalty) but only where the descendants of the pre-deceased heir share with a surviving uncle or aunt. In any other circumstance it is the next of kin who take in equal shares in parity of degree. In other words the succession is per capita and not per stirpes where acquêts (and personalty) are concerned, unless an aunt or uncle survives. 68
With limited exceptions for acquêts, as we shall see. Ie the descendants of a pre-deceased class member share his interest. 70 When Advocate Foote wrote in the early part of the 20th century male heirs were entitled to take as much as twice the share of the female heirs, and this after the eldest had taken his préciput. 71 Note the shrewd balance struck by customary law. If the last to choose determines the composition of the lots they are most likely to be equal. 69
184 The Laws of Guernsey Take the following example: Rollon ———— William ———— Richard ———— Robert (de cujus) (deceased) (deceased) (alive) | | | | | | Mathilda Eleanor Harold Stig
Rollon is the de cujus, ie the person with whose succession we are concerned. He has died leaving one surviving brother and four nephews and nieces. His two other brothers have pre-deceased him. If Rollon leaves 30 equal plots of inherited land (ie propres72) and has no descendants Robert is the only survivor of the brothers and sisters class, ie the next class in rank. However, each of William and Richard have left surviving issue who represent them in the succession and who will share what would have been inherited by their respective parents, had they survived. Accordingly 10 plots will go to Richard and five each to Mathilda, Eleanor, Harold and Stig. The example is of course fanciful but the numbers convenient to demonstrate the principles involved. If the 30 plots were acquêts the result would be exactly the same if Robert survived Rollon. If however we vary the example as follows: Rollon ———— William ———— Richard ———— Robert (de cujus) (deceased) (deceased) (deceased) | | | | | | | | Mathilda Eleanor Harold Stig Stephen
Here there are no surviving brothers and sisters of the de cujus. Accordingly there is no representation for acquêts. There is a single class of heirs comprising the sons and daughters of the deceased’s siblings; these constitute jointly the next of kin and each takes an equal per capita share. Each is an heir de son propre chef ie in his own right. If Stephen had also pre-deceased Rollon but had left a son, (greatnephew to Rollon), that son would inherit nothing if any of his Uncles and Aunts had survived Rollon; they would take in equal shares as the closest next of kin to the exclusion of the great-nephew. The relevant statutory provisions are found at Articles 11 and 12 of the 1840 Succession Law and are as follows: Article 11: In collateral successions to propres, or real property inherited, neither males nor their descendants shall exclude females or their descendants; but the relatives of both sexes belonging to the line whence the property descends shall divide the estate by branches (per stirpes), in the same proportions as in successions in the direct line. 72
Not received by the de cujus as specific bequests, see Norris.
Succession Laws of the Bailiwick 185 Article 12: In collateral successions to personal property acquêts and conquêts and purchased real property, neither males nor their descendants shall exclude females nor their descendants in parity of degree; but the nearest of kin to the deceased, in parity of degree, both males and females, shall share the property in the same proportions as property of this nature, whether personal or real, would be shared in successions in the direct line; and representation of degree shall be allowed when descendants of a brother or sister of a deceased shall come to the succession with his other brothers and sisters, and not otherwise; in which case the said descendants shall sub-divide among themselves, in the same manner, that portion of the succession which would have fallen to their ascendant, had he or she been alive. If there are no brothers or sisters or descendants of brothers or sisters ascendants are called next to the succession, ie the third class identified above. An ascendant can only inherit from the last of his or her descendants. Ascendants are defined as those from whom the deceased is descended; eg a mother is the ascendant of her son. Again the distinction between propres and acquêts is made. Propres return to ascendants in the line from which they came; ie paterna paternis, materna maternis. In other words real estate inherited from the mother or maternal line will return to the mother and vice versa. By contrast where there are acquêts the father is preferred to the mother and the paternal line to the maternal line in parity of degree. This is, as noted, the most blatant survival of ancient customary principles favouring the male line to the exclusion of the female but applies only in parity of degree. If the father is dead a surviving mother will take the acquêts. Where there are no surviving ascendants the fourth and final class comprises other collaterals. Propres again return to the side of the family from which they came. Acquêts pass this time to the next of kin, whether in the maternal line or the paternal line, in parity of degree (ie regardless of sex, see Article 12). Collaterals are permitted to take up to, but excluding, the seventh degree. Again the closest surviving collateral (or his descendant, where representation is permitted, as for propres) takes, sharing equally with those in parity of degree. Where no heir is found within the permitted degree the property is bona vacantia and goes to the Crown.
Personalty If there is an intestacy of personalty the droit du conjoint and légitime again operate to confer rights upon the surviving spouse and surviving legitimate children (only). The minimum entitlement protected by the légitime is also an entitlement upon intestacy in the same way as the surviving spouse’s one half entitlement to enjoy the deceased’s realty is protected whether there is a will or not. The surviving spouse will take one-third of the personalty absolutely if there are descendants and one-half if there are none.
186 The Laws of Guernsey The extra subtlety on intestacy is that the descendants take both their légitime and the residue of personalty by default because of the intestacy. It follows that they take two-thirds if there is a surviving spouse and everything if there is none. In each case they take in equal shares with representation per stirpes. If there are no descendants a surviving spouse will still take one-half of the personalty absolutely but the balance will go to the next of kin following the same rules as for intestate succession to acquêts, (ie representation only where sharing with a surviving sibling of the deceased and preference of the male line where there is parity of degree in ascendant succession).73 Property again goes to the Crown if there is no heir within the permitted degree, ie up to but excluding the seventh degree. Illegitimate descendants are again excluded from the succession. Dying Intestate Under Guernsey Law It is unlikely that the Guernsey rules of intestate succession accord with any individual’s conception of how they would wish their estate to devolve, particularly the limitation of a surviving spouse’s right to one-half of personalty where there is no issue of the relationship. The importance of making wills when domiciled in Guernsey or the owner of Guernsey realty cannot be over-emphasised.
ALDERNEY TESTATE SUCCESSION
Realty What should be becoming a familiar pattern holds good in Alderney law also. As in Guernsey there is prima facie testamentary freedom to dispose of land subject to the protected rights of the surviving spouse. There is in fact greater freedom because, save for this protected right, the testator may leave realty to whomsoever he pleases.74 The key provisions are found at section 56 and following of the Alderney Land and Property etc. Law 1949. Amongst other things the Law provided for the re-establishment of boundaries after the end of the German occupation and the creation of the Alderney Land Register. Section 56(1) reads as follows: “If a person who dies . . . has made a will disposing of real property, that will subject to any right of dower or franc veuvage shall if otherwise valid take effect notwithstanding that the said person is survived by persons to whom the said property would have passed under the law hitherto in force.” 73
See again Art 12 of the 1840 Law. No one questions why subjects in Alderney should have greater testamentary freedom than subjects in Guernsey. 74
Succession Laws of the Bailiwick 187 Testamentary freedom as regards realty is therefore subject to the surviving spouse’s dower (douaire in French) if female or right of franc veuvage if male. The douaire is the customary law right of a surviving widow to enjoy a lifetime interest over a portion of her husband’s realty. The Norman douaire comprises a usufruit over one-third of the biens immeubles of which the husband was possessed at the time of their marriage and of those immeubles which have since come to the husband in direct line of descent. The one-third right would seem also to extend to acquêts today. By marriage contract an express agreement could (and most likely still can) be made that the wife should have a douaire of less than onethird. The right itself was only acquired once the wife had slept with her husband: “Au coucher ensemble gagne femme son douaire selon la Coutume de Normandie”, explains the Grand Coutumier. This usufruit of a third was a right in rem, ie it attached to the land itself. If the husband sold or otherwise disposed of land to which the douaire attached the wife could claim her usufruit over that land upon the husband’s death regardless. The widow was entitled to bring an action called the “bref de douaire encombré ”. This principle still applies today and is the reason why a wife is required by a purchaser to join in the sale of a husband’s land by renouncing whatever rights she might have in respect of the land, whether present or future. There is express power for the wife (or widower) to surrender these rights, see section 56(2)(a) of the 1949 Law. The right of franc veuvage is the customary right of the surviving widower to enjoy a lifetime interest in all of his wife’s realty. The pre-condition to obtaining this right was (and still is) that his wife should have had a child born alive, no matter how briefly or how deformed.75 His wife must have been a “femme de qui il ait eu enfant qui ait esté ney vif, jà soit ce qu’il ne vive . . .”, (Coutume rédigée, art. 382). By contrast to the life interest given by the douaire the droit de franc veuvage does not survive re-marriage.76 In summary the protected right is a life interest in one-third of the husband’s realty to a surviving wife and an interest until death or re-marriage in all of the wife’s realty to a surviving husband. The inequality is, of course, indefensible today. Personalty By a curious legislative quirk there are inequalities working in the opposite direction in the context of Alderney personalty. A 1928 Law77 had given a married woman the right (for the first time) to acquire and dispose of property as if she 75 Whether Alderney law would follow the 18th century development in Norman customary law whereby a child born after the usual period of gestation would be presumed born alive without the need for a cry to be heard by witnesses remains to be seen, albeit not with very great excitement. 76 Again there is some debate. At customary law there is authority to suggest that the widower’s interest was reduced to a one third interest if he re-married. Note though that the 1949 Law appears to be clear in the context of intestacy that the widower’s right comes to an end on remarriage. 77 The Married Women’s Property Law 1928 Tome VIII p 213.
188 The Laws of Guernsey were unmarried and of full age, (ie rights equivalent to those of a man whether married or not). This Law extended only to Guernsey. As a result an earlier 1872 succession Law was repealed and replaced by the Guernsey Loi Relative à la Portion Disponible des Biens Meubles des Pères et Mères 1930 which again did not apply to Alderney. Alderney, left somewhat in a limbo, re-enacted the 1872 provisions in 1930, but when Alderney finally gave women the same 1928 rights78 it did not also amend its 1872/1930 legislation. The unlooked for consequence is that the husband now has no rights over the personalty of his wife regardless of whether there are descendants. The background to the 1872 legislation was that married women owned no personalty in their own right. They had a very limited legal personality and all personalty was owned by the husband. Accordingly he needed no right over his wife’s personalty when she died, it was all his anyway. This was the lacuna addressed in the Guernsey Law of 1930. It follows that in Alderney the surviving wife has a protected absolute entitlement to one-half of the personalty of her deceased husband where there are no descendants of the husband. In the presence of descendants her right is reduced to one-third. A surviving husband has no intestate entitlement to his deceased wife’s personalty at all. Descendants have an absolute entitlement to one-half of the personalty if the surviving spouse is male and one-third if the surviving spouse is female.79 Beyond these rights there is testamentary freedom of personalty in Alderney. Thus if a married couple have surviving issue a wife can leave half of her personalty to her husband, but only half whereas a husband may leave two-thirds to his wife. In Alderney law there exists the same right to make a trust of a child’s légitime as in Guernsey law.80 The 1979 Guernsey Law was not extended to Alderney. Accordingly it is not possible to direct that illegitimate children or step-children may share in the légitime and who therefore remain excluded. The disposable portion of an estate may be used to balance any perceived injustice through the forced heirship provisions.81
ALDERNEY INTESTATE SUCCESSION
Realty Alderney intestate succession to realty is a sanitised version of the Guernsey model. The relevant provisions are found from section 57 onwards of the 1949 Law. 78
By s 55 of the 1949 Law. Ie descendants always have a right to not less than one half of the mother’s estate, but either ⅓ or ½ of the father’s estate depending upon the survival or not of a spouse. 80 See la Loi Supplementaire à la Loi des Successions 1893. 81 This is true of all three systems, to the extent that it may be necessary to do so. 79
Succession Laws of the Bailiwick 189 If a person dies intestate, whether wholly or partly, in Alderney his (intestate) realty vests forthwith in the Clerk of the Court. Lucky clerk, one might think, but there is more to this surprising turn of events. In essence the Clerk holds the land as trustee pending its eventual sale; meanwhile he has powers of administration and management over the land under the Court’s direction, (s 57(4)). Prima facie the Clerk is to sell the land within 12 months of the deceased’s death unless the Court otherwise directs. For example, there is power for the Court to order the transfer of land to individual or group applicants from among those entitled upon the intestacy. There might be a desire to keep, say, a farm in family ownership or some other good reason why the land should not be sold. A sole prospective heir aged twenty or above is entitled to have the land transferred to him or her if he or she applies to that effect; see generally section 57(2). Assuming that there is a sale the Clerk is required to deal with the proceeds in the manner set out in sections 58 to 64 of the 1949 Law. If there is only a surviving widow or widower and no other potential beneficiary under the Law the whole proceeds will be transferred to that survivor absolutely. If there are other prospective heirs besides the surviving spouse rights equivalent to the douaire and franc veuvage have effect. The Clerk must invest one-third of the proceeds and pay the income for life to the surviving widow. He may distribute the balance immediately. If there is a surviving widower the Clerk must keep the whole of the proceeds invested and pay the whole of the income to the widower until the earlier of his re-marriage or death.82 Subject to the above rights83 the proceeds of sale are distributed to the intestate’s legitimate children,84 with representation permitted per stirpes. If the intestate has left no surviving spouse and no descendants the proceeds are paid to the parent or parents of the intestate.85 If there are two surviving parents the proceeds are divided equally. If the intestate has left no spouse or descendants or parents the proceeds go to brothers and sisters of the whole blood with representation per stirpes. In the absence of siblings of the whole blood the proceeds go to siblings of the half-blood with representation again permitted per stirpes. The next category is surviving grandparents and then great-grandparents, (sharing equally in each group). The final categories comprise uncles and aunts of the whole blood and then uncles and aunts of the half-blood, all permitting representation. In default of any of the above the proceeds go to the Crown. It should be noted that there is no rôle for the distinction between acquêts and propres in the Alderney law of succession. 82
Not that one can re-marry after death, even in Alderney. Even if there is a surviving spouse this serves only to delay the distribution of the third or whole, as the case may be, to the same heirs. 84 See the definition of “child” at s 54. 85 Note the higher priority of parents in Alderney intestate succession to realty, but, it would seem, only to realty. 83
190 The Laws of Guernsey Personalty The surviving spouse and descendants have the same absolute rights to personalty as if the intestate had left a will. The freely disposable portion would devolve in the same way as under the Guernsey law of intestacy of personalty, with the exception of the husband’s limited rights under Alderney law. Thus if an intestate woman left a husband and a son the husband would take no part of the personalty. The son would take one-half by reason of his légitime and one-half by reason of his membership of the first class of beneficiaries upon intestacy; ie descendants. The husband cannot inherit the wife’s personalty if she is intestate. The effect of this is of course mitigated by the husband’s right of survivorship to jointly owned assets. The illegitimate child again has no rights on intestacy under Alderney law, whether as to realty or personalty.
SARK SUCCESSION
Realty Sark’s law of succession to realty remained the most faithful to Customary law.86 Until January 2000 a valid will of Sark realty could not be made at all. Succession to Sark realty was entirely ab intestat87 and determined by the provisions of untempered customary law. Thus the droit de douaire and droit de franc veuvage survived with all their customary vigour. The indivisibility of property was absolute to the point where even the provisions of the coûtume were exceeded; for example, where there were only daughters and a single tenement the eldest daughter would take all to the exclusion of the others. The customary distinction between propres and acquêts was maintained in ascendant or collateral succession. The coûtume’s rigorous preference of males and exclusion of illegitimates also prevailed. Inevitably all of this led to attempts to avoid the law through the use of devices such as leases.88 There has now been a substantial reform of Sark law governing the inheritance of realty in the form of the Real Property (Succession) (Sark) Law 1999.89 The Law is thoroughly sympathetic to the customary origins of Sark’s succession law whilst removing the injustices perceived by people of today; these comprise principally the enforced preference of the eldest male, the exclusion of illegitimates and the unequal treatment of females. The main provisions of the legislation are as follows: 86
And arguably still remains the most faithful. Without testament; ie forced heirship by operation of law alone. 88 With success in the case of Surcouf v de Carteret, a 1999 judgment of the Bailiff on appeal from the Sénéschal. The case is now the leading case on the subject of Sark leases; see the section on Landlord and Tenant Law. It is sufficient to say here that, prima facie, a lease of Sark realty is effective in law. 89 Drafted by Advocate JN van Leuven of Ozannes, HM Procureur from 7 October 2002. The law came into force on 17 January 2000. 87
Succession Laws of the Bailiwick 191 s 1:
ss 2 & 3: s 4:
ss 5 to 7:
s 8:
Tenements90 and Freeholds remain impartable and undivided. (The Law talks of “property” which is defined as a tenement or freehold.) This provision preserves the customary imperative of avoiding excessive division of land-holdings, particularly important in an island the size of Sark. Any rule of law or custom preferring a male, legitimate or nonadopted person is abolished. This provides (by reference to the Law’s schedule) new rules for intestate succession to the Sark realty of a person dying after the commencement of the Law. A person with descendants may now by will give a property to any one person amongst his descendants. Descendants are defined as children and remoter issue through all degrees, and includes illegitimate and adopted descendants.91 A person with descendants who owns more than one property may, by will, give all or any one or more of the properties to any one descendant; ie five properties could go to one descendant or one each to each of the five or any combination of properties to one or more descendants, again without dividing a single property, see s 6. Where a person has no descendant he may by will give a property to any one natural person, or all or any one or more of the properties he owns (if more than one) to any one natural person, ie in combinations akin to s 6, again without division of a single property, see s 7. A person without descendants who owns one or more properties may, by will, give all or any one or more of the properties to a person to be held on trust for sale and may direct that the net proceeds of sale be paid or applied to or for the benefit of any identifiable persons, (whether by name or by reference to a class or relationship). Charitable objects and charitable purposes fall within the meaning of persons within this provision. By these means the descendantless owner of Sark realty can avoid collateral or even ascendant succession to his realty. He can benefit such persons or charitable objects as he pleases, albeit only out of the net proceeds of sale (at least in the longer term) and without dividing the property. A trustee of such a trust for sale may postpone, but must not delay unreasonably, the sale of the trust property. Pending sale, and without prejudice to his other powers and duties, the trustee for sale may let the trust property. The trustee of a tenement held on trust for sale does not have a right to sit in Chief Pleas.
90 Ie the parcels of land into which Sark was divided when the land was granted to Helier de Carteret in 1565 following a turbulent period of nearly 200 years during which Sark was either unpopulated altogether or the base for pirates, smugglers and other ne’er-do-wells. 91 There is no reference to step-children; although step-children may, in appropriate circumstances, be adopted.
192 The Laws of Guernsey
s 9:
s 10:
s 11:
s 12:
The trustee has express duties to act in the utmost good faith en bon père de famille, in accordance with the terms of the trust and only in the interests of the beneficiaries, (s 8(9)). Applications to the Court in respect of the trust may be made by the Law Officers, a trustee, a beneficiary or any other person with leave. It follows that the ownership of Sark realty by a trustee is only intended to be a temporary state of affairs pending sale and the application of the net proceeds in accordance with the terms of the will trust. It is interesting to note that the 1999 Law may continue to govern such a trust even after sale, if only through the express powers given by s.8(14) to make orders in respect of the trust. Note however that the Law refers only to a trust for sale; which, taken literally, it ceases to be after sale. This rather roundabout provision states that a gift by will of realty is not invalidated by the fact that the will also makes a gift of personalty. This is to avoid the Guernsey law obstacle in the 1840 Law which was itself largely obviated by the 1994 Law, see above. The droit de douaire and droit de franc veuvage are abolished, but not retrospectively if the spouse concerned died before the 2000 Law came into force. It follows that rights acquired before the Law came into force are unaffected and vice versa. This gives a new right to the surviving spouse of a lifetime92 enjoyment of one-third of the property of the deceased spouse. This may be exercised over such part of the property as the survivor may reasonably select. Conditions may be imposed by the deceased’s will concerning repair, maintenance and insurance. This confers power upon the Court to make such order as it thinks fit in the event of a dispute between the surviving spouse and the owner of the property. Sark law therefore provides an effective means of resolving issues between the surviving spouse and the remaindermen. Existing Guernsey law governing the relationship between a usufruitier93 and nu-propriétaire (remainderman, literally bare owner) is based on modern French law and provides no adequate remedy for a usufruitier against a defaulting nupropriétaire.94
92 Thus permitting Sark widowers to re-marry without losing their rights over a former spouse’s realty, unlike in Alderney. 93 A French legal term formed from the two Latin words usus and fructus, literally the right to use the fruit (of a land-holding). A usufruit typically takes the form of a life interest, although one may also be granted for a fixed term contractually. The usufruitier has no right of abusus, ie the right to dispose of the property itself or to use it up. This last is the preserve of the owner of the land. All three facets of ownership are united in the absolute owner free of any lesser interest. 94 See the section on usufruit within the chapter on realty and leases for a more detailed discussion of the problems in this area.
Succession Laws of the Bailiwick 193 s 15:
This section gives power to Chief Pleas to make ordinances amending various provisions of the Law. Notable amongst these is the power to extend the class of persons in s.6 to include the spouse as a person to whom Sark property may be willed where there are descendants. This (for Sark) radical proposal may yet be adopted. The existing Law is, perhaps, vulnerable to challenge under the European Convention of Human Rights.95 Everywhere else in the Bailiwick realty may be left to a spouse, regardless of the existence of descendants. Chief Pleas may also increase the proportion of realty to which the surviving spouse’s usufruit attaches96 and amend or repeal any of the intestacy provisions. ss 16 & 17: These sections are unrelated to the principal subject matter of the Law and confer powers on the Court of the Sénéschal to make rules of procedure and evidence together with rules providing for Court fees. These powers are subject to the oversight of the Royal Court Guernsey. In any event the costs of and incidental to all proceedings are expressly in the discretion of the Court.
It is important to note that when the Law says what one may do as regards making a will of Sark realty a restriction is in fact implicit. Where there are descendants you may only dispose of Sark property by will in accordance with section 6. Where there are no descendants you may only dispose of property by will in accordance with sections 7 or 8. The schedule setting out the rules of intestate succession to real property in Sark can be summarised as follows: Property vests in the heir on the death of the deceased, (paragraph 1). For a person to inherit he must be alive, which includes a child en ventre sa mère who, when born, must be capable of living, (para 3). Inheritance is allowed up to, but not including, the seventh degree of relationship calculated in the familiar canonical way, (para 4). Siblings of half blood rank equally with siblings of the whole blood in parity of degree. Siblings of the half blood with a common father rank equally with siblings of the half blood with a common mother in parity of degree, (para 5). Descendants of females rank equally with descendants of males in parity of degree, (para 6). In succession to property representation is always allowed, (para 7), subject to the pre-deceased and the representative qualifying in their own rights as heirs. The potential classes of heirs are defined in descending rank of priority. Class one comprises descendants; class two is privileged collaterals comprising the 95 Art 1 of the First Protocol states that every natural person is entitled to the peaceful enjoyment of his possessions. Arguably this would entitle you to dispose of property as you pleased, subject to moral obligations to maintain reflected in the United Kingdom’s Inheritance (Provisions for Family and Dependants) Act 1975. But note that forced heirship is a common feature of continental legal systems; it is very unlikely that a successful challenge could be mounted against forced heirship per se. 96 Eg from ⅓ to ½.
194 The Laws of Guernsey brothers and sisters of the deceased and their descendants; class three is ascendants, comprising those from whom the deceased is descended and class four is remaining collaterals. A person is not to be excluded from a class by reason only that he is illegitimate or adopted. A person in class two, three or four cannot inherit when there is a person in any preceding class who is capable of inheriting, (para 10). The general rule in any class is that the person nearest in degree, regardless of sex, inherits and, in parity of degree, the eldest, again regardless of sex inherits. Ascendants can only inherit from the last of their descendants, (para 11). There are special rules for propres in relation to classes two, three and four. Propres must be returned along the line from which they are inherited and within that line they must be inherited in accordance with the general rule (ie as set out in para 11); the property of illegitimate persons (in the absence of descendants) is returned along the deceased’s maternal line and within that line again inherited in accordance with paragraph 11. Apart from these provisions the distinction between propres and acquêts and conquêts is abolished. The property of adopted persons is dealt with as if the adoptee were the child of the adopter born in lawful wedlock and not the child of any other person. In default of an heir in class one, two, three or four the property escheats97 to the Seigneur. It is important to note the positive and automatic inclusion of illegitimate children where there is intestacy as to realty. Sark now leads the way in Bailiwick law. It is noteworthy also that the ruling in Norris has not been followed. Where a propre is willed to a descendant who then dies intestate the land is still a propre notwithstanding the fact that it was willed. Nevertheless special care is required if acting for an illegitimate child seeking to show that he or she is the true heir. Section 18(3) creates certain evidential presumptions in favour of the illegitimate as regards proving parenthood. However, section 18(3)(c) contains an easily overlooked prescription period of 12 months from the death of the de cujus during which time the application for a declaration of paternity must be brought. The Court has power to grant leave to make an application out of time, but only in “exceptional circumstances”. Arguably any such application would, necessarily, be exceptional and therefore self-fulfilling of the condition. In summary the new Law represents a careful and respectful overhaul of ancient customary principles, removing only what could no longer be justified; not even in the special context of Sark. It is easy to imagine that Norman customary law would have developed along similar lines if Napoleon had not intervened decisively in 1804.
97 Ie lapses or reverts in precisely the same way as land would otherwise revert to the Crown; in Sark there remains an intermediate feudal overlord in the form of the Seigneur.
Succession Laws of the Bailiwick 195 Personalty Sark law governing testate and intestate succession to personalty is to the same effect as Guernsey law as regards the rights of descendants and/or a surviving spouse; with the exception that the Law of Inheritance (Guernsey) Law 1979 does not apply to Sark. Testators cannot therefore deem step-children and illegitimate children to be children capable of sharing the légitime. The Sark law is found in (or is the consequence of) three 1975 laws: the Married Women’s Property (Sark) Law 1975, the Husband and Wife (Joint Accounts) (Sark) Law 1975 and the Successions (Personal Estates of Married Persons) (Sark) Law 1975. The first of these is noteworthy for its late date, almost half a century after Guernsey. Where there is intestacy and no descendants personalty is inherited by whoever would be entitled to inherit the deceased’s acquêts, subject again to any surviving spouse’s rights. Advocate Peter Collas prepared a paper on this difficult subject in which he identified 7 rules governing Sark intestate succession to personalty: Rule 1 The customary rules as to succession to conquêts (acquired real property after marriage) apply also to succession to personalty; Rule 2 There is no ascending succession to personalty in Sark; Rule 3 Personalty always passes to the nearest of kin in parity of degree without distinguishing between those on the paternal side and those on the maternal side in equal shares; Rule 4 Brothers or sisters of the whole blood rank equally and are preferred to those of the half blood; Rule 5 Preference of males over females and of descendants of males over descendants of females in parity of degree in collateral succession to personalty; Rule 6 Females are not admitted to represent the male sex of their father if there is male issue from that father; Rule 7 In collateral succession to conquêts kinship is admitted down to the sixth degree inclusively. The reader is referred to Advocate Collas’ paper. AVOIDANCE
It is inevitable that some will seek to avoid the restrictions imposed by the Bailiwick’s succession laws for whatever reason; typically because the law’s preconception of who should inherit property does not accord with the individual’s. He or she may have fallen out completely with an only child. Often the simple expedient of making a careful and valid will or wills may be sufficient.98 98 All realty could be left absolutely to the surviving spouse or a grandchild under Guernsey Law. Avoiding the légitime would be more difficult and might require a change of domicile.
196 The Laws of Guernsey In Sark the long lease proved an effective means of avoidance in the case of Surcouf v de Carteret (1999). By contrast in Guernsey there has been less success, albeit these matters are rarely tested in Court. In the case of Re Norman Francis Davis (dec’d) (1963) it was held that a trust for sale of realty contained in a will of Guernsey realty failed. Where a deceased left a surviving spouse or legitimate children the realty could not be placed in trust but had to devolve directly. Where such an ineffective disposition had been made the Court would endeavour to establish the intention of the testator as disclosed by the will and consider how to give effect to that intention within the law. Equally a will trust for sale of Guernsey realty is valid if there are no descendants nor any surviving spouse; there is testamentary freedom in such circumstances. The extent to which lifetime dispositions of realty can avoid effectively Guernsey succession law is undecided; although some light was shed by the case of In re Kurzschenkel, a judgment of the Bailiff handed down on 16 March 2000. This case concerned principally lifetime gifts of personalty. Contrary to the popular view that there was freedom under Guernsey law to dispose of personalty during one’s lifetime it was argued successfully that gifts of personalty by a mother to one of two daughters had to be brought back into account upon the mother’s death when calculating the légitime of the child not so favoured.99 The Bailiff accepted that, without more, there was a presumption under Guernsey law that payments made to one child by way of advancement should be brought into account when calculating the value of the estate of the deceased for the purpose of establishing the amount of légitime. The effect of this decision requires potentially every testator to be advised as to the possible consequences of lifetime gifts of personalty to children; likewise the protection which may be afforded by adding a clause to the will of personalty designed to displace the presumption which would otherwise be raised regarding lifetime gifts.100 While Kurzschenkel is relevant to attempts to avoid légitime generally101 it is also noteworthy for the Bailiff ’s apparent lack of concern for the mother’s actions in making also an inter-vivos transfer of realty at an undervalue to the same favoured daughter: “We are only concerned here with advances of personalty as opposed to interest in realty. The position concerning gifts of realty to a child is something quite different from the issues I have been considering in this case. Here we are not even dealing with a gift of realty. What we are dealing with is a sale at a low price. Mrs Funk could have sought to ‘retrait’102 the sale.”
Arguments based upon customary principles regulating avancement de succession to a favoured heir are more likely to succeed for personalty than realty, at least 99 It is noteworthy that a daughter’s dot (dowry) must also be brought into account when entitlement to personalty is determined, unless the daughter elects not to share in the personalty; see Art 10 of the 1840 Law. 100 Ie to the effect that such gifts are not to be brought back into account; of course this assumes that such a clause would be effective. 101 Most often the attempts will be unconscious. 102 The right of a relative to redeem family land from a purchaser for the price paid plus costs of sale.
Succession Laws of the Bailiwick 197 where a sale of realty takes place, because of the existence of an alternative remedy for the disinherited. Any sale of realty at an undervalue is at risk from retrait by the disgruntled would-be heir. If a simple lifetime gift is made of the realty there is most likely no right to retrait.103 The better view is probably that the property comes back into the estate of the donor upon his death. This is admittedly a difficult area. In any event the prospective heirs would have a claim to be able to set aside the gift upon the death of the donor, particularly if they have all been excluded in favour of someone who would not be a permitted heir in normal circumstances. It is relevant here that a single child could lawfully be favoured in all three jurisdictions in any event. The disinherited are less likely to succeed in their challenge if the realty had been newly acquired via a company104 and the shares105 then disposed of either inter vivos (subject to the Kurzschenkel caveat if gifted to children) or on death, admittedly subject to the légitime restrictions.106 Another possibility is to transfer the land either to the intended recipient directly or into a company whilst reserving a usufruit. The sale would either be at a low value, risking retrait but subject to the usufruit, or at the (still) much reduced but not insignificant value of the reversionary interest, again subject to the usufruit. The combination of a not insignificant price and the encumbrance would be likely to deter the would-be retrayant. The simple device of transferring a property into a company then gifting the shares in cynical breach of succession law provisions is unlikely to succeed.
PRESCRIPTION
The Prescription (Amendment) (Guernsey) Law of 1997 repealed earlier provisions in the Loi relative aux Prescriptions of 1889. By the 1997 Law personal representatives may give notice in La Gazette Officielle for two successive weeks of their intention to distribute the personal estate of a deceased person at the end of a minimum period of three months and requiring any person interested to give particulars of any claim he might have. If the representatives distribute the property having regard to the claims they have notice of they are not liable to any person who has failed to give notice. The Law is without prejudice to rights registered in the Livre des Hypothèques, Actes de Court et Obligations or in the Livre des Contrats107 prior to the date of death. Likewise the Law does not prejudice the right of any person to follow the property, or any property representing it, into the hands of any person other than a purchaser for value without notice. As noted 103 Customary law provided its own system of protection against gifts via the réserve, subject to the conditional tierce disponible; note also the customary principle that seul Dieu fait des héritiers, pas l’homme. See generally Laurent Carey pp 159 et seq. 104 Note the risk inherent in any conveyance by way of share transfer, namely the unknown previous history and liabilities of the company purchased. 105 Personalty not realty. 106 The testator would have greater flexibility, eg to make a trust of personalty. 107 Both forms of registers of interest.
198 The Laws of Guernsey previously there is typically no administration of realty because of Bailiwick law forced heirship provisions and the principle le mort saisit le vif.
WINDING UP OF ESTATES
Under customary principles personalty is regarded as the “seat” of debt. Accordingly, and subject to the express terms of a will, unsecured money debt is paid from the gross residue of personal estate before distribution. Specific gifts of personalty abate pro rata if there is insufficient residue having regard also to the entitlement to légitime and/or the droit de conjoint. If the personalty is insufficient the heirs of realty may be proceeded against with any residual gift of realty being exhausted first. As in French law beneficiaries may be the objects of legs universel, legs à titre universel, and legs particulier. The first is a gift of the whole estate or the whole of a residual estate. The second is a gift of an aliquot part of the estate or a residuary estate, (eg a half or a quarter). The third is a gift of a specific object or sum. The different categories of beneficiary bear the estate’s liabilities according to the principles set out above. In addition, those who inherit either a legs universel or à titre universel are liable to make good the estate shortfall, (or a proportion of it if à titre universel). If there is a risk that the estate is insolvent the beneficiary may seek what is known as a bénéfice d’inventaire.108 This either gives a more distant relative the opportunity to take over the estate or enables the heir to have an inventory taken, the effect of which is to limit the heir’s liability to the value of the inventorised estate should a shortfall indeed arise.
RECTIFICATION OF WILLS AND TESTAMENTARY TRUSTS
In the case of In re William Willoughby-Winlaw Trust (2002) 30 September the Court of Alderney held that it had the power to order rectification as a discretionary remedy; albeit restricted to the rectification of wills and testamentary trusts.109 This power was said to “embrace the discretionary remedy to delete, substitute or add to the wording of a will, in order to arrive at its true construction and (so) that the clear intentions of the Testator may be reflected in it”. The Court further held that there was no authority binding upon it to apply a time bar to applications for rectification. The Court cited and was influenced by the Jersey case of Re Vautier (2000) 12 October together with the “firm belief that the Court of Alderney has the inherent jurisdiction to exercise its powers in civil matters with108 See the 1843 Ordinance. See also Jeremie’s evidence to the Commissioners in 1861 at paras 14,168 et seq. and the Order in Council of 1858. 109 Presumably restricted in the sense that this form of rectification only was being considered by the Court. Note that the decision is likely to be appealed.
Succession Laws of the Bailiwick 199 out limitation and, by its judgement, to contribute to the evolution of the Common Law over time”. It is suggested that the Royal Court also would find that it had power to order rectification to the extent that such is not already provided for by the Trusts (Guernsey) Law 1989, as amended.110
CONCLUSION
The succession laws of Guernsey and Alderney are overdue for reform. Both have obvious inadequacies when judged by contemporary values. Like Sark it would be more appropriate to evolve existing law rather than shift radically to another model. There is a certain attraction to protecting classes of prospective heir from the outset rather than after the event as in England. Arguably that protection should be strengthened rather than weakened whilst doing away with inequalities as between sexes and the exclusion of illegitimates.111
110 The English law position is summarised by Paul Hewitt in a New Law Journal article at vol 152 no 7037 p 950 (21 June 2002). See s 20(1) of the Administration of Justice Act 1982. See also Michael O’Connell’s article on the Vautier case at [2002] 5 JL Review 64. 111 At the time of writing there are active proposals to amend the succession Laws in order to make them more Convention friendly. The areas likely to be targeted are the exclusion of illegitimates and the unequal treatment of the sexes on intestacy.
10 Income Tax1 INTRODUCTION
G
UERNSEY IS A comparatively low tax jurisdiction. There are various indirect duties levied on alcohol and tobacco known as impôts together with duties on petrol, vehicles and imports.2 There is also a dwellings profits tax, which is in fact rarely paid because it is easily and lawfully avoided in most cases.3 There is duty payable on purchases of realty. However, many of the United Kingdom’s taxes are unknown within the Bailiwick. There is no capital gains tax, no inheritance tax, no insurance premium tax and no value added tax.4 Likewise there is no separate corporation tax.5 Instead, the sole direct tax in Guernsey is income tax.6 For taxation purposes Guernsey and Alderney form a single tax area.7 In Sark there is no income tax as such. Revenue is raised by means of impôts, landing charges and a rather obscure levy raised upon householders. Our concern here is only liability to Guernsey income tax under the Income Tax (Guernsey) Law 1975, as often amended.8 The tax year in Guernsey is the calendar year, ie 1 January to 31 December. Each calendar year is a year of charge by reference to which the tax chargeable is 1 I acknowledge here the very great and expert help which André Trebert and John Bradley of PKF Guernsey gave to me in preparing for the Guernsey Bar finals on this subject, including an excellent set of notes. That help is reflected in this chapter, although any errors are mine. 2 Although note that Guernsey is within the European Community free trade area. 3 See the section on the law of realty. 4 After some debate the introduction of Value Added Tax in Guernsey has been ruled out. 5 But note that this is likely to change within the comparatively near future to take account both of emerging international standards in taxation promoted by bodies such as the OECD and EU as well as competitive pressures from jurisdictions such as Ireland, the Isle of Man, Gibraltar and Jersey. The current intention is to move towards a general rate of income tax payable by Guernsey companies of 0% from 2008 onwards and taxation of Guernsey Financial Services Commission regulated companies at the rate of 10%, with the exception of insurers who would fall within the 0% band. The status of exempt company and international company would be abolished. Guernsey residents would be taxed on a proportion of the profits of a company in which they had a beneficial interest. Resident individuals would continue to pay tax at the rate of 20% on their assessable income. There is no intention to introduce capital taxes nor VAT. See the paper entitled Future Corporation Taxation Strategy produced by the Advisory & Finance Committee and published with Billet d’État XXIV for December 2002. The proposals are in the earliest stages of development. 6 Excluding local taxation or rates, which themselves are very low. 7 Ie Guernsey income tax is paid both in Guernsey and Alderney. 8 See also the annual compendium of States of Guernsey Income Tax Statements of Practice (Including Interpretations of Law) and Extra Statutory Concessions. These are arranged under the following headings: residence, companies, businesses, employment and miscellaneous. See generally the helpful Income Tax Authority website at www.tax.gov.gg/index.html.
202 The Laws of Guernsey assessed. Income in respect of which tax is chargeable is income in one of four specified categories. The first category is income from businesses, the second is income from offices and employments, the third is income from the ownership of land and buildings and the fourth is income from other sources. Assessable income within each class is calculated according to methods set out in the Law which are themselves in accordance with commonly employed principles. Thus the amount of the profits of a business in a standard year of computation are calculated in accordance with ordinary commercial principles applicable to the computation of profits. The assessable income for offices and employments is the full emoluments of the office or employment arising or accruing in the year of computation less the authorised deductions and so on. The basis of charge in Guernsey was the preceding year basis for both businesses and individuals; however with effect from 1 January 2002 the current year basis has been adopted except for income from business, see the Income Tax (Year of Computation) (Guernsey) Law 2000. Income tax is chargeable at a flat rate of 20 per cent subject to capital allowances in the context of business profits and personal allowances where individuals are concerned. In the year of charge 2002 the single person’s allowance was £7,000 and the married person’s allowance £14,000.9 Higher allowances applied for those over 64. It is noteworthy also that there is complete mortgage interest relief in Guernsey, in fact relief is currently available in respect of all interest paid on money borrowed. There is also relief for qualifying pension premiums and contributions together with 50 per cent relief for life assurance premiums or payments.10 The issue of most interest to the practitioner is whether any given legal entity is liable to Guernsey income tax or not. If it is so liable a second issue arises as to whether there are any steps which can be taken to exempt that legal person from liability.
LIABILITY TO GUERNSEY INCOME TAX
The extent of a legal person’s liability to pay Guernsey income tax is determined by the extent to which that person is resident in Guernsey. There are different categories of residential status producing differing degrees of income tax liability.
9
Although reduced by the amount of any wife’s earned income allowance given, see below. But note the effect of The Income Tax (Restriction of Tax Relief on Interest) (Guernsey) Law 2001. This enabling legislation permits the States to “make such provision as they think fit in respect of the abolition, restriction, limitation or apportionment of relief from the payment of income tax for interest paid on money borrowed”; for a fuller explanation of the purpose behind this legislation see the States Income Tax Authority’s policy letter dated 21 October 1999 Billet d’État No. XIX of 1999. So far the threat has not been realised. 10
Income Tax 203 The Non-resident If an individual is non-resident in Guernsey his liability to Guernsey income tax will be restricted to income arising or accruing from: (a) (b) (c) (d)
businesses carried on in Guernsey; offices and employments held or carried on in Guernsey; the ownership of land and buildings situate in Guernsey; any other Guernsey source of income, other than Guernsey bank deposit interest.
It is a common thread throughout Guernsey income tax legislation that nonresidents are not liable to Guernsey taxation on Guernsey bank deposit interest.11 Non-resident companies are taxable on Guernsey income in exactly the same way. Determining Residence A person will be treated as being resident in Guernsey in a year of charge if any one of five conditions is met. These conditions are as follows: (a) he is in Guernsey in the year of charge for one hundred and eighty-two days or more;12 (b) he is in Guernsey during the twelve months commencing on the 1st day of August in the year preceding the year of charge and ending on the 31st day of July in the year of charge for a period or periods amounting in all to one hundred and eighty-two days or more; or (c) he maintains or has maintained for him in Guernsey a dwelling-place for a period or periods amounting in all to ninety one days or more in the year of charge and is in Guernsey in the year of charge for a period or periods amounting in all to ninety-one days or more; or (d) he is in Guernsey for any time in the year of charge with the intention of setting up a dwelling-place therein, and in that or the following year of charge sets up such a dwelling-place; or (e) having during the four years immediately preceding the year of charge been in Guernsey for a period of, or for periods amounting in all to, three hundred and sixty five days or more, is in Guernsey at any time during the year of charge, otherwise than on an occasional or casual visit. The basic test of residence is at (a). For all such computations of periods the “midnight rule” applies whereby days only count if midnight is spent in Guernsey. 11 The bank must, however, be a licensed deposit-taking business pursuant to the Banking Supervision (Bailiwick of Guernsey) Law 1994. 12 Ie over half a year.
204 The Laws of Guernsey Midnight is deemed to come at the end of the day. It follows that days of arrival in Guernsey are counted but not days of departure. Category (b) catches those who might otherwise escape through days spent in Guernsey not being counted in one year of charge; this affects seasonal workers and the like. Category (c) is less straightforward. If a person occupies property en famille or occupies staff accommodation he is not considered to be maintaining a dwelling, likewise children who live with their parents when in Guernsey. By contrast if a person rents or acquires a dwelling in Guernsey and furnishes it so that it is available for habitation and it is not let that person is considered to be maintaining a dwelling within (c). Category (d) is also not without difficulty. Extra-statutory concessions have been made in order to assist in the interpretation of this provision. Where a person acquires a dwelling in Guernsey but does not furnish it he is not considered to have set up a dwelling nor is he considered to have been in Guernsey in that year, notwithstanding that his intention is to return to live in the Island in a subsequent year of charge. Likewise where a person acquires a dwelling and furnishes it and lets it immediately without residing in it himself he escapes this provision. If a person acquires a dwelling in Guernsey, furnishes it and lives in it for a short time, he will nevertheless not be treated as resident if he is not resident or has not taken up permanent residence in the following year.13 Category (e) presents a potential danger; a business visit in year five would most likely cause the individual concerned to be treated as resident for that year of charge. Degrees of Residence After having established whether or not an individual is resident further distinctions are made between individuals who are either principally or solely resident and those who are merely resident only. A person is solely resident in Guernsey if he is not resident elsewhere. Guidance on the issue of when a person was solely (or principally) resident was given by the Administrator of Income Tax in a memorandum dated 11 May 1998: “It should . . . be remembered that a person may be solely resident in Guernsey . . . This will be the case where the individual is not resident elsewhere. In determining whether a person is resident elsewhere it would not be unreasonable to be guided by the same parameters as are used to determine whether someone is resident in Guernsey. If they are not so resident in another territory then they must, by definition, be solely resident in Guernsey.”
A person who is resident in Guernsey but not solely resident will nevertheless be 13
See Statement of Practice R1 and statements R1–8 generally for guidance concerning residence.
Income Tax 205 treated as being principally resident in Guernsey if, in the year of charge: (a) he maintains or has maintained for him a dwelling-place or a place of business in Guernsey, but neither a dwelling-place nor a place of business elsewhere; or (b) he maintains or has maintained for him a dwelling-place in Guernsey and has taken up permanent residence in Guernsey; or (c) he neither maintains nor has maintained for him a dwelling-place or a place of business in any country, but is domiciled in Guernsey. For those who fall outside of these categories there is a final broad discretion to treat someone as being principally resident “if he appears in view of all the circumstances of his case to be so resident, regard being had in particular to his domicile, nationality, and habits of life”.14 What habits of life distinguish the person principally resident in Guernsey is not well known or understood. It is unlikely to have much to do with a love of bean jar and the like. As regards companies the tests are fewer and, on balance, more straightforward. A company is resident in Guernsey for income tax purposes if either it is incorporated in Guernsey and has not been granted an exemption from tax for that year of charge in accordance with section 40(a) of the 1975 Law15 or if it is controlled in Guernsey. Section 122 of the 1975 Law defines control. Unlike the UK and Jersey where control is determined by reference to the location of the central management of the company’s affairs, in Guernsey control is dependent upon beneficial share ownership. If the company is neither a Guernsey company nor controlled in Guernsey it is not Guernsey resident. A Resident’s Liability to Guernsey Income Tax Individuals who are either solely or principally resident in Guernsey are assessable to Guernsey income tax on the total of their world-wide income regardless of where that income arises or accrues. This is subject only to the availability of any double or unilateral tax relief, alternatively any proportional allowances.16 An individual who is resident only in the sense that he is not principally or solely resident is assessable to Guernsey income tax on his income arising or accruing in Guernsey together with any remittances to Guernsey of any overseas income. Thus the person who spends one hundred days a year in Guernsey and has a dwelling house or dwelling houses elsewhere will be liable to assessment on his Guernsey income and income remitted to Guernsey. His world-wide income apart from this 14
See s 3(2) of the 1975 Law. See below. 16 Note also the taxation of benefits in kind, subject to certain exemptions, see the Income Tax (Exemption of Benefits) Ordinance 1995. 15
206 The Laws of Guernsey escapes charge.17 In the same way a Guernsey resident company is liable to Guernsey income tax on its total world-wide income, regardless of where that income arises or accrues. The distinction drawn between a resident and non-resident company for the purposes of Guernsey Income Tax Law explains the heavy dependence upon British Virgin Island companies managed, but not controlled, in Guernsey. Such entities are non-resident and have no need to bring themselves within one of the various categories by which liability to Guernsey income tax may either be reduced or extinguished. Exempt Companies The Income and Corporation Taxes (Amendments) (Guernsey) Law 1989 provided that, with effect from 1 January 1990, all Guernsey incorporated companies would be treated as resident in Guernsey unless exemption from tax was granted under the Income Tax (Exempt Bodies) (Guernsey) Ordinance 1989, as amended. There are five categories of potentially exempt corporate bodies. Category E concerns insurers. Categories B and C concern investment companies. Category A is intended for unit trusts. Category D is outside of each of the other categories and is the exempt company itself as popularly understood. The qualifying conditions for a category D exempt company are that no individual solely or principally resident in Guernsey, and no company resident in Guernsey, has any beneficial interest in the (exempt) company other than an interest which that person has: (a) as the holder of a share or debenture in a quoted body corporate which itself has a beneficial interest in the company; or (b) as a loan creditor of the company, if that person is registered under or exempted from a requirement to be registered by virtue of, the Protection of Depositors (Bailiwick of Guernsey) Ordinance 1971 (ie a properly authorised loan creditor); or (c) as a nominee or trustee, (ie a Guernsey based company administrator or the like). A company may apply for exemption upon, or even prior to, incorporation, otherwise before 31 March in each calendar year. Exempt status is granted and must be renewed annually. The fee is currently set at £600. On application the names and addresses of the ultimate beneficial owners of the company must be disclosed to the Guernsey Financial Services Commission. Where the shares are held on trust the names and addresses of the trustees, the settlor and any other person who provided trust property, the name of the trust and nationality, domicile and date and place of birth and occupation of the beneficiaries must all be supplied. The exempt company must disclose the existence of any source of income in 17 Reference should again be made to the Administrator’s memorandum of 11 May 1998 concerning the unrealistically low level of remittances declared in such circumstances at that time.
Income Tax 207 Guernsey other than bank deposit interest. The obligation to inform the Income Tax Authority of any Guernsey source income is a continuing one. Although accounts are not required to be lodged a sufficient statement of Guernsey source income must be provided. When exempt status is granted the company is taxed as a non-resident, ie only upon Guernsey source income other than bank deposit interest. Exempt status will be lost if the qualifying conditions for exemption are not maintained. However there is power to grant relief from loss of category D exempt status if the Income Tax Authority is satisfied that the event or circumstance which led to the failure was beyond the control of the company and the company takes all necessary steps to satisfy the Authority that it is again complying with all appropriate conditions and complies with any other reasonable conditions imposed.18 It follows that an exempt company will be liable to Guernsey taxation if it carries on business in Guernsey; but for such income to be chargeable the company must carry on business from a permanent establishment. The Income Tax Authority has stated that the carrying on of mere clerical and administrative functions does not amount to the carrying on of a business. Likewise the directors of an exempt company can meet in the Island and conclude contracts without incurring liability to Guernsey income tax. By contrast the opening of a branch or factory would plainly amount to a permanent establishment. Income payable to a non-resident director of an exempt company is not liable to Guernsey income tax. A resident director of an exempt company is liable to income tax in the ordinary way. Dividends paid by exempt companies are paid gross and without the deduction of Guernsey income tax. By their nature such profits are unlikely to represent Guernsey source chargeable income. Likewise interest payable by an exempt company is not deemed to be a Guernsey source of income in the recipient’s hands. Accordingly the usual requirement to deduct Guernsey income tax when making an income type payment to a nonresident does not apply.19 There is general power to change between income tax and exempt status albeit not for part only of a year.20 There is an extra-statutory concession as regards Guernsey resident liquidators and the treatment of income arising to an exempt company in liquidation. In short such income will not be charged to tax save for Guernsey source income, (other than, of course, bank deposit interest). International Business Companies International business companies are a creation of the Income Tax (International Bodies) (Guernsey) Law 1995. They permit a company incorporated either in Guernsey or overseas to apply to the Income Tax Authority for international tax sta18 19 20
See schedule 3 para 4 of the 1989 Ordinance as amended. See below under the heading “Agents”. Ie between being a company which is liable to Guernsey income tax and an exempt company.
208 The Laws of Guernsey tus. The company must be, prima facie, liable to pay tax in Guernsey by virtue of being resident in Guernsey and carrying on business there. However the company must equally derive no income from trading with any person who is resident in Guernsey, other than a body which already has international tax status. It must also be wholly beneficially owned by non-residents or another company with international tax status. A bank, a registered (licensed) or exempt insurer or exempt company may not become an international business company, nor may a company which has carried on business or exercised functions in Guernsey without international tax status. International companies are established for various purposes which might include group financing operations, the creation of a new captive insurance company, industrial and commercial activities or overseas investment. A rate of tax is negotiated between the prospective international business company and the Income Tax Authority at a rate of up to 30 per cent for a five year period which may be renewed (in practice the company is either exempted or the rate is set at 20 per cent, depending on the circumstances). The Income Tax Authority has a complete discretion whether to grant or refuse applications. Tax is deducted from dividends paid by international business companies at the rate of 20 per cent. Any surplus tax deducted is refunded. Interest paid to non-residents is payable without deduction of tax and is a deductible expense for the purposes of income tax liability calculation. Annual accounts must be completed and returned to the Income Tax Authority. DOUBLE TAXATION RELIEF
Double taxation arrangements are in force between Guernsey and Jersey and between Guernsey and the United Kingdom. The United Kingdom double taxation arrangement with Guernsey was made on 24 June 1952 and effective from 1 January 1951. The essential provisions are as follows: 3(1) The industrial or commercial profits of a United Kingdom enterprise shall not be subject to Guernsey tax unless the enterprise is engaged in trade or business in Guernsey through a permanent establishment situate therein. If it is so engaged, tax may be imposed on those profits by Guernsey but only on so much of them as is attributable to that permanent establishment. 3(2) The industrial or commercial profits of a Guernsey enterprise shall not be subject to United Kingdom tax unless the enterprise is engaged in trade or business in the United Kingdom through a permanent establishment situate therein. If it is so engaged, tax may be imposed on those profits by the United Kingdom, but only on so much of them as is attributable to that permanent establishment. 3(4) No portion of any profits arising from the sale of goods or merchandise by an enterprise of one of the territories shall be attributed to a permanent establishment situated in the other territory by reason of the mere pur-
Income Tax 209 chase of the goods or merchandise within that other territory. Accordingly the pre-condition to the ability of either Guernsey or the United Kingdom to tax the profits of the other’s enterprises is whether or not that enterprise has a permanent establishment within the relevant jurisdiction. Without such a permanent establishment the profits of the enterprise are not taxable within the jurisdiction concerned. They are, of course, taxable in the home jurisdiction. 9(1) Subject to the provisions of the law of the United Kingdom regarding the allowance of a credit against United Kingdom tax of tax payable in a territory outside the United Kingdom, Guernsey tax payable, whether directly or by deduction in respect of income from sources within Guernsey other than dividends or debenture interest payable by a company resident in Guernsey shall be allowed as a credit against any United Kingdom tax payable in respect of that income. 9(2) Subject to such provisions (which shall not affect the general principle hereof) as may be enacted in Guernsey regarding the allowance as a credit against Guernsey tax of tax payable in a territory outside Guernsey, United Kingdom tax payable, whether directly or by deduction, in respect of income from sources within the United Kingdom other than dividends or debenture interest payable by a company resident in the United Kingdom shall be allowed as a credit against any Guernsey tax payable in respect of that income. This is the basic double taxation relief provision, but note that it does not extend to company dividends in particular; although tax will not be deductible from dividends in the case of non-resident or exempt companies where non-Guernsey income is concerned in any event. 10(1) The taxation authorities of the United Kingdom and Guernsey shall exchange such information (being information available under their respective taxation laws) as is necessary for carrying out the provisions of this arrangement or for the prevention of fraud or the administration of statutory provisions against legal avoidance in relation to the taxes which are the subject of this arrangement. Any information so exchanged shall be treated as secret and shall not be disclosed to any persons other than those concerned with the assessment and collection of the taxes which are the subject of this arrangement. This 1952 provision puts into perspective concerns over much more recent powers enabling the exchange of information; such powers have already existed for half a century without undue adverse consequence.21 The double taxation provisions as regards Jersey provide, in essence, that Jersey 21 Note now also the Arrangement between the Government of the United States of America and the Government of the States of Guernsey for the Exchange of Information relating to Taxes dated
210 The Laws of Guernsey tax payable on Jersey source income is a credit against Guernsey income tax payable in respect of that same income. Where there is income accruing from third party countries a Guernsey tax payer is entitled to claim relief from tax in Guernsey. The amount of that relief will, in most cases, be 75 per cent of the effective Guernsey tax. Any overseas tax not relieved by this credit will be relieved by deduction.
TAXATION OF NON-RESIDENTS VIA THEIR AGENTS
Section 48 of the 1975 Law provides that where a non-resident person is liable to (Guernsey income) tax in respect of any income and has an agent in Guernsey, the agent shall be chargeable on his behalf with tax in respect of any such income which arises, whether directly or indirectly from or through his agency. The most basic example of the application of this principle is the obligation of a tenant of Guernsey property to deduct tax at the rate of 20 per cent from rental payments remitted to a non-resident owner landlord. The direct liability of the non-resident to taxation is unaffected, but the difficulty or impossibility of enforcing Guernsey tax judgments abroad requires this other and more effective means of collecting tax due from non-residents.22 What is an agent is broadly defined by section 48(2) as any agent, whether for the purpose of carrying on a business or for any other purpose, and includes a manager and any person receiving or paying income on behalf of or to a non-resident. There are various exceptions to this basic rule. Section 48 does not render a resident person chargeable in respect of income arising from sales or transactions carried out through him, unless the resident is an authorised person carrying on the regular agency of the non-resident. For example the simple purchase of goods from a non-resident does not render the purchaser liable to account to the Income Tax Authority for tax on the profit element of the price paid. Likewise where sales or transactions are carried out on behalf of a non-resident through a person carrying on bona fide the business of a broker in Guernsey who receives in respect of the business remuneration at a rate not less than that customary in the class of business in question, neither the non-resident nor the broker are chargeable in respect of the income arising to the non-resident from those sales or transactions. This permits, for example, Guernsey resident stockbrokers to manage their client’s portfolios and to make payments of income out of that portfolio without having to deduct Guernsey income tax. Where the rule applies the agent is himself chargeable to tax in the alternative to (and, unless satisfied, additionally to) the non-resident whose income is being assessed. The agent is given power by section 48(3) to deduct the income tax 19th September 2002. This is interesting not only in itself but also from a constitutional point of view; ie the States of Guernsey making agreements directly with a sovereign state. 22 The difficulty arises because of the general private international law principle that tax liability within one jurisdiction will not be enforced by another.
Income Tax 211 payable from the payment otherwise due to the non-resident. If such sums are deducted they must be paid over to the Administrator of Income Tax within one month. If the agent fails to make such deduction he is likely to be out of pocket because he will be chargeable nevertheless. A person chargeable in respect of any income of a non-resident is liable to submit an annual return of the material income to the Guernsey Administrator of Income Tax. There are specific provisions governing the payment of interest. Where interest is paid by investment companies to non-residents the basic principle is that no tax relief may be claimed by the company. However, where interest is payable to nonresidents out of income or profits brought into charge the Guernsey resident will be entitled to deduct and retain out of the interest paid, tax at 20 per cent;23 no assessment is raised against the recipient of the interest.24 By an extra-statutory concession an investment company may deduct interest paid to a UK or Jersey bank when computing profits so long as no tax is deducted or retained and sufficient information is provided to the Income Tax Authority showing that the recipient bank will be exempt from Guernsey income tax. In effect the bank will be taxed on the profits within its own jurisdiction and reflects the special double taxation régime between the jurisdictions. There is a statement of practice governing interest paid to banks abroad other than to UK or Jersey banks.25 In general tax must be accounted for by an agent unless the loan is in the nature of a mortgage or bond on a property situated outside of Guernsey. Here the source of the interest is deemed to be outside of Guernsey and no requirement to account for Guernsey income tax arises. Tax relief will still be available to the payer on a current year basis. There is a similar exemption at section 50 in respect of interest payable by trading companies to non-residents in respect of trade carried on outside Guernsey. Interest may again be paid without deduction of tax but with tax relief. Tax Allowances for Non-resident Individuals Section 51(1) of the 1975 Law has the effect of disqualifying an individual not (solely or principally) resident from entitlement to tax allowances. Instead a proportional allowance may be applied for. This is determined by calculating the Guernsey tax which would be payable on the individual’s world-wide income as if he were principally resident in Guernsey. The proportion of Guernsey tax actually payable from this total is the same as the proportion which his Guernsey income bares to his world-wide income. In order to be eligible for a proportional allowance the non-resident must be a British subject or resident in the UK or another Channel Island (where the 1975 Law is not in force).
23 24 25
Ie off-setting the tax chargeable. See ss 164 and 165. Statement M22.
212 The Laws of Guernsey Allowances for the Resident Only Person By section 51(A) of the 1975 Law a person who is resident only in Guernsey, ie not principally or solely resident, is entitled to a proportion of the personal or other allowances. That proportion is calculated at the rate of 1⁄ 52 nd of the annual allowances for each complete seven day period that the individual spent in Guernsey during the material year of charge.
THE TAXATION OF PARTNERSHIPS
Section 42 of the 1975 Law governs the taxation of partnerships in Guernsey. The basic provision is that: “In respect of income arising from any business carried on by two or more persons in partnership, and in respect of income arising from any other source and belonging to the partnership, each partner shall be assessed and charged in respect of his share of the profits of the partnership.”
It follows that there is no assessment of the partnership itself. Each partner’s share of the partnership profits is assessed separately together with any other chargeable income of that partner. Changes in the composition of the partnership or even the change from sole trader to partnership need not affect the tax treatment of the existing or remaining business partners, save where a unanimous election is made by the remaining partners.26 It follows that individual partners may continue to be assessed on the preceding year basis whereas departing or joining partners will be assessed on a quite different basis, ie the closing or opening year rules as interpreted locally. For an ongoing business the normal basis of assessment is the accounting period ending in the calendar year preceding the year of charge, ie the preceding year basis. The opening year rules are as follows: (a) for the first year of charge the assessable income will be the profits arising in that year; (b) the assessable income for the second year of charge will be the profits arising in the twelve months beginning with the commencement date of the business; (c) the assessable income for the third year of charge will be the profits for the twelve months to the end of the accounting period in the preceding year of charge; if that accounting period is less than twelve months or if no 26 Whether such an election is made will depend on the level of profits in the two years leading up to the change in partnership composition. If profits have fallen the partnership may benefit from dissolution and reliance on the opening year rules and vice versa.
Income Tax 213 accounting period ends in the first or second year the assessable income will be the profits of the twelve months preceding the year of charge.27 Cessations are dealt with by section 31 of the 1975 Law. In the year of charge in which there is a cessation, the assessable income will be the profits arising in the year of charge from 1 January to the date of a cessation. For the penultimate year of charge the assessable income will be determined on the usual preceding year basis unless a higher taxable profit figure arises in the year ended 31 December in that year of charge. In those circumstances the higher figure is adopted as the basis for charge.
THE TAXATION OF PERSONS UNDER GUARDIANSHIP
Section 52(1) of the 1975 Law provides as follows: “The person having the direction, control or management of any income of any person under guardianship may be charged with income tax at the standard rate in respect of that income.”
This provision extends not only to legally appointed guardians such as curateurs but also the natural guardians of infants, ie parents. The key word is may. As elsewhere in the 1975 Law there is a discretion to charge a person in the alternative to the person directly liable; again the primary liability of the person whose income it is remains intact. Whether or not the guardian is charged he is responsible for making tax returns on behalf of the person under guardianship. The guardian may claim all and any allowances to which the person under guardianship is entitled, whether the guardian is being charged directly or not. If tax charged directly to the person under guardianship is unpaid the guardian again comes under a liability to pay, but limited to the extent of that person’s property in his hands. In any event the guardian has a right to liquidate assets of the person under guardianship in order to discharge the tax liability and/or to reimburse himself for tax paid. The guardian is entitled to an indemnity as regards any deficit.
THE TAXATION OF TRUSTEES
A similar regime governs the taxation of trustees. Section 53(1) of the 1975 Law provides as follows: “A trustee may be charged with income tax at the standard rate in respect of any income which he is entitled to receive on behalf of any person or which is derived from property 27
See s 30 of the 1975 Law.
214 The Laws of Guernsey vested in him, but nothing herein contained shall affect the liability of the person beneficially entitled to such income to be charged in his own name.”
The trustee steps into the shoes of the person beneficially entitled to the income in order to determine the tax treatment of that income. Thus if the beneficiary is principally resident in Guernsey the whole of the income to which the beneficiary is entitled will be chargeable to Guernsey income tax. By contrast if the beneficiary is non-resident Guernsey source income only will be chargeable to Guernsey income tax, excluding bank deposit interest.28 By section 53(4) the trustee is required to make any return of income which the person beneficially entitled to the income would otherwise have been required to make if he had been charged for tax in his own name. In practice this requires the trustee to submit trust accounts where there are resident beneficiaries or sufficient information for the purpose of declaring resident beneficiary income and its sources. Where there is a mixture of resident and non-resident beneficiaries of a single trust a statement of practice29 provides that the liability of the trustees to Guernsey income tax is restricted to the income to which the Guernsey resident beneficiaries are entitled together with any Guernsey income, apart from Guernsey bank interest, of the non-resident beneficiaries. Ie the trustee stands in the shoes of each beneficiary individually regardless of the fact that there is a single trust instrument. The same statement of practice governs the circumstances where trustees accumulate income without distributing it to the beneficiaries. If income is accumulated in circumstances where all the beneficiaries are non-resident and the income is not Guernsey source income (other than bank interest) no charge to tax will arise. If income is accumulated in circumstances where one or more of the potential beneficiaries is resident a charge to tax will be imposed upon the whole accumulation. This is easily avoided because the statement of practice goes on to provide that if separate funds are set up within the settlement in respect of the different classes of beneficiary (ie resident or non-resident) each fund may be assessed and charged separately. A tax efficient way of managing Guernsey trust assets is to provide, insofar as possible, that Guernsey source income (other than bank interest) is payable to Guernsey resident beneficiaries. Income which is chargeable in any event should be paid to beneficiaries who are liable to pay Guernsey income tax in any event.
REVOCABLE SETTLEMENTS AND SETTLEMENTS ON CHILDREN
Particular care is required with the drafting of trust instruments if the provisions of section 65 and section 66 of the 1975 Law are to be avoided. By section 65 income arising under a revocable settlement is deemed to be the income of the settlor. A settlement is deemed to be revocable by section 65(3) if: 28 29
See s 53(3). Statement M12.
Income Tax 215 “. . . any income or property which may at any time arise under or be comprised in the settlement is, or will or may become, payable to or applicable for the benefit of the settlor or the wife or husband of the settlor in any circumstances whatsoever.”
However, the settlement will not be deemed revocable (merely) because its terms provide for a reversion to the settlor in the event of either the beneficiary’s insolvency, assignment or disposition by the beneficiary of his interest, the death of both parties to a marriage the subject of a marriage settlement, or the death of the beneficiary prior to reaching a vesting age under the age of 25. Without prejudice to the generality of section 65(3) the minimum conditions for irrevocability comprise the following: (a) The settlement is not revocable for at least six years (or three years in the case of a charity) or during the lifetime of the beneficiary of the settlement; and (b) the settlor has divested himself, while the settlement remains irrevocable, of all control over, or right to receive, any beneficial interest from the settlement; and (c) the settlement is made in such manner and contains such particulars as may be prescribed by the authority by regulation.30 Parallel provisions at section 66 of the 1975 Law deem income payable to a child or children of the settlor under the age of 18 to be the settlor’s income if payable during the settlor’s lifetime.“Child” is defined to include a stepchild, adopted child or illegitimate child. If the minor child is in fact married the section does not apply. The relevant date, for all purposes, is the commencement of the year of charge concerned. It is immaterial whether the income is in fact paid over to the child; all that is required is that the income is capable of being paid. PERSONAL REPRESENTATIVES
By section 54(1) of the 1975 Law the personal representatives are liable to make returns of and to pay whatever outstanding tax liability of a deceased there may be. Any tax or penalty payable is a debt due and payable from the deceased’s estate. The personal representatives are deemed to be trustees of income arising after the individual’s death to the effect that the general trustee provisions apply. TAXATION OF SPOUSES
The taxation of married people in Guernsey harks back to a different time and philosophy. The prima facie rule is set out at section 43(1) of the 1975 Law which reads as follows: 30
S 65(1).
216 The Laws of Guernsey “Any income of a married woman living with her husband shall for the purposes of assessment, charge, collection, computation of total income, and release be treated as if it were the income of the husband.”31
Accordingly, all allowances are, prima facie, enjoyed by the husband to the exclusion of the wife. Hence the married person’s allowance is expressed as a single figure of £14,000.32 A husband may only claim a married person’s allowance where in the year of charge his spouse is both living with him or is wholly maintained by him. A further condition is that he is not entitled to any deduction from his taxable income in respect of any Court maintenance order. The question of whether or not a wife is wholly maintained by her husband is determined by her financial circumstances and the facts of the individual case. A married woman is not treated as living with her husband if they are separated under an order of a Court of competent jurisdiction or by deed of separation or they are in fact separated in such circumstances that the separation is likely to be permanent. Taxation of Maintenance Payments From a matrimonial lawyer’s point of view the most important provision within this part of the 1975 Law is at section 43(A):33 “Where under the order of any Court of competent jurisdiction a person is required to pay alimony or maintenance out of that person’s income to or for the benefit of that person’s spouse or former spouse, any sum so paid shall be treated as the income of that person’s spouse or former spouse and shall be allowed as a deduction in computing the income of that person”.
In plain terms maintenance payable to a wife or ex-wife under a Court order is not taxable in the husband’s hands but rather is chargeable to the wife.34 The corollary is that the husband is not entitled to the married person’s allowance whereas the recipient wife will be entitled to a single person’s allowance. Even where a maintenance order is payable to the wife for the benefit of the children of the marriage the maintenance will still be chargeable as the wife’s income as opposed to the husband’s. It is only where the Court order requires the husband to pay the maintenance to the children directly that the husband remains liable in full for the tax on the amounts so paid. Accordingly, if a practitioner is seeking to minimise the wife’s tax liability, any maintenance in favour of children should be 31 Note however that it is the married woman’s residence and/or nationality which is taken into account where such criteria are relevant to the determination of liability for tax. 32 Year of charge 2002 allowance. 33 Inserted by the Income and Corporation Taxes (Amendment) (Guernsey) Law 1989. But note the imminent change about to be effected by the Income Tax (Relief on Maintenance Payments) (Guernsey) Law 2002, see below. 34 And vice versa where a wife or ex-wife is ordered to pay maintenance to a husband or ex-husband.
Income Tax 217 ordered to be paid to the children as opposed to the wife. From the husband’s point of view the order should be made in favour of the wife if payments are to be allowable deductions against his assessable income. Where the order concerned is a Guernsey Court order in favour of a nonresident spouse the payer will be chargeable to Guernsey income tax on the ordinary agency basis and should therefore deduct Guernsey income tax from the maintenance payment. If the maintenance payments are pursuant to a foreign Court order no such deduction need be made,35 but the payment is still deductible for the purposes of Guernsey income tax. Reference should be made to statement of practice M7 which says of section 43A: “As this is the only Part of the Income Tax Law which deals with maintenance payments, a strict interpretation is applied when taxpayers make claims for relief in respect of payments made by them. Where a Court Order specifies that an amount is to be paid to a person’s spouse or former spouse for the maintenance of a child of the marriage it is the income of the spouse or former spouse, and the payer is entitled to a deduction for the amount paid. Where the payment is made under the order of a Court other than a Guernsey Court to a person’s spouse or former spouse resident outside Guernsey, payments under the Court Order should be made without deduction of Guernsey Income Tax. Where maintenance payments under a Court Order are payable to a child (and not payable to the spouse or former spouse) such payments are not regarded as the income of the spouse or former spouse so that if the payments are made to a child not resident in Guernsey they can be made without deduction of Guernsey Income Tax.36 To be allowable as a deduction within the meaning of s.43A of the Law, the payments must be made to or for the benefit of that person’s spouse or former spouse and consequently payments not conforming with this requirement of the Law are not allowable deductions.”
Note however that the above position as between spouses or former spouses is about to be reversed as and when the Income Tax (Tax Relief on Maintenance Payments) (Guernsey) Law 2002 comes into force.37 The new Law will repeal section 43A, but only with prospective effect, ie existing orders (including variations of existing orders) will be unaffected. It follows that payments of maintenance pursuant to post-2002 Law orders will no longer be treated as taxable income in the hands of the recipient; the payer will no longer qualify for income tax relief and will be assessed on his taxable income inclusive of maintenance payments. The advantage of the reform is the simplicity of the resulting system. Practitioners must allow though for the transfer of the taxation burden when negotiating future maintenance payment orders. 35 Presumably on the basis of comity or else because otherwise the payer might be at risk of being found in breach of the foreign order, a form of double jeopardy. This would not be the case for a Guernsey resident payer paying under a Guernsey Court Order; subject to any prevailing double taxation arrangement. 36 Plainly on the basis that the payer will be chargeable to Guernsey Income Tax in any event. 37 See Billet d’État XX for 25 September 2002.
218 The Laws of Guernsey Unpaid Income Tax If there is unpaid income tax in respect of a wife’s income section 44 gives the Income Tax Authority power to collect that tax directly from the wife or her personal representatives if she is deceased.38 There is power under section 45 for the husband of a deceased wife to disclaim liability for tax in respect of her income, which becomes collectable directly from her personal representatives. Separate Taxation of Spouses By section 46 spouses may apply for the separate charging to tax of a husband and wife. All allowances which they would be entitled to individually may be used up between them, notwithstanding separate assessment. Right of Appeal Section 76 of the 1975 Law provides the taxpayer with a right of appeal to the Guernsey Taxes Tribunal from an assessment of the Administrator of Taxes. The procedure to be followed is set out in the case of Administrator of Taxes v Tremoille Properties Limited (2002) 27 May, a judgment of Lieutenant Bailiff Talbot QC.39
SOCIAL SECURITY
What is known as National Insurance in England is called Social Security in Guernsey.40 The Guernsey system is based on the English, although a great deal less burdensome due to the different social and political circumstances of Guernsey; for example there is no national health service, at least not in the English form. A detailed analysis of the Guernsey social security system is beyond the scope of this work. It is noteworthy though that there is a social security agreement between the United Kingdom and both Jersey and Guernsey which is helpfully summarised in the UK benefits agency leaflet SA4.
38 Ie the normal rule is for collection of the wife’s tax from the husband, assuming they are still living together and assessed to income tax together. 39 The appeal itself concerned the proper characterisation of payments made by a taxpayer as between capital and revenue payments. See also the Court of Appeal case of Gold v Administrator of Income Tax (1999) 22 July. 40 Administered by the Social Security Authority.
11 Insolvency DÉSASTRE
W
HEN A PERSON (including a corporate person) is unable to pay his debts he is said to be en état de désastre. Désastre is defined in French as “malheur trés grave, ruine qui en résulte”.1 It means that the financial status of the person concerned is literally disastrous in the sense that his (current and pressing) liabilities exceed the value of his assets. Désastre is customary in origin; there are no written rules establishing the procedure and few governing it. Désastre is intended to be a quick, cheap and realistic judicial solution to the problem of insolvency, albeit from the point of view of the creditors as opposed to any broader public interest. The philosophy underpinning désastre is to permit all the creditors to share the proceeds of sale of a debtor’s chattels, as opposed to a single creditor liquidating assets for his exclusive benefit. It is a procedure concerned entirely with personalty as opposed to realty. Likewise désastre has no other consequence at all for the debtor save for the liquidation of his personalty and distribution of the proceeds of sale to his creditors. There is no sense in which désastre proceedings impede or prohibit any form of future activity by the debtor, at least not as a matter of law. The reality may be somewhat different if the case is well publicised. It is still important to note, however, that désastre is not, of itself, equivalent to a bankruptcy order. Neither does désastre in any sense constitute a discharge or even a potential discharge for the debtor from his liabilities. Any creditor in the désastre proceedings may continue to pursue the debtor notwithstanding part-payment of the material debt. Typically this would occur when other assets were discovered subsequent to initial désastre proceedings which may in turn lead to further désastre proceedings and so on for as long as new assets appear. The creditor may likewise turn to the debtor’s realty.2 All that will prevent repeated execution against assets and the pursuit of the debtor by his creditors is prescription itself, whether of the cause of action or any judgment obtained.
1 2
Le Robert Micro 1998. See below for an account of the separate procedure to enforce debt against realty.
220 The Laws of Guernsey Execution and Arrest Désastre proceedings originate in one of two ways. A judgment creditor will (usually) first seek to execute judgment against the personalty of the debtor. The judgment creditor delivers a certified copy of the Act of Court3 to the Sheriff who will then arrest the personalty of the debtor.4 Alternatively a creditor may, without first obtaining judgment, apply to the Bailiff or Deputy Bailiff for an arrest of the debtor’s personalty or certain specified personalty where there is good reason for an immediate arrest to be made. This would include circumstances where it is feared that the defendant will either dissipate or remove the assets to be arrested from the jurisdiction if he has the time and forewarning afforded under conventional debt recovery procedure, ie a civil action.5 In practice the Court would require a summons for the debt to be issued as a condition of the grant of an arrêt. The net effect is the same. The personalty of the debtor (up to the requisite value) is arrested. The Sheriff will notify the judgment or arresting creditor of the fact that the arrest has taken place. He will certify the Act of Court or order permitting the arrest to the effect that goods have been arrested and will make a report listing the personalty found. Physical goods are not normally removed immediately; they are however inventorised so that any goods removed will be identifiable. Solemn undertakings are extracted from the debtor pending further action. This is the equivalent of the English Sheriff ’s “walking possession” and the agreement of the judgment debtor not to dispose of or otherwise interfere with the arrested goods the equivalent of a “walking possession agreement”. In order to progress matters the arresting creditor6 must apply to the Court for the arrest to be confirmed and for permission to sell or otherwise realise the personalty arrested by the Sheriff. The application is in the form of a summons or cause actioning the debtor to see the Court confirm the arrest and to give leave for the sale.7 If the arrest was pursuant to a judgment it is unlikely that the application will be opposed, alternatively that any opposition would be successful. This is in the absence of any extant appeal or requête civile.8 If the arrest was not pursuant to a judgment this is the opportunity for the alleged debtor to contest the debt pursuant to which the arrest has been made. It is more likely that an alleged debtor would have challenged the arrest already, ie within hours or at least a very few days of the Sheriff ’s arrival at his premises. Again, in practice a summons for the debt will have been issued in any event with the same return date. If the debt is defended the case will proceed in the normal way, albeit with safeguards in place for the personalty, if still appropriate. 3
Ie judgment. Or rather as much of a debtor’s personalty as is necessary to satisfy the judgment and costs. 5 Arrest is considered in detail in the section: Injunctions, arrêts and the Clameur de Haro. 6 Whether a judgment creditor or not. 7 The Sheriff is also summonsed. 8 A form of application to set aside a judgment; see the section on civil procedure. Any such appeal or requête would have to have some discernible merit. 4
Insolvency 221 Matters are proceeding thus far in exactly the same way as any other arrest of personalty or execution of a judgment debt. The same is true of the next stage whereby the arrested personalty is (assuming leave has been given) sold by public auction after advertisement of the sale in the Gazette Official. The arresting creditor must then action HM Sheriff as the sequestrator of the net proceeds of the sale of personalty to pay over to him the amount of his debt; again there is no distinction in procedure. By this time any other creditors of the debtor are likely to have come forwards. If the Sheriff becomes aware of any such creditors he will notify the Court when he appears in answer to the summons of the original arresting creditor for payment over of the proceeds of sale. It is at this point that the désastre procedure proper comes into play. There is some slight dispute as to the qualifying requirement. Sir Havilland de Sausmarez considered that désastre proceedings could not be initiated unless HM Sheriff reported that there were at least two judgment debts which could not be satisfied in whole by the proceeds realised. By contrast, Sir Charles Frossard in the 1983 case of Re Pagliarone (en désastre) held that that the procedure could be instigated whenever HM Sheriff had insufficient funds to satisfy the judgment debt and knew of other unsatisfied judgments or claims not the subject of Court proceedings. It is submitted that there will be sufficient grounds to institute the désastre procedure whenever the sheriff has insufficient funds to cover the judgment debt and other debts notified to him which appear prima facie payable, regardless of whether those other debts are judgment debts or not. If the proceeds of sale will in fact satisfy the arresting creditor’s debt and the other (judgment) debts of which the Sheriff is aware those creditors will be paid in full9 and the matter will be at an end so far as the arresting creditor is concerned. It may be that other arrests follow immediately if they have not already been put in place. The fund will be used up to the extent of the properly payable debts notified to the Sergeant.
THE COMMISSIONER
Again, assuming that there are insufficient funds to satisfy the debts notified10 the Court will order the arresting creditor, the debtor and other creditors to appear before a Jurat appointed by the Court to act as Commissioner for the purpose of establishing the claims of debtors and any preferences. There follows an initial meeting between the arresting creditor, the Sheriff and the Commissioner at which the Sheriff will confirm to the Commissioner that the proceeds realised by the Sheriff are insufficient to satisfy the debts of which he is aware. The Commissioner will then declare the debtor to be “en désastre” and will fix the place, date and time when he will examine the claims and preferences of creditors and declare what 9 10
Assuming as regards non-judgment creditors that the debts are not disputed. Which is much more likely.
222 The Laws of Guernsey dividend is to be paid from the monies in the possession of the Sheriff; ie the creditors’ meeting proper. There is no longer any strict requirement or any requirement at all to summons the debtor to the initial meeting;11 nor is the failure to hold the meeting fatal to the désastre proceedings, see the case of in Re Fresh Taste Bakery Limited (en désastre) P de M 11 April 1984. The arresting creditor must give notice of the creditors’ meeting on two occasions, once in each of two successive weeks, in the Gazette Officielle. Notice must also be posted in the vestibule of the Royal Court. The notice requirements are found at paragraph 1 of the Ordonnance relative aux Désastres et au Partage des Biens-meubles en cas de Renonciation ou de Cession, Tome IV p 332.12 In practice the creditors will notify their claims to the Sheriff in advance of the creditors’ meeting and the Sheriff will make what enquiries are practicable in the time available. The Sergeant may uncover further assets in the process which will also be brought into account. The debtor is summonsed to attend the meeting, although rarely attends in practice. The Sheriff will have liaised with the debtor to establish the nature of his debts so far as he is concerned. The debtor’s own admission of a creditor’s debt is persuasive in the absence of any connection between the debtor and the alleged creditor. As with the whole of the désastre procedure it is the arresting creditor’s Advocate who takes the initiative and leads the proceedings, although it is the Commissioner who formally presides over the meeting. The arresting creditor’s Advocate opens the meeting and introduces its nature and purpose to the Commissioner and the assembled creditors and other persons interested. Each creditor has an opportunity to submit their claim; in practice the Sheriff works through a list he has already prepared for this purpose indicating the extent of each claim, its status and whether it is challenged to his knowledge. As each debt is raised by the Sheriff the Advocate for the arresting creditor gives an opportunity to the assembled creditors to indicate whether there is any dispute as to either the debt or the amount in which it is claimed. Priority of Debts Costs Apart from this general marshalling of debts there is also the question of priority between debts to be determined. The désastre costs themselves have the highest priority, ie HM Sheriff ’s fees, any other costs he has incurred realising the sums to be distributed and the legal costs of the arresting creditor. The case of Pagliarone is authority for the proposition that the legal costs of creditors generally have the 11
Although it is good practice to do so. See also the Ordinance of 1895, the Loi par rapport à la Publication des Annonces Officielles 1936 and the Official Publication Ordinances 1936, 1940, 1948, 1965 and 1973. 12
Insolvency 223 same priority if incurred in the pursuit of the debtor. Sir Charles Frossard relied upon an Ordinance of 18 January 1936 which states that any act of Court or registration for debt obtained in the fortnight preceding a désastre confers no preference upon the creditor save to the extent of his “legal” expenses which will be paid to him in full.13 This is an area which ought perhaps to be reviewed given the effect of the Royal Court (Costs and Fees) Rules 2000 and the higher level of recoverable costs today when compared to 1983. Secured Creditors There must also be taken into account any secured creditors. These comprise chiefly creditors pursuant to a security interest under the Security Interest (Guernsey) Law 1993. The relevant portion of the proceeds of sale of the security are to be applied in the manner provided by sections 5 and 6 of the 1993 Law. Alternatively there may have been an assignment under the earlier, but still in force, Law of Property (Miscellaneous Provisions) (Guernsey) Law 1979. Both forms of security taking amount to a charge over personalty; but note that there are formal requirements to be fulfilled and other limitations imposed as preconditions to the grant of an effective security interest/assignment.14 There may also be creditors secured by way of pledge; ie they were given possession of the relevant article of personalty as a part of the loan/security agreement. Assuming the security taken is effective and sufficient secured creditors will be unconcerned by the désastre proceedings and simply get on and liquidate their security. Creditors with security over realty may also try to claim in the désastre proceedings. There is some debate generally as to whether secured creditors may claim only for the unsecured balance of any debt owed, ie to the extent only that the security is inadequate. If the secured creditor wishes to claim he ought, it is suggested, to supply a valuation of the security he holds which must be agreed by the other creditors and accepted by the Commissioner. If there is agreement the claim would be admitted to the extent of the unsecured balance but have no priority as such, ranking equally with other non-preferred debts. Note also other possible forms of security such as ship mortgage or lien.15 Preferred Debts So-called preferred debts are then identified and marshalled. Preferred debts are those set out in the Preferred Debts (Guernsey) Law 1983. For reasons lost in history and ancient customary law the debt with the highest priority after the costs of the désastre proceedings and any secured debt is “ . . . debt owing to a landlord by his tenant in respect of the rent of any immovable property to the extent that such 13
The substantive provision is of itself noteworthy. See below for a fuller discussion of security interests. Unless there is a fraudulent preference the holder of a security interest will have a priority to the extent of his collateral. 15 There is pawn broking legislation for example. 14
224 The Laws of Guernsey debt is secured by goods present in or upon that immovable property which are subject to tacit hypothecation by operation of law. . . .”16 The 1983 Law recognised the hypothèque tacite of customary law.17 This was the right of a landlord to seize and sell his tenant’s personalty in order to discharge any arrears of rent. Under customary law the right extended to execution against any goods found on the landlord’s premises, regardless of their true ownership. This avoided the mischief of a tenant declaring that none of the property found in his possession belonged to him. This inflexible rule was capable of causing injustice and accordingly the Preferred Debts Law provides by section 4 that property which appears to be owned by the tenant is subject to tacit hypothecation, subject to the true owner proving his exclusive ownership of the goods in accordance with the Law’s provisions. By section 1(2) HM Sheriff must give notice on two occasions in the Gazette Officielle of the seizure of any goods found upon the property of a landlord, requiring anyone claiming ownership of the goods to apply to the Court within fourteen days of the first publication. In the case of Bell Data Systems (CI) Limited v William Moffat [1993] 15 GLJ 35 it was held that the fourteen day period could not be extended. By contrast in the case of Concorde Leasing UK Limited v B D Properties Limited [1992] 13 GLJ 42 it was held that an informal fax sent on the last day to the Greffier was sufficient in the circumstances to constitute the required application. It is important to note the limitations of the hypothèque tacite. It applies only to goods found on the landlord’s property and the proceeds of their sale. If only a small foot-stall is found, the proceeds of sale of that foot-stall represent the extent of the priority. In any event the amount of rent protected in this way is limited by reference to the rent period under the tenancy concerned. Where the tenancy was a weekly tenancy the protection is capped at six weeks rent and the current week (if relevant). Where the tenancy was monthly the period is three months and the current month; where quarterly six months and the current quarter and where half-yearly or longer one year’s rent. Any unpaid balance is dealt with as an ordinary unsecured and non-preferred debt ranking equally with other creditors in the same position. After the costs of the désastre proceedings, secured creditors, and rent there follow four categories of preferred debt which rank equally between themselves but have priority over all other unsecured creditors, see section 1(1)(b). Wages and Salaries The first category comprises the wages and salaries of clerks or other servants in respect of services rendered to the debtor during the four months immediately preceding the appointment of the Commissioner by the Court and all wages of any workmen or labourers. It is not clear what justification there was for the unlimited period as regards workmen or labourers; perhaps there was a perception that they were at greater risk of exploitation. 16 17
See s 1(1)(a). See p 244 Terrien and Thomas Le Marchant, Tome 1 p 274.
Insolvency 225 The maximum preferred debt of any individual within this category is fixed at £3,000 by section 4(2), as amended by the Preferred Debts (Guernsey) (Amendment) Law 1992. This is subject to a rather unclear provision in the same sub-section which appears to remove the limit where earnings were payable in the form of a lump sum at the end of a period of employment. Holiday Pay The second category comprises all accrued holiday remuneration becoming payable to any clerk, servant, workman or labourer (or his personal representative if he is dead) on the termination of his employment before or by reason of the insolvency of the debtor or the winding-up of a company.18 Unpaid Income Tax The third category comprises the amount of any income tax deducted by an employer from the earnings of an employee during the twelve months immediately preceding the date of appointment of the Commissioner by the Court but not paid over to the Income Tax Authority. Unpaid Social Security Contributions The fourth category comprises Class 1 social security contributions deducted during the same one year period and again not paid over by the employer. There is no good reason why the States should be favoured in this way; save perhaps to prevent deductions from employees’ earnings benefiting ordinary creditors indirectly. Again this does not justify giving equal priority with the employees themselves. As noted above, all four categories of preferred debt, other than rent,19 rank equally amongst themselves and, subject to the landlord’s right, must be paid in full unless the assets are insufficient to meet them, in which case they abate in equal proportions. By section 1(3) a person who advances monies used to pay employees’ earnings or holiday remuneration has the same right of priority in respect of the monies advanced that the employees would have had if these sums had not been paid. This is popularly referred to as the “good Samaritan” clause. Note also the provisions of section 29 of the Employment Protection (Guernsey) Law 1998 whereby awards under the Law have equal priority with the four section 1(1)(b) categories up to a limit of £3,000.
18 There is no statutory entitlement to holiday pay per se in these circumstances, only the accrued contractual entitlement is taken into account. 19 And debts effectively secured against personalty.
226 The Laws of Guernsey Set-off Where a bank is involved there are likely to be issues relating to set-off.20 There are provisions of general application governing contractual set-off at section 1 of the Law of Property (Miscellaneous Provisions) (Guernsey) Law 1979, as amended. In particular the automatic effect of set-off and the availability of only the balance (if any) in favour of other creditors. This is subject to agreements being deemed void as fraudulent preferences if entered into in the six months prior to the creditors’ meeting in the case of désastre and/or six months before the commencement of winding-up in the case of a corporate body. Note also the provisions of section 3 of the 1979 Law giving certain rights to the assignor of a debt or other chose in action which is subsequently arrested as an asset of the assignee. Subject to certain conditions the assignor is entitled to the reassignment of the debt or chose, alternatively damages. The condition is, typically, payment of the sum outstanding pursuant to the arrangement. See in particular the priority given to the assignor by section 3(3) as regards damages.21 Non-preferred Debts After preferred debts have been marshalled all other debts are marshalled in turn. If any claim is disputed the Commissioner may (and in practice will) adjourn the proceedings and seek the direction of the Court, see In re Fresh Taste Bakery Limited (en désastre) (1984). Ultimately the Court may be required to adjudicate upon a disputed claim although given the amounts involved this would be rare. Special Cases There are a number of special cases where the priority of debts or creditors may be adjusted notwithstanding the general rules as set out above; the chief examples are as follows: (a) a creditor who has failed to take part in an earlier division of meubles is given a certain degree of priority in any subsequent division by an Ordonnance of 1827 (p 339, Tome II); (b) where assets are held on trust for others, see s 68 of the Trust Law; (c) distributions under a limited partnership pursuant to the Limited Partnerships (Guernsey) Law 1995 or by reason of s 43 of the Partnership (Guernsey) Law 1995; (d) the Court may adjust the application of monies recovered from a director under the Companies Law; 20
Eg between credit and debit balances held in different accounts with the same bank. S 3 is considered more fully below, together with equivalent provisions in the 1993 Security Interests Law. 21
Insolvency 227 (e) where there is a protected cell company; (f) where there is a Guernsey insolvency linked to a foreign insolvency by reason of s 426 of the Insolvency Act 1986 as extended to Guernsey; (g) where monies are subject to a restraint order under the drug trafficking legislation; (h) where specific provisions governing insurance businesses apply. The Dividend At the end of the creditors’ meeting an estimate will be made of the dividend payable to the various categories of creditor. The dividend is calculated by taking the proceeds of sale of the arrested personalty and deducting the various sums payable in order of priority. The (estimated) Sheriff ’s costs and arresting creditor’s costs are deducted first (together with other creditors’ legal costs). The balance is then reduced by the amount properly due to creditors with effective security over personalty.22 The qualifying preferred debt due to the landlord (if any) is deducted next. Any remaining balance is then subject to the four categories of preferred debt identified above. What is left is divided rateably between all remaining unsecured and non-preferred creditors and secured creditors (to the extent that they are unsecured) and preferred creditors (to the extent that their claims are not preferred). Inevitably this requires the calculation of a dividend of so much in the pound, (otherwise there would have been no désastre). The dividend is calculated by dividing the remaining money balance available to the debt class by the total debt claimed by that class. For example if there is only £25,000 by the time the unsecured and non-preferred creditors are considered, but still £100,000 of debt outstanding, the dividend will be 25p in the pound or 25 per cent of the debts claimed (and admitted). The Commissioner must make a report to the Royal Court of the creditors’ meeting. This report is, in practice, prepared on his behalf by the Advocate for the arresting creditor. The report sets out in summary form the amount in the hands of the Sheriff, the various classes of creditor, the debts claimed and admitted within each class and the calculation of the amount payable to each creditor and the dividend payable to creditors who are not to be paid in full. The Commissioner signs the report which is lodged with the Court. The terms of the report are put into effect without the requirement for any further action on the part of the arresting creditor; assuming there is no disputed claim. This is the end of the procedure. The Merits of Désastre The Désastre Procedure Committee identified the advantages and disadvantages of désastre. The advantages were considered to be the ability to deal with numerous 22 If the security has not already been enforced apart from the désastre proceedings, which is much more likely.
228 The Laws of Guernsey claims equitably, swiftly and cheaply. Dissatisfied creditors were not prevented from taking matters further against the debtor and other assets could be attacked if they came to light subsequently. In addition there was no public cost of any note. The disadvantages were said to be the fact that désastre could only operate in respect of assets found and realised by the Sheriff within the jurisdiction. There was no effective method (or any method for that matter) of requiring a debtor to make full disclosure of his assets and liabilities. There was no clear code of procedure for désastre. The likely inexperience of the Commissioner was noted, together with his reliance upon the Advocate for the arresting creditor in circumstances where he was an interested party. A particular fault with désastre proceedings was identified as being the fact that any individual subject to désastre proceedings was free to continue trading as recklessly as before. Désastre is therefore an area of distinctively Guernsey law which, in common with other such areas, has its attractive features. Désastre is a swift, efficient and (with the exception of the landlord’s hypothèque) a relatively fair means of distributing an inevitably insufficient sum of money. The perceived failure to have any greater impact on a debtor in order to protect the public is not, in truth, a defect of désastre but a reflection on the failure (probably through lack of incentive) of a creditor to proceed one stage further and apply under Article 16 of the Law relating to Debtors and Renunciation 1929. Article 16 reads as follows: “Any debtor whose affairs have been declared in a state of ‘désastre’ by his arresting creditors at a meeting held before a Jurat as Commissioner of the Court, may be summoned before the Court by such arresting creditors or by one of them to hear the Court declare that the debtor is insolvent. If the Court so declares the procedure in this case shall be the same as that prescribed in Part II of this Law and such declaration shall be deemed to be an application by the debtor for a declaration of insolvency.”
This is considered in the next section. Very often the efficiency of HM Sheriff in uncovering any assets means that there is little else likely to be achieved by taking matters further. As regards companies the equivalent next step would be a winding-up petition pursuant to the Companies (Guernsey) Law 1994 as amended. This is again considered elsewhere. The Economics of Désastre The désastre procedure itself requires an arresting creditor to take the initiative and incur reasonably significant expense. An assessment of the economics of proceeding with désastre can be made at the stage when the assets have been arrested and a likely estimate of their value is known. Equally, it is not attractive to a creditor to have to share the debtor’s assets with other creditors. Accordingly, other forms of execution not involving the watering down of assets should be considered. These will include Mareva injunctions in support of execution, but
Insolvency 229 operating directly between the judgment creditor and the person in whose hands the relevant asset is frozen.23 Whether in fact the Royal Court would impose désastre proceedings in such circumstances is not known. There seems no reason why it should, any more than désastre proceedings will be imposed where a simple arrest of earnings is sought. It is submitted that this principle would apply to the equivalent of garnishee proceedings within the Bailiwick generally.24 Under the Petty Debts Ordonnance HM Sheriff may distribute the proceeds of sale of an execution without further Court order. There is therefore no scope for désastre proceedings in relation to Petty Debt judgments. The State of Insolvency and the Individual The next stage in the insolvency process for a natural person is to apply for a declaration of insolvency pursuant to the Law relating to Debtors and Renunciation 1929 and the accompanying Ordonnance relative à la Renonciation of 30 September 1929. This is the Guernsey equivalent of bankruptcy and provides also for eventual and/or potential discharge. Unfortunately the Law has been used rarely, perhaps on only a handful of occasions in the last half century. The reason why is not altogether clear. Commonly held wisdom says that the procedure is expensive and time consuming; however there seems little in the way of additional burden by comparison with désastre proceedings which are perceived as swift and cost-efficient. What seems to be under-appreciated is the fact that for the cost of one, or possibly two more short Court applications there are swingeing powers available under the 1929 Law to compel the debtor that are wholly missing from the désastre procedure. There are even means provided of attacking whatever pension provision the debtor has made as well as his income. The Law Officers may also be required by the Court to intervene in order to investigate a debtor who is suspected of evading his obligations. In short the 1929 Law and Ordinance provide creditors with all the weapons they require to ensure the maximum possible recovery from a debtor. Obviously the economics of pursuing a debtor will be at the forefront of a creditor’s mind. The Law has greatest potential in respect of the debtor who, anticipating financial failure, takes dishonest steps to hide what remains of his wealth. Désastre is unlikely to be sufficient in these circumstances whereas the 1929 Law may succeed.25
23 A Mareva injunction itself gives no security per se; see generally the case of Flightline Ltd v Edwards LTL 5 February 2003. 24 A garnishee order has now become a third party debt order in England. There is no formal provision in the Guernsey rules for garnishee proceedings per se; see the section on civil procedure for a fuller consideration of the issues in this context and the options available, which draw upon customary/French law and procedure. 25 Other methods of enforcement must not, of course, be overlooked. As noted above these include Mareva injunctions in support of execution, garnishee proceedings and the like.
230 The Laws of Guernsey
THE LAW RELATING TO DEBTORS AND RENUNCIATION 1929
Imprisonment for Debt26 Part I of the 1929 Law reformed Guernsey law as to the circumstances in which a debtor might be imprisoned. Reform had been long overdue. There was a time when Guernsey law discriminated grossly between natives of Guernsey and foreigners. The latter were likely to be imprisoned for lengthy periods if unable to pay their debts whereas the former were afforded various opportunities to be released within a much shorter period of time. In any event by 1929 the view had come to be accepted, however belatedly, that the honest man unable to pay his debts should not be imprisoned. Article 1 states the basic rule that no person shall be arrested or imprisoned for making default in payment of a sum of money, but then goes on to make various exceptions comprising chiefly the wilful failure to pay money which the Court has ordered to be paid. Perhaps the most significant of these exceptions is that of default by a trustee or person acting in a fiduciary capacity in making payment of any sum in his possession or under his control which the Court has ordered him to pay. In any event the maximum period of imprisonment which may be served is one year. Article 4 preserves the right of a creditor to have a debtor arrested where it is feared he is about to leave the Island. This is considered in detail elsewhere.27 If the application to the Bailiff succeeds and an order for arrest is made this is deemed to be the commencement of an action against the debtor. Within eight days of the date of the order the creditor must action28 the debtor to see the Court confirm the arrest, in default of which the order ceases to have effect and the debtor will be released. At the hearing it is for the creditor to prove the debt, alternatively for the defendant to argue why he should not continue to be imprisoned. In any event the debtor is entitled to be released if he provides security to the Sheriff in the amount claimed or if he takes an oath before the Bailiff not to leave the Island without the Bailiff ’s written permission. The debtor may also secure his release by applying to the Court for a declaration that he is insolvent. This is the subject of Part II of the 1929 Law. The application may (of course) be free-standing of any arrest. The Application for a Declaration of Insolvency The combination of Articles 6 and 16 permit either a debtor himself or, where the debtor has been declared en désastre, one or more of his creditors, to seek a decla-
26 27 28
See Pothier, Traité de la Procédure Civile, part 5, ch 1. See the section on arrêts. Ie summons.
Insolvency 231 ration that he is insolvent. Paragraph 33 of the Ordonnance provides that a debtor’s application for a declaration of insolvency must be made by means of a petition, if not in response to an action against him by a creditor. The debtor must, prima facie, be present in Court when the application for a declaration of insolvency is made since he is required to take an oath not to leave the Island until his application has been adjudicated upon, save with the leave of the Court.29 Equally there is no good reason why the 1929 procedure should be held up by a debtor absenting himself voluntarily. By Article 7 of the 1929 Law the application, once made, is adjourned for a month, during which time a meeting of the creditors will take place. In order to secure and supervise the estate of the debtor a Jurat is again appointed Commissioner, together with a committee of creditors. One would expect the principal creditors to be represented on the committee, either personally or by their Advocates. Immediately after the making of the application for a declaration of insolvency the debtor is obliged to deliver to the Sheriff all books, titles, papers and other documents relating to his affairs together with all his movable property liable to division between his creditors.30 The debtor is also obliged within four days of the application to prepare an inventory of his movable and immovable property and a list of his assets and liabilities. He must swear to the truth of the inventory and list before the Court.31 These are then presented to the committee of creditors along with his declaration.32 The debtor is liable to imprisonment for contempt if he fails to comply with these initial obligations. The Creditors’ Meeting The creditors’ meeting takes place within a month of the application date. Notice of the place and time of the meeting is given by announcement in the Gazette Officielle on two occasions, once in each of two successive weeks, at least ten days before the appointed date.33 In addition notice must be posted in the vestibule of the Royal Court. The debtor himself must give notice in writing of the meeting to all of his creditors at least four days before the meeting. The debtor is required to attend the meeting and must answer any questions put to him by his creditors. Article 10 of the 1929 Law provides that every question for the creditors as regards the administration or realisation of the debtor’s property or an offer of
29
See Art 8. Para 42 of the 1929 Ordonnance describes in detail the property which is divisible amongst creditors. Property held on trust (by the debtor) is excluded, together with clothes, bedding and necessary household articles of furniture and effects, in the discretion of the Sheriff. 31 Most conveniently presented in affidavit form. The Ordonnance assumes an affidavit. 32 Ie his application for a declaration; see Art 7. 33 See the Loi par rapport à la Publication des Annonces Officielles 1936 and the Official Publication Ordinances 1936, 1940, 1948, 1965 and 1973. 30
232 The Laws of Guernsey composition by the debtor must be decided by the majority of unsecured creditors present, provided that the creditors present represent two-thirds of the total unsecured liabilities declared by the debtor, without prejudice to preferential claims. The Ordonnance makes detailed provision governing the creditors’ meeting. A person may only vote as a creditor if he has been included in the debtor’s affidavit (ie his sworn account of his assets and liabilities) unless he has been recognised by the committee as being a creditor. Creditors may not vote in respect of any unliquidated or contingent debt. There are stringent conditions governing the voting rights of secured creditors. These require the secured creditor either to surrender his security before he will be entitled to vote or to value his security and only exercise voting rights in respect of the unsecured balance. There are shrewd provisions permitting the committee to require a secured creditor to give up or assign his security for the benefit of the creditors generally on payment of the value estimated by him and a 20 per cent uplift. By this device a balance is struck between secured and unsecured creditors. The secured creditor must give a tolerably honest valuation or else risk being hoisted by his own pétard. The creditors’ committee considers the admissibility or otherwise of each debt. By paragraph 7 of the Ordonnance the Commissioner has power, on the application of the committee, to admit or reject a debt for the purpose of voting, but his decision is subject to appeal to the Royal Court. There is a half-way house open to the Commissioner of marking the claim as objected to and permitting the creditor to vote, subject to that vote being declared invalid in the event of an objection being sustained. Paragraph 9 makes subtle provision regarding the quorum required for a creditor’s meeting. A quorum comprises three creditors, or all of the creditors if their number is not greater than three. This must be cross-referenced to Article 10 of the Law whereby, as already noted, effective decisions require the majority agreement of those present who must themselves collectively represent two-thirds of the unsecured debt. If there is no quorum the meeting must be adjourned for between seven and twenty days. There would be no point in proceeding if effective decisions could not be made by the creditors present in any event. There is some confusion as to when precisely debts are proved. The Ordonnance anticipates proof of debts only after a declaration of insolvency has been made, see paragraph 10; whereas by Article 11 of the Law it is at the end of the month prescribed by Article 7 that the Court is required to adjudicate upon the application for a declaration of insolvency after having heard both the creditors’ and the Commissioner’s report regarding the debtor’s affairs.34 There are no examples of actual practice to draw from. The better view is that the application for a declaration for insolvency triggers the various obligations of the debtor and a period of investigation into the affairs of the debtor. It may be that more than one month is 34 Note the confusion within Art 16 itself. If the debtor has already been found to be en état de désastre the Court may move directly to declaring him insolvent. However the article goes on to say that the Part II procedure is then applied; ie the declaration is deemed to be an application by the debtor for a declaration of insolvency (ie the declaration just made by the Court).
Insolvency 233 required, which period could be extended by the Court where appropriate. During that time the creditors would meet and the debts prima facie established by the Commissioner. If the debtor is indeed found to be insolvent the declaration of insolvency would be granted. Debts would then be proved formally and the estate liquidated and distributed amongst the creditors. Proving Debts Irrespective of the above each creditor is required to prove his debt on or before the day fixed by the Commissioner, with a discretion for the Commissioner to accept late proof for good reason. Paragraph 12 provides that debts may be proved by the creditor or his agent in person or by sending a declaration signed by the creditor verifying the debt. The declaration must contain a statement of account showing the particulars of the debt and specifying any supporting documents. The declaration must also state whether the creditor is secured and whether he claims any preference. There are provisions for proof of debts by secured creditors which reflect the voting limitations noted above. There are surprisingly cynical provisions permitting amendment of valuations by secured creditors where these have been challenged, see generally paragraphs 18 to 26. The Ordonnance was plainly written with all manner of mischief in mind. Paragraph 27 permits creditors to prove for debts payable at a future time subject to discount at the rate of 5 per cent per annum. By paragraphs 28 to 31 the Commissioner must examine every proof and either accept or reject the debt or require further evidence to be submitted. When rejecting a debt the Commissioner must give reasons. A dissatisfied creditor may apply to the Ordinary Court for the decision of the Commissioner to be reversed or varied. Preferences There are extensive provisions in the Law nullifying preferences given or obtained fraudulently in the three months prior to the debtor’s application for a declaration of insolvency.35 Article 9 of the 1929 Law provides at some length that any transaction or judicial proceedings taken or suffered by any person unable to pay his debts during the relevant period with a view to giving a creditor a preference over other creditors shall be deemed fraudulent and void as against the committee of creditors. There are exceptions to this general provision which are not completely coherent. Thus a broad range of transactions with the debtor are not invalidated if the transaction takes place before the date of the declaration of insolvency and the party concerned has no notice of an application to the Court for a declaration of
35
Or a creditor’s application pursuant to Art 16.
234 The Laws of Guernsey insolvency. Given that the material three month period identified in the first subsection of Article 9 is the three month period prior to the application for a declaration it is hard to see how the exemption category corresponds with the general prohibition. The requirement to conclude the transaction before the declaration is made appears to be a reference to the date one month after the initial application for a declaration when the Court must actually adjudicate on the application. Taken at face value it seems that those dealing innocently with a debtor are unaffected by the preference provisions up until the date when he is declared insolvent. This appears to be notwithstanding the absolute requirement for the debtor to hand over all his movables and documents on the date he makes his application. There is a more straightforward exemption for those purchasing or otherwise acquiring property for valuable consideration in good faith through or under a creditor of the bankrupt. Paragraph 32 of the Ordonnance expressly provides that any preference obtained by a creditor over the immovable property of a debtor by means of the registration of an act of Court is null and void if obtained within the three months immediately preceding the application date. The anti-preference provisions are potentially of great assistance to a creditor who realises late in the day that the debtor is insolvent. By making an application for a declaration of insolvency he can nullify the advantage obtained by other creditors during the previous three months. The State of Insolvency As noted already, by Article 11 the Court is required to adjudicate on the application for a declaration of insolvency after the expiry of the month-long period prescribed in Article 7 and after having heard both the creditors’ and the Commissioner’s report concerning the debtor’s affairs. Subject to dispute between the creditors and/or between a creditor and the debtor the hearing is likely to be a formality. It is at this point that the debtor will be declared insolvent with near equivalent effect to a bankruptcy order. Thus under Article 15 it is an offence for a debtor who has been declared insolvent inter alia to undertake or engage in trade or business on his own account, obtain credit of ten pounds or more without disclosing his insolvent state, or to conceal or remove any part of his property with intent to defraud his creditors.36 The insolvent’s personalty will be liquidated and distributed in accordance with the désastre principles. In practice realty is dealt
36 Note that there is no express automatic disqualification from acting as a company director, although the general prohibitions in the 1929 Law might make this difficult in practice. The Court may instead disqualify the insolvent of its own motion or on the application of either the Advisory & Finance Committee, the Financial Services Commission, HM Procureur, the company of which he is a director, or any other interested party (with leave), see s 67A The Companies (Guernsey) Law 1994, as amended. See both Arts 15 and 18 for the full extent of the restrictions imposed on the debtor.
Insolvency 235 with separately under the saisie procedure, see below.37 It is most probable that the insolvent’s affairs will not yet have been wound up fully. The Law and Ordonnance assume that the creditors’ committee remains in being for as long as necessary in order to deal with any matters arising. Renunciation From the time the declaration of insolvency is made the debtor will seek his discharge or benefit of renunciation38 whereas the creditors will continue to try to extract what they can by way of repayment from the debtor. Article 12 provides that every debtor who has been declared insolvent may at any time apply to the Court for the benefit of renunciation. A debtor may therefore apply for the benefit of renunciation immediately after being declared insolvent.39 However, renunciation is a great deal more subtle than a simple discharge; there is a very real sense in which renunciation can itself become the state of bankruptcy rather than any true release. The application for the benefit of renunciation is governed by Article 13 and paragraph 34 of the Ordonnance and is made by way of an action on the part of the debtor against the committee to see the Court grant him the benefit of renunciation.40 The debtor must give notice of the hearing date in the Gazette Officielle at least ten days beforehand and place a notice in the vestibule of the Royal Court. The debtor must also, when possible, give eight days’ previous notice in writing to all his creditors. On the hearing of the application the Court must hear the creditors and the Commissioner’s report as to the debtor’s conduct and affairs (to date). This implies that such a report will be made. The Court then has a very broad prima facie discretion as to whether to grant or refuse renunciation, likewise as to the quality of any renunciation granted. At one end of the spectrum renunciation may be granted immediately and unconditionally. Here there is a true and full discharge from payment of debts incurred before the application for a declaration of insolvency, save for those debts which survive renunciation as set out at Article 14: (a) debts due to the Crown or to a person for any offence against a law relating to the public revenue or for bail given for the appearance of a person accused of crime; 37 This is because of the likelihood that there will be secured creditors. In theory there appears to be no reason why realty should not also be dealt with by the 1929 procedure; indeed the Law expressly mentions conveyances of immovable property in the context of preferences and refers at paragraph 42 of the Ordonnance to “all such property as may belong to or be vested in the debtor at the time he applies for the declaration of insolvency”. 38 Renonciation in French. 39 Again if realty is involved it is likely to be months before all the individual’s assets are liquidated or otherwise disposed of and therefore the final position known. 40 Ie by summons to the committee.
236 The Laws of Guernsey (b) debts or liabilities incurred by means of any fraud or fraudulent breach of trust to which he was a party, or a debt or liability from which he has obtained a discharge by any fraud to which he was a party; (c) any liability under a judgment of the Court against him in an action under an affiliation order. These debts may only be discharged with the express authority of the Court and subject to such conditions as may be imposed. Alternatively the Court may grant renunciation but suspend its effect for a period of time or grant renunciation immediately but with such conditions attached as to earnings, income or other after-acquired property or otherwise as it deems fit. At the other end of the spectrum Article 13(1) requires the Court to refuse renunciation if the debtor has been convicted of fraud under the 1929 Law or “any other misdemeanour or felony connected with his insolvency” unless for special reasons the Court otherwise determines. Article 15 sets out various misdemeanour offences after a declaration of insolvency has been made including the ban already noted on engaging in trade or business on his own account, failing to comply with a condition imposed by the Court, obtaining credit of ten pounds or more, obtaining credit under false pretences, donating or otherwise transferring assets with intent to defraud creditors, and concealing or removing property within a period two months before or after a debt judgment with intent to defraud. Article 18 sets out further misdemeanour offences whilst in a state of insolvency; these include failing to disclose to the committee all his property and the full circumstances of any disposal; failing to deliver up all his property; failing to deliver up all books, documents and papers; concealing property prior to an application for insolvency or during the state of insolvency; fraudulently removing property; making a material omission in any statement to the committee; failing to inform the committee of a false debt and so on (there are fully 18 separate sub-categories of the offence). Where acts of fraud are alleged by the creditors Article 17 gives the Court power to make such order as it thinks reasonable to give an opportunity to the Law Officers to examine the allegations and institute proceedings if necessary.41 This is again a powerful weapon in the hands of the creditors. Both the Article 15 and 18 offences attract a sentence of imprisonment of up to two years, (with or without hard labour). There is a further general offence at Article 20 of knowingly aiding an insolvent to obstruct or frustrate the insolvency process. In addition to the Article 15 and 18 offences there are 12 sets of circumstances set out at Article 13(2) which, if made out, also limit the Court’s discretion to grant unconditional renunciation. These facts comprise: if the debtor’s assets are worth less than 50p in the £1 on his unsecured liabilities, if he has failed to keep proper accounting records, if he has traded whilst knowingly insolvent, if he has con41 A creditor can therefore shift part of the burden (and cost) of pursuing a debtor to the state where such allegations are made; the Court is however only likely to refer the matter to the Law Officers where there is prima facie evidence of serious wrongdoing.
Insolvency 237 tracted debts without expecting to be able to pay, if he has failed to account satisfactorily for any loss of assets, if he has brought on his insolvency by rash speculation (including gambling), if he has put his creditors to unnecessary expense by running a frivolous defence or bringing a frivolous action, if he has given any undue preference, if he has incurred liabilities with a view to making his assets equal to 50p in the £1 (ie just above the earlier threshold), if he has previously been declared insolvent, and if he has been guilty of any fraud or fraudulent breach of trust. In any of these circumstances Article 13(1) requires the Court either to refuse the benefit of renunciation altogether or to suspend renunciation for a minimum period of two years, (although this period may be reduced if the only fact made out is that the debtor’s assets do not equal 50p in the £1 of liabilities); alternatively the Court may suspend the benefit of renunciation until the creditors have been paid a dividend of not less than 50p in the £1 or grant the benefit of renunciation on condition that the debtor consents to judgment being entered against him in favour of the committee of creditors for the balance of his debt, or a part of it, to be paid from future earnings and after-acquired property in such manner and subject to such conditions as the Court directs. The judgment may not be executed without the leave of the Court and only on proof that the debtor has acquired such property or income. After two years from the date of the Court’s order under Article 13 (ie the order on the application for the benefit of renunciation) the Court has power in all cases (ie whether an offence has been committed, fact made out or otherwise) to modify the terms of the order or of any substituted order in such manner and upon such conditions as it thinks fit. Before exercising such power the debtor must satisfy the Court that there is no reasonable probability of his ever being in a position to comply with the terms of the (original) order. It is implicit that it is for the debtor to bring the matter back before the Court. The less blameworthy the debtor the more likely it is that he will obtain the benefit of unconditional renunciation quickly, and vice versa. One could contrast the likely fates of an elderly and innocent guarantor of a prodigal son’s failed business venture who had also traded whilst insolvent and failed to disclose certain assets. Both would be free to apply for the benefit of renunciation immediately. In the case of the elderly parent the Court would prima facie have an unfettered discretion as to whether to grant the benefit of renunciation immediately, or suspend renunciation or attach conditions. The parent might be discharged completely within a very short time. In the case of the son the Court might refer the matter to the Law Officers for investigation of the Article 18 offence (failing to disclose assets) or refuse renunciation, or suspend renunciation for a minimum of two years or until a dividend of 50p in the £1 had been paid or enter judgment under Article 13(1) for trading whilst insolvent. The Court could be required to review matters after two years if the son showed there was no reasonable probability of complying with whatever order had been made. Paragraphs 35–37 of the Ordonnance make more detailed provision concerning consent judgments under Article 13(1)(d). The debtor is required to give the
238 The Laws of Guernsey committee such information as it requires with regard to his earnings and afteracquired property and income. He is also required to file a statement not less than once a year showing the particulars of any such after-acquired property or income. The statement must be verified by affidavit. The committee may also require the debtor to attend before the Court to be examined on oath with regard to his statement. Failure to comply with the requirements of the Ordonnance renders the debtor liable to have the renunciation order rescinded upon application by the committee. Paragraph 38 of the Ordonnance requires the applicant debtor to give 14 days’ notice in writing of the day fixed for the (post two year) hearing to the committee and to all his creditors. It follows from the above that it will be in most debtors’ interests to get on and apply for the benefit of renunciation as soon as possible, if only to start the two year clock running where applicable or potentially applicable.42 Income and Pension Article 19(1) makes the important provision that: “Where a debtor who has been declared by the Court to be insolvent is in receipt of a salary or income or is entitled to a pension, the Court, upon the application of the Committee, shall from time to time make such order as it thinks just for the payment of the salary, income or pension, or any part thereof to the said Committee to be applied by them in such manner as the Court may direct.”
Paragraphs 39 and 40 of the Ordonnance govern the committee’s application which must be on notice to the debtor. If an order is made the Greffier must notify the person liable to pay the income or pension. This is akin to attachment of earnings and is again a powerful remedy unavailable in simple désastre proceedings. Creditor Spouses There are provisions at Article 19(4)–(5) governing insolvent spouses and the creditor status of their solvent partner. The purpose of these provisions is to limit the obvious potential for fraud of the creditors. In essence the claim of any creditor spouse is subordinated to those of other creditors. Summary It follows that the Guernsey régime for individual insolvency is very flexible, having the potential for a great variety of responses to any given facts. A transparently 42 See also Pothier, Traité de la Procédure Civile part V, ch II for a general discussion of the closely related subject of cession.
Insolvency 239 honest debtor is likely to be admitted to full and unconditional renunciation comparatively quickly. It may be that a minimum tariff period would be set of, say, one year during which time earnings, income and after-acquired property would be applied to the unpaid balance of debt. Doubtless the debtor would be permitted a living wage to maintain himself and his family. By contrast, in any of the specified circumstances or whenever the debtor has misconducted himself the Court will either refuse renunciation, suspend it or attach conditions. In any event the policy of the legislation is to regard two years as a period after which the Court must at least consider further whether to grant full renunciation, if required to do so by the debtor. If the debtor has behaved himself during the two year period and there is still no prospect of the debt being paid, renunciation is likely to be given. Everything will turn on the facts of the individual case and, in particular, the gravity of any misconduct prior to insolvency and the extent of co-operation since. In the worst cases the full benefit of renunciation may not be given for a number of years.
POWERS OF THE COURT TO RE-SCHEDULE DEBT AND INTEREST
Article 2 of the Law relating to Debtors and Renunciation 1929 gives the Court a general power to order the payment of the whole of a debt at a fixed date or to order that payment be made by instalments of such amounts and at such times as it shall think fit.43 Any such order may be revoked or varied at any time subsequently. There are even broader powers given to the Court as regards the payment of interest by the Ordonnance donnant pouvoir à la Cour de Réduire les Intérêts Excessifs of 6 December 1930. If interest is payable on a sum of money at a rate exceeding 10 per cent per annum in circumstances where the rate claimed appears to be unreasonable and unjust the Court may: (a) reduce the rate at which future interest is payable (to a figure of not less than 10%); and/or (b) order that interest already paid at the excessive rate be set-off against interest due (at the reduced rate) or the principal sum itself. The Ordinance gives similar powers over interest due under hire purchase agreements together with power to order the deferral of any right to re-take possession of the goods subject to the hire purchase agreement. The combination of the above provisions gives the Court considerable powers to do what it perceives to be just as between, say, an institutional creditor and an individual debtor for whom the Court has sympathy. There is considerable scope for the use of these provisions in all manner of circumstances. Note however that the Ordinance applies only for the benefit of individual and not corporate debtors. 43 There is some question as to whether the power is exercisable only post-judgment. The Law is silent. There seems no reason why a debtor should not apply in anticipation for relief.
240 The Laws of Guernsey
SAISIE
Introduction Saisie proceedings are to realty what désastre proceedings are to personalty. Désastre has nothing to do with realty and saisie has nothing to do with personalty. What they have in common is the provision of a procedure whereby the assets of an insolvent person may be distributed between two or more creditors who would otherwise be in competition. As with désastre there is no other status consequence for the debtor as a result of saisie proceedings, an application for a declaration of insolvency would have to be made in addition, alternatively a winding-up order in the case of a company. By contrast to désastre proceedings there is a very substantial consequence for a debtor’s indebtedness to those creditors joining in the saisie proceedings by reason of the simple fact of that participation. If a creditor elects either to institute or to join saisie proceedings the effect is to transfer his right to be paid to the realty which is the subject of the proceedings, generally all of a debtor’s Guernsey realty; and regardless of the extent to which the debt is eventually satisfied (if at all) the creditor will have no further remedy against the debtor.44 Désastre has no such consequence. Accordingly the greatest of care is required when contemplating saisie proceedings. It also follows necessarily that after electing to pursue or join saisie proceedings a creditor may not thereafter execute against the debtor’s personalty.45 This has the obvious consequence that a creditor is generally best advised to proceed first against the personalty of a debtor before turning to the debtor’s realty for the balance. The only practical exception to this rule will be where the creditor is secured by a first bond and it is confidently believed that there is sufficient equity in the property to satisfy the debt. Very often a lending institution which is secured will not wish to squabble with minor creditors over small items of personalty in désastre proceedings. It will proceed directly to saisie. In order to advise properly a client contemplating saisie proceedings without first executing against personalty one should obtain a valuation of the realty and search for other bonds registered against the property. You would have to consider the likely priority between bond holders and other known creditors and the amount likely to be realised in favour of the client. Saisie Procedure The substantive law relating to saisie is rooted in ancient customary law. The procedure relating to saisie became intolerably complex and long drawn out. This led 44 The precise moment at which a person becoming involved in existing saisie proceedings makes this election is open to debate, see below. 45 See para 1(4)(b) of the 1952 Ordonnance and the very limited exceptions to this rule which are not, in truth, exceptions at all, see below.
Insolvency 241 to the Saisie Procedure (Simplification) (Bailiwick) Order 1952, as amended by the Saisie Procedure (Simplification) (Bailiwick) (Amendment) Order 1989. What is important to note is the fact that the 1952 Order only purports to affect procedure as opposed to substantive law. The various stages in the simplified procedure are defined by reference to the ancient law. If, for example, there arose an issue as to the specific rights and obligations of a creditor in possession of the seized property one might well have to conduct extensive historical research. An account of the minutiae of this ancient law is again thankfully beyond the scope of this work.46 Preliminary Vesting Order The first stage in saisie procedure is to obtain a Preliminary Vesting Order (“PVO”), see paragraph 1 of the 1952 Ordonnance. When a judgment is obtained leave is automatically given to execute against the judgment debtor’s personalty. The PVO is the additional leave given by the Court to levy execution on the real property of the defendant. It should be noted that the leave is general and relates to all the realty then owned by the judgment debtor. Thus a bond holder may take saisie proceedings against all of a judgment debtor’s realty regardless of whether he is secured in respect of all of the realty or not. The pre-existing security will have effect only to determine priority as regards the realty secured and not otherwise. In Guernsey a Preliminary Vesting Order may be applied for when judgment is entered and without any prior notice to the defendant. This of course requires the plaintiff to be very confident in advance as to the prudence of limiting his ability to execute the judgment against the realty only and in competition with other creditors who might have priority over him. Typically it is only a bank which will seek an immediate PVO. Although notice is not required it is good practice to refer in the cause to the fact that leave will be sought to execute against realty. By contrast, in Alderney it has been held that notice must be given that a PVO will be sought with leave to execute against realty.47 46 There follows a list of texts where further assistance may (or may not) be derived: Terrien; Thomas Le Marchant; Warburton, pp 95–97; Jeremie (1815); Jeremie, LRP pp 103–107; Gallienne, chs I–IV; Pothier, vol 9, p 209 et seq; Pothier, vol 10, pp 880 et seq; Report of the Royal Commissioners, 1815–1823; Josué Le Marchant, Ébauche du Style de Procéder p 30 et seq.; and the following Laws: Renonciation et Cession 1825, vol 1 p 37; Intérêts et Amerci des Rentes 1870, vol 1 p 337; Modification à la Procedure en Plaids d’Héritage 1858, vol 1 p 319; Registration, Notices to Creditors & Rentes, vol 6 p 47 & vol 4 p 42; and the following Ordonnance: Saisie (Registration of Rentes after Closing of Register) (Repeal) Ordonnance 1957. See Gallienne in particular. The then Deputy Bailiff made a number of observations about saisie in the case of Selwood v Madely (2001). The first instance judgment is 61 pages long and contains dicta on many subjects concerning the Guernsey law of realty. Note in particular what is said about leaseholders and creditors. The Court of Appeal overturned the Deputy Bailiff on the central issue in the case without commenting either way on much of the rest of the detail of the judgment. See the case of Waterman v McCormack (2002). 47 Alderney procedure is also distinguished by the need to give additional notices in the Alderney Journal; in particular a notice must appear once in the Alderney Journal during one of the two weeks when a notice appears in the Gazette Officielle advertising the opening of the creditors’ register, copies of the notices must be filed with the Clerk of the Court.
242 The Laws of Guernsey An unsecured judgment creditor may, either in addition or in the alternative to applying for a PVO seek leave48 to register his judgment against the realty of the defendant in the Livre des Hypothèques, Actes de Cour et Obligations, (and in most cases probably should49). This will give the creditor some form of priority which has yet to be worked out fully under Guernsey law. It is likely that the registered judgment creditor has priority over unregistered judgment debtors (whether earlier judgments or not) and certainly over unregistered unsecured nonjudgment debts generally.50 If the Preliminary Vesting Order is not sought at the time when judgment is entered it may be obtained subsequently by summonsing the defendant to see the Court grant leave to execute against the defendant’s realty and to make a PVO. As with each stage of saisie procedure there are strict service requirements, here set out at paragraph 7 of the 1952 Ordonnance. When applying for a PVO in this way two clear days’ notice must be given. All notice periods under the Ordonnance comprise a number of clear days ranging between two and seven and always exclude non-business days within the meaning of section 1(1) of the Bills of Exchange (Guernsey) Law 1958, as amended. The Preliminary Vesting Order will be made in the absence of any compelling reason to the contrary. Such reasons might including the defendant’s realistic proposals for repayment of the debt. Alternatively a bona fide appeal against the judgment. The making of the Preliminary Vesting Order has a number of consequences. The defendant retains ownership of his realty but the judgment creditor acquires what amounts to a right to make use of the premises so as to reduce the debt owed, and this to the exclusion of other creditors. The judgment creditor has a right to possession of the premises. He has the right to require any sitting tenant to pay rent to him and not the judgment debtor. He has the right to let the premises and keep any rent for himself. He has the right to repair the premises, although this right is unlikely to be exercised often.51 Accordingly the creditor has a right to evict the judgment debtor and his family. An alternative would be to negotiate a tenancy agreement with the judgment debtor himself. This might cause difficulty when seeking possession at a later date. 48
Pursuant to the Law Reform (Miscellaneous Provisions) (Guernsey) Law 1987. Unless very confident the judgment will be paid; eg where there is an insurer. There is also the cost of registration to be considered, 0.5% document duty on the amount registered; a party may elect only to register in respect of a lesser sum. A secured creditor may wish to register an unsecured balance. Care should be taken to remember to take the necessary steps to effect registration. It does not occur automatically. 50 Curiously the action itself can be registered against realty even before any adjudication on the merits or judgment. Again the effect has yet to be decided conclusively. Some sort of lawful preference does seem to be conferred. It is a prudent step to take in any claim of significance where the opposing party is not insured. The registration is also likely to impede attempts at sale. Note however the effect of Art 9 of the 1929 Law on judicial proceedings suffered by any person within 3 months prior to the debtor’s application for a declaration of insolvency. 51 It seems likely that the creditor would be at liberty to reimburse himself the costs of repair from rental receipts. 49
Insolvency 243 It is more common to institute eviction proceedings against the judgment debtor as soon as the Preliminary Vesting Order has been obtained. By the Stay of Evictions (Amendment) Law 1954 the Court has power to suspend for up to six months execution of an order for the eviction of a lawful occupier of premises. The judgment debtor would be such a lawful occupier and therefore the creditor risks having to wait as long as six months before being able to obtain vacant possession. If eviction proceedings are commenced immediately there is a good prospect of vacant possession being obtained at about the time that the realty is finally disposed of. There is no clear law as to what positive duty the creditor is under during the Preliminary Vesting Order stage to maximise his profit from the debtor’s realty. It is, of course, in the interests of the other creditors that the PVO holder should reduce his debt as much as possible. It is important to note that the judgment creditor is unable to take any effective step in the exercise of the powers conferred by the PVO unless and until HM Sheriff has notified the judgment debtor in writing of the making of the Order. HM Sheriff will certify a copy of the Order when such notice has been given, see paragraph 1(2)(b). While a Preliminary Vesting Order lasts the judgment debtor retains the right to sell his property, since it continues to be vested in him. The consent of the judgment creditor and any other secured creditor would, in practice, be required. It is very much in the judgment debtor’s interests that he succeed in finding a purchaser before losing the property altogether if there is any prospect of raising a sufficient sum to pay off his creditors. Again finely balanced judgments are required. There may be something to be said for permitting debts to be extinguished by the saisie procedure rather than struggling on; although creditors who do not join the saisie are unaffected and free to pursue the debtor.
Summonsing the Debtor Before the Commissioner The next substantive order which the judgment creditor will seek is an Interim Vesting Order (“IVO”). This has the effect of extinguishing fully and finally the judgment debtor’s title and interest in the realty concerned. A necessary preliminary to the obtaining of an Interim Vesting Order is a requirement that the judgment debtor be summonsed to appear before a Jurat Commissioner (usually the duty Commissioner for the period concerned) to approve or dispute the judgment creditor’s account of the sums due to him having regard to events since the judgment was entered. The summons to the debtor to appear before the Commissioner must give three clear days’ notice, again excluding non-business days. Very often the debtor will not appear. At the hearing before the Commissioner the judgment creditor will produce a statement of account setting out the amount of the judgment debt together with interest accrued to date and recoverable costs, less rent or any other payments received in reduction of the outstanding amounts. The debtor has the opportunity to make representations concerning the account. If there is any dispute
244 The Laws of Guernsey the Commissioner may determine the true balance payable. If there is a substantial dispute the Commissioner would most likely seek directions from the Court. When the balance payable has been determined the Commissioner must sign (authenticate) a report which is usually drafted by the creditor’s Advocates recording the following: (a) whether the debtor attended; (b) if he attended whether he examined or had an opportunity of which he did not avail himself of examining the account; (c) whether he agreed the account as correct or made representations (as set out) as to its incorrectness; and (d) declaring the amount appearing to the Commissioner to be payable to the creditor. No date is fixed for the Interim Vesting Order hearing at this stage. The judgment creditor is again required to summons the debtor on three clear days’ notice; this time to appear before the Royal Court constituted as the Plaids d’Héritage.52 The summons must require the debtor to pay to the creditor the amount declared to be due by the Commissioner. The summons must also notify the debtor that in default of payment the creditor will, on the date specified in the summons, apply for an IVO to be made vesting the whole of the real property of the debtor in the creditor as trustee for claimants against the realty. The debtor must further be notified in the summons that he may apply to the Court for a postponement of the making of such order, see paragraph 2(3). The Interim Vesting Order The judgment debtor very often does not appear at the hearing and again the order is very likely to be made unless the debtor either has extremely realistic proposals for repayment of the judgment debt or, more credibly, he has a buyer willing to purchase the property at a proper price. Assuming the Interim Vesting Order is granted the debtor’s interest in the realty comes to an end53 and he will take no further part in the proceedings, subject to any possible appeal. The effect of the Interim Vesting Order is to vest the realty in the judgment creditor as trustee for all claimants against the realty. There is again a requirement that the debtor be notified in writing by the Sheriff of the making of the IVO before any step may be taken pursuant to the Order. From this point on any income received in respect of the property54 is no longer taken by the judgment creditor for his own 52
The Bailiff or his Deputy sitting with 3 or more Jurats. Confirmed by the Court of Appeal in the case of Waterman v McCormack (2002) where the Bailiff of Jersey gave the judgment of the Court. The case is important both as regards the rights of third party creditors of a joint owner of realty as well as the rights of joint owners between themselves. 54 Which may be quite substantial, for example the car parking rental income in the Royal Hotel saisie. 53
Insolvency 245 benefit but is held on trust for the party eventually taking the realty. The power to let and repair continues but this time there is a positive duty to insure, let, repair and generally manage the property on behalf of the other claimant creditors as trustee of the realty. Apart from terminating the interest of the judgment debtor the purpose of an IVO is to enable the judgment creditor to progress towards the conclusion of the saisie proceedings by requesting the Greffe to open a register of claims against the realty in question. The Register of Claims The creditor must give notice in the Gazette Officielle on two occasions, once in each of two successive weeks, that the register has been opened. The register must remain open for a period of 28 days from, it would seem, the date of the second such notice. The notice gives the name of the creditor and his address for service and advertises the fact that an Interim Vesting Order has been obtained by the creditor in respect of the realty of the identified debtor. Notice is given that all persons having claims against the realty must register their claims at the Greffe within 28 days of the (last) publication. It is essential that the creditor pursuing the saisie proceedings register his own claim against the realty. There is no automatic registration of the creditor’s claim.55 Note also that a bond56 holder must register his claim. In Guernsey law a bond is a right in personam not in rem. The claim must be asserted against the debtor’s realty; it is not enough that the bond has been registered qua bond against the individual. When the 28 days have elapsed the register is closed. The creditor must then summons each of the registered claimants to attend before the Commissioner for the purpose of marshalling57 the registered claims. In practice one would fix an appointment before the same Commissioner as previously and summons the creditors accordingly. At this stage of the procedure seven clear days’ notice are required, again excluding non-business days. In the alternative the creditor may elect to apply to the Royal Court sitting en Plaids d’Héritage58 for what amounts to an immediate Final Vesting Order (“FVO”) vesting the property in himself. Such an order will only be granted conditionally upon the creditor undertaking to discharge all of the registered claimants’ debts. This undertaking must itself be unconditional, the creditor may not dispute the amount of any claim, see the case of Moulin Huet Holdings Limited v Moulin Huet Hotels Limited [1995] 20 GLJ 58. The creditor in these circumstances is said to 55 The consequences of failing to do so are unclear; at the very least the creditor would have to re-advertise and/or seek the indulgence of the Court. A determined opponent might argue that the creditor’s claim was flawed fatally. 56 Broadly equivalent to a mortgage, albeit with important differences. See the section on bonds under realty. 57 Ie in the sense of identifying the claimant, the amount of the claim, whether the claim is good and the priority inter se of the claims. 58 Ie Bailiff sitting with a minimum of 3 Jurats.
246 The Laws of Guernsey “se faire tenant”. The application will only be made where the creditor is confident that there will be a surplus, or at least sufficient equity to discharge all debts, including his own. A striking feature of saisie proceedings is the right of the creditor who finally takes the realty to keep any surplus proceeds after all debts have been paid. A creditor who sees the possibility of profit may therefore take this course. In practice banks will hand back any surplus, not wishing to profit in such circumstances. Marshalling the Claims Assuming that matters are not brought to a swift end in this way each of the registered claimants wishing to pursue their debt against the realty must appear before the Commissioner at the appointed time. It is quite common for minor claimants to drop out at this stage if they perceive that it is unlikely they will recover anything by the process. Prior to the hearing before the Commissioner the creditor is required to prepare a draft marshalling report. The form of the report is set out at schedule 1 of the 1952 Ordinance. In essence the Commissioner is concerned to establish the proper amount of each registered claim and the order of priority between the claims. The amount of interest that any individual creditor may claim is limited in two ways. Interest may not be claimed after the date of the Commissioner’s marshalling report, ie the report prior to the Final Vesting Order stage, see the case of Guernsey Savings & Loan Corporation Limited v Wallace [1987] 5 GLJ 75. In any event no more than 730 days’ interest may be claimed, see section 4 of the Loi qui limite dans les Saisies l’Exigibilité des Intérêts et des Arrérages de Rentes 1860. At the hearing the creditor will produce to the Commissioner the Interim Vesting Order, the draft report, a certified copy of the saisie register, related59 copies of the summonses served on the registered claimants, the original of any bond held by the creditor and the creditor’s own statement of claim. The Commissioner will hear each creditor and, hopefully, authenticate the draft report whilst appointing also a date for the termination of the proceedings before the Royal Court constituted en Plaids d’Héritage. Any dispute may be settled before the Commissioner or directions may again be sought from the Royal Court. Paragraph 3(2) makes express provision for the claimants and their “garants” to be heard. This raises the difficult issue of saisie and its effect upon the enforceability of debt against a guarantor. A guarantor or surety who is not a joint principal debtor has a number of important rights under Guernsey law.60 These include the droit de discussion (the right to require a creditor to pursue and exhaust his rights against the principal debtor before turning to the guarantor61) and the right to be 59
Ie endorsed by the Sergeant as to service. See generally p 261 et seq. Gallienne, Traité de la Renonciation par Loi Outrée et de la Garantie (1845). 61 De Ferrière wrote “discussion introduite en faveur d’une caution, est de ne pouvoir être contraint par les voies de droit, à qu’après la recherche, perquisition & discussion faire de tous les biens du principal débiteur” which translates as “discussion introduced in favour of a guarantor is (the right) not to 60
Insolvency 247 discharged from his debt if the creditor omits to do something which he is bound to do for the protection of the guarantor.62 Likewise a guarantor’s liability is a secondary liability. It is a guarantee of whatever indebtedness exists (subject to any express limits of the guarantee). Accordingly a guarantor is likely to challenge subsequent attempts to enforce his guarantee if the creditor has not first exhausted his remedies against the principal debtor, alternatively if he has failed to exercise his right to execute also against personalty, alternatively on the basis that pursuing the realty of a debtor extinguishes the principal debt regardless of the outcome or, in the further alternative, that the principal debt is extinguished if the creditor renounces against the realty.63 This is a very real minefield for unwary creditors. Generally one expects to see all such customary rights of a guarantor and obligations of a creditor towards a guarantor expressly excluded and/or waived by the guarantor.64 There is usually express provision in addition to the effect that the whole of the debt may be recovered from the guarantor notwithstanding the subsequent taking or participation in saisie proceedings. In the absence of such express protection (and probably in any event to avoid argument) the creditor must also summons his guarantor to the saisie proceedings.65 There is an argument to say that the saisie initiating creditor should involve the guarantor even before the Preliminary Vesting Order is applied for because it is at this stage that decisions are taken which will affect the guarantor. That said, and as noted above, express provision is made for summonsing the guarantor before the marshalling Commissioner. Likewise, in the absence of express provision in the guarantee the guarantor would be summonsed to the Final Vesting Order hearing. In each case the guarantor is summonsed for the purpose of communicating his views to the creditor as to how best to proceed in the circumstances. The creditor is, prima facie, bound to follow the advice of the guarantor unless the Court rules otherwise. If the guarantor is not involved the creditor will lose his rights against the guarantor unless saved by the provisions of the guarantee document.66 be compellable by law until after the search, careful investigation and examination of all the assets of the principal debtor”. 62 This right is not unique to Guernsey law and applies equally under English law. 63 See below. 64 Note also the droit de division which is the customary right of a guarantor to divide his liability as guarantor with co-guarantors. De Ferrière wrote that “bénéfice de division est celui que l’Empereur Adrien a introduit en faveur de plusieurs fidéjusseurs qui ont servi de caution à un même débiteur. En vertu de ce bénéfice, lorsque l’un des fidéjusseurs est poursuivi pour toute la dette, il oppose l’exception qui en résulte, qui est de n’être tenu que pour sa part & portion”, albeit with certain conditions attached, principal amongst which was the requirement that the other guarantor(s) be solvent. The definition translates as follows: “(the) benefit of division was introduced by the Emperor Hadrian in favour of several guarantors who have provided a guarantee to a single debtor. By reason of this benefit when one of the guarantors is pursued for all of the debt he may raise in opposition the right which results, which is to be liable only for his share (of the total sum otherwise due)”. See also Livre VII ch III p 231 Terrien, p 232 vol 1 Thomas Le Marchant. 65 In the sense of the guarantor to whom he will otherwise look. 66 See the case of The Liquidators of the Late Shopper Limited v Barclays Bank plc noted at [1988] 6 GLJ 204.
248 The Laws of Guernsey The logic of making the hearing before the Commissioner the crucial date so far as the guarantor is concerned is not obvious. The lead creditor appears to commit himself much earlier, as noted already. As to other claimants against the realty it is argued by many that the point at which they commit themselves to executing only against realty and forego their rights against personalty is when they register their claim against the realty. For others the moment of truth is either not until they attend the marshalling hearing, or until they renounce at the Final Vesting Order stage.67 There is something to be said for mere registration not amounting to a critical election, as otherwise the summonsing of the guarantor to the marshalling appointment would serve no purpose, even if you were not the saisie-initiating creditor. It would be too late. At the end of the marshalling appointment and after authenticating the report determining the priority of debts the Commissioner must appoint a date for the termination of the proceedings “en Plaids d’Héritage”. The Final Vesting Order The 1952 Ordonnance expressly requires the creditor either personally or by counsel to table a cause against each of the claimants before the Royal Court en Plaids d’Héritage; each must therefore be summonsed to the hearing notwithstanding their presence when the date was fixed.68 This must again be served seven clear days in advance of the hearing date. Paragraph 3(3) describes the procedure at the final hearing as follows: “On the date so appointed it shall be the duty of the creditor to appear personally or by counsel before the Court and to table a cause against each of the said claimants requiring him to declare whether or not he elects to have the real property of the debtor vested in him for an estate of inheritance subject to the condition that he assume liability for all claims ranking in priority to his own and to read the report marshalling their claims and immediately thereafter, each cause being read in inverse order of the priority of the claimants, the name of the claimant named therein shall be called and, unless he shall either personally or by counsel elect to have the said real property vested in him subject to such condition as aforesaid, he shall be deemed to have renounced to his right so to do and his claim shall thenceforth cease to be of any effect and a record shall be made accordingly.”
Starting therefore with the lowest priority claim each creditor is put to his election whether to take the realty (and the accumulated net income arising since the Interim Vesting Order) on condition that he pays in full all higher ranking creditors or to renounce his claim against the realty. The effect of renunciation is that the creditor not only loses any right to execute his claim against the realty of the debtor but also to pursue his claim in any form at all, whether against personalty, 67
See below. Note the equally bizarre requirement to summons an opponent to the trial of an action notwithstanding their appearance at the hearing to fix the date. 68
Insolvency 249 realty or otherwise. It does not take much to imagine the drama which such a ruthless system may give rise to when the stakes are sufficiently high. A great deal turns upon the ranking of the creditors, the size of individual creditors’ debts and the expected value of the realty concerned. The priority as between secured creditors and unsecured creditors is generally easy to determine, likewise between secured creditors themselves. As noted above it seems likely that registration of a judgment debt (and even a simple act of Court in an unadjudicated claim) in the Livre des Hypothèques, Actes de Cour et Obligations gives priority over claims not registered in the Livre. The date of registration will determine priority between such registered claims. It seems unlikely that any priority is obtained by the simple fact of a judgment. The greatest difficulty is to determine priority as between creditors who are both unsecured and unregistered.69 It may be that priority is given according to the date of entry on the saisie register, alternatively it may be that unsecured and unregistered claims rank equally, which creates its own problems in the context of the consecutive elections which must be made whether to accept the realty or renounce the claim. It may be that the unsecured and unregistered creditors are given the option to take the realty jointly, with their liability to pay prior claimants being in proportion to their share of the collective unsecured debt. Those not wishing to take part would be free to renounce, thus reducing the pool of unsecured unregistered creditors and increasing their individual share of the benefits and burdens. It is suggested that this is the better view. Each creditor must calculate the cost and benefit to him of either accepting the realty or renouncing his claim. There will come a point in the list where the estimated value of the property equals or exceeds the amount of a creditor’s claim and those of the creditors above him, or will at least produce sufficient net proceeds to make the risk worthwhile. It is this creditor who is likely to take the realty. The creditor who elects to take the realty is granted a Final Vesting Order whereby the realty is vested in him for an estate of inheritance.70 He also becomes liable to pay to the higher ranking creditors the full amount of their claims within 15 days, alternatively in such time as the Court permits. A creditor ought not to elect to take the realty unless he is confident of being able to pay out the higher ranking creditors within 15 days.71 In default of payment it would seem that the higher ranking creditors would themselves have a claim against the defaulting creditor, alternatively they might seek rescission of the FVO in favour of the next highest ranking creditor willing to accept the realty.72 69 Ie unregistered in the sense of not being registered in the Livre. If the claim is unregistered also in the saisie register the claimant can take no part in the saisie at all, and is unaffected by the outcome; save as to the fact of the disposal of the realty itself. 70 The equivalent of freehold. 71 An application could be made seeking extra time, whether it would be granted is another matter. 72 The case of C & D Holdings Limited v Brewbuck Limited (1982) 24 May is general authority to the effect that a creditor may be subrogated to the position of another creditor who has failed to advance the saisie procedure. The same authority might be relied upon where the creditor fails to pay out the higher ranking creditors, although here one is concerned more to do away with the defaulter altogether than step into his place.
250 The Laws of Guernsey The Final Vesting Order itself acts as a conveyance of the realty to the creditor and is registered automatically at the Greffe (there is a registration fee to pay). The creditor must notify the Cadastre of the vesting. The holder of the FVO is thereafter free either to sell or to keep the realty as he pleases and, as already noted, to retain any surplus proceeds. Saisie procedure is available for any valuable interest in land. In practice it will be restricted to a right of ownership or, exceptionally, a usufruit. Any co-owner who is not an original defendant or judgment debtor must be summonsed to appear at the Final Vesting Order stage. In reality the co-owner will have become involved at a much earlier stage. Given English case-law it is prudent to establish the nature of the co-owner’s interest earlier rather than later. There is a general belief that if the amount sued for by the creditor who obtains a Final Vesting Order includes interest the Income Tax Authority will assume payment of that interest and raise a charge to tax accordingly. The right of the Authority to recover such a charge is untested.
12 Security Interests INTRODUCTION
T
HERE ARE TWO principal pieces of Guernsey legislation governing the taking of security over incorporeal movables or choses in action. The first is the Law of Property (Miscellaneous Provisions) (Guernsey) Law 1979 and the second, more important, is the Security Interests (Guernsey) Law 1993.1 These Laws owed their genesis to a debate amongst Guernsey lawyers as to whether incorporeal movables could be charged effectively under Guernsey customary law. The 1979 and 1993 Laws ended the argument in favour of those who maintained that such security interests could be created, whilst not altogether dispensing with the law that went before. It is important to note that neither Law applies in Alderney or Sark and therefore the customary position remains in force in those islands. In 1993 a 25 page paper was written by Advocate Nigel Carey on the question of security interests in personalty under Guernsey law2 prior to the Law of that year coming into force. It shows persuasively how Guernsey law may have fallen into error through an Ordinance of 25 June 1636 which purported to prohibit any (future) hypothèque of specific movable property with the avowed intention of restoring Guernsey law to its allegedly proper customary foundation. As Advocate Carey points out, the Ordinance is of questionable validity due to its probable misunderstanding of the true pre-existing state of customary law. Both today and historically the power to legislate by Ordinance has been circumscribed. In the report of the Privy Council Committee on Channel Islands’ reform dated 1947 it was noted that: “The scope of such Ordinances is not clearly defined but appeared to be regulated by custom and tradition; it is clear, however, that they cannot impose taxation or alter existing written or customary law and that an Ordinance which conflicts with such law is inoperative.”
It follows that, to the extent the Ordinance purported to change customary law, it was invalid. Everything therefore turns on the correct identification by the Ordinance of the customary law it attempted to “restore”. In fact it appears quite clearly from Basnage and Pothier that various forms of security could be granted 1 2
In practice the 1993 Law is used. Ie customary law.
252 The Laws of Guernsey over both corporeal and incorporeal movable property at customary law. There is no doubt that a security interest could be created validly in respect of tangible movable property if such property was delivered to a pledgee. Likewise a valid security interest could be created in intangible movable property if dominion over that property was placed entirely in the hands of the creditor. Here there were more stringent requirements for legal formalities to be effected before such an interest could be created, these included notarisation and/or registration at Court. Finally it appears from contemporary Norman customary law sources that incorporeal personalty left in the possession and control of the debtor could also be charged or hypothecated if similar formal requirements were complied with. However, an important limitation was placed upon the efficacy of such charges. This is summarised by the maxim “meuble n’a point de suite par hypothèque”, ie a charge or hypothèque of meubles was only effective for as long as the property so charged remained in the hands of the material debtor; although it seems unlikely that a third party not acting in good faith and without notice could take free of the charge. It follows that the makers of the 1636 Ordinance appear to have misunderstood the customary law they were attempting to restore. The Ordinance did not reinstate the customary law but changed it; which is something an Ordinance may not do. It therefore seems that prior to the 1979 and 1993 Laws security interests could be granted validly in Guernsey, albeit with imperfect protection for the secured party. This would appear to be the up-to-date position in Alderney and Sark. THE LAW OF PROPERTY (MISCELLANEOUS PROVISIONS) (GUERNSEY) LAW 1979
The 1979 Law performed a number of functions. The first and main purpose of the Law was to clarify and confirm the right of set-off pursuant to an agreement governing mutual dealings between the parties. The effect of section 1 is to make clear that any third party right is enforceable only against the net balance after set-off in the absence of any such agreement amounting to a fraudulent and void preference given within six months either of the material party being declared en désastre or the commencement of liquidation. Where such a preference is suspected the Royal Court may set aside the agreement on reference from the Commissioner Jurat presiding over the désastre proceedings, alternatively a liquidator will himself set aside the effect of the agreement, subject to a right of appeal to the Royal Court. The definition of debt for the purpose of mutual set-off of debts is broadly stated to include all debts and liabilities, present or future, certain or contingent; but not so broadly as to include demands in the nature of unliquidated damages arising other than by reason of contract or breach of trust. Section 2 confirms that the legal right to a debt or other chose in action and all legal remedies connected to a debt or chose in action may effectively be assigned3 3
Note that the law refers only to “any absolute assignment”.
Security Interests 253 to a third party. The key point is that the assignment is effective regardless of whether there is a proviso or condition for re-assignment. This reveals the purpose of the provision as being to permit security to be taken over intangible personalty by way of absolute assignment of debt or choses in action but subject to a requirement for the creditor to re-assign the asset upon discharge of the obligation so secured. The formal requirements for an effective assignment are that it is executed in writing by the assignor and express notice in writing of the assignment is served on the debtor, trustee or other person from whom the assignor would have been entitled to claim the debt or chose in action. The exception to these requirements is where the simple delivery or indorsement of the bond or instrument is effective to transfer the rights under that bond or instrument, for example a bearer bond. A key limitation of the 1979 Law is that it did not apply to the transfer of shares in a company which were not transferable upon simple delivery. If the person given notice of the assignment of the debt or chose in action is aware that the assignment is disputed by the assignor or any person claiming through him, alternatively of any other opposing or conflicting claim, he may bring proceedings before the Royal Court in order to determine for whose benefit the debt or other obligation is held. This is, in effect, a form of interpleader action. Section 3 gives protection to an assignor in the event that either the assignee fails to re-assign the debt or chose in action in accordance with the terms of the related security agreement, or the debt or chose is arrested by HM Sheriff as an asset of the assignee or the assignee is a company in the process of being wound up. In any of these circumstances the assignor may institute proceedings in the Royal Court for an order re-vesting the security in himself. The Court has the option instead of awarding damages against the assignee. If damages are awarded for breach of a proviso or condition for re-assignment those damages have priority in either the liquidation or désastre proceedings over any other debts, save those secured by bond or judgment debts which have been registered in the Livre des Obligations. This provision, section 3(3), is ambiguous in the sense that it refers only to damages for breach of a proviso or condition for re-assignment. It appears to exclude, almost certainly unintentionally, damages given in the exercise of a simple discretion not to order re-assignment where there is no such breach. Care is therefore required. The right to bring such proceedings and to obtain relief is itself subject to the stringent time condition that, in the case of liquidation, the proceedings are brought within fourteen days of the commencement of the winding-up. Where there has been an arrest the proceedings must be instituted before the sale of the debt or chose in action. Whether dealing with the Sheriff or liquidator it is a fundamental pre-condition to the proceedings that the obligation secured has either been discharged in full or payment tendered within the same time limit. The 1979 Law therefore went some way to dealing with the concerns of lawyers and bankers at that time. The Law did not go far enough in the sense that shares were largely excluded. In addition, probably unnecessary concern was expressed as
254 The Laws of Guernsey to the requirement for an “absolute” assignment. The 1993 Law was accordingly enacted in order to resolve all doubts and to place on a proper and sound footing the giving and taking of security interests under Guernsey Law.
THE SECURITY INTERESTS (GUERNSEY) LAW 1993
Section 1 of the 1993 Law provides that a security interest may be created in any intangible movable property other than a lease. A security interest is defined at section 11 as meaning an interest in intangible movable property that secures payment or performance of an obligation under the provisions of the 1993 Law. An obligation is itself defined as including a debt, a contingent obligation and a guarantee of payment or performance of an obligation. Movable property is defined as meaning all property, wherever situated, whether tangible or intangible, and whether vested, contingent or future, which is not regarded by the Law of Guernsey as “immeubles” and as including choses in action. Methods of Creation Section 1(2) provides that a security interest may be created in accordance with one or more of the methods referred to between sub-sections 3 and 6. Sub-section 6 is the so-called universal method by which a security interest may be created by a security agreement assigning title to the collateral to the secured party. In this case express notice in writing that the collateral has been assigned must be given by or on behalf of the secured party to the person from whom the assignor would otherwise have been entitled to claim the collateral, see section 1(8). If the person given notice is aware that the assignment is disputed either by the assignor or any person claiming through him, or if he is aware of any other opposing or conflicting claims to the collateral he must give notice to the assignee and may again institute proceedings to have the competing claims determined by the Court. This is largely a repeat of the 1979 scheme with the additional positive requirement to give notice to the assignee of any dispute; this is by contrast to the simple power under the 1979 Law to bring proceedings. Assignment of title pursuant to section 1(6) is effected either by delivery of any bearer certificate together with any necessary endorsement, alternatively by assignment of the collateral, whether or not with a proviso or condition for reassignment. The other three methods of creating a security interest all depend upon possession or control of the collateral being obtained by the secured party to a more or less effective degree. By section 1(3) a security interest in securities is created4
4
In the alternative to the universal method.
Security Interests 255 where the secured party, or some person acting on his behalf other than the debtor, has possession of the certificates of title to those securities pursuant to a security agreement.5 Securities are again broadly defined as meaning shares, stock, debentures, debenture stock, loan stock, bonds, units of a unit trust scheme, other interests in the investments of a collective investment scheme, instruments which confer rights in, options to acquire or dispose of, and rights under any contract for, the acquisition or disposal of, securities as defined, but does not include negotiable instruments. See section 1(3) generally and section 11. By section 1(4) a security interest in a policy of life assurance may be created where the secured party, or some person acting on his behalf other than the debtor, has possession of the policy pursuant to a security agreement. A policy of life assurance is defined as any instrument by which the payment of monies on the happening of any contingency depending on the duration of human life is assured or secured, section 11(1). By section 1(5) a security interest in a bank account is created where: (a) the bank which holds that account for its customer is the secured party; and (b) that bank has control of the account pursuant to a security agreement; and (c) its customer and the debtor are one and the same person. Formal Requirements Section 2 imposes formal pre-requisites for the validity of any security agreement. The agreement must: (a) (b) (c) (d) (e)
be in writing; be dated; identify and be signed by the debtor; identify the secured party; contain provisions regarding the collateral sufficient to enable its precise identification at any time; (f) specify the events which are to constitute events of default; and (g) contain provisions regarding the obligation, payment or performance to be secured, sufficient to enable the same to be identified. It is not unknown for the requirement at (f) regarding the specification of default events to be omitted. This is, prima facie, fatal. By section 3 a security interest may be created before or after the secured obligation has come into existence. It is arguable whether this provision dispenses with the need for consideration or its French/Norman equivalent of cause. It will be 5 The efficacy of mere possession as a safeguard being dependant upon the nature of the asset and how ownership is in fact registered or acknowledged in each particular case.
256 The Laws of Guernsey prudent to ensure that there is in fact consideration for the security interest regardless of the Law’s terms. Consideration is rarely difficult to find in such circumstances, comprising, if necessary, the simple agreement to continue existing facilities or a forbearance to sue. Priority Section 4 provides that priority between security interests in the same collateral is determined by their order of creation. It is rare in practice that there will be successive security interests in the same collateral. It would require one holder of a secured interest to hold collateral not only on his own behalf but also on behalf of another. If the collateral is manifestly more than sufficient for the first security interest holder he may be willing to permit a further security interest to be created in that collateral. Section 5 provides that where the debtor either becomes insolvent or is declared to be en état de désastre the amount due to a secured party in respect of a security interest without title is payable in priority to all other claims, but only to the extent that the collateral is sufficient. There is express provision that the power of a titleholding secured party to realise or otherwise deal with the collateral is unaffected by the debtor either becoming insolvent or his property being subjected (whether in Guernsey or elsewhere6) to any other judicial arrangement or proceeding consequent upon insolvency (or désastre). However, where a debtor has been declared en désastre, the arresting creditor may apply to the Court for an order vesting in him the rights of the secured party to the collateral and directing that it be sold and/or applied by HM Sheriff in accordance with section 7(5)(a) and (b) and section 7(6) of the 1993 Law. Alternatively the Court may make an order directing the vesting and sale of the collateral upon such terms and conditions as it thinks fit. Sale of Collateral and Application of Proceeds Section 7 contains general provisions governing the sale of collateral and the application of its proceeds. Section 7(5) requires all reasonable steps to be taken to ensure that the sale takes place both within a reasonable time and either at the open market price or, where there is no open market, the best price reasonably obtainable. Whenever collateral is sold the proceeds must be applied pursuant to section 7(5)(b) in the following order: (i) in payment of the costs and expenses of the sale; (ii) in discharge of any prior security interest; 6 Although a foreign jurisdiction’s private international law might intervene as regards the enforceability of the agreement against assets outside of the jurisdiction.
Security Interests 257 (iii) in discharge of all monies properly due in respect of the obligation secured by the security agreement; (iv) in payment, in due order of priority, of secured parties whose security interests were created after his own and on whose behalf (as well as on his own behalf) he was holding possession of documents or exercising control of collateral; (v) as to the balance (if any remains) in payment to the debtor, or if the debtor has become insolvent or is subject to any other judicial arrangement consequent upon insolvency, to the Sheriff or other proper person. Cancellation and Discharge of Security Section 6 makes detailed provision for the cancellation and discharge of security interests. Subject to any other rights or interests of which he has notice, the collateral holder must hand back possession, control or title of the collateral, as the case may be, upon the discharge, payment or other performance of the secured obligation. This is unless the security agreement expressly provides otherwise. In addition, the collateral holder must supply the debtor with a certificate of (whole or partial) discharge of the security interest. If the collateral holder fails to comply with his obligations under this section the debtor may apply to the Court to compel performance. The Court is given express power by section 6(5) to make an order re-vesting title to the collateral, to transfer possession or control of the collateral or to pay damages as well as a general power to make such other order as the Court thinks fit. The Court may also order a certificate of discharge to be given. The Insolvent Creditor Where the assignee is himself in financial difficulty and the collateral has been arrested by HM Sheriff or liquidation has commenced the assignor is given the right to seek relief, subject again to certain pre-conditions being met. These follow closely the 1979 conditions. A full performance of the secured obligation must have been tendered. In the case of arrest the application must be made before the underlying asset is sold. In the case of liquidation the application to the Court must be made within fourteen days of the commencement of winding up. It is not altogether clear why a debtor should not be able to claim damages where the asset has been sold but full payment tendered. The use of the word “tender” in both Laws suggests a right of the debtor to make an offer without actually paying over funds before knowing what consequence such payment will have. It is noteworthy that if the Court orders shares to be re-vested in the debtor this takes effect as a transfer in accordance with the company’s articles, see section 6(7).
258 The Laws of Guernsey Circumstances in Which a Power of Sale May be Exercised Apart from general provisions governing the sale and application of proceeds of a security interest section 7 also governs the circumstances in which a power of sale may be exercised. Section 7(1) provides that an event of default occurs whenever an event so defined under the security agreement occurs. In practice any breach of the terms or conditions of a security agreement will amount to an event of default for the purposes of the 1993 Law. Section 7(2) expressly states that a power of sale or application of the collateral arises when an event of default arises. Section 7(3) requires notice to be given to the debtor specifying the particular event of default complained of. There is no other requirement concerning such notices, whether as to timing or form. The notice serves no purpose other than to inform.7 Where the security agreement so requires the power of sale may only be exercised with the authority of the Court. If satisfied that the right of sale has arisen the Court must make an order authorising the sale, but an order may be made subject to such conditions as the Court thinks fit. This would, for example, permit the Court to make an order for sale postponed for a period during which the debtor would have an opportunity to discharge his obligation, thus entitling him to the return of the collateral pursuant to section 6(1). In practice security interest agreements do not make the power of sale conditional upon the obtaining of Court authority. Agreements are inevitably drawn so as to favour the creditor. Private International Law and Security Interest Agreements Section 10 of the 1993 Law clarified another uncertainty in Guernsey law and provides that a person who is resident, domiciled or incorporated in Guernsey is not to be considered as lacking capacity, or as ever having lacked capacity, to give security governed by foreign law over property situated outside Guernsey, by reason only that the law of Guernsey does not permit security to be given by the method or in the circumstances permitted by the foreign law. In short a Guernsey entity may give security according to the lex rei sitae.8 Saving Provisions Section 14 contains important saving provisions whereby the rights of: (a) a holder of a negotiable instrument other than a certificate of deposit; and (b) a bona fide purchaser of securities without notice of a security interest affecting those securities; and 7 Contrast notices served by landlords pursuant to s.146 Law of Property Act 1925 and default notices pursuant to the Consumer Credit Act 1974 in England. 8 The law of the place where the thing is located or, indeed, to the extent that the lex rei sitae permits, some other foreign law, again on the pre-condition that the asset is located outside of Guernsey.
Security Interests 259 (c) a person who has taken a certificate of deposit in good faith and for value without notice of a security interest affecting that certificate of deposit; and (d) any person (other than the debtor) who was the owner of, or who had an interest in, any collateral at the time when a debtor purported to cause or permit a security interest to be created in it; are to be determined without regard to the 1993 Law. In effect the legal maxim nemo dat quod non habet 9 applies. This is particularly important in the context of securities where mere possession of the security may prove to be no security at all. By section 14(3) the 1993 Law does not affect a lien or right of set-off in relation to intangible movable property or any other arrangement entered into under either customary law or the 1979 Law. Somewhat inconsistently section 14(4) states that any 1979 agreement for set-off or assignment, whether made before or after the commencement of the 1993 Law is governed, if it does not create a security interest under the 1993 Law, by the 1979 Law. It follows that the 1993 Law applies where a security interest is in fact created regardless of which Law is being expressly relied upon. It seems therefore that nothing done under the 1979 Law is necessarily invalidated by the 1993 Law, certainly not in the period prior to the commencement of the 1993 Law, but that where a security interest is created the additional requirements and provisions of the 1993 Law have effect. Finally, section 14(5) provides that nothing in the 1993 Law affects the rights of any creditor or other person under any statutory or customary law in relation to any transaction or disposition conferring a fraudulent preference. A security interest agreement will therefore count for nothing if caught by the anti-preference provisions of any other law. The Typical Security Interest Agreement The typical security interest agreement will follow closely the formal requirements set out by the 1993 Law at section 2. It will identify the collateral and the manner in which the security interest is to be created. It is likely to contain restrictions on dealing. It will include representations and warranties given by the debtor to the creditor in respect of the collateral and the validity of the agreement itself. The agreement is likely to be in the form of a continuing security extending to the ultimate balance of the secured liabilities notwithstanding any intermediate payment. The events of default will be identified together with the consequences of default. Where shares are concerned there will be specific provisions governing calls, premiums, voting rights and a release of the creditor from any obligation to exercise any rights, privileges, powers or obligations relating to the charged property.
9 Literally, no-one may give what he has not got. This is the basic rule of law that a person cannot sell or otherwise dispose effectively of what does not belong to him, except with the true owner’s authority, and subject to various more or less well-established exceptions.
260 The Laws of Guernsey The debtor may be required to provide already executed transfer forms in respect of the underlying asset and to give an undertaking to provide such further documentation as may be demanded in order to perfect the security taken. There may be provision for the opening of a new account in the event of a bank being given notice of a claim over any existing account. Provision is likely to be made for set-off. A power of attorney is likely to be granted in favour of the creditor. There will be extensive exclusion and limitation of liability clauses together with severance clauses, waiver clauses, manner of communication clauses and provision for costs, charges and expenses.10 Often one will see a clause providing that any indebtedness under the agreement may be proved conclusively by the certificate of an officer of the creditor. The agreement will conclude with a Guernsey law and jurisdiction clause which nevertheless permits the creditor to bring proceedings against the debtor in any other Court of competent jurisdiction. There is, as yet, no Guernsey case-law to provide any additional guidance as to the efficacy of any such clauses or the application of the laws generally.
10
Not forgetting the exclusion of customary rights such as the droit de discussion where applicable.
13 Control of Borrowing
T
HE BORROWING (CONTROL) (Bailiwick of Guernsey) Law 1946 and the extant Ordinances made pursuant to the Law, principally the Control of Borrowing (Bailiwick of Guernsey) Ordinance 1959 as amended, represent a large collective trap for the unwary. The name of the Law betrays its origins in immediate post-war capital control measures, but not the extent of its present-day effect. The legislation is now used largely for regulatory purposes and has nothing to do with the control of capital. The Law is administered on behalf of Guernsey’s Advisory & Finance Committee by the Guernsey Financial Services Commission. Any consents required to be obtained under the legislation are given by the Committee but all dealings are with the Commission itself. The two principal current uses of the legislation are to control firstly the formation of Guernsey companies and secondly the creation of closed-ended investments funds.1
THE BORROWING (CONTROL) (BAILIWICK OF GUERNSEY) LAW 1946
The 1946 Law largely comprises enabling provisions for the subsequent ordinance(s). However, it also contains the enforcement and penalty provisions. The latter include a sentence of imprisonment of up to two years and a fine of an amount equal to the value of the sum involved in the unauthorised transaction if convicted on indictment. There are also powers granted which foreshadow later provisions under the Criminal Justice (Fraud Investigation) (Bailiwick of Guernsey) Law 1991 and the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law 1999. Thus there is power to require a person to furnish information in his possession or control which may be required for the purpose of securing compliance with, or detecting evasion of, any ordinance made under the 1946 Law, see section 2(1) of the enforcement provision schedule. This is, touchingly, subject to the privilege against self-incrimination; legal professional privilege is also respected. A person may further be required to produce books, accounts or other documents in his possession or control. If there is a failure to comply with these requirements (and seemingly not otherwise), a search warrant may be obtained from the Bailiff. 1 Open-ended investment funds are separately provided for; see generally the section concerning financial regulation.
262 The Laws of Guernsey By section 3 of the schedule where an offence under the 1946 Law has been committed by a corporate body every person who at the time was a director, manager, secretary or other similar officer, is deemed to be guilty of that offence, unless he proves that the offence was committed without his consent or connivance and that he exercised all due diligence to prevent the commission of the offence having regard to the nature of his functions and to all the circumstances. There are likely to be human rights arguments concerning the lawfulness of all such reversals of the burden of proof.
THE CONTROL OF BORROWING (BAILIWICK OF GUERNSEY) ORDINANCE 1959
Part I of the Ordinance defines activities which require the consent of the Advisory & Finance Committee. By section 1(1) a person may not, without the consent of the Committee, borrow money in the Bailiwick where the aggregate of the amount of money borrowed and any other amounts borrowed in the Bailiwick by that person in the previous twelve months exceeds £50,000.2 Section 1(2) immediately sets out important exceptions to this general rule. Thus the prohibition does not apply to borrowing by a person in the ordinary course of his business from a banking undertaking. It does not apply where the money borrowed is repayable on demand or not more than six months after demand has been made in circumstances where it is wholly unsecured or secured only by a bill of exchange or promissory note payable within the same time limit. The prohibition does not apply to deposits taken by a bank, nor to borrowing by personal representatives to pay any death duties nor borrowing from a department of HM Government or a Bailiwick government. If a guarantee is given in respect of a loan it is not unsecured and therefore comes within the control of the Ordinance. Likewise, by section 2 reference in the Ordinance to the borrowing of money extends to the making of any arrangement to provide any guarantee, mortgage or charge to secure the payment of a sum either already due or due within six months. Also controlled is any arrangement whereby the price of any property is allowed to remain unpaid but secured on (any) property. However, this control does not apply to the price of goods sold by a person in the ordinary course of his business, ie Romalpa or reservation of title clauses in the sale of goods. It is noteworthy that by section 2(2) money which is either repayable on demand or repayable at the end of a fixed period is deemed to be payable either immediately or at the end of the fixed period whether or not a demand is made.3 Section 13(2) provides that a person shall be deemed to borrow or raise money in the Bailiwick if the money is made available in the Bailiwick or 2
See s.1(a) of the Control of Borrowing (Amendment) (Bailiwick of Guernsey) Ordinance 1989. This corresponds with the Guernsey common law position concerning when a debt ostensibly payable on demand is in fact repayable; the position is different under English law because of a subsequent statute reinforcing the requirement for a demand. 3
Control of Borrowing 263 the money would, but for any guarantee, mortgage or charge arrangement under section 2, have been payable in the Bailiwick. In any event a person is deemed to borrow money in the Bailiwick if the money is secured by property in the Bailiwick. Sections 3 and 8 contain the most important controls of the Ordinance: “Subject to the exemptions contained in Part II of this Ordinance, a body corporate shall not, without the consent of the Committee, raise money in the Bailiwick by the issue, whether in the Bailiwick or elsewhere, of any shares in that body corporate.”4 “Subject to the provisions of this section, the consent of the Committee shall not be required to carrying out (sic) by any such person as is mentioned in any of the provisions of Part I of this Ordinance of any transaction mentioned in that provision [other than a transaction which consists of the raising of money by the issue of shares to founder members of a body corporate]. . . .”5
It is these provisions which enable the Financial Services Commission, on behalf of the Advisory & Finance Committee, to control the incorporation of Guernsey companies.6 Section 4 contains additional and more detailed controls governing various activities relating to shares. Consent is required to issue partly paid shares if the company is either incorporated in the Bailiwick or the shares are to be registered in the Bailiwick. Consent is required to issue shares in a Bailiwick company where the whole or any part of the consideration for the issue is the transfer of any property. Consent is likewise required to issue shares in a Bailiwick company if the purpose or effect of the transaction includes the raising or borrowing of money outside the Bailiwick, unless the borrowing is from a bank and the money is made available within the 1946 capital control zone. Consent is also required if exchanging or substituting new securities for redeemable securities already issued, unless the new securities are either not redeemable or redeemable no earlier than those replaced. Non-Bailiwick companies require consent to issue shares which are to be registered in the Bailiwick if the purpose or effect of the transaction includes the raising or borrowing of money outside of the Bailiwick or the exchange or substitution of new securities for redeemable securities, subject to the same exception as above. A Bailiwick company requires consent to issue shares where the whole or any part of the consideration for the issue is the discharge of any capital liability in respect of any borrowing which would otherwise be excluded from control. A more significant provision is the requirement at section 4(6) for a Bailiwick company to obtain consent for the issue of any redeemable shares if the purpose or effect of the transaction includes the capitalisation of profits or reserves. Section 4(7) requires a Bailiwick company to obtain the consent of the Commission for the 4
S 3. Se 8. The words in square brackets were added by the Control of Borrowing (Amendment) (Bailiwick of Guernsey) Ordinance 1976. 6 With particular emphasis on s 8. 5
264 The Laws of Guernsey issue of securities other than shares. A non-Bailiwick company requires consent if those securities are to be registered in the Bailiwick. This group of controls does not apply to securities issued by a company for the sole purpose of securing money borrowed by the body corporate, whether in or outside the Bailiwick, if the borrowing is in the ordinary course of its business and from a person carrying on a banking undertaking (and the money is made available in the capital control zone). Section 5 requires consent for the issue of any foreign government’s securities other than HM Government or a Channel Island government. Section 6, as substituted by the 1976 Ordinance, imposes controls upon the circulation of prospectuses in the Bailiwick offering the securities of non-Bailiwick companies either for subscription or sale. Like controls apply to securities issued by a foreign government. Only offers to the public or to existing holders of securities in the company concerned are affected. An exemption is made for offers for subscription or sale where the offer either is being or has recently been made in Great Britain and is in accordance with the Companies Act 1985 and the Financial Services Act 1986 (now Financial Services and Markets Act 2000). Section 7 requires consent to be obtained for the raising of money by the use of a unit trust scheme if the money is either to be raised in the Bailiwick or outside of the Bailiwick and either the scheme is governed by Bailiwick law or the units are to be registered in the Bailiwick. Part II of the 1959 Ordinance contains (further) general exemptions to the controls set out in Part I. Apart from the inclusive effect on company incorporation already noted, section 8(1) makes a general exemption in favour of any transaction if the amount involved in the transaction together with the amount involved in all previous transactions by the same person in the previous 12 months, being transactions which are to be taken into account, does not exceed £500,000.7 The transactions to be taken into account are any borrowing of money in the Bailiwick, save that expressly excluded from control under section 1(2),8 whether or not consent was required, and any other transaction for which consent either was required or would have been required but for the general exemptions in Part II. There are provisions limiting the accumulation of transactions where the effect of transactions is merely to replace existing indebtedness. The expression “the amount involved” is defined at section 8(5) to mean either (i) the amount of money borrowed; (ii) the amount of money raised by a share issue, alternatively the total nominal value of the issue or the value of any assets to be acquired in return for the securities, whichever the greatest; (iii) in relation to the circulation of an offer of securities the total price of all the securities offered; (iii) where there is a guarantee or mortgage or charge the amount of the sum so secured; and (iv) where a price is permitted to remain unpaid, the unpaid amount. 7
See s 1(e) of the Control of Borrowing (Amendment) (Bailiwick of Guernsey) Ordinance 1989. Ie borrowing in the course of a business from a bank, unsecured borrowing repayable on demand or not more than six months after demand, bank deposits, borrowing by personal representatives and borrowing from HM Government and Bailiwick governments. 8
Control of Borrowing 265 Section 8A, as inserted by the 1989 Ordinance, provides a general exemption from the requirement for consent where the relevant activities are being carried on by an authorised collective investment scheme within the meaning of the Protection of Investors (Bailiwick of Guernsey) Law 1987. This Law and the Rules made thereunder provide their own comprehensive system of regulation for such entities. Section 10 provides a general exemption for employee profit sharing schemes. Section 11 dispenses with the requirement for any further consent where a consent has already been obtained from the relevant United Kingdom or Jersey body. Section 12 permits any consent given by the Advisory & Finance Committee to be either general or special, revocable, absolute or conditional or limited in time. Throughout the Ordinance it is essential to note that it is the borrower who is required to obtain consent, alternatively the company issuing shares or person circulating a subscription or sale offer. By section 1(3) of the 1946 Law it is expressly provided that: “. . . the rights of the persons concerned in any transaction shall not be affected by the fact that the transaction was in contravention of (the Ordinance).”
The system of control is therefore based upon the criminal penalties which may be imposed and not nullification of the transaction entered into without consent.
SUMMARY
In summary the Ordinance is concerned with borrowing in the Bailiwick, the incorporation of any Bailiwick company, the raising of money outside of the Bailiwick by either a Bailiwick company or a company whose shares are to be registered in the Bailiwick and the circulation by any person of sale or subscription offers for shares within the Bailiwick. The exceptions within Part I itself principally concern business/bank borrowing and borrowing which is unsecured and repayable on demand. The Part II general exemptions revolve around the twelvemonthly limit of £500,000 after taking into account transactions which merely replace existing debt or loan capital. The Ordinance is not a straightforward piece of legislation which is used today for purposes never intended by the legislature of the time. A Guernsey practitioner must be able to identify when a transaction might require consent. If in doubt it is prudent to apply for consent regardless.
14 Financial Services Regulation in the Bailiwick INTRODUCTION
M
OST FORMS OF financial service business in the Bailiwick of Guernsey are regulated strictly. The Bailiwick regulatory authority is known as the Guernsey Financial Services Commission.1 This body was established by the Financial Services Commission (Bailiwick of Guernsey) Law 1987 (as amended2). The Commission3 comprises a chairman and four other commissioners. The commissioners are elected by the States from persons nominated by the Advisory & Finance Committee, being persons having knowledge, qualifications or experience appropriate to the development and supervision of finance business in the Bailiwick.4 Traditionally the commissioners have been drawn from experienced and respected figures in the accountancy, insurance, banking and legal professions. The general functions of the Commission are set out at section 2 of the 1987 Law. These include taking such steps as the Commission considers necessary or expedient for the development and effective supervision of finance business in the Bailiwick and to provide the Advisory & Finance Committee with such reports, advice and assistance on any matter connected with finance business as the Committee may request. The Commission is specifically required to counter financial crime and the financing of terrorism.5 In exercising its functions the Commission may take account of any matter which it considers appropriate but must have regard in particular to the protection of the public interest, including protection against financial loss due to dishonesty, incompetence or malpractice 1 Note the very substantial changes to United Kingdom regulation of financial services effected by the Financial Services and Markets Act 2000, the main provisions of which came into force on 1 December 2001. The Act consolidates and reforms UK regulation under a single super-regulator, the Financial Services Authority. Note the express requirement for the FSA to have regard to 7 principles of good regulation, which include the proportionality of the benefit of regulation to the burden. Note also a new civil offence of market abuse, albeit in the context of Human Rights Act case-law concerning the potentially criminal nature of civil penalties and the various article 6 consequences, see in particular cases concerning the VAT tribunal. 2 Most recently by the Financial Services (Bailiwick of Guernsey) (Amendment) Law 2002, which came into force fully with effect from 1 February 2003. See the commencement ordinance XX of 2002. 3 Also commonly referred to as the FSC, although note that its full formal title is the Guernsey Financial Services Commission, ie GFSC. 4 See the new schedule 1 to the Law inserted by the 2002 Amendment Law. The Chairman is no longer required to be the President for the time being of the Advisory & Finance Committee. 5 See s 2(2)(d), as inserted by the Financial Services Commission (Bailiwick of Guernsey) (Amendment) Law 2002.
268 The Laws of Guernsey by persons carrying on finance business together with the protection and enhancement of the reputation of the Bailiwick as a financial centre. The Commission is not a committee of the States of Guernsey. It is independent of the States, although accountable to it, and largely self-funding through the collection of licence fees. The Commission is a body corporate with perpetual succession and a common seal. It is capable of suing and being sued in its corporate name, see section 1(2). Section 21 of the 1987 Law imposes a general obligation of confidentiality upon the Commission. Information obtained by the Commission may not be disclosed to third parties save to the extent that disclosure appears to the Commission to be necessary to permit it to carry out any of its functions or in the interests of the prevention or detection of crime or in connection with the discharge of any international obligation to which the Bailiwick is subject.6 The Commission may also be required to divulge information by order of the Royal Court. Note that by section 21A it is now expressly provided that the Commission shall take such steps as it considers appropriate to co-operate with corresponding bodies in other jurisdictions for the purposes of the investigation, prevention or detection of crime. Such co-operation may expressly take the form of sharing any information which the Commission may disclose lawfully. Section 22 excludes civil liability on the part of the Commission or any member, officer or servant of the Commission in the discharge of its functions under the 1987 Law, save for acts done in bad faith. This is a generous measure of protection given the level of damage the Commission has the potential to inflict upon an innocent business should a mistake be made. There is here a balancing of public and private interests in which the latter clearly fare worse. It may be that in an appropriate case the Court will not be slow to find bad faith, alternatively that what was done fell outside the discharge of the Commission’s proper functions. There are four areas of finance business which concern the Commission. These comprise investment business, banking, those areas of business grouped together under the Regulation of Fiduciaries, Administration Businesses and Company Directors, etc. (Bailiwick of Guernsey) Law 2000 and insurance business. The legislation is constantly evolving and being added to; most recently through the coming into force of new Laws governing insurance business replacing earlier 1986 legislation. The primary legislation is supplemented by ordinances, regulations and codes. Informal publications are also influential; for example a joint policy statement of November 2002 pulling together the different regimes’ common threads on what is expected of a licensee.7
6 This is an area where challenge can be anticipated given the increasing willingness of the FSC to cooperate in cross-border investigations. 7 The publication is entitled “Policy for persons licensed or otherwise regulated by the Commission”.
Financial Services Regulation in The Bailiwick 269
THE PROTECTION OF INVESTORS (BAILIWICK OF GUERNSEY) LAW 1987 (AS AMENDED) 8
By section 1(1) subject to the provisions of the 1987 Protection of Investors Law a person must not carry on or hold himself out as carrying on, any controlled investment business in or from within the Bailiwick, except in accordance with the terms of a licence granted by the Commission.9 By section 1(3) a person carries on controlled investment business if by way of business he engages in any restricted activity in connection with a controlled investment. Controlled investments are defined at schedule 1 and comprise principally general securities, derivatives and open-ended investment schemes, as opposed to closed-ended investment schemes. The distinction between the two is that open-ended funds have no fixed capital; investors are entitled to redeem their holdings on demand, subject to any applicable notice period. By contrast closed-ended funds normally have fixed capital; investors have no absolute entitlement to redeem their shares or units. Closedended schemes are regulated separately by the requirement for consent under the Control of Borrowing (Bailiwick of Guernsey) Ordinance 1959. What is a restricted activity is defined at schedule 2 of the 1987 Law and includes promotion, subscription, registration, dealing, management, administration, advising and custody activities in connection with a controlled investment. The scheme of the 1987 Law is to require application to be made for a licence to carry on controlled investment business. The Commission must take into account various factors, including whether or not the applicant is a fit and proper person to carry on that business. Conditions may be imposed on licences which may themselves be cancelled or suspended in appropriate circumstances. Section 7 provides that, subject to certain exemptions under section 29, a licensee must not engage by way of business in any restricted activity in connection with a collective investment scheme, unless the scheme is itself an authorised collective investment scheme of a specified class. The licensee must, in addition, carry on the activity in accordance with any conditions imposed in respect of the scheme and any rules and regulations applicable to a collective investment scheme of the relevant class. There are three classes of open-ended funds: Class A funds; which follow closely the rules applicable to United Kingdom authorised collective investment schemes; Class B funds; ranging from retail products aimed at the general public via institutional schemes to the strictly private fund; 8 Note also the Protection of Investors (Bailiwick of Guernsey) (Amendment) Law 2002 which will introduce inter alia the offence of market manipulation. A draft was circulated for consultation in August 2002. 9 The Commission has been substituted for the Advisory & Finance Committee for most purposes in regulatory legislation; see para 25 sch 2 of the Financial Services Commission (Bailiwick of Guernsey) Law 1987.
270 The Laws of Guernsey Class Q funds; targeted at qualifying professional investors which may include a government or municipal authority, a trustee of a trust with net assets in excess of £2,000,000, a body corporate or limited partnership if it, or a holding company, or a subsidiary has net assets of £2,000,000 (or the currency equivalent) or an individual who has, together with a spouse, a minimum net worth, excluding main residence and household goods, of £500,000; There are detailed rules made pursuant to the Law governing each class (eg the Class B rules) setting out the specific requirements for each fund type. The rules also assist in understanding the legal rights, obligations and relationships involved, together with their potential consequences.10 Section 10 of the 1987 Law nullifies the effect of any provision in an authorised collective investment scheme purporting to exempt any person carrying on a restricted activity in relation to the scheme from liability for failure to exercise due care and diligence in the discharge of his functions.11 Likewise by section 32, a controlled investment agreement entered into in breach of s.1 of the 1987 Law is (prima facie) unenforceable against the other party,12 who is entitled to recover any money paid or other property transferred by him under the agreement, together with compensation for any (consequential) loss sustained.13 Money or property received by the investor under the agreement must be returned; ie the effect is equivalent to rescission. It is implicit from the Law that the investor in fact has an option whether to treat the agreement as unenforceable (against him) or 10 Again there is a helpful loose-leaf publication of the FSC containing the following materials: the Collective Investment Scheme Rules 1988; the Collective Investment Schemes (Designated Persons) Rules 1988; the Collective Investment Schemes (Compensation of Investors) Rules 1988; the Licensees (Financial Resources, Notification, Conduct of Business and Compliance) Rules 1998; Guidance Notes and the Collective Investment Schemes (Class B) Rules 1990; Guidance Notes and the Collective Investment Schemes (Qualifying Professional Investor Funds) (Class Q) Rules 1998; the Licensees (Conduct of Business and Notification) (Non-Guernsey Schemes) Rules 1994; the Investment Exchange (Notification) Rules 1998 together with the Financial Services Commission (Fees) Regulations 1997, as amended; the Investor Protection (Designated Countries and Territories) Regulations 1989, as amended; the Investor Protection (Designated Countries and Territories) (Republic of Ireland) Regulations 1992 and the Principles of Conduct of Finance Business. This last document is only 10 paragraphs long but of fundamental importance in day to day practice. The ten paragraph headings are: integrity; skill care and diligence; conflicts of interest; information about customers; information for customers; customer assets; market practice; financial resources; internal organisation and relations with the Guernsey Financial Services Commission. Note that the Collective Investment Schemes (Class A) Rules 2002 came into force on 1 October 2002 and will eventually supersede the Collective Investment Schemes Rules 1988 after designation requirements with HM Treasury are complete. The new regulations require that a manager and trustee must be independent of each other. 11 It is interesting to contrast this provision with the greater freedom to exclude liability under Guernsey trust law, see s 34(7) of the Trusts (Guernsey) Law 1989. How the provisions of the trust law sit with the characterisation of the custodian of a collective investment scheme as a trustee is unknown, particularly as regards s 70 director liability. 12 Ie the unsuspecting member of the public. 13 Note however that this is qualified by s 32(3) which gives the Court a discretion to permit the agreement and dispositions of property to stand if the regulatory breaches are not of a serious nature. Difficult issues of quantum may also arise when trying to measure alleged loss of investment opportunity.
Financial Services Regulation in The Bailiwick 271 not. If the agreement is favourable notwithstanding it is likely that the investor will affirm the contract. By section 33 there is a general power vested in the Commission to seek and obtain injunctions from the Royal Court where contraventions of the Law have either taken place or are threatened. The Court may also require persons in breach of the Law to pay into Court monies representing profits made by them or losses incurred by others as a result of the breach(es). The Court then has broad powers to distribute those monies to those who either entered transactions from which the profits resulted or who have otherwise suffered loss. There is the potential here for swift and effective remedies short-circuiting full-blown litigation. A particularly important provision is at section 34 of the 1987 Law whereby any contravention of the rules or regulations made under the Law and any breach of section 7 is an actionable breach of statutory duty against the person contravening the material provision. The right of action is vested in any person who has suffered loss, or who has been otherwise adversely affected by the contravention. This (it is suggested) extends the range of potential claimants beyond the investor himself to, say, the manager of a collective investment scheme as against the custodian, eg to enforce custodian duties and/or to require any loss to be made good to the investment company. The section 32 and 34 provisions are not well known and of potentially great usefulness to a prospective claimant. Again the prospective claimant may obtain assistance from the FSC in a sufficiently clear case of wrongdoing. Section 35 confers a right to make representations concerning Commission proposals to make significant decisions.14 The Commission must give written notice to the person affected that it is considering taking the material decision and allow a 28 day opportunity in which to make representations (as little as two days in an emergency). The Commission must supply written reasons within two working days as to why it is considering making the decision, if so requested. Section 36 provides a right of appeal against the decisions themselves. Any such appeal must be instituted within 28 days of the date on which notice in writing of the decision was served, see section 36 (2). The two grounds of appeal are either that the decision was ultra vires the Commission or an unreasonable exercise of its powers. The appeal is to the Royal Court sitting as an Ordinary Court, which may quash or confirm the decision of the Commission or substitute any other decision which the Commission could have made. There is a further right of appeal to the Court of Appeal, but on a question of law only. By section 27 there are general investigative powers conferred upon the Commission including the right to demand information and documents, together with an explanation of any documents so produced. There are various criminal offences created at section 38 concerning chiefly those who carry on a restricted activity in contravention of the Law.
14 Eg a decision to refuse, suspend or revoke a licence or else a refusal to authorise a collective investment scheme.
272 The Laws of Guernsey
THE BANKING SUPERVISION (BAILIWICK OF GUERNSEY) LAW 1994
The 1994 Law re-enacted provisions which had previously appeared in the Protection of Depositors, Companies and Prevention of Fraud (Bailiwick of Guernsey) Law 1969 whilst making more extensive specific provision for the regulation of banks themselves. The key provision is at section 1 whereby no person shall in the Bailiwick of Guernsey accept a deposit in the course of carrying on, whether in the Bailiwick or elsewhere, a deposit-taking business, except under the authority of and in accordance with the conditions of a licence granted by the Guernsey Financial Services Commission. A deposit is defined at section 2 as a sum of money paid on terms under which it will be repaid, with or without interest or a premium, either on demand or at a time or in circumstances agreed by or on behalf of the person making the payment and the person receiving it and which are not referable to the provision of property or services or the giving of security. Section 3 states that a business is a deposit-taking business if, in the course of the business, money received by way of deposit is lent to others, or any other activity of the business is financed to any material extent out of the capital of or the interest on money received by way of deposit. A business is not a deposit-taking business if, in the normal course of the business, the person carrying on the business does not hold himself out as accepting deposits on a day-to-day basis and any deposits which are accepted are accepted only on particular occasions, whether or not involving the issue of debentures or other securities. There are exemptions from the meaning of deposit extending to sums paid by a person in the course of carrying on a business consisting wholly or mainly of lending money,15 or a sum paid by a person who is a close relative of the person receiving the sum. The Law contains familiar provisions requiring a licence to be applied for and sets out the criteria for the grant of any such licence. The minimum criteria for licensing as a deposit-taking institution are set out at schedule 3. Paragraph 1 requires that the business of the institution is, or will be carried on with the prudence, professional skill and integrity appropriate to the nature and scale of its activities and in a manner which will not tend to bring the Bailiwick into disrepute as an international finance centre. There are equally important provisions governing the maintenance of an appropriate capital base and adequate liquidity. Conditions may be imposed upon a banking licence and directions given pursuant to sections 9 and 12 respectively, whether for the purpose of safeguarding the institution’s assets or otherwise. Section 14 provides that no person may become a shareholder controller or an indirect controller of a licensed banking institution, unless he has notified the Commission in writing of his intention so to become. The Commission may object either to a proposed new controller or an existing 15
Ie without deposit taking.
Financial Services Regulation in The Bailiwick 273 controller. By section 17 the Commission has powers to undo share transactions which would otherwise result in a person becoming a controller of the relevant institution in circumstances where the Commission objects. By section 8 the Commission may revoke a banking licence in fully 13 separately stated circumstances including the provision of false, misleading or deceptive information to the Commission and threats to the interests of depositors. There is a right of appeal to the Royal Court against decisions taken by the Commission to refuse, revoke, or impose conditions on a banking licence or giving directions to an institution. The grounds are again that the decision was either ultra vires or an unreasonable exercise of the Commission’s power.16 The appeal must be instituted within 28 days following the date of the notice of the Commission’s decision.17 The Court may quash the decision of the Commission against which the appeal was brought, confirm it, with or without modification, or substitute any other decision which the Commission could have made. There is again a right of appeal to the Court of Appeal on a question of law only. There is no equivalent to the provisions of earlier Laws requiring the Commission to give notice that it is considering making certain kinds of decision and giving an opportunity for representations to be made. Note however that by section 8(2) the bringing of an appeal operates as an automatic stay of the revocation of a banking licence during the period allowed for appeal; if an appeal is brought the stay continues in force until the conclusion of the appeal. Section 10 provides a mechanism for discovering the grounds and reasons of the Commission for refusing, revoking or attaching conditions to a banking licence. The 1994 Law requires certain events to be notified to the Commission. By section 22 a licensed banking institution must give notice to the Commission of any change of director, controller or manager of the institution. By section 23 a person who becomes a significant shareholder (ie holding between 5 per cent and 15 per cent of the issued shares) must notify the Commission in writing within fourteen days. If the shareholding is greater than 15 per cent the shareholder controller provisions impose more stringent requirements. A key provision at section 24 of the 1994 Law requires a licensed institution, other than one whose principal place of business is outside the Bailiwick, to report to the Commission if it proposes to enter into transactions relating to any one person which, either alone or cumulatively, would result in exposure to a risk of incurring losses in excess of 25 per cent of its capital base.18 Failure to make the report is a criminal offence. It is intended that such reports be made before the transactions are entered 16
S 18. S 18(5)(a); contrast s 36(2)(a) of the Protection of Investors (Bailiwick of Guernsey) Law 1987 where the 28 days runs from the date on which notice in writing of the decision is served by the Commission. This is but a single example of how successive regulatory laws have become less and less generous in their provisions. Perhaps the best example is the reduction of the Royal Court’s powers when hearing appeals; see below. The FSC takes or, more strictly, is given increasing power with each new piece of legislation both cumulatively and qualitatively. The same process is seen in the 2002 insurance legislation. 18 The heading of the section is memorably stated to be: “Reports of large exposures”. 17
274 The Laws of Guernsey into. By section 24(6) the Commission may require the institution concerned and any relevant subsidiary to make such arrangements within such time as may appear to the Commission to be desirable for the protection of the institution’s capital base.19 There are extensive powers at section 25 permitting the Commission to obtain information and documents from licensed institutions. Section 26 gives a right of entry to the premises of licensed institutions in order to exercise the section 25 powers. There are various additional investigative powers given at section 28, together with the power to obtain a search warrant from the Bailiff where an offence against section 1 of the 1994 Law is suspected. Section 33 permits an auditor to make disclosures concerning a licensed institution to the Commission without liability for what would otherwise be a breach of duty (or confidentiality). The auditor must act in good faith. There is power by section 34 for the Commission to order the repayment of unauthorised deposits and profits, alternatively to appoint a receiver. Injunctions to enforce the provisions of the Law may be obtained pursuant to section 35. Section 36 gives a general power to the Commission to apply for the winding up of a licensed institution, former licensed institution or an institution, whether licensed or not, guilty of breach of the Law’s provisions or in the usual circumstances of inability to pay debts or on the grounds of what is just and equitable. Part II sets out restrictions governing the use of names indicating that a person is a bank, a banker or carrying on a banking business. Likewise it is forbidden to hold oneself out as a licensed institution or deposit-taking business if not in fact so licensed. Permission to use banking names must be obtained from the Commission. Part III contains provisions restricting disclosure of information obtained by the Commission but again permitting disclosure for the purpose of enabling or assisting a relevant supervisory authority in a country outside of the Bailiwick to exercise its supervisory functions and for the purpose of any criminal proceedings, whether under the 1994 Law or otherwise. Information may be disclosed to HM Procureur or to an Officer of Police for the purposes of a prosecution either within or without the Bailiwick, but only with the prior consent of HM Procureur in the case of the latter.
THE REGULATION OF FIDUCIARIES, ADMINISTRATION BUSINESSES AND COMPANY DIRECTORS, ETC. (BAILIWICK OF GUERNSEY) LAW 2000
The Fiduciary Law, as it is commonly referred to, came into force on 1 April 2001.20 The scheme of the Law is an evolution of the earlier regulatory Laws for other forms of business of 1986,21 1987 and 1994. For the first time regulation has been 19 There is no provision for appeal within the Law against the exercise of these powers nor any of the regulatory provisions after s 19. An aggrieved institution could seek judicial review. Where powers are exercised by the Court at the instance of the Commission there would be a right of appeal or challenge in the normal way. 20 See the Regulation of Fiduciaries, Administration Businesses and Company Directors etc. (Bailiwick of Guernsey) Law 2000 (Commencement) Ordinance 2001. 21 The Insurance Business (Guernsey) Law 1986 is now superseded by the 2002 laws; see below.
Financial Services Regulation in The Bailiwick 275 extended to those carrying on fiduciary and administration businesses. The enactment of this Law put Guernsey ahead of the United Kingdom. Prohibition Without Licence Section 1 of the Law provides that a person other than a Bailiwick company must not carry on by way of business, in or from within the Bailiwick, any regulated activity except under the authority of and in accordance with the conditions of a fiduciary licence granted by the Commission. A Bailiwick company must not carry on by way of business, in or from within any place whatsoever, any regulated activity except under the authority of and in accordance with the conditions of a fiduciary licence. Regulated Activities What is a regulated activity is defined by section 2 as follows: (a) the formation, management or administration of trusts, and the provision of advice in relation to the formation, management or administration of trusts, including: (i) acting as corporate or individual trustee or protector for trusts; (ii) the provision to trusts of corporate or individual trustees or protectors; (b) company or corporate administration including: (i) the formation, management or administration of companies, partnerships or other unincorporated bodies, and the provision of advice in relation to the formation, management or administration of companies, partnerships or other unincorporated bodies, whether incorporated or established in or under the laws of the Bailiwick or elsewhere; (ii) the provision to any such companies, partnerships or other incorporated bodies of: (A) corporate or individual directors; (B) individuals or companies to act as company or corporate secretary or in any other capacity as officer of a company, partnership or other unincorporated body other than a director; (C) nominee services, including acting as or providing nominee shareholders; (D) registered offices or accommodation addresses; (iii) acting as director of any company or unincorporated body, or as partner of any partnership, whether incorporated, registered or established in or under the laws of the Bailiwick; (c) the provision of executorship services including acting as, or accepting an appointment made by will as, an executor of a will or administrator of an
276 The Laws of Guernsey estate. It follows that the Law applies to the core financial business of the Bailiwick other than business which is already and separately regulated. There is power to add to the list of regulated activities.
Exemptions After having cast the regulatory net very wide a large number of exemptions follow at section 3. These include the following: (a) acting as a trustee or custodian of an authorised collective investment scheme; (b) acting as a director of a company which has an established place of business within the Bailiwick provided that no services consisting of or comprising a regulated activity are supplied to the company by the director (other than acting as director); (c) acting as a director of a company which is quoted on a stock exchange recognised by the Commission; (d) acting as a director of a company where more than half in nominal value of the equity share capital of that company is held by: (i) the director, as beneficial owner; (ii) any close relative of the director, as beneficial owner; or (iii) the trustees of a trust of which a person mentioned in sub-paragraph (i) or (ii) is a beneficiary; (g) acting, where the person is an individual, as a director of not more than six companies, being directorships which are not the subject of an exemption contained in any other paragraph, except in any case where the Commission disapplies the exemption on the grounds that the person concerned is not a fit and proper person to be or to become a director of a company; (i) acting as a partner of a partnership which has an established place of business within the Bailiwick provided that no services consisting of or comprising a regulated activity are supplied to the partnership by the partner (other than acting as partner); (n) acting as guardian of a minor or person under legal disability where the appointment is made by, and where the discharge of the functions of guardian is subject to the supervision of, the Royal Court, the Court of Alderney or the Court of the Sénéschal; (o) acting as executor of the will of, or administrator of the estate of, a person who was resident or domiciled in the Bailiwick at the time of the execution of the will or at the time of death, provided that the person so acting is a lawyer;
Financial Services Regulation in The Bailiwick 277 (p) acting as trustee of testamentary trusts created by the will of a person who was resident or domiciled in the Bailiwick at the time of the execution of the will or at the time of death, provided that the person so acting is a lawyer; (q) the provision of advice or the drafting of documents by a lawyer, accountant or actuary in the ordinary course of carrying on the profession of lawyer, accountant or actuary; (r) the incorporation of companies by an Advocate and the drafting of minutes of meetings by a lawyer, accountant or actuary; (t) activities undertaken in the course of a profession or business: (i) which are undertaken without separate or additional remuneration (whether from the client concerned or from a third party); and (ii) which are incidental to the carrying on of that profession or business; provided that the person carrying on the professional business does not hold himself out as undertaking those activities; (w) any activity carried on under the authority of and in accordance with the conditions of a licence, registration or authorisation granted under any of the regulatory Laws. A procedure is also provided whereby application may be made to exempt a particular activity, transaction or appointment not already exempted. There is also a general power to add to the list of exemptions. The fact that an activity is not exempted does not mean that it is regulated. What is regulated is determined solely by reference to s.2, thus preserving the rule of law.22 Licensing There are different categories of licence which may be granted. A full fiduciary licence may only be granted to a company or a partnership. A full licence authorises any director, manager, partner or employee of the licensed fiduciary acting in the course of his or her duties to carry on by way of business any regulated activity in or from within the Bailiwick and, in the case of a Bailiwick company, from within any place whatsoever.23 A more restricted licence, a personal fiduciary licence, may be granted to an individual to carry on by way of business from within the Bailiwick a range of regulated activities comprising acting as a director, partner, trustee, protector, executor or administrator of an estate. Applications for licences must be made to the Commission which may grant or refuse the application or impose conditions, see sections 5–7. There is a requirement to state in or from which Bailiwick Islands the applicant proposes to carry on a regulated 22
See s 3(4). Note the extra-territorial effect of the Law. The corollary to this provision is that the Law also purports to catch the unlicensed regulated activities of a Bailiwick company in a foreign jurisdiction; see s 1(2). 23
278 The Laws of Guernsey activity. There is a requirement for the Commission to consult with the authorities of Alderney and Sark, if relevant.24 Schedule 1 sets out the usual minimum criteria for licensing. Again paragraph 1 requires that the business of the applicant or licensed fiduciary is or will be carried on with the degree of prudence, professional skill and integrity appropriate to the nature and scale of its activities and in a manner which will not tend to bring the Bailiwick into disrepute as an international finance centre. The applicant or licensed fiduciary must be a fit and proper person to hold a fiduciary licence. In the case of a full fiduciary licence every person who is, or is to be, a director, controller, partner or manager of the applicant or licensed fiduciary must be a fit and proper person to hold that position. By paragraph 4, in the case of a full fiduciary licence at least two individuals, resident in the Bailiwick and of appropriate standing and experience, must effectively direct the business of a licensed fiduciary. This is the so-called “four eyes” requirement.25 The schedule goes on to state various criteria according to which a person will not be regarded as conducting its business in a prudent manner. Thus an appropriate capital base and insurance cover must be maintained, likewise a system to maintain adequate accounting and other business records. The Commission is specifically required to have regard to whether the applicant or licensed fiduciary has staff of adequate number, skills, knowledge or experience to undertake and fulfil their duties, likewise the systems of control or record keeping. The Commission must also take account of any history of complaints. By section 6 the Commission may either refuse or grant the application for a licence. It may not grant a licence if the schedule 1 criteria are not fulfilled. The Commission is required to take into account any written guidance issued to it by the Advisory & Finance Committee26 and may take into account the provisions of any code of practice27 and any matter which would be taken into account under section 8 (which confers power to revoke a licence). When granting a licence (or at any time thereafter) the Commission may, by virtue of section 9, impose such conditions on the licence as it thinks fit. The Commission may subsequently vary or rescind the conditions. Section 9(4) illustrates the kind of conditions that may be imposed and include requirements for the fiduciary to take certain steps, to refrain from adopting or pursuing a particular course of action or to restrict the scope of its business in a particular way. Section 9(4)(f) goes so far as to permit the Commission to require the removal of any director, controller, manager, partner or employee as a condition of granting a licence. 24
See s 5(9). A similar provision is found at para 4 of sch 3 of the Banking Supervision (Bailiwick of Guernsey) Law 1994. 26 Ie pursuant to s 7 of the Financial Services Commission (Bailiwick of Guernsey) Law 1987; such guidance will necessarily be of a general character concerning regulated activities. 27 Ie issued pursuant to s 35; there are codes of practice for corporate service providers, trust service providers and corporate directors. They are important documents which should be studied closely; all these materials are available at the GFSC website www.gfsc.guernseyci.com. 25
Financial Services Regulation in The Bailiwick 279 Revocation of Licence The section 8 power to revoke an existing fiduciary licence is likely to be the most contentious area of this Law and more likely to be exercised than equivalent powers under, say, the Banking and Insurance Laws, if only because of the numbers involved. By section 8 the Commission may revoke a fiduciary licence if it appears to the Commission that: (a) the schedule 1 criteria are or have not been fulfilled either in relation to the licensee itself or any person who is a director, controller, partner, manager or employee of the licensee; (b) the licensee or any of those mentioned in (a) have committed an offence under the Fiduciary legislation or have contravened any prohibition, restriction, condition, requirement direction or arrangement imposed pursuant to the legislation;28 (c) a person has become a controller or partner of the licensed fiduciary in breach of the requirement to give notice of such to the Commission and/or without securing the non-objection of the Commission;29 (d) the Commission has been provided with false, misleading, deceptive or inaccurate information by or on behalf of the licensed fiduciary; (e) the interests of clients of the licensed fiduciary are threatened; (f) licence fees are unpaid; (g) an equivalent licence from an overseas authority has been withdrawn; (j) the licensed fiduciary has not carried on by way of business a regulated activity in the Bailiwick for 12 months since a licence was granted or for any period in excess of 6 months thereafter; The 4 other grounds are various indicators of insolvency. Section 8(2) permits the Commission to have regard to section 6 matters when considering revocation in the same way that section 6 permits reference to section 8 matters; ie the greatest possible latitude is given. By section 8(3) a decision to revoke a fiduciary licence does not, prima facie, have effect until the end of the period allowed for appeal under section 19 (28 days from the date of the notice of the relevant decision/objection). If an appeal is brought within that period the coming into effect of the revocation is automatically stayed until the appeal is either determined or withdrawn. However, by section 8(4) where the Commission is of the view that it is “necessary or desirable” in the interests of the clients of the fiduciary or “for the protection or enhancement of the reputation of the Bailiwick” the Commission may apply to the Court for an order that the revocation shall have immediate effect (without prejudice to the 28 This illustrates the power of the FSC over licensed fiduciaries; failure to comply with a condition imposed by the FSC is itself a ground for revocation. 29 See the requirements in this regard under ss 14 and 15.
280 The Laws of Guernsey right of appeal). Section 8(5) provides that the application may be made ex parte. Where the relevant licensed fiduciary is a Guernsey or Alderney company the application must be made to the Royal Court or Court of Alderney as appropriate. If the licensed fiduciary is not a Guernsey or Alderney company the application must be made either to the Court of Alderney or the Court of the Sénéschal as appropriate if the licensed fiduciary’s principal place of business is in the corresponding Island. In all other circumstances the application is to the Royal Court. Notice of Refusal, Revocation or Imposition of Conditions If the Commission decides either to refuse the grant of a fiduciary licence or to revoke a licence or to impose, vary or rescind conditions in respect of a licence it must serve a notice in writing of the decision, giving also, where appropriate, particulars of the relevant condition, see section 10.30 The notice must state the grounds of the Commission’s decision and give particulars of the right of appeal. If a ground or condition is directed against a person within or prospectively within the fiduciary’s establishment a copy of the notice must also be served upon that person, (eg where a condition requires the removal of a director or partner). A section 10 notice may itself be accompanied by directions in order to protect the interests of the clients of the fiduciary. Such directions may require the fiduciary, inter alia, to take certain steps, to refrain from adopting or pursuing a particular course of action or to restrict the scope of his business in a particular way; ie a régime akin to the power to impose conditions. Again the fiduciary may be required to remove an individual. The requirement to serve a section 10 notice should be read with section 18. This provides that where the Commission makes a decision in respect of which there is a right of appeal (ie principally decisions to refuse, revoke or impose conditions on a licence or to give directions) a person with a right of appeal from the decision may require the Commission to produce a written statement of the reasons for the decision. It is this statement which is likely to be used to formulate the grounds of any subsequent appeal. There is power given to the Commission at section 18(2) not to disclose certain categories of sensitive information in the statement of reasons.31 This concerns chiefly information prejudicial to ongoing criminal or regulatory investigations. Controllers As with the Banking Supervision Law there are restrictions upon becoming the controller of a licensed fiduciary. The Commission must be notified of a proposed 30
See s 53 for the largely unsurprising, if one-sided, provisions for service of notices. See also s 19(9) as to how an appeal against a decision to omit material from the statement of reasons is dealt with. There is no apparent provision permitting the Appeal Court to take account of undisclosed material per se. 31
Financial Services Regulation in The Bailiwick 281 change in the controller and indicate whether or not it objects. Likewise it may object to an existing controller. It is an offence not to comply with a notice of objection; see generally sections 14 and 15. There is power also to control transactions relating to the shares of a licensed fiduciary company, see section 17. Right of appeal Section 19 sets out the circumstances in which a person aggrieved by a decision of the Commission may appeal to the Court. These comprise the more important decisions which the Commission can make concerning a proposed or existing licensed fiduciary and include the refusal to grant a licence, the revocation of a licence, the imposition of conditions, and the giving of directions. An individual who has been singled out as a ground for a decision to refuse, revoke or impose a condition on a licence or whose removal has been required also has a right of appeal, see section 19(2). The grounds of appeal are again that the decision concerned was ultra vires or an unreasonable exercise of the Commission’s powers. Unlike earlier regulatory Laws section 19(7) provides that on appeal the Court may (only) set the decision of the Commission aside and, if the Court considers it appropriate to do so, remit the matter to the Commission with such directions as the Court thinks fit; or else confirm the decision. There is no power to substitute any other decision which the Commission could have made.32 This is illustrative of the way in which the regulatory laws have evolved; ie the Commission acquiring greater powers with each successive Law. As noted above, the appeal must be brought by summons served on the Chairman of the Commission within 28 days of the date of the material decision notice (or notice of objection, eg to a new controller).33 There is express power for the Commission to apply for the appeal to be struck out for want of prosecution in order to avoid the mischief of appeals brought in bad faith so as to take advantage of the automatic stay at section 8(3). There is an important power at section 19(8) to suspend or modify the operation of a condition or direction on the application of the appellant pending the determination of an appeal against the same. Where the prospective appellant is a Guernsey or Alderney company the appeal is to the Royal Court or Court of Alderney, as appropriate. If the appellant is not a Guernsey or Alderney company the appeal must be made either to the Court of Alderney or the Court of the Sénéschal as appropriate if the appellant’s principal place of business is in the corresponding Island. In all other circumstances the appeal is to the Royal Court.34 There is a further right of appeal to the Court of Appeal on a question of law only. 32
Contrast s 18(7) of the Banking Supervision (Bailiwick of Guernsey) Law 1994. Again earlier laws allowed 28 days from the date of service of the notice, see for example s 52(2)(a) of the now superseded Insurance Business (Guernsey) Law 1986 which has itself been replaced by a harsher régime. 34 This matches the provisions at s 8(5). 33
282 The Laws of Guernsey Advertising and Notification Provisions There are provisions governing fiduciary advertising which also permit the Commission to issue regulations, breach of which is an offence, see section 20. There are much more controversial provisions at section 21 of the Law whereby notification must be given to the Commission of any change in director, controller, partner or manager of a licensed fiduciary. This gives the Commission the opportunity to impose a condition on the licence pursuant to section 9(1) and 9(4)(e) and to issue a direction under section 12(2) requiring the removal of any director, controller, partner, manager or employee. The Commission can therefore theoretically control the composition of a fiduciary’s board or partnership, albeit only with grounds to do so.35 Likewise section 22 requires notification to be given of an acquisition of a significant shareholding, defined as between five and up to, but excluding, 15 per cent of the issued voting shares. Investigative Powers Sections 23 to 28 give extensive investigative powers to the Commission in order to police the Law. These include powers to require information and documents to be provided to the Commission together with an explanation of any documents so supplied. The Commission may also appoint an inspector to investigate the affairs of a fiduciary at the expense of the person being investigated, see section 24(11). This is subject only to the requirement that the sums claimed be reasonable and reasonably incurred. By section 26 a search warrant may be obtained from the Bailiff on specified grounds. There are various offences committed by those who tamper with documents during an investigation. By section 52 the Commission has power to direct that information provided to it pursuant to a requirement imposed by the Law be verified in such manner as the Commission may reasonably specify.36 If the information is not verified the Law’s requirement is deemed not to have been complied with. The Law seems to have in mind that the person concerned be required to swear, say in affidavit form, to the truth of the information provided in order to increase the pressure upon that individual by opening up the prospect of committing additional serious offences. There is again scope for challenge to provisions such as these given the impossible position in which a person might find him or herself. Such a person may not be able to swear to the truth of the information, but equally if he does not he may be prosecuted for the offence of failing to comply with the relevant requirement, eg section 23(12). If he changes his story to give more truthful information he will expose himself to prosecution under section 46(1)(b). Note also the roundabout way in which the privilege against self-incrimination is itself neutered in section 35 36
The mischief is the potential for reliance on bad or misconceived grounds. The same provision appears at s 52 of the Banking Supervision (Bailiwick of Guernsey) Law 1994.
Financial Services Regulation in The Bailiwick 283 23. A statement obtained by compulsion under section 23 may not be used in evidence against the maker except for the offences of failing to give information at all and giving false or misleading information, alternatively in proceedings for some other offence where an inconsistent statement is made. It follows that unless the person investigated both makes a statement and a candid statement he is liable to prosecution. Of course not giving information at all is not an option, unless the person concerned has a “reasonable excuse”. It is not clear whether the privilege against self-incrimination is a reasonable excuse given the following provision already noted as to the supposed non-admissibility of such evidence and the preservation of legal professional privilege at section 23(14). Miscellaneous Provisions Various notifications must be given concerning the appointment and retirement of auditors. An auditor is again at liberty to make disclosures to the Commission without being in breach of any duty owed to the fiduciary. Important powers are set out at section 32 whereby the Court may, on the application of the Commission, order the repayment of monies resulting from unauthorised business. Likewise a receiver may be appointed to recover any such monies. These are again potentially useful short-cuts to remedies for victims of wrongdoing associated with regulatory breach. Section 33 permits the Commission to obtain injunctions restraining unauthorised activities. Section 34 permits a winding-up application to be made to the Court by the Commission in respect of Bailiwick companies acting in breach of the Law, alternatively on the usual grounds. As noted already, codes of practice have been drawn up by the Commission; these are given quasi-legislative force by section 35. There are codes for corporate service providers, trust service providers and corporate directors. The codes represent both guidance to the relevant industries as well as yardsticks against which individual businesses will be measured.37 Part II of the Law contains prohibitions concerning the unauthorised use of descriptions and names relating to fiduciary business or regulated activities generally, likewise unauthorised holding out as offering or willing to conduct fiduciary business. In short only licensed fiduciaries may use such descriptions or names or so hold themselves out, unless the FSC has given permission (which seems unlikely). Part III repeats provisions found elsewhere for the disclosure of information to other agencies whether inside or outside the Bailiwick. Part IV creates a general offence of providing false or misleading information. Section 48 extends criminal liability to the controller, manager, secretary or other officers of a company where the company has committed an offence with either their consent or connivance. 37 They are also potentially useful in order to establish the standard to be achieved in the context of a professional negligence action.
284 The Laws of Guernsey Section 49 makes the interesting provision that criminal proceedings must be brought against an unincorporated body rather than its members. Section 51 avoids any inter-Island jurisdictional problems by deeming an offence under the Law to have been committed in any place in the Bailiwick. Section 57 again provides a blanket immunity from civil suit to the Bailiwick governments, their Committees and the Commission as regards anything done under the Law otherwise than in bad faith.38 Rules and regulations have been made pursuant to the Law as follows: (a) The Regulation of Fiduciaries (Accounts) Rules 2001; (b) The Regulation of Fiduciaries (Fiduciary Advertisements and Annual Returns) Regulations 2001; (c) The Regulation of Fiduciaries (Fees) Regulations 2001; (d) The Regulation of Fiduciaries (Consequential Modifications) Regulations 2001; Summary The Law confers extensive, even extreme powers upon the Commission to control persons wishing to carry on regulated fiduciary and administration activities within the Bailiwick; even outside the Bailiwick if the relevant entity is a Bailiwick company. It remains to be seen to what extent this Law will impede or otherwise burden lawful business, likewise how effective it will be in identifying and neutralising the dishonest and/or incompetent. The draconian nature of the Commission’s power is a hallmark of the Law, likewise the further watering down of the obligations of the Commission and even the Court’s power over the Commission at the expense of the regulated person. Certainly dicta of the Court of Appeal concerning the nature of the Housing Laws and how they must be applied have equal force in this statutory context also. It is likely that there will be human rights and administrative law challenges to a number of this and other regulatory Laws’ provisions.39 Equally, it is undoubtedly appropriate that financial services industries are regulated; the real issue is whether the right balance between regulation and commercial freedom has been struck.
38 Again the section rewards careful study if it were to be relied upon; much will turn on what bad faith means, likewise the phrase “discharge or purported discharge of any function”, see below. 39 This theme is taken up again below.
Financial Services Regulation in The Bailiwick 285
THE INSURANCE BUSINESS (BAILIWICK OF GUERNSEY) LAW 2002 & THE INSURANCE MANAGERS AND INSURANCE INTERMEDIARIES (BAILIWICK OF GUERNSEY) LAW 2002
Introduction The Insurance Business (Bailiwick of Guernsey) Law 2002 (“the Insurance Law”) and the Insurance Managers and Insurance Intermediaries (Bailiwick of Guernsey) Law 2002 (“the Managers Law”; collectively the “Insurance Laws”) replaced the Insurance Business (Guernsey) Law 1986 (as amended) with effect from 5 November 2002.40 The Insurance Laws are very much an evolution of the 1986 Law41 with seamless transitional provisions at section 102 of the Insurance Law and section 78 of the Managers Law. Those who were registered or authorised under the old régime are deemed to be licensed under the new. Consolidation and Development The Insurance Laws essentially overhaul the 1986 Law by consolidating and building on earlier amendments whilst also developing the insurance regulatory framework along lines very similar to the Fiduciary Law of 2002. For example, the full integration of Alderney and Sark into the Insurance Laws, although not new, is indicated by the title of the new Laws. There are careful provisions respecting the relevant regulatory and judicial authorities in all three jurisdictions. Functions discharged by the Royal Court in Guernsey are discharged by the Court of Alderney and Court of the Sénéschal respectively in those jurisdictions; this includes determining appeals against the decisions or actions of the Guernsey Financial Services Commission, albeit the right of appeal from a decision of the Court of Alderney or the Court of the Sénéschal to the Royal Court is preserved.42 Likewise, although the Commission has Bailiwick-wide powers under the Laws it is often required to consult with the Policy and Finance Committee of the States of Alderney or the General Purposes and Finance Committee of the Chief Pleas of Sark.43 Note 40 To the great regret of the author who was compelled to read all 455 A5 pages of this new legislation, not to mention the accompanying regulations and codes. The 1986 Law was a mere 82 pages long, which seemed challenging enough. It is unclear why a single and rather shorter Law could not have been devised; or even a core regulatory Law with separate specialist “cell” Laws for insurance, investment, banking and fiduciaries. The author’s patience wore especially thin to find on p 171 of the Managers Law the following definition: “ ‘action’ includes inaction and failure to act”. 41 Which had itself evolved, chiefly through the addition of part 4A and the extension of regulation to insurance intermediaries. 42 See s 63(11) of the Insurance Law and s 43(11) of the Managers Law; note that the sub-section numbers are very often the same; this is because many of the sections are identical. 43 One of the more (only) charming aspects of the Laws is the equivalent requirement in Sark of a publication in the Gazette Officielle: a copy of the relevant document or information must be sent or delivered to the Sénéschal who shall forthwith insert the same “in the Sark notice box”; see s 101(1)(b) of the Insurance Law and s 77(1)(b) of the Managers Law.
286 The Laws of Guernsey however that, in common with other more recent Laws, technical defences based on where events occurred within the Bailiwick are avoided by a provision to the effect that proceedings for an offence under the Laws “may be taken, and the offence may for all incidental purposes be treated as having been committed, in any place in the Bailiwick”.44 An obvious change is the division into two of the 1986 Law. The regulation of insurance managers and insurance intermediaries is now separated from the regulation of insurers, albeit the two Laws are otherwise very similar, as appears below. A more subtle difference is the replacement of the language of “registration” with that of “licensing”. The Regulatory Régime For all categories of licensed insurance entity; ie the insurer itself, the insurance manager, and the insurance intermediary the regulatory structure is essentially the same and mostly familiar from earlier Laws. Subject to limited exceptions45 it is prohibited to carry on insurance business,46 or to act as an insurance manager,47 or to carry on or profess to carry on business as an insurance intermediary or (without the Commission’s permission) hold oneself out as an insurance or assurance adviser, broker or consultant,48 in or from within the Bailiwick without being licensed by the Commission accordingly. Application A would-be licensee must apply to the Commission in the required form and supply the required information; the Commission has considerable powers in this regard.49 The Commission may either grant or refuse the licence application. While purporting to preserve the generality of the Commission’s powers the Laws provide that the Commission must not grant the application unless satisfied that a number of criteria are fulfilled.50 The essence of the requirements are contained
44
See s 92 of the Insurance Law and s 69 of the Managers Law. In the case of insurers these comprise the States, employer or employee organisations for limited purposes and institutions holding banking licenses under the 1994 Law; see s 5 of the Insurance Law. Note the limited exemptions for Friendly Societies and EU insurers at s 38 of the Insurance Law. 46 See s 1(1) of the Insurance Law; note the division between domestic business and long term business and the special requirements for each, particularly long term business, see s 2 and sche 1 of the Insurance Law together with the requirements at ss 40–48 concerning long term business; ie requirements to appoint an actuary, periodic actuarial investigation, separation of assets and restrictions on transfers of long term business. Note also the restriction on a Bailiwick body carrying on insurance business outside the Bailiwick unless licensed or with the consent of the Commission; see s 4. 47 See s 1(1) of the Managers Law. 48 See s 2(1) of the Managers Law. 49 See s 6 of the Insurance Law and s 3 of the Managers Law. 50 See s 7 of the Insurance Law and s 4 of the Managers Law. 45
Financial Services Regulation in The Bailiwick 287 in a schedule to each Law in near identical form.51 The schedule describes itself as “minimum criteria for licensing” and takes the following familiar themes: (a) the integrity and skill of the applicant; (b) whether the application is consistent with economic benefit to the Bailiwick; (c) whether the applicant and everyone who is to be a director, controller, manager, general representative or authorised insurance representative is a fit and proper person to hold that position; (d) the requirement that the relevant business be directed effectively by at least two individuals;52 (e) the requirement for a non-associated, non-executive director on the board of a licensee company; (f) the requirement that the material business be conducted in a prudent manner together with various safeguards to ensure better that it is, including maintenance of an appropriate capital base, adequate liquidity, adequate provision for liabilities, proper records and systems, and adequate numbers of suitably skilled staff, whilst also having regard to the complaints history of the applicant. A constant theme of the regulatory Laws is their concern for the good reputation of the Bailiwick as a finance centre, likewise the interests of the public and, in this context, policyholders and potential policyholders. The Licence A licence, if granted, is prima facie valid until either suspended or revoked; although a condition as to duration can be imposed. It is noteworthy that under the Insurance Law there is power to impose an insurance licence. One might ask why, given the difficulty of obtaining one voluntarily. The answer is that by this means the entity becomes subject to the full regulatory régime of the Insurance Law; it is the gateway permitting the Commission in effect to take control of an improperly unlicensed insurer.53 Conditions may be imposed upon the relevant licence under both Laws; in addition there are general restrictions and requirements particular to the category of license.54 It is by way of the imposition of conditions that the Commission can 51
Sch 7 to the Insurance Law, sch 4 of the Managers Law. The “four eyes” requirement, for obvious reasons; whether this is appropriate in a world now sensitive to the feelings of everyone, including monoculists, is another matter. 53 See s 10 of the Insurance Law. 54 See ss 11 and 12 of the Insurance Law and ss 7 & 13–18 of the Managers Law. Note the requirement that a Current Personal Questionnaire be lodged with the Commission for every director and controller of a licensed insurer. The questionnaire is another means to establish whether key individuals within a regulated entity are fit and proper persons. 52
288 The Laws of Guernsey control very specifically what an individual licensee may or may not do. Given the power to vary such conditions the Commission is given considerable power over the day to day conduct of regulated businesses. For example, express provision is made for the imposition of conditions governing fundamental aspects of an insurer’s business such as the requirement for a licensed insurer to establish and maintain technical reserves over and above those required by recognised accounting standards. Regulation of Business Names and Controllers The Commission has broad powers to regulate the names of licensees and business names associated with regulated activities generally.55 The Commission has considerable power to govern the controllers of licensees, including power to object to controllers, power to require their removal and even power to apply for the sale of their shares.56 A controller is either a managing director or chief executive of the material company or a parent company or else a shareholder controller, which is itself defined as a person who, alone or with associates, is entitled to exercise or control the exercise of 15 per cent or more of the voting power in general meeting of that company or a parent. New controllers must be notified to the Commission. There is, in addition, an obligation to notify the Commission of the acquisition of a significant shareholding in a licensed entity, defined as more than 5 per cent but less than 15 per cent of the company’s voting power in general meeting, or its parent.57 Information The Laws require the Commission to keep lists of licensees for public inspection; there are requirements as to the information to be provided in these lists. The exchange of information between the licensee, the Commission and the public/policyholders is again a recurrent theme of the Laws. Licensees are required to make an annual return to the Commission of their activities, they must likewise lodge annual accounts, which accounts must be audited. There are provisions governing auditors and actuaries engaged by licensed entities which, in effect, compel the auditor or actuary to act as a whistle-blower in the event of anything untoward occurring. Quite apart from the recurrent obligation to supply information the Commission is given extensive powers to obtain information from licensees. Site visits by the Commission are put on a statutory footing, express powers are conferred to request and obtain information and documents, and an explanation of 55
See ss 18–24 of the Insurance Law and ss 30–35 of the Managers Law. Likewise advertising. See ss 25–28 of the Insurance Law and ss 36–39 of the Managers Law. Sale itself must be ordered by the Court; there are lesser powers in effect freezing the shareholding which do not require an application. 57 See s 49 of the Insurance Law and s 28 of the Managers Law. 56
Financial Services Regulation in The Bailiwick 289 such documents. There are powers to appoint inspectors who are themselves given powers; the licensee must meet the cost of such investigations.58 Margins of Solvency There are very specific requirements for licensed insurers relating to the margins of solvency and holdings of approved assets which they must maintain, likewise restrictions on payments of dividends and specified minimum levels of paid up capital.59 Control without Liability The extent to which the Commission is likely to end up determining precisely how insurance business is conducted in the Bailiwick whilst at the same time excluding civil liability, save for anything done or omitted to be done in bad faith, is striking.60 Insurance Representatives It is noteworthy that the regulation of insurance intermediaries carries with it, mostly indirectly, regulation of insurance representatives. An insurance representative is defined as “an individual who acts on behalf of, and under a contract of agency or employment with, an insurer or insurance intermediary, for the purpose of arranging contracts of insurance for clients and giving advice to those clients”.61 An insurance intermediary is defined as a person62 other than an insurance representative or a licensed insurance manager who by way of business: “(a) advises clients on their insurance requirements; and/or (b) arranges contracts of insurance between insurers and clients.”63
The concept of an insurance manager is familiar from the original 1986 legislation as a person who “. . . exercises, in relation to any insurer of which he is not an employee, managerial functions (including administration and underwriting)
58 Albeit that the obligation is qualified by requirements of reasonableness, see s 69(9) of the Insurance Law and s 46(9) of the Managers Law. 59 See s 30 of the Insurance Law and sch 2 et seq. 60 See s 93 of the Insurance Law and s 70 of the Managers Law. Note that the protection applies only to activities “in the discharge or purported discharge of any function conferred by or under” the Laws, which opens up another possible line of challenge. 61 See s 2(6) of the Managers Law. 62 The distinction between person and individual is important; an individual is human whereas a person includes entities with legal personality, typically a company. 63 See s 2(5) of the Managers Law.
290 The Laws of Guernsey or such other functions as may be prescribed by the Commission by regulation”.64 The Requirement to have Authorised Insurance Representatives: The subtlety of the Managers Law lies in the imposition of a duty upon every licensed insurance intermediary, licensed insurer acting as an insurance intermediary in relation to the general Bailiwick public and every licensed insurance manager dealing with the general Bailiwick public to authorise one or more insurance representatives to act on his or their behalf. (Individuals who are licensed insurance intermediaries or managers are deemed to be their own authorised insurance representatives.) By section 16 of the Managers Law “an individual shall not, by way of business or in the course of employment, advise clients or arrange contracts of insurance unless that individual is an authorised insurance representative”; this is subject to limited exceptions, principally where the general public is not the customer. There is a positive requirement at section 16(3) that “a licensed insurance intermediary, licensed insurer or licensed insurance manager shall not advise clients, or arrange or enter into contracts of insurance, otherwise than through an authorised insurance representative”; ie there must be a regulated entity responsible for those that advise on or arrange insurance business with the public. The effect of an authorisation is that: “. . . for so long as it remains in force, and thereafter in relation to events occurring whilst it remained in force, the actions and conduct as an insurance representative of the person to whom it is issued when acting or purporting to act under it are deemed for the purposes of (the Managers Law) . . . to be actions and conduct of the person issuing it; and that person is accordingly obliged to take responsibility under this Law for all such actions and conduct.”65
Liability for the Authorised Insurance Representative Although there is clear liability from a regulatory point of view the position so far as ordinary civil liability is less certain. Section 15(3)(b) of the Managers Law requires that the written authorisation “. . . state that its issuer is responsible for the actions and conduct of the authorised insurance representative concerned when acting or purporting to act under it”. This appears indirectly to impose vicarious liability for the actions of the representative. As a matter of general law there is vicarious liability for employees and ostensible agents; these provisions arguably go further. The policy behind the legislation is plainly to make directly regulated
64 See s 1(3) of the Managers Law; the definition is identical to the sch 5 definition of the 1986 Law save only for the express reference to administration and underwriting. 65 See s 15(2) of the Managers Law.
Financial Services Regulation in The Bailiwick 291 entities responsible for those who are not directly regulated;66 which in the circumstances appears both reasonable and appropriate.67 A further safeguard is at section 17 which requires insurance intermediaries or managers only to place the insurance business of clients who are members of the public with recognised insurers; recognised that is, by the Commission. A distinction must be drawn between an authorised insurance representative and an insurer’s general representative which every licensed insurer must appoint under section 29(1) of the Insurance Law. The general representative must either be a director, employee or agent resident in Guernsey and approved as a fit and proper person to act in that capacity, or else a licensed insurance manager. It follows that a licensed insurance manager is likely to be an insurer’s general representative and may also be an authorised insurance representative, but an authorised insurance representative may or may not be a general representative. General Regulatory Enforcement Powers The chief weapons in the Commission’s regulatory arsenal are again its powers to suspend or revoke a licence, since without the licence the relevant business cannot be carried on. The criteria for both suspension and revocation are the same and could hardly be more broadly stated. The Commission may suspend or revoke a licence if it appears to the Commission that the licensee or any director, controller, partner, manager, general representative, authorised insurance representative or employee of the licensee either has failed or is failing to comply with the schedule 7 Insurance Law or schedule 4 Managers Law criteria noted above. Likewise the Commission may suspend or revoke on the grounds that the licensee or any of the above-mentioned has: “(i) . . . contravened or committed an offence under any provision of this Law or any Ordinance, regulation or rule made under it; or (ii) has contravened any prohibition, restriction, condition, requirement, code, duty, direction or arrangement under any such provision.”68
There are specific criteria permitting revocation of a licence in addition to the general; these include insolvency and revocation of an equivalent licence outside of the Bailiwick. Given the myriad requirements of the Laws and the subordinate provisions, together with the fact that the codes themselves contain requirements as sweeping as:
66
At least not in the fullest sense. Note the problems in English law of establishing liability, or rather non-liability, for agents in the context of consumer credit law. 68 See s 14(1)(b) of the Insurance Law and s 9(1)(b) of the Managers Law. 67
292 The Laws of Guernsey “. . . at all times (to) conduct business with utmost good faith and high standards of integrity, exercising due skill, care and diligence when dealing with clients;”69
the licensee is a permanent hostage to fortune; a fortune very largely controlled by the Commission. The licensee’s safeguard, apart from the Laws’ express appeal provisions, is the general human rights law requirement for a public authority to act proportionately. Likewise, by section 6(1) of the Human Rights (Bailiwick of Guernsey) Law 2000 prima facie it will be unlawful for a public authority to act in a way which is incompatible with a Convention right. General administrative law principles would also apply. Without more, neither suspension nor revocation of a licence may take effect until the time permitted for appealing the decision of the Commission (28 days) has elapsed; however the Commission may apply to the relevant Court to foreshorten or even extinguish this interval. The application can itself be made ex parte; although the Court may be expected to scrutinise carefully the Commission’s justification for proceeding ex parte, in line with general case law. A short return date would be likely even if the application were to be granted. One might also expect suitable undertakings in damages to be given, to the extent that a body such as the Commission should ever be required to give undertakings in damages, having regard to its public duty, policy considerations and immunities.70 Both Laws prima facie permit the surrender of a licence; although again the Commission may refuse the surrender as a means of retaining regulatory powers over a licensee if not satisfied with the circumstances of the surrender. The Commission has broad powers to give directions to licensees when a licence is either suspended, revoked, surrendered or merely expired, if given for a fixed duration, in order to protect or promote the interests of the public or policyholders. Contravention of such a direction by the licensee does not “. . . of itself invalidate any contract entered into or any transaction completed under the authority of the licence concerned”.71 69 See para 1 of the Code of Conduct for Authorised Insurance Representatives. This same Code provides also that if an insurance representative is in breach of the Code “. . . he must immediately inform his principal/employer who must inform the Commission as soon as is reasonably practicable”; which seems more 1984 than 2002 and positively Orwellian. 70 See for example the English case of Securities & Investments Board v Lloyd-Wright [1993] 4 All ER 210 where undertakings were not required and Steven Gee, Mareva Injunctions and Anton Piller Relief 4th edn p 151 where it is said that: “The Court may not insist on an undertaking from the Crown when bringing proceedings to enforce the law, as opposed to bringing proceedings for its own financial benefit”. Note the specific power of the Commission to apply for injunctions as one of the available enforcement tools and the express application of s 1 of the Law Reform (Miscellaneous Provisions) (Guernsey) Law 1987, excepting s 1(1) and (7); note however that s 1(3) is not excluded, ie the power to require undertakings. See s 76 of the Insurance Law and s 53 of the Managers Law. The 1987 Law is to be found at Appendix 3. 71 See s 16(6) of the Insurance Law and s 11(6) of the Managers Law. This provision can be contrasted with a similar but much more general provision at s 50 of the 1986 Law. It is not clear whether any substantive change of law was intended by this refinement. Note also the reference to “under the authority of the licence concerned”; this begs the question of what authority if the licence has been suspended or revoked. The better view is that the regulatory laws do not prima facie affect the general law as between contracting parties—here a would-be insurer, manager, or intermediary and a policyholder;
Financial Services Regulation in The Bailiwick 293 Apart from the wide range of powers to obtain information there are additional express powers given to the Commission in support of investigations into possible offences under the Laws and in support of enforcement more generally, including the possibility of obtaining a warrant permitting the (forced) entry and search of premises, seizure of documents, the power to take copies of documents found, the power to require persons named in the warrant to answer questions, to state the whereabouts of documents and to give an explanation of documents.72 It is generally an offence not to co-operate with the Commission’s investigative powers; in particular it is an offence to obstruct or fail to comply with the warrant powers, which means that it is prima facie an offence not to answer questions.73 There is some limited safeguard in that answers given under compulsion are not generally admissible in evidence against the statement maker save for a statement which is itself an offence for being false or misleading74 or else in proceedings for some other offence where in giving evidence the statement maker makes a statement inconsistent with the earlier statement; which is no real protection at all. The Commission can (prima facie) obtain information by compulsion from a prospective defendant which may well lead to criminal charges; the defendant is, in effect, barred from giving evidence unless he is willing to repeat his earlier statement, which, if damaging, probably contributed to his predicament. Note that the defendant must give evidence to risk admission of the earlier statement.75 There are broad powers to make enquiries of professionals connected with the entity under investigation; however legal professional privilege is ultimately preserved.76 There is a noteworthy provision whereby a person may be required to verify (ie swear to) any information given to the Commission, which could again put a prospective criminal defendant in a great deal of difficulty.77 Challenge It seems inevitable that the exercise of powers under the Insurance Laws (and indeed other regulatory Laws) will be subject to administrative and human rights law challenges. Long-established rights, privileges and safeguards are threatened ie what is or is not a good contract is unaffected by these two Laws. However, note the powers of the Commission to require either the repayment or surrender of monies and profits derived from unlawfully conducted business; see s 75 of the Insurance Law and s 52 of the Managers Law. 72 See ss 71–72 of the Insurance Law and ss 48–49 of the Managers Law. Note also the special powers of the Commission to apply for the winding up of a licensed insurer, see part IV of the Insurance Law. Again note the power to apply for an injunction to prevent unlawful business, see s 76 of the Insurance Law and s 53 of the Managers Law. 73 See s 72(6) of the Insurance Law and s 49(6) of the Managers Law. 74 Note the general offence in this regard at s 87 of the Insurance Law and s 64 of the Managers Law. 75 See s 72(7) of the Insurance Law and s 49(7) of the Managers Law and similar provisions throughout both Laws. See also the House of Lords case of R v Lyons [2002] 4 All ER 1028 for an examination of the issues in this context as well as the question of where the loyalties of a court should lie when domestic law comes into conflict with international treaty obligation. 76 See s 73 of the Insurance Law and s 50 of the Managers Law. 77 See s 96 of the Insurance Law and s 73 of the Managers Law.
294 The Laws of Guernsey by these Laws. That said, the Laws themselves provide tolerably generous rights to challenge the actions of the Commission. The scheme of the Laws is to require the Commission to serve a notice on the entity concerned (which may be the Licensee, prospective Licensee or an individual to whom the Commission’s objection relates) stating that the Commission is proposing to take a specified decision,78 setting out the grounds and any other material particulars and informing the person (a) of their right within a period of 28 days from the date of the notice to make written or oral representations to the Commission “in such manner as the Commission may from time to time determine” and (b) their right to appeal should the proposed decision be taken.79 If, notwithstanding, the decision is taken, a further notice must be served informing the person concerned of the decision, the grounds of the decision and giving particulars of the right to appeal.80 The person affected has a prima facie right to require the Commission to provide a written statement of reasons for the decision.81 Right of Appeal The right of appeal itself is against the exercise of specified powers under the Laws; in essence all of the major exercises of power are capable of challenge by way of appeal to the relevant Court.82 Of course the Laws are not exclusive of general rights of challenge by way of judicial review, but express rights under the Laws should be the first resort. An appeal must be “instituted” within a period of 28 days immediately following the date of the notice of the Commission’s decision (or notice of objection, eg to a controller). The appeal is brought by summons served on the Chairman of the Financial Services Commission stating the “grounds and material facts on which the appellant relies”. Note that time runs from the date of the notice, not when it is served. Equally there is no reason to doubt that time could be extended under the Court’s inherent jurisdiction, for good reason. The grounds of appeal are familiar from other contexts, notably the Housing (Control of Occupation) (Guernsey) Law 1994; they are that the decision was: (a) ultra vires; or (b) an unreasonable exercise of the Commission’s powers.83 78 Ie a decision to exercise one of the Commissions’ more fundamental powers under the Law; eg to refuse a licence, to impose conditions on a licence, suspension or revocation of a licence, refusal to accept surrender, and the giving of directions. The notice of objection to a controller, partner or director itself performs the notice function. 79 See s 61 of the Insurance Law and s 41 of the Managers Law. 80 See s 60 of the Insurance Law and s 40 of the Managers Law. 81 See s 62 of the Insurance Law and s 42 of the Managers Law. Note also that there is power to withhold reasons from the statement in certain circumstances; chiefly to assist law enforcement elsewhere. The person must be informed of the omission which is itself challengeable. 82 See s 63 of the Insurance Law and s 43 of the Managers Law. The requirement to serve a notice is indicative of a right of appeal. 83 See ss 63(4) of the Insurance Law and 43(4) of the Managers Law.
Financial Services Regulation in The Bailiwick 295 It follows that Housing Law jurisprudence will apply to appeals in this context also; ie cases such as Walters v States Housing Authority [1997] 24 GLJ 32. Note that on appeal the Court may set aside the Commission’s decision and “if the Court considers it appropriate to do so, remit the matter to the Commission with such directions as the Court thinks fit”; in the alternative the Court may confirm the decision, in whole or in part. This is again a watering down of the powers on appeal under the 1986 Law where the Court could quash a decision or substitute any other decision which the (Commission) could have made and follows the Fiduciary Law model. Arguably a purposeful enough construction of the power to remit with directions would achieve the former result. There is a further right of appeal from the Royal Court to the Court of Appeal on a question of law;84 which is perhaps ambiguous, given the vagueness of the boundaries between questions of fact, questions of mixed fact and law and questions of pure law. It is submitted that the Court of Appeal would not deny a remedy in a proper case. Prima facie the institution of an appeal again operates as an automatic stay of the Commission’s decision to suspend or revoke a licence.85 There is also the important provision whereby the appellant may apply to suspend, modify, vary or rescind the operation of any condition or direction in question pending the determination of the appeal.86 By contrast there are various powers given to the Commission to shorten or even avoid altogether the 28 day period prima facie permitted for making representations; likewise the Commission may apply for a suspension or revocation to have immediate effect if the circumstances justify such a draconian exercise of power.87 Offences There are a great many new offences created under the legislation together with umbrella offences of giving false or misleading information or else falsifying, concealing, destroying or removing documents. Penalties range from a maximum of a level 5 fine and/or three months imprisonment on summary conviction88 to an unlimited fine and/or imprisonment of up to two years on conviction on indictment. It is a general defence for the accused to prove that he “took all reasonable precautions and exercised all due diligence to avoid the commission of (the) offence by himself and by any person under his control”. It is difficult to see how this defence could possibly be made out and the offending conduct still have been committed; assuming a prosecution which is not misconceived.89 84
A right of appeal independent of the Law is not expressly excluded. See ss 14(3)–(6) and 13(6) of the Insurance Law and ss 9(3)–(6) and 8(6) of the Managers Law. 86 See s 63(8) of the Insurance Law and s 43(8) of the Managers Law. 87 See ss 61(5) and 14(4) of the Insurance Law and s 41(5) and s 9(4) of the Managers Law. 88 Notwithstanding that in Sark this would otherwise exceed the Sénéschal’s sentencing powers. 89 See s 91 of the Insurance Law and s 68 of the Managers Law. Demonstrable compliance with all material codes and regulations would presumably go some considerable way to establishing the defence. 85
296 The Laws of Guernsey There are familiar powers to share information with other bodies, principally for law enforcement purposes both within and without the Bailiwick. Codes and Regulations Apart from the Laws themselves the various codes, regulations and rules must also be considered; these include the following: (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) (n)
The Insurance Business (Annual Return) Regulations 2002; The Insurance Business (Approved Assets) Regulations 2002; The Insurance Business (Asset and Liability Valuation) Regulations 2002; The Insurance Business (Duties of General Representatives) Regulations 2002; The Insurance Business (Licensing) Regulations 2002; The Insurance Managers and Insurance Intermediaries (Annual Return) Regulations 2002; The Insurance Managers and Insurance Intermediaries (Licensing) Regulations 2002; Code of Conduct for Authorised Insurance Representatives; Code of Practice for Branch Operations; Code of Practice for Insurance Intermediary Applicants and Licensees Conducting Business from within the Bailiwick of Guernsey; Conduct of Business Rules for Licensed Insurance Intermediaries; Licensed Insurer’s Code of Conduct; Licensed Insurer’s Corporate Governance Code; Licensed Insurer’s Loss Reserve Percentages.
Civil Liability Although the question of civil liability for breach of the Laws’ requirements and the various regulations, codes and rules made thereunder is left unanswered it is plain that breach of the standards set by these provisions will be highly material in a civil claim based on ordinary causes of action. In any event the very useful provisions permitting the repayment of monies from unlawful business and/or the seizure of unlawful profits might make such litigation less likely; likewise the creation of compensation schemes. Summary The 2002 Laws follow closely the pattern of the Fiduciary Law whilst growing ever larger.90 Regulation is necessary but one wonders whether regulation is required in quite such quantity. 90
Note also that the Laws can be amended by Ordinance.
Financial Services Regulation in The Bailiwick 297
THE INSURANCE BUSINESS (FINANCIAL GUARANTEE: SPECIAL PROVISIONS) (GUERNSEY) LAW 1996
This Law provides for regulation by special ordinance of financial guarantee insurance business carried on by a Guernsey company. Financial guarantee insurance business is defined at section 25(7) as “the business of accepting financial guarantee insurance risks by effecting and carrying out contracts of financial guarantee insurance” which, although not adding much to our knowledge, happily takes us beyond the scope of this work.91
FINANCIAL SERVICES OMBUDSMAN
There is a current proposal for the establishment of a financial services ombudsman scheme in Guernsey. A detailed consultation document was circulated by the Advisory & Finance Committee in the early part of 2002. It seems likely that such a scheme will be put in place with the intention of providing a cost-effective means of resolving financial services disputes. The so-called Scheme Administrator would have power to make rules governing all aspects of a complaints process with three stages; conciliation, the issue of a provisional decision and the issue of a formal decision with power to award up to a maximum of £100,000 in compensation and an additional £5,000 for distress and inconvenience.
THE FUTURE
There is no sign of any let up in the legislative march of the Commission.92 Extensive proposals for amendments to the regulatory laws were put to the States in Billet XXII of 2002 and approved. In essence the older Laws are to be amended to incorporate the kind of extensive powers conferred upon the Commission by the Fiduciary Law and Insurance Laws. More curious is the proposal that the 1987 Commission Law should be amended to require the Commission “to take such steps as it considers appropriate to safeguard its members, officers and servants . . . from bearing legal costs arising from the discharge or exercise of their functions or duties”. A particularly noteworthy proposal is that permitting the Commission to investigate matters on behalf of an equivalent non-Bailiwick body following a request for information. Such investigations could be conducted by appointing external inspectors; doubtless officers of the foreign body. 91 Financial guarantee insurance is commonly associated with the guarantee of investment bonds and therefore a higher than usual risk activity justifying a special régime. 92 Look out for the Regulation of Bodily Functions, Mental Processes and After-life etc. (Bailiwick of Guernsey) Law 2010. Only fit persons need apply for the necessary licence to exist, unless, that is, the licence is to be surrendered on account of becoming very unfit, ie dead; in which case there are transitional provisions.
298 The Laws of Guernsey Again it seems an appropriate time to consolidate all regulatory laws into a single coherent structure with a core law comprising provisions common to all areas and specialist related laws containing only the distinct provisions for the area of business concerned.93
THE DATA PROTECTION (BAILIWICK OF GUERNSEY) LAW 2001
The Data Protection (Bailiwick of Guernsey) Law 2001 came into force in 2002, replacing earlier data protection legislation. The Law has a long transitional period before it is in force fully and is closely modelled on the equivalent English legislation. The purpose of the Law is to ensure that Guernsey qualifies as a jurisdiction with an adequate level of data protection in order to permit the free transfer of personal data between Guernsey and the EU, given that Guernsey is a third country vis-à-vis the European Union. The Law requires so-called data controllers to register with the Data Commissioner and confers various rights in respect of personal data, including a right of access.94
93 Ie borrowing the structure of a protected cell company, as already suggested. The draft laws appeared on the GFSC website on 20 December 2002 with a consultation period expiring on 24 January 2003. The draft Laws are entitled: The Banking Supervision (Bailiwick of Guernsey) (Amendment) Law 2003 (18 pp), The Financial Services Commission (Bailiwick of Guernsey) (Amendment) Law 2003 (18 pp), The Protection of Investors (Bailiwick of Guernsey) (Amendment) (No.2) Law 2003 (34 pp) and the Regulation of Fiduciaries, Administration Businesses and Company Directors etc. (Bailiwick of Guernsey) (Amendment) Law 2003 (5 pp). It can be expected that Laws close to these drafts will come into force at some time in 2003. 94 See the annual report of the Data Protection Commissioner for the year ended 31 December 2001 in Billet d’État XIX of 2002.
15 Guernsey Company Law
T
HE GENERAL PROVISIONS of Guernsey company law are found in the Companies (Guernsey) Law 1994 as amended by the Companies (Amendment) (Guernsey) Law 1996.1 Many of the provisions are derived from English companies legislation.2 The Guernsey legislation is supplemented by common law principles which are again drawn for the most part from English law, although there is no reason why solutions from another jurisdiction should not be adopted, or even an original solution in appropriate circumstances. As with the Trust Law there is no substitute for reading what is in some respects a selfcontained set of rules governing the constitution and affairs of a Guernsey company. It is proposed here to consider the more important features of the three stages of a Guernsey company’s existence: its formation, its day to day existence and winding up, ie its birth, life and death.
FORMATION OF A GUERNSEY COMPANY
Consents The leave of the Royal Court is required in order to register the memorandum of a new company in the Guernsey Register of Companies.3 It is this act of registration which constitutes incorporation; ie the creation of the separate legal personality of the company. The application for leave must first have obtained the approval of both the Law Officers of the Crown and the Guernsey Financial Services Commission. It is not clear why the Law Officers should become involved save that they represent the public interest in a general sense. The Financial Services Commission discharges the functions of the Advisory & Finance Committee under the Control of Borrowing (Bailiwick of Guernsey) Ordinance 1959 whereby consent is required to raise money in the Bailiwick of Guernsey by the issue of any shares.4 1 Note that Alderney has its own company legislation in the form of the Companies (Alderney) Law 1994, with material differences to Guernsey company law. 2 It is likewise noteworthy that the City Code on Take-overs and Mergers applies not only to companies resident in the United Kingdom but also the Channel Islands and the Isle of Man; this of course assumes that the person concerned is amenable to the jurisdiction of the panel/authority. 3 See s 3(1). 4 See ss 3 and 8 of the 1959 Ordinance. The requirement for consent applies regardless of the amount involved. See the section on this legislation.
300 The Laws of Guernsey When obtaining consent from the Financial Services Commission the applicant is required to disclose the full name, date and place of birth, occupation and address of the ultimate beneficial owner(s) of the company together with the name of any relevant trust. The FSC will also wish to know who gave instructions to register the company, the reason for incorporation in Guernsey, the real objects of the company and whether any issue of shares to the public is contemplated. The applicant must say whether any person will be enabled to avoid any existing UK tax liability5 and indicate where the central management of the company is to be based, together with the amount of authorised share capital, issued share capital and the share denomination. A further requirement is to state whether the company is to be an exempt company or resident company for the purposes of Guernsey income tax. The Company Name Close attention is paid to the proposed name of the company. The particular concern of the Financial Services Commission is that specific words such as “insurance”, “assurance” or “bank” are not used as part of company names in breach of the Laws governing the relevant finance industries.6 Likewise any inappropriately expansive or misleading name will be objected to. There are specific provisions governing company names under section 21 of the 1994 Law. Thus a company name must end either with the word “Limited”,7 or the words “with limited liability” or “avec responsabilité limitée”. A company name may not be the same as a name currently appearing in the Register of Companies. The proposed name must not be such as to constitute a criminal offence or be offensive, misleading or inappropriate in relation to the company concerned. Any word implying either a royal or governmental connection is forbidden save with the written consent of HM Procureur.8 Members, Memorandum and Articles Two or more founder members are required to form a Guernsey company. It is a continuing requirement of a Guernsey company that there be a minimum number of two members.9 Each company requires a memorandum of association stating the company’s name, the company’s objects, the amount of the company’s share capital, the number of shares in the company and the value of each of them, 5 The FSC usually requires to know (if applicable) the identity of any UK tax adviser involved as a check that adequate UK tax advice has been given as regards the effect of incorporation in Guernsey. 6 See for example ss 18–24 of the Insurance Business (Bailiwick of Guernsey) Law 2002 and ss 30–35 of the Insurance Managers and Insurance Intermediaries (Bailiwick of Guernsey) Law 2002. 7 Note that it is not sufficient to use the abbreviation “Ltd”. 8 See further the section on changing company names. 9 By contrast single member companies are permissible under Alderney company law; see generally the Companies (Alderney) Law 1994, as amended, most recently in 2001.
Guernsey Company Law 301 together with the terms of payment of such shares.10 The memorandum must also state that the liability of the company’s members is to be limited and identify the common signature of the company, see section 2(1). By express provision at section 2(2) a company’s memorandum may state that the object of the company is to carry on business as a general commercial company, in which case that company’s objects are deemed to be to carry on any trade or business whatsoever with power to do anything incidental or conducive to the carrying on of any trade or business. The memorandum must be signed by the founder members and contain a statement of their names and addresses. The signatures must be made in the presence of, and be attested by, a witness whose name and address must also be stated.11 The company must have articles of association in addition to the memorandum. There are no standard articles under the Guernsey Law.12 The articles must be registered within 6 months of registration of the memorandum if not registered at that time. The same signing formalities apply to the articles as for the memorandum. The memorandum and articles together constitute a contract between the company and each of its members as well as a contract between the members themselves. This is expressly provided for at section 6(3): “. . . the memorandum and articles of a company shall . . . bind the company and its members in all respects as if the memorandum and articles: (a) were comprised in an agreement duly executed by the company and each member; (b) contained covenants on the part of the company and each member to observe all provisions thereof . . .”.
Typically directors will also be appointed as from the moment of registration, in which case the proposed director or directors must sign and deposit with the Greffier a written consent to act as director and bind himself to take whatever, if any, qualifying shareholding is required for that office. The Application Since an application must be made to the Royal Court for leave to register the company’s memorandum it follows that a Guernsey Advocate must be involved in company formation. The notice of application is addressed to HM Greffier and 10 Note now however the Companies (Shares of No Par Value) Ordinance 2002, made pursuant to the Companies (Enabling Provisions) (Guernsey) Law 1996, whereby a company (including a company limited by guarantee) may, subject to the provisions of the Ordinance and any regulations made under the Ordinance, issue shares which have no nominal or par value. Note however that the company may not issue shares of no par value unless authorised expressly to do so by the provisions of its memorandum and in accordance with such material provisions (if any) of its articles. A company may by special resolution alter its memorandum for this purpose. See generally the terms of the Ordinance. 11 See s 3(2). 12 Again by contrast with Alderney company law. S 5 of the 1994 Guernsey Law provides a mechanism for a standard table to be prescribed, none has yet been promulgated.
302 The Laws of Guernsey requests that the application be placed before the Court in accordance with the provisions of the Royal Court (Non-Contentious Applications) Rules 1988, as amended. As noted already, it is the action of registering the memorandum which heralds incorporation, see section 6.13 The application notice14 will certify due compliance with the formal legal requirements for incorporation and that all necessary consents have been obtained. It will further be certified that the objects of the company are lawful and that there is no reason in law why the application should not be granted. The application must be made in the name of all the founder members.15 It is very rare indeed that a company formation application would be refused or even queried given the fact that consent will already have been obtained from two separate authorities. In any event there is often very little to note about a company at its birth. The authorised share capital may be minimal with an issued capital of perhaps two £1 shares. The founding directors and shareholders will very often be Advocates’ in-house nominee companies. The FSC will be aware of the identity of the (initial16) ultimate beneficial owner and a bare statement of the company’s purpose. Even this information is not disclosed to the Income Tax Authorities either here or elsewhere; certainly not as a matter of course. Certificate of Registration When a company’s memorandum and articles have been registered the Greffier is required to give a certificate of registration to the company and to allocate a registration number to it. The certificate of registration is deemed to be conclusive evidence that the company is duly registered. Duty Document duty17 is payable on incorporation and calculated at the rate of 0.5 per cent of the authorised, as opposed to issued, share capital. There is a minimum duty of £50 (equivalent to an authorised share capital of £10,000) and a maximum duty payable of £5,000 (ie the equivalent of £1,000,000 authorised share capital). There are combined Court, Greffe and registration fees totalling £47.50.
13 Note however the further limitations placed upon a company offering its shares to the public as to when it may commence business; see s 16 and below. 14 Or cause. 15 See s 3(2)(a). 16 Changes in the beneficial ownership of exempt companies must be notified to the Commission. 17 See the Document Duty (Guernsey) Law 1973, as amended, and the various ordinances made under it, which are themselves amended from time to time.
Guernsey Company Law 303 THE DAY TO DAY REQUIREMENTS IN THE LIFE OF A GUERNSEY COMPANY
The initial formal requirements are supplemented by obligations during the life of the company. Registered Office Section 24 of the 1994 Law requires every company at all times to have a registered office in Guernsey to which all legal process and other communications and notices may be addressed. The requirement is to give notice to the Greffier of the situation of the registered office within 28 days of registration. In practice the application for leave to form the company will be accompanied by a notification to HM Greffier of the registered office of the proposed company. Seal There is no longer any strict requirement under Guernsey law for a company to have a seal, see section 25, as amended. In practice a seal will be produced principally so as to permit the company to comply with formal requirements for the execution of documents under the laws of another jurisdiction (or even the simple expectation that a document will be sealed). Record Keeping and Accounting Obligations A Guernsey company is subject to a number of recording and accounting obligations. By section 53 the company must keep a minute book of all proceedings at its annual and extraordinary general meetings and at meetings of its directors. By section 54 every company must keep a register of its directors and secretaries. By section 55 every company must keep a register of members and in relation to each member the register must state the number of shares attributed to that member, the amount paid up on the shares, the date on which that person was registered as a shareholder and the date on which the person ceased to be a holder of any share. By section 59(1) every company must keep accounting records which are sufficient to show and explain the company’s transactions and which are such as to “disclose with reasonable accuracy, at any time, the financial position of the company at that time”. By section 62 every company is required to appoint auditors to report on the company’s balance sheet and profit and loss accounts as they are produced. Typically the balance sheet, profit and loss account and auditors’ report will be produced to each annual general meeting. There is a positive requirement for the auditors to report on every balance sheet and profit and loss account laid before the company in general meeting, see section 64. However, the requirement to appoint auditors is excluded for so-called “unaudited companies”. These are defined at schedule 2 of the 1994 Law and comprise
304 The Laws of Guernsey dormant companies and so-called “asset-holding” companies. The latter is by far the more important category and is a company whose principal purpose is to own specified assets. It must not engage in trade nor receive any significant income, other than income derived directly from its ownership of the material assets. An asset-holding company’s activities must be directly connected with the ownership of the relevant assets and it must incur no significant expenditure other than expenditure incidental to the ownership of the material assets. In any event a company may not be an unaudited company if it either has more than ten members or carries on banking, insurance or controlled investment business. Unaudited status must be renewed each year by unanimous vote in the company’s annual general meeting. The Annual Return A company must make an annual return to the Greffe of certain fundamental information. Section 28(1) requires every company to file an annual return before 31 January in each year containing the following information: (a) the address of the company’s registered office; (b) the names and addresses of the company’s directors; (c) the names and addresses of the company’s members (excluding holders of redeemable preference shares); (d) the number of shares issued to each member, the amount paid up on the shares and their distinguishing numbers;18 (e) the company’s share capital and the number of shares that it is divided into, distinguishing between shares which have been issued for cash and those which have been allotted in whole or in part for a consideration other than cash; (f) the number of shares issued since the formation of the company; (g) the number of calls made by the company on its members, the amount per share of each call, the total amount of capital called up for payment by means of such calls, the amount received by the company for those calls and the amount still payable to the company on further calls. The information contained in the return must be current as at the 1 January of the year in which it is required to be delivered. Failure to file a return is an offence. In practice the much more effective sanction of striking the company off the Guernsey Company Register is employed pursuant to section 76. Other returns of information that a Guernsey company must make to the Greffe from time to time include: 18 Subject to the exception at s 43(3) which dispenses with the requirement for shares to have distinguishing numbers in certain circumstances; ie where all shares are fully paid up and rank pari passu for all purposes.
Guernsey Company Law 305 (a) returns of share allotments (excluding allotments of redeemable preference shares); (b) copies of every special resolution of a company within twenty-one days of the resolution date, alternatively thirty-six days where the resolution has purported to alter the company’s objects.19 Rights of Inspection The corollary of the various record keeping and return of information requirements is the right of inspection given to others. The extent of that right is proportionate to a person’s connection with the company. By section 58 every Guernsey company is required to keep at its registered office: (a) (b) (c) (d) (e)
its minute book; its register of members; its register of annual returns; its register of directors and secretaries; and an index of its members if they number more than fifty.
The minutes of proceedings at general meetings may be inspected by any member of the company without charge. The minutes of proceedings at directors’ meetings may be inspected by any director without charge. The registers may be inspected by any member or director without charge and by any other person on payment of the appropriate fee. A person is entitled, on payment of the appropriate charge, to a copy of any document which he is entitled to inspect. By section 59 the accounting records must be kept at the registered office of the company, or such other place as the directors think fit, and must be open at all reasonable times to inspection by any director or secretary of the company. There is a specific requirement to keep a set of accounting records at a place in Guernsey. Such records must disclose with reasonable accuracy the financial position of the business in question at intervals not exceeding six months. This is where the records are not themselves prepared in Guernsey. In any event accounting records are required to be preserved for a period of at least six years from the date upon which they were made. A search of the Companies Register at the Greffe will disclose the information required to be given to the Registrar; which includes annual returns, the address of the registered office, returns of share allotments, and special resolutions. Note that there is no obligation to file accounts with the Registrar under Guernsey company law. In practice more sensitive documents such as accounts and minutes are in any event vulnerable to disclosure, whether as part of simple discovery or ancillary to more aggressive action in the form of freezing or search order applications. The 19 Ie a period of twenty-one days in order to permit a shareholder to apply for the annulment of the alteration pursuant to s 19 and a further 15 days.
306 The Laws of Guernsey obligation to maintain such records creates obvious targets in later hostile litigation. General Meetings and the Right to Commence Business A further essential requirement in the life of a Guernsey company is that it hold a general meeting of its shareholders (commonly known as an annual general meeting) within eighteen months of the date on which it was entitled to commence business, and thereafter at least once in every calendar year. No more than 15 months may elapse between one annual general meeting and the next, see generally section 68. The reference to entitlement to commence business is an allusion to section 16 of the 1994 Law whereby a company which offers its shares to the public may not commence business or exercise borrowing powers until any minimum paid up subscription (if any) has been allotted, the directors have taken and paid for their shares at the public rate, a declaration of fulfilment of these two conditions has been lodged with the Greffe and a certificate issued by the Greffier that the company is entitled to commence business. A company not offering its shares to the public is entitled to commence business upon incorporation.20 The Company, its Members and Third Party Relationships By section 10 a minor or person under legal disability may not be a founder member of a company nor become a member of a company, save by inheritance or operation of law. In any event such a member does not count towards the minimum requirement for there to be two members of a Guernsey company. The central provision of Guernsey company law is at section 7 of the 1994 Law whereby the liability of a member of a company for the company’s debts is limited to the amount, if any, unpaid on the shares held by him. This principle is the raison d’être for the existence of a limited liability company. There are however important exceptions under Guernsey law whereby a member may become personally liable for the company’s debts. In practice these provisions concern the directors of a company21 and/or require positive wrongdoing. The only meaningful exception to this general statement is found at section 49 of the 1994 Law by which a member may be liable to the extent of his interest in the reduction of a company’s share capital if a creditor has been omitted from the list of creditors, such a list being a precondition for the application for leave to effect the reduction. By s 11(1) the ultra vires rule is expressly disapplied from Guernsey Law: “No act of a company shall be invalidated on the ground of lack of capacity by reason of anything contained in or omitted from the company’s memorandum”. 20 Note the English Court of Appeal case of Braymist Ltd. v Wise Finance Company Ltd. [2002] 2 All ER 333 and the use made of the personal liability of the solicitor agent of an unformed company to enforce a contract against a purchaser who had failed to complete a purchase of land. 21 Who need not be members of the company.
Guernsey Company Law 307 This principle had emerged in English law as a potential defence for a company to obligations entered into by directors purporting to act on its behalf but in excess of the powers contained in its memorandum. The defence became discredited and unduly interfered with commercial certainty, hence its abolition in order to avoid uncertainty in Guernsey law.22 However it remains the duty of a company’s directors to observe any limitation on their powers imposed by or deriving from the company’s memorandum, see section 11(2). It follows that a company may not challenge a contract made on its behalf which exceeds its objects but will nevertheless have a potential remedy against its own directors. Section 11(1) therefore gives a considerable measure of protection to third parties dealing with a Guernsey company. In addition section 13(1) provides that a single director of a Guernsey company may execute a document validly. By section 13(2) a person acting in good faith is expressly unaffected by any limitation imposed upon the directors’ powers to bind the company deriving from its memorandum or articles, any resolution of the company or any agreement between the company’s members. Furthermore a person is not regarded as acting in bad faith solely because he knows that an act is beyond the directors’ powers. By section 14 a party to a transaction is expressly stated not to be bound to enquire as to whether any given transaction is permitted by the company’s memorandum or as to any limitation on the directors’ powers to bind the company. By contrast a pre-incorporation contract is provisional only and not binding on the company until the date after which it is entitled to commence business, see sections 15 and 16.23 Meetings Sections 68 to 73 govern the procedure relating to the convening and conduct of meetings of a company’s shareholders. The section 68 requirements for annual general meetings have already been noted. Section 70 permits extraordinary general meetings to be requisitioned by any one or more members of the company holding at least one-tenth of the issued shares between them. If the directors do not take steps to convene the meeting within twenty-one days of the members’ requisition the members may themselves take steps to convene the meeting. The general provisions concerning the convening of meetings are set out at section 72. Written notice of the date, time and place of any general meeting, signed by the persons convening the meeting, must be given to every member of the company at 22
It is a near dead letter in English law also. Although only the title of s 15 refers to pre-incorporation contracts, the reference to contracts made prior to the date before a company is entitled to commence business is synonymous with preincorporation for a company which does not offer shares to the public; cross-refer to s 6(2)(d). Compare and contrast generally English company law in this context; see in particular pp 141–44 Gower’s Principles of Modern Company Law 6th edn (Sweet & Maxwell). It is the practice (where appropriate) for Guernsey companies to ratify (and/or novate) pre-incorporation contracts with a view to relieving (again where appropriate) the individual of (potential) personal liability. 23
308 The Laws of Guernsey least ten days before the day of the meeting, (the convening notice). This strict requirement may be waived by all the members of a company entitled to attend and vote at a general meeting. General provisions governing meetings are set out at section 69. These permit meetings to be held either in Guernsey or elsewhere.24 A person may attend the meeting in person or by proxy.25 A list of the names and addresses of all members showing the number of shares held by them respectively must be available for inspection throughout the meeting. No resolution for which notice has not been given in accordance with the articles may be passed, although any matter may be raised concerning either the formation of the company or arising out of the directors’ report. A meeting is quorate if two members are present holding between them at least one-twentieth of the issued share capital.26 The members must elect one of their number as chairman of the meeting. The subjects set out in the convening notice must be considered and put to the vote first. Every proposition duly proposed and seconded must be put to the vote unless contrary either to the Companies Law or the company’s articles. A simple majority is required for any resolution other than a special resolution27 which requires 75 per cent of the votes cast (at a quorate meeting) to succeed, see section 73 for the provisions governing special resolutions. A resolution may be voted on by a show of hands or by poll if demanded by a member or members holding at least one-tenth of the issued share capital.28 Where the vote takes place by a show of hands every member entitled to vote is deemed to have one vote. This method is intended for non-contentions resolutions; ie where there is likely to be a clear majority one way or the other. On a poll the number of votes for each member present in person or by proxy is determined by the company’s articles; ie the articles will determine the strict voting rights of each member according to the number of shares owned by the member and the rights attached to different categories of share, if more than one. In any event a member may not vote in respect of shares where there is an outstanding payment due on a call for capital relating to those shares. If there is an equality of votes the chairman has a second deciding vote. Alteration of Memorandum and Articles Sections 17 to 20 concern the powers of a Guernsey company to alter its memorandum and articles. There are very limited powers to alter the memorandum restricted in the main to permitting an alteration of the objects clause; this is itself subject to challenge by disgruntled shareholders with not less than 15 per cent of the issued share capital on application to the Court within twenty-one days of the 24 25 26 27 28
If the company’s articles so permit. Unless the articles provide otherwise. Unless the articles provide otherwise. Unless the articles provide otherwise. Unless the articles provide otherwise.
Guernsey Company Law 309 material resolution.29 A Guernsey company may alter its articles by special resolution, subject to the terms of its memorandum. Changing a Company’s Name Section 22 provides that a company may by special resolution change its name. A change of name is not effective however unless confirmed by Order of the Royal Court. By section 22(3) an application to the Court will not be granted unless, prior to the hearing, the company has on two occasions, once in each of two successive weeks, placed a notice in the Gazette Officielle giving details of the proposed change of name and of the date, time and place of the hearing. Such applications are commonplace and are dealt with by the Bailiff sitting alone in the Friday Ordinary Court.30 By section 23 the Ordinary Court is given a general power to govern Guernsey company names.31 In particular the Court may direct a company to change its name or may refuse an application to change name. The grounds for exercising these powers are that the name or proposed name is such as to induce the public to confuse the company with some other person or body previously established in Guernsey or elsewhere, alternatively that the provisions of section 21 are or have not been complied with.32 This section has produced a small body of case-law including the cases of Bugatti Fashions Limited v Bugatti Limited [1985] 2 GLJ 12 and St Peter’s Trust Company Limited and St Peter’s Trust (Insurance Managers) Limited v Saint Peter Insurance Company Limited [1988] 6 GLJ 35. Section 27 provides that a company’s name must appear in legible characters upon its: (a) business letters, statements of account, invoices and order forms; (b) notices and other official publications; and (c) negotiable instruments, letters of credit, bills of exchange and other obligations or promises to pay purporting to be signed or issued by or on behalf of the company. Failure to include the company’s name in a document from the last-mentioned category will lead to personal liability on the part of the individual responsible for 29 Note also the power under s 45(2) to alter the memorandum by reducing the amount of the company’s share capital and shares when effecting a reduction of share capital, see further below. See also the power contained in the Companies (Financial Assistance for Acquisition of Own Shares) Ordinance 1998 for that purpose. 30 Again note the special interest and requirements of the FSC in connection with any proposed change of name to include what can be described as a regulated word or holding out. 31 Note that this power is in addition to the controls exercised over company names prior to incorporation. 32 Ie the requirements to end the company name with the word “limited” or words “avec responsabilité limitée”, not to use a name already in use, and not to use an offensive, misleading or inappropriate name, nor a word with a royal or government association.
310 The Laws of Guernsey producing the document. The company commits an offence if there is a breach of any of the section 27 requirements. Failure to comply with the provisions at (a) and (b) is also likely in practice to lead to personal claims against those responsible for producing such documents on the grounds that the material obligation was that of the individual rather than the (insolvent) company. This is a question of fact rather than law.
PROTECTION OF SHARE CAPITAL AND SHAREHOLDER RIGHTS
Parts VI, VII and VIII (ss 29–52) make detailed provision governing a Guernsey company’s share capital, reduction of its share capital and variation of shareholders’ rights. Share Capital Section 29 establishes safeguards for public share offers. No allotment of share capital may take place unless the minimum subscription has already been subscribed and the related sum payable already received by the company. By section 30 an allotment contravening section 29 is voidable. By section 31 the return of any share allotment must be made to the Greffier within a period of one month, stating the number and nominal amount of the shares comprising the allotment, the names and addresses of the allottees and the amount (if any) paid or due and payable on each share. Section 32 prohibits payments of commissions or any other discount33 or allowance in respect of share subscriptions, save where authorised by a company’s articles and disclosure is made in the prospectus. Section 33 prohibits the payment of dividends except from profits available for the purpose. This is the first of the various provisions in Guernsey company law by which the maintenance of capital doctrine is established, ie the requirement that capital sums raised by a company are to be applied for the company’s purposes and not those of its shareholders to the potential exclusion of creditors and other interested parties. Sections 34 to 37 bestow a number of freedoms on companies concerning the structure of their share capital. Thus by section 34 a company may by its articles distinguish between shareholders as to the amounts and times of payment of calls on their shares. By section 35 a company may by special resolution determine that any portion of its share capital which has not been called up shall not be capable of being called up save where the company is to be wound up. By section 36 express provision is made permitting a Guernsey company to purchase the shares of any of its members under the authority of a Court order. By section 37 a company may, if authorised by its articles, by ordinary resolution either increase its share capital, 33
But see also s 39.
Guernsey Company Law 311 consolidate and divide existing share capital into shares of larger amounts, convert fully paid shares into stock or sub-divide existing shares into smaller amounts. A company may also cancel shares which have not been taken up or convert paid shares into a different currency. Cancellation of shares under section 37 does not qualify as a reduction of share capital. Any resolution whereby share capital is altered must be lodged at the Greffe as a pre-condition of its validity.34 By section 38, where shares are issued at a premium the value of the premium must be transferred to a share premium account. Any depletion of the share premium account qualifies as a reduction of the paid up share capital and all that this implies.35 By section 39 shares may be issued at a discount, notwithstanding the provisions of section 32, if they are of a class already issued and the proposed issue is both authorised by resolution and sanctioned by order of the Court. Section 40 permits the issue of redeemable preference shares if authorised by the company’s articles. Such shares may only be redeemed out of the profits of the company which would otherwise have been available for distribution as dividends, alternatively they may be redeemed out of the proceeds of a fresh issue of shares made for the purposes of the redemption. Again this is in support of maintaining capital. Shares may not be redeemed unless they are fully paid and if redeemed other than out of the proceeds of a fresh share issue the company must transfer to a reserve fund a sum equal to the nominal amount of the shares redeemed. This sum must be taken from profits which would otherwise have been available for distribution and the fund designated as a capital redemption reserve fund. Again there is a requirement to give notice in writing to the Greffe whenever a company redeems preference shares. The notice must be in writing and given within one month of the redemption. By section 41 the annual return must give particulars of the amounts of any commission paid or share discount given on the issue of any of its shares. Section 43 makes the unsurprising provision that a member’s shares qualify as personal estate and are transferable in the manner provided by a company’s articles.36 It is noteworthy that the articles are likely to contain pre-emption rights. Where all the issued shares of a particular share class are paid up and rank equally for all purposes the requirement for distinguishing share numbers no longer applies by reason of section 43(3). Section 44 permits the valid transfer of the shares of a deceased member notwithstanding the fact that the transferor is not entered in the register of members. A new section 44A is inserted by the Companies (Guernsey) (Amendment) Law 2001 making provision for share certificates and reduction of share capital on the conversion, denomination or redenomination of shares or share capital. 34
Note the amendments to s 37 effected by the Companies (Guernsey) (Amendment) Law 2001. See ss 45–49 of the 1994 Law, commented on below. 36 Thus clearing the way for attempts to avoid the forced heirship provisions of Guernsey succession law as to realty. 35
312 The Laws of Guernsey Reduction of Share Capital Sections 45 to 49 concern the reduction of a Guernsey company’s share capital. Under the 1994 Law share capital reduction is (only) permitted by special resolution subject to confirmation by the Court.37 To this end the company may also be permitted to alter its memorandum.38 There are specific safeguards for creditors at section 46. The net effect of the provisions is encompassed within section 47(1) whereby the Court may permit the capital reduction on such terms and conditions as it thinks fit if the consent of every creditor has been obtained, alternatively the debt or claim of the creditor(s) has either been discharged, determined or secured. By section 49 the members are potentially liable to a creditor who has been omitted from the procedure to the extent of the capital reduction. Variation of Shareholders’ Rights By section 51 shareholder class rights may be varied if permitted by, and subject to, the terms of the memorandum or articles, alternatively by special resolution. The holders of not less than 15 per cent of the issued shares may apply within 21 days to the Court to have the variation annulled. Unfair prejudice must be demonstrated by the applicants. By section 52 non-voting or restricted voting shares may be issued in a Guernsey company.
DIRECTORS’ DUTIES AND LIABILITIES
English legal principles would be adopted by Guernsey law when determining the general nature of a directors’ duties and liabilities to a company. Thus directors will be regarded as fiduciaries and subject to the following obligations: (a) (b) (c) (d)
a duty to act honestly and in good faith; a duty to act bona fide in the interests of the company; a duty to act for a proper purpose; a duty not to place themselves in a position where there is a conflict between their duties to the company and their personal interest or duties to others; (e) a duty not to use corporate property, opportunity or information to make an unauthorised or secret profit; (f) a duty to exercise reasonable care and skill.39 37
But see also the Companies (Purchase of Own Shares) Ordinance 1998, considered below. Note that by s 48(a) the Act of Court containing an order confirming a resolution for reducing share capital is deemed to be substituted for the corresponding part of the company’s memorandum and has effect as if originally contained in the memorandum. 39 Whether measured subjectively or, more probably, objectively, see generally Gower’s Principles of Modern Company Law 6th edn ch 22. 38
Guernsey Company Law 313 See English case-law generally and in particular older cases such as Scottish CoOperative Ltd v Meyer [1958] 3 All ER 66 and dicta of Lord Denning and Lord Keith: “the duty . . . was to do their best to promote its business and to act with complete good faith towards it; and, in consequence, not to disclose their knowledge of its affairs to a competitor; and not even to work for a competitor, when to do so might operate to the disadvantage of the company. . . . I cannot think that, where directors, having power to do something to save a company, lie back and do nothing, they are not conducting the affairs of the company, perhaps foolishly, perhaps negligently, perhaps with some ulterior object in view. They are certainly conducting the affairs of the company in breach of their duty as directors.”
Potential remedies for breach of these duties include injunctive or declaratory relief, the setting aside of improper directors’ resolutions, damages, orders for the restoration of the company’s property, rescission of the impugned contract, an account of profits and summary dismissal. There may also be remedies against third parties, either on the grounds of that party’s complicity with the director’s breach of duty,40 alternatively on the grounds of the third party’s knowing receipt of company property, likewise general tracing, restitutionary or proprietary remedies. See the case of Royal Brunei Airlines Sdn Bhd v Tan [1995] 3 All ER 97 for principles of general application.41 Prima facie directors’ duties are owed to the company and accordingly may only be enforced by the company. This is the rule which takes its name from the case of Foss v Harbottle (1843) 2 Hare 461; in essence it is for the majority of shareholders to determine whether or not a company should exercise its rights or remedies. The principal exception to the rule is where there would otherwise be a fraud on the minority; in such circumstances the minority may be permitted to sue to enforce the company’s rights.42 40 Accessory liability. Note also the usefulness of economic torts in this context, for example the third party’s procuring of a breach of the director’s contract or the tort of conspiracy in its subtly different forms which vary according to whether lawful or unlawful means are employed by the conspirators. 41 Note also the English Court of Appeal case of JJ Harrison (Properties) Ltd v Harrison (2002) 1 BCLC 162 which in turn applied the reasoning of the Court of Appeal in Paragon Finance Plc v DB Thakerar & Co [1999] 1 All ER 400. See also the section on Remedies Against Officers of Companies in Liquidation, below. 42 Ie by way of derivative action, see further below. Note also English case-law as to when a shareholder may bring a personal claim as distinct from the company; the general rule is to prevent so-called reflective claims, ie claims reflective of a loss in fact suffered by a company as opposed to a member. See the leading House of Lords case of Johnson v Gore Wood & Co. [2001] 2 WLR 72, see also Ellis v Property Leeds (UK) Ltd. (2002) 2 BCLC 175, but note Giles v Rhind [2002] 4 All ER 977 where the Court of Appeal held that a shareholder could proceed with a claim for diminution in the value of his shares in a company where the defendant had disabled the company from pursuing any claim for damages. Contrast also the position of actions against trustees where there is an underlying company; see the case of Shaker v Al-Bedrawi [2002] 4 All ER 835.
314 The Laws of Guernsey Quite apart from the various instances when a director may have personal liability under the 1994 Law the potential liability of a director of a corporate trustee where a breach of trust has been committed should also be recalled, see section 70 of the Trusts (Guernsey) Law 1989. Again there are circumstances where the Court will impose personal liability for the company’s wrongs, see the leading case of Williams v Natural Health Foods Ltd [1998] 2 All ER 577 alternatively where it will pierce the so-called corporate veil to impose liability.43 It is sometimes overlooked that the simple fact of incorporation does not entitle a company officer or member to commit torts personally; personal liability remains for torts committed personally, although fine distinctions are drawn, as in the case of Williams itself.
MINORITY SHAREHOLDER PROTECTION
In practice it will be rare that an aggrieved minority shareholder is able to obtain a satisfactory or any remedy under common law principles. It is of course open to a shareholder to call an extraordinary general meeting, on condition that the shareholder or group of shareholders hold at least one-tenth of the issued shares between them, see section 70(2). Again this will only provide the dissatisfied minority shareholder with an opportunity to voice his concerns and to seek to persuade the majority. It is unlikely that any satisfactory remedy will in fact result. Accordingly express provision is made at sections 74 to 75 for the protection of (minority) shareholders.44 Section 74 permits any member of a company to apply to the Ordinary Court for an injunction restraining: (a) an act which, but for s.11(1)45 would be beyond the company’s capacity; (b) any act which is beyond the powers of the directors by reason of any limitation contained in: (i) the company’s memorandum or articles; (ii) any resolution of the company; (iii) any agreement between the company’s members or any of them. Section 74 necessarily requires the shareholder to act either when the action complained of is threatened or is still taking place since it is concerned with the 43 See Gower ibid pp 147–77 for a discussion of the topic; Gower concludes that the circumstances in which a Court might lift the veil are restricted to three: (1) when construing a statute, contract or document, (2) when the Court is satisfied that a company is a mere façade concealing the true facts and (3) when it can be established that the company is an authorised agent of its controllers or its members. For Gower only (2) is a true example of lifting the veil. Of course the lifting of the veil may affect officers who are not directors and even mere members, in appropriate circumstances. 44 The Law refers to “any member” of a company; in practice the majority do not need the Law’s assistance. 45 It will be recalled that s 11(1) provides: “No act of a company shall be invalidated on the grounds of lack of capacity by reason of anything contained in or omitted from the company’s memorandum”. Ie the ultra vires rule has no application vis-à-vis third parties by contrast with the company’s own directors; hence this provision.
Guernsey Company Law 315 restraint of excess powers. There is a further limitation imposed in that no application may be made in respect of an act to be done in fulfilment of a legal obligation arising from a previous act. Section 75 gives a broad range of additional and general powers to the Court when the interests of members have already been prejudiced or are in the course of being prejudiced.46 By section 75(1) a member of a company may apply to the Court for an order on the ground that the affairs of the company are being or have been conducted in a manner which is unfairly prejudicial to the interests of some part of the members or that any actual or proposed act or omission of the company is or would be prejudicial. Notice of the hearing must be given to the company pursuant to section 75(2). If the Court is satisfied that the application is well-founded it may make such order as it thinks fit for giving relief in respect of the matters complained of, see section 75(3). This gives the Court a very broad power to remedy any perceived unfair prejudice. Section 75(4) goes on to identify specific remedies that may be granted without prejudice to the broad discretion to make such order as meets the justice of the case. Thus a Court may make an order regulating the future conduct of the company’s affairs. It may require the company either to refrain from doing or continuing to do an act or positively to perform an action which it has to date omitted to perform. Express mention is made of the power of the Court to authorise civil proceedings to be brought in the name of and on behalf of the company by such persons and on such terms as the Court may direct. This enacts the remedy of the derivative action without the excessive English case-law restrictions as to when such a remedy is available.47 A further option for the Court is to provide for the purchase of the shares of any member of the company by other members or by the company itself and, in the latter case, to provide for a reduction of the company’s share capital. This provision may be used not only to require the complainant shareholder’s shares to be purchased at a proper price by the majority but also, when appropriate, to permit the minority to purchase the majority’s shareholding. 46 See generally Gower ibid ch 27. See also AJ Boyle, Minority Shareholder’s Remedies (CUP). The Guernsey Law provisions are very close to equivalent provisions at ss 459 and 461 of the English Companies Act 1985; it follows that English case-law would be persuasive. The Royal Court of Jersey concluded likewise in Robertson v Slous (2002) 11 June given the similarity between Art 141 of the Companies (Jersey) Law 1991 and s 459. The case is also a helpful example of a share sale being ordered. For recent Guernsey cases concerning s.75 see Reid & Ors v European Internet Capital Limited (2002) 5 July, a judgment of the Court of Appeal, and first instance judgments in Technocom Ltd v Roscomm Ltd (2002) and (2003). The leading English case is O’Neill v Phillips [1999] BCC 600, [1999] 2 All ER 961. See also the older case of Re a Company No 002612 of 1984 [1984] 1 BCC 262 where injunctions were granted by Harman J to prevent a rights issue taking place. He held that “. . . in cases of litigation under s.75 it is more desirable that the position of the company be not altered or disturbed more than is absolutely essential between the presentation and the hearing of the petition”. 47 An interesting case concerning the proper law to determine the ability of a foreign company to bring a derivative action and the appropriate forum for such an action is the case of Konamaneni v Rolls-Royce [2002] 1 All ER 979, a judgment of Mr Justice Lawrence Collins of Dicey & Morris fame.
316 The Laws of Guernsey Only legitimate expectations are protected. Gower gives the example48 of a shareholder who needs money being prejudiced by the failure of a company to adopt a scheme for the return of capital to its members. It does not follow from this failure that there would be anything unfair in the company’s decision to retain the capital in the business. Some causal nexus is required between the prejudice complained of and the allegedly unfair conduct of the company’s affairs. Gower observes that: “The test of whether the prejudice was unfair is an objective one, but this means no more than that unfair prejudice may be established even if the controllers did not intend to harm the petitioners. The question is whether the harm which the petitioner has suffered is something he or she is entitled to be protected from.”49
By sections 75(5) and (6) the Court has power either to require a company not to make any alteration to its memorandum or articles or for any alteration in the memorandum and articles resulting from a Court order to take effect as a special resolution. The Greffier is required to register any Court order by reason of which a company is deemed to have passed a resolution for the reduction of share capital, likewise an order making any alteration to a company’s memorandum or articles. Valuation of Minority Interests A common issue arising when share purchase orders are sought is the question of the proper valuation of the (usually minority) interest. Under English case-law the prima facie principle is that the applicant’s shareholding should be valued pro rata to the total value of the company.50 The pro rata measure may not be appropriate if the applicant has misconducted himself or, more questionably, where the applicant has acquired the shares by operation of law, for example by way of inheritance. Some discount may be appropriate for the minority status of the shares. It may be, for example, that the shares were acquired at a price which reflected their minority status. Everything turns on the facts of each case. The date by reference to which the valuation is to take place is prima facie the date that the order for purchase of the minority interest is made, although the Court may choose an earlier date if fairness to either party so requires.51 A further and more radical remedy which a shareholder may seek is the winding up of the company altogether. Save where the conduct of the company has been outrageous or for some other compellingly good reason it is more likely that the Court will grant a remedy under section 75 than order the dissolution of the company. 48 49 50
At p 746 ibid. See p 747 ibid. See the case of Re Bird Precision Bellows Limited [1984] Ch 419, approved on appeal at [1986] Ch
658. 51
See the case of Profinance Trust SA v Gladstone [2002] 1 WLR 1024. See also Robertson v Slous, ibid.
Guernsey Company Law 317
ENDING THE LIFE OF A COMPANY
There are three broad routes to company dissolution under Guernsey law. By the first route a company may be struck off the register by the Greffier in certain circumstances in his policing rôle as registrar of companies. By the second route a company may be wound up voluntarily. By the third route a company may be wound up involuntarily; both forms of winding up ultimately resulting in the company being struck from the register. Dissolution by the Greffier’s Administrative Act52 By section 76 the Greffier has power to strike a company off the Register for any one of the following reasons: (a) the company has failed to deliver an annual return; (b) the Greffier has reasonable cause to believe that a company is not carrying on business or in operation; (c) the Greffier has reasonable cause to believe that a company which is being wound up either has been wound up fully or that no liquidator is acting; (d) the company has failed to give notice to the Greffier of the situation of its registered office.53 Each of the four reasons requires the company either to be in default of the Law’s requirements or to be defunct. The Greffier must first give notice of his intention to strike the company from the Register by advertisement in the Gazette Officielle and to the company at its registered office or, where there is none, to any officer of the company or, in default, to each founder member at the address stated in the memorandum. Notice must also be given to any liquidator. Unless the company shows cause why it should not be struck off, or else remedies the procedural default leading to the service of the notice, the company will be struck off after a period of two months. There is, for example, a monthly penalty to pay for failure to file an annual return in addition to the obligation to make good any missing returns. The penalty is £10 for the first calendar month that an annual return is overdue, or any part thereof, £20 for the second month and £50 for each subsequent calendar month. The company is dissolved once notice of the striking off is published in the Gazette Officielle. This is however without prejudice to any continuing liability of every officer and member of the company, likewise it is without prejudice to the 52 Note that there is no provision in general Guernsey company law for the appointment of an administrator or receiver as opposed to the appointment of a liquidator. This lack of flexibility is missed from time to time. Contrast however the protected cell company régime where a receiver or administrator may be appointed. 53 See s 76(1).
318 The Laws of Guernsey power of the Court to order a company’s winding up. Upon the dissolution of a company under section 76 all property and rights vested in the company or held upon trust for it become bona vacantia and belong to the Crown. Section 77 provides for restoration to the Register where the Court is satisfied that the company was, at the time of its striking off, carrying on business or in operation or otherwise that it would be just for the company to be restored.54 An application to restore must be made within 20 years of publication of the notice of striking off. The company’s property or its value will only be restored to the company if application is made within the shorter period of six years from the date of dissolution. Practice Direction No 1 of 1995 gives guidance as to what will be required of the applicant by way of pre-conditions for restoration. Where an application is made other than on behalf of the beneficial owner or directors of a company, undertakings to file outstanding annual returns are neither possible nor will they be required.55 Likewise the applicant will be unable to ensure that the company is properly managed in the future. Accordingly an alternative undertaking to place the company in compulsory liquidation must be given; in such circumstances the Court will not necessarily expect a practising accountant to be presented to undertake the liquidation. The undertaking to liquidate does not apply where the directors of the company to be restored are in fact willing to accept responsibility for its future good management and comply with any outstanding registry requirements or penalties; ie where it is intended to restore the company to active life of some kind. Note however that the section 77 power to restore to the register applies only where a company has been struck off the register pursuant to section 76(4); ie struck off by the Registrar for one of the reasons set out at section 76(1).56 The section 77 power is the broad equivalent of the English section 653 Companies Act 1985 as opposed to the section 651 power, which has no equivalent in the Guernsey legislation.57 Winding Up Sections 78 to 93 concern voluntary winding up and sections 94 to 103 compulsory winding up. There are provisions common to both (for the most part) between sections 104 and 110. 54 One of the most common instances of the use of this power is in personal injury claims where a prospective corporate defendant has been struck from the register before proceedings have been commenced; a plaintiff may well need to resurrect the company in order to obtain judgment so as to have a remedy under the Loi par rapport aux Tierces Parties (Droits contre Assureurs) 1936 against the defunct company’s insurer, note however the limits of the s 77 power referred to below. 55 And vice versa, although this is not expressly stated. 56 Set out above. 57 Which could cause considerable prejudice to a Guernsey personal injury claimant; the power to restore or not depending upon the arbitrary answer to the question of how the company concerned came to be struck off. Note in particular the absence of provisions equivalent to s 651(4)–(7), themselves inserted into the 1985 Act by s 141 of the Companies Act 1989. See Gower p 848 et seq. Whether a sufficiently robustly purposive human rights law construction of s 77 could rescue the situation remains to be seen. It would be simpler to amend the section.
Guernsey Company Law 319 Voluntary Winding Up By section 78 the articles of a company may expressly provide for a time or event to trigger winding up. In addition an ordinary resolution in favour of voluntary winding up would be required at the time, ie a majority of those voting with a quorum of two members holding between them one-twentieth of the issued share capital, see section 69(g) and (k). Alternatively a voluntary winding up may be brought about by special resolution in favour of the same, ie 75 per cent of the votes cast with the same quorum requirement as for a general meeting, see section 73. Notice must be given in the Gazette Officielle of any special resolution for the voluntary winding up of a Guernsey company, see section 79. By section 83 the company is required in general meeting to appoint a liquidator and to fix his remuneration. Upon the appointment of the liquidator all powers of the directors cease save to the extent that the general meeting or liquidator permit otherwise. By section 80 any transfer of a company’s shares made after the commencement of a voluntary winding up is void, save for a transfer to or with the sanction of the company’s liquidator. By section 82 the company must cease to carry on business from the commencement of voluntary winding up save insofar as is expedient for the beneficial winding up of the company. By section 85 the liquidator is required to realise the company’s assets and to discharge the company’s liabilities and, having done so, to distribute any surplus amongst the members having regard to their respective entitlements. By sections 84(1)(a) and 86 the Court has broad powers to replace a liquidator who has either died or resigned or to appoint a liquidator where the company has failed to do so. Furthermore by section 91 the liquidator may be removed from office by the Court and a replacement appointed. Ultimately the Court retains a power to supervise the conduct of any liquidator where circumstances require and, if need be, to order his removal. If the liquidation lasts as long as a year the liquidator must call a general meeting and submit an account of his acts and dealings. This is a continuing obligation for as long as the liquidation lasts. When the affairs of the company are fully wound up the liquidator must prepare a final account and convene a general meeting at which the account must be presented and an explanation given. After this meeting the liquidator must give notice of the meeting to the Greffier who must register the notice. The company is deemed to be dissolved at the end of a period of three months from the date of registration of this notice.58 By section 89 the company may, by special resolution, delegate its powers to appoint a liquidator to its creditors or any committee of them. By section 90 any liquidator of a company in voluntary liquidation may apply to the Court for directions concerning any aspect of the winding up. This, and its equivalent provision in compulsory winding up at section 110, permit any issue 58
Contrast this procedure to the way in which a compulsory liquidation comes to an end, see below.
320 The Laws of Guernsey arising in the liquidation to be brought before the Ordinary Court for determination or guidance. The liquidator may also seek approval for any course of conduct which might otherwise expose him to a risk of future action. Section 92 provides that all costs, charges and expenses properly incurred in the voluntary winding up of a company, including the remuneration of the liquidator, are payable from the company’s assets in priority to all other claims. The compulsory winding up of a company may be ordered notwithstanding the fact that it is in voluntary liquidation, see below.
Compulsory Winding Up Section 94 sets out the circumstances in which an order may be made for the compulsory winding up of a company and comprise the following: (a) the company has by special resolution resolved that the company be wound up; (b) the company does not commence business within one year beginning on the date of its incorporation; (c) the company suspends business for a whole year; (d) the number of members of the company is reduced to less than two; (e) the company is unable to pay its debts; (f) the company has failed to comply with a direction of the Court to change its name; (g) the company has failed to give notice to the Greffier of the situation of its registered office; (h) the company has failed either to hold an annual general meeting or the directors have failed to produce a directors’ report, as defined by s 68(4); (i) the Court is of the opinion that it is just and equitable that the company should be wound up. Sub-paragraph (a) permits compulsory winding up where the company has already embarked upon voluntary winding up. This allows a creditor to take greater control of the liquidation process than would be possible or likely if the company’s nominated liquidator remained in place. A number of the winding up grounds coincide with the grounds permitting the Greffier to strike a company off the Register, but note that the power to order winding up is in addition to the administrative power to strike off which may be exercised independently of any formal winding up. The ground at (d) corresponds to the fundamental requirement under Guernsey law that there be no less than two members for a valid incorporation. The core grounds in everyday practice are at (e) and (i). By section 95 a company is deemed unable to pay its debts if either it has failed to pay a debt in excess of £750 within 21 days of service via the Sergeant of a written demand pursuant to
Guernsey Company Law 321 section 95(a) and (b) or if it is proved to the satisfaction of the Court that the company is unable to pay its debts. The preparation and service of a written or statutory demand is a convenient means of establishing the relevant winding up ground. The notice must be served via the Sergeant at the company’s registered office and 21 days must pass without the debt being discharged. The debt must, of course, be well-founded or a challenge to liability is likely to follow. An unsatisfied and unchallenged judgment debt in excess of £750 is plainly a good foundation for this ground. Ground (i) permits the Court to order the compulsory winding up of a company whenever there are good grounds to do so. As noted above this might extend to an extreme example of minority shareholder abuse, likewise where there is a quasi-partnership, as in the case of Hubert v Circuit Skips Limited (2001) 24 January, a decision of the Royal Court. Hubert also confirms that English principles in this context will be followed. The application for compulsory winding up may be made by the company itself, any member or creditor of the company or any other interested party, including the Law Officers and the Financial Services Commission. Express powers to seek the winding up of a company are given to the Financial Services Commission by the various regulatory laws governing financial services business in the Bailiwick as already noted. After a compulsory winding up order has been applied for the company or any creditor may also apply to the Court for an order restraining any action or proceeding pending against the company and appointing a provisional liquidator to ascertain the company’s assets and liabilities and to manage its affairs. Typically it is a creditor who will make application under this section in order to prevent other creditors attempting to obtain an advantage; see section 97. By section 98 the Court has broad powers on the hearing of an application for a compulsory winding up order. The Court may grant the application outright, or on such terms and conditions as it thinks fit, alternatively it may dismiss the application or make such other order as it thinks fit. There is scope for considerable invention by this section and, perhaps, the devising of means whereby the company might survive any financial or other difficulty which is perceived to be temporary only. If a compulsory winding up order is made the Court must appoint a liquidator, see generally section 99. Prima facie the Court must appoint the person nominated by the applicant if he is suitably qualified. The Court has power to require the liquidator to give security for the proper discharge of his functions and to pay monies received by him into a specified account. These powers are not generally exercised save for good reason. A Court appointed liquidator is sworn by the Court and accountable to it as a quasi-officer of the Court.59 The liquidator has power:
59 Although the liquidator in a voluntary liquidation is appointed in a general meeting of the members he is also subject to Court supervision.
322 The Laws of Guernsey (a) to bring or defend civil actions in the name of and on behalf of the company; (b) to carry on the business of the company to the extent expedient for the beneficial winding up of the company; (c) to make calls of capital; (d) to sign all receipts and other documents in the name of and on behalf of the company, and to do any other act relating to the winding up of the company; and (e) to do any act authorised by the Court. This last sub-section can be related to the general power to seek directions from the Ordinary Court pursuant to section 110 whereby the Court has power to make such order on the application as it thinks fit. A very broad use is made of this provision in practice. Thus in the case of In re Med Vineyards Limited (in liquidation) [1995] 20 GLJ 7 the liquidator of a company applied for an order that a former director be required to submit to examination by the liquidator. The application was allowed and the note of the judgment reads as follows: “. . . The Court had always accepted that the liquidator was an officer of the Court who was entitled to the advice and direction of the Court on matters that arose in this liquidation. The Court had a wide discretion to consider such applications and to make such orders as it thought fit in accordance with the terms of s 110.”
By section 100 the appointment of a liquidator in a compulsory winding up has the effect of extinguishing all of the directors’ powers save to the extent that the liquidator or the Court sanctions their continuance. It is a criminal offence to continue to purport to exercise any such power where unauthorised to do so. By section 100(3) the company must cease to carry on business when a compulsory winding up order is made, again save insofar as it may be expedient for the beneficial winding up of the company. Subject to these provisions the company’s corporate state and powers survive until dissolution. This permits the liquidator to wind up the company in an orderly way for the eventual benefit of those interested. Section 101 again gives the Court broad powers either to replace or to remove a liquidator whether because of his resignation or death or for any other good reason such as his mishandling of the liquidation. When the liquidator has realised the company’s assets in a compulsory winding up he must apply to the Court for the appointment of a Commissioner to examine his accounts and to distribute the funds derived from the company’s assets. This Commissioner is in fact a Jurat nominated for the purpose. The Commissioner must arrange a creditors’ meeting for the purpose of examining and verifying the financial statements and creditors’ claims and preferences and fix a date for the distribution of the company’s assets. Notice of the meeting/ distribution must be placed in the Gazette Officielle on two occasions in successive weeks and at least 14 days must elapse between the date of the second notice and
Guernsey Company Law 323 the meeting/distribution. At the meeting if a claim is disputed the Commissioner must refer the issue to the Ordinary Court; otherwise the liquidator may distribute such part of the company’s assets as he thinks fit in relation to any claim. In practice and in the absence of dispute such assets as there are will be distributed after this meeting, subject to notice having been given. Section 10560 requires the liquidator to apply to the Court within 15 days of the final distribution of the company’s assets for an order declaring the company to be dissolved. Contrast this more robust procedure with the less well-defined dissolution at the end of voluntary winding up. The company is prohibited to undertake any business or contract debts or obligations once dissolved, any member causing or permitting any breach of this fundamental requirement incurs personal liability in respect of any debt or obligation undertaken. As with voluntary winding up the expenses of a compulsory winding up are payable from the company’s assets in priority to all other claims, see section 103. General Provisions Governing Winding Up By section 104 it is a general requirement of any winding up that a company’s assets be realised and applied in satisfaction of the company’s debts and liabilities pari passu. This is subject to the general law concerning preferences and preferential payments, likewise any agreement between the company and a creditor to subordinate his debt to others. This is not to overlook secured debts, which are likely to have been realised already; see Gower p 843.61 Provisions governing preferences are found at section 108 of the 1994 Law. If a company gives a preference to any person during the six month period preceding either the application or resolution for the winding up of a company the liquidator may make application to the Court in respect of that preference. If the Court is satisfied that the preference was given at a time when the company was unable to pay its debts and that it was influenced in deciding to give a preference by a desire to improve the other person’s position in the company’s liquidation it may make such order as it thinks fit for restoring the position to what it would have been if the preference had not been given. Section 108(4) sets out possible orders which the Court may make, without prejudice to the very general powers conferred. Thus the Court may require any property transferred in connection with the giving of the preference to be re-vested in the company. The Court may order the release or discharge of any security given by the company. The Court may require any person to pay to the liquidator in respect of benefits received by him from the company such sums as may be directed. Consequential orders may regulate the extent to which the person concerned is to be able to claim in the 60 S 105 although a part of the general provisions for winding up applies only to compulsory winding up by virtue of amendments made by s 10 of the 1996 Company Law. 61 See also the case of Money Markets International v London Stock Exchange [2001] 4 All ER 223 and Neuberger J’s judgment on the so-called anti-deprivation principle whereby prima facie a contractual provision transferring assets of an individual to another on his insolvency is invalid, subject to certain exceptions.
324 The Laws of Guernsey liquidation for debts which were the subject of the preference. By section 108(5) conditional protection from these provisions is given to a bona fide purchaser for value without notice of the circumstances which are the foundation for the application, ie the insolvency of the company and the desire to favour a person. Greater protection is given if the property was not directly acquired from the company alternatively if the person seeking protection was not a creditor.62 Where the recipient of the preference is “connected” with the company the period of six months is extended to two years. Additionally the company is presumed to have desired to improve a connected person’s position. A person is connected with a company if that person had any significant direct or indirect proprietary, financial or other interest in the company other than as a creditor, surety or guarantor, alternatively a mutual connection between such a person and the company. By section 109 there is a general requirement for a company to be given notice of any winding up application. Remedies Against Officers of Companies in Liquidation There are a number of provisions in the 1994 Law, as amended, whereby directors and other officers of the company may be held personally liable in defined circumstances either for the company’s debts generally or to make a contribution to those debts. By section 106 any past or present officer of the company or any other person who, directly or indirectly, has been concerned in the promotion, formation or management of the company may be ordered to repay, restore or account for such sum of money or property and interest as the Court thinks fit, whether by way of indemnity, compensation or otherwise. An application for such an order may be made by the liquidator or any creditor or member of the company in the course of the winding up where it appears that any person concerned has: (a) appropriated or misapplied any of the company’s assets; (b) has become personally liable for any of the company’s debts or liabilities; (c) has otherwise been guilty of any misfeasance or breach of fiduciary duty in relation to the company. This already powerful sanction for misconduct is supplemented by further powers inserted by the 1996 amendment. By section 67B any person who was knowingly a party to the company carrying on business with intent to defraud creditors or for any other fraudulent purpose is liable to make such contributions to the company’s assets as the Court thinks proper. The application may be made by the liquidator or any creditor or member of the company. The conduct triggering such liability is commonly known as fraudulent trading. Section 67C relates to what is known as wrongful trading. By contrast to 67B which concerns any person knowingly concerned with fraudulent trading 67C 62 Note though that the Court may act against any person, whether or not he was beneficiary of the preference, see the opening words to 108(5).
Guernsey Company Law 325 is restricted to a person who is or has been a director of the company. Again the liquidator, any creditor or member of the company may apply to the Court for an order that the director make such contribution to the company’s assets as the Court thinks proper. The conduct which triggers such potential liability is permitting the company to carry on business in circumstances where the director either knew or ought to have concluded that there was no reasonable prospect of the company avoiding going into insolvent liquidation and the company does in fact go into insolvent liquidation. It is a requirement that the person concerned be a director at the time. The mischief is permitting a company to carry on trading when steps ought to have been taken to wind up the company. It is implicit that the company’s debts have increased during the material period to the prejudice of either creditors or members. By section 67C(4) the director is judged by the standard of a reasonably diligent person having both: (a) the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company; and (b) the general knowledge, skill and experience of that director. Although the test combines subjective with objective elements it is ultimately an objective standard by which the director is measured. English case-law has taken this test and applied it generally in the context of directors’ duties. It is noteworthy that the definition of a director for the purposes of the wrongful trading provisions is extended by section 67C(7) to a shadow director, which itself is defined as a person in accordance with whose directions or instructions the directors of the company are accustomed to act. There is a defence available to the director that he took every step with a view to minimising the potential loss to the creditors. It is difficult to see how this defence could be made out if taken literally; see section 67(C)(3). Where the Court does make a declaration that the director is liable to make a contribution it may go on to impose a charge on any debt or obligation owed by the company to the director, or even impose a charge upon whatever security over the company’s assets the director may already have taken. The power is further extended to imposing a charge on any third party acting on the director’s behalf or assignees. The Court may also make such further order as may be necessary for enforcing any such charge. See generally section 67(D)(2). Disqualification of Directors By section 67A, as inserted by the 1996 Law, the Court may make an order prohibiting a person without leave from: (a) being a director or other officer of any company or any specified company; or
326 The Laws of Guernsey (b) from participating in, or being in any way concerned in, directly or indirectly, the management, formation or promotion of any company or any specified company. An application for a disqualification order or for the renewal of a disqualification order may be made by the Advisory & Finance Committee, the Financial Services Commission, HM Procureur, any body corporate of which the person in question is (or has been) an officer, a liquidator, a member or creditor of the company or, with the leave of the Court, any other interested party. A disqualification order may only be made initially for a maximum period of five years but may be renewed.63 Note however that the renewal must be obtained before or within one month of the date of expiry of the order. The single criterion for making a disqualification order is that the relevant person is unfit to be concerned in the management of a company. In determining whether or not a person is unfit the Court is required to consider the matters set out at schedule 3. Paragraph 1 requires every person who is, or is to be, a director of a company to be a fit and proper person to hold that position. Paragraph 2 requires regard to be had to: (a) that person’s probity, competence, solvency and soundness of judgement for fulfilling the responsibilities of that position; (b) the diligence with which he is fulfilling or is likely to fulfil those responsibilities; (c) whether the interest of members or creditors or potential members or creditors of the company are, or are likely to be, in any way threatened by his holding that position; and (d) the rules, standards and guidelines of any relevant professional, governing, regulatory or supervisory authority. By paragraph 3 the Court may also have regard to the relevant person’s previous conduct and activities in business or financial matters. It is a criminal offence to contravene the provisions of any disqualification order. A person will also be personally liable for any debts and liabilities of the company in relation to which the contravention was committed. By section 67A(9) a person may apply for the revocation of a disqualification order. The Court may grant the application if satisfied that it would not be contrary to the public interest to do so and that the applicant is no longer unfit to be concerned in the management of a company. Not less than 28 days’ notice must be given to the person who originally applied for the disqualification order and to such other persons as the Court may direct. It should be noted that disqualification may only be ordered under the 1994 Law in relation to directorships of Guernsey companies, (see the definition of 63 The maximum period of disqualification is likely soon to increase to 15 years, likewise any renewal; see item 1 of Billet d’État XXII of 2002.
Guernsey Company Law 327 “company” and “Register of Companies” in the interpretation section of the 1994 Law). Criminal Offences By sections 111 to 113 many and various criminal offences are created for breach of the Law’s provisions. Penalties range from a fine not exceeding level 2 on the uniform scale64 to imprisonment for a period of up to two years and an unlimited fine when convicted on indictment. Section 112 creates a general offence of making a false statement in connection with any document, report or record required by or for the purposes of the Companies Law. By section 113 where an offence under the Law committed by a company is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of, any officer of the company or any person purporting to act in any such capacity he as well as the company is guilty of the offence. Again a person in accordance with whose directions or instructions any officer of a company acts is deemed also to be an officer of the company. The Court Whenever the Companies Law refers to the Court it is a reference to the Royal Court sitting as an Ordinary Court.
THE PROTECTED CELL COMPANY
Guernsey protected cell companies (PCCs) are the creation of the Protected Cell Companies Ordinance 1997, as amended by the Protected Cell Companies (Amendment) Ordinance 1998. Both Ordinances are themselves the creation of the Companies (Enabling Provisions) (Guernsey) Law 1996. A protected cell company is a single legal person comprising a core of noncellular assets and one or more distinct cells holding assets independently of each other and the non-cellular core but within the framework of the single corporate identity. The key feature of a protected cell company is that each cell carries on business independently of other cells. It is a requirement of the Ordinance that a protected cell company inform any person with whom it transacts both that it is a protected cell company and identifies the cell in respect of which that person is transacting, unless the transaction is not a transaction in respect of a particular cell. Failure to comply with these requirements may lead to personal liability on the part of the directors, alternatively a direction that the liability in question shall instead be met from such of the cellular or non-cellular assets of the 64
Currently £500.
328 The Laws of Guernsey protected cell company as may be specified by the Court, see section 11 of the 1997 Ordinance. The 1998 Ordinance makes more explicit the limited nature of a creditor’s rights against a cellular company, whether with regard to cellular or non-cellular transactions. Those rights are restricted to enforcing any right or claim against the assets of the relevant cell and, if these be insufficient, the non-cellular assets of the company. The creditor has no additional right to enforce any debt beyond these assets save to the extent that section 11 may provide a remedy against the directors, alternatively the 1994 Law.65 The 1998 Ordinance makes further elaborate provision to restrict the rights of creditors, including the implication of contractual terms creating reciprocal liabilities if a creditor does in fact enforce against assets belonging to another cell. It appears that the Ordinance has in mind a creditor attempting to enforce against the assets of another cell outside the jurisdiction and in particular a jurisdiction which does not recognise cell companies. The 1997 Ordinance provides for the appointment of either a receiver or administrator in the alternative to the liquidator which may be appointed under general Guernsey company law. Save as is inconsistent with general Guernsey company law the provisions of the 1994 Law, as amended by the 1996 Law, apply to protected cell companies. The special interest of the Guernsey Financial Services Commission should be noted given the terms of the Ordinance and the fact that, until 6 February 2001,66 only authorised collective investment schemes and registered insurers could incorporate or re-incorporate as protected cell companies. Since that date two further classes of company have been permitted to take PCC form, namely companies established principally for the purpose of issuing bonds or other debt securities or instruments in respect of which the repayment of capital and interest is to be funded from the proceeds of the company’s investments67 and, secondly, any company established for the purpose of carrying on finance business other than a company already supervised under the Protection of Investors, Insurance Business, Banking Supervision or Regulation of Fiduciaries Laws. COMPANIES LIMITED BY GUARANTEE
The Guarantee Companies Ordinance 1997 made pursuant to the Companies (Enabling Provisions) (Guernsey) Law 1996 makes provision for the incorpora65 Or general legal remedies not specific to company law at all; eg breach of warranty of authority, personal assumption of a duty of care etc. 66 See the Protected Cell Companies (Special Purpose Vehicle) Regulations 2001, a statutory instrument made by the Financial Services Commission after consultation with the Advisory & Finance Committee pursuant to the 1997 Ordinance. See also provisions such as s 11(5) of the Insurance Business (Bailiwick of Guernsey) Law 2002 regulating, inter alia, the creation of new cells by a licensed insurer protected cell company. 67 Ie the special purpose (corporate) vehicle (spv) created for securitisation (ie the securing) of debt against income as a means of raising capital in, inter alia, a tax efficient way.
Guernsey Company Law 329 tion in Guernsey of companies limited by guarantee. Such are defined at section 1(1) as, “a company . . . with the liability of its members limited by the memorandum to such amount as the members may respectively thereby undertake to contribute to the assets of the company in the event of its being wound up”. Companies limited by guarantee must identify themselves as such by their name, which must end with the expression “Limited by Guarantee” or “LBG”. A company limited by guarantee may, but need not, have a share capital. The registration and return requirements are tailored accordingly by the Ordinance. In any event the consent of the Advisory & Finance Committee (in reality the Financial Services Commission) is required pursuant to the Control of Borrowing (Bailiwick of Guernsey) Ordinance to incorporate. The guarantee company’s memorandum must state the amount which each member of the company undertakes to contribute to the assets of the company in the event of its being wound up while he is a member and the maximum number of members which the company is to have. The member’s liability for the company’s debts is limited to the amount specified in the memorandum and the amount, if any, unpaid on the shares held by him (where there is share capital). If a member ceases to be a member of a guarantee company he remains liable to pay the amount guaranteed by him for a period of one year. This is the necessary implication of section 4(a)(i) concerning the memorandum requirements taken together with section 6(1)(a) governing the maximum liability of members.
THE AMALGAMATION OF COMPANIES
The amalgamation of companies is the subject of the Amalgamation of Companies Ordinance 1997. This provides at section 1 that, subject to the provisions of the Ordinance, two or more companies may amalgamate and continue as one company, which may be one of the amalgamating companies or a new company. One of the amalgamating companies must, however, be a Guernsey company. The consent of the Financial Services Commission is required for an amalgamation if one of the amalgamating companies is either a supervised company or not a Guernsey company. A supervised company is a company regulated by the Financial Services Commission, ie companies carrying on controlled investment business, insurancebusiness and the business of a deposit taking institution.68 The procedural requirements for amalgamation are set out in the Ordinance. There is a long form procedure which is standard and a short form procedure for wholly owned subsidiaries of amalgamating companies. The standard procedure requires the formulation of an amalgamation proposal by the amalgamating companies comprising the intended name of the amalgamated company, the registered office of the amalgamated company, the full names and residential addresses of the 68 Or from time to time prescribed as such by regulation; and now most likely extending to businesses governed by the Fiduciary Law.
330 The Laws of Guernsey directors, the share structure, the manner in which the shares of each amalgamating company are to be converted, the consideration payable for shares which are not to be converted into shares of the amalgamated company and any other necessary details for the completion of the amalgamation. The directors of each amalgamating company must certify that in their opinion the amalgamation is in the best interests of the company and furthermore that the amalgamated company will satisfy a solvency test as defined by the Ordinance. There are notice requirements to both members and creditors. Specified documents must be given to members not less than twenty-eight days before the date upon which it is proposed the amalgamation take effect, including a copy of the amalgamation proposal itself. The proposal must be approved by special resolution of the members of each amalgamating company. Likewise every creditor of each amalgamating company must be given not less than twenty-eight days written notice of the proposed amalgamation; notice must also be placed in the Gazette Officielle. It is implicit that they have the right to object to the Commission and/or the Court. The notification and registration requirements at the Greffe are tailored to the circumstances of the amalgamation. If the amalgamated company is to be a new company an Act of Court permitting registration is required in the usual way. The Greffier will issue a certificate of amalgamation in respect of the amalgamated company. Section 8 of the Ordinance summarises the effect of the issue of a certificate of amalgamation which includes the following: (a) the amalgamated company succeeds by operation of law to all property, rights, powers and privileges of each of the amalgamating companies; (b) the amalgamated company is liable for all debts, liabilities and obligations of each of the amalgamating companies; (c) legal proceedings which could have been instituted or continued by or against an amalgamating company may be instituted or continued by or against the amalgamated company; (d) any conviction, ruling, order or judgment in favour of or against an amalgamating company may be enforced by or against the amalgamated company. In short the Amalgamation of Companies Ordinance presents an attractive and potentially efficient alternative to the simple take over by one company of another.
THE MIGRATION OF COMPANIES
The Migration of Companies Ordinance 1997 makes provision for both the immigration and emigration of companies to and from Guernsey. In essence the Ordinance is concerned with companies incorporated in foreign jurisdictions
Guernsey Company Law 331 wishing to register in Guernsey and vice versa. The provisions governing immigration and emigration of companies correspond closely with each other. A company wishing to register in Guernsey must be capable of transferring the locus of its incorporation under the law of the jurisdiction where it is situated for the time being. The company must also have complied with any local requirements as to the transfer of its locus of incorporation. If there are no specific requirements as to what kind of resolution is required by the company wishing to emigrate the Ordinance provides that 75 per cent of the shareholders entitled to vote must approve the proposal,69 or such other figure as the Commission may specify. Overseas companies may not be registered in Guernsey if they fail to satisfy a solvency test as defined by the Ordinance,70 alternatively if any step in liquidation, receivership or administration procedure has been taken in respect of that company. Companies capable of issuing bearer shares are not permitted to register in Guernsey in any event. The permission of the Financial Services Commission is required for an overseas company to register within Guernsey. Evidence is required that an overseas company is not prohibited from registering in Guernsey. An application for consent must also be made to the Court. Where the application is granted the company will be registered at the Greffe. The registration may be revoked if the company remains incorporated outside of Guernsey. By section 8 registration in Guernsey does not create any new legal person nor does it prejudice or affect the identity of the company. It is specifically provided that the rights of any third party and the obligations of the company are unaffected. No legal proceedings are rendered defective against the company and legal proceedings which could have been instituted or continued by or against an overseas company before registration as a Guernsey company may be instituted or continued by or against the company after registration. Sections 9 to 17 make very similar provision for Guernsey companies wishing to register elsewhere. A special resolution of the shareholders is required. The company also requires the consent of the Financial Services Commission. Not less than 28 days before seeking this permission the company must give notice of its proposal to register outside of the jurisdiction to all of its creditors and in the Gazette Officielle.71 The transferring company must further satisfy the Commission that HM Procureur and the Administrator of Income Tax72 have no objection to the transfer, likewise that the transfer will be permitted under the law of the jurisdiction to which the company proposes to migrate. No application to the Court itself is required. The trigger permitting de-registration is the approval of the Commission. This will cause the Greffier to remove the company from the Guernsey Register whereupon he must enter a notice in the Gazette Officielle and 69
Ie not just 75% of those voting at a quorate meeting. See ss 4 and 22 of the Ordinance. The implication being that objection may be made (to the Commission) by creditors or any other person with a proper interest. 72 In effect adding to the consents required. 70 71
332 The Laws of Guernsey in the Register of Companies. The process may be reversed if it appears that the company has not in fact become incorporated under the law of an overseas jurisdiction. A Guernsey company may not be removed from the Register of Companies in Guernsey if it is insolvent or any other insolvency procedure has been commenced or is outstanding in respect of it. A Guernsey company may not transfer its registration if it fails to satisfy the solvency test. As with immigration the effect of emigration does not prejudice or affect the identity of the company nor prejudice the rights of any person or affect the property, rights, liabilities or obligations of the company. Likewise legal proceedings are unaffected. The Migration of Companies Ordinance is a straightforward and valuable tool for Guernsey commercial lawyers.
THE COMPANIES (FINANCIAL ASSISTANCE FOR ACQUISITION OF OWN SHARES) ORDINANCE 1998
Prima facie under English law an English company is forbidden to acquire its own shares, see the case of Trevor v Whitworth (1887) 12 App. Cas. 409 and section 143(1) of the Companies Act 1985. This is subject to a number of statutory exceptions. There is additionally a specific prohibition against the provision by a company of financial assistance for the purpose of acquiring its shares at section 151 of the 1985 Act, again subject to statutory exceptions. There was some uncertainty in Guernsey law as to whether a Guernsey company could either purchase its own shares or give financial assistance for the acquisition of its shares, notwithstanding the absence of any express prohibition in Guernsey company law. Two 1998 Ordinances were made in order to avoid any lingering uncertainty and to regulate the process. By section 1 of the Companies (Financial Assistance for Acquisition of Own Shares) Ordinance 1998 a Guernsey company is permitted to give financial assistance, whether directly or indirectly, to a person for the purpose of or in connection with the acquisition of its shares if: (a) it is authorised to do so by the provisions of its memorandum or articles; and (b) it will, immediately after the financial assistance is given, satisfy the solvency test. If the acquisition has taken place the company may give financial assistance for the purpose of reducing or discharging the liability so incurred providing the same criteria are met. A company may by special resolution alter its memorandum so as to authorise the company to give such financial assistance. Financial assistance is defined, inter alia, at section 2 to include assistance by way of gift, guarantee, security or indemnity and assistance by way of loan. The solvency test is defined at section 3. A company satisfies the test if it is able to dis-
Guernsey Company Law 333 charge its liabilities as they become due in the normal course of its business. The value of the company’s assets must be greater than the aggregate of: (a) the amount of its liabilities; (b) the nominal amount of its issued shares; and (c) any amounts standing to the credit of its share premium account and capital redemption reserve fund. There are additional requirements in respect of supervised companies, ie those regulated by the Financial Services Commission. Section 6 makes the important provision that no act of the company is invalidated by reason of a failure to comply with the provisions of section 1 of the Ordinance as regards a person dealing with the company in good faith. A party to a transaction with a company is not bound to enquire as to whether the transaction is in accordance with the provisions of section 1. Accordingly a person taking security from a company acquired by another is not concerned, if acting in good faith, as to whether the pre-conditions for giving financial assistance are met by that company.
THE COMPANIES (PURCHASE OF OWN SHARES) ORDINANCE 1998
The Companies (Purchase of Own Shares) Ordinance 1998 gives power to a company limited either by shares or guarantee and having a share capital to purchase its own shares, including any redeemable preference shares, if authorised by its articles. This power is subject to the provisions of the Ordinance and subject to the overall caveat that a company may not purchase its own shares if, as a result, there would no longer be any member of the company holding shares other than redeemable preference shares. Only fully paid up shares may be purchased by the company under the Ordinance. A company may not purchase its own shares without the consent of the relevant shareholder, save where permitted to do so by the terms of its memorandum or articles or any other condition under which the shares were either issued or subscribed to. The Ordinance distinguishes between purchases by a company of its own shares according to whether the shares are to be purchased out of distributable profits or the proceeds of a fresh issue of shares made for the purpose, as opposed to out of capital. Payment for shares out of capital requires prior notification in the Gazette Officielle and written notice to each creditor. Any objecting member or creditor may apply to the Court within 28 days of the resolution date for cancellation of the resolution. The Court has broad powers upon the hearing of any such application including making provision for the purchase by the company of the shares of any dissenting member. Regardless of whether the purchase is out of distributable profits or capital the company may only proceed by way of special resolution approving the proposed
334 The Laws of Guernsey contract. If the purchase is to be made in a market specific authority must be given by general meeting governing the maximum number of shares to be bought, the maximum and minimum prices to be paid and the date upon which the authority expires. Any resolution conferring, varying, revoking or renewing a company’s authority to make a market purchase must be delivered to the Greffe within 21 days following the date of any such resolution. Any rights of a company pursuant to a contract for the purchase of its own shares are non-assignable. By section 16(2) a company is not liable in damages in respect of any failure on its part to purchase any of the shares. Where a company does purchase its own shares it must make a return to the Greffe within 28 days of the purchase giving particulars of the number and nominal value of the shares purchased and the aggregate amount paid. This return is registered. Shares purchased under the Ordinance are treated as cancelled on purchase and the amount of the company’s issued share capital is diminished accordingly. There is no corresponding reduction in the company’s authorised share capital. Where a purchase is made out of the company’s profits, the amount by which the company’s issued share capital is diminished must be transferred to a reserve called the capital redemption reserve. By section 12 conditions for payments out of capital are imposed along familiar lines concerning solvency. Thus there is a key requirement that the company’s directors reasonably believe that, immediately after the payment out of capital is made: (a) the company will be able to discharge its liabilities as they become due in the normal course of its business; and (b) the value of the company’s assets will be greater than the aggregate of: (i) the amount of its liabilities; (ii) the nominal amount of its issued shares; and (iii) any amount standing to the credit of its share premium account and capital redemption reserve fund. This amounts to the solvency test seen in other Ordinances. It is not, by definition, applicable to the purchase of shares out of distributable profits only. Note that where the effect of the purchase is to reduce the company’s share capital the Ordinance procedure is in the alternative or an exception to the requirements of sections 45 to 49 of the 1994 Law.
LIMITED PARTNERSHIPS
Limited partnerships are the creation of the Limited Partnerships (Guernsey) Law 1995, as amended by the Limited Partnerships (Guernsey) (Amendment) Law 1997. The 1995 Law is closely modelled on the much earlier English Limited
Guernsey Company Law 335 Partnerships Act 1907. This form of trading vehicle proved to be unpopular in England73 since it is only of use where one or more of the partners truly intends to be a sleeping partner for reasons that become apparent below. England has since moved forwards to the truly limited liability partnership in the form of the Limited Liability Partnerships Act 2000 which received Royal Assent on 20 July 2000. By this Act a new form of legal person known as a limited liability partnership is created as a separate incorporated entity with unlimited capacity.74 The relationship between members of the partnership is or may be governed by agreement between them, alternatively by default regulations made pursuant to section 15(c) of the Act. The limited liability partnership model borrows heavily from company law as opposed to partnership law which is expressly disapplied save where otherwise provided. By contrast the limited liability partnership is taxed as if it were a true partnership. The promise of the LLP is the “organisational flexibility and tax status of a partnership with limited liability for its members”.75 A third party will, in the normal course of events, contract with the limited liability partnership as an entity separate from its members. Accordingly any liability will be that of the corporate entity as opposed to the members jointly and/or severally. The only likely additional liability would (or rather might) be that of the member with whom the client deals personally on the basis of the principles set out in the case of Williams v Natural Health Foods Ltd [1998] 2 All ER 577.76 Again incorporation is no defence against torts committed individually.77 In Guernsey the limited partnership based on the earlier legislation continues to be of interest as a potentially tax efficient vehicle. By contrast to the LLP a limited partnership is governed by the ordinary rules of law applicable to partnerships save to the extent that they are inconsistent with the express provisions of the Limited Partnership Law, see section 33 of the 1995 Law. The principal difference between the law relating to limited partnerships and other partnerships is the distinction made between a general partner and a limited partner. A limited partnership comprises one or more general partners who: (a) are admitted to the partnership as general partners in accordance with the partnership agreement; and (b) are jointly and severally liable for all debts of the partnership without limitation;
73
DTI figures show that there were a grand total of 6,749 limited partnerships in Great Britain in
1999. 74
See s 1 of the Act. See para 3 of the explanatory notes to the Act. 76 There seems no reason why normal principles as to when the corporate veil will and will not be pierced should not be applied. 77 See Robert Foster’s article “Limited liability partnerships—could they save your home?” New Law Journal vol 152 no 7036 p 919 for an account of the advantages and disadvantages of the UK LLP. 75
336 The Laws of Guernsey and one or more limited partners who: (c) are admitted to the partnership as limited partners in accordance with the partnership agreement; and (d) upon entering the partnership, contribute or agree to contribute to the capital thereof a specified sum; and (e) subject to certain regulatory provisions of the 1995 Law are not liable for any debts of the partnership beyond the amount they have contributed or have agreed to contribute. Accordingly the limited partner is in a similar relationship with the limited partnership as a shareholder is to a company. However by section 12 a limited partner is forbidden to participate in the conduct or management of the business of the limited partnership and must not transact the business of, sign or execute documents for, or otherwise bind the limited partnership. It seems that the philosophical foundation for the limited liability of a limited partner is the notion that such a partner will bear no responsibility for the failure of the partnership if the provisions of section 12 are respected. In fact there are a considerable number of exceptions to the rule against participation, chief amongst which is the right of the limited partner to advise the general partners and even to act as the director of a corporate general partner. Contravention of the requirements of section 12 render the limited partner liable as if he were a general partner. There are comprehensive registration requirements for a limited partnership akin to those of a company.78 No Act of Court79 is required to register but, apart from this, the process is similar. A Register of Limited Partnerships is again kept by the Greffier and various documents must be lodged and information given. In particular the consent of the Financial Services Commission is required before registration will be permitted, see section 7A of the Control of Borrowing (Bailiwick of Guernsey) Ordinance 1959. A limited partner is permitted to demand the return of his contribution to the partnership, although this right is curtailed substantially where the partnership is insolvent. If the limited partnership is insolvent or becomes insolvent at or within six months of the date of repayment of a limited partner’s contribution the limited partner is liable in the amount of the repayment to the extent that it may be necessary to discharge any partnership debt incurred at a time when his contribution formed a part of the partnership assets. A limited partnership may (now) elect to have legal personality.80 In any event its name must include the words “Limited Partnership” or the abbreviation “LP”, with or without full stops. If it does take separate legal personality it must addi78 Note also the auditing requirements for limited partnerships providing services of a banking, insurance, investment, asset management, trust, company formation or legal nature, see the Limited Partnership (Application of Audit Requirements) Regulations 2000. 79 Court order. 80 By reason of the 1997 amendment Law which only came into force in 2001.
Guernsey Company Law 337 tionally employ the word “Incorporated” or any cognate expression approved by the Guernsey Financial Services Commission.81 Unless a limited partnership chooses to take legal personality it has no legal personality.82 The fact that if it does make the election it will have a separate legal personality may have interesting consequences which have yet to be worked out fully. For example, it may render the distinction between a general and a limited partner immaterial as regards liability if the corporate veil is not, in any event, pierced. A Guernsey limited partnership is required to have a registered office in Guernsey in much the same way as a company. The usefulness of a limited partnership save as an investment vehicle is questionable, unless one takes the more extreme view that the 1997 amendment created LLPs by the back door. It is anticipated that Guernsey will adopt the thoroughgoing LLP model in due course.
PARTNERSHIP LAW
Whilst on the topic of limited partnerships it is appropriate to mention general partnership law. The relevant Guernsey legislation is to be found in the Partnership (Guernsey) Law 1995 which is itself modelled closely on the English Partnership Act 1890. It follows that English case-law and texts would be very influential; see for example Lindley & Banks on Partnership, 18th edn. Pothier’s Treatise on the Contract of Partnership83 might also be referred to in a proper case.84
81
See s 9C of the 1995 Law as inserted by the 1997 amendment Law. See s 9A(1) as inserted by the 1997 amendment. 83 Again there is a helpful translation dating from 1854 by Owen Davies Tudor, reprinted by William S Hein & Co. in 1994. 84 For a recent and important House of Lords case on the law of partnership and, in particular, the questions of vicarious liability for the wrongful actions of partners together with rights of contribution from third parties see Dubai Aluminium Co Ltd v Salaam [2002] UKHL 48, the opinions were delivered on 5 December. 82
16 Employment Law INTRODUCTION
G
UERNSEY EMPLOYMENT LAW is in its infancy. The Law conferring protection against unfair dismissal dates back only to 4 January 1999. There is, as yet, no sex or race discrimination legislation nor any disability discrimination legislation, although there is an outstanding resolution of the States from 1996 to introduce sex discrimination legislation. There is no equivalent of the National Minimum Wages Act 1998 nor a host of other acts. There is no statutory right to maternity pay. It goes without saying that EU directives such as the Working Time Directive (93/104) have no application; there are no rights equivalent to the more esoteric varieties provided by the Employment Rights Act 1996. Equally, good employees are in such short supply in Guernsey that express statutory rights are not so important. In a society with what amounts to full employment employees are in a peculiarly strong bargaining position. The extent to which such gaps as may be perceived in Guernsey law can be remedied by the bringing into force of the Human Rights (Bailiwick of Guernsey) Law 2000 remains to be seen.1 Whether the Bailiwick should in fact mimic the panoply of English employment legislation is debatable. The high cost of extravagant employment rights is a powerful deterrent, likewise the doubtful sense of English employment law and case-law. Whether anyone in England will either (a) be bothered or (b) able to afford to employ another person in the future seems increasingly less likely. From the viewpoint of the Bailiwick, England and the European Union seem generally at risk of sinking under the weight of impossibly generous rights, which rights are often abused.2 What rights there are under Guernsey employment law are comparatively limited and straightforward. Such complexity as there is arises from the fact that English legislative provisions have been copied, at least in part, and therefore English case-law must be considered, if not always followed.
1 Through the so-called horizontal effect of the legislation and the obligation of the Court itself to be convention compliant. 2 Note the extraordinary use to which the Disability Discrimination Act 1995 has been put; meanwhile in France a 35 hour week has become the norm causing a crisis in healthcare in early 2002. If the Bailiwick is to remain a low tax jurisdiction it cannot afford employment or human rights which are disproportionate to responsibilities (but neither can mainland jurisdictions).
340 The Laws of Guernsey
CONTRACTUAL RIGHTS
An employee’s rights and obligations under the contract of employment itself must not be overlooked. In a jurisdiction where statutory rights are comparatively limited the common law position remains especially important given the number of obligations likely to be implied into a Guernsey contract of employment. Again English case-law would be influential in this context. An English law employer’s implied common law obligations would include the following: (a) (b) (c) (d) (e)
an obligation to pay remuneration; to provide work;3 to take reasonable care for the employee’s safety; to treat employees with respect; to deal timeously with a grievance raised by an employee.4
By contrast an English law employee’s obligations can be summarised as follows: (a) (b) (c) (d) (e) (f)
an obligation to carry out the employer’s lawful orders; to adapt himself to new methods and techniques; to take reasonable care in the discharge of his duties; to take reasonable care for his own safety and the safety of others; not to disrupt the operation of the employer’s business; a duty of good faith and fidelity during the currency of the employment.5
The employee’s contractual rights will extend typically also to provide for a right to a period of notice prior to employment termination, provision for sickness, sickness leave, maternity leave, pension provision and so on. Rights conferred by Guernsey employment legislation are either minimum rights in default of more generous contractual provision or rights additional to contractual rights. It follows that if an employee is dismissed in breach of the contract of employment he or she will have a remedy for the wrongful dismissal in addition to whatever statutory remedies are available.6 3 But only where the nature of the employment so demands; eg where publicity is important or where the remuneration is earned by reference to work done, alternatively where the employment is of a professional nature; see Halsbury’s Laws of England vol 16 (2000 reissue) para 29. 4 See Halsbury ibid para 48. 5 This includes the obligation not to make secret profits and a duty not to misuse confidential information belonging to the employer. See paras 50–59 Halsbury ibid for employee’s obligations generally. Note that there is no equivalent in Guernsey to the Public Interest Disclosure Act 1998. 6 One distinguishes between the common law rights and remedies arising from wrongful dismissal as opposed to the additional rights under Guernsey law arising from an unfair dismissal. Of course a dismissal may be both wrongful and unfair in which case there will be two sets of remedies; the contractual and the statutory. Equally a dismissal may be wrongful without qualifying for protection against unfair dismissal, eg because the employee has not been employed for long enough. Again a dismissal can be unfair without being wrongful.
Employment Law 341 In a standard case the prima facie entitlement to damages for wrongful dismissal is an amount equivalent to the remuneration and other contractual benefits which the employee would have been entitled to receive during whatever notice period ought to have been allowed, less the amount by which the employee has in fact mitigated his loss. The employee has a positive duty to mitigate loss.7 English case-law would again be considered and most likely followed when analysing employment contract remedies; for example the English Court of Appeal case of Silvey v Pendragon Plc (2001) IRLR 685 determined that pension losses were capable of forming part of an award for damages for wrongful dismissal. Likewise in Malik v Bank of Credit & Commerce International SA (In compulsory liquidation) [1997] 3 All ER 1 the House of Lords held that damages for wrongful dismissal could extend to compensating the loss suffered by an employee for difficulty in finding replacement employment where a former employer had been in breach of an implied term not to conduct its business dishonestly or corruptly (so-called “stigma claims”). Note however the subsequent distinction drawn by the House of Lords in the case of Johnson v Unisys Limited [2001] 2 All ER 801 where it was held that damages could not be awarded for injured feelings, mental distress or damage to reputation arising out of the manner of dismissal given the statutory unfair dismissal régime.8 Another employment law case arising out of this line of authorities and of general importance to contract law is that of Bank of Credit & Commerce International SA (In liquidation) v Ali & Ors [2001] 1 All ER 961 where it was held that a general release of claims signed by a former employee did not extend to a “stigma claim” arising from the later discovery as to how BCCI had carried on its business.9 This case is likely to be relied upon whenever a party subsequently discovers a cause of action not in contemplation at the time of compromise.10
7
See generally Halsbury’s Laws of England vol. 16 (2000 reissue) paras 451 et seq. Likewise the English Court of Appeal in Eastwood v Magnox Electrical Plc (2002) would not allow the unfair dismissal legislation to be circumvented by a claim for breach of an alleged term governing the circumstances of a dismissal. 9 See also the case of Gibbs v Ebbetts (1997) LTL 20 October 1997. Test case stigma claims were brought and failed (on the facts) and on appeal, see Bank of Credit & Commerce International SA (in liquidation) v Ali (No.2) [2002] 3 All ER 750. One other recent interesting English case is that of Morrow v Safeway Stores Plc (2002) IRLR 9 where the EAT found that all breaches of the implied term of trust and confidence in employment contracts inevitably amounted to repudiatory breaches, the seriousness of the breach being immaterial. This is particularly relevant where constructive dismissal is alleged, see below. 10 Note the parallels with French law where there is sometimes a marked reluctance to uphold a binding compromise, particularly in the context of personal injury cases. See Arts 2044–2058 Code Civil and the concept of “la transaction” or compromise, see also Bénabent, Droit Civil Les Obligations 8th edn (Montchrestien) p 454. See also Heaton v Axa Equity and Law [2002] 2 All ER 961 concerning a plaintiff ’s ability to pursue a defendant not party to the material compromise agreement. 8
342 The Laws of Guernsey
STATUTORY RIGHTS: THE CONDITIONS OF EMPLOYMENT (GUERNSEY) LAW 1985
The Right to Receive Written Particulars of Terms of Employment The Conditions of Employment (Guernsey) Law 198511 requires an employer to provide an employee who is employed for more than 15 hours weekly with written particulars of the terms of his or her employment. The obligation is not to provide a written contract as such but rather specified information about the terms and conditions of employment in writing. The particulars must be given within four weeks of the beginning of the employment12 and must provide the following information: (a) the identity of the parties; (b) the employment commencement date; (c) the scale, rate or method of calculation of remuneration including overtime, shift pay and other money benefits; (d) the intervals at which remuneration is paid; (e) terms and conditions relating to hours of work; (f) holiday and holiday pay entitlement including entitlement (if any) to accrued holiday pay on employment termination; (g) incapacity for work through sickness or injury and provision for sick pay; (h) pensions and pension schemes; (i) length of notice to be given by either employer or employee; (j) job title.13 If there are no particulars to give for any category this fact must itself be stated expressly; eg that there is no pension provision. The logic behind the requirement is to avoid future misunderstanding or dispute. If the contract is for a fixed period the contract expiry date must be stated. The written particulars may incorporate another document by reference if the employee will have reasonable opportunities to read that other document. Any changes to the particularised terms of employment must be notified by written statement within not more than four weeks of the change.14 There is provision also for a change of name of the employer to be dealt with by written notification. Section 5 excludes the section 1 requirement where the employment contract is itself in writing and contains the required particulars. 11 As amended by the Conditions of Employment (Amendment) (Guernsey) Law 1992 and the Conditions of Employment (Amendment) (Guernsey) Law 1994. 12 Or the coming into force of the Law for already existing employment. 13 See s 1. 14 See s 4(1) and the alternative according to whether a copy of the statement is left with the employer. The provision as a whole is curious given that the change should have been notified and/or agreed prior to its coming into effect. Again the Law is concerned only with documenting the terms of a contract of employment rather than making provisions governing the contract itself.
Employment Law 343 By section 6 the requirements of the 1985 Law do not apply during any period where the employee is engaged in work wholly or mainly outside Guernsey, unless the employee ordinarily works in Guernsey and the work outside the Island is for the same employer. Section 7 excludes the effect of the Law from certain categories of mariner and fishermen. Section 8 likewise excludes the employment of a husband by a wife or vice versa from the Law’s scope. The Law provides at section 10 for the enforcement of its provisions by reference to the Industrial Disputes Tribunal as governed by the Industrial Disputes and Conditions of Employment (Guernsey) Law 1993.15 This method of enforcement plainly proved to be inadequate, and accordingly the 1992 amendment Law inserted section 9A by which failure to comply with the 1985 requirements also became a criminal offence punishable by a fine not exceeding level 4 on the uniform scale. The Right to Receive a Statement of Pay The Conditions of Employment (Amendment) Law 1992 added section 3A to the 1985 Law, requiring an employer to provide employees with a statement of pay specifying: (a) the gross amount of remuneration payable to the employee for the material contractual period; (b) the amount of deductions; (c) the total of all deductions; (d) the net remuneration payable; and (e) the date on which the net amount is to be paid.16 The exception in the 1985 Law for husband and wife is extended to the section 3A obligation; although a further amendment disapplies the 1985 exception for all purposes if the parties are separated judicially. Failure to comply with the section 3A obligation is again an offence under section 9A. The Conditions of Employment (Amendment) (Guernsey) Law 1994 brought yet further enforcement provisions. By section 10A a person authorised by the Board of Industry may enter premises and investigate suspected breaches of the 1985 Law. The investigator may require any person on the premises to reply to questions and furnish information necessary for the purposes of investigating suspected non-compliance with the 1985 obligations. There is power also to seize documents. The Law makes it an offence, without reasonable excuse (the burden of 15 Which replaced the earlier 1947 Law. The tribunal appears to have been created to resolve rather larger scale industrial disputes between groups of employees and an employer. Awards of the tribunal must be incorporated into the material contracts of employment; the Law is likewise concerned with the recognition of conditions of employment. 16 Note the limited extent of these provisions compared to the more rigorous controls contained in the Wages Act 1986, now Part II of the Employment Rights Act 1996.
344 The Laws of Guernsey proof being on the accused), to fail to produce or furnish any information or document in accordance with any requirement. There are also standard offences concerning giving false statements and the like. By section 10A(10) it is expressly provided that “a statement made by a person in compliance with a requirement imposed under this section may be used in evidence against him”, which places the Law in conflict with article 6(1) of the Convention for the Protection of Human Rights and Fundamental Freedoms 1950. The only comfort is the qualification “without reasonable excuse” to the offence provision. The Human Rights Law would bolster powerfully any argument to the effect that reliance on the right against self-incrimination is a reasonable excuse.
STATUTORY RIGHTS: THE EMPLOYMENT PROTECTION (GUERNSEY) LAW 1998
A none too flattering history of the genesis of employment protection legislation in Guernsey was set out by the Bailiff in the opening pages of his judgment in the case of Milford v Seaward Marine Limited (2000) 1 December; his comments on the Board of Industry’s proposals to the States as set out in Article XIV of Billet d’État XI of 1995 (p 500) are stinging. Equally those self-same proposals have been influential in shaping the subsequent jurisprudence if only because of the inadequacies of the legislation itself.17 The Law came into force on 1 January 1999 and enacts a number of employment rights: the right to a period of notice, the conditional right to receive reasons for dismissal and the conditional right not to be dismissed unfairly. The Guernsey legislation appears to be based upon provisions of the Employment Rights Act 1996, notably Part X; the chief differences being that comparatively few of the ERA rights and remedies were taken into Guernsey law, and such as were adopted carry (for the most part) substantially lesser penalties for employers, certainly maximum penalties. It follows that where English provisions have been adopted English caselaw is likely to be influential, although not necessarily conclusive.18
17 The proposals called for a “non-adversarial and non-legalistic” method for resolving disputes over dismissals. This unrealistic ambition was doomed absolutely to fail as soon as the draftsman turned to English legislation as the model to adopt. 18 Note also how quickly English employment law moves; thus the Employment Bill received its 3rd reading in the House of Commons on 12 February 2002 and includes proposals for paternity and adoption leave as well as amendments to statutory maternity leave and pay together with various other amendments to the already much amended ERA 1996. It received Royal Assent in July 2002.
Employment Law 345 The Right to Receive Notice of Termination of Employment By section 1 of the 1998 Law an employee (or employer for that matter) is entitled to not less than one week’s notice to terminate the contract of employment if he or she has been employed continuously for between one month and two years; this entitlement increases to not less than two weeks’ notice if employed continuously for between two and five years, increasing further to not less than four weeks’ notice after five years continuous employment. The Law does not define continuous employment, an issue to which we return. Any express contractual term is subject to these minimum requirements, although an employee may waive his or her right to notice or accept a payment in lieu. The notice rights to not apply to contracts intended to last three months or less. Section 1(4) expressly preserves the common law right to treat the contract of employment as terminated forthwith and without notice where that right existed prior to the Law’s commencement; ie the right to dismiss summarily for gross misconduct,19 or the employee’s right to treat the employer as being in repudiatory breach of the employment contract, ie constructive dismissal. Section 1(5) provides that breach of the statutory notice provisions shall be deemed to be a breach of the employment contract and actionable as such. Curiously this is said to be “without prejudice to any other remedy of the parties”, which might suggest that the employee could claim damages for failure to give any expressly agreed contractual notice and failure to give the statutory notice period, although note the wording of section 1(2) which all but incorporates the statutory notice periods into contracts of employment. There are familiar exclusions of the provisions from employment during any period when the employee is engaged in work wholly or mainly outside Guernsey, save where the law of the employment contract is Guernsey law or the employee ordinarily works in Guernsey and the off-Island work is for the same employer. There is again an exclusion for mariners and fishermen. There is a special dispensation for liquidators of Guernsey companies, see section 1(7). The Right to Receive a Written Statement of Reasons for Dismissal An employee has a conditional right to be provided with a written statement giving particulars of the reasons for his or her dismissal. The statement must be provided within seven days of a request to that effect. The qualifying conditions are that the employee must have been “continuously employed” for a period of not less than two years ending on the “effective date of termination”. This is also the key qualifying condition for the right not to be dismissed unfairly.20 19
For summary dismissal generally see Halsbury ibid para 447 et seq. S 15(1), subject to the exceptions of 15(2). Note that the right does not apply to employment where the employee ordinarily works outside Guernsey, see s 2(6). 20
346 The Laws of Guernsey The Effective Date of Termination The effective date of termination is defined by section 5(4) & (5) as the following, according to the circumstances: (a) if the contract of employment is terminated by notice, the date on which that notice expires; (b) if the contract of employment is terminated without notice, the date on which the termination takes effect; (c) if the employment contract is for a fixed term and expires without being renewed, the date on which that term expires; (d) if the notice required by s.1 of the 1998 Law had been given and the employment would thereby have come to an end on a later date than by reference to (a), (b) or (c) the effective date of termination is deemed to be that later date. Continuously Employed More difficult is the meaning of “continuously employed”. This is not defined nor does the Law condescend to identify by whom the employee must have been employed, all this in a context where no general transfer of undertakings legislation was introduced alongside the 1998 Law.21 The issue was considered in the case of Garenne Group Limited v Falla (2002) 4 January, a decision of the Bailiff on appeal from the Adjudicator. The applicant had been employed by a company which formed a part of a group of companies which underwent a restructuring some nine months before her employment was terminated. She brought her claim against the successor company to the original employer. When the point was taken by the successor company that she had not been employed by it for two years she issued a second complaint against the first company, but this had not been allowed to proceed by the Board because it was (just) out of time.22 The Adjudicator found that her employment by the first company had not been terminated effectively and so she had been employed continuously for in excess of the qualifying period. The Bailiff again referred to the Board of Industry’s policy letter to the States at the time the legislation was proposed. He highlighted the intention to “give some balance to the relationship between employer and employee and in typical
21 Note however the Transfer of States Undertakings (Protection of Employment) (Guernsey) Law 2001 enacted in order to clarify the position of States employees in industries about to become commercialised. The Law was originally enacted for the benefit of telecommunications workers but was extended to employees of the Post Office Board and Electricity Board, see Ordinances XXV and XXVI 2001 and the amending ordinance XXVII 2001. Compare and contrast English law, see Halsbury ibid paras 387 et seq and 393 et seq. 22 The application was not renewed before an Adjudicator pursuant to s 17(3).
Employment Law 347 Guernsey fashion, address the issue of employment protection provisions in a unique manner”. He relied in particular on the following sentence: “In order to take advantage of these provisions an employee would have to have a minimum of two years continuous employment with the same employer or in the same job.”
He noted that the Law itself did not say “continuous employment with the same employer” and that the express power to legislate by way of Ordinance as to the meaning of “continuously employed” had not been used.23 He identified the Transfer of States Undertakings legislation but noted that this went far further than the protections of the 1998 Law. The employer sought to rely on various English authorities based on similar wording in English redundancy legislation. The Bailiff distinguished the English cases given the different legislative contexts and consequential burdens. Instead the Bailiff construed the Guernsey legislation in a way that: “. . . not only meets the clear intention of the policy letter . . . but in my judgment is the only fair way of interpreting the section to meet the purposes of the legislation”.
He added that to interpret the legislation in the way the employer proposed would be to “fly in the face of the expressed wish of the States”. Although the Bailiff did not spell out expressly the consequences of his decision it appears clear that an employee will qualify if he or she has been employed continuously for two years by the same employer or in the same job, regardless of the identity of the final employer.24 The uncertainty in the judgment concerns the fact that the Bailiff appeared to adopt the Adjudicator’s finding that there had been no change in employer at all, yet the claim was directed only against the successor entity. It follows that there is a missing link in the judgment which should perhaps be read subject to the further implicit finding that a successor who purports to stand in the shoes of the original (and technically subsisting) employer is also potentially liable in place of the original employer, presumably at the option of the employee. Here it was the successor employer which had purported to terminate the employee’s employment. Without this additional step the employee would find him or herself in a remedyless lacuna, which is plainly what the Bailiff was attempting to avoid. Notwithstanding the Bailiff ’s evident distaste for the appellant’s case the appellant sought leave to appeal from the Court of Appeal. Richard Southwell QC sitting as a single Judge of the Court of Appeal refused leave to appeal on essentially procedural grounds. He focused on the fact that the unfair dismissal régime was intended to be “less formal, less legalistic and speedier” than Royal Court litigation. He criticised the decision to take the question of continuous employment as a preliminary issue, holding that the entire case should have been determined on its 23
See s 34(4). Richard Southwell QC interpreted the Bailiff as meaning in the same group of companies, although this seems unduly narrow; see below. 24
348 The Laws of Guernsey merits all at once and any appeal then pursued. This was, in effect, what he directed by refusing “at this stage” leave to appeal. He implicitly criticised the decision not to extend time for the claimant’s second complaint against the first company and suggested that a second complaint out of time should now actively be considered again, alternatively an amendment to the existing proceedings to reflect the finding of the Adjudicator that the identity of the employer had not changed. The importance of the judgment lies in the clear message that claims for unfair dismissal are to be dealt with swiftly and cheaply on the merits and not the technicalities. It is noteworthy that the Bailiff ’s view of the Law was neither endorsed nor rejected, leaving matters uncertain. The fact that two procedural solutions were suggested indicates where the Court of Appeal’s sympathies perhaps lay. Hopefully the power to define the meaning of continuous employment legislatively will be used. The Garenne case itself was settled without the full Court of Appeal adjudicating. Dismissal A dismissal triggering the right to receive a statement of reasons is broadly defined at section 2(1). Constructive dismissal is not expressly included for obvious reasons.25 A woman who is either pregnant or on maternity leave when dismissed is entitled to be provided with a written statement of reasons for her dismissal regardless of the length of time she has been employed and without having to make a request. The written statement itself is admissible in evidence in any proceedings; not just proceedings under the 1998 Law. The Complaint Procedure If the employer fails to comply with the requirements of section 2 the employee may make a complaint to the Board of Industry pursuant to section 17 of the 1998 Law on the ground that the employer “unreasonably failed to provide a written statement . . . or that the particulars of reasons given in purported compliance . . . are inadequate or untrue”. Section 17 sets out the general requirements to be followed under the Law for making complaints and applies equally to complaints of unfair dismissal. The complaint must be made within a period of one month beginning with the effective date of termination26 or “within such further time as the Board may in its absolute discretion allow in a case where it is satisfied that it was not reasonably practicable for the complaint to be presented within the said period of one month”, see section 17(2)(b). If the Board does not extend time the complainant may require the 25 If the employee does not know the reasons for his constructive dismissal the allegation is unlikely to succeed. Note though that the definition of “dismissal” for the purposes of the Law generally at s 5 does include constructive dismissal. 26 As defined by s 5(4), see above. Under English law the period is 3 months.
Employment Law 349 Board to appoint an Adjudicator to determine whether the Board’s decision was reasonable. The Adjudicator’s decision is final either way. If the Adjudicator does extend time the complaint must be heard by another Adjudicator. A complaint may be brought before any notice period has in fact expired. The Board has power to require the complainant to supply such additional information and documents as it deems fit, it may also require verification of the information or documents. There is power for the Adjudicator to refuse to act on a complaint (the equivalent of striking out) if the complainant fails to follow any of the Board’s requirements as to information, documents or forms, or if the complaint appears to be frivolous or vexatious or if the complainant and employer have in fact settled the case either via the agency of the Industrial Disputes Officer or through some other legally binding agreement.27 The reference to an Industrial Disputes Officer relates to the requirement at section 18 that the Board use its best endeavours to settle the complaint by giving advice and assistance to the parties or through offering conciliation services. It is only after the failure of this conciliation process (which itself has a long-stop of six weeks) that an Adjudicator will be appointed. Any communication to the Industrial Disputes Officer is inadmissible before the Adjudicator, save with the consent of the communicating party. An agreement brokered by the Industrial Disputes Officer is enforceable as a judgment debt and carries judgment interest. The formal requirements for making and responding to a complaint under the 1998 Law are explained in two booklets: “Unfair Dismissal Employee’s Guide” and “Unfair Dismissal Employer’s Guide”. The employee makes his complaint on a form called EMPROT1 whereas the employer responds by the equally poetic EMPROT2. The schedule to the Law sets out the procedure to be followed on an adjudication of any dispute under the Law. Its provisions are unsurprising and largely follow the procedure a Judge sitting alone would follow in a civil trial. It is noteworthy that the strict rules of evidence do not apply. The Adjudicator may “admit any evidence given for the purposes of the hearing . . . notwithstanding any rule of law relating to hearsay or otherwise as to the admissibility of evidence”.28 The Adjudicator has the power at any time to require a party to supply further particulars in writing. There is no reason why a party should not ask the Adjudicator to give such a direction. The Adjudicator has broad powers to demand the production of documents and witnesses; he personally has power to call and examine persons on oath in a rôle akin to that of an examining magistrate. There is power also to authorise the issue of witness summonses at the request of a party, likewise to summon a person to produce documents. It is perhaps anticipated that the Adjudicator will take a more pro-active rôle where a complainant is unrepresented in order that a truer picture may emerge. It is expressly provided at paragraph 4 that the Adjudicator has the same power as the Royal Court concerning the 27
See s 17(7). Para 1(b), subject to the confidentiality provisions of s 18(3) as regards communications with the Industrial Disputes Officer at the conciliation stage. 28
350 The Laws of Guernsey attendance and examination of witnesses, the administration of oaths and affirmations together with the production of documents and exhibits. By paragraph 3 (as amended) the hearing may be in camera. It is provided that the Adjudicator may at any time exclude any person from the hearing or any part thereof. This is a little at odds with the express right at paragraph 1(c) for the parties to be present during any hearing when representations are made in person. In the case of Milford v Seaward Marine Ltd (2000) 1 December the Bailiff dealt firmly with an Adjudicator who had had casual conversations with one of the parties in the absence of the other holding that: “. . . I find it wholly unacceptable for these adjudication hearings to be conducted other than in accordance with the principles of natural justice, which apply in courts of law. Judges do not engage in private conversations with one party or other during the course of a hearing and neither . . . should Adjudicators.”
The Adjudicator must give his decision in writing. He will not give an extempore judgment. There is provision for the Board of Industry to prescribe more detailed rules of procedure, but this power has not been used. Subject to what express provision there is, the Adjudicator is free to adopt his own procedure. It is expressly provided that costs may be awarded “other than the costs of legal representation of any of the parties” which are irrecoverable. It follows that certain witness expenses or other pure disbursements are potentially recoverable.29 Again the costs award is recoverable as a civil debt and carries interest. It is an offence to make false statements, produce false information, fail to respect a summons, take the oath, produce a document when required to do so, or answer a question, or behave in such a way as would constitute a contempt before the Royal Court. The offence is punishable by a level 5 fine and/or imprisonment of up to three months. By section 27 the confidentiality of the proceedings is further reinforced by making it a criminal offence punishable by a level 5 fine to disclose (except with lawful excuse) any matter which came to the material person’s knowledge by being present before an Adjudicator when sitting in camera. Reference to the Royal Court of a Point of Law By section 24 the Adjudicator may refer a question of law to the Royal Court for determination. There is a right of appeal from the Royal Court to the Court of Appeal (with leave) on such a determination. There is a curious provision at section 29 whereby application can be made within one month of the date of the Adjudicator’s award for a decision upon any question as to the interpretation of the award.
29
See para 5(2) of the schedule for a less than clear definition.
Employment Law 351 Remedies for Failure to Give a Written Statement of Reasons If the Adjudicator upholds a complaint under section 17(1)(b), ie finds that there has been an unreasonable failure to provide a written statement of reasons for dismissal or that the particulars of reasons given in purported compliance are inadequate or untrue, the Adjudicator may make a declaration as to what he finds the employer’s (true) reasons were for dismissing the employee and shall make an award of either half a month’s pay or two weeks’ pay if the complainant had been paid weekly. Section 22(3) defines a month’s or week’s pay as the complainant’s average pay during the three months or thirteen weeks immediately prior to the effective date of termination. “Pay” is defined at section 34(1) as all gross wages or salary (including any commission payments) paid pursuant to the contract of employment, including overtime, shift and holiday pay and any other pecuniary benefit paid in cash. It is unclear whether pension contributions are included; it seems likely that any employee’s contribution would be included. The award is again recoverable as a judgment debt and carries interest. Preferred Debt An award of an Adjudicator qualifies as a preferred debt ranking equally with the four categories provided for in section 1(1)(b) of the Preferred Debts (Guernsey) Law 1983, as amended; ie wages and salary, accrued holiday pay, income tax and social security contributions.30 Appeal From the Adjudicator to the Royal Court A person aggrieved by a decision or award of an Adjudicator on a question of law (only) has a right of appeal to the Royal Court, see section 23(1). Mere procedural irregularities without more are insufficient to invalidate an award or decision. There is a further right of appeal on the point of law decided by the Royal Court to the Court of Appeal, but only with the leave of the Court of Appeal. There is, obviously, no right of appeal to the Royal Court from its own decision on a point of law referred to it under section 24. Again the route of appeal is to the Court of Appeal, with leave. The Right Not to be Dismissed Unfairly31 By section 3 of the 1998 the single most important right is conferred, the right not be dismissed unfairly by an employer. The right is again a conditional right. By section 4 the right applies to every employment except : 30 31
See s 29 of the 1998 Law and the section of this work concerning preferred debts. See generally Halsbury ibid paras 471 et seq.
352 The Laws of Guernsey (a) employment where under the contract of employment the employee ordinarily works outside Guernsey; (b) the employment is under a contract for a fixed term of two years or more32 and the dismissal arises only through effluxion of time without renewal of the contract and the employee has agreed in writing before expiry of the contract to exclude any claim in respect of the right not to be dismissed unfairly; (c) employment as the master or member of the crew of a fishing vessel where the employee is paid only by a share in the earnings of the vessel.33 Assuming that the employment is one to which the right prima facie applies it is a further requirement that the employee must also have been employed continuously for a qualifying period of two years ending with the effective date of termination, see section 15.34 The meaning of continuous employment and effective date of termination have already been considered in the context of the right to receive a written statement of reasons for dismissal.35 Again there are exceptions to the qualifying period requirement in order to protect employees who are particularly vulnerable. The requirement does not apply if it is shown36 that the principal reason for the dismissal, or for the selection of the employee for redundancy in a redundancy case, was either: (a) that the employee was pregnant; or (b) any other reason connected with her pregnancy; (unless at the effective date of employment termination she was or would have become incapable of doing the work she was employed to do adequately, or her continued employment would have led to a contravention of any duty or restriction imposed by Guernsey law upon the employer or employee);37 or (c) the employee was dismissed for carrying out health and safety at work duties whether on behalf of the employer or fellow workers, alternatively for having drawn attention to health and safety issues or otherwise responding to health and safety at work issues or dangers;38 or 32 If the employment is for a fixed term of less than two years there is prima facie no right not to be dismissed unfairly in any event, subject to the general exceptions to the qualifying period mentioned below. 33 There are again special provisions for seamen. It is also interesting to note more generally that there is no express exclusion of the right not to be dismissed unfairly where the effective date of termination of employment occurs after normal retirement age; contrast English employment law. Equally it may not be difficult to show that dismissal for this reason was fair. 34 Note that the qualifying period in England is prima facie only 1 year. 35 See above. 36 Implicitly by the employee, although note also s 6(1). If the employer proves a reason it will be for the employee, in practice, to establish a different “true” or principal reason if the employer’s alleged reason is challenged. If the reason proved by the employer is one of the reasons excluding the qualifying period requirement the dismissal will be unfair in any event. 37 See s 9. 38 S 11.
Employment Law 353 (d) the employee was dismissed for asserting or attempting to enforce a statutory right under the 1998 Law, the Conditions of Employment Law or the Industrial Disputes Law.39 Note in particular the generous exceptions to the general pregnancy reason which is curiously drafted and attached only to the “other reasons connected with her pregnancy” category.40 Assuming that the right applies to the employment the next requirement is that there should have been a dismissal. This is defined at section 5 of the Law and is near all-embracing save where the employee truly resigns willingly. An employee is therefore dismissed if: (a) his contract of employment is terminated by the employer, whether with or without notice; (b) a fixed term contract of employment comes to an end without being renewed;41 (c) the employee terminates the contract, with or without notice, in circumstances such that he is entitled to terminate the contract without notice by reason of the employer’s conduct. This last form of dismissal is known as constructive dismissal; the idea being that the employer has behaved in such a way towards the employee as in some sense to have forced the employee to leave his or her employment. Analysed strictly the conduct of the employer will amount to a repudiatory breach of the employment contract which the employee accepts via the termination. The termination is deemed a dismissal for the purposes of the legislation to provide a gateway to the unfair dismissal rights. It is for the employee to prove that there has been a constructive dismissal.42 Again one would look to English common law and the implied term that an employer “. . . will not, without reasonable and proper cause, conduct himself in a manner calculated as likely to destroy or seriously damage the relationship of confidence and trust between employer and employee”.43 Where an employer gives notice to an employee terminating his employment and the employee subsequently himself gives shorter notice to the employer, the employee is deemed to have been dismissed by the employer based on whatever reasons supported the original notice, again preserving the unfair dismissal rights.44 39
S 12. It will be interesting to see whether such a provision survives the horizontal effect of the Human Rights legislation. 41 But note s 4(1)(b) whereby a fixed term employment contract may exclude the unfair dismissal right based on simple effluxion of time. 42 See generally the case of Milford v Seaward Marine Ltd (2000) 1 December for a consideration of what conduct was capable of amounting to a dismissal, see p 8 of the judgment at D. 43 See Halsbury’s Laws of England vol 16 (2000 reissue) para 47 et seq. See the various examples set out there of conduct of employers which has previously been held to qualify for breach of this term. See also the case of Morrow v Safeway Stores Plc (2002) IRLR 9. 44 S 5(3). 40
354 The Laws of Guernsey Determining Whether the Dismissal is Unfair: Proving an Eligible Reason Assuming that the employment is one to which the right attaches and that the qualifying period has either been served or does not apply and that there has been a dismissal the issue then to be determined is whether the dismissal was unfair or not. Commonly the question of the fairness of the dismissal will be the only issue between the parties. Here the burden is upon the employer, certainly in the initial stages. By section 6(1) it is for the employer to prove the reason for the dismissal (or principal reason if more than one) and that the reason so proved fell within the fixed categories set out within section 6(2). Those categories are as follows: (a) a reason related to the capability or qualifications of the employee for the work he was employed to do: (b) a reason related to the employee’s conduct; (c) that the employee was redundant; (d) that the employee could not continue in the position he held without contravention either by the employee or the employer of a duty or restriction imposed by Guernsey law; (e) the reason was some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held. The section 6(2)(a) reason is tolerably clear; although perhaps factually more difficult to establish than the others. Essentially the complaint is that the employee was not up to the job.45 The section 6(2)(b) reason is concerned with misconduct and is comparatively straightforward.46 The section 6(2)(c) reason is more involved.47 Section 13 makes additional specific provision in this regard. Even if the employer shows that the reason for the dismissal was that an employee was redundant the dismissal will nevertheless be deemed unfair if it is shown that the circumstances constituting the redundancy applied equally to one or more other comparable employees who were not dismissed and that the reason for which the employee was selected for dismissal was an inadmissible reason, ie not a section 6(2) reason. Redundancy itself is defined at section 34(3). The section 6(2)(d) reason has a particular resonance in Guernsey given the provisions of the Housing (Control of Occupation) (Guernsey) Law 1994 and the Right to Work (Limitation and Proof) Law 1990.48 Section 6(2)(e) operates as a general sweeping up provision, the hallmark of which is the requirement that the reason be “substantial” and of a kind such as to “justify the dismissal” of the relevant employee.
45 46 47 48
See generally Halsbury ibid para 488. See ibid para 491. See ibid para 495 et seq. See ibid para 498.
Employment Law 355 If the employer fails to satisfy the requirements of section 6(1), ie prove both a reason and that the reason falls within section 6(2), the dismissal is necessarily unfair and there is no need to embark on any further investigation. Did the Employer Act Reasonably? If the employer has discharged the section 6(1) burden the next stage of the enquiry is provided for by section 6(3): “Where the employer has fulfilled the requirements of subs.(1), then, subject to the provisions of ss.8 to 14, the determination of the question whether the dismissal was fair or unfair, having regard to the reason shown by the employer, shall depend on whether in the circumstances (including the size and administrative resources of the employer’s undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee; and that question shall be determined in accordance with equity and the substantial merits of the case.”
If the reason or principal reason proves to have been one of the reasons specified by sections 8, 9, 11 or 12 the dismissal is conclusively deemed to have been unfair. Again the policy is to give protection to those perceived to be particularly vulnerable. Section 8 concerns dismissal for union membership and activities, as well as non-membership or refusal to become a union member;49 section 9 relates to dismissal on the grounds of pregnancy, with the curious provisos already noted; section 11 concerns dismissal for reasons connected with health and safety activism on the part of the employee; section 12 specifies dismissal related to an employee’s assertion of a statutory employment right, eg under the Conditions of Employment (Guernsey) Law 1985. By contrast section 10 provides that the dismissal of an employee shall be regarded as falling within section 6(2)(e) if arising because of the return to work of another employee absent either wholly or partly due to pregnancy or childbirth. It is a pre-condition that the employee should have been informed in writing that this would be so when first engaged by the employer. Note though that the dismissal is not deemed to be fair; only that it is a qualifying section 6(2) reason. It is perhaps implicit that the final barrier may not be hard for an employer to cross from this position. Assuming that the employer again clears the sections 8, 9, 11 and 12 hurdles the issue of fairness or unfairness is determined according to the section 6(3) provisions. In the case of Micropublishing Ltd t/a Hamilton Brooke v Solway (2001) 26 January the Bailiff held that the section 6(3) burden was neutral, citing Halsbury’s Laws of England in support.50 It follows that neither party bears an evidential burden under section 6(3). The Adjudicator must conduct a general assessment of the 49 This harks back to closed shops or the admittedly rare circumstance where an employer will look for union membership in order to facilitate collective bargaining. 50 See ibid para 484.
356 The Laws of Guernsey case, starting with the reason established by the employer for the dismissal. The Adjudicator must determine whether the employer acted reasonably in treating the established reason as a sufficient reason for dismissal. In making this assessment the Adjudicator must have regard to all the circumstances. The Adjudicator is expressly required to have regard to the size and administrative resources of the employer’s undertaking. It is implicit that the expectation of a small employer with limited resources will be lower proportionately to, say, the expectations of a multinational with thousands of employees world-wide. The Adjudicator is required to make his or her assessment “in accordance with equity and the substantial merits of the case”; fine words which add little. It is important to note carefully the true rôle of the Adjudicator. The adjudication is akin to a review of the conduct of the employer as opposed to deciding the merits of the employer’s actions themselves. It is not for the Adjudicator to substitute his or her own view of how the employee should or should not have been dealt with. The Adjudicator’s only proper concern is to determine the reasonableness of the employer’s actions in dismissing the employee for the reason proved by the employer. This point was made forcefully by the Court of Appeal of England and Wales in the case of The Post Office v John Foley & Ors [2001] 1 All ER 550 where the Court re-established orthodoxy in the face of challenge. As the headnote states, members of (English) employment tribunals: “. . . must not simply consider whether they personally think that the dismissal is fair and they must not substitute their decision (ie their subjective view) of what was the right course to adopt for that of the employer. Rather, their proper function is to determine whether the decision to dismiss the employee fell within the reasonable responses which a reasonable employer might have adopted.”
The Court of Appeal re-affirmed and approved the approach adopted in the earlier case of Iceland Frozen Foods Ltd v Jones [1983] ICR 17. Likewise the Court of Appeal upheld the approach to dismissal based on conduct established in British Home Stores Ltd v Burchell [1980] ICR 303: “The employer, not the tribunal, is the proper person to conduct the investigation into the alleged misconduct. The tribunal’s function is to decide whether that investigation was reasonable in the circumstances and whether the decision to dismiss, in the light of the results of that investigation, was a reasonable response.”
It follows that the Adjudicator is determining whether both the employer’s reason and response to that reason (ie ultimately the dismissal itself) fell within an imaginary band of reasonable responses which a reasonable employer would have been capable of; ie if a reasonable employer acting reasonably would or could have acted in the same way the complaint will fail. If the employer’s conduct fell outside of that (broad) band of reasonable responses the dismissal will be unfair. Note that the focus of the enquiry is the reasonableness of the employer, not the alleged injustice to the employee. Again matters are judged as they were known at the time
Employment Law 357 of the dismissal or of any workplace appeal procedure as opposed to subsequently.51
PROCEDURAL FAIRNESS
The issue of whether there has been procedural fairness is an integral part of the overall assessment of the reasonableness of the employer’s actions and the sufficiency of the reason(s) relied upon. If the procedure adopted by the employer was unfair it is likely that the dismissal resulting from the unfair procedure will also be deemed unfair. In English law this can be so even if the employer in fact had a perfectly sound reason for dismissing the employee; ie the fact that the employee could have been dismissed fairly in any event is by no means necessarily a defence to the allegation of unfair dismissal. Put another way, it may not matter that the chain of causation would or could have been broken. What Halsbury says is this: “A breach in procedure is merely one of the factors to be taken into account, but the House of Lords has placed renewed emphasis on procedural fairness so that it is likely that a breach of procedure will make a dismissal unfair; and the former rule that, if the breach of procedure in fact made no difference, then the actual dismissal could be held to have been fair has been disapproved. Ultimately, however, the overall fairness of the dismissal, including any procedural matters, remains a question of fact for the employment tribunal.”52
It follows that there is flexibility in the approach. In favour of the employee the procedural unfairness may render even an otherwise objectively justifiable dismissal unfair. In favour of the employer the circumstances may be such that a procedural failure is still insufficient to affect the overall fairness of the dismissal. It is a question of fact to be determined according to the circumstances of each case. There are, however, different considerations under the Guernsey model of these provisions. In the case of Polkey v AE Dayton Services [1987] 3 All ER 974 it was accepted that if the employee would shortly have been dismissed (fairly) in any event this might well limit the amount awarded; ie an adjustment could be made for the overall justice of the case by reducing the award. Of course this is based on the premise that there is a range of possible awards, whereas there is essentially a single fixed award for unfair dismissal in the 1998 Law amounting to three months gross wages or the weekly equivalent.53 It follows that a Guernsey Adjudicator would be justified in taking a different approach given the potential injustice of applying English jurisprudence to a different legislative framework. An 51
Which is not so for wrongful dismissal, see Halsbury ibid para 485. Ibid para 483. 53 Subject to what is said below. There is no equivalent to the potentially significant and fluid compensatory element of an English award for unfair dismissal. 52
358 The Laws of Guernsey Adjudicator may be slower to find an unfair dismissal where the only substantial unfairness is procedural.54
BOARD OF INDUSTRY ADVICE AND CODES OF PRACTICE
There is guidance as to what is expected of an employer both procedurally and substantively in the Board of Industry’s advisory booklet entitled “The Requirements of the Employment Protection (Guernsey) Law 1998”. By way of example, the booklet lists matters which an employer ought to consider before terminating an employee’s employment as follows: “(a) Would some form of disciplinary action be more appropriate? eg a verbal or written warning, suspension with or without pay (normally where an investigation is carried out due to an allegation made against an employee), movement to an alternative job within the Company?55 (b) if the Company has a grievance and/or disciplinary procedure, have all the procedures been followed? (c) if there is a Trade Union/Staff Association, have they been consulted and kept fully informed? (d) take into account previous loyalty and service; (e) has a disciplinary code of practice been followed prior to dismissal? (f) is the employee’s action “out of character”, ie is there a more serious underlying reason for their actions which may need counselling?”
There is a further booklet entitled simply “Discipline at Work”.56 Both booklets contain as an appendix the relevant Code of Procedure: “Disciplinary Practice and Procedures in Employment”. This was produced pursuant to the power at section 31 of the 1998 Law. Failure to comply with a code is not of itself determinative, however any Code of Practice is admissible in evidence and may be taken into account when determining the s.6(3) issues.57 It follows that any serious breach of a Code is more likely to result in a finding against the employer. The Disciplinary Practice and Procedures Code identifies in particular the perceived essential features of a proper disciplinary procedure; it should: “(a) be in writing; (b) be applied equally and consistently to all staff;58 54 See now also the case of J Sainsbury Ltd v Hitt (The Times 14 November 2002) where it was held by the English Court of Appeal that the range of reasonable responses test applied equally to whether the investigation was reasonable as it did to whether the decision to dismiss itself was reasonable. 55 Sic. 56 There is also a booklet concerning redundancy. See http://industry.guernsey.net/relalist.html for a list of the Board’s publications, a number of which can be accessed online. 57 See s 31(9). 58 An English case turning on this point was that of Noel v Leeds Western Health Authority (1990) ICR 585 where a hospital worker was dismissed for fighting when employees at another of the authority’s hospitals had not been.
Employment Law 359 (c) provide for matters to be dealt with quickly; (d) indicate the disciplinary actions which may be taken; (e) specify the levels of management which have the authority to take the various forms of disciplinary action, ensuring that immediate superiors do not normally have the power to dismiss without reference to senior management; (f) provide for individuals to be informed of the complaints against them and to be given an opportunity to state their case before decisions are reached; (g) give individuals the right to be accompanied by a trade union representative or by a fellow employee of their choice; (h) ensure that, except for gross misconduct, no employees are dismissed for a first breach of discipline; (i) ensure that disciplinary action is not taken until the case has been carefully investigated. Wherever possible, the person conducting the disciplinary hearing should not also conduct the investigation; (j) ensure that individuals are given an explanation for any penalty imposed; (k) provide a right of appeal and specify the procedure to be followed. Preferably, the appeal should be conducted by someone not involved in the original hearing.”
The need to make and keep records is also emphasised. Although the Code is necessarily concerned with conduct the basic principles of procedural fairness are of general application.
COMPENSATION FOR UNFAIR DISMISSAL 59
If the Adjudicator finds that the employee was unfairly dismissed he must make an award of compensation. The compensation is recoverable as a judgment debt and carries judgment interest until paid. See generally section 19. The amount of the compensation award is determined by sections 20 and 21. Subject to one exception, there is a fixed formula dictating the amount of compensation for unfair dismissal under the 1998 Law. The award is a sum equal either 59 Contrast the position under English law where a battery of different remedies is available, including interim relief, an order for reinstatement or re-engagement, additional penalties payable by the employer in default of compliance with such orders besides compensation which itself has two elements, a basic element calculated by reference to years’ service multiplied by weekly pay and a compensatory award calculated in a similar way to damages for wrongful dismissal but with a statutory limit of £52,600, see the Employment Rights (Increase of Limits) Order 2002. There are minima and maxima governing the basic award also. An English employee who has not been employed long and who has mitigated his loss may in fact recover less than a Guernsey employee. There are broader powers to reduce awards where the employee has contributed to his dismissal. It is often here that conduct which would have justified a fair dismissal is likely to be taken into account. Double recovery by way of compensation for unfair dismissal (the compensatory element) and damages for wrongful dismissal is not permitted. Note that pure wrongful dismissal claims may also be dealt with by an English employment tribunal, although the tribunal’s power to award damages is limited to £25,000. It follows that an employee in England is only likely to bring Court proceedings for wrongful dismissal where either he does not qualify to claim for unfair dismissal and/or where the employment tribunal’s statutory maxima are likely to be exceeded, ie the employee was very well remunerated and/or had a long notice period and/or long fixed term contract. Whatever small advantages there are in England no Guernsey employer in their right mind would swap employment law systems.
360 The Laws of Guernsey to three months or 13 weeks pay according to whether the employee was paid monthly or weekly.60 The amount of a month’s or a week’s pay is deemed to be the complainant’s average monthly or weekly pay during the three months or 13 weeks immediately preceding the effective date of termination. Pay is defined at section 34 as comprising: “. . . all wages or salary (whether or not earned wholly or in part by way of commission) paid to the employee in question pursuant to his contract of employment, including: (a) overtime rates, shift pay and holiday pay; and (b) any other pecuniary benefit paid to him in cash; in each case before the making of any deductions from the gross amounts payable, whether in respect of income tax or social insurance contributions or otherwise;”
This is a comprehensive definition and would include not only amounts which would otherwise have been deducted for income tax and social security but also employees’ pension contributions. The three months or 13 week entitlement is therefore calculated by reference to the highest figure possible. Note that the definition would exclude non-pecuniary benefits and employer’s pension contributions. The inflexibility of the award was plainly something that troubled the Bailiff in the case of Milford v Seaward Marine Limited given that the claimant had found replacement employment on better terms within days of his departure. The exception to this measure is found at section 21. Where the Adjudicator finds that: “. . . the complainant has unreasonably refused an offer by the employer which if accepted would have had the effect of reinstating the complainant in his employment in all respects as if he had not been dismissed, the Adjudicator shall reduce the amount of the award of compensation for unfair dismissal to such extent as he considers just and equitable having regard to that finding.”
It is unlikely that this exception will arise often in practice, given that it would require a complete recantation on the part of the employer in circumstances where the relationship between employer and employee had not already so soured as to make it unreasonable for the employee not to go back. Combining the Remedies If the circumstances so arise there seems no good reason why the employee should not combine complaints of a failure to give a written statement of reasons for dismissal and unfair dismissal itself. In Milford v Seaward Marine Limited the Bailiff noted that the complaints under section 17 appeared to be disjunctive but held nevertheless that he could: 60
S 20(1).
Employment Law 361 “. . . see no mischief in both limbs being invoked in the appropriate case.”
Alternatively, two separate complaints could be made and dealt with at the same time, if need be. Procedure on the Hearing of a Complaint of Unfair Dismissal The adjudication procedure is set out in the schedule to the 1998 Law and has already been considered in the context of complaints regarding the failure to supply written reasons for dismissal. In essence the powers of an Adjudicator are assimilated to those of a civil Judge deciding both issues of law and fact, albeit with power to refer a point of law to the Royal Court. There is again a right of appeal on a point of law to the Royal Court and from there, with leave, to the Court of Appeal, see section 23 of the 1998 Law.61 There are strict limits on the recoverability of costs before the Adjudicator, as opposed to before the Royal Court or Court of Appeal.
PRIVATE INTERNATIONAL LAW AND THE 1998 LAW
It is expressly provided by section 34(6) that it is immaterial for the purposes of the 1998 Law whether (apart from the 1998 Law) the law which governs a person’s employment is the law of Guernsey or not. It follows that if the Adjudicator has jurisdiction the 1998 Law will be applied regardless of the proper law of the employment contract.
PROPOSALS FOR REFORM
There are detailed proposals for reform in a paper entitled Review of the Working of the Employment Protection (Guernsey) Law 1998.62 In summary it is suggested that the qualifying period for an unfair dismissal complaint should be reduced to 1 year; the period for lodging a complaint should be increased to three months; a compensatory element should, where appropriate, supplement the basic award for unfair dismissal; a definition of continuous employment should be adopted as soon as possible; provision should be made for compromise agreements; the Adjudication Tribunal should be given power to hear civil claims for wrongful dismissal up to a limit of £25,000; a new panel of independent lay chairmen should be recruited to sit with two side members as a new adjudication tribunal; adjudication hearings should be tape recorded and full reasoned decisions given. What proposals go forward to become legislation remains to be seen. 61 62
See also the Employment Protection (Appeals and References) Order 1999. By Peter Syson.
362 The Laws of Guernsey
SUNDAY SHOP WORKING
The Employment Protection (Sunday Shop Working) (Guernsey) Law 2001 added a series of provisions (ss 15A–L) to the 1998 Law giving conditional protection to employees against being required to work on a Sunday. In defined circumstances employment contract terms requiring a person to work on a Sunday are unenforceable. Dismissal for refusing to work on a Sunday is unfair dismissal for the purposes of Part II of the 1998 Law. Detriment falling short of dismissal is potentially compensatable by an award of one month’s or four week’s pay, depending on how the complainant was paid.63
RESTRAINT OF TRADE AND THE PROTECTION OF CONFIDENTIAL INFORMATION
English principles would be applied when considering the enforcement of employee covenants against competing with a former employer, dealing with the former employer’s customers, soliciting the former employer’s customers, taking the employer’s employees or misusing an employer’s confidential information.64 A general indication of how employee covenant cases are likely to be dealt with in the Royal Court of Guernsey is the Jersey judgment R A Rossborough (Insurance Brokers) Limited v Boon & Anor. (2001) 25 July, 2001/157.65 An example of a Guernsey judgment concerning confidential information is the first judgment of Lieutenant Bailiff Catherine Newman QC in the Vardinoyannis v Ansol Limited litigation.66
63 Note the various consequential amendments to other provisions of the 1998 Law, notably the procedural provisions, see s.2 of the 2001 Law. 64 For a recent summary of English law relating to post-employment restrictive covenants see Daniel Barnett and Timothy George’s article in the New Law Journal vol 152 no 7059 pp 1849–1850 (6 December 2002). 65 The case concerned a contract which contained non-competition, non-dealing and nonsolicitation clauses. There was no allegation of misuse of confidential information. 66 The judgment is dated 31 July 2001.
17 Health and Safety at Work INTRODUCTION
D
ESPITE THE EFFORTS of the Guernsey Health and Safety Executive it is fair to say that a substantial proportion of Guernsey employers and employees pay insufficient attention to health and safety at work; yet every employer has a legal and moral duty to take reasonable care for the safety of its employees while every employee has a legal duty to take reasonable care for his or her own safety and the safety of fellow workers. It is not an overstatement to say that lives depend upon a responsible attitude to health and safety at work as well as livelihoods and quality of lives. The purpose of health and safety at work law is to compel employers and employees to take greater care over, or at least to respect a minimum standard of care for, safety in the workplace. Guernsey law relating to health and safety at work follows a pattern familiar from other areas of Bailiwick law in borrowing selectively and only periodically from English legislation whilst being influenced heavily by English common law, yet remaining distinct through its own génie.
SOURCES FOR GUERNSEY HEALTH AND SAFETY LAW
There are four main sources for Guernsey health and safety law:1 (a) (b) (c) (d)
English common law; Guernsey common law; English legislation; Guernsey legislation.
1 Unlike many other areas French law has little to contribute to Guernsey law in this context. French personal injury law has simply taken too many different turns, as anyone familiar with the peculiar notion of fait des choses will appreciate. This amounts to strict liability for the keeper of an object implicated in an accident; see Art 1384 Code Civil: “On est responsible non seulement du dommage que l’on cause par son propre fait, mais encore de celui qui est causé par le fait des personnes dont on doit répondre, ou des choses que l’on a sous sa garde”; which translates as, “A person is liable not only for damage caused by his own act but also for damage caused by the acts of people for whom he is answerable, or of things which that person has in his control”. Thus in the leading Arrêt du Remorqueur (literally “tugboat judgment”) a ship’s boiler blew up and killed a worker. It was held that the owner was liable without the necessity of proving any fault on the owner’s part. The same result might have been achieved by the English law notion of res ipsa loquitur, but fait des choses goes very much further. In French law there can be liability in circumstances where matters certainly do not speak for themselves. See further the chapter on Guernsey tort and contract law.
364 The Laws of Guernsey English Common Law English common or case law influences most areas of Guernsey tort law.2 Health and safety law is no exception. There is both a powerful indirect and direct effect. The indirect effect is illustrated by the leading English case of Wilson and Clyde Coal v English 3 where it was held by the House of Lords that the standard of an employer’s duty towards his employee is to see that reasonable care is taken. The scope of that duty was held to extend to the provision of safe fellow-employees, safe equipment, a safe place of work and access to it and a safe system of work. The case was also important for establishing the non-delegable nature of an employer’s duty to his employee. It is no coincidence that these duties form the core obligations of the English Health and Safety at Work Act 1974 and the single most important piece of Guernsey health and safety legislation, the Health and Safety at Work (General) (Guernsey) Ordinance 1987. The direct influence of English case law arises from the simple fact that not many personal injury cases, let alone personal injury cases with a health and safety at work context, reach trial in Guernsey. English cases are therefore very persuasive both as regards legal principle and how similar facts have been dealt with. Three examples of cases which would be influential in Guernsey on similar facts are as follows: In Parker v PFC Flooring Supplies Ltd [2001] EWCA Civ 1533 LTL 11 October 2001 the English Court of Appeal held that although an employee had known that it was dangerous to climb onto the roof of premises where he worked, the employer would be in breach of its common law duty of care where it failed to ensure the safety of its employees through lack of express direction or instruction. The case seems very generous to the claimant; but perhaps understandably so given that he was confined to a wheelchair as a result of the accident. Nevertheless contributory negligence of 50 per cent was found. In the case of Palmer v Marks & Spencer Plc [2001] EWCA Civ 1528 LTL 9 October 2001 the English Court of Appeal held that a weather strip fitted to a staff exit which caused a slight lip on the floor did not create a health and safety at work risk to persons passing over it. In the case of Witham v Hastings & Rother NHS Trust (2001) QBD LTL 16 November it was held at first instance that the defendant had failed properly to manage the claimant nurse’s return to work after post-natal depression. In particular it had failed in its duty to take reasonable care thereafter to inform itself about her physical and mental condition. Lost earnings based on a reduced grade with a multiplier of 7.5 were awarded together with damages of £17,500 for psychiatric damage and £7,500 for loss of status. Whether the Jurats would come to the same conclusions on similar facts to those of Parker and Witham will probably never be known, but these cases and thousands of others have their effect. 2 Ie the law relating to civil wrongs; from the French word tort, although the French would themselves refer, ironically, to the law of délits ie delicts. 3 [1938] AC 57, [1937] 3 All ER 628.
Health and Safety at Work 365 Guernsey Common Law The influence of Guernsey case law in this area is likewise both general and specific. Again one would look to Guernsey law’s single most important case, Morton v Paint.4 Here the Court of Appeal recognised that Guernsey common law was not static and opened the way for first instance Judges to develop Guernsey law in the absence of legislation by reference to developments in other jurisdictions and to what was appropriate for Guernsey. In Morton itself the problem had been Guernsey’s failure to enact a Law equivalent to the Occupiers’ Liability Act 1957 by which a duty of care was imposed on occupiers of premises to their visitors. The Court of Appeal circumvented the difficulty by holding that Guernsey common law had developed to incorporate a similar duty without the need for legislation. The scope for the application of the principles in Morton is almost endless; a particular example is the fact that in Alderney and Sark any contributory negligence on the part of a workman is still, on the face of it, a complete defence to the claim. If, say, a workman is just 10 per cent to blame for an accident he is prima facie prevented from recovering any damages at all. This obviously unfair state of the supposed common law was altered by statute in England in 1945 and in Guernsey in 1979,5 but unfortunately the legislation was not extended to Alderney or Sark. A defendant might argue that the common law position long since abandoned in England and Guernsey remains good law in those Islands.6 In fact no one seriously expects either the Court of Alderney, the Court of the Sénéschal, the Royal Court or the Court of Appeal to accept that this is the law. It would surely be held that Alderney and Sark common law have moved on without the need for legislation to effect reform, as in Morton. It follows that Guernsey common law can be expected to adapt to the circumstances of any given case, within reason.7 In any event it is not seriously doubted that in Guernsey common law an employer has duties equivalent to the English common law duties owed to employees (or anyone else affected by his activities qua employer); nor is it really disputed that the standard to be achieved would be equivalent to the English standard. It follows that there are common law duties concurrent with statutory duties of a very similar kind in the 1987 Ordinance. It will be rare that these concurrent common law duties make much practical difference save where, for whatever reason, the Ordinance does not apply. Again this serves to illustrate the influence of English common law.
4
Set out fully at [1996] 21 GLJ 61. See the Law Reform (Contributory Negligence) Act 1945 and s 1 of the Law Reform (Tort) (Guernsey) Law 1979. The 1979 Law is set out at Appendix 2. 6 Ie following cases such as Caswell v Powell Duffryn Collieries Ltd [1940] AC 152 where the House of Lords held unanimously, albeit obiter, that a plaintiff ’s contributory negligence provided the employer with a good defence to the claim. 7 With the exception of areas where common or customary law has become so hardened as to be immutable save by legislative interference. 5
366 The Laws of Guernsey English Legislation The effect of Modern English legislation is indirect. Guernsey health and safety legislation has been influenced strongly by equivalent English legislation in the past; thus much of the Health and Safety at Work (General) (Guernsey) Ordinance 1987 was copied from the Health and Safety at Work Act 1974. It is only the fact that there has been no very recent Guernsey health and safety legislation which conceals this. Certainly there has been a considerable flurry of regulation making in England as a result of EU directives; no less than six sets of regulations came into force on 1 January 1993 comprising the Management of Health and Safety at Work Regulations 1992 (since replaced by the Management of Health and Safety at Work Regulations 1999), the Provision and Use of Work Equipment Regulations 1992 (since replaced by the Provision and Use of Work Equipment Regulations 1998), the Workplace (Health, Safety and Welfare) Regulations 1992, the Personal Protective Equipment at Work Regulations 1992, the Manual Handling Operations Regulations 1992 and the Health and Safety (Display Screen Equipment) Regulations 1992. Arguably the sheer bulk and quantity of such regulations (and there have been plenty more since 1992) is itself a considerable danger to occupational health, certainly for those who have to read them. Obviously none of these regulations, nor any European Union health and safety directives or regulations derived from them have any application in Guernsey, certainly no direct application. If and when there is a further round of health and safety legislation in Guernsey it is inevitable that existing English regulations will be influential. Even without being incorporated formally into Guernsey law English legislation has an effect through setting some kind of benchmark for good working practices in Guernsey and the standard of care required before an employer’s common law duty is likely to be deemed discharged. This is quite subtle in that the more precise the English legal requirement, the less likely it is that a Guernsey Court would adopt it as the required standard for Guernsey common law. By contrast a Guernsey Court might well be persuaded that a Guernsey employer should carry out the equivalent of a risk assessment under the manual handling regulations. Guernsey Legislation Guernsey legislation itself is the single most important source of Guernsey health and safety law. Some of that legislation is a little out-dated but still in force8 and effective nonetheless. We consider briefly each piece of post-1945 legislation.9
8 Subject to repeals of various sections by the 1987 Ordinance, chiefly in order to harmonise notification and investigation procedures. 9 There is pre-war legislation protecting women and children.
Health and Safety at Work 367
THE HEALTH, SAFETY AND WELFARE OF EMPLOYEES LAW 1950
This Order in Council is the enabling legislation which led to each of the subsequent ordinances relating to health and safety at work up to the 1979 enabling Law. THE SAFETY OF EMPLOYEES (MISCELLANEOUS PROVISIONS) ORDINANCE 1952
This Ordinance provides for aspects of working safety in factories (see s 77), docks, wharves, quays and warehouses (s 23) as well as building operations (s 27). Part I makes provision for the fencing of flywheels and transmission machinery. The legislation shows its age at various points by requiring certain forms of dangerous work to be carried out only by “male persons who have attained the age of eighteen” (eg s 4 and the lubrication of moving machinery). Other areas dealt with include hoists, lifts, chains, ropes and lifting tackle; safe means of access to and place of employment, fumes, explosive vapour and steam boilers. Part II makes provision for eye protection in certain processes, amongst other matters. Part III regulates scaffolds, working platforms, boards, ladders, step-ladders, roof work, excavations, and demolition. A common feature of all Guernsey health and safety legislation is the balancing of the duty of the employer with the duty of the employee (see for example s 72 of this Ordinance). THE QUARRIES (SAFETY) ORDINANCE 1954
This Ordinance contains provisions similar to the 1952 Ordinance but tailored to quarries. Thus there are provisions governing machinery safety, means of access, ladders, lifting machinery and eye protection as well as specific rules governing aerial cableways and explosives. Again there is what appears now to be the rather quaint provision that only a competent male may either fire a shot or search for an unexploded charge where a second shot has been fired near a missed-fire shot (see ss.33 and 39). Doubtless there will be calls to amend this legislation to give female quarry workers their equal human right to be blown to smithereens if something goes wrong. More disturbing is the provision at s.28(2) whereby a person is prohibited from using his (or her) teeth for the purpose of making or securing the attachment of a fuse to a detonator. THE SAFETY OF EMPLOYEES (FIRST-AID AND WELFARE) ORDINANCE 1954
This Ordinance requires first-aid boxes or cupboards to be provided and maintained at every factory, quarry and growing property and specifies their minimum
368 The Laws of Guernsey contents. The Ordinance also allows certain industrial processes to be prescribed which in turn triggers an obligation for the employer to provide suitable washing facilities.
THE SAFETY OF EMPLOYEES (GROWING PROPERTIES) ORDINANCE 1954
This Ordinance again contains similar general provisions to those seen in the 1952 and 1954 (quarry) Ordinances with additional provisions specific to the growing industry. Thus there are provisions governing the cleaning of grading machines, the fencing of boiler pits, works to the roofs of greenhouses, the maintenance of top pegs, the use of poisonous substances, and the provision of protective clothing, (complete with helpful definitions of what is meant by a rubber apron, rubber boots, rubber coat, and rubber gloves and a sou’wester—the resulting mental image of a person thus protectively equipped is unhelpful). There are restrictions placed on the employment of those under 18 for certain forms of more dangerous work. There are specific requirements for the benefit of those working with poisonous substances. It is a particular requirement that a so-called protected worker shall not “blow, suck or apply his mouth” to any jet, sprinkler, nozzle or other spraying apparatus “which contains or has contained a poisonous substance, whether for the purpose of removing any obstruction or otherwise”; what the “otherwise” refers to is not altogether clear. It is again a common feature of these Ordinances that registers be kept for the purpose of recording certain categories of information relevant to the issues addressed by the legislation.
THE SAFETY OF EMPLOYEES (ELECTRICITY) ORDINANCE 1956
This Ordinance makes specific provision for the health and safety of those working with electricity and is of broad application (see ss 2(2) and 3(1)). Detailed provision is made for conductors, lines, sub-stations, circuit-breakers, fuses, electrical motors and the like.
THE SAFETY OF EMPLOYEES (WOODWORKING MACHINERY) ORDINANCE 1959
Again the familiar pattern is followed. In addition to general provisions a number of specific provisions are included concerning the safe use of woodworking machinery. Noteworthy provisions concern requirements as to lighting and temperature as well as training.
Health and Safety at Work 369
THE SAFETY OF EMPLOYEES (IONISING RADIATIONS) (GUERNSEY) ORDINANCE 1967
This brief Ordinance requires an employer to give at least one month’s notice of his intention to carry on work for the first time involving possible exposure to ionising radiation, likewise of the installation of equipment capable of producing ionising radiation. This includes electromagnetic radiation such as x-rays and gamma ray protons as well as corpuscular radiation in the form of positrons and heavy particles.
THE SAFETY OF PITS ORDINANCE 1973
This even briefer Ordinance requires pits either to be filled in, covered or fenced in such a manner as to prevent a person from accidentally falling in. The word “pit” is quite narrowly defined as “any boiler pit, oil catchment pit, water-cistern or well” whether in use or not and whether derelict or not.
THE HEALTH AND SAFETY AT WORK ETC. (GUERNSEY) LAW 1979
This is again an enabling Order in Council conferring greater Ordinance making powers than the 1950 Law.
THE HEALTH AND SAFETY AT WORK (GENERAL) (GUERNSEY) ORDINANCE 1987
This Ordinance is 71 pages long and is by far the most important piece of Guernsey health and safety legislation. Every employer should make him or herself familiar with its provisions, and ideally every employee also. Part I of the Ordinance sets out the general duties of the employer, the selfemployed and employees. Essentially it is a codification of English common law duties via the Health and Safety Act 1974. Sections 1(1) and (2) are so important that they are worth relating in full: “1 (1) It shall be the duty of every employer to ensure, so far as is reasonably practicable, the health, safety and welfare at work of all his employees. (2) Without prejudice to the generality of an employer’s duty under sub-section (1) above, the matters to which that duty extends include in particular— (a) the provision and maintenance of plant and systems of work that are, so far as is reasonably practicable, safe and without risks to health;
370 The Laws of Guernsey (b) arrangements for ensuring, so far as is reasonably practicable, safety and absence of risks to health, in connection with the use, handling,10 storage and transport of articles and substances; (c) the provision of such information, instruction, training and supervision as is necessary to ensure, so far as is reasonably practicable, the health and safety at work of his employees; (d) so far as is reasonably practicable as regards any place of work under the employer’s control,11 the maintenance of it in a condition that is safe and without risks to health and the provision and maintenance of means of access to and egress from it that are safe and without such risks; (e) the provision and maintenance of a working environment for his employees that is, so far as is reasonably practicable, safe, without risks to health, and adequate as regards facilities and arrangements for their welfare at work.”
By section 1(3) every employer of five or more persons, or less than five for certain types of employment, must produce a written general health and safety policy setting out also the organisation and arrangements in force for carrying out that policy. Section 2 contains important provisions imposing duties on employers and the self-employed in relation to third parties generally.12 The obligation is to conduct their undertakings in such a way as to ensure, so far as is reasonably practicable, that persons affected by their activities are not exposed to risks to their health or safety. This section has public liability implications, although in reality it probably adds little to common law duties.13 See also section 3 for what amounts to occupiers’ liability towards non-employees in respect of non-domestic premises; for example the occupier of an office would owe a duty under this section to a cleaner employed by a cleaning company to clean the office. The duty is to take such measures as “it is reasonable for a person in his position to take to ensure . . . that the premises, all means of access thereto or egress therefrom . . . and any plant or substance in the premises or . . . provided for use there, is or are safe and without risks to health”. This requirement may come as a surprise and is likely to be relied upon where the immediate employer was uninsured or where the injury causing thing was within the control of the occupier rather than the employer. Both sections would also apply in favour of independent contractors. Section 4 concerns harmful emissions into the atmosphere. Section 5 makes important provision governing the safety of articles for use at work, imposing duties on “any person who designs, manufactures, imports or supplies” such articles. The obligations are to ensure (so far as is reasonably practicable) that an article is so designed and constructed that it will be safe in use, to carry out testing and examination for that purpose, to provide information about use of the article and to provide updating information when revisions are made. This adds considerably 10 11 12 13
Thus potentially importing the equivalent of the manual handling operations regulations. Note the requirement only that the place of work be under the employer’s control. As opposed to employees who are already specifically protected. In the same way that occupiers’ liability adds nothing to employers’ liability.
Health and Safety at Work 371 to the potential remedies of an injured worker or even third party.14 There are similar provisions governing substances. There are specific provisions for fairground equipment. Section 6 imposes a positive duty on every employee while at work: (a) to take reasonable care for the health and safety of himself and of other persons who may be affected by his acts or omissions at work; and (b) as regards any duty or requirement imposed on his employer or any other person by or under any of the relevant statutory provisions, to co-operate with him so far as is necessary to enable that duty or requirement to be performed or complied with. Section 9 requires employers to notify (the Health and Safety Executive) immediately of injuries of a specified degree of seriousness, as well as certain illnesses and dangerous occurrences (as defined, see schedule 2; these include the collapse of scaffolding, lifting machinery or a building and an explosion or fire, amongst others). A report must be sent within 7 days to (the Health and Safety Executive). Section 10 requires records to be kept of events which must be reported. The particulars to be included are set out at Part I (II and III) of schedule I. Part III of the Ordinance makes detailed provision for the appointment of inspectors, the powers of inspectors and enforcement of the Ordinance generally; in particular the power to issue improvement and prohibition notices, (ss 18 and 19, see also the appeal provisions at s 21). Part IV contains provisions as to offences. It is a feature of all the health and safety ordinances that breach of their requirements is a criminal offence. Note in particular that by section 25 it is an offence for a person to fail to discharge a duty to which he is subject by virtue of sections 1 to 6 of the Ordinance. Furthermore, by section 28: “In any proceedings for an offence under any of the relevant statutory provisions consisting of a failure to comply with a duty or requirement to do something so far as is practicable or so far as is reasonably practicable, or to use the best practicable means to do something, it shall be for the accused to prove (as the case may be) that it was not practicable or not reasonably practicable to do more than was in fact done to satisfy the duty or requirement, or that there was no better practicable means than was in fact used to satisfy the duty or requirement.”15
Breach of the 1987 Ordinance can be dealt with either in the Magistrate’s Court or by trial on indictment before the Royal Court where there is a potential penalty of 14 Compare and contrast generally the Employers’ Liability (Defective Equipment) Act 1969 and the case-law it generated. 15 As to the human rights compatability of the equivalent provision in the Health and Safety at Work Act 1974 see Davies v Health & Safety Executive [2002] EWCA Crim 2949; as to the strictness of liability see R v Gateway Foodmarkets Ltd [1997] 3 All ER 78. It is likely that both cases would be followed by a Guernsey Court.
372 The Laws of Guernsey an unlimited fine.16 Note in particular that an employee acting in breach of his section 6 obligation is also guilty of an offence and potentially liable to prosecution. A sentence of imprisonment is available where a prohibition or improvement notice has not been complied with. Section 27 is again worth setting out in full: “Where an offence under any of the relevant statutory provisions committed by a body corporate is proved to have been committed with the consent or connivance of, or to have been attributable to any neglect on the part of, any director, manager, secretary or other similar officer of the body corporate or a person purporting to act in any such capacity, he as well as the body corporate shall be guilty of that offence and shall be liable to be proceeded against and punished accordingly.”
It follows that directors and managers cannot avoid personal criminal responsibility merely because they are not themselves the employer. Note also how broadly “relevant statutory provisions” is defined in the interpretation section.17 It includes essentially all of Guernsey’s health and safety legislation. Civil Liability By section 32 of the 1987 Ordinance breach of a duty imposed by any of the relevant statutory provisions (which, as noted above, is all of them) shall, so far as it causes damage, be actionable except in so far as those provisions may otherwise provide. The net effect of this is to provide an employee (and theoretically an employer) with a civil cause of action based on any breach of the legislation considered above, subject to causation being established, ie the breach must be shown by the employee to have caused the damage complained of. The 1987 Ordinance accordingly provides very powerful causes of action, arguably approaching near strict liability, subject to contributory negligence. By contrast, it is noteworthy that a right of action is excluded for breach of the general duties under the 1974 Act. Codes of Practice Section 13 of the 1987 Ordinance provides for the adoption by the Board of Industry of codes of practice concerning any relevant statutory provision. Breach of a code does not lead to civil or criminal liability of its own but does have a powerful evidential value.18 In July 1996 the Board of Industry produced an approved code of practice called the Organisation & Management of Health and Safety in Construction. It is a reasonably comprehensive and detailed statement of the requirements for safety in construction and building work and is essential reading for anyone connected with the Guernsey building industry. Codes of practice have also been issued for work with ionising radiation, commercial diving, scallop diving and diving instruction carried on by an employee. 16 17 18
In England such fines can be very substantial indeed where the circumstances so warrant. S 35. Material breaches of a code would also be relied upon as particulars of negligence in a pleading.
Health and Safety at Work 373 Dangerous Substances In addition to the general provisions of the health and safety Ordinances there are specific laws and regulations governing poisonous substances, petroleum and explosives. These comprise chiefly the Control of Poisonous Substances Regulations 1995 (made pursuant to the Poisonous Substances (Guernsey) Law 1994), the Loi relative aux Huiles ou Essence Minérales ou autres substances de la même nature 1924 and the Explosives (Guernsey) Law 1905. Each regulates the lawful use of these substances and provides for a system of licensing or accredited competency as a precondition to lawfulness.
EMPLOYERS LIABILITY (COMPULSORY INSURANCE) (GUERNSEY) LAW 1993
It is a compulsory requirement that an employer insure and maintain insurance under an approved policy with an authorised insurer against liability for bodily injury or disease sustained by his employees arising out of and in the course of their employment. Failure to do so is a criminal offence. There are very limited exemptions which it would probably not be prudent to take advantage of in any event. If there is civil liability the employer will find him or herself liable to pay damages out of their own assets to the extent that they either have no insurance or inadequate insurance. It is a criminal offence not to comply with the Law’s requirements.
SUMMARY
Guernsey health and safety law is not so specific or voluminous as its English counterpart. Nevertheless it reaches all areas of work through the general nature of its provisions. Breach of those provisions can lead to both criminal and civil liability. The obligations affect not only employers but employees and the self-employed. There is scope for reform of the existing legislation without adopting wholesale the costly and burdensome law now in force in England. An Ordinance addressing health and safety at work issues in the financial services industries is perhaps overdue.
18 Civil Courts and Procedure INTRODUCTION
P
ERHAPS MORE THAN any other area of law Guernsey civil procedure at first appears familiar, even an old friend, but proves on closer examination to be quite alien. The chief source for Guernsey rules of procedure is the Royal Court Civil Rules 1989 (“RCCR”), the first codification of Guernsey procedural rules in modern times.1 The RCCR were very largely taken from the English Rules of the Supreme Court. Those rules have since been superseded in England by the Civil Procedure Rules 1998 (“CPR”) leaving Guernsey in something of a jurisprudential quandary. Given the fresh start made by English jurisprudence it is difficult for Guernsey to adopt at face value English case law even where CPR provisions are very similar to their RSC precursors. The Guernsey Court still looks principally, at least as a starting point, to the 1999 White Book and last cumulative supplement before the April 1999 revolution in English civil procedure. Of course the RSC and English jurisprudence derived from it does not bind the Guernsey Court any more than English common law; it is however very persuasive. Note however that it is common for RCCR provisions not to have been copied exactly, there may be changes with potentially significant consequences. In any event the RCCR represents only a very slender filet of the RSC. Where there are gaps in Guernsey civil procedure one might look to the RSC to supply the answer, or else the Court might determine that there is no equivalent or else a customary solution might be found. There is often consensus between parties as to the proper course to adopt and the Court will rarely interfere. New custom soon emerges and is repeated and established. Again it is in procedural law where one can see the quickest evolution of custom. The difficulty with the RCCR is that old Guernsey procedure is interwoven into the RSC provisions; it is this mixture and the practical result which is so unfamiliar. What is striking is how much Court business is actually done in Court as 1 Set out at Appendix 1. The qualification is because of the publication of various “styles” setting out the procedure in Norman Courts under customary law; for example “L’Ancien Style” composed between 1386 and 1390 was followed by “Instructions et Ensaignemens”, a manual written for the instruction of Judges, and the “Nouveau Style” (1457) found in the work of Le Rouillé (1539). There was also a “Style de 1515”, the product of an arrêt de réglement (the close equivalent of an Order of the Royal Court) of the Parlement du Rouen (itself a Court rather than a Parliament as we would know it, and the successor of the Norman Échiquier, the common ascendant of English and Channel Island Courts and the present-day English Exchequer or HM Treasury). In Guernsey there was Josué Le Marchant’s Ébauche du Style de Procéder published in 1804 but dating from the mid-18th century.
376 The Laws of Guernsey opposed to on paper, starting with the first appearance, which is either in person or by Counsel as opposed to returning a written form indicating whether the claim is defended or not. The next stage is equally unfamiliar; a defendant must be summonsed again in order to extract his pleaded defence. The defendant then has a generous opportunity to raise a request for further and better particulars. There are no automatic directions nor any custom of giving standard directions as a matter of course in the average case. Litigation generally lasts much longer than in England although, ironically, there is a system of automatic striking out which is particularly dangerous, especially after limitation (prescription) has gone. Guernsey civil procedure can, as a consequence, be very frustrating. It is difficult sometimes to progress a case. There are many opportunities for a difficult opponent to obstruct a case. The Courts have historically been too kind to the Guernsey Advocate. However, matters do not stand still. The Court is becoming less indulgent and more insistent that litigation be progressed and Court time not wasted. It seems inevitable that active case management and the imposition of standard directions becomes the norm; likewise a much greater insistence that Court time be used efficiently. Certainly one would not look for wholesale revolution in Guernsey procedure. One of the great advantages of Guernsey law is the time taken to consider whether measures adopted in another jurisdiction are actually for the better. The jury remains, to some extent, out on the merits of the CPR. The solution for Guernsey might well be to update its rules in the light of the more attractive English reforms to produce a body of rules that combines the best of both worlds and means that current English jurisprudence remains relevant. A good example would be summary judgment. It is an obviously sensible reform to permit a defendant to seek summary judgment; likewise the CPR payment in regime has a great deal of merit. There are various omissions from the RCCR which could be made good easily; for example provision for notices to admit documents and facts or else permitting interim payments to be ordered. One of the chief difficulties facing the Guernsey practitioner is that of researching Guernsey law. There are no official law reports to date, although a legal information website is anticipated. The excellent Guernsey Law Journal is some years behind. Because of the comparative paucity of Guernsey jurisprudence there is inevitably greater uncertainty as to the outcome on any given Guernsey law issue. A high proportion of all reasoned judgments are making new law of some kind. Another difficulty is the fact that Guernsey procedural law continues to include a strict rule against the admissibility of hearsay evidence. This causes considerable practical problems, not least with expert evidence. The overseas lawyer instructing Guernsey Advocates must bear all these factors in mind, together with the comparatively low rate of recoverable costs in the event of success, currently £167 per hour on a standard basis. Note also that the ability to recover an overseas lawyer’s own fees in Guernsey proceedings is likely to be very restricted, save where truly specialist advice and assistance has been required.
Civil Courts and Procedure 377 There are nevertheless very positive aspects to Guernsey litigation. The Court goes to great lengths to accommodate requests for assistance, particularly with injunction applications and return dates. Because any Guernsey litigation Advocate will know his or her opponent there is also the opportunity for negotiation and discussion which might not present itself so readily in a larger jurisdiction. There is a degree of flexibility between Court and Bar that is unknown in England. The Court knows the Advocates that appear before it and vice versa; a mutual understanding and respect evolves and is maintained, or else is lost at the peril of the Advocate. Guernsey is investing considerably in its Court infrastructure; it is also likely that a Law Commission will soon be established. There is an appetite for the reform and evolution of civil procedure generally. It is particularly striking that when Guernsey has turned its mind to original solutions these have generally worked very well.2 It seems much more likely than ever that matters will be addressed satisfactorily.3 Indeed, at the time of writing there are now active proposals to introduce case management along English lines, automatic directions, summary assessment of interlocutory costs, interim payment orders, a re-vamped system of pre-trial offer-making akin to the provisions of CPR pt 36 and a more active promotion of alternative dispute resolution.4 It is also possible that civil trials will be permitted to take place without Jurats if the parties so elect jointly.
SOURCES OF BAILIWICK PROCEDURAL LAW
There are various sources for the law governing Bailiwick Courts and their procedure. Orders in Council established the modern Guernsey Magistrate’s Court and Juvenile Court as well as the Court of Alderney and the Guernsey Court of Appeal. By contrast other Orders in Council merely reformed various aspects of jurisdiction and procedure in the Royal Court and the Court of the Sénéschal. Examples of the first category of Laws include the Magistrate’s Court (Guernsey) Law 1954 and the Government of Alderney Law 1987. Examples of the latter include the Royal Court of Guernsey (Miscellaneous Reform Provisions) Law 1950 and the Reform (Sark) Law 1951. Areas such as prescription5 are also the subject of Orders
2 See in particular the Ordonnance donnant Pouvoir à la Cour de Réduire les Intérêts Excessifs of 6 December 1930 at Tome VIII p 98 which achieves in 2 pages what the Consumer Credit Act 1974 struggles to do in 174. See also Guernsey landlord and tenant legislation, discussed below. 3 See an article by Tim Hanson,“Justice in our Time: The Problem of Legislative Inaction” Jersey Law Review, February 2002 for a critical review of similar matters in another island. 4 Note that there already exists arbitration legislation, albeit somewhat out-dated; see the Arbitration (Guernsey) Law 1982, as amended by the Arbitration (Amendment) (Guernsey) Law 1986. These laws are based on now superseded English legislation. 5 Prescription performs the same function in Guernsey law as does limitation in English law; save that prescription forms a part of substantive law as opposed to merely procedural law.
378 The Laws of Guernsey in Council, see for example the Loi Relative aux Prescriptions 1889 and provisions of the Law Reform (Tort) (Guernsey) Law 1979. Ordonnances are another source for Guernsey procedural law. These mostly date from the nineteenth and early twentieth centuries. One of the difficulties of Guernsey procedural law is to know of the existence of these Ordonnances, let alone their meaning. The modern equivalent of procedural Ordonnances are Orders of the Royal Court.6 These include not only the Royal Court Civil Rules themselves but also other important procedural provisions such as the Royal Court (Discovery of Documents) Rules 1998 and the Employment Protection (Appeals and References) Order 1999. Older and less well known provisions include the Royal Court (Despatch of Business) Order 1982 permitting the Royal Court and Ordinary Court to sit at the same time and for the Ordinary Court to sit in two or more divisions. The RCCR is the single most important source for day to day procedure in the Royal Court. Royal Court (and some Magistrate’s Court) procedure is also to be found in the Practice Directions issued from time to time by the Royal Court. These have a status approaching law and govern matters as disparate as the mode of address to the Bailiff and Jurats7 and the making of interlocutory applications. Guernsey case law is both a source of procedural law proper and helpful as a means of illustrating the steps in fact followed to achieve any given purpose. Older academic writings are a less common source of Guernsey procedural law. For example, to the extent that absentee proceedings survive in modern Guernsey procedural law, Gallienne is a primary source. His work remains relevant for saisie procedure. There is also what may be called procedural coutume8 ie the largely oral tradition of how one goes about Court business which is passed on between generations of members of the Royal Court, Greffiers, Deputy Greffiers, Advocates and Advocates’ Clerks. As noted already the 1999 edition of the White Book is extremely influential given that the Rules of the Supreme Court was the source of the Royal Court Civil Rules, likewise English procedural case law up to the bringing into force of the Civil Procedure Rules. The extent to which post-CPR case-law is influential depends upon the extent to which it is based on new CPR provisions or new interpretations of old RSC provisions incorporated into the CPR as opposed to representing a true continuation of RSC case-law. It is only the last which is unambiguously an influential source for Guernsey procedural law. Where Guernsey civil procedure is still customary or French law-leaning one would look to sources such as Laurent Carey’s Essai sur les Institutions, Lois et 6 Which, properly understood, are also ordonnances. The ancient power of the Royal Court to legislate was preserved but essentially confined to Court procedure by post-war constitutional reforms; see s 64(1)(b) of the Reform (Guernsey) Law 1948 . It is very important to note this primary legislative power and the scope for its potential future use for the purpose of reform. 7 Mr Bailiff, Madam and Gentlemen, see Practice Direction No 5 of 1985. 8 For Madame Musset, late of Caen University, coutume was “un usage qui naît spontanément et trouve sa force obligatoire dans sa répétition avec l’approbation tacite du groupe social où il est né”, ie a usage arising spontaneously becoming compulsory through repetition and the tacit approval of the social group where it originated.
Civil Courts and Procedure 379 Coûtumes de l’île de Guernesey, Josué Le Marchant’s Ébauche du Style de Procéder Devant la Cour Royale de l’île de Guernesey and again Gallienne’s Traité de la Renonciation par Loi Outrée et de la Garantie.9 Likewise one would or could look to Pothier, whose Traité de la Procédure Civile is of considerable potential use, together with its modern French equivalent, the Nouveau Code de Procédure Civile.10 BAILIWICK COURTS AND THEIR CIVIL JURISDICTION
The Civil Jurisdiction of the Magistrate’s Court The Guernsey Magistrate’s Court has jurisdiction to hear and determine any civil action for the recovery of debt or damages, whether in contract or tort, if the amount claimed does not exceed £2,500, see section 12 of the Magistrate’s Court (Guernsey) Law 1954, as amended.11 The procedure governing the exercise of this jurisdiction is set out in a 1932 Ordonnance entitled Ordonnance Réglant la Procédure à Suivre devant la Cour Supplémentaire de Police Correctionnelle et Pour le Recouvrement de Menues Dettes12 of 18 January 1932, Recueil d’Ordonnances Tome VI page 171. By article 1 the claimant must supply the necessary details of the parties and the debt to the Sergeant so that the summons may be prepared, alternatively the Advocate will prepare the summons for the Sergeant to serve. Two clear days must pass before the first hearing of what is known as a petty debt summons. By article 2 if the defendant fails to appear or to make sufficient excuse for his absence judgment may be entered for the amount claimed together with judgment for the Court fees, (Advocates’ fees are not recoverable in any circumstances, save on appeal, see below). If the claimant fails to appear his claim may be struck out. By article 3 the Magistrate may hear evidence from the parties and any witnesses present if there appears to be a dispute. In theory this could occur at the first hearing, but in practice where the debt is disputed the matter is adjourned to a trial date when all the evidence will be heard together. Article 4 contains provisions permitting the summonsing of witnesses by the Magistrate (via the Sergeant) and penalties for failure to attend. Article 5 contains provisions for the execution of a petty debt judgment. The claimant delivers the judgment to the Sheriff together with the necessary fee. The Sheriff will then execute the judgment against the personalty of the defendant, 9 And even Livre IX Terrien, eg ch 18 on élection de domicile, ch 20 on récusation des juges, ch 39 on péremption and so on; see also Thomas Le Marchant. Again see Livre X concerning judgments and execution. 10 Sometimes one might have to resort to customary or French law to fill a gap in Guernsey procedure; for example the equivalent of interpleader proceedings may be provided by a procedure known to Laurent Carey as séquestre, and written about by Pothier, albeit only in relation to realty at part II, ch III, Art 2 of his Traité de la Procédure Civile. 11 The Magistrate’s Court is commonly known as the Petty Debts Court in this rôle. 12 French does not lend itself to snappy titles. Even the simple expression “help” takes two words and 9 letters, “au secours”.
380 The Laws of Guernsey selling the goods he seizes to the highest bidder at auction. Before such a sale can take place a fortnight must have elapsed since the execution and two adverts publicising the sale must have been placed in the Press. The defendant himself must be notified of the sale by the Sheriff four days before it is due to take place. The Sheriff may not execute a petty debt judgment against certain basic items of personalty including bedding, the tools of a debtor’s trade, professional books, a table and chair, and cutlery and crockery for each family member. Section 13 of the Magistrate’s Court (Guernsey) Law 1954 permits the Magistrate either to order payment of a debt in a single lump sum or by instalments, and then to vary any such order. Article 6 of the Ordonnance sets out the procedure for seeking a variation of the manner in which a judgment is to be paid. On the application of the plaintiff leave may be given to levy execution against the realty of the defendant with the effect of a Preliminary Vesting Order.13 By section 14 of the 1954 Law there is a right of appeal to the Ordinary Court from the judgment of the Magistrate in a civil action if the amount of the debt or damages claimed exceeds £25 or against any determination on a point of law. The procedure is governed by the Magistrate’s Court (Civil Appeals) Rule 1955. By rule 1 an appeal pursuant to section 14 must be made (ie commenced) within seven days following the determination (ie judgment) appealed against. The appeal is entered by filing at the Greffe a notice of appeal in the form set out in the schedule to the rules stating the grounds of appeal. A copy must be served on every other affected party within forty-eight hours of the filing of the notice. The appellant must obtain a transcript of the Magistrate’s Court proceedings and serve a copy on the respondent. The Greffier must provide the Bailiff ’s secretary with a certified copy of the Act of Court appealed against and three copies of the transcript. The respondent may apply for security for the costs of the appeal to be lodged by the appellant. The Greffier will inform the appellant of the date fixed for the appeal which the appellant must notify to the respondent not less than four clear days before the date so fixed (good practice requires the date to be notified forthwith). By rule 6 the Ordinary Court has power to confirm, reverse or vary the determination of the Magistrate’s Court or to make such other order in the matter as it thinks fit. The Ordinary Court has power to make a costs order relating both to the appeal and the first instance hearing. The appeal may be abandoned at any time not less than two clear days before the date fixed for the hearing of the appeal, but a costs order may then be made against the appellant and any security for costs forfeited. By the Magistrate’s Court (Civil Appeals) Rules 1956 it is confirmed that the Ordinary Court has power to enlarge the time fixed by any provision of the 1955 Rules for doing any act. This principally concerns the time during which the appeal must be brought after judgment. In the case of Domaille v Harris, noted at [1987] 6 GLJ 164, the Bailiff directed the Jurats that the proper approach for the Royal Court when sitting as an 13
S 13(3)(b) of the 1954 Law.
Civil Courts and Procedure 381 Appellate Court was that adopted by the Court of Appeal, ie not to interfere with a finding of fact made by the Magistrate unless it was satisfied that there was no evidence upon which he could reasonably have arrived at those findings or that, for any other reason, the finding of fact of the Magistrate was perverse. Alleged errors of law are for the Bailiff alone to determine. The Court of Alderney In contrast to the Magistrate’s Court the Court of Alderney has essentially unlimited first instance civil jurisdiction. The chief exception is the exclusive power of the Royal Court to grant decrees of divorce.14 The principal Law governing the constitution of the Court of Alderney is the Government of Alderney Law 1987. The Court is constituted by a minimum of two Jurats sitting with a third as Chairman.15 There is a right of appeal to the Royal Court sitting as an Ordinary Court from a decision of the Court of Alderney in relation to any civil matter. The right is excluded if any enactment provides that the Court’s decision is to be final. An appeal may only be made with the leave of the Court of Alderney from a consent order or costs order. Likewise leave is required where the value of the matter in dispute does not exceed £25, unless there is in issue a question of law. The procedure governing civil appeals from the Court of Alderney is set out in the Court of Alderney (Civil Appeals) Rules 1969. An appeal is commenced by filing with the Clerk of the Court of Alderney a notice of appeal within fifteen days following the judgment appealed against. The notice must set out the grounds of appeal and follow the standard form set out in the schedule to the rules. A copy of the notice of appeal must be served on every other party affected by the appeal within seven days of the filing of the notice. The longer appeal period of 15 days is noteworthy by comparison with the seven permitted for appeal from a Magistrate’s Court decision; likewise the full week in which to serve notice of the appeal on other parties as opposed to 48 hours under the Magistrate’s Court procedure. Under the Alderney Rules the appellant must again obtain a transcript of the proceedings or, where there is no recording, a copy of the Chairman of the Court’s notes. A copy of the transcript or notes must be served on the respondent. The Clerk of the Court must supply HM Greffier with a copy of the Act of Court and three copies of the transcript or notes. There is again provision for the respondent to apply for security for the costs of the appeal. The Greffier will likewise provide a hearing date which the appellant must notify to the respondent not less than four
14 Note also the limited application of other legislation such as the Children and Young Persons (Guernsey) Law 1967. 15 See s 8 of the 1987 Law and the section of this work concerning the constitution of Alderney generally.
382 The Laws of Guernsey clear days before the appeal date. The Ordinary Court again has power to confirm, reverse or vary the determination of the Court of Alderney or to make such other order in the matter as it thinks fit. There is power to award the costs of the appeal and below. Likewise, similar provisions apply concerning abandonment of an appeal and enlargement of the time for doing any act required by the appeal procedure.
The Court of the Sénéschal Like the Court of Alderney the Court of the Sénéschal has unlimited first instance civil jurisdiction, save for certain matters reserved to the Royal Court, again note the Royal Court’s Bailiwick-wide divorce jurisdiction. There are necessarily restrictions where legislation has not been extended (or not extended fully) to Sark or the Court of the Sénéschal. There is again a right of appeal from the Court of the Sénéschal to the Ordinary Court. Section 23 of the Reform (Sark) Law 1951, as amended by section 1 of the Court of the Sénéschal (Increase of Jurisdiction and Transfer of Prisoners) Law 1971, confirms both the Court of the Sénéschal as the sole Court of justice in Sark and the right of appeal from the Court of the Sénéschal to the Ordinary Court. There is also an Ordonnance dated 7 June 1930 (Tome V 383) which provides that: “La Cour de Serk aura le droit d’entendre et de juger de toute cause soit en meubles soit en immeubles, pourvu toutefois qu’il y aura appel de la sentence de la Cour de Serk à la Cour Royale de L’Île de Guernesey par l’une ou l’autre partie.”
This Ordonnance was relied upon in the related cases of Woodward v RG Falla Ltd and Matthews v RG Falla Ltd (2000) to say that the Court of the Sénéschal had first instance jurisdiction over Sark matters to the exclusion of the Royal Court. This argument was not accepted by the Bailiff, whose ruling was to the effect that the Royal Court will have a concurrent first instance jurisdiction where, as on the facts of these cases, the defendant was resident in Guernsey. He did not interpret the Ordonnance as positively requiring Bailiwick cases with a Sark connection to be brought in Sark. There are no rules governing appeals from the Sénéschal. It is tentatively thought that an appeal must be brought within a year and a day of the judgment appealed against. Inevitably the longer it takes to bring an appeal from the Sénéschal to the Ordinary Court the less likely it will be regarded favourably. Good practice demands that the appeal be brought as soon as possible. There is useful guidance to be found as to the relationship between the Court of the Sénéschal and the Royal Court in In re a patient (2001) 23 February. The case concerned an appeal from the Sénéschal as to the terms of a guardianship order. The Bailiff held that:
Civil Courts and Procedure 383 “. . . it is important that this Court on appeal confines itself to issues of law and procedure where the Sénéschal has clearly misdirected himself and not seek to interfere with matters that are matters for his discretion.”
From this it is plain that the Royal Court will no more interfere with the exercise of discretion of the Sénéschal than the Court of Appeal of Guernsey would interfere with the exercise of discretion of the Royal Court. Arguably the Bailiff ’s judgment goes further to the extent that the Royal Court is willing merely to supervise as opposed to usurp a decision-making function, even where there has been error; however, this is probably restricted to matters where there are ongoing judgements to be made, as in this case. In the 1999 case of Surcouf v de Carteret the Bailiff gave general guidance as to the conduct of proceedings before the Sénéschal, stating that: “The Sénéschal is not a lawyer. If serious litigation . . . is to be conducted before him it is incumbent on counsel to work together to identify the issues which he is being asked to decide and to do all they can to prepare and present the case in a way that he can come to a reasoned decision.”16
Reform of Civil Procedure in Alderney and Sark By section 17(2) of the Government of Alderney Law 1987 the Court of Alderney was given power to regulate its own procedure and, for that purpose, to make rules of Court. The Court of Alderney has not exercised the power and, accordingly, there are no rules of procedure for the Court of Alderney. The refusal of the Court to order (inter alia) interrogatories led to an appeal in the case of Laughton v Main, the material judgment being given by the Deputy Bailiff on 14 January 2000. Earlier decisions in the same litigation made law on prescription and established the power of the Court of Appeal to impose indemnity costs orders. In the 2000 judgment the Deputy Bailiff held that the Court of Alderney’s power to regulate its own procedure, both by reason of the Law and inherently, permitted it to make the interlocutory orders sought. The Deputy Bailiff cited the Guernsey Court of Appeal case of Cherub Investments Limited v Channel Islands Aero Club (Guernsey) Limited (Appeal No 11 (Civil) 1982) where Hoffmann JA stated: “. . . the Court remains master of its own procedure and can allow a departure from those rules when justice requires this to be done . . .”
The Deputy Bailiff relied also upon the general power to develop Bailiwick common law, citing the case of Morton v Paint, and held that the Court of Alderney was obliged to make such interlocutory orders as would do justice in the proceedings: 16 See also In re a patient for guidance as to communications with the Court of the Sénéschal; as with the Royal Court one should correspond via the Court’s Greffier.
384 The Laws of Guernsey “This is, to the best of my belief, the first time that the Court of Alderney has been faced by a claim of the nature and potential complications of the instant (case). The Court does not have, at the moment, any enacted rules to assist it in regulating how this case should proceed to trial. In my view, the Court, in those circumstances, is obliged to do the very best it can, however invidious its position. If that means making the rules ‘on the hoof ’ as Advocate Greenfield would describe it, then so be it. I am not persuaded that the absence of any specific rules relating to a specific subject matter precludes the Court from making appropriate orders, or giving appropriate directions, on such matters. Indeed, as will already be clear, I am persuaded to the contrary, namely that the Court should and has the power to do so.”
The Deputy Bailiff was conscious that his decision might have consequences for Guernsey procedural law also. As regards notices to admit17 he sought to draw the distinction that the Royal Court had enacted its own rules of procedure which did not include a rule providing for such notices. He observed that this “deliberate omission” might well be significant. Whether this is a valid distinction remains to be tested, based as it is on the premise that the omission of notices to admit was itself deliberate at the time when the Royal Court Civil Rules were made.18 It follows that the case of Laughton may be relied upon in support of any application for interlocutory relief not expressly provided for in the Royal Court Civil Rules where the justice of the case requires the order sought. In the final paragraph of the judgment the Deputy Bailiff invited the Court of Alderney to consider enacting its own comprehensive rules of procedure. By the Real Property (Succession) (Sark) Law 1999 the Court of the Sénéschal was given express power to make rules regulating and prescribing its procedure and law of evidence. Such rules are subject to the approval of the Royal Court. The Court of the Sénéschal was also given power to award costs, likewise to prescribe the level of Court fees and recoverable costs, see sections 16 and 17 of the 1999 Law. It is to be hoped that both the Courts of Alderney and Sark will adopt comprehensive procedural codes within the foreseeable future. It may be that when Guernsey’s own rules are reformed a common procedure could be adopted, insofar as that was possible, between Bailiwick Courts.
THE ROYAL COURT
The Royal Court of the Island of Guernsey is an ancient institution with unlimited first instance civil jurisdiction within the Island of Guernsey and for certain other matters throughout the Bailiwick. In addition, and as noted above, it has an appellate function in relation to the civil jurisdictions of the Court of Alderney, the Court of the Sénéschal and the Magistrate’s Court. 17 18
Which had also been applied for. Which is hard to imagine, given the cheapness and effectiveness of this procedural tool.
Civil Courts and Procedure 385 The Royal Court sits as an “Ordinary” Court for most civil purposes. Thus the right of appeal in civil matters from other courts to the Royal Court is to the Ordinary Court. General civil litigation is conducted before the Ordinary Court. The Ordinary Court is constituted by the Bailiff sitting with a minimum of two, but usually three, Jurats.19 Generally speaking the Law governing the business at hand will determine whether a matter must go before the “Full” Court as opposed to an Ordinary Court. A Full Court is constituted by the Bailiff sitting with a minimum of seven Jurats. Examples of Full Court business include liquor licence applications and various civil appeals, typically from the decisions of State committees. Jurats perform the rôle of jurors in civil trials; albeit with the important difference that they hold an ancient office and are selected only from well respected members of the community. There are 12 Jurats at any one time and, once elected, usually remain in office until the age of 70. It follows that a Jurat is very much more experienced than a simple juror. Important provisions governing the functioning of the Royal Court and the roles of the Bailiff and Jurats are set out in the Royal Court of Guernsey (Miscellaneous Reform Provisions) Law 1950. Section 6(2)(a) provides as follows: “The Bailiff shall be the sole Judge of Law and of questions of procedure in all causes and matters heard in a Court over which he presides and shall award the costs, if any, and, for the purposes of the determination of any question of which he is the sole Judge, the Royal Court shall be properly constituted if it consists of the Bailiff sitting unaccompanied by the Jurats or any of them.”
Jurats judge questions of fact. Section 6(3) of the 1950 Law provides that matters within the competence of the Jurats may be decided by a majority of the Jurats sitting on the material occasion. Section 6(4) provides that the Jurats may, and at the request of any one of them shall, retire from the Court for consultation immediately after the summing up. If they then require direction, advice or information they must return to the Court for this purpose and their questions must be put to the Bailiff and the answers given in open Court. Section 6(5) provides that in all causes and matters the Bailiff has a casting vote whenever the Jurats are equally divided. It is for this reason that the number of Jurats sitting is generally the lowest uneven number above the quorate figure. After the Jurats have consulted or otherwise reached their collective decision, whether divided or not, they must return and give their individual decisions in open Court.20 19 When constituted for plaids d’héritage the minimum number of Jurats is 3. The closest equivalent in the English legal system to a Jurat would be a non-stipendiary Magistrate (merely to say civil juror understates the office), but note the much greater rôle of the Jurats in that they sit in the equivalent of High Court and Crown Court trials. They do not actually sit in the Magistrate’s Court at all, unless also appointed Acting Magistrates. Note the failed challenge to Jurats in the European Court of Human Rights case of Snooks & Dowse v United Kingdom 8 October 2002. 20 Under the heading “On the Administration of Justice” Jonathan Duncan in his 1841 History of Guernsey wrote affectionately that: “Justice, in all its varied and complicated forms, is administered by the Bailiff and Jurats. . . . The same men who authorize a mountebank to exhibit his tricks in the streets, decide on character, property and life. Such a system may appear absurd and dangerous to an English reader, but he should bear in mind that as there is no law in Guernsey, the inconveniences resulting
386 The Laws of Guernsey The Rule Making Power of the Royal Court Section 12 of the 1950 Law confirms expressly the power of the Royal Court to make rules of procedure varying, modifying or revoking any rule of procedure operative by result of either customary or enacted Law. This is a reference to the Reform (Guernsey) Law 1948, Article 63 of which transferred the Royal Court’s historic legislative powers to the States of Deliberation. At the same time Article 64 preserved the Royal Court’s powers and functions of a legislative nature as regards the making, variation, modification and revocation of rules of procedure in the Royal Court and any Royal Court Division or subordinate Court. As noted already, the Royal Court Civil Rules 1989 were themselves a consequence of these provisions; again the limits of what are prima facie broad powers have not been tested. In practice it is a question of whether the Royal Court chooses to claim and exercise a right to make law in any given area.21
THE COURT OF APPEAL (CIVIL DIVISION)
The Guernsey Court of Appeal is the creation of the Court of Appeal (Guernsey) Law 1961 and replaced the former Cour des Jugements et Records, a manifestation of the Royal Court.22 By section 14 of the 1961 Law the Court of Appeal has all the power, authority and jurisdiction which vested in the Royal Court sitting as the Cour des Jugements et Records together with power, if appropriate, to order a judgment to be set aside and a new trial to take place. As a result there is a right of appeal in civil cases from either the Ordinary Court23 or the Full Court to the Court of Appeal within the limitations set by section 15 of the 1961 Law. Accordingly, there is no appeal from a decision stated by the relevant legislation to be final.24 Likewise an appeal may only be brought against a consent order or a from this system are not so grievous as might be imagined. With very rare exceptions, the Jurats are elected from the mercantile class, are utterly ignorant of the principles of jurisprudence, and little versed in its practice; they usually pronounce judgment from a common sense view of the matter in litigation, as arbitrators or referees; they are guided solely by the facts, and pay no regard to law, unless in matters of real property, concerning which defined rules exist to a certain extent. Domat and Pothier, Coke and Mansfield are treated with little courtesy by the Royal Court of Guernsey.” (p 471) Duncan added a footnote citing with approval an article written by the then government inspector of prisons in Scotland who pointed out that there were no unmeritorious acquittals for technicalities in Guernsey: “One does not hear in Guernsey of a jury being directed by the judge to acquit the prisoner, charged with stealing a duck, on the ground that the duck being dead was no longer a duck, and therefore wrongly described by that name in the indictment . . .”. Today’s Court is more sophisticated, but still imbued with that common sense which appears to be in short supply in another very much larger jurisdiction to the north of these Islands. 21 See Webber v Allied Dunbar Plc (2001) 16 August for a discussion of the issues in this context. 22 For an account of the history of the Guernsey Court of Appeal and its powers see the judgment of Michael Beloff QC in IDC v Portholme Properties Limited (2002) 20 September. 23 Including an appeal against the judgment of the Ordinary Court on appeal from the Magistrate, although this will be rare. 24 But note that the Court of Appeal held it had power to hear an appeal in the context of the 1966 Development Law, notwithstanding the absence of express provision to that effect.
Civil Courts and Procedure 387 costs order with the leave of the presiding Judge. Leave either of the presiding Judge or the Court of Appeal is required to bring an appeal where the value of the matter in dispute does not exceed £200, unless a question of law was in issue. The leave of the presiding Judge or the Court of Appeal is also required to appeal any interlocutory order or judgment. A Practice Direction of 17 November 1998 concerning leave to appeal to the English Court of Appeal sets out the criteria by reference to which leave will or will not be given. These same criteria would be applied by the Guernsey Court of Appeal. The Practice Direction was issued by Lord Woolf MR and is reported at [1999] 1 All ER 186 and [1999] 1 WLR 2. The general test for leave was stated as follows: “The general rule applied by the Court of Appeal, and thus the relevant basis for first instance courts deciding whether to grant leave, is that leave will be given unless an appeal would have no realistic prospect of success. A fanciful prospect is insufficient. Leave may also be given in exceptional circumstances even though the case has no real prospect of success if there is an issue which, in the public interest, should be examined by the Court of Appeal. Examples are where a case raises questions of great public interest or questions of general policy, or where authority binding on the Court of Appeal may call for reconsideration.”
Leave is not required if the liberty of the subject or the custody of children is concerned, nor if the appeal concerns a decree in a matrimonial cause or a judgment or order in an admiralty action determining liability. Note however that no appeal lies from a final order for the dissolution or nullity of marriage, (see s 15(b)). Where leave is required it should be sought from the first instance Judge initially.25 The application may be renewed to a single Judge of the Court of Appeal and, if again refused, to the full Court of Appeal.26 By section 18 the costs of and incidental to all proceedings in the Court of Appeal are in the discretion of the Court of Appeal. The case of Laughton v Main confirmed the power of the Court of Appeal to make indemnity costs orders.27 25 See for example the judgment of Lieutenant Bailiff Hancox in the case of Shamurin v Base Metal Trading Limited (2002) 8 October refusing leave to appeal against a judgment itself refusing a freezing order. English case-law was adopted and applied. 26 Rule 16(7) of the Court of Appeal (Civil Division) (Guernsey) Rules 1964 requires the application for leave to appeal to be made, in the first instance, to the Court below. See also rule 16(5) which requires an application to the Court of Appeal for leave to appeal to be made ex parte initially (unless made outside of the time permitted in which to bring an appeal). If the application is not dismissed directions will then be give for service of the notice of appeal. 27 [1995] 20 GLJ 92. Note that Court of Appeal (Civil Division) costs were dealt with by the Court of Appeal (Civil Division) (Costs and Fees) (Guernsey) Rules 1964, as amended by the Court of Appeal (Civil Division) (Costs and Fees) (Amendment) Rules 1991 as further amended by the Court of Appeal (Costs and Fees) (Amendment) Rules 1999. The chief hallmark of these rules was the low level of recoverable costs. The rules were long overdue for reform along the lines of the Royal Court (Costs and Fees) Rules 2000. Note the criticism of Clarke JA in his judgment on costs in the case of Stuart-Hutcheson v Spread Trustee Company Limited (2002) where an order was made that the successful beneficiary appellant be paid his costs out of the trust fund on a full indemnity basis. The rules have indeed now been replaced by the Court of Appeal (Civil Division) (Costs and Fees) (Guernsey) Rules 2002, which came into force on 1 January 2003. They are controversial to the extent that they purport to have retrospective effect.
388 The Laws of Guernsey Sections 19 and 20 contain little used provisions permitting assessors to sit with the Court of Appeal or for specific issues to be referred to experts. By section 21 power is given to a single Judge of the Court of Appeal to deal with interlocutory matters arising on an appeal and, in particular, to give leave to appeal or to extend the time within which a notice of appeal or application for leave to appeal may be given. Such applications may be renewed before the full Court of Appeal if refused. The detailed rules governing Court of Appeal procedure are to be found in the Court of Appeal (Civil Division) (Guernsey) Rules 1964. These provide by rule 2(1) that an appeal shall be by way of rehearing, except where a new trial is sought, and must be brought by notice of appeal in the form set out in a schedule to the rules. The appeal is not literally a rehearing of the matter appealed against. The words indicate that the Court will consider the whole of the evidence given in the Court below. Nor is the appeal limited to a consideration of whether a new trial should be ordered because of some misdirection, misreception of evidence or other alleged defect in the trial. It is, however, and as a rule, a rehearing on the documents. The Court of Appeal is not confined to making an order which should have been made by the Court below, but may also consider what facts have occurred since the trial, and what relevant change has been made in the law, and may, if necessary, receive fresh evidence and make such further or other order as the case may require, according to how matters stand at the time of the hearing before it; see generally paragraph 59/3/2 of the 1999 Supreme Court Practice which is equally applicable to Guernsey procedure. The circumstances in which the Court of Appeal will in fact admit additional evidence are restricted. The principles are set out in the Guernsey Court of Appeal case of Kirk v Blackwell, noted at [1986] 4 GLJ 65. Here it was held that English principles applied; accordingly three conditions had to be fulfilled before further evidence would be admitted. These comprised the following: (a) The evidence could not have been obtained with reasonable diligence for use at the trial; and (b) the evidence must be such that, if given, it would probably have had an important influence on the result of the case, without necessarily being decisive; and (c) the evidence must be apparently credible, although without necessarily being incontrovertible. The notice of appeal itself must specify the grounds of the appeal and the precise form of the order which the appellant proposes to ask the Court to make. Unless the Court of Appeal gives leave, the appellant may not rely upon any ground of appeal or apply for any relief not specified in the notice, see Rule 2(3). The notice of appeal must be served upon all other parties to the proceedings who are directly affected by the appeal. By rule 3 the notice must be served within one month from the date on which the judgment or order of the Court below was pronounced. By rule 4 the appellant must, within seven days of serving his notice
Civil Courts and Procedure 389 of appeal, apply to set down the appeal by leaving with the Registrar of the Court of Appeal (the Greffier) a copy of the notice of appeal and evidence of service of the notice upon the other parties. This will comprise the certificate of service of either the Sergeant, the Clerk of the Court of Alderney or the Prévôt of Sark, alternatively an affidavit of service if substituted service has been effected pursuant to an application made under rule 20 of the 1964 Rules permitting substituted service where the respondent does not have an address for service in the Island of Guernsey. By rule 4(5) the appellant must give notice to any respondent that he has set down the appeal within two days. By rule 5 the respondent must serve his own notice setting out grounds if he wishes to contend any of the following: (a) That the decision of the Court appealed against should be varied, either in any event or in the event of the appeal being allowed; or (b) that the decision of the Court below should be affirmed on grounds other than those relied upon by that Court. The respondent must also specify the precise form of the order which he proposes to ask the Court to make. The respondent’s notice must be served on the appellant and any other directly affected party within fourteen days of service of the notice of appeal. The respondent must provide a copy of his notice to the Registrar within two days of service upon the appellant and other parties. There are general provisions permitting amendment of notices with leave and for the provision of supplemental notices without leave, but at least seven days before the day appointed for the hearing. Any supplemental notice must also be lodged with the Registrar. By rule 7 the official transcript of the proceedings below must be provided to the Registrar. This is the responsibility of the “shorthand writer” or person who transcribes the tape as opposed to the appellant directly. In practice this is dealt with internally by the Greffe. It is implicit that the transcript is then provided to the appellant. Rule 8 makes detailed provision for documents to be lodged by the appellant within four months of setting down the appeal. These comprise the notice of appeal, the judgment or order appealed against, the pleadings, the official transcript, affidavits or depositions, exhibits, the notes of the Judge if there is no transcript and a statement of his case (“the appellant’s case”), which is more commonly known as a skeleton argument these days. Within two days of lodging four copies of the above the appellant must serve a copy on each of the other parties to the appeal. Within one month each (separately represented) respondent must lodge four copies of his (ie the respondent’s) statement of case (“the respondent’s case”). It is expressly required that each party’s statement of case set out the contentions which will be made and the authorities to be cited. The respondent must likewise serve a copy of his skeleton argument upon the appellant within two days.
390 The Laws of Guernsey Failure to lodge documents within the four months or any extended time will be deemed to constitute an abandonment of the appeal by the appellant. Notwithstanding this the appeal may be reinstated upon application.28 By rule 10 a Judge of the Court of Appeal will fix a date for the hearing of the appeal which will usually be not less than twenty one days ahead. The appellant must give at least ten days notice of the appeal hearing date to the other parties. In practice the appellant should notify the other parties as soon as he is himself notified of the hearing date. Rule 11 contains an interesting provision whereby the Court of Appeal may direct the notice of appeal to be served upon any party to the proceedings in the Court below upon whom it has not been served or upon any person not a party to those proceedings. It is difficult to anticipate the circumstances in which such a power would be used. Perhaps where it is felt that a non-party with an interest in the proceedings either ought to have been joined initially or should now be heard upon issues in the case. Rule 12 confers general powers upon the Court of Appeal to order any document to be amended, to receive further evidence, to draw inferences of fact and to give any judgment and make any order which ought to have been given or made, and to make such further or other order as the case may require. It is expressly provided that the power to admit further evidence may only be exercised upon special grounds where a trial on the merits has taken place. It is immaterial to the Court of Appeal’s powers that an appellant or respondent may not have relied upon the ground in fact upheld by the Court; but note the case of DnB Mortgages Limited v Bullock & Lees (a firm) [2000] TLR 227 where it was held that an application to raise a new point on appeal should not be entertained where it could not be established beyond doubt that the facts, if fully investigated, would be found to support the new point. Rule 12(5) permits the Court to order that security for costs be given for an appeal but only in special circumstances and only such security as may be just. Rule 13 restricts the Court of Appeal’s power to order a new trial to circumstances where some substantial wrong or miscarriage has been occasioned. The fact that civil trials still take place in the Royal Court before a Bailiff sitting with Jurats causes particular difficulty when it comes to appealing the amount of damages awarded. By rule 13(3) the Court is given power to vary the sum awarded by the Jurats where a new trial would otherwise be ordered on the ground that the damages were either excessive or inadequate, but only with the consent of all parties concerned or the consent of the party entitled to receive (if reducing the amount awarded) or liable to pay the damages (if increasing). Given the time and expense involved it is likely that the parties would agree to the Court of Appeal varying the award. 28 See r 17(1) whereby the Court may extend time, even when the application for an extension is not made until after the expiration of the material period. Equally the applicant would have to show a sufficient reason for the discretion to be exercised in his favour. It is prudent not to have to rely upon the Court’s indulgence.
Civil Courts and Procedure 391 Rule 15 gives power to the Court of Appeal to grant a stay of execution of the decision of the Court below. However, a stay is not an automatic consequence of appeal and must be applied for either to the first instance Judge or to the Court of Appeal. The application must be made initially to the trial Judge. If refused the application may be renewed before a single Judge of the Court of Appeal and again renewed before a full Court of Appeal. Rule 16 makes provision for interlocutory applications during the appeal proceedings. The Court of Appeal has power, exceptionally, to make ex parte orders but applications must normally be made on three days notice to the other parties concerned. Rule 16(7) expressly provides that where an application may either be made to the presiding Judge of the Court below or to the Court of Appeal it must be made in the first instance to the presiding Judge of the Court below. This provision is of general application. However, it follows in particular that applications for leave to appeal or for a stay of execution must first be made to the Judge or Court appealed against. Rule 17 provides a general power to extend or abridge any time period specified within the rules.29 Rule 18 requires an appellant to give an address for service within the Island of Guernsey, likewise a respondent. Substituted service is otherwise likely to be permitted. In the case of Bordeaux Vineries Limited v States of Guernsey (April 2000) the Court of Appeal imposed a requirement for all future appeals that a full and, ideally, agreed chronology be prepared and lodged, together with a chronological file of all formal documents in the proceedings, ie pleadings, orders, judgments and the like.30 Grounds of Appeal The following are commonly stated grounds of appeal:31 (a) The learned (Bailiff, Deputy Bailiff, Lieutenant Bailiff) was wrong in law in holding that . . . The learned (. . .) ought to have held that . . . ; (b) The learned (Bailiff, Deputy Bailiff, Lieutenant Bailiff/Jurats) wrongly exercised his/their discretion in that . . . (he/they relied on (a factor) which he/they ought not to have taken into account/placed excessive reliance on (a factor)/failed to take any or any sufficient account of (a factor)) . . . Having regard to the (specified) circumstances of the case the learned . . . ought to have (exercised his/their discretion in a (specified way)); 29 See the Court of Appeal case of Sayers v Clarke Walker (a firm) [2002] 3 All ER 490 for current English principles in this context; at least in a complex case. 30 The Registrar of the Court of Appeal has also referred Guernsey practitioners to the Court of Appeal Consolidated Practice Direction for the Jersey Court of Appeal published at [2000] JLR Notes 32 as an indication of best practice in a neighbouring jurisdiction. 31 See Atkin’s Encyclopaedia of Court Forms in Civil Proceedings vol. 5 1997 issue p 326 for a helpful general form precedent of a notice of appeal and notes concerning these grounds; Atkin is another publication whose usefulness to a Guernsey practitioner is best preserved by not updating it.
392 The Laws of Guernsey (c) The decision of the Jurats that (specify the challenged finding of fact) was against the weight of the evidence in that . . . ; (d) There was no or no sufficient evidence upon which the Jurats could find that . . . ; (e) The Jurats’ conclusion that . . . is inconsistent with their finding of fact that . . . . Having found that . . . they ought to have (found/reached the conclusion that/inferred that) . . . ; (f) The Jurats’ conclusion that . . . is inconsistent with their acceptance of the evidence of . . . or their finding that . . . ; Ground (a) alleges an error of law. Ground (b) alleges a wrongful exercise of discretion. Grounds (c) to (f) are concerned with wrong findings of fact and/or otherwise erroneous reasoning. Of course not all grounds of appeal will be relevant to every appeal. The grounds themselves will be directed at that part of the tribunal responsible for the matter complained of. Thus the Bailiff will be responsible for findings of law and partly responsible for matters of mixed fact and law; whereas the Jurats will have made the findings of fact. Of course the precise grounds of appeal in any given case are not set in stone and must be tailored to the circumstances complained of.32 Principles Upon Which the Court of Appeal Acts The principles guiding the English Court of Appeal are set out at paragraph 59/1/141 of the 1999 Supreme Court Practice and are followed by the Guernsey Court of Appeal. Where the appeal is against a decision on questions of fact a great deal of weight will be given to the fact itself that only the first instance tribunal (Judge and, more importantly in this context, Jurats) will have seen and heard the witnesses in the case, whereas the Court of Appeal will not have done. Only the first instance tribunal is able to assess the demeanour and manner of the witnesses. The extent of the weight given to decisions of the Jurats was emphasised in the case of Smith v Slawther [1998] 26 GLJ 79 where Collins JA held that: “It is, by now, well established that this Court will only interfere with a decision as to the facts of the Jurats if this Court is satisfied that there was no evidence before the Jurats on which they could reasonably have arrived at the findings under challenge in the appeal or that for some other reason their findings were perverse.”33
A distinction must however be drawn between the first instance tribunal’s view of conflicting testimony (insofar as it is ascertainable) and the proper inferences to be
32 Note also the case of English v Emery Reimbold [2002] 3 All ER 385 for the English principles governing appeals where the ground of complaint is a failure to give reasons. In a Guernsey context only the Judge is affected, unless one were to argue that the Jurats must give reasons; which traditionally they do not. 33 See also the 17 November 1998 Practice Direction of Lord Woolf MR referred to above and what is said concerning appeals on questions of fact.
Civil Courts and Procedure 393 drawn from that view or, indeed, the inferences to be drawn from facts not in dispute. Here the Court of Appeal is willing to form an independent opinion.34 As to appeals against the exercise of discretion there are a great many authorities to the effect that an appeal will not be entertained from an order which it was within the discretion of the Judge (tribunal) to make, unless it be shown that the discretion was exercised (a) under a mistake of law, or (b) in disregard of principle, or (c) under a misapprehension as to the facts, or that (d) irrelevant matters were taken into account, or (e) there was a failure to exercise the discretion or (more generally) that the conclusion which the Judge reached in the exercise of the discretion was “outside the generous ambit within which a reasonable disagreement is possible”, see the case of G v G [1985] 2 All ER 225 and paragraph 59/1/142 Supreme Court Practice 1999 generally. Many of the reported cases concern a refusal to interfere with the Judge’s discretion in the making of an interlocutory order. The leading case in this context is that of Hadmor Productions Ltd v Hamilton [1982] 1 All ER 1042, a decision of the House of Lords. Lord Diplock stated as follows: “. . . it is I think appropriate to remind your Lordships of the limited function of an appellate Court in an appeal of this kind. An interlocutory injunction is a discretionary relief and the discretion whether or not to grant it is vested in the High Court Judge by whom the application for it is heard. On an appeal from the Judge’s grant or refusal of an interlocutory injunction the function of an appellate Court, whether it be the Court of Appeal or your Lordship’s House, is not to exercise an independent discretion of its own. It must defer to the Judge’s exercise of his discretion and must not interfere with it merely on the ground that the members of the appellate Court would have exercised the discretion differently. The function of the appellate Court is initially one of review only. It may set aside the Judge’s exercise of his discretion on the ground that it was based on a misunderstanding of the law or of the evidence before him or on an inference that particular facts existed or did not exist, which, although it was one that might legitimately have been drawn on the evidence that was before the Judge, can be demonstrated to be wrong by further evidence that has become available by the time of the appeal, or on the ground that there has been a change of circumstances after the Judge made his order that would have justified his acceding to an application to vary it. Since reasons given by Judges for granting or refusing interlocutory injunctions may sometimes be sketchy, there may also be occasional cases where even though no erroneous assumption of law or fact can be identified the Judge’s decision to grant or refuse the injunction is so aberrant that it must be set aside on the ground that no reasonable Judge regardful of his duty to act judicially could have reached it. It is only if and after the appellate Court has reached the conclusion that the Judge’s exercise of his discretion must be set aside for one or other of these reasons that it becomes entitled to exercise his original discretion of its own.”
These principles are of general application when contemplating an appeal against the exercise of a discretion. A Judge exercising a judicial discretion must normally give reasons for his decision, but the detail with which he is required to set out those reasons depends upon 34 See generally the recent House of Lords case of Grobelaar v News Group Newspapers Ltd [2002] 4 All ER 732 for a consideration of the appeal court’s rôle in relation to, and ability to interfere with, the decision of a civil jury; similar considerations would apply in Guernsey.
394 The Laws of Guernsey the circumstances of the case. The exceptions to the requirement comprise chiefly where the Judge is exercising a discretion as to costs and is not making an unusual award, and where a Judge refuses leave to appeal to the Court of Appeal.35 A recent English case concerning the giving of reasons generally is that of Flannery v Halifax Estate Agencies Ltd [2000] 1 All ER 373 where it was held that if the failure of a Judge to give reasons made it impossible to tell whether he had gone wrong on the law or the facts, that failure could itself constitute a self-standing ground of appeal since the losing side would otherwise be deprived of its chance of appeal. The duty to give reasons was a function of due process and therefore of justice. How easily this principle sits with the format of a Royal Court trial with Jurats has yet to be argued. The ground that a Judge was wrong in law is sufficiently clear in itself. It is worth bearing in mind however that merely establishing an error of law will not assist if the outcome would have been the same regardless; eg because the Court of Appeal holds that the conclusion is correct, even if reached by a different legal route. It is noteworthy that under English law, a Court has power to recall, vary or alter its judgment at any time before any order consequent upon it is perfected.36 This power is especially useful where an error or genuine misapprehension is uncovered and avoids the need for a potentially time-consuming and expensive appeal. There seems no reason why the Royal Court would not also have the same power.37 Note that the Court of Appeal itself may re-open an appeal after the giving and drawing up of a final judgment if it was clearly established that a significant injustice had occurred and that there was no alternative effective remedy.38 THE JUDICIAL COMMITTEE OF THE PRIVY COUNCIL
There is a right of appeal from the Court of Appeal to the Judicial Committee of the Privy Council. That right is set out in section 16 of the Court of Appeal (Guernsey) Law 1961 and reads as follows: “No appeal shall lie from a decision of the Court of Appeal under this part of this Law without the special leave of Her Majesty in Council or the leave of the Court of Appeal except where the value of the matter in dispute is equal to, or exceeds, the sum of five hundred pounds sterling.”
There is some subtlety in this provision. Merely because the amount at stake exceeds five hundred pounds does not give a prospective appellant an unfettered right to take his case to the Privy Council. The appeal must first be “admitted” in 35
Recently re-affirmed in England notwithstanding a human rights challenge. See, for example, the case of Royal Brompton Hospital NHS Trust v Frederick Alexander Hammond & 15 Ors [2001] EWCA Civ 778. The case went on to the House of Lords on the substantive issues. 37 See now the Matrimonial Causes Division case of C v C (2002) 29 April where the Court rectified the terms of a judicial separation consent order after finding that a mistake had been made as to its terms. 38 See the English Court of Appeal case of Taylor v Lawrence [2002] 2 All ER 353, likewise the case of Seray-Wurie v Hackney LBC [2002] 3 All ER 448, confirming a similar power for the High Court. 36
Civil Courts and Procedure 395 the sense of being acknowledged as properly brought. This distinction is dealt with as follows by Halsbury’s Laws of England:39 “Appeals to the Judicial Committee fall into two categories: (1) appeals as of right under Orders in Council or other statutory provision, and (2) appeals by special leave. Even where appeal lies as of right application for leave to appeal must first be made to the Court overseas from which the appeal is to be brought; and it is the duty of that Court to form a judgment as to whether the appeal lies or does not lie under the statutory provisions applicable. Although the word “leave” normally implies a discretion to give or withhold permission it does not in this context imply such a discretion. Failure to come to a conclusion on the right, while accepting the necessary security from the appellant for the prosecution of the appeal, is incorrect, and in such a case the Judicial Committee will determine for itself whether the appeal is within the grant and admit it or refuse it accordingly.”
The process is illustrated by the case of Taylor v States of Guernsey Board of Health, a 1990 judgment of the Court of Appeal which is more in the form of a discussion between the Court and the Advocates involved as to the way in which the appellant’s application for leave to appeal to the Privy Council should be dealt with. The case also addresses the question of security for costs. The eventual order was that the appellant should have leave to appeal to Her Majesty in Council, conditional upon security for costs being given in the sum of £1,000 in respect of each respondent and the Record of the matter being dispatched within a certain time.40 Where either leave is required or has been refused by the Court of Appeal it may be sought from the Judicial Committee of the Privy Council itself. In any event leave is required. Again the application should be made in the first instance to the Court of Appeal. The procedure governing the appeal process to the Privy Council is found in the Judicial Committee (General Appellate Jurisdiction) Rules Order 1982 with helpful guidance set out in a note prepared by the Registry of the Judicial Committee dated October 1983.41 The 1982 Rules were registered in Guernsey in 1983. There have been two further UK statutory instruments which are relevant but appear not to have been registered here. These comprise the Judicial Committee (General Appellate Jurisdiction) Rules (Amendment) Order 1990 (SI 1990 No 2297) and the Judicial Committee (Fees) Order 1996 (SI 1996 No 3170). The unamended 1982 Rules confirm that no appeal shall be entertained unless either leave to appeal has been granted by the Court appealed from or special leave to appeal has been granted by Her Majesty in Council, see rule 2. There are provisions regulating how such special leave is to be applied for. There are provisions permitting a person to seek special leave to appeal as a poor person. If the petition 39 Vol 10 para 774. See also the report of the Privy Council in the Jersey case of In re the Esteem Settlement and the Number 52 Trust (2000) 10 October, 2000/195 for the principles governing appeals against case management issues which were said not to be matters for review by the Privy Council “in the absence of some error of principle or other special factor . . .”. 40 See also Havilland Estates Ltd v Channel Island Ceramics Ltd [1993] 15 GLJ 51. 41 It may be that there are more up-to-date rules and/or notes.
396 The Laws of Guernsey is granted a person may appeal at greatly reduced cost to himself. However, his net worth apart from his interest in the case, must be less than £500. As soon as the appeal has been admitted, again in the sense of being permitted to be brought, the Record must be transmitted to the Registrar of the Court. The Record comprises the material documents in the case such as pleadings, judgments, significant documentary evidence and the transcript of the various hearings leading to the ultimate appeal. There are detailed provisions governing the production and content of the Record. Meanwhile, all parties to the appeal must enter appearances. After the Record has been lodged the next step for the appellant to take is to lodge his petition of appeal itself. This is a largely formal document. When the Record and petition have been received the Registrar will set down the appeal. Each party must then lodge his case in the appeal. The form of the case is again closely regulated by the rules, see rule 63(1). The rules provide for the contemporaneous exchange of cases and eventual binding together of the Record and cases for use at the hearing.42 The Registrar notifies the parties of the hearing date. At the hearing of an appeal not more than two counsel may be heard for each side. Judgment is likely to be reserved. Submissions on costs should be made at the hearing so that all matters may be dealt with in the judgment. The Registrar may give such directions in matters of practice and procedure as may be just and expedient in the circumstances of the particular appeal, see Rule 83. There are various provisions permitting appeals to be dismissed for nonprosecution. This power may be exercised by the Registrar himself; although there is further power to reinstate upon application being made. In essence, the Registrar is to the Privy Council what the Master is to the High Court. It is noteworthy that in criminal cases leave must always be sought from the Privy Council. It is not for the Court of Appeal to grant or refuse leave in criminal matters. PRESCRIPTION
What is known as limitation in English law is called “prescription” in Guernsey law.43 There is, however, an important distinction between the two concepts in that the passing of a limitation period merely bars the remedy whereas prescription most likely extinguishes the right.44 Thus, under English law a right may be set up 42 The copies must be bound with plastic comb binding in limp cornflower blue covers of fibre board substance with the various sections indicated by incuts. 43 Ie one would talk of the prescription period or of a claim being prescribed. Art 2219 of the Code Civil defines prescription as “. . . un moyen d’acquérir ou de se libérer par un certain laps de temps, et sous les conditions déterminées par la loi” (a means of acquisition or release by the expiry of a certain period of time upon conditions determined by law). Note the English Law Commission’s proposals for reform of the law of limitation, see Law Com No 270, which includes a draft bill to replace the Limitation Act 1980. 44 There is some controversy in this regard. For customary sources see Terrien pp 332, 334 and 675, Thomas Le Marchant Tome 1 p 391 et seq. and Gallienne ibid p 315. See also Laurent Carey p 207 et seq. Note in particular the qualifications made by Pothier, see “Treatise on Obligations”, PIII c 8 Art 1 para 642. For modern French law see Bénabent, Droit Civil Les Obligations, 8th edn (Montchrestien), para 890 et seq. and Art 2219–2283 Code Civil.
Civil Courts and Procedure 397 as a defence notwithstanding the expiry of limitation whereas after prescription there is no right at all.45 This distinction is again a product of Guernsey law’s Norman roots, with the consequence that modern French law is of some assistance in understanding and establishing Guernsey law in this area. The practical consequence of the distinction is seen when a foreign jurisdiction is applying Guernsey law. Limitation is merely a part of procedural law and therefore prima facie governed by the lex fori 46 whereas prescription forms a part of the lex causae.47 The local procedural law’s view of limitation in any particular case might well be different to the Guernsey law conclusion as to prescription.48 It is also important to note that prescription may be interrupted or suspended. The principle cause of interruption49 is the commencement of proceedings. This appears to have the effect of effacing any time which has already run, as opposed to mere suspension. One possible consequence of interruption might be to permit an otherwise prescribed claim which is the subject of proceedings in one jurisdiction to be brought additionally or in place of the original proceedings in another jurisdiction.50 The logic would appear to be that if proceedings have been commenced in time there is no prejudice through merely switching venues. It seems that in the complexity of the mainland customary legal system it was not uncommon to begin proceedings before the wrong tribunal. Note though that péremption (see below) is prima facie fatal to a cause commenced within the prescription period. These principles have survived in modern French law.51 Note also that prescription will not run at all in certain circumstances, for example against a minor or a patient without a guardian.52 Droits Immobiliers There are subtle distinctions to be drawn when determining the effect of prescription where Guernsey realty is concerned. Historically the prescription period for rights in realty was forty years. That period was reduced to thirty years by a Law entitled “De la Prescription Immobilière” of 1852. The period was reduced still 45
With obvious consequences for counterclaims. The law of the forum. The lex fori governs procedure and matters such as mode of trial, the availability of remedies and most issues relating to evidence and limitation. As to limitation see Caltex Singapore Pte Ltd. v BP Shipping Limited [1996] 1 Lloyd’s Rep. 286. 47 The law applicable to the case in dispute, as opposed to the lex fori. Ie the law according to which the substantive issue is determined. 48 But note the English Foreign Limitation Periods Act 1984 which has the effect, prima facie, of requiring an English court to apply the substantive law’s prescription/limitation periods. This is subject to s 2(1) & (2) of that Act providing for exceptions based upon public policy and undue hardship. See generally Cheshire & North’s Private International Law p 73. Guernsey would continue to operate according to common law rules. 49 The word is the same in French, although it has a greater sense of stopping than in English. 50 Although the circumstances where this is desired will be rare, for example if connected proceedings have been commenced abroad and cannot be halted in that jurisdiction. This might be the only way to unite the proceedings with all the attendant benefits. 51 See Arts 2242 and 2247 Code Civil. 52 See Pothier, Treatise on Obligations PIII c 8 Art II § 2 para 648. 46
398 The Laws of Guernsey further to twenty years by the Loi Relative à la Prescription Immobilière of 1909. The relevant provision reads as follows: “À partir du 1er avril 1909 toutes choses immobilières et actions reélles ou dépendantes de la réalité, qui se prescrivent maintenant par le laps de trente ans seront prescrites par le laps de vingt ans; et suffira la tenue de vingt ans, bien entendu qu’elle soit de bonne foi, pour titre compétent en matière héréditale”.
In French law a distinction is drawn between what is called prescription extinctive and prescription acquisitive. The former describes the destructive effect of the expiry of prescription upon rights. The latter reflects the positive consequence of prescription in that new rights are (potentially) created and acquired. They are different sides of the same legal coin. In Guernsey law these two related functions of prescription also have a place, with extra subtlety for good measure. In both systems of law mere non-user and the passage of time (whether 20 years or more) will not prescribe a droit réel immobilier. A droit réel immobilier may be defined as a right which gives to the owner of that right a direct and immediate power over the realty concerned without the intervention of a third party.53 Examples of such rights are the right of ownership of land itself, a usufruit54 and a servitude. By contrast a lease is a droit personnel or personal right.55 A droit réel immobilier cannot be extinguished in a vacuum. The existing title will endure unless and until it is displaced by a new prescriptive title obtained by another, ie prescription acquisitive. This was confirmed in the Privy Council case of Vaudin v Hamon [1974] AC 569. The relevant part of the headnote reads as follows: “. . . the provision in the law of Guernsey in s 1 of the Loi Relative à la Prescription Immobilière 1909 referred back to pre-existing law namely, La Charte aux Normans 1314, which did not extinguish an owner’s title to corporeal immovables unless another person, being in peaceful possession (‘paisiblement’) was able to show an acquisitive prescriptive title, so that lapse of time in preferring a claim was not by itself enough to defeat a claim to a corporeal immovable . . .”
By contrast, although a servitude may not be lost by mere non-user and the running of the prescription period, neither can a servitude be acquired by prescription or even increased in extent under Guernsey law. The authority for this proposition is the case of Singleton v Le Noury [1990] 9 GLJ 48 where it was held by the Court of Appeal that whilst the coûtume did develop over the centuries such development could not change the fundamental common law. Maxims such as “nul servitude sans titre”56 were a part of the coûtume which could not be altered by judicial decision. 53
See pp 390 and following of Louis Bach, Droit Civil 13th edn (Editions Sirey). The equivalent of a life interest (in realty), but much more regulated. 55 The vulnerability of leases in saisie proceedings is also noteworthy; see Gallienne. 56 No servitude without (legal) title. Contrast French law where servitudes may also be acquired by possession for 30 years, see Art 690 Code Civil. It is unclear why servitudes should not be acquired by prescription in Guernsey law. It may be that the coûtume took a wrong turn centuries ago, as it did in other areas. 54
Civil Courts and Procedure 399 Note in any event the requirements under the 1909 Law that the claimant acted in good faith and acquired the property in a manner which ostensibly conferred good title (titre compétent). Modern French texts can assist with the interpretation of these requirements given that French law continues to employ similar pre-conditions.57 Empêchement d’Agir The Vaudin case is also important for its reference to the ancient customary principle of empêchement d’agir.58 This provides that prescription will not run against a person who is subject to an impediment which prevents him from bringing a claim or otherwise acting in the prosecution or defence of his rights. There are two forms of potentially qualifying impediment. The first is an empêchement de droit and the second an empêchement de fait. The former is the more straightforward of the two, comprising circumstances where the person concerned is suffering from a legal disability. Thus there is a qualifying empêchement during minority, likewise during any period of mental disability to the extent that the individual concerned is incapable of managing his or her affairs. It is much more difficult to determine what is a qualifying empêchement de fait. Historically absence on crusade or imprisonment overseas would suffice. Nowadays the issue is more likely to concern whether the circumstances of a plaintiff ’s ignorance of a cause of action brings him within the principle. Older authorities state quite clearly that mere ignorance is not sufficient, whereas more recent Jersey cases have gone to some trouble to distinguish mere ignorance from potentially qualifying ignorance; see the cases of Maynard v Public Services Committee [1995] JLR 65 and Boyd v Pickersgill (Jersey Court of Appeal, 30 September 1999). The instinct of the (mainly English) Judges of Appeal is to make good the perceived failure to have enacted legislation equivalent to the Latent Damage Act 1986.59 57 Albeit with a more developed system which allows different prescription periods according to how innocently the prospective acquirer conducted him or herself. Thus in France the simple squatter with no pretence of title must wait 30 years, whereas the occupier who went into possession pursuant to what he perceived to be a “juste titre” may only have to wait as little as 10 years to acquire good title, depending upon whether the true owner lives within the local appeal Court’s jurisdictional area; see Art 2265 of the Code Civil. This begs the question of whether a squatter can in fact acquire good title in Guernsey. In reality it is unlikely that matters would be left for 20 years. See by way of comparison how matters stand in England in the light of the House of Lords judgment in JA Pye (Oxford) Ltd v Graham [2002] 3 All ER 865. 58 Literally “impediment to action”. See also Poingdestre, Lois et Coutumes de l’îsle de Jersey p 49 et seq. 59 This, inter alia, inserted s 14A of the Limitation Act 1980 and provided a new time limit for actions in respect of latent damage not involving personal injury. The relevant period under English law is either six years from the date on which the cause of action accrued, or three years from the date on which the plaintiff knew, or ought to have known, facts about the damage, whichever the later. The section applies only to actions in tort for damages for negligence. Given the concurrent nature of contractual and tortious duties in English law this is not a problem for the English plaintiff. Again contrast French law where there are no concurrent tortious and contractual obligations; this is known as the régle du non-cumul des deux ordres de responsabilité or “non-cumul” for short and forbids a contracting victim who has suffered damage to elect to claim in tort, which may seem more favourable to him at the material time.
400 The Laws of Guernsey The principle of empêchement d’agir was affirmed further in the Guernsey case of Smith v Harvey, a judgment of the Court of Appeal dated 14 May 1981. The case was concerned principally with the length of the prescription period in an action for damages for personal injury in Guernsey prior to the Law Reform (Tort) Guernsey Law 1979.60 The time limit was determined to be six years as opposed to one year and a day.61 Smith upheld expressly the application of the empêchement principle in the context of claims for personal injury caused by negligence. See now also the case of Holdright Insurance Company Limited v Willis Corroon Management (Guernsey) Limited (2000) 25th August, which is discussed in detail below. Droits Personnels et Mobiliers This leads on to the question of prescription for rights other than droits réels immobiliers generally, ie droits personnels and droits réels mobiliers.62 A droit personnel may be defined as the right of a person to demand from another a performance or payment in its broadest sense.63 That performance or payment may, at its simplest, be a right to money but extends also to rights as diverse as damages or the right to occupy premises pursuant to the terms of a lease. It is a right personal to the individual and generally founded on a contract or the commission of a tort.64 By contrast, droits réels mobiliers are rights bearing upon objects (or even other rights) which are, by their nature, movable, as distinct from realty. Accordingly, rights of ownership over a car, a chair or shares are all droits mobiliers, whereas ownership of land is a droit immobilier. Thus the owner of a house has a droit réel immobilier. The tenant of the house has a droit personnel as 60 Which fixed the prima facie prescription period for personal injury claims at 3 years. The Law is set out at Appendix 2 and discussed further below. 61 Smith was cited in the subsequent decision of Laughton v Main (the first of the Laughton judgments). Here the prescription period for Alderney was also determined to be six years. The 1979 Law does not extend to Alderney and therefore the six year time limit for personal injury actions still applies, likewise in Sark. 62 Excluding extra-patrimonial rights such as human rights. The concept of patrimoine is fundamental to an appreciation of French law. The droits patrimoniaux of a person taken together comprise his patrimoine, literally “patrimony”, although not in the narrow sense of inherited wealth. The patrimoine of a person encompasses all of his rights with a financial value. It comprises not only all that a person possesses at any given moment (his current assets) but all his future assets also. The patrimoine is likened to an open envelope, receiving assets which coalesce into an ensemble, while other assets leave (either disposed of or otherwise lost). The patrimoine constitutes what is called an actif, which consists of all the positive rights of the person concerned (rights of ownership, obligations owed to that person) together with negative éléments known as a passif. The patrimoine is the difference (whether negative or positive) between the actif and the passif. It follows that the patrimoine is in a state of flux from day to day. See Gérard Cornu, Droit Civil Introduction Les personnes Les biens 10th edn (Montchrestien) para 55 and pp 367 et seq. 63 In modern French law the word is “prestation”, it is defined as ce qui est dû par le débiteur d’une obligation, (what is owed by the debtor of an obligation; ie the person contractually bound or liable in tort). 64 Which therefore confers a right on the victim; ie the right to be compensated by the wrongdoer.
Civil Courts and Procedure 401 against the landlord owner. The owner of a chair within the house has a droit réel mobilier. The history of the prescription period for droits personnels and droits mobiliers in Guernsey law has likewise been one of progressive reduction of the time during which a claim must be brought or right otherwise asserted.65 Thus an 1844 Order in Council reduced the prescription period for demandes mobilières from 30 years to 10 years.66 In the report of the Privy Council to Her Majesty express reference was made to the term within which “personal actions and suits relating to personal property” might be instituted. The prescription period of 10 years was confirmed and extended to all “choses mobilières et actions personnelles” by an 1847 Order in Council. By Article 1 of the Loi Relative aux Prescriptions 1889 the period was reduced further to six years as follows: “Toutes demandes mobilières et actions personnelles qui se prescrivent maintenant par le laps de dix ans, seront à l’avenir prescrites par le laps de six ans.”
It follows that the general prescription period for all claims in tort and contract is, prima facie, six years. However, certain special prescription periods have been fixed by subsequent legislation, the most commonly encountered of these is the period fixed for personal injury actions. The Law Reform (Tort) (Guernsey) Law 1979 confirms at section 4(1) what was already the case for actions founded on tort: “Notwithstanding the provisions of any enactment or any rule of law, an action founded on tort shall not be brought after the expiration of six years from the date on which the cause of action accrued.”67
PERSONAL INJURY CLAIMS
Section 5 goes on to set a special time limit for personal injury claims based upon negligence, nuisance or breach of duty (whether contractual or not). The legislation follows closely the English Limitation Act 1980 and provides for a shortened time limit of three years from the date on which the cause of action accrued or, if later, the date of the plaintiff ’s knowledge. If the victim has died during this period a new period is fixed of three years from the date of death of the victim or, if later, the date of the legal personal representative’s knowledge, whichever the later.68 65 See the Court of Appeal case of Smith v Harvey (1981) 14 May for a fuller account of the history of Guernsey prescription law. 66 Note that actions on a specialty were excepted. 67 The 1979 Law is set out at Appendix 2. Note that the Law does not extend to Alderney and Sark; accordingly see the Smith and Laughton judgments referred to above. 68 This time period relates to personal injury claims of the deceased himself which are transmitted to his estate, as opposed to fatal accident claims for the benefit of dependants. Section 5 is concerned only with the claim of the living or dead plaintiff, not the dependants. Separate provision is made by s.6 in respect of the latter, see below. Thus the prescription period for the claim transmitted to the estate of a man struck by a car and who eventually dies will be fixed by s 5 and s 5(5) in particular. The
402 The Laws of Guernsey Wherever there is a reference to the date of knowledge it is the date upon which the material person first had knowledge69 of the following facts: (a) That the injury in question was significant, and (b) that the injury was attributable in whole or in part to the act or omission which is alleged to constitute negligence, nuisance or breach of duty, and (c) the identity of the defendant, and (d) if it is alleged that the act or omission was that of a person other than the defendant, the identity of that person and the additional facts supporting the bringing of an action against the defendant. The knowledge that any act or omission did or did not, as a matter of law, involve negligence, nuisance or breach of duty is irrelevant, see section 5(6). An injury is deemed to have been significant if the plaintiff would reasonably have considered it sufficiently serious to bring proceedings against a defendant who did not dispute liability and had sufficient means to satisfy the judgment, see section 5(7). A person’s knowledge includes knowledge which he might reasonably have been expected to acquire from facts observable or ascertainable by him or with the help of medical or other appropriate expert advice which it would have been reasonable for him to seek, see section 5(8). Section 6 provides a similar shortened prescription period for actions brought under the Fatal Accidents Law 1900. An action may not be brought under the Fatal Accidents Law after the expiration of three years from the date of death of the victim or, if later, the date of knowledge of the person for whose benefit the action is brought, ie the dependants. The date of knowledge is again defined by reference to section 5(6), ie as for personal injury claims. It is important to note that if the deceased survives for so long that his own claim is time barred the dependants’ claim is likewise (prima facie) time barred, see section 6(2).70 Section 8 permits the Court to override the three year prescription period for personal injury and fatal accident claims if it would be equitable to do so having regard to the degree to which the shortened prescription period prejudices the plaintiff and the extent to which any extension of the prescription period would prejudice the defendant. The Court undertakes a balancing exercise in which the level of prejudice to each party is assessed and weighed. The Court is required to take into account the length of and reasons for the plaintiff ’s delay; the extent to which any evidence is likely to be less cogent as a result of the delay; the conduct of the defendant, including the extent to which he responded to any requests for information; the duration of any disability of the plaintiff arising after the date of prescription period for the dependants’ claim arising out of the same death will be fixed by reference to s 6. By contrast, it may be that the victim of an accident dies for reasons wholly unconnected with the material accident. In such a case the prescription period is again fixed by reference to s 5(5). No s 6 calculation is necessary because there is no claim on behalf of the dependants, ie no Fatal Accidents Law claim as such. 69 See the case of Nash v Eli Lilley [1993] 1 WLR 782 at 792 for a definition of knowledge. 70 Fatal accident claims are considered in detail below.
Civil Courts and Procedure 403 the accrual of the cause of action; the extent to which the plaintiff acted promptly and reasonably once he had the requisite knowledge and the steps, if any, taken by the plaintiff to obtain medical, legal or other expert advice and the nature of any advice he may have received. Express provision is made by section 9 delaying the start of the prescription period to the date on which the person concerned ceased to be under a disability (or died). Again it is important to note that the disability must have existed on the date when the right of action accrued. Thus, subsequent mental illness will not be enough to prevent prescription running under the 1979 Law. It would, of course, be highly relevant to an application under section 8.71 There is a large body of case-law on the equivalent English legislation and, in particular, the equivalent to section 8 of the 1979 Law which is section 33 of the Limitation Act 1980. A recent example is the case of Long v Tolchard & Sons Limited [2000] TLR 3. Here it was held that a claimant applying to the Court under section 33 had to disclose all the relevant circumstances at the hearing of the application. If evidence came to light subsequently that the claimant had failed to give a truthful and accurate history of the injury the Judge’s purported exercise of his discretion under section 33 would be set aside. Likewise although the claimant might have a strong case on liability it did not necessarily follow that the Court had to exercise its discretion under the section in his favour. Another example is the case of James v East Dorset Health Authority [1999] TLR 856 where it was held that a patient whose condition deteriorated following an operation and who inferred that the operation had not been a success, but who had nothing to alert him to the fact that he had been injured during the operation, could not be said to be fixed with knowledge by section 14 of the Limitation Act 1980. A final example is Corbin v Penfold Metallising Company Limited [2000] TLR 345 where a claimant had instructed solicitors promptly after he became aware that his medical condition might be attributable to an industrial injury. It was held that delay by his solicitors in issuing a writ after the three year limitation period had expired would not, as a matter of law (ie necessarily) be visited on the claimant.72 It should be noted that the 1979 Law indiscriminately and confusingly refers to prescription or limitation, whereas only prescription is in fact known to Guernsey law.73 Nevertheless, all seemed reasonably clear until the case of Holdright Insurance Company Limited v Willis Corroon Management (Guernsey) Limited, a judgment of the Deputy Bailiff dated 25 August 2000. This judgment is of great prima facie importance to Guernsey law in a number of respects. The Deputy Bailiff held that the date upon which a cause of action accrued in Guernsey contract law was the date of the breach of the contract, regardless of knowledge. This coincides with English law. The Deputy Bailiff likewise held that a cause of action 71 See generally the case of Goode v Martin [2002] 1 All ER 620 for a discussion of human rights law in the context of limitation. 72 See also the case of Das v Ganju [1999] PIQR P260 where a decision to disapply the limitation period after an 18 year delay caused largely by wrong legal advice was upheld on appeal. 73 The same is true of the Trusts Law 1989.
404 The Laws of Guernsey in tort accrued when the relevant actionable damage occurred, again regardless of knowledge.74 The Deputy Bailiff was tempted to adopt the “reasonable discoverability” test adopted in many other common law jurisdictions75 but felt that he was unable to given the statutory position. Notwithstanding the terms of section 4 of the 1979 Law the Deputy Bailiff found that the principles embodied in the empêchement d’agir maxim applied not only to claims in contract but also tort, subject to the application of the provisions of Part II of the 1979 Law. The net effect of this seems to be that an empêchement d’agir may be relied upon both in contract and tort cases but that the principle might be ousted where equivalent and/or express provisions have been enacted in the 1979 (or any other) Law.76 The Deputy Bailiff held that: “Part II of the 1979 Law did not abolish, in relation to tort, all the previous potential rights and remedies derived from the customary law principle of empêchement d’agir. I deliberately expressed the belief that, in relation to personal injuries cases, it will be very difficult for any plaintiff to argue, successfully, that he has a remedy outside that provided by the statutory regime. In all other cases in tort, not least where ignorance might properly form part of an ‘empêchement’ or ‘practical impossibility’ in being able to institute proceedings, I find that the customary law remedy is still available, save to the extent that the 1979 Law provides otherwise (ss 9 and 11), the interpretation of such provisions falling to be determined by the leading English authorities in respect of similar provisions in that jurisdiction . . .”
Section 9, as noted above, delays the start of the prescription period where there is legal disability. Section 11 likewise postpones the beginning of the prescription period where the action is based upon the fraud of the defendant or where the right of action is concealed by the fraud of a defendant or the action is for relief from the consequences of a mistake.77 It follows that the possibility of an empêche74 Ie again the same as in England. Note however that time starts to run immediately where the wrongful act is actionable per se without proof of actual damage, eg libel and interference with goods. It is only where the wrong is not actionable without actual damage that the period does not begin to run until that damage occurs—negligence is the prime example, there is no (complete) cause of action without damage. See Khan v Falvey & Co [2002] All ER (D) 361 for a recent case on the question of when time starts to run in the context of professional negligence claims, here relating to proceedings struck out for want of prosecution. 75 Eg New Zealand. 76 It would be interesting to see whether Guernsey would follow English law in barring the exercise of the s 33 discretion where a second action is started outside of the limitation/prescription period after the procedural death of an original set of proceedings commenced in time, see the cases of Walkley v Precision Forgings [1979] 1 WLR 606 and Whitfield v North Durham HA [1995] 5 Med LR 32. 77 Note the important difference in drafting between s 11 of the 1979 Law and s 32 of the 1980 Act. The Guernsey Law refers to the right of action being “concealed by fraud” as opposed to the English “deliberately concealed from him”. This meant that the English cases of Brocklesby v Armitage & Guest (a firm) [2001] 1 All ER 172 and Liverpool Roman Catholic Archdiocese Trustees Incorporated v Goldberg [2001] 1 All ER 182, where the Court of Appeal and High Court respectively held that it was sufficient for a solicitor’s acts to have been intentional to deprive him of a limitation defence had no relevance to Guernsey law. In any event English orthodoxy was restored by the House of Lords in Cave v Robinson Jarvis [2002] 2 All ER 641; s 32(2) does not apply where the defendant was unaware that he had been committing a breach of duty.
Civil Courts and Procedure 405 ment d’agir must be considered in every case where, prima facie, the prescription period has expired. Contribution Proceedings The 1979 Law contains another important prescription period at section 18. This section establishes or confirms (depending on your point of view as to how matters stood beforehand) the right of one tortfeasor to sue a joint tortfeasor for a contribution to his liability to another. The amount recoverable is such (amount or proportion) as may be found by the Court to be just and equitable having regard to the extent of that person’s responsibility for the damage. The powers of the Court range from exempting the person from any liability to ordering a complete indemnity. The claim must, however, be brought within a period of two years from the date on which the right to recover contribution accrued to the first tortfeasor, see section 10 of the 1979 Law. The relevant date from which time runs is the date upon which judgment was given against the first tortfeasor or the earliest date on which the amount to be paid by him in discharge of his liability was agreed.78 Claims Against Trustees A special prescription period is also fixed in the context of trust litigation by section 71 of the Trusts (Guernsey) Law 1989, as amended. An action founded on breach of trust must be brought against a trustee by a beneficiary within three years from delivery of the final accounts of the trust to the beneficiary or three years from the date on which the beneficiary first had knowledge of the breach of trust, whichever the earlier. The prescription period does not begin to run until any legal disability has ceased. Likewise no period of prescription applies in respect of any fraud to which the trustee was a party or privy or to recover from the trustee trust property or its proceeds. Again the principle of empêchement d’agir might come to the rescue of a would-be plaintiff in a hard case, although it is difficult to envisage the circumstances given the wording of the Law.
78 These are again provisions which are not copied exactly from the equivalent English legislation; see the Civil Liability (Contribution) Act 1978 and s 10 of the Limitation Act 1980. Note in particular the failure to copy a provision equivalent to s 1(4) of the 1978 Act facilitating the recovery of contribution where a bona fide settlement has been made. See also the increasingly complex English case-law in this area; in particular the leading English case of Royal Brompton Hospital NHS Trust v Hammond & Ors. [2002] 2 All ER 801. The key point to note is that the claim for contribution must be in respect of the “same damage”; the difficulty is in knowing when the damage is indeed the same. See now also the House of Lords case of Dubai Aluminium Co Ltd v Salaam [2002] UKHL 48 in the context of partnership law.
406 The Laws of Guernsey Unfair Dismissal Claims There are special and short prescription periods in other contexts which the Guernsey practitioner must be alert to. Thus a complaint of unfair dismissal under section 17 of the Employment Protection (Guernsey) Law 1998 must be made to the Board of Industry within a period of one month beginning with the effective date of termination; unless the Board, in its absolute discretion, allows the case to be brought after the expiry of one month where it is satisfied that it was not reasonably practicable for the complaint to be presented within the one month period. Executors and Administrators There is a special prescription period for claims against executors or administrators arising out of the distribution of a deceased’s estate where notice has been given in the stipulated form for two successive weeks in La Gazette Officielle.79 The notice must require claimants against the estate to give particulars of their claim within the time specified by the notice, which must be not less than three months from the second publication date. After that date the executors or administrators may distribute the deceased’s personalty having regard to the claims made, and without liability to any person whose claim they have not had notice of at the time of distribution. However, this provision is expressly without prejudice to the right (whatever right that be) of a (late) claimant to follow the property distributed (or property representing it) into the hands of any recipient other than a bona fide purchaser for value without notice. Likewise, the executors and administrators remain bound by any obligation registered in the Livre des Hypothèques, Actes de Cour et Obligations or the Livre des Contrats prior to the date of death. It is good practice to warn recipients of gifts of personalty of the risk that a claim might be made at some time in the future, (with a prima facie final prescription period in the region of 6 years). Boats and Planes Short time limits also very often apply to aviation and maritime accidents and incidents. These are, thankfully, outside the scope of this work save for this bare warning. The relevant legislation is commonly UK or Convention based. The prescription period is typically reduced to no more than two years, and sometimes very much less in the case of property damage. There is extra subtlety where the incident does not comprise a collision between boats. As to maritime law generally, note that the Merchant Shipping (Bailiwick of Guernsey) Law 2002 is likely to come into force in the reasonably near future, replacing a great quantity of United 79
See the Prescription (Amendment) (Guernsey) Law 1997.
Civil Courts and Procedure 407 Kingdom and Guernsey legislation. See also the Convention on Limitation of Liability for Maritime Claims 1976 which imposes prima facie strict limits on the amounts payable in respect of maritime accidents, although those limits may be increased substantially as and when a 1996 protocol comes into force. This is a specialist area of law where it is appropriate to seek specialist assistance in a claim of any size.80 FATAL ACCIDENTS LEGISLATION
The Loi relative à la compensation qui pourra être accordée aux familles de personnes dont la mort aura été causée par accident 1900 gives the dependants of a person killed by the wrongful act of another a cause of action against the wrongdoer for such damages and interest as the Court determines to be proportionate to the wrong.81 The resulting total damages are to be divided between the claimants in such proportions as the Court determines. Only a single action may be brought on behalf of the dependants with the plaintiff being deemed to combine in him or herself all the qualities of those on behalf of whom the claim is brought. The dependants may institute proceedings themselves if the deceased’s executor or administrator fails to act within six months. The 1900 Law restricted the class of possible claimants to the wife or husband, children and parents of the deceased. Parent included natural parents, grandparents and step-parents. Children included grand-children and step-children. The class was extended further in 1936. Those provisions were themselves superseded and the class again extended by the Fatal Accidents (Guernsey) Law 1960 with the inclusion of brothers, sisters, uncles and aunts. The 1960 Law also provided that no distinction would be made between natural children and adopted children, between a relation of the half-blood and the whole-blood, between a natural child and a stepchild and furthermore that an illegitimate person would be treated as the legitimate child of his mother and reputed father. An unmarried partner of the deceased therefore has no right to make a claim on his or her own behalf, no matter how long the relationship. By section 3 of the 1960 Law the Court is required to disregard any insurance money, benefit, pension or gratuity which has been or will be paid as a result of the 80 In short, alarm bells should ring whenever a boat or aeroplane is involved in an accident, both as to time and as to quantum. Establish your prescription period at the earliest opportunity and confirm with your opponent that your understanding is correct for extra assurance and/or to secure an estoppel by convention if an unrecognised time bar is in fact missed (this is an under-valued but potentially very useful form of estoppel, and adopted without demur by Clarke JA in the case of Smith v States of Guernsey Education Council (2002) 5 July). It is common to extend prescription by agreement. Equally it is common to extend prescription by agreement in other areas of Bailiwick personal injury law. For an example of the technical difficulties in these areas see the case of Phillips v Air New Zealand Limited [2002] 1 All ER (Comm) 801 where it was held that Art 17 of the Warsaw Convention (liability of the carrier) applied to an accident which occurred when the passenger was being wheeled in a wheelchair to board her flight. The Warsaw Convention is itself in the course of being superseded by the Montreal Convention of 1999. 81 In practice calculated according to English principles.
408 The Laws of Guernsey death when assessing damages. This goes beyond the equivalent and current English provision at section 4 of the Fatal Accidents Act 1976 and ought to enable the Royal Court to avoid litigation of the kind seen in the case of Longden v British Coal Corp [1998] 1 All ER 289. Section 4 of the 1960 Law permits funeral expenses to be claimed by the dependants, if incurred by them. An issue in Guernsey law is the extent to which double recovery82 may be made through the separate claims of the dependants and the deceased’s estate. Under English law the estate was entitled to make what was called a “lost years claim”, until the right was abolished by statute.83 This was the right of the estate to claim for the deceased’s earnings during his so-called “lost years”, notwithstanding and in addition to the dependants’ right to claim their dependency based upon the same notionally lost earnings. To the extent that the dependants were also heirs they were required to give credit for their entitlement out of the estate. Beyond this a double recovery was, prima facie, permissible. No equivalent legislation was enacted in Guernsey to remove (unambiguously) this obvious injustice and some still argue for the survival of lost years claims in Guernsey law. In the case of Vidamour v Hood, a first instance judgment of the Royal Court, it was held that “. . . unlike the position had this accident happened in England a claim for loss of earnings in respect of the “lost years” is clearly justiciable”. However the judgment went on to state: “I now consider the question of double damages. Whatever learning may have developed in England as to the valuation of the claim for loss of earnings it does seem to be me to (be) defying common sense to tell Jurats calculating the multiplicand they are to take no account of the existence of Benjamin and the ongoing obligation of the deceased towards Benjamin and perhaps also his mother. My view at this stage is that the Jurats should not be told to slavishly follow a formula that has apparently been developed in England for taking a percentage of gross earning as the surplus available and therefore the basis for the multiplicand and so cause a situation where the wrongdoer is being penalised into effectively paying the same damages to two parties. Whilst obviously the precise directions to be given to the Jurats will be a matter for me to hear submissions on I have confidence that the Jurats will be able to take a realistic view of the situation when appraised with the peculiar difficulties of assessing damages that exist in this case. Any award the Jurats make will of course have to clearly apportion the total between the Law Reform (Miscellaneous Provisions) Law for damages and the Fatal Accidents Law of damages.”
It seems therefore that if lost years claims survive their unjust effect will be mitigated by the common sense approach of the Jurats to the amount of damages actually awarded. It remains to be seen if this case will be followed in either respect. In 82
Or, as supporters of the status quo would argue, double claim. See the English cases of Pickett v British Rail Engineering [1980] AC 136 and the ostensibly logical consequence in Gammell v Wilson [1982] AC 27, the effect of which was soon reversed by s 4(2) of the Administration of Justice Act 1982 abolishing lost years claims on behalf of estates in the case of deaths after 31 December 1982; see generally Kemp vol. 1 at paras 6-063 et seq. Why Guernsey common law should ever follow bad English common law is not clear. 83
Civil Courts and Procedure 409 the absence of an active legislature in this area the answer might be to employ a Morton v Paint argument to say that Guernsey law has moved on from whatever English common law may have been (if that is a material starting point in any event). The English cases would not be followed and lost years’ claims would not be admitted at all, thus bypassing the need for legislation. Other important provisions governing fatal accidents litigation are to be found in the Law Reform (Tort) (Guernsey) Law 1979. Thus any Fatal Accidents Law award is liable to be reduced by the same percentage of contributory negligence as if it were the claim of the deceased himself, see section 1(4). There are detailed provisions concerning the prescription period for Fatal Accidents Law claims which have already been considered. Again time does not run against a dependant claimant acting under a disability at the date when any right of action accrued, see section 9 of the 1979 Law. There is greater subtlety in this context given the requirement that a single action be brought. Infant claimants may not be time barred when an adult is, see section 7. It follows that an application under section 8 might have to be made in conjunction with claims that are otherwise not time barred. Some dependants may not be permitted to proceed at all.84 Another feature of Guernsey fatal accident litigation is the absence of a statutory bereavement award. In its place the common law claim for loss of expectation of life appears to survive in Guernsey law; see generally Kemp paragraph 4-0001 for an introduction to this head of claim.85 What amounted to a tariff of £500 was fixed by the House of Lords in the case of Naylor v Yorkshire Electricity Board [1968] AC 529. Allowing for inflation this would amount to a figure in the region of £5,000, still some distance short of the current English figure for bereavement.86 As to the claims of a deceased’s estate generally the Loi relative à la réforme de diverses dispositions de la Loi 1936 provides that causes of action survive the death of a party both against and for the benefit of his estate. This excludes any cause of action in defamation, likewise any right to exemplary damages regardless of the cause of action.
LOI PAR RAPPORT AUX TIERCES PARTIES (DROITS CONTRE ASSUREURS) 1936
This important Law has the effect of transferring to a third party87 an insolvent person’s or wound-up company’s right88 to be indemnified by an insurer in respect of loss or damage suffered by that third party, who accordingly may enforce the right directly against the insurer once the relevant liability has been established. 84 But again note the case of Goode v Martin [2002] 1 All ER 620; although the legislative and procedural law background is admittedly different. 85 Long since obsolete as a head of claim in England. 86 Now £10,000 as a result of the Bereavement (Variation of Sum) (England and Wales) Order 2002 2002/644 which came into force on 1 April 2002. 87 Ie in the typical case to your client, the proposed plaintiff. 88 Ie in the typical case the proposed defendant’s right.
410 The Laws of Guernsey The third party steps into the shoes of the insured person in order to obtain whatever payment the insolvent person or wound-up company would have been entitled to under the material policy. This may be nothing if the insurer would have been entitled to avoid the policy; in any event the amount recoverable is limited to the amount of the contractual indemnity. By section 2 of the Law the third party has a right to information concerning his potential remedies under the Law. By section 3 of the Law any payment made by the insurer to an insured who is either en état de faillité, en état de désastre or being wound up has no effect as regards the right of the third party to pursue the insurer directly. This is to avoid the problem of any such payment being seized and divided amongst the creditors of the insured generally.89 The English statute upon which the 1936 Law was based90 is itself the subject of a recent English Law Commission report.91 Reform is proposed in order to remove a number of obstacles and make good certain shortfalls in the existing statute. It is to be hoped that the proposals are adopted into Guernsey law as soon as may be possible. The Law is of general application. UNINSURED DRIVERS, UNTRACED DRIVERS AND UNSATISFIED JUDGMENTS 92
Introduction The victim of an uninsured driver liable for loss and damage in circumstances where that liability ought by law to have been insured may still obtain compensation as a result either of the imposition of a conditional statutory obligation on insurers to satisfy judgments or else by reason of agreements made between the Motor Insurers’ Bureau93 and the States of Guernsey. The relevant agreement is now dated 18 October 2000 and applies to accidents occurring on or after 11 October 2000. There were earlier agreements going back to 1953. The immediate predecessor agreement was dated 4 April 1990 and applies to accidents occurring between 2 October 1989 and 10 October 2000. The 1990 agreement will continue to be relevant for some time; chiefly until 11 October 2003 and the third anniversary of 11 October 2000 given the prima facie three year prescription period for 89 Note the more extensive examples in French law of the action directe; see Alain Bénabent, Droit Civil, Les Obligations 8th edn (Montchrestien) paras 259–263. These permit, inter alia, a landlord to claim rent directly from a sub-tenant and a sub-contractor to claim payment directly from the employer of the main contractor. Note in particular the general obligation (and therefore liability in default) of an insurer to pay the sum due under a policy of insurance directly to the victim pursuant to L 124–3 Code des Assurances (to be found immediately following Art 1983 in the Code Civil). 90 The Third Parties (Rights Against Insurers) Act 1930. 91 Law Com No 272 published 31 July 2001, see the Law Commission website at www.lawcom.gov.uk. 92 I am very grateful to Vince Bray of Insurance Corporation of the Channel Islands for his assistance with this section. 93 Of 152 Silbury Boulevard, Milton Keynes, MK9 1NB, England.
Civil Courts and Procedure 411 personal injury claims. There are significant differences between the 1990 and 2000 agreements. In most respects the 2000 agreement represents a considerably harsher régime when compared to the 1990 agreement and was the subject of strong criticism when introduced in England.94 The equivalent English agreements are set out in Bingham together with case-law.95 The need for considerable care in this highly technical area cannot be overstated. The Scheme of the 2000 Agreement and the 1936 Law Insurer The essential idea of the 2000 agreement is that it acts as a policy of insurance of last resort where there is no effective compulsory insurance for a road traffic incident. It is important to note that if there was a policy of insurance relating to the vehicle concerned then prima facie, and notwithstanding the absence of cover in the particular circumstances of the case, the policy insurer is still likely to have to deal with the claim. This is by reason of the provisions of the Loi par rapport à l’Assurance Obligatoire contre les Risques dits “Third-Party Risks” s’élevant de l’usage de Véhicules Automobiles 1936 (as amended) (“the 1936 Law”). The 1936 Law limits severely the ability of a road traffic insurer to avoid the compulsory third party elements of a motor policy and obliges the insurer (conditionally and subject to strict notice requirements) to pay unsatisfied judgments against an otherwise uninsured defendant. To the extent that the insurer can avoid liability under the 1936 Law it is still likely to find itself dealing with the claim as “Article 75 insurer”. The term Article 75 insurer refers to Article 75 of the Articles of Association of the MIB, to which all British (including Channel Island) road traffic insurers must sign up. Article 75 replaced the earlier so-called Domestic Regulations and applies to the UK, the Channel Islands, Isle of Man and Gibraltar. In essence the Article requires an Insurer to deal with a claim notwithstanding the invocation of such of the provisions of the 1936 Law as permit avoidance of liability under the Law. The only significant advantage of the avoidance procedure for an insurer is that it offers protection from subrogated claims/claims for contribution. It follows that the pecking order in terms of establishing the defendant’s indemnity is as follows: (i) a true insurer under a valid policy (ii) a 1936 Law insurer where there is a policy, but where there would be no enforcable indemnity, save for the non-avoidance provisions of the 1936 Law (iii) an Article 75 insurer where there is a policy but the 1936 Law liability has in fact been avoided and (iv) MIB as insurer of last resort where there is no policy relating to the vehicle. Assuming that there is truly no insurer to deal with a claim the MIB obliges itself by the 2000 agreement to pay an unsatisfied Guernsey Court judgment for sums 94 See also Andrew Ritchie’s very helpful article in the Journal of Personal Injury Law [2002] JPIL Issue 3/02 for a comprehensive critique of the English agreement and the problem of dealing with uninsured liabilities generally in a road traffic context. 95 Bingham & Berryman’s Motor Claims Cases 11th edn (Butterworths) ch 3 p 149 et seq.
412 The Laws of Guernsey which ought to have been insured pursuant to the requirement to have third party insurance.96 Guernsey in this context appears to mean the Island of Guernsey.97 Although the agreement is between the MIB and the States it is in practice enforceable by those for whose benefit it was made. There are however, a considerable number of exceptions and conditions precedent to liability. There is also a limitation in respect of property damage. All that can be set out here is a summary. Any person concerned with an MIB case should read the agreement and accompanying notes completely and carefully. A claimant is well-advised to get on with their claim as quickly as possible and to issue proceedings (if necessary) long before limitation or prescription looms, for reasons which will become obvious below. In short, if something goes wrong the claimant will be able to start again. If prescription has already gone there is prima facie a problem.98 Exceptions to MIB Liability The 2000 agreement excludes liability in a variety of circumstances as follows: (a) where the liability arose out of use of a vehicle in the possession of the Crown or the States;99 (b) where the claim arises out of vehicle use not required by law to be insured;100 (c) where the claim is assigned or subrogated (ie as opposed to claims brought by the estate, dependents or other direct victims); (d) where the victim knew or ought to have known that the vehicle was not insured; (e) where the victim was allowing himself to be carried voluntarily in the uninsured vehicle and he knew it had been stolen, unlawfully taken or was being used without insurance, was being used in connection with a crime or as a means of escape from arrest. Note that the exclusion is in respect of the liability of the owner, keeper or user of the vehicle in which the victim was travelling as opposed to another vehicle. The burden of proving knowledge is on the MIB but certain presumptions arise in connection with knowledge of lack of insurance when the claimant was the owner or keeper, or else the claimant knew that the driver was too young to hold a licence, or the claimant knew that the driver was disqualified or knew that he was not the owner, keeper or employee of the owner of the vehicle. A claimant is 96
Ie under the 1936 Law. There are related arrangements between the MIB and Alderney and Sark, see generally the MIB website. 98 At least if English case-law on provisions equivalent to s.8 Law Reform (Tort) (Guernsey) Law 1979 ie s 33 Limitation Act 1980 is followed. Sed quaere whether the Human Rights Law would now require a change in jurisprudence, see the case of Goode v Martin [2002] 1 All ER 620. 99 It is not at all clear why the States should be included here; the English agreement refers only to the Crown. Note however that the corresponding and extended definition of “possession” does not refer to the States, only the Crown, see para 6(5)(a). 100 Unless in fact the use was insured. Note that MIB has a general obligation to satisfy unpaid judgments even where there is an insurer; in practice the insurer will settle the judgment if there is one. 97
Civil Courts and Procedure 413 deemed to have knowledge which he would otherwise have been aware of but for self-induced intoxication by either drugs or alcohol.101 Conditions Precedent to MIB Liability There are a great many and onerous conditions precedent to MIB liability under the 2000 agreement. The importance of studying each of these carefully and complying with them cannot be stressed enough. It is for this reason that proceedings should be got on with as soon as possible. The “new” pre-conditions are a great deal more onerous than under the 1990 agreement save that there is/was a shorter period for giving notice of proceedings under the 1990 agreement. Any pre-10 October 2000 accident must be considered in the context of the 1990 agreement. Given the receding importance of the 1990 agreement it is not proposed here to describe minutely the differences in régime. The pre-conditions to liability under the 2000 agreement are as follows: (a) an application must be made in the required form either to the MIB, or where there is an insurer, to the insurer;102 (b) the application should be signed by the claimant or his Advocate, otherwise an application is at risk of being refused unless and until the MIB is satisfied as to the claimant’s knowledge (and implicit approval) of the application; (c) proper notice has been given to the MIB or any ascertained insurer103 within 14 days (prima facie only 7 under the 1990 agreement) of the commencement of proceedings in respect of a liability prima facie required by law to be insured and therefore prima facie covered by the agreement; the commencement of proceedings is defined as when the summons is the “first in the hands of ” Her Majesty’s Sergeant; see also RCCR 56. If alternative means of service are being employed it would seem prudent for the earliest date that could reasonably be argued for commencement of proceedings to be adopted. (d) proper notice is itself defined very broadly to include the following (there is no strict requirement to duplicate steps already taken but, if in doubt, serve everything again): (i) notice in writing that proceedings have been commenced by whatever specified form (typically proceedings will have commenced by Summons); (ii) a copy of the Summons, Cause, Signification or document evidencing the commencement of proceedings; 101 In this context see the House of Lords case of White v White [2001] 2 All ER 43 on what constitutes knowledge; note though the influence of European law on the outcome. 102 Again, if matters are left to the last minute uncertainties of this kind will cause great difficulty. If in doubt serve both with everything. 103 Or, it is suggested, both if in doubt.
414 The Laws of Guernsey
(e)
(f)
(g)
(h)
(iii) a copy of any insurance policy providing benefits in the case of death, bodily injury or damage to property to which the proceedings relate, where the claimant is the insured and the benefits are available to him (see below for the significance of this); (iv) copies of correspondence in the possession of the claimant, his Advocate or agent to or from the Defendant, his Advocate, insurers or agent relevant either to the loss and damage the subject of the claim or, additionally, any correspondence relating to any insurance cover which may be available to the Defendant relating to the subject matter of the claim; (v) a copy of any other document required to be served on the Defendant pursuant to Guernsey rules of procedure (in practice usually none apart from the Summons itself and any schedule/report in fact served with the Summons; in English procedure the service of a schedule and medical reports is a requirement); (vi) such other information about the proceedings as the MIB may reasonably specify; the claimant has given, not later than 7 days104 after the occurrence of specified events, notice in writing to the MIB or ascertained insurer of the date of the event and has supplied a copy of any defence filed, amendment to the particulars of claim (cause), or any amendment of or in addition to any schedule or other document required to be served with a material pleading. The specified events are as follows: (i) the filing of the defence; (ii) any amendment to the particulars of claim or amendment to or addition to any schedule or other document required to be served with the particulars of claim (cause); (iii) the setting down of the case for trial; (iv) the date when any notice of the trial date is received.105 the claimant has supplied the MIB or any ascertained insurer with such further information and documents in support of his claim as the MIB/insurer reasonably requires within a reasonable time; the claimant has pursued the rights and remedies available to him under s.7 of the 1936 Law as regards discovering the insurance particulars of the prospective Defendant, including making a complaint to the police of any failure to comply with the statutory requirements and, additionally, he has used all reasonable endeavours to obtain the name and address of the registered keeper of the vehicle concerned; the claimant has, if so required by MIB and after being granted a full indemnity in respect of costs, taken all reasonable steps to obtain judgment against every person who may be liable for the injury, loss and damage;
104 Note the provision at para 2(3) which excludes weekends and public holidays from calculations of numbers of days when 7 or less are specified as the period allowed. 105 Again this does not correspond very happily with existing Guernsey procedure, which only adds to the problems.
Civil Courts and Procedure 415 (i) the claimant has not refused to agree to the MIB being joined as a party to the proceedings; (j) the claimant has assigned to the MIB or its nominee any unsatisfied judgment (whether or not the judgment includes sums in addition to those which the MIB is otherwise liable to satisfy); (k) the claimant has undertaken to repay the MIB sums paid on a judgment subsequently set aside or sums which are paid from other sources by way of compensation or benefit for the material death, injury or other damage.106 These pre-conditions are found at paragraphs 7 to 13 of the agreement but can be taken together as a whole; it also helps to illustrate the very extensive nature of the obligations and the care required. Many of the pre-conditions appear unreasonable. There seems no good reason why there should be quite so many potentially terminal pitfalls placing the MIB in such a privileged position. The idea that a severely injured claimant should not recover for his loss because his Advocate had not supplied a copy of the defence within seven days is absurd. One would hope and expect the Guernsey Court and/or the President of the Board of Administration to whom disputes are, in the first instance referred, to take a strong line with the MIB. However, English case law has, on a number of occasions, supported a strict and literal interpretation of the equivalent agreement. In short it is much preferable not to test the issue in the first place. How to Serve Notices or Supply Documents to the MIB Paragraph 8 of the agreement concerns the proper mode of service on the MIB. In essence any requirement for proper notice to be given of relevant proceedings or the giving of further information or supply of documentation under either paragraphs 9 or 10 (ie in effect all of the notice/information-giving requirements) is sufficiently given or supplied only if sent by fax or by registered or recorded delivery post to the MIB’s registered office. Delivery may be proved by production of the sender’s fax transmission report or an appropriate postal receipt. Again this is another potential trap for the unwary. Limitations to MIB Liability By paragraph 14 of the 2000 agreement the MIB has only limited liability in respect of property damage. The MIB has no liability for the first £300 of property damage nor for any damage to property in excess of £250,000. In day-to-day personal injury practice this is rarely an issue, typically the only property damage is to 106 It is by no means clear how extensive this provision in fact is. Prima facie certain States benefits might be affected, but this is presumably subject to general law in this area as to what must and need not be given credit for. Equally, this is not the only place in the agreement where MIB appears to seek to put itself on a better footing than the ordinary insured defendant. See further below.
416 The Laws of Guernsey a car, articles carried in it and other personal effects. It would be more relevant if an uninsured lorry driver demolished a building. A more significant limitation is at paragraph 15 whereby the MIB has no liability in respect of compensation already received from the Policyholders Protection Board, an insurer under an insurance agreement or arrangement or any other source. This appears potentially to give the MIB a right to set-off the kind of insurance proceeds which in normal law a claimant would not have to give credit for. It explains the various disclosure requirements relating to policies of insurance and other sources of compensation generally. Again this requirement was not included within the 1990 agreement and it is hard to see why it was acceded to, save that the new agreement had already been adopted in England. It is noteworthy that by paragraph 3 the MIB again purports to improve its position over the general law by providing, in essence, that any act or compromise by an Advocate or other person acting on behalf of a minor or patient shall be treated as if performed in respect of a claimant of full age and capacity. In case of challenge there would be interesting arguments. Again the question of enforceability and privity would arise. The MIB agreement could be said to be made on behalf of victims, which is why they can enforce it. If so it is hard to see why a victim without capacity could or should be bound by such a provision. Where a parent reaches agreement with an insurer in normal circumstances the parent often gives the insurer an indemnity against the child renewing his claim in the future; the claim itself is not extinguished by the compromise, if it was the indemnity would be unnecessary. Policy issues would also arise, not to mention the question of proportionality. Miscellaneous Apart from the conditional obligation to pay unsatisfied judgments the MIB has few other obligations, save to give reasoned replies and decisions by virtue of paragraph 16. Disputes relating to the “reasonableness of a requirement made by the MIB for the supply of information or documentation or for the taking of any step by the claimant” may be referred by the claimant or the MIB to the President of the Board of Administration whose decision is said to be final. This suggests the possibility of an over-arching necessity for the reasonableness of any action taken by the MIB in respect of any failing to comply with a requirement. Again, and as noted above, one would hope that the President would be robust in dealing with mere procedural failures where there was no prolonged or unjustifiable failing on the part of the claimant. One might also appeal to Human Rights Law/administrative law principles, particularly the principle of proportionality. The MIB would also be susceptible to challenge in Court. If the MIB does pay out it will itself seek recovery of the sums paid from the uninsured person, if circumstances permit. If the MIB makes a recovery of money on an assigned judgment which included sums the MIB was not required to
Civil Courts and Procedure 417 satisfy, the MIB must apportion the recovered monies pro-rata the proportion of sums which were covered by the agreement to those which were not. The agreement permits the MIB to discharge its obligations via agents, typically an insurer nominated by the MIB for the purpose. The 1990 agreement is amended to include a provision requiring the MIB to give reasoned replies. The notes accompanying the agreement provide at paragraph 7 for applications to be made for interim payments which will be considered on a “voluntary basis”; yet is also said that “the claimant has a right to apply to the court for an interim payment order which, if granted, will be met by MIB”. This is perhaps another instance where the use of the English form has not quite been tailored to existing Guernsey procedure, where there is in fact no provision for interim payments.107 The Progress of a Claim Against an Uninsured Driver Assuming there is no ascertainable insurer and that all the criteria are fulfilled for liability under the 2000 agreement an application should be made as early as possible to the MIB and well within the prescription period. The MIB may choose to deal with the matter without the need to issue proceedings, but again prescription must be watched carefully. If proceedings are issued they are directed at the uninsured defendant in the normal way. The right of action is still properly speaking restricted to a claim against the defendant on normal legal principles. If the defendant is cooperating with the MIB he will sign over the right to deal with the action to the MIB; if the defendant will not co-operate or if there are other difficulties the MIB typically will apply for leave to be joined as a defendant and will conduct the defence of the claim as if it were the substantive defendant; this is with a view to reducing its liability for any eventual judgment sum to the smallest amount it properly can. If there is an insurer, albeit there was no cover in the circumstances, then it must be established whether the insurer will deal with the claim. If so, the matter proceeds relatively normally; although there may be difficulty if the uninsured driver will not co-operate with the insurer, in which case the claim will proceed in a similar way to the above. In any event the strict notice requirement of section 4 of the 1936 Law must be complied with, see below. The defendant himself should not be overlooked in all of this; just because he is not insured does not mean he is not worth enforcing against if there are problems with the MIB. The lawyer should consider carefully the ways in which liabilities can be satisfied without having to give credit for benefits under the 2000 agreement. If There is an Insurer As noted above, if there is an insurer a separate statutory prima facie obligation is imposed to satisfy unpaid judgments against the insured person, see section 4 of the 1936 Law (as amended). There is again a strict requirement to give 107
At least as yet; this is another area likely to be reformed.
418 The Laws of Guernsey notice to the insurer within seven days of commencing proceedings; see section 4(2)(a). Great care is required. Note that the plaintiff may well be better off invoking the 1936 Law than the 2000 agreement. (The 1936 Law is, perhaps, overdue for re-enactment and consolidation, having been amended by the Road Traffic (Compulsory Third Party Insurance) (Amendment) (Guernsey) Law 1958, the Motor Vehicles (Passenger Insurance) (Guernsey) Law 1971, the Road Traffic (Compulsory Third Party Insurance) (Amendment) (Guernsey) Law 1979, the Road Traffic (Compulsory Third Party Insurance) (Amendment) (Guernsey) Law 1983, the Road Traffic (Compulsory Third-Party Insurance) (Amendment) (Guernsey) Law 1989 and the Administration of Justice (Bailiwick of Guernsey) Law 1991. For present purposes the 1989 amendments are the most significant.) Untraced Drivers In England there is a separate agreement governing claims against untraced drivers. The system is different procedurally because no proceedings can be brought against an unknown defendant. The agreement is dated 14th June 1996.108 There is no equivalent in Guernsey, again for reasons which are not clear. However, paragraph 10 of the notes accompanying the 2000 agreement provide that MIB “undertakes to give consideration to bodily injury or fatal cases, informally, along the lines of the Agreement dated 14 June 1996 . . .”. The paragraph goes on to confirm in rather stronger terms the “eligibility” of a claimant for an award subject to the exemptions in clause 6 of the agreement. It is noteworthy that the 1996 untraced drivers agreement does not cover property damage at all (again not of the greatest importance where there is a serious personal injury). Note however that in England a new untraced drivers agreement came into force on 14 February 2003. The 2003 agreement does make provision (within limits) for recovery of property damage where there is an identified vehicle, if not driver. It would be very important to agree with MIB at the outset precisely what was expected of any Guernsey claimant. Note for example that under the 1996 agreement an English claimant would be required to have reported the incident to the Police within 14 days or as soon as the applicant reasonably could; (now just 5 days for property damage under the 2003 agreement). The application must be made in any event within three years of the date of the material incident (only 9 months for property damage under the 2003 agreement). It is likely that the 2003 agreement will be extended to the Channel Islands in due course. For now it is prudent to make careful enquiry and to act long before any likely time limit is exceeded.
108
See Bingham ibid p 202.
Civil Courts and Procedure 419 ROYAL COURT CIVIL PROCEDURE
What follows is an account of civil procedure in proceedings before the Royal Court of the Island of Guernsey. There is little more to be said about civil procedure in Alderney or Sark since in practice those courts look to Royal Court procedure for guidance, alternatively the principles set out in the case of Laughton v Main. Preliminary Matters The absence of any pre-action protocols is a significant difference between litigation in Guernsey and England.109 Equally there would be nothing to prevent a party adopting a protocol either unilaterally (to the extent possible) or even by agreement with an opponent (again to the extent possible). Subject to this, the matters to be addressed prior to litigation are broadly similar; ie: (a) (b) (c) (d) (e) (f) (g) (h)
issues relating to the proper law and forum; the question of when prescription will expire; the merits and economics of the proposed litigation; the enforceability of any resulting judgment; the taking of detailed proofs; preservation and/or recording of physical evidence; preservation and gathering of documentary evidence;110 preservation and/or recording of evidence not in the possession or control of the client (and the possible need to apply to the Court in this regard); (i) whether any injunction application is necessary and appropriate to preserve assets or evidence; ie a Mareva order or Anton Piller order;111 (j) whether some alternative means of dispute resolution is provided for in any contractual documentation or is otherwise appropriate; (k) whether the dispute can be resolved amicably and without recourse to proceedings.
109 There are pre-action protocols in force in England in the following areas: personal injury claims, clinical disputes, construction and engineering disputes, defamation and judicial review. There are draft protocols in a number of other areas. The more general ethos behind pre-action protocols is also important, in particular the notion of Court proceedings as being a last resort. 110 Including explaining to the client the discovery obligation; it is not inappropriate to give advice concerning the risks associated with the creation of new documents not covered by legal professional privilege. 111 Now so-called “freezing” and “search” orders in England; where the use of Latin phrases has also been outlawed, presumably in the interests of political correctness and human rights generally. Given that most legal terms are, in any event, Greek to the ordinary man (whether such terms be written in Latin or English) this insistence is misplaced and more patronising than of any genuine assistance to the common man or woman. No one suggests that the word “consideration” should not be used, but what does it mean to the person on the Clapham omnibus? Res ipsa loquitur.
420 The Laws of Guernsey There are, in addition, the requirements of the Rules of Professional Conduct to consider; in particular rule 34. The client must be informed and kept informed of the following: (i) the types of recoverable costs; (ii) the fact that in any event they will be personally responsible for payment of their own Advocate’s bill of costs in full, regardless of any order for costs made against opponents; (iii) the probability that if they lose they will have to pay their opponent’s recoverable costs as well as all their own; (iv) that even if they win their opponent may not be capable of paying what they have been ordered to pay; (v) the fact that recoverable costs are unlikely to cover all the actual costs, even if successful.112 Potential liability for an opponent’s costs has become a much more important consideration since the coming into force of the Royal Court (Costs and Fees) Rules 2000. Note also the requirements of Rules 30 and 31 of the Rules of Professional Conduct: “On taking instructions the Advocate should give clients the best information possible about the likely cost of the matter, unless the circumstances do not allow such information to be given.”113 “If no fee has been agreed or estimate given, the Advocate should tell clients how the fee will be calculated.”
Given the introduction of a legal aid scheme in Guernsey in 2002 the Advocate must also consider, where appropriate, the client’s means and eligibility for legal aid.114 Pre-action Discovery The question of the availability of pre-action discovery under Guernsey procedural law has led to considerable debate over the years, albeit matters now appear to be sufficiently clear. Simple pre-action discovery is not generally available. In the case of International Technology Ltd v Silver Falcon Enterprises Ltd [1994] 17 GLJ 61 the Court of Appeal held that the Law Reform (Miscellaneous Provisions) 112 Ie the difference between recoverable costs, currently fixed at the rate of £167 per hour (it is unclear whether this rate may be charged only for an Advocate as oppposed to any qualified lawyer working within the Advocate’s practice, there are potential issues also concerning the charging of paralegals) and whatever the actual rate charged to the client. 113 Which will be very rare, perhaps extreme emergency. 114 The scheme continues to evolve and is beyond the scope of this edition, save to note its existence and importance.
Civil Courts and Procedure 421 (Guernsey) Law 1987 could not be used to make a pre-action discovery order, nor did the Royal Court Civil Rules confer such a power. Likewise an argument based on an 1860 Ordonnance concerning the production of documents was dismissed.115 The legislative exception to this starting point is the express provision made in the context of personal injury and fatal accident claims by the Royal Court (Discovery of Documents) Rules 1998. It is also common for disclosure orders to be made ancillary to Mareva injunctions in order to police the same (as opposed to giving discovery per se). It now seems clear also that Norwich Pharmacal 116 orders may be made in Guernsey together with orders pursuant to the principles set out in the case of Bankers Trust Co. v Shapira [1980] 3 All ER 353, the headnote of which reads: “The Court was entitled, for the purpose of giving effect to a defrauded plaintiff ’s equitable right to trace his money, to order a bank to disclose the state of, and the documents and correspondence relating to, the account of a customer who was prima facie guilty of fraud even though the bank had not incurred any personal liability for the fraud, for unless there was the fullest possible disclosure the fund could not be traced. To justify such an order, however, the evidence of fraud against the customer had to be very strong, but, where it was, the customer was disentitled from relying on the confidential relationship between him and his bank to prevent discovery. Moreover, such an order for discovery would only be made on terms that the plaintiff gave an undertaking in damages to the bank, paid the bank’s expenses of making the discovery and used the documents solely for the purpose of tracing the money. On that basis, the Court would aid the New York bank’s claim . . . The fact that the true defendants, S and F, had not been served and that a considerable period of time had elapsed since the fraud had been committed did not, in the circumstance(s), deprive the Court of its power to make the order. . . .”
Whereas Bankers Trust orders are essentially ancillary to tracing remedies Norwich Pharmacal orders rely on the distinct principle that a person who has become mixed up in wrongdoing (whether innocently or not) may be required to disclose the identity of, and full information concerning, the wrongdoer to the person who has been wronged.117 Where justice cannot otherwise be done, a plaintiff may 115 Arguably insufficient weight was given to the fact that the final paragraph of the 1860 Ordonnance plainly took as its premise other (undefined and now not remembered) powers to order the production of documents apart from at trial: “Cette Ordonnance ne porte point préjudice aux cas où la production d’une pièce peut être ordonnée par la Cour.” 116 Norwich Pharmacal Co v Customs & Excise Commissioners [1973] 3 WLR 164. See generally the case of Vardinoyannis v Ansol Limited & Ors. (2001) 20 November a judgment of Lieutenant Bailiff Catherine Newman QC (the second and longest of her judgments in this litigation). Note however the conclusion of the Court of Appeal in the case of States Prison Board v Kirk [1991] 11 GLJ 62 where it was held that, as a general rule, the Court had no power to order the discovery or production of documents as against a person who was not a party to the action. It was said that the proper procedure would be to issue a subpoena to the relevant person. The better view is that the Royal Court of Guernsey has inherent powers akin to and certainly no less than the High Court of England, and accordingly may make equivalent orders in equivalent circumstances. It is for the Royal Court to determine what those inherent powers are (subject to appeal). 117 See Steven Gee, Mareva Injunctions and Anton Piller Relief 4th edn p 258 et seq. See also the case of Totalise Plc v Motley Fool Ltd & Another (2002) Times 10 January for the principles governing
422 The Laws of Guernsey obtain a discovery order against a party with a view to using the material obtained to bring proceedings against a third party even where, without the information sought, it cannot even be ascertained whether the plaintiff has a cause of action against that third party see P v T Ltd [1997] 4 All ER 2000.118 A comparatively recent case to consider such matters with a coincidental factual connection to Guernsey is that of Aoot Kalmneft v Denton Wilde Sapte (A Firm) (2002) 1 Lloyd’s Rep 417, a first instance decision of HHJ McGonigal sitting in the QBD Leeds Mercantile Court. Here the claimant sought disclosure of documents from a firm of solicitors who had acted for a Guernsey company which had since been struck off. The claimant sought disclosure both in relation to the company itself and in relation to an individual connected with the company and a series of transactions resulting in alleged diversion of the claimant’s monies to third parties. The claimant also sought disclosure to assist it in the defence of arbitration proceedings. It was held that disclosure would not be ordered for the arbitration purpose alone, but that the existence of a collateral purpose would be no bar to disclosure if there were purposes within the relevant principles. The test in Bankers Trust Co v Shapira & Ors and Norwich Pharmacal Co v Customs & Excise Commissioners was identified and applied as follows: if through no fault of his own a person became mixed up in the tortious acts of others so as to facilitate their wrongdoing he might incur no personal liability himself but he came under a duty to assist the person who had been wronged by giving him full information and disclosing the identity of the wrongdoer. The principle was not simply that the wrongdoer be identified, but extended to his identification as a wrongdoer. A ‘mixed-up’ third party was under a duty to disclose information to enable the claimant to commence an action. It was held also that legal professional privilege did not protect the client where the documents had come into existence in the course of a fraud, but that the Court should be slow to deprive the client of privilege in the course of an interlocutory application.119 This area of procedural law continues to evolve in favour of the claimant and against prospective defendants and whatever rights of confidentiality they might have; although in the case of Novo Nordisk v Banco Santander (Guernsey) Ltd [2000] 2 ITELR 557 Lieutenant Bailiff Hancox set aside a disclosure order made against a bank on the grounds that the circumstances were neither such as to provide the foundation for a Norwich Pharmacal order or a Bankers Trust order. The monies in the account had never been the plaintiffs’, accordingly there was no tracing remedy. Likewise there was no sense in which the bank had facilitated the wrongdoing complained of. costs on such applications. In general the applicant will be ordered to pay the costs of the respondent, including the costs of making the disclosure. The applicant will, in due course, look to recover those costs from the wrongdoer. 118 Likewise, post-judgment discovery in aid of enforcement may be ordered against a non-party who has become mixed up in whatever transaction is the subject of enquiry if the Court considers it just and convenient to do so, see the case of Mercantile Group (Europe) AG v Aiyela [1994] QB 366. 119 See also the case of Ashworth Security Hospital v MGN Ltd [2002] 4 All ER 193; a judgment of the House of Lords concerning the proper use and scope of Norwich Pharmacal orders.
Civil Courts and Procedure 423 Service and Service Out of the Jurisdiction Assuming that proceedings are to be brought it must be established whether there is a good address for service within the jurisdiction. The jurisdiction is, of course, restricted to the Island of Guernsey itself for hearings at first instance, save for those exceptional matters where the Royal Court has a Bailiwick-wide first instance jurisdiction. Leave is therefore usually required to serve a person resident in either Alderney or Sark. Service within the jurisdiction is the subject of rules 1–6 of the Royal Court Civil Rules. Service must be effected by the Sergeant either personally or at home in the case of an individual. Service on a company must be effected by the Sergeant leaving the document to be served at the company’s registered office in the Island. If the company has no registered office but carries on business in the Island service may be effected by leaving the document at any place of business in the Island of the company. Service on the States of Guernsey or any committee is effected by the Sergeant leaving the document to be served at the Chambers of the Law Officers of the Crown.120 Pursuant to RCCR r4 the Sergeant must make a “relation” as to the mode of service. The Sergeant will endorse a copy of the document served with either the letter “A”, “B” or “C”. “A” service indicates either personal service (in the case of an individual) or service on a company at either its registered office or place of business in the Island if there is no registered office. “B” service indicates service at the party’s home but requires also that the document was left with a reliable adult who undertook to bring it to the attention of the person to be served. “C” service indicates service (or non-service) other than in accordance with the requirements of “A” or “B” service. “A” or “B” service permits the matter to proceed in every respect. “C” service permits the matter to be tabled (the significance of which see below), but nothing more, unless the party appears in Court at the appointed time or the Court is otherwise satisfied that the party has notice of the document or that service of the document was in fact good. Rule 6 permits substituted service within the jurisdiction where it would be impracticable or entail undue expense to serve in the normal prescribed manner. By rule 7 the Court may give leave to effect service of a document (typically the summons itself) out of the jurisdiction if satisfied that the matter to which the document relates is:
120 Ie St James’ Chambers, St Peter Port. When the States is sued it should be sued simply as the States of Guernsey. The States of Guernsey is a legal person. Individual committees or groups of committees should not be sued, having no separate legal personality, (as opposed to individual committee members who may be proper defendants in their own right, eg for misfeasance in a public office). States committees are merely emanations of the States itself. There are exceptions created by statute, eg the GFSC. See generally HM Procureur’s responses to questions raised by the Harwood Committee in the “Review of the Machinery of Government in Guernsey” p 113.
424 The Laws of Guernsey (a) Properly justiciable before the Court; and (b) a proper one for service out of the jurisdiction. The Court will be concerned to see that, prima facie, there is sufficient reason for the proposed litigation to be brought before the Guernsey Court. The Court is likely to form a preliminary view on the question of whether it has jurisdiction under the principles of Guernsey private international law, what the applicable law would be and whether there is any indication as to the forum conveniens.121 The Court is in no sense bound by this brief examination and is likely only to be concerned by obvious reasons why the litigation should not be commenced in Guernsey. The Court’s order permitting service out of the jurisdiction will state the form, manner and time in which, and conditions subject to which, service is to be effected and the minimum period which must elapse before the matter may be proceeded with. Commencement of Proceedings There is some debate as to when Royal Court proceedings commence for the purpose of interrupting the running of prescription. The majority view is that proceedings begin when the summons is given to the Sergeant for service. So long as this is done within the relevant prescription period the claimant is said to be safe. However, a substantial minority view holds that the relevant date is the day upon which the cause is first tabled. This appears to be based upon a concern that prescription might stop running without the opposing party being aware, possibly for quite some time, that proceedings have begun. Although this was equally possible under English procedure express provision was made limiting the life of a standard writ to just four months, see RSC O6 r 8. The difference between the date when the cause is handed to the Sergeant and when it is first tabled may amount only to a few days, but this period could be decisive. Note however that the defendant may still not have notice even if the later date is adopted, (eg because only “C” service has been effected). Some Guernsey practitioners would say that time does not stop running until the defendant has been served with the process; but this would make the running of prescription dependant upon the ease with which a defendant could be found and served, which must be incorrect. 121 It is generally accepted that the Court will grant leave to serve out where one or more of the criteria equivalent to those set out at RSC O11 r 1(1) are met. See the case of Konamaneni v Rolls-Royce [2002] 1 All ER 979 for the law relating to applications to set aside such leave. The leading case for forum conveniens principles remains Spiliada Maritime Corp v Cansulex Limited [1986] 3 All ER 843. See likewise the judgment of Lieutenant Bailiff Newman QC in Vardinoyannis v Ansol Limited & Ors (2002) 24 May on the question of forum in which the Spiliada principles were adopted and applied. The judgment is also noteworthy for its spirited defence of Guernsey procedural law. A separate judgment also dated 24 May 2002 in the same litigation concerned leave to serve out directly and applied RSC O11 principles.
Civil Courts and Procedure 425 The better view is that prescription in fact stops running when the papers are delivered to the Sergeant, and perhaps also when (if such be required) application is made for leave to serve out of the jurisdiction,122 ie when the application is lodged with the Greffe. The Royal Court Civil Rules themselves state that an action commences when the summons is handed by the plaintiff to the Sergeant, see rule 56. The case of Bordeaux Vineries Limited v States of Guernsey, a Court of Appeal decision of 5 April 2000, discussed the problem without pretending to come to a conclusion. The case is also important because of an acknowledgement that proceedings may be commenced informally (as between represented parties) and for dicta concerning the (in)ability of a party to rely upon the other’s procedural failures when no complaint has been made at the time. It is always prudent to work well within prescription periods if at all possible. The best practice is to avoid the debate altogether by commencing proceedings well in advance of the expiry of prescription. Absentee Proceedings An alternative (albeit used rarely) to obtaining leave to serve out of the jurisdiction is a procedure known as “absentee proceedings”. Here the proposed plaintiff applies to the Court for “permission d’évoquer” ie permission to publish a notice in the Gazette Officielle to the effect that, in the absence of opposition, an Attorney will be appointed by the Court to represent the proposed defendant throughout the intended proceedings. When seven days have elapsed the plaintiff may action HM Sergeant in the Royal Court to be sworn as Judicial Attorney of the absent person, assuming no opposition has been provoked by the newspaper notice. HM Sergeant is sworn as Judicial Attorney and granted a “terme à écrire” (period in which to write) in order to correspond with the intended defendant at his last known address and to receive whatever instructions might result. The Judicial Attorney is obliged to act upon such instructions as are received although, in reality, it is seldom that anything will be heard from the absent person. There is some suggestion that the Sergeant will not act if there is no address for the absentee, equally it is probably sufficient if a last known address is supplied. If the terme à écrire has expired and nothing has been heard from the absentee the matter may proceed against him via the Judicial Attorney. The Attorney is required to consult the parents of the absent person if this is possible. There is an Ordonnance from 1936 setting out the various periods which must be allowed for corresponding with the absentee. This Ordonnance was repealed by the 1989 Royal Court Civil Rules, although the Royal Court follows its guidance notwithstanding. 122 Particular care is required here. It is difficult to see what other date could properly be taken, since the papers are unlikely to be delivered to the Sergeant for service. Again it is better to avoid such issues in the first place. The difficulty is that there is no moment when proceedings are “issued” as this would be understood in English Court office procedure.
426 The Laws of Guernsey It is difficult to foresee the circumstances in which absentee proceedings would be used in preference to the service out procedure provided for by Rule 7; save perhaps where a proposed defendant is merely absent from the Island for long enough not to want to await his return and it seems he maintains a real connection with the Bailiwick. The procedure may also be helpful in the case of saisie proceedings, given the number of notices which are required to be served. The Cause Every action in Guernsey proceedings is commenced by and contained in a cause123 which must be tabled before the Court. The expression “tabled” in this context is alien to any non-Guernsey lawyer. It indicates literally the personal attendance of the Guernsey Advocate in the Royal Court to present the new proceedings. A notable feature of Guernsey procedure is the amount of Court business conducted in person in open Court which would be dealt with administratively or automatically elsewhere; although where both parties are represented consent orders are possible. By rule 9 the cause must contain a statement of the material facts on which the plaintiff relies for his claim, but not the evidence by which those facts are to be proved. The cause performs the same function as a statement of claim under the former Rules of the Supreme Court. It is pleaded in very similar fashion, apart from the formal opening and the fact that at each successive stage in the action the plaintiff is required to add to the cause a reference to the last event in the proceedings, including the date and short particulars of what occurred, eg any Court order. As the pleadings are added to so they are joined to the cause to produce a single consolidated pleading at the time of trial which will include the cause itself, the defence (“defences”) any reply (“réplique”) and any reply to the reply (“duplique”). Again the narrative of the course of the proceedings will appear at the end. Any request for further and better particulars dealt with formally by way of pleading is also likely to be included, although practice differs.124 By Practice Direction No 3 of 1999 all causes, other than straightforward debt and like actions, together with any other pleadings tabled in actions before the Royal Court must bear the name of Counsel who settled the pleading in capital letters at its foot. The same applies to skeleton arguments and written submissions which must additionally be signed. 123 The word cause has two senses. In this context it refers to a pleading and is the near equivalent of the old English specially indorsed writ, ie combined summons and statement of claim, although it is only the latter which is tabled as such, see below. The word also has a sense equivalent to cause of action. de Ferrière defined the word cause as “. . . un droit acquis à quelque personne, par quelque titre que ce soit, vente, cession, donation, succession, etc.” There is no equivalent of the originating summons. It is not uncommon for trustee applications and the like to be made by simple application directly to the interlocutory Court; this is a small example of how coutume is made. Note also the section on injunctions and how free-standing injunction proceedings are possible under Guernsey law. There is a third meaning in the context of contract law where cause is the approximate equivalent of consideration. All three meanings are related. 124 Likewise any exception de forme, see below.
Civil Courts and Procedure 427 A summons must also be produced which is either given to the Sergeant for service upon the defendant or used for the purposes of substituted service or service overseas as the case may be. The summons may either be a slightly amended version of the cause with a formal opening to the Sergeant requesting that he summons the defendant, alternatively the cause may be attached to a separate summons document. Accordingly the defendant receives either a summons version of the cause or a summons and a cause. The Sergeant is additionally given the original cause. It is upon this original document that he makes his relation as to service, as referred to above. This document is collected by the relevant firm’s Court clerk and lodged with the Greffe in time for tabling in Court on the following Friday (see below). It is this document which the Greffier will have before him and therefore the evidence of service. The Advocate for the plaintiff also therefore knows from his or her clerk whether he or she can proceed from the way in which the cause is marked by the Sergeant, ie whether with “A”, “B” or “C” service. Tabling the Cause Causes are first tabled at a regular sitting of the Ordinary Court which takes place every Friday commencing at 9.30am.125 The Bailiff or Deputy Bailiff sit alone since the Court is concerned only with procedural matters and matters of a noncontentious nature which do not require the presence of the Jurats. After all such business is completed the Court reconstitutes itself as the Interlocutory Court with the Bailiff or Deputy Bailiff again sitting alone to deal with interlocutory applications and any matter which has been stood over from the earlier Ordinary Court. Rule 10(1) requires the summons to have been served not less than two days before the day on which the cause is tabled. It follows that in order to be able to proceed against an absent defendant when a matter is tabled at the Friday Ordinary Court he must have been served not less than two days before. If he nevertheless appears or is represented it might be possible to progress. An adjournment is more likely. Although the requirement is not for two clear days service it is generally accepted practice that the summons must be delivered to the Sergeant by no later than Tuesday for service before close of business on the Wednesday. Same day expedited service is possible if a higher fee is paid to the Sergeant. In practice one would look to serve at least a week in advance, save for good reason. Each of the causes to be tabled by a firm, together with a copy for the Bailiff, must be lodged at the Greffe no later than 4.45pm on the Wednesday.126 The firm must also supply an agenda or schedule setting out all of its Ordinary Court business, see below.
125 Commonly referred to as the Friday Ordinary Court. See Practice Direction No 1 of 1999 for a detailed account of the procedure for this sitting. Robes are currently not worn 126 See Practice Direction No. 6 of 2002 dated 22nd December. The Practice Direction concerns both Matrimonial Causes Division business as well as Ordinary Court business and is of general importance.
428 The Laws of Guernsey The Friday Ordinary Court At the Friday morning hearing judgment will be entered for the plaintiff if the defendant is either absent without explanation127 or is present but indicates that the claim will not be defended. It is noteworthy that a party who does not intend to defend a claim is better off permitting a default judgment to be entered against him as opposed to a judgment by consent. The former has a prima facie lifespan of only three years whereas the latter may be enforced for a period of six years. The Rôle des Causes à Plaider It is a part of the Advocate’s Articles governing professional conduct that he or she will not maintain, whether as plaintiff or defendant, any cause which the Advocate does not in good conscience believe to be good and in conformity with the law.128 Accordingly an Advocate who has not had sufficient opportunity to take instructions or to assess the merits of the proposed defence must seek an adjournment, which will invariably be granted for at least one week. Assuming that there is a defence on the merits which the Advocate can, in good conscience, put forward he or she will indicate that the matter is to be defended by calling out the word “inscrite”. This French term indicates that the matter should be inscribed upon what is called the rôle des causes à plaider, ie the Royal Court’s list of cases before it at the pleading stage. There are a series of obscure and seldom referred to Ordonnances containing provisions governing the rôle des causes à plaider including Ordonnances dated 1849 (Tome III, p 157), 1850 (Tome III, p 175), 1851 (Tome III, pp 181 and 207), 1854 (Tome III, p 335), and 1860 (Tome III, p 436). They are principally concerned with granting a privileged position to certain types of case and litigant on the pleading list and are essentially obsolete. If the plaintiff himself does not appear at the tabling of the cause judgment may be given against him. This would not prevent the cause from being tabled again in the future, assuming prescription had not passed and that there had been no abuse of process over and above simple error. Élection de Domicile It is the obligation of both plaintiff and defendant to make an élection de domicile129 which amounts to an undertaking to maintain a presence in the Island for the purposes of the proceedings. This is principally concerned with facilitating 127
RCCR 12(2). There is a continuing obligation in this respect. If it subsequently comes to the knowledge of the Advocate by any means whatever that a cause is bad the Advocate must no longer plead it and must abandon it entirely. See Appendix 5. 129 Referred to in English as an address for service. 128
Civil Courts and Procedure 429 future service of documents and notices. If a party acts in person he will typically be resident in the Island and will give his home address. If the party is represented it is typically the address of his Advocate which is given, whether the party is resident in the Island or not. An unrepresented defendant resident outside of the Island must nevertheless give an address for service within the Island of Guernsey.130 If the plaintiff fails to give an effective élection de domicile the action may be dismissed. Likewise if the defendant fails to give an élection de domicile judgment may be given against him. The obligation to give an élection de domicile should be noted carefully. The plaintiff ’s Advocate should always request that the élection be made by the defendant at the time when the cause is first tabled. This does not prevent a later request being made if the initial opportunity is overlooked, but inconvenience and difficulty may result unless raised on the first occasion. There is provision for changing the élection de domicile which otherwise remains valid until the action is terminated. If there is a challenge to jurisdiction it is prudent for a defendant to mention this at the earliest opportunity, ie when first appearing in Court. The address for service should be given expressly without préjudice to arguments concerning jurisdiction, although it is unlikely that a party would be debarred from challenging jurisdiction in default of such express reservation.
REGISTRATION OF CLAIMS
Part II of the Law Reform (Miscellaneous Provisions) (Guernsey) Law 1987 contains important provisions concerning the registration of interlocutory matters in the Livre des Hypothèques, Actes de Cour et Obligations.131 This is a curious procedure with no direct equivalent in England whereby a plaintiff may register a claim made in proceedings against the defendant’s realty in order to provide security, albeit of a slightly uncertain extent. In this context the Livre has the function of a form of Land Charges Register. The claim can be registered at the outset, ie long before any judgment is given. No registration may be made however without the leave of the Court, although the application may be made ex parte.132 The amount to be registered can be limited and may be varied or revoked on the application of either party. The Court may impose conditions upon fulfilment of which the registration shall be removed. The Court of Appeal case of Moed v Cockram from July 1999 is the leading authority in this area. Leave to register will be refused if the action is frivolous or vexatious 130 Although the correctness of this requirement and the precise meaning of élection de domicile have never seriously been challenged. 131 The material parts of the 1987 Law are set out at Appendix 3. 132 Note however the memo sent by the Secretary to the Bailiff to all practising Advocates dated 11 June 2001 indicating that a Practice Direction might issue controlling the making of ex parte applications for leave to register. The guiding principle is always that an application should be made inter partes if circumstances permit, ie the interests of the applicant will not be threatened unacceptably by giving notice.
430 The Laws of Guernsey or obviously unsustainable or otherwise such as should be struck out on any of the recognised grounds. Similarly leave will be revoked if it should later transpire that the action falls to be struck out upon such basis. The Court’s discretion is unfettered but must be exercised with regard to the circumstances and context in which the discretion falls to be applied. If the plaintiff ’s action is sustainable in the sense that it cannot be struck out on any of the usual grounds then he is, prima facie, entitled to registration. Registration does indeed confer a form of priority; likewise the registration itself will not become perempt independently of the action itself. It follows that a prudent plaintiff will usually seek registration of his claim at the earliest opportunity, typically on the occasion when the first Act of Court is granted, ie placing the claim on the rôle des causes à plaider. It is not uncommon for the plaintiff to seek leave to register when the cause is first tabled. Note however that there is a charge for registration comprising document duty of .5% ie ½ of one per cent. Whether this can eventually be recovered as a disbursement is untested; there seems no reason in principle why not. Registration of the claim is not automatic, the Court merely gives leave. It is for the party concerned to effect the registration and to pay the document duty. Obviously if a defendant is plainly good for the money, eg it is insured and there is no issue concerning the right to or limits of indemnity, registration is unnecessary. SECURITY FOR COSTS
Rule 48(1)(b) permits the Court to order any party to give security for costs in such amount, on such terms and in such manner, as the Court thinks just.133 Applications for security for costs are very common in Guernsey and are typically made by defendants against plaintiffs resident outside of the Island. This has, in the past, been treated as sufficient reason in itself for security for costs to be ordered regardless almost of any other consideration.134 Such an approach is clearly wrong. The fact that a plaintiff may be non-resident is by no means conclusive. The judgment of Lieutenant Bailiff Hancox Gillingham v NRG Benelux BV t/a NRG Distribution (2002) 2 January confirmed both that English principles should be followed (at least English principles under the Rules of the Supreme Court) and that the Court retained a discretion whether or not to require security notwithstanding the non-residence of the plaintiff; ie it is not enough of itself that a claimant is non-resident. The case is helpful generally as to the approach a Guernsey Court should take.135
133
Which may also include security on an indemnity basis as opposed to recoverable. The Royal Court (Security for Costs) Order 1957 went so far as to state that security for costs should only be granted by the Court if the plaintiff or appellant was ordinarily resident out of the jurisdiction. The 1957 Order was repealed by the RCCR 1989. 135 See also the judgment of the Bailiff in Strawn v Hemery Trustees Limited (2001) 23 February where he refused to grant security for costs against a non-resident academic claiming against a former trustee. 134
Civil Courts and Procedure 431 The relevant paragraph of the 1999 Supreme Court Practice is found at volume 1 23/3/3 and reads as follows: “. . . Rule 1(1) provides that the Court may order security for costs ‘if, having regard to all the circumstances of the case, the Court thinks it just to do so.’ These words have the effect of conferring upon the Court a real discretion, and indeed the Court is bound, by virtue thereof, to consider the circumstances of each case, and in the light thereof to determine whether and to what extent or for what amount a plaintiff (or the defendant as the case may be) may be ordered to provide security for costs. It is no longer, for example, an inflexible or rigid rule that a plaintiff resident abroad should provide security for costs. . . . In exercising its discretion under r 1(1) the Court will have regard to all the circumstances of the case. . . . A major matter for consideration is the likelihood of the plaintiff succeeding. This is not to say that every application for security for costs should be made the occasion for the detailed examination of the merits of the case. Parties should not attempt to go into the merits of the case unless it can be clearly demonstrated one way or another that there is a high degree of probability of success or failure (Porzelack KG v Porzelack (UK) Ltd [1987] 1 All ER 1074). . . . In considering an application for security for costs the Court must take account of the plaintiff ’s prospects of success, admissions by the defendant, open offers and payments into Court; but a defendant should not be adversely affected in seeking security merely because he has attempted to reach a settlement. . . .”
The effect of Porzelack can perhaps be overstated. The Court may consider the merits of the case in a general sense; what is not permitted is to go into the merits in a detailed fashion.136 There must be some degree of obviousness either way. The essence of the Porzelack judgment is as follows: “. . . it seems to me that I have an entirely general discretion either to award or refuse security, having regard to all the circumstances of the case. However, it is clear on the authorities that, if other matters are equal, it is normally just to exercise that discretion by ordering security against a non-resident plaintiff. The question is what, in all the circumstances of the case, is the just answer.”137
The judgment of Lightman J in Leyvand v Barasch & Ors (2000) 15 February [2000] TLR 223138 summarised concisely the approach to a plaintiff who was not ordinarily resident: “The jurisdiction of the Court to order a claimant ordinarily resident out of the jurisdiction to provide security is long established. It is clear from the authorities cited to me and relied on by the defendants (and in particular Ebrard v Gassier (1884) 28 Ch D 232, Swinburne v Carter (1853) 23 LJQB 16 and In re Apollinaris Company’s Trade-Marks [1891] 1 Ch 1) that during the nineteenth century the practice was established that claimants living abroad were prima facie bound to give security for costs and that, if they 136 137 138
See p 1077e of the first instance judgment of Browne-Wilkinson VC. See p 1077b ibid. Emphasis added. See Lawtel for the full judgment.
432 The Laws of Guernsey desired to escape from doing so, they were bound to show that they had substantial property in this country, not of a floating, but of a fixed and permanent nature, which would be available in the event of the defendants being entitled to the costs of the action. On the basis of these authorities, the submission has been made that a foreign claimant should be ordered to provide security whenever the claimant fails to discharge the onus upon him to prove that he has fixed and permanent property here. This submission however founders because the practice of the courts has now fundamentally changed. Security cannot now be ordered as a matter of course from a foreign claimant: to avoid the making of such an order he does not have the burden of establishing the ownership of fixed and permanent property here or indeed any property at all; the simple and single criterion for ordering security is what is just in the circumstances of the particular case. The authorities relied upon by the defendants are no longer of any relevance or assistance: they are a distraction and should not (sic) longer be cited. The common sense principle applies that the existence of assets within the jurisdiction, their fixity or permanence, are among a number of potentially relevant factors, their importance depending on the particular facts of the case. The Court will not infer the existence of a real risk that assets within this country will be dissipated or shipped abroad to avoid there (sic) being available to satisfy a judgment for costs unless there is reason to question the probity of the claimant: there is no such reason in this case. If there is reason to question the claimant’s probity, the character of his property within the jurisdiction is relevant in assessing the risk: the risk may be greater if the property is cash or immediately realisable or transportable, and less if fixed and permanent.”
In Sir Lindsay Parkinson & Co. v Triplan Ltd [1973] QB 609 at 626–27 Lord Denning MR adopted the following considerations (amongst others) as relevant when determining whether security should be ordered: “The Court might also consider whether the application for security was being used oppressively—as to try and stifle a genuine claim. It would also consider whether the company’s want of means had been brought about by any conduct by the defendants, such as delay in payment or delay in doing their part of the work”.
Certainly there is scope for abuse in the making of an application for security which the Court must be alert to. It is not at all infrequent for a powerful defendant to seek to impede a less well off plaintiff by such procedural means. In Gillingham the risk of applications for security for costs being used oppressively was acknowledged, noting also that the impecuniosity of a plaintiff was not a reason to order security, see paragraph 23/3/19 Supreme Court Practice 1999. Additional arguments against unthinking orders for security for costs against nonresidents are to be found in the case of Nasser v United Bank of Kuwait [2002] 1 All ER 401 at pp 418–19. The English Court of Appeal went so far as to say that it would be discriminatory to make orders against (non-residents) for that reason only. It also developed the interesting argument that if security for costs were to be ordered they should be proportionate to the difficulty of enforcing a costs order against the foreign claimant in the relevant jurisdiction.
Civil Courts and Procedure 433 The procedure for making an application for security for costs appears to be informal in the extreme. A practice has developed whereby one simply writes to the plaintiff ’s Advocate informing him or her that you intend to apply for security and enclosing a draft bill of recoverable costs. The bill is lodged by the defendant with a copy of the cause when it is first due to be tabled. Security may then be ordered on the first occasion the matter is in Court or the application put over to be argued, if disputed. It is becoming more common to see a properly drawn application notice, particularly when the application is made after proceedings have commenced. Typically security is only ordered up to a given point in the proceedings; for example, all steps up to but excluding the trial itself. The defendant may return for additional security if need be. Again note that a plaintiff may seek security from a counterclaiming defendant in appropriate circumstances. Until recently only trifling sums were involved given the low level of recoverable costs. This is no longer so and more applications are likely to be made and contested as a result. Note that on the hearing of a summons for security for costs the general rule relating to without prejudice correspondence applies, namely that without prejudice correspondence concerning negotiations between the parties is not admissible in evidence without the consent of all the parties concerned, see the case of Simaan General Contracting Co. v Pilkington Glass Ltd [1987] 1 All ER 345. The Summons for Defences By rule 15 the defendant must table “defences” when summonsed to do so by the plaintiff. This is another instance of open Court procedure being required where in England the equivalent obligation would be automatic and unquestioned. In Guernsey a defendant may simply sit back and wait for the plaintiff to bring the matter back before the Court given the absence of any such automatic obligation to serve a defence. A plaintiff must literally issue and have served by the Sergeant a fresh summons requiring the defendant to do so. The documentation itself is unimpressive, comprising often what appears to be exactly the same document that was served initially save that it is headed rôle des causes à plaider, has a future Friday Court date in the top left-hand corner, and refers at the end to the fact that the cause was first tabled on whatever date and placed upon the rôle. Again there is a difference in practice between firms. Some firms draft a summons requiring the defendant to appear on the date in question in order to produce defences and attach the cause in its new form.139 This is perhaps the more straightforward and elegant way of proceeding. The summons for defences must be served on the defendant not less than four days before the day upon which it is intended that the defences be tabled. As with the cause itself it is good practice to give a longer notice period than the minimum 139
Ie headed rôle des causes à plaider with a paragraph at the end giving the history.
434 The Laws of Guernsey requirement. Particularly in the case of a summons for defences it is unrealistic in the extreme to expect one’s opponent to be ready to proceed swiftly. In theory one could summons for defences for the following Friday, in practice a minimum of several weeks must elapse before there is any hope of obtaining defences. It is good practice to give some little notice of the intention to summons for defences. A further procedural requirement of the Greffe is that any case to be called in Court which is on the rôle des causes à plaider must be entered in a book kept for that purpose at the Greffe prior to 11.00am on the Friday preceding.140 Curiously the requirement does not extend to cases which have moved from the rôle des causes à plaider to what is called the rôle des causes en preuve or witness list. Again there is a requirement for the summonsing plaintiff to lodge the related cause141 (and a copy) at the Greffe in time for the Friday hearing. In short, any matter which an Advocate’s firm intends to raise at the Friday Ordinary Court will be listed in a schedule with brief particulars as to what it concerns and lodged together with all material documents prior to Wednesday at 4.45pm142. This extends not only to causes being tabled for the first time and summonses for defences but also the calling of any matter before the Ordinary Court which is on either the rôle des causes à plaider or the rôle des causes en preuve, likewise any non-contentious matter which may be dealt with by the Bailiff sitting alone. (A separate agenda and bundle of documents must also be produced and lodged for Interlocutory Court matters. Each Interlocutory Court matter of any significance has its own small bundle with a schedule at the front indicating the nature of the application, its likely duration and whether it is opposed. These must also be lodged by 4.45pm on the Wednesday before the Friday, see below.143) At the hearing of the summons for defences a number of outcomes are possible. It is unlikely that the defendant will fail to appear at all (assuming good service) given that an appearance will already have been made to reach this stage. By rule 16 express power is given to the Court to enter judgment against a defendant who fails to table his defences, which would extend to simple absence. A defendant or his Advocate might seek further time from the Court to file defences. Generally it will only be opposed applications for extra time which are dealt with in this way. There are alternative procedures permitting additional time to be given by agreement. The first procedure, which can be applied to any form of summons,144 including the first occasion when the cause is to be tabled, permits a summons to be “signed over out of Court” by the opposing Advocate. The original, related cause is taken back from the Greffe and put before the opposing Advocate to endorse his 140
Immediate action is therefore required to bring a case back the next Friday. Ie the cause supplied to the Sergeant at the same time as the summons for defences and upon which he certifies the form of service effected. This is precisely the same procedure as for the cause which commenced the proceedings. 142 See Practice Direction No 6 of 2002. 143 Note also the different copy and documentation requirements for causes to be tabled before Monday/Tuesday Ordinary Courts and Full Courts; see Practice Direction No 4 of 1999 & more generally No 6 of 2002. As to interlocutory matters see Practice Direction No 7 of 2002. 144 Or application. 141
Civil Courts and Procedure 435 agreement that the matter should be put over to an agreed date (typically a Friday in one or more weeks’ time) together with an acknowledgement that no formal reservice of the summons will be required.145 The alternative is to prepare and lodge a consent order pursuant to Practice Directions Nos 1 and 2 of 1999. There is nothing to stop a matter being adjourned by agreement in Court itself. Eventually the Defences will be tabled and served. Exceptions and Defences Guernsey procedure differs significantly from English procedure (as is and as was) in the form that the pleaded defence takes and, in particular, the form in which preliminary issues are raised. A provision in the RCCR reflecting English procedure prevented requests for further and better particulars being made prior to the filing of defences, unless necessary or desirable to enable the defendant to plead, or for some other special reason, see rule 37(2). However the old procedure was not abolished whereby a defendant may preface his defences by what are known as exceptions de forme. These operate and are pleaded in exactly the same way as a request for further and better particulars but have the extra effect of staying the proceedings until either the particulars are supplied to the satisfaction of the defendant or the plaintiff (usually) has brought the matter before the Interlocutory Court to determine whether the exceptions are justified and, if so, the extent to which they must be answered and he then answers them (satisfactorily). Meanwhile the case will simply stand adjourned sine die in the Ordinary Court with leave to restore, typically on seven days notice whilst the exceptions are dealt with. The effect of all this is potentially to delay proceedings substantially, given the unreasonable demands often made by exceptions. It is not at all unknown that once exceptions have been answered or otherwise dealt with a request for further and better particulars is then raised either of the cause or even the answers supplied to the exceptions. The scope for abuse is very great, exceptions delay a case by a minimum of weeks and often months. The essence of a true exception de forme is the inability (sometimes expressly pleaded) of the defendant to plead properly to the case against him unless further information is supplied as requested in the exceptions. One might find a defence pleaded after the exception, but often with a right reserved to amend those defences in the light of the information demanded. The other broad category of exception is known as an exception de fond. This is an objection going to the root or foundation of the cause of action alleged. It amounts to a preliminary issue which, if found in favour of the defendant, will dispose of the matter without the need for a trial on the merits before Jurats. In day 145 Sometimes a copy of the cause will be signed over and later attached to the original if, say, a defendant in person has promised to pay money by a certain time and the Advocate does not wish to lose the chance of proceeding on the following day if the promise is broken. The original document remains lodged for tabling, if need be.
436 The Laws of Guernsey to day practice one refers only to the generic category of exception de fond. Historically such exceptions are further sub-divided into three categories. The first is the exception déclinatoire and applies where it is to be argued that that the Royal Court either does not have or should not exercise jurisdiction in the matter before it. The exception may be based upon simple absence of jurisdiction under private international law, or an allegation of forum non conveniens alternatively for reasons of litispendance and connexité.146 The defendant who proposes to take such an exception must raise the exception from the outset and not join issue with the cause generally or otherwise conduct himself in a manner which amounts to a submission to Guernsey jurisdiction. It is current practice for the defendant’s Advocate to indicate opposition on this ground from the outset when he or she gets to their feet at the first tabling of the cause. When summonsed for defences the exception(s) déclinatoire will be pleaded, alternatively (and possibly additionally) any other exceptions de fond which may be relevant147 together with a simple denial of liability in any event (assuming there is a proper defence), and all without prejudice to the primary contention which is the exception déclinatoire. The second category of exception de fond is the exception dilatoire. This exception is based upon an allegation that the plaintiff ’s cause of action has not yet arisen or matured and is therefore misconceived, at least for the present. This would apply where, for example, a debt is payable after a certain date which has not passed or is payable subject to a condition precedent which has yet to be fulfilled, eg a demand for payment has not been made. The final form of exception de fond is the exception péremptoire. This category of exception, if made out, has the effect of rendering the action a nullity. For de Ferrière it is “celle qui détruit entierement l’action intentée”.148 Examples would include an allegation that the debt sued upon had already been paid (as unlikely as this may seem). The most commonly pleaded exception péremptoire is that a claim is prescribed. Exceptions de fond will be dealt with as preliminary issues by the Bailiff or Deputy Bailiff sitting alone where the determination does not depend upon findings of fact, which must be made by Jurats. It was held in the case of Donaldson v Upton Limited, a 1982 decision of the Guernsey Court of Appeal, that exceptions de fond based on facts which were not admitted should normally be reserved until after the hearing on the facts had taken place.149 There is an Ordonnance dated 20 January 1851 entitled “Des Exceptions et Fins de Non-Recevoir” governing exceptions de fond, (a fin de non-recevoir performs a 146
See Pierre Mayer, Droit International Privé 6th edn pp 441–46. See below concerning the 1851 Ordonnance. 148 That which destroys an action completely. 149 See also the judgment of Lieutenant Bailiff Hancox in the case of Smith v Islands Insurance (2002) 13 August on the question of when it will and will not be appropriate to order trial of a preliminary issue. See also Collas v Peet (2001) 20 February. In summary, where a split trial would require findings of fact to be made and therefore Jurats to sit it is unlikely to be ordered, save exceptionally; for example where liability and quantum are clearly separated, as in many personal injury cases. 147
Civil Courts and Procedure 437 very similar function to an exception de fond, if not near identical.) Every exception de fond must be put in writing and every exception déclinatoire must be put forward before any other exceptions or defence. This seems to require any exception déclinatoire to be taken alone and independently of any other exception or defence. The logic appears to be that the Court’s time should not be wasted with other issues if, in fact, it either has no jurisdiction or declines jurisdiction. It also avoids any accusation of submission to the jurisdiction. Equally where there is a clear prescription defence an Advocate may wish to raise that exception also, although care would be required at least to stay within the spirit of the 1851 Rules and to emphasise the primary contention. It would be appropriate to seek directions as to how best to proceed with the exceptions. In any event all exceptions must be put forward before “l’établissement de la Cause”. This requirement was considered in the Guernsey Court of Appeal case of Cherub Investments Limited v Channel Islands Aero Club (Guernsey) Limited of 1982. Here it was held that the defendant to an action may enter an exception de fond as of right avant l’établissement de la Cause, which was taken to mean up until the moment the pleadings were closed and the action placed on the rôle des causes en preuve. However it was also held that the Court retained a discretion to allow an exception de fond to be entered at any time before final judgment, subject to appropriate orders as to costs.150 It was further held that the test of whether an exception de fond would be upheld was whether there were no facts which might be proved at the trial which would allow the plaintiff to succeed. In essence, whenever facts have to be decided it will be a matter for the Jurats at trial.151 Pothier wrote about exceptions at Part I, chapter II, sections 2, 3, 4 and 6 of his Traité de la Procédure Civile. Modern French procedural law concerning exceptions and fins de non-recevoir is to be found between Articles 71 and 126 of the Nouveau Code de Procédure Civile, an overlooked authority for this technical area.152 Pleading of Defences After any exceptions have been pleaded the defences follow (save where a bare exception déclinatoire is relied upon). The net pleading effect of Guernsey defences is very similar to an English defence under former English procedure, save that the defences should be sub-divided into what are called niances and prétentions. The former word is derived from the French verb nier which means to negate or deny. The latter is derived from the French verb prétendre which means to claim. Accordingly the defence must separate denials (and admissions) from the positively asserted defence case (ie the averments). Care must be taken when pleading 150 But not, presumably, an exception based upon absence of jurisdiction if the defendant has in fact submitted. 151 Allowing, of course, for the possibility (exceptionally) of a split trial; see above. 152 The NCPC is overlooked generally as a source for Guernsey procedural law. See also Terrien p 334 for a 16th century account of exceptions.
438 The Laws of Guernsey niances to ensure that each and every allegation made in the cause is sufficiently traversed. If a defendant fails to deny any material allegation of fact in the cause or to state expressly that he does not admit it, he will be taken to admit it.153 Sometimes one sees a defence in English form pleaded under the combined heading “niances and prétentions”. Set-off and Counterclaim There seems to have been some doubt over the right of set-off 154 under Guernsey procedural law. This was investigated in a paper by Advocate Peter Collas dated January 1986. He concluded that because set-off or compensation155 was such a widespread and long-established feature in all the coutumes, including that of Normandy, the Guernsey Court “could not refuse to accept that it was part of the coutume of Guernsey”, unless there were good authority to the contrary, and he knew of none. It seems from the paper that customary set-off was only available in the following circumstances: (a) there were two debts between two parties in respect of which they were reciprocally creditors and debtors the one of the other; (b) the two parties were creditor and debtor in the same right, (thus a party indebted personally could not set-off a sum due to him as agent or trustee of another); (c) both debts had to be certaine et liquide;156 a disputed claim could not be set-off against a certain debt, nor could a claim for an unliquidated sum be set-off; (d) both debts had to be due (ie without more and forthwith); (e) when set-off did occur it took place de plein droit and automatically. Many of these features are common to the English notion of set-off as strictly defined.157 What is less clear is the precise extent to which a mere counterclaim may be used to prevent judgment either being entered or, as importantly, executed—ie when will a counterclaim be sufficiently effective to allow a judgment obtained on the claim to be stayed nevertheless? RCCR 21 prima facie confers a broad discretion on a Court hearing an application for summary judgment and is considered further in that context. 153 See Bullen & Leake and Jacob’s Precedents of Pleadings 12th edn p 75, the last to combine pleading precedents with a comprehensive account of the system of pleadings itself. 154 In the sense of true defence to a claim, as opposed to a mere independent right of claim. 155 Which is, confusingly, the French term for set-off. 156 Ie in a fixed sum or otherwise liquidated, as opposed to a mere claim for damages. 157 Ie in the sense of a true defence to a claim. See also Pothier, Treatise on Obligations, Pt III ch IV (p 408 vol 1 of Evans’ translation). For Pothier compensation (set-off) “is the extinction of debts of which two persons are reciprocally debtors, by the credits of which they are reciprocally creditors”.
Civil Courts and Procedure 439 The right of contractual set-off was confirmed by section 1 of the Law Reform (Miscellaneous Provisions) Law 1979. Although apparently intended to appease concerned bankers the provisions have general application as regards mutual dealings between parties pursuant to a contractual arrangement. The right to counterclaim generally was provided for, alternatively assumed or confirmed, by RCCR 27.158 Today it is likely that the Royal Court would largely adopt modern English principles governing counterclaim and set-off, whether under the RSC or CPR.159 Equally the Royal Court is free to regulate its own procedure. There are circumstances under English law where execution of a judgment is permitted although the balance of justice appears to demand otherwise. There is no reason why the Royal Court should follow such precedent if it does not accord with the Guernsey tribunal’s sense of what is just. One of the failings of the edifice which was the Supreme Court Practice was its tendency to overlook what is now enshrined in the CPR as the overriding objective. Under Guernsey procedure the counterclaim is pleaded as a part of the defence, as in English procedure. The pleading must be signed by an Advocate.160 Rule 27(2) provides that a counterclaim shall have effect as a cross-action enabling the Court to pronounce a final judgment in the action both on the plaintiff ’s claim and on the counterclaim. The Court may nevertheless order a counterclaim to be separated from the action and for it to proceed independently if the subject matter is not sufficiently closely connected to the action. Save for the final disposal of both claim and counterclaim the latter survives whatever interlocutory fate may befall the claim. Current Guernsey practice is to treat the counterclaim as a quasiindependent action regardless. Accordingly one must go through the rigmarole of placing the counterclaim on the rôle des causes à plaider, the plaintiff must be summonsed to produce his defences and the counterclaim will eventually reach the rôle des causes en preuve as if it were a separate case altogether.161 Third Party Proceedings Rule 33 of the Royal Court Civil Rules provides for third party proceedings. These are permitted whenever a defendant (a) claims a contribution or indemnity from a non-party or (b) claims any relief or remedy from a non-party relating to the subject matter of the cause together with substantially the same relief or remedy as claimed by the plaintiff or (c) where any question or issue relating to the original 158
“A defendant may, by his defences . . . set up a counterclaim against the plaintiff.” See also Jersey cases such as Jersey Steel Company Ltd. v Regal Construction Company Ltd (1971) where judgment was granted but execution stayed until conclusion of the trial of the counterclaim or further order. 160 It is noteworthy that a summons commencing proceedings before the Royal Court must also be signed by an Advocate. This requirement applies to litigants in person as well as those who are represented; it follows that litigants in person must find Advocates willing to sign their pleadings. This acts as a modest safeguard against hopeless cases being put to the Court, although whether it is human rights compliant is quite another matter. 161 Which is rather to miss the point. 159
440 The Laws of Guernsey subject matter of the action should be determined not only between the plaintiff and the defendant but also between either or both and the proposed third party, (to avoid unnecessary multiplication of proceedings and inconsistent findings). Third party proceedings are commenced by service of a summons on the third party, again signed by an Advocate. The pleading is in a form similar to an English Third Party Notice (as was). On the return date of the summons the Court may make such order as it thinks just as regards the filing of pleadings and any other incidental matter. The third party is treated as if he were a defendant sued in the ordinary way by the party who joined him. It is noteworthy that no leave is required to issue third party proceedings in Guernsey. By rule 33(5) where a third party is joined, the Court may, at or after the trial of the action, give such judgment for the defendant as the nature of the case may require against the third party or for the third party against the defendant. Where a judgment is pronounced in favour of the defendant against a third party leave is required before it may be executed. By Rule 33(7) there is provision of sorts permitting contribution proceedings between existing parties. Again the party may be ordered to be joined as a third party (strangely) and directions made accordingly. There seems no reason why a contribution notice should not be served and directions sought, equally no reason why contribution should not simply be claimed in the defences themselves. Parties to Proceedings By rule 34(1) the Court may remove any improperly joined or unnecessary party from the proceedings. The Court may alternatively order that a party be joined to the proceedings if it appears that such a person ought to have been joined or there exists between the party and any existing party a question or issue arising out of or relating to or connected with any relief or remedy claimed in the proceedings which, in the opinion of the Court, it would be just and convenient to determine as between him and that party as well as between the existing parties. No plaintiff may be joined without his consent. The Guernsey Court of Appeal considered rule 34 in the case of Cross v Benitrust International (CI) Ltd [1998] 25 GLJ 47, where the issue was the appropriateness of joining directors to proceedings against a corporate trustee with a view to obtaining an (eventual) remedy pursuant to section 70 of the Trusts (Guernsey) Law 1989.162 There are useful provisions at rules 30 and 31 permitting representative proceedings and class actions to be brought. Rule 31(1) expressly provides that proceedings may be brought on behalf of a class where the rights or obligations of any members of the class depend upon the construction which the Court may put upon a document, the identity of any of the members is unknown or difficult to ascertain and the Court considers that it is convenient to have the question of con162 Prima facie guarantor liability for directors of corporate trustees; the case is considered more fully in the context of trusts.m
Civil Courts and Procedure 441 struction determined before the identity of the members is ascertained. In such circumstances the Court may appoint one or more persons to represent the class members who will be bound by any order or judgment of the Court given in the proceedings. Likewise in representative proceedings a judgment or order given is binding upon all persons represented, but may not be enforced against a person not a party to the proceedings without the leave of the Court. Whenever considering parties and causes of action it is important to bear in mind the rule of English procedural law in the case of Henderson v Henderson (1843) 3 Hare 100 whereby it is an abuse of the process of the Court to raise in subsequent proceedings matters which could and should have been litigated in earlier proceedings. It is likely that the same principle would be applied in Guernsey. The leading case is now Johnson v Gore Wood & Co. [2001] 1 All ER 481 which represents something of a blurring of the rule.163 This House of Lords decision is also of great importance in the company law context of determining when claims may be brought by shareholders as opposed to the companies themselves; ie the whole issue of locus to sue and the vesting of causes of action.164 Vexatious litigants The Restriction of Vexatious Legal Proceedings (Guernsey) Law 1985 permits the Royal Court to make an order preventing a person from bringing proceedings in the Magistrate’s Court, or continuing such proceedings or making an application within the proceedings without the leave of the Royal Court. The order is applied for by either HM Procureur or HM Comptroller; the procedure is set out in the Restriction of Vexatious Legal Proceedings Rules 1986. The legislation does not apply to the Royal Court itself, although it is implicit from section 4 of the 1985 Law that the Royal Court already has jurisdiction to restrain vexatious legal proceedings. The test to be satisfied under the 1985 Law is that the person concerned has “habitually and persistently without any reasonable ground” instituted vexatious proceedings or made vexatious applications. It is suggested that the Royal Court plainly has an inherent jurisdiction to restrain vexatious litigants.165 Consolidation of Actions The Court has broad powers to consolidate actions or to order that they be heard at the same time or one after the other or to order that an action be stayed 163 See also Woodhouse v Consignia [2002] 4 All ER 977 in the context of successive pre-trial applications for the same relief. 164 See also Giles v Rhind [2002] 4 All ER 977. See the company law section. 165 See also the Royal Court of Jersey case of Eves & Eves v Hambros Bank (Jersey) Limited [2000] JLR 221, and the subsequent judgment between the same parties dated 2 August 2001. The first judgment is of general importance on the question of the Royal Court’s inherent jurisdiction. In the English case of A-G v Ebert [2002] 2 All ER 789 an order was made essentially excluding a vexatious litigant from the Royal Courts of Justice, London for 3 years in the first instance.
442 The Laws of Guernsey pending the determination of another. In each case the Court will consider whether there is a common question of law or fact, whether the rights to relief claimed arise out of the same transactions or series of transactions or whether for some other reason it is desirable for the Court to exercise its powers. Alternatively the Court may order the severance of claims within an action or of a claim and counterclaim and that there be a separate trial. See generally RCCR 28. The French word crocheté 166 is still used to denote the consolidation of claims. Interlocutory Applications Rule 43 makes the general provision that the Court may by order give directions as to the hearing of any action or any question raised by the pleadings, including any exception, fin de non-recevoir or other preliminary point in issue. Express power is given to order that any facts specified or described shall be proved by affidavit, that no more than a specified number of expert witnesses may be called, that the evidence of a particular witness be taken by commission or that evidence be taken in a certain manner. In practice these specific powers are rarely exercised in contrast to the general power to give directions.167 There is no reason why directions should not be given in the Ordinary Court when cases are placed either on the pleading list or witness list. In practice directions are sought by application to the Interlocutory Court. There is no established culture of directions being given as a matter of course in order to progress matters, which is a source of regret. The manner of making application to the Interlocutory Court is the subject of Practice Direction No 5 of 1995. This provides that interlocutory applications will be dealt with at the conclusion of the Friday Ordinary Court. Applications must be submitted to the Greffe not later than 4.45pm on the preceding Wednesday.168 Each firm representing an applicant must prepare and lodge two copies of a schedule setting out the names of the parties and the nature of the applications to be made. Two copies of each application, the up-to-date pleadings and any other supporting documents must also be lodged, together with the original and one copy of any supporting affidavit. One copy only of authorities is required to be lodged. There is a degree of flexibility in these requirements according to how substantial the application is, although two copies are always required of whatever is lodged.169 Applications for consent orders must be marked as such and three copies supplied signed by counsel for all parties concerned. Practice Direction No 2 1999 sets out the standard form for a consent order to follow. Where a consent order is to be 166
Literally crocheted together, as in the English crochet from the same French root. There is plenty of scope for debate as to the precise ambit of the Rule 43 powers. Note the conservative approach of the Court in the case of Webber v Allied Dunbar Assurance Plc (2001) 16 August, a first instance decision in litigation which was settled before the interlocutory appeal could be heard. 168 The deadline used to be 12 noon on the Thursday, in common with Ordinary Court matters. The change was effected by Practice Direction No 2 of 2001 dated 12 June 2001. 169 See now also the specific requirements for interlocutory papers provided by Practice Direction No 7 of 2002 dated 24th December. 167
Civil Courts and Procedure 443 made counsel need not be present in Court. Applications which are not by consent must be marked as such together with a time estimate. At the sitting of the Interlocutory Court consent orders are dealt with first and an assessment is then made as to what other matters can be dealt with on the day. Dates may be fixed for the hearing of applications which cannot be dealt with there and then and which require a specific appointment to be made, usually because of the anticipated length of hearing or complexity. Advocates may by agreement between them adjourn matters from one sitting of the Interlocutory Court to another by notifying the Greffe no later than 9.30am on the Friday morning. After that time the attendance of at least one of the parties will be required, if only to adjourn the application. No formal list is issued by the Greffe. It is the responsibility of the applying Advocate to notify his opponent of the application. Current practice is to give one week’s notice to an opponent; formal notice via the Sergeant is not necessary between co-operating firms. The 1995 Practice Direction itself only requires official notice to be given to unrepresented parties. The strict requirements of the rules for making application are set out at RCCR 47(2). A person intending to apply to the Court must give notice to any opposing party by causing a signification170 to be served upon him by the Sergeant not less than two days before the day fixed for the hearing of the application. The signification must state the date and time appointed for the hearing, annex a copy of the application and be signed by an Advocate. It is good practice to cause the signification to be served on an unrepresented party a minimum of one week in advance of the proposed hearing. In Guernsey procedure the simple notice of application served by post is not sufficient except between represented parties and even then a difficult opponent may still take issue if it suits him or her to do so. The Public Nature of Proceedings It is important to note that all sittings of the Royal Court are open to the public, with the exception of sittings in the Matrimonial Causes Division, ex parte applications and “any case in which Counsel or a party to the proceedings can satisfy the Court that proceedings should be held in camera. Separate applications in that regard should be made to the Court, in advance where possible”.171
170 The signification (or notification) is a useful device. Rather like a summons it is addressed to the Sergeant and asks him to notify the person to be served of whatever is attached to the signification and any Court date given for the hearing, if relevant. The signification has much greater potential as a means of notifying anything requiring formal service, personal service or simply good evidence of service. An injunction might be served in this way or even a particularly important letter. 171 See Practice Direction No.2 of 2000. Note also recent case-law in England which seeks to place family proceedings on the same footing as any other proceedings, although the exceptions are so many (eg where children are concerned or ancillary relief) that most family proceedings remain private, see Clibbery v Allan [2002] 1 All ER 865. The Practice Direction also provides that robes will continue to be worn only when the Court is sitting with Jurats or for Judicial Separations.
444 The Laws of Guernsey
AFFIDAVITS
Interlocutory applications and many other forms of application are regularly supported by affidavit(s).172 The Powers of Attorney and Affidavits (Bailiwick of Guernsey) Law 1995 provides that an affidavit may be executed or sworn anywhere in the Bailiwick before a notary public. In Guernsey, Herm or Jethou an affidavit may be sworn before a Jurat of the Royal Court of Guernsey. In Alderney an affidavit may be sworn before a Jurat of the Court of Alderney. In Sark an affidavit may be sworn before the Sénéschal. Outside of the Bailiwick an affidavit may be sworn before a person empowered to administer oaths or take sworn declarations in that place.173 The Law also conferred power on the Royal Court to extend the scope of the Law by order. This power was exercised in the Affidavits, etc (Execution before Advocates) Rules 1999 which provide that affidavits may be sworn anywhere in the Bailiwick before Advocates of the Royal Court of Guernsey of five years’ standing or more. Practice Direction No. 6 of 1999 must be read in tandem with the Rules. The Practice Direction provides that the Royal Court will not accept an affidavit sworn by an Advocate where a member of that Advocate’s firm has been responsible for the drafting of the document. It is said that the practice whereby notaries public swear documents prepared within their own firm is being reviewed. The content and layout of affidavits themselves is the subject of the Royal Court (Affidavits) Civil Rules 1990. The provisions are unsurprising. Affidavits must be expressed in the first person and must give the address of the deponent (which may be a professional address). Every affidavit must be bound and divided into numbered paragraphs. Dates, sums and other numbers must be expressed in figures. Every affidavit must be signed by the deponent with an attestation completed and signed by the person before whom it is sworn. There are provisions for affidavits to be made by two or more deponents and by illiterate or blind persons. The most important provision from a litigation point of view is rule 9 which states as follows: (1) An affidavit may contain only such facts as the deponent is able of his own knowledge to prove. (2) An affidavit sworn for the purpose of being used in interlocutory proceedings may contain statements of information or belief with the sources and grounds thereof. Accordingly an affidavit for use in interlocutory proceedings may contain hearsay.
172 173
An affidavit is often a procedural requirement. See also RCCR 54 for very similar provisions.
Civil Courts and Procedure 445 SUMMARY JUDGMENT
Rule 17 of the Royal Court Civil Rules provides that the plaintiff may apply for summary judgment against the defendant at any time after the cause has been placed on the rôle des causes à plaider. The ground for the application is that there is no defence to the claim or a particular part of it, alternatively that there is no defence save as to quantum alone. This provision follows closely the old Order 14 of the Rules of the Supreme Court (now replaced by Part 24 of the Civil Procedure Rules). Rule 17 permits a plaintiff to obtain an early judgment against the defendant where the merits of his case are sufficiently overwhelming to justify a denial of what would otherwise be the right to defend a claim. The application must be supported by an affidavit verifying the facts upon which the claim (or material part of the claim) is based (ie formally proving the claim) and deposing to the fact that, in the deponent’s belief, there is no defence to the claim (or part thereof), or no defence except as to the amount of damages claimed, together with the reasons for the belief, see rule 19. The Court may dismiss the application if not satisfied with the contents of the affidavit but, once this hurdle has been cleared, will require the defendant to satisfy the Court that there is an issue or question in dispute which ought to be tried or that there ought for some other reason to be a trial, see rule 20. If the defendant fails to persuade the Court that he should be permitted to defend the action judgment will be entered against him. The question for the Court is whether there is a bona fide defence to the claim; alternatively the defendant must persuade the Court that, notwithstanding his failure to show such a potential defence, there ought to be a trial. It is rare that this alternative ground for defeating an application for summary judgment will succeed. Examples are set out at paragraph 14/4/10 of the 1999 Supreme Court Practice volume 1 and include the situation where a defendant reasonably and properly requires to crossexamine the plaintiff or is unable to contact a witness who might be able to provide him with material for a defence. In the vast majority of cases the question will be whether there is a defence on the merits arising either from a dispute of fact or issue of law or mixed fact and law. The defendant might also show cause by a preliminary or technical objection, eg that the affidavit in support is defective. The power to give summary judgment is intended only to apply to cases where there is no reasonable doubt that a plaintiff is entitled to judgment. Equally it is the Judge’s duty to give judgment for a plaintiff where he is satisfied not only that there is no defence but also that there is no fairly arguable point to be taken on behalf of the defendant. The leading Guernsey authority to consider the principles underlying summary judgment is Monument Trust Company Limited v Gaudion [1996] 22 GLJ 81 where Robert Harman JA held as follows: “In our opinion the way in which the Supreme Court of England and Wales has interpreted Order 14 should apply in the interpretation of Rule 20.
446 The Laws of Guernsey We have been referred to the case of European Asian Bank AG v Punjab and Sind Bank (No. 2) [1983] 1 WLR 642 and the judgment of Goff LJ (as he then was) in these terms at p 653: ‘Now it is true that the words used in the rule are “the Court may give such judgment for the plaintiff . . .” and at first sight the word “may” could be read as indicating that the Court has a discretion. But it is to be observed that the Court can only give such judgment if (1) the Court has not dismissed the plaintiff ’s application (presumably for some defect in the application itself, eg that there is no due verification of the claim), and (2) the defendant has not satisfied the Court either (a) that there is an issue or question in dispute which ought to be tried, or (b) that there ought for some other reason to be a trial. Once these three possibilities are eliminated, it is very difficult indeed to conceive of any circumstances where the Court should not give judgment for the plaintiff, especially when it is borne in mind that the policy underlying RSC Order 14 has always been that, on a proper application, if the Judge is satisfied that there is no triable issue, he should give judgment for the plaintiff. . . . The use of the word “may” in this context is, we strongly suspect, a survival from the days when RSC Order 14 did not contain the words “or the defendant satisfied the Court . . . that there ought for some other reason to be a trial . . .”. If, having regard to those words there remains any discretion in the Court, once the three possibilities we have referred to are eliminated, to decline to give judgment, it can only be a discretion of the most residual kind.’ It follows, in our opinion, that any issue or question in dispute, or other reason for a trial, must provide a defence to that part of the claim for which summary judgment is sought. We emphasise these matters at the outset because we have been told that this is the first appeal to this Court from a decision of the Royal Court on an application for summary judgment under the Royal Court Civil Rules 1989.”
The Monument case was cited with apparent approval by the Court of Appeal in Trinity Investments Ltd & Anor. v Long Port Properties Ltd (2001) CA 6/7/01 where it was said that: “The test which this Court is to apply therefore is whether we are satisfied not only that there is no defence but also that there is no fairly arguable point to be argued on behalf of the Vendors.”174
The application itself must be served on the defendant by signification not less than four days before the date of the application.175 The signification must give the date and time of the hearing, be signed by an Advocate and annex a copy of the supporting affidavit. The signification must also contain a statement of the effect of the application if successful. 174 See also the judgment of Lieutenant Bailiff Patrick Talbot QC in Sinclair et autres v Nicholson et autres (2002) 10 January citing and relying upon the Trinity case. It was also held that RCCR 17 required the Court to decide whether there was a defence to the claim, which was a question for the Judge (alone and without Jurats) to decide on legal principles. 175 Formal service may not be required between co-operating firms; although the time limits should be respected.
Civil Courts and Procedure 447 As noted previously, rule 21 permits the Court to grant a stay of execution of a summary judgment until the trial of any counterclaim alleged by the defendant or any separate claim brought or to be brought by the defendant against the plaintiff. There is subtle English case-law concerning the effects of a set-off or counterclaim in the context of summary judgment applications. A set-off is a true defence whereas a counterclaim is, prima facie, merely an independent right of action. Where there is a bona fide set-off the defendant is entitled to leave to defend, at least to the extent of the set-off. Where a bona fide counterclaim is shown arising out of the same subject matter as the action the defendant is entitled to unconditional leave to defend, even if admitting the claim in whole or in part, again to the extent that the counterclaim is for not less than the amount of the claim. The plaintiff will usually be entitled to summary judgment, but execution will be stayed pending trial of the counterclaim or further order. Where no defence is shown and the counterclaim arises out of a separate and distinct transaction the plaintiff is entitled to summary judgment with no stay. Again the extent to which the Royal Court would follow some of the harsher English decisions in this context remains to be seen. There is particular English case-law concerning dishonoured cheques and now cancelled direct debit instructions also.176 Rule 22 provides that a defendant may show cause against an application for summary judgment by affidavit or otherwise. One could therefore seek to persuade the Court by argument alone.177 By rule 22(2) the Court may order a defendant to produce documents or, in special circumstances, to give evidence. Such powers are unlikely to be used very often. By rule 23 the Court may either grant a defendant unconditional leave to defend or leave subject to such conditions as it thinks fit. Conditional leave to defend will be appropriate in a borderline case where the defendant barely succeeds in persuading the Court that there should be a trial. In such circumstances the price of obtaining leave will very often be a requirement that the amount claimed or a substantial proportion of it be paid into Court.178 Leave to defend conditional upon the full amount claimed being paid into Court may be ordered where the defence is “shadowy” or there is little or no substance in it, or the case is almost one in which summary judgment should be ordered. See paragraph 14/4/16 of the 1999 Supreme Court Practice. An application for summary judgment may be made upon a counterclaim in the same way as for a claim. By rule 25 the Court may give directions for the future conduct of the action whenever disposing of a summary judgment application. A successful application
176
See the case of Esso Petroleum Co Ltd v Milton [1997] 2 All ER 593. But see Practice Direction 6 of 1990, noted below. Note though the case of Anglo-Eastern Trust Ltd v Kermanshahchi [2002] All ER (D) 321 where it was held that leave to defend should not be made conditional on payment in of a sum so large that the defendant could not comply; to do so would amount to granting summary judgment. 177 178
448 The Laws of Guernsey for summary judgment on either the claim or counterclaim does not prevent, prima facie, the opposing claim from proceeding. By rule 26 there is express provision for the Court to award costs against an applicant who knew that his opponent was relying upon a contention which would entitle him to unconditional leave to defend. It is not clear why this provision should have been thought necessary given that it follows general principles. Practice Direction No 6 of 1990 makes specific provision for summary judgment procedure. It confirms that applications for summary judgment will be dealt with by the Bailiff or his Deputy sitting in Chambers. Two copies of the cause together with any supporting affidavit or affidavits must be lodged with HM Greffier. A hearing date will be notified to the Advocate for the plaintiff, (alternatively a hearing date is given in Interlocutory Court). Upon receipt of the summary judgment signification the Advocate for the defendant is required to lodge an affidavit in reply within 48 hours if the application is to be opposed. This is an unrealistically short period and an extension is invariably agreed to or granted if opposed. The case of Swain v Hillman [1999] TLR 745 illustrates current English practice concerning what is still called summary judgment under the Civil Procedure Rules. A Judge may summarily dispose of a defence or a claim179 if it does not have a realistic, as opposed to a fanciful, prospect of success. In deciding whether to exercise such a power it was held that a Judge ought not to conduct a mini trial of issues which ought properly to be investigated at a trial. A new twist to summary judgment procedure in England is the case of James v Evans [2000] TLR 592. Here a Judge was upheld by the English Court of Appeal when he gave summary judgment against a defendant with no real prospect of success after the first of what was due to have been a three day trial.180 Striking Out By RCCR 36 the Royal Court may order any pleading either to be struck out or amended. The rule is closely modelled on RSC O18 r 19. The Guernsey rule makes additional express provision permitting the Court to order a cause or counterclaim to be struck out for want of prosecution.181 This power is a distillation of various specific powers in the RSC taken together with the High Court’s inherent jurisdiction to dismiss an action for want of prosecution. The principles which the Royal Court would follow are set out in the notes to RSC O18 r 19 and at paragraph 25 L/1 of volume 1 of the 1999 Supreme Court Practice. The grounds for striking out a pleading are stated by Rule 36(1) to be that: (a) It discloses no reasonable cause of action or defence, as the case may be; or (b) it is scandalous, frivolous or vexatious; or 179
This was one of the innovations of the CPR and as yet unavailable in Guernsey. But now see also the case of Orford v Rasmi Electronics Ltd. CA (Brooke LJ, Bodey J) LTL 25 October 2002. 181 RCCR 36(2). 180
Civil Courts and Procedure 449 (c) it may prejudice, embarrass or delay the fair trial of the action or any other proceedings; or (d) it is otherwise an abuse of the process of the Court. The Rules of the Supreme Court expressly provide that no evidence shall be admissible on an application under the first ground, ie that the pleading discloses no reasonable cause of action or defence. It is very likely that the Royal Court would adopt the same practice; particularly given that issues of fact are for the Jurats. A reasonable cause of action means a cause of action with some chance of success when only the allegations in the pleading are considered. So long as the statement of claim or the particulars disclose some cause of action, or raise some question fit to be decided by a Judge or Jurats, the mere fact that the case is weak, and not likely to succeed, is no ground for striking it out, see for example the case of Wenlock v Moloney [1965] 2 All ER 871. The words frivolous or vexatious mean what they say but also encompass cases which are obviously unsustainable. An example of the third ground is the introduction of a pleading which is unnecessary or which contains irrelevant allegations likely to distract from the real issues between the parties. In such circumstances it is said to become a pleading which is beyond the right of the person seeking to rely upon it. The category is broadly drawn. The final ground, abuse of process, has as its premise the requirement that the process of the Court be used bona fide and properly. The Court will, in a proper case, summarily prevent the use of its machinery as a medium for vexation and oppression, see paragraph 18/19/18 of the 1999 Supreme Court Practice. In addition, a case may be dismissed for want of prosecution if there has been default in complying with procedural rules or excessive delay in the prosecution of the cause. The principles applied are found in the leading case of Birkett v James [1977] 2 All ER 801 where the House of Lords gave the following guidance: (a) The power to dismiss for want of prosecution should be exercised only where the plaintiff ’s default has been intentional and contumelious or where there has been inordinate and inexcusable delay on his part giving rise to a substantial risk that a fair trial would not be possible or to serious prejudice to the defendant; (b) the power to dismiss for want of prosecution, other than in a case of contumelious conduct, should not normally be exercised within the currency of the limitation period, as the plaintiff would be entitled (save in an exceptional case182) to issue fresh proceedings for the same cause of action; (c) the Court should use its powers to make a plaintiff pursue his action with due diligence; disobedience to its peremptory orders as to the time for taking steps in the proceedings would amount to contumelious conduct; 182
Ie where there is contumely or abuse of process.
450 The Laws of Guernsey (d) where the plaintiff has delayed in bringing his action in the first place, he must thereafter pursue his action with diligence, but there must be, in addition to non-compliance with the rules, some additional prejudice to the defendant from the delay after action brought to justify dismissal of the action for want of prosecution. Two members of the House of Lords held that the fact that the plaintiff may or may not have an alternative remedy against his solicitor was not relevant. Perimée and Rayée There are forms of striking out peculiar to Guernsey procedural law. The first is when a case is “rayée”. The second is when a case becomes “perimée”. The word rayée comes from the French rayer meaning, amongst other things, to cross or score out. In modern French one would still say, for example, “il a été rayé de la liste”. In Guernsey procedural law if a case is placed on the pleading list and no further action taken by the plaintiff (or counterclaiming defendant) for a period of six months the Greffe will strike the cause (or counterclaim) from the rôle des causes à plaider. This is an administrative act requiring no action on the part of the opposing party. In practice the consequences are not severe. The party whose cause it is can remedy the situation simply by re-summonsing his opponent. The effect is to re-start the case and the defendant must again indicate whether or not the matter is to be defended and therefore placed on the rôle des causes à plaider. It seems that no prescription issue arises.183 The word perimée comes from the French verb perimer meaning to lapse or expire or otherwise become outdated. In a Guernsey procedural context it is a rule by which a cause is liable to be struck out if no procedural step is taken during a period of one year and one day. The case is not automatically struck out, but rather it is for the opponent to raise péremption as an objection to the cause proceeding against him. It follows that if a defendant fails to rely upon péremption and continues to take steps in the case he will be prevented from subsequently raising péremption as a bar to the cause; see the case of William Place Investments Limited v States of Guernsey [1995] 20 GLJ 52 where it was held that the right to rely upon péremption could be renounced either expressly or tacitly. The defendant must raise a péremption exception before taking further steps in the action, alternatively simply apply for his costs of the action on the ground that the action is perempt. By contrast péremption does not run if a case is adjourned sine die, see the case of Nigerian Television Authority v Transcom International Limited [1985] 1 GLJ 48. Current practice is in fact to adjourn cases for no greater period than the Friday before the year and a day would otherwise expire. This avoids cases lingering on indefinitely.
183
Indeed the Greffe appears to have abandoned the practice altogether.
Civil Courts and Procedure 451 If a case does become perempt and the defendant takes the point the plaintiff may nevertheless apply for the action to be restored under Rule 50 of the RCCR. The Court has a general discretion broader than the excessively harsh regime which once ruled reinstatement after automatic striking out in old English procedure. A recent case considering an application for reinstatement after péremption was that of Stoneman v Cummings & Others, a 1999 judgment of the Deputy Bailiff. This reviewed previous authorities and distilled the following principles: (i)
Rule 50 gives the Royal Court a discretionary jurisdiction to order the restoration of actions which have become périmée; (ii) the burden is upon the plaintiff to satisfy the Royal Court that, in all the circumstances, it is just to exercise the discretion in his favour; (iii) matters to be taken into account include the following: (a) the position of the plaintiff and the effect on the plaintiff if the action is not restored; (b) the history of the action and the level of activity or inactivity of the plaintiff or his legal representative; (c) the position of the defendant and the effect on the defendant if the action is restored; (d) any other special circumstances relating to the action and its conduct by the parties, including such matters as settlement discussions or any express or implied agreement not to take further steps in the action for the time being; (e) the general circumstances in Guernsey relating to the relevant class of litigation, including, for example, any difficulties in securing legal representation for impecunious plaintiffs, or in securing medical reports for plaintiffs suing for personal injuries. In Stoneman restoration was refused. There is a slight question left by the case as to whether an action may be restored when it has also become prescribed. It is submitted that the power to restore would be unnecessary unless it also applied in such circumstances. In any event it is particularly dangerous to allow a claim which would otherwise be prescribed to go périmée. Save where there is the most trifling of oversights the outcome of any application to restore will never be beyond doubt. Even within the prescription period there are likely to be adverse costs consequences. A case may become périmée at any stage in the proceedings where no step has been taken for a year and a day; this is in contrast to a case becoming rayée which applies only when a matter is on the rôle des causes à plaider.184 It is good practice to keep a périmée (and rayée) diary for a firm’s cases. Péremption is easily avoided either by seeking directions or simply having the case called in the Friday Ordinary Court. For a general discussion of péremption and its application in practice see the Court of Appeal case of Bordeaux Vineries Limited v States of Guernsey (5th April 2000). 184
If the process of going rayée remains a part of Guernsey procedural law at all.
452 The Laws of Guernsey Rôle des Causes en Preuve Assuming that a defence is eventually filed and that there are no outstanding exceptions the pleadings will be deemed to be closed and the matter must then be placed upon the rôle des causes en preuve if it is to progress towards trial. The rôle des causes en preuve is known in English as the witness list. A case will go on the witness list either when a defence is filed which does not contain exceptions or where exceptions are subsequently dismissed by the Court or where the exceptions are satisfied by the plaintiff, in which case the matter may progress by consent order placing the case en preuve. Discovery Placing a matter on the rôle des causes en preuve permits the claimant to proceed to discovery. The rules governing discovery under Guernsey procedure are found between Rules 39 and 42. There is no automatic requirement to give discovery under Guernsey procedure.185 Rule 42 permits an informal approach to the opposing party to agree to the (mutual) provision of discovery and inspection. Discovery is commonly dealt with in this way. Typically the parties will exchange lists of documents in the English form to which will be attached copies of discoverable documents not already known to be in the possession of the opponent. If there is no agreement about discovery or a dispute as to whether proper discovery has been given, application may be made to the Court. By Rule 39 the Royal Court has power to order any party to furnish an applicant for discovery with a list of documents which are or have been in his possession, custody or power relating to any matter in question between them in the proceedings. This replicates the discovery requirement as it was under the Rules of the Supreme Court. English principles would be applied as they then were, before the discovery obligation was changed significantly by the Civil Procedure Rules. The Royal Court may additionally order any discovery list to be verified by affidavit, see Rule 39(1)(b). Alternatively, discovery may be limited to such documents or classes of documents or issues as the Court directs.186 It should be noted that the power to order discovery is ultimately a discretionary power. There are circumstances in which discovery may become oppressive, in which case application may be made to restrict its ambit. There is no express provision for specific discovery equivalent to RSC O24 r7 but equally there is no reason why the Royal Court should not make such an order given its general power to make discovery orders pursuant to rule 39. Any claim to privilege must be asserted in the list of documents. English principles are again followed as regards the nature and extent of legal professional priv185 186
At least as yet. RCCR 39(2).
Civil Courts and Procedure 453 ilege in addition to discovery generally; see in particular the notes at paragraph 24/2/11 and paragraph 24/5/7 and following of volume 1 of the Supreme Court Practice 1999. The fundamental discovery obligation is to give disclosure of a document if it “contains information which may enable the party (applying for discovery) either to advance his own case or to damage that of his adversary, (or) if it is a document which may fairly lead him to a train of enquiry which may have either of these two consequences”, see the case of Compagnie Financière du Pacifique v Peruvian Guano Co. [1882] 11 QBD 55 per Brett LJ. A party to an action is entitled to the production of all documents which afford evidence, or indicate the means of evidence, in support of his case. A party is also entitled to the production of documents which, though not in direct support of the case he makes in the first instance, will rebut the case which his opponent sets up. It is not necessary that the documents themselves be evidence or admissible evidence. However, a person is not entitled to see documents merely because such documents will afford material for the cross-examination of his opponent, see the case of Richards v Gellatly [1872] LR 7 CP 127. The prima facie broad obligation to give discovery was placed in context by the case of O Co. v M Co. [1996] 2 Lloyd’s Rep 347 per Colman J: “The principle was never intended to justify demands for disclosure of documents at the far end of the spectrum of materiality which on the face of it were unrelated to the pleaded case of the plaintiff or defendant and which were required for purely speculative investigation. The excessively wide application of Brett LJ’s formulation of relevance has probably contributed more to the increase of the costs of English civil and commercial litigation in recent years than any other factor other than the development of the photocopying machine. That formulation must not, in my judgment, be understood as justifying discovery demands which would involve parties to civil litigation being required to turn out the contents of their filing systems as if under criminal investigation merely on the off-chance that something might show up from which some relatively weak inference prejudicial to the case of the disclosing party might be drawn. On the contrary, the document or class of documents must be shown by the applicant to offer a real probability of evidential materiality in the sense that it must be a document or class of which in the ordinary way can be expected to yield information of substantial evidential materiality to the pleaded claim and the defence to it in the broad sense which I have explained. If the document or class cannot be demonstrated to be clearly connected to issues which have already been raised in the course of the proceedings, or which would in the ordinary way be expected to be raised in the course of the proceedings, if sufficient information were available, the application should be dismissed.”
Of general application is the observation made by Bowen LJ in the case of Leitch v Abbott (1886) 31 Ch D 374 at 379: “If at a particular stage of an action you are stopped by reason of ignorance of some fact which is known only to the other party, that is the very reason why you should have discovery of that from him”.
454 The Laws of Guernsey By RCCR 40 a party who supplies a list of documents must allow the other party to inspect the listed documents, save those which are privileged, and allow copies to be taken. A notice must be sent with the list specifying when and where inspection may take place. If the party serving the list fails to co-operate the Court has power under rule 41(1) to order the inspection and copying of the documents in question. An important and sometimes overlooked provision is at rule 41(2) whereby if a party to the proceedings makes reference to a document in his pleadings or affidavits the Court may, on the application of the opposing party, order the inspection and copying of the document. One must therefore consider carefully the potential consequences of referring to a document in a pleading or affidavit. The leading English authority is the Court of Appeal case of Dubai Bank Ltd v Galadari (No 2) [1990] 2 All ER 738 where Slade LJ observed of the phrase “reference is made to any document” that: “To our minds, the phrase imports the making of a direct allusion to a document or documents. If the plaintiff were correct in its broad submission, this would oblige the Court to enter into a process of inference and conjecture in order to determine whether the document or class of documents in question even existed . . . The absence of a direct allusion to the document in the affidavit or pleading will merely mean that the other side will not have the right to seek production and inspection under Ord 24, r 10 itself.”
It is interesting to note the difference in drafting between the Guernsey provision and its English equivalent at RSC O24 r 10. The premise of the English rule is that reference is made (passive) in a party’s pleadings or affidavits to the material document, whereas in the Guernsey rule it is that “a party to the proceedings makes reference to a document . . .”, ie an active reference. This may have some significance where, for example, a document is not directly referred to by a party; eg it is referred to in an exhibit. In any event the more general provisions for discovery will still apply, albeit the party seeking such general discovery is likely to have to wait. The advantage of RCCR 41(2) is that discovery of the document can be called for immediately.187 Discovery will not normally take place until after the case has gone en preuve; but note the potential flexibility of when discovery will be ordered as demonstrated by the case of van Leuven v Nielsen [1993] 15 GLJ 79. There is some suggestion that the requirements of Guernsey discovery are evolving in line with English procedural law; ie to reduce its scope. See dicta in the case of Smith v Islands Insurance Company Limited (2001) 11 May.
187 See now the Guernsey Court of Appeal’s judgment in the case of Klabin v Technocom Ltd. (2002) 20 September; a decision of Beloff, Gloster and Sumption JJA where the Dubai case was cited and followed, albeit with a dissenting judgment from Sumption JA as to the operation of the rule, if not the outcome on the facts.
Civil Courts and Procedure 455 Amendment of Pleadings Rule 35 provides that no party to an action may amend his pleadings except with the consent of all other parties or by leave of the Court. English principles would be followed as to when amendment will be permitted and upon what terms, principally as to costs. The later the amendment and the closer the trial date the more likely it is that the application will be refused. However, the basic guiding principle is that an amendment should always be allowed if it can be made without injustice to the other side, and there is no injustice if the other side can be compensated by costs, see the case of Steward v North Metropolitan Tramways Co (1886) 16 QBD 556. In any event there is likely to be a costs penalty of greater or lesser significance according to how advanced the proceedings are. See generally RSC O20 and the notes thereto. Particular problems arise where leave is sought to amend after expiry of the prescription period. The Rules of the Supreme Court made express provision permitting an amendment to add a new cause of action if it arose out of the same facts or substantially the same facts as a cause of action in respect of which relief had already been claimed by the applicant party and notwithstanding the expiry of limitation. Likewise amendments might be permitted to correct the name of a party even if this had the effect of substituting a new party. An amendment could also be made to alter the capacity in which a party sued. Unfortunately, no equivalent express provision is found in the Royal Court Civil Rules. In the case of Williams v BASA Surveying Limited (1999) 14 January, the then Deputy Bailiff held that: “There is no power to this Court to allow a cause to be amended after any relevant period of limitation current at the date of issue of the summons has expired and so paragraphs (2) to (5) of (RSC O20) r 5 have no application.”
It is clear that the Deputy Bailiff was referring to amendments to introduce new causes of action. He went on to hold that the application to amend before him did not amount to a new cause of action. This judgment was cited and adopted by Lieutenant Bailiff Hancox in the case of Ogier v Grande Havre Holdings Limited (1999) 4th May where a number of English authorities were considered. The application in Ogier ultimately failed on the ground that it was “. . . not permissible to employ the amendment procedure to bring in an entirely fresh cause of action fundamentally different from the original one” (where prescription had run).188 Whether future Courts will follow these decisions remains to be seen. There seems no good reason not to allow amendments to add new causes of action when based on substantially the same facts which have already been pleaded. This would 188 Following Weldon v Neal [1887] 19 QBD 394 and Marshall v London Passenger Transport Board [1936] 3 All ER 83. Although as a matter of general principle, the persuasiveness of old English common law which has (now) itself been superseded in that jurisdiction can properly be questioned.
456 The Laws of Guernsey seem especially so in a jurisdiction where prescription appears to be effaced altogether by the bringing of proceedings as regards the causes of action which are pleaded.189 The way to avoid the consequences of a literal interpretation of the lack of express provision might be to say that it is sufficient to have pleaded the facts which are the grounds of the “new” complaint. Arguably this is enough to stop prescription. The alternative would be to introduce such a rule by Order of the Royal Court or else by Order in Council. Note in any event the continuing potential usefulness to an opponent of what was originally pleaded. In the case of Carroll v Highseal Windows Limited (2002) 18 April the Court of Appeal endorsed the Royal Court’s reliance on a statement in a superseded pleading as necessarily constituting an admission that the defendant had been a partner of the material individual. Summary judgment was granted and upheld. Equally, it is a curious feature of Guernsey practice that once amendment is permitted new pleadings are produced in the amended form without showing what has changed. This does not prevent an opponent drawing attention to what went before. Exchange of Evidence There is no requirement under Guernsey civil procedure to exchange witness statements. There is no express provision even requiring the exchange of expert evidence.190 In practice expert evidence is required to be exchanged at an early date and long before trial. If a party sought to adduce undisclosed expert evidence at the trial it is very likely that an adjournment would be granted at his expense, alternatively that the Court would refuse to admit the evidence. Witness statements may be disclosed or exchanged voluntarily. The plaintiff may well wish to disclose evidence in order to persuade or seek to persuade the defendant either to concede liability or to make a proper offer of settlement. However it is very common that matters come on for trial without either party knowing what the other’s lay witnesses will say. This undoubtedly prolongs trials and litigation generally. The prudent defendant will employ other means to probe a plaintiff ’s case; hence the increased importance of requests for further and better particulars and interrogatories in this jurisdiction.
189 See the discussion of interruption in the section on prescription above. See also the interesting case of Goode v Martin [2002] 1 All ER 620 and the interplay of the Art 6(1) Convention right of access to the Court, s 3(1) of the Human Rights Act 1998 and the relevant procedural rule which was interpreted here in such a way as to permit the claimant to make an amendment which would not have been permitted prior to the 1998 Act. 190 There is first instance authority to the effect that expert reports should not even go into the trial bundle (let alone witness statements); see the case of Webber v Allied Dunbar Assurance Plc (2001) 16 August.
Civil Courts and Procedure 457
PREPARING FOR TRIAL
There are particular difficulties with Guernsey’s law of evidence which are considered more fully elsewhere. At the heart of the problem is the fact that there is no legislation equivalent either to the Civil Evidence Acts of 1968 and 1972 or 1995. The hearsay rule appears to retain its full vigour, subject to common law exceptions and a very few statutory exceptions which do not concern general civil litigation.191 Prima facie, live evidence must be called to prove every contention in the absence of any applicable exception.192 It therefore becomes much more important in Guernsey litigation to obtain an opponent’s admission of as many facts and documents as possible, alternatively his agreement that evidence may be admitted in a form not otherwise strictly permitted. It is important also to try to limit the issues in the case to the minimum. Interrogatories There is no formal equivalent of the simple but effective notice to admit facts in Guernsey procedural law. Notwithstanding, there is no reason why one should not write to an opponent requiring him to admit specified facts in default of which he will be expected to pay the costs of proving those facts regardless of the overall case outcome.193 The letter would be produced to the Bailiff when it came to deciding the issue of costs. The Bailiff ’s discretion is sufficiently wide to punish the successful party who has caused costs to be incurred unnecessarily. The obstinate refusal to admit what should properly be admitted is a particular problem when dealing with certain opponents in Guernsey and again highlights the usefulness of interrogatories. 191 The qualification is because of the terms of the relevant provision itself. Art 36 of the Loi relative aux Preuves 1865 provides that hearsay is not admissible in evidence except in the special cases recognised by law, whatever these might be or found to be. 192 This can cause enormous problems with expert witnesses in particular and is quite insupportable. An expert witness may be required to be present for a much greater proportion of the trial than ever they would in England simply in order to hear evidence which is otherwise not before the Court; eg in the form of witness statements or expert reports. Potentially an expert may have to wait to hear the opposing expert in order to deal with his evidence. It is not at all unknown for a defendant to refuse to admit a plaintiff ’s medical records in order to extract a concession of some kind. The scope for oppressive conduct is almost limitless. Again see the first instance case of Webber for an illustration of the unhappy state and consequences of the prima facie current Guernsey law of evidence. See also RCCR 43 and the potential that still exists for using this rule to overcome at least some of the difficulties, given sufficiently firm judicial resolve. 193 See the judgment of the Deputy Bailiff in the Alderney case of Laughton v Main (2000) for principles of general application in this regard; and now see also the judgment of Lieutenant Bailiff Newman QC in Vardinoyannis v Ansol Ltd. (2002) 24 May at para 6(c) concerning the possibility of an informal introduction of an equivalent procedure: “. . . the deficiencies of the (payment in) system or the lack of provision for notices to admit should not be a bar to the development of sensible and effective practices”. Such dicta might support the informal adoption of wider CPR Pt 36 principles, eg a claimant’s offer to settle, with attendant consequences in costs for a defendant who fails to better the offer; eg see the case of Huck v Robson [2002] 3 All ER 263.
458 The Laws of Guernsey By RCCR 38 the Court may, on the application of any party to the proceedings, give leave to serve upon any other party interrogatories relating to any matter in question between them in the proceedings. There is, unfortunately, no equivalent to RSC O26 r 3 whereby interrogatories without order may be served obliging the recipient to answer unless he applies to the Court within 14 days for the interrogatories to be varied or withdrawn. It is perfectly allowable to serve interrogatories without order under Guernsey procedure, but if the opponent refuses to answer it is necessary to apply to the Court which can lead to significant delay. The attraction of the English procedure was to require the party served with interrogatories actively to take a procedural step. Simply getting on and answering the interrogatories often proved more attractive. In Guernsey the boot is on the other foot, as it commonly is. Apart from this difference English RSC principles apply.194 Witnesses RCCR 49 provides that every summons to a witness must be served by the Sergeant personally, and not less than four days before the hearing date in question. The provision takes as its premise the power of the Court to summons witnesses. However, witnesses cannot be compelled to attend to give evidence in Guernsey if they are beyond the jurisdiction of the Royal Court.195 If the witness will not attend voluntarily alternative means of putting the evidence before the Court must be found. If the witness is co-operative but merely unwilling to come to Guernsey it is possible to apply to the Court for an order that his evidence be taken by a commissioner appointed for that purpose in the jurisdiction where the witness is. The RCCR make express provision for the taking of evidence from a particular witness by commission at Rule 43(c), see generally the chapter on evidence.196 Where a witness is not so co-operative it is necessary to employ the more formal procedure of a commission rogatoire or letter of request. Here it is important to note that the United Kingdom is a signatory to the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters dated 18 March 1970. The Convention was extended to Guernsey also. The principal domestic provisions permitting evidence to be taken in Guernsey for the purposes of civil 194 See the cases of Seymour v MacDonald (2001) 5 October and Strawn v Prism Educational Research Ltd (2001) 18 December. The fact that witness statements were not exchanged as a matter of course in Guernsey procedural law was a matter to consider in support of ordering interrogatories. 195 Note that the Bailiff recently suggested that an expert be required to give an address for service in Guernsey at the time of instruction so that a witness summons might be served effectively and the problem of subsequent expert poaching for the purposes of conflicting English trials avoided. It might be simpler to request the expert to submit voluntarily to the jurisdiction of the Court for the purposes of serving a witness summons out of the jurisdiction by recorded delivery at the material time. The essential thing is to put the expert in the position of being able to say that he will be in contempt of the Royal Court if compelled to attend the (subsequently notified) English trial. 196 See also Art 17 of the Hague Convention discussed below. See also Art 40 of the Loi relative aux Preuves 1865, discussed in more detail in the chapter on evidence.
Civil Courts and Procedure 459 proceedings outside of the jurisdiction comprise the Evidence (Proceedings in other Jurisdictions) Act 1975 and the Evidence (European Court) Order 1976 as incorporated into Guernsey law by the Evidence (Proceedings in other Jurisdictions) (Guernsey) Order 1980.197 Without Prejudice Offers The possibility of settling a dispute should always be considered and explored at the earliest opportunity. The vehicle for this is typically the without prejudice letter or other communication. English principles govern the making of without prejudice offers and their subsequent inadmissibility as evidence.198 The general rule is to the effect that written or oral communications made with a genuine intention to negotiate a settlement are excluded from being given in evidence and may not be brought to the attention of the trial Judge. The question of whether a communication is truly without prejudice is one of substance not form. Merely heading a communication “without prejudice” serves no purpose if the communication is not in some genuine way connected to negotiations for the resolution of the litigation. There are exceptions to the rule. Thus the content of without prejudice communications may be revealed and considered by the Court if there is an issue as to whether or not a settlement has in fact been concluded. Likewise the contents of without prejudice correspondence may be disclosed to explain the passage of time and the conduct of the parties where inordinate and inexcusable delay is being alleged in order to defend an application to strike out for want of prosecution. A less certain exception is where the recipient of a without prejudice communication might otherwise be prejudiced unless permitted to rely upon it, see the case of Re Daintrey, ex p Holt [1893] 2 QB 116. In this case a party made a without prejudice offer to compound the debt he owed stating also that he was unable to pay his debts and would suspend payment if the offer were not accepted. A recipient of the offer presented a bankruptcy petition relying upon the letter as an act of bankruptcy. It was held that the letter was admissible to prove the act. It is clearer that the protection will be lost where improper threats are made or there is some other lack of good faith. A modern example is the case of Hawick Jersey International Limited v Caplan (The Times, 11 March 1988) where the plaintiff claimed repayment of a £10,000 loan to the defendant made by means of a cheque. The defendant denied that the transaction was a loan because he had supplied £10,000 cash in return. The defendant secretly tape recorded a “without prejudice” meeting at which the plaintiff did not dispute (and indeed accepted) the defendant’s repeated assertions that the transaction was not a loan but one involving an exchange for £10,000 in cash; the plaintiff also expressly or impliedly said that the proceedings were brought to persuade the defendant to, inter alia, settle 197
SI No 1956 of 1980. Again see the chapter on evidence. For a recent English account of the topic see Jonathan Ross’ article, “The Without Prejudice Rule”, New Law Journal vol 152 no 7050 p 1488 (4 October 2002). 198
460 The Laws of Guernsey other differences. Anthony May QC, as he then was, held that the plaintiff was threatening to persist with dishonest proceedings and accordingly the without prejudice privilege did not apply to the discussion. The limits of the exceptions were illustrated in the case of Rush & Tompkins v GLC [1989] 1 AC 1280 where Lord Griffiths commented on the old case of Waldridge v Kennison [1794] 1 Esp 142199 in the following terms: “I regard this as an exceptional case and it should not be allowed to whittle down the protection given to the parties to speak freely about all issues in the litigation both factual and legal when seeking compromise and, for the purposes of establishing a basis of compromise, admitting certain facts. If the compromise fails the admission of the facts made for the purpose of the compromise should not be held against the maker of the admission and should not therefore be received in evidence.”
Ultimately, if the communication truly forms a part of bona fide negotiations the privilege will be maintained, in the absence of dishonesty or other abuse. Further examples where the privilege has been refused are the cases of Kitcat v Sharp (1882) 48 LT 64, (threats made if offer not accepted), and Alizadeh v Nikbin (1993) Times, 19 March, (a tape recorded admission of impropriety).200 By the very nature of without prejudice communications they will often contain offers of settlement. If the offer is refused and the offeree fails to do better at trial the offeror201 will wish to rely upon the without prejudice communication when it comes to arguing over costs. The offeror may do so if the offer was made “without prejudice save as to costs”.202 The extent to which such an offer will in fact assist the offeror is likely to depend upon the nature of the claim and whether a payment in could instead have been effected.203 There are detailed English provisions governing the making of such offers and when they ought and ought not to be taken into account. In the absence of such express provision in Guernsey all such offers would simply form part of the material for the Bailiff to consider when exercising his broad discretion as to costs. As a matter of general principle it would seem that if a payment into Court can be made it should be; this could be combined with an offer letter as to the non-money element of the claim. Anything less may fail to put the offeree at risk.204 199 Which had been authority for the admissibility of admissions made in without prejudice communications concerning matters independent of or collateral to the matter at hand. 200 See now the first instance High Court decision Savings & Investment Bank Ltd (in liquidation) v K Fincken (2003) 19 February which reviews more recent case law in this developing area. 201 In this context the party at risk of having to pay damages, usually a defendant. 202 So-called Calderbank offers, from the English ancillary relief case Calderbank v Calderbank [1976] Fam. 93. 203 See below for an explanation of the Guernsey payment in régime. 204 See the English cases of Singh v Parkfield Group Plc (1996) LTL 14/3/96; see also Cutts v Head [1984] 1 All ER 597 and the notes to RSC O22 r 14. Note however that these cases turned on express wording of the RSC which has no precise equivalent in the RCCR. Note also the 1990 amendments to the RSC commented on in Singh. Those amendments would have post-dated the RCCR, although the old wording had not been adopted in any event. It is submitted that the Guernsey Court would reach the same conclusion as Singh independently of the precise wording of the respective rules on policy and
Civil Courts and Procedure 461 Although there is again no express provision in Guernsey procedural law there is no reason why a claimant should not make a without prejudice save as to costs offer stating what sum he is prepared to accept in full and final settlement of his claim and in respect of costs. If the offer is refused and he betters his own offer at trial there would be powerful grounds for arguing for indemnity costs and/or higher rates of interest from the expiry/refusal of the offer. Such a system has been formalised under the Civil Procedure Rules. Payments into Court RCCR 45 makes basic provision for the making of payments into Court. It is fair to say that this represents the bare bones of a payment into Court régime. By rule 45(1) a party to an action may at any time pay into Court a sum of money in satisfaction of any claim made against him in the action. The payment is made by lodging the sum of money with the Greffier who must deposit the money and give notice of the payment to the other party or parties within seven days. No payment into Court may be withdrawn except with the consent of all the other parties or by leave of the Court. As with English procedure the fact of the payment in is not to be disclosed to the Court until all questions of liability and the amount of damages or indebtedness have been determined. (This is unless the paying in party chooses to disclose the payment in.) Unlike English procedure there is no set period of 21 days during which the other party may accept the payment in without leave and thereby trigger an automatic entitlement to his costs. In Guernsey the only effect of a payment into Court is found at rule 45(6) which states: “Without prejudice to the Court’s complete discretion to make such order as to costs as it thinks just, the Court, when awarding costs, may take the fact and date of payment into Court into account.”
This is a considerably diluted version of the English regime, particularly in its broadened and strengthened form under Part 36 of the Civil Procedure Rules. The case of Ford v GKR Construction Limited [2000] 1 All ER 802 illustrates the current English approach to a payment into Court under the CPR. Here it was held that where there was a payment into Court a Judge was required to take into account all relevant aspects of the litigation when exercising his discretion,205 including late disclosure, late service of evidence or the development of unanticipated contentions, the stage in the litigation when such events had occurred, their nature and effect on the outcome. In this case the defendants had served video common sense grounds; ie a defendant must prima facie demonstrate an ability to pay on the nail, a mere future promise is insufficient if money could and should be brought into Court. Note the positive requirement of CPR 36.3(1) to bring money into Court to make an effective Part 36 payment in for a money claim. 205 Ie when considering the effect of a payment in at the end of a trial—as opposed to the automatic cost consequences of earlier acceptance in defined circumstances.
462 The Laws of Guernsey evidence which damaged the plaintiff ’s claim substantially. The plaintiff failed to beat the payment in but still recovered all of her costs because of the defendant’s failure to obtain and serve such evidence earlier.206 Until the coming into force of the Royal Court (Costs and Fees) Rules 2000 recoverable costs were so low as to make costs orders nearly irrelevant, unless made on an indemnity basis. It is likely that payments in will now be taken more seriously. It is likely that a Guernsey Court would adopt English principles when determining the cost consequences of a payment in, regardless of the paucity of express provision in the Guernsey Rules. Ending Proceedings by Agreement It is common for parties to wish to bring proceedings to an end by agreement for a variety of reasons. The parties may have agreed liability, quantum and costs. Payment of the agreed overall sum will be made in full and final satisfaction of the plaintiff ’s causes of action arising out of the material events; for example an accident causing personal injury. Alternatively a payment into court may lead to overall agreement, but note that costs must be addressed expressly under Guernsey procedure. By way of contrast a plaintiff may wish to discontinue proceedings because the merits or quantum (or both) of the claim no longer appear sufficiently strong to warrant pursuing the matter. Here the plaintiff will seek to negotiate an agreement that the proceedings should be brought to an end with each side bearing their own costs.207 If the defendant is confident of the plaintiff ’s ultimate failure he may insist upon his recoverable costs being paid as a condition of the termination, on the basis that costs prima facie follow the event. The plaintiff may call the defendant’s bluff and indicate that he will carry on if it is not agreed that each side will bear their own costs; ultimately it is a matter for negotiation. Guernsey proceedings are typically brought to an end consensually by way of a letter written to the Court, signed jointly by the Advocates concerned, stating that the claim is withdrawn; see RCCR 44(1)(a). A more formal procedure is to put a consent order before the interlocutory court again indicating that the proceedings are to be withdrawn together with whatever order has been agreed as to costs. It is perhaps not ideal that proceedings are merely “withdrawn” given that mere withdrawal is insufficient to establish a cause of action estoppel. RCCR 44(2) expressly provides that, subject to the terms of any order by which leave to discontinue or withdraw is granted, the fact that a party has discontinued or withdrawn a claim or counterclaim is not a defence to a subsequent action. It would be surer for the defendant to insist that a consent order was obtained dismissing the proceedings on whatever terms had been agreed. In practice there is not a difficulty. If there is a settlement agreement underlying the withdrawal that will be sufficient. If it is a simple withdrawal it is normally for good reason. 206 207
See also Factortame v Secretary of State for the Environmnent [2002] 2 All ER 838. A so-called “walk away” or even “drop-hands” agreement.
Civil Courts and Procedure 463 Application for a Trial Date There are fully three Practice Directions governing the making of an application for a hearing date. They are No 1 of 1992 and Nos 4 & 5 of 1995. By Practice Direction No 1 of 1992 the applicant must give written notice to his opponent of his intention to apply for a hearing date. The opponent must be requested to supply a time estimate for his case (ie how long he requires to open his case, call his witnesses and close), and to lodge his trial bundle of documents at the Greffe together with a certificate that all documents (upon which he intends to rely) have been so lodged. Alternatively he must certify that no documents are relied upon in support of his case. The applicant Advocate must then fill in an application form stating the names of the parties, the date of inscription on the rôle des causes en preuve and attach a copy of the cause in its final form. The Advocate must also provide a set of indexed documents or a statement that no documents will be produced at the trial and give the time estimate for his own case as well as his opponent’s time estimate together with the identity of the opposing Advocate. An application for a trial date ought not usually to be made unless and until the action is ready for trial and all interlocutory matters have been dealt with. Exceptionally a trial date may be applied for earlier. A supporting affidavit would be required. The application form also requires the applying Advocate to certify compliance with the provisions of Practice Direction No 1 of 1992 and that the action is ready for trial (unless the exception is relied upon). A copy of the letter to the opposing Advocate requesting their time estimate and the lodging of documents must be attached. By Practice Direction No 4 of 1995 the application for a trial date will be listed for consideration at the first sitting of the Interlocutory Court after receipt. Somewhat inconsistently paragraph 3 of Practice Direction No 5 of 1995 requires the Advocate to give fourteen days notice in writing to the Greffe of the proposed application so that the Deputy Bailiff may review the papers prior to considering trial date allocation. Trial dates are fixed in the Interlocutory Court and Advocates must have ready their experts’ and lay witnesses’ dates to avoid, alternatively their dates of availability.208 Practice Direction No 4 of 1995 requires one month’s notice to be given to an opponent of the trial date application. In practice this means sending the written notice required by Practice Direction No. 1 of 1992 at least one month before the intended application date. A trial date may be fixed up to three terms in advance. Trial dates may be reviewed subsequently by the Interlocutory Court at any time upon written application to HM Deputy Greffier copied to the opposing Advocate or Advocates. There is provision also at paragraph 3 of Practice Direction No 5 of 1995 for 208
Depending upon how busy the witness is.
464 The Laws of Guernsey directions to be sought by the parties for the filing of expert reports and other documents prior to a trial date being given. Such applications are required to be made in advance of the trial date application being considered by the Court. Under Guernsey procedure the application for a trial date is intended to produce a number of consequences. The applicant is required to certify that the matter is ready for trial, all interlocutory matters should have been disposed of and both sides’ documents lodged. It was once common for Guernsey Advocates to treat the obligation to lodge documents as if it were a requirement to lodge separate trial bundles. It was rare that a consolidated trial bundle would be prepared, let alone core bundles. Happily practice is changing.209 Of fundamental importance is the surprising need to summons a defendant to the trial, unless your opponent expressly waives the obligation. This is another aspect of Guernsey procedure long overdue for reform.
RÉCUSATION
Récusation is the objection made by one or more of the parties to an assigned Judge hearing or continuing to hear a matter. It is the means by which a party invites a Judge to decline to hear a case because of a risk of actual or perceived bias.210 De Ferrière defines récusation as follows: “. . . une fin ou exception déclinatoire, pour éviter la jurisdiction du Juge pardevant lequel on est assigné, que l’on regarde comme suspect, demandant que le différend211 soit renvoyé pardevant un autre Juge.”
Which translates as follows: “. . . a fin or exception déclinatoire,212 raised with the intention of avoiding the jurisdiction of an assigned Judge when (a party) is suspicious of that Judge, asking that the dispute be re-assigned to another Judge.”
For de Ferrière there were clear circumstances in which a Judge must either be recused or recuse himself; for example if he were related to or associated with one of the parties within a certain degree, or if he had himself been involved in a dispute on the same question, or had advised or otherwise possessed previous knowledge of the dispute, or if he was himself involved in proceedings before the Court in which one of the parties was a Judge, or if the Judge had threatened one of the parties either verbally or in writing. These specific examples were in addition to the general. He makes particular mention of debauchery between Judge and party as 209 Note also the requirements of Practice Direction No 1 of 2002; all bundles prepared for Court hearings must be copied double-sided. 210 One talks of recusing a Judge or inviting a Judge to recuse himself. 211 Dispute. 212 Ie preliminary issue.
Civil Courts and Procedure 465 being a ground for récusation, likewise the circumstance he describes euphemistically as the Judge being “en grande liaison avec la partie adverse”. See also Pothier, Traité de la Procédure Civile, part I, chapter 1 at section 5. Modern French principles in this context are to be found at Articles 341–55 of the Nouveau Code de Procédure Civile. The leading Guernsey case is now that of Law Officers of the Crown v Ogier (2002) 28 January, a first instance decision of Lieutenant Bailiff Talbot QC.213 Apparent bias was alleged in a case where the Magistrate had previously prosecuted (when still a Crown Advocate) the Appellant for a planning offence very similar to the conviction which was the subject of the appeal. Talbot LB adopted the principles set out by Lawrence Collins J in the English case of Bank of Credit and Commerce International SA v Ali (2001) LTL 11 December, themselves drawn from English case law comprising principally the cases of Locabail (UK) Ltd v Bayfield Properties Ltd & Ors. [2000] 1 All ER 65, In Re Medicaments & Related Classes of Goods (No. 2) [2001] 1 WLR 700 and the older case of R v Gough [1993] AC 646. In particular he adopted the following dictum from the Medicaments case: “The Court must first ascertain all the circumstances which have a bearing on the suggestion that a Judge was biased. It must then ask whether those circumstances would lead a fair-minded and informed observer to conclude that there was a real possibility, or a real danger, the two being the same, that the tribunal was biased.”
The Lieutenant Bailiff added: “In my judgment, where it is submitted that a Judge should recuse himself, or, as in the present case, that a Judge should have recused himself, it is more satisfactory that the Judge decides whether an objective onlooker would consider that there was or was not a real possibility or a real danger of bias than that the Judge, as the court, decides whether there is, or is not, a real possibility or a real danger of bias.”
The Lieutenant Bailiff likewise adopted a passage from Locabail as setting the appropriate test to determine whether or not there had been a binding waiver of objection to a Judge sitting; such waiver had to be clear and unequivocal, made with full knowledge of all relevant facts. One would expect greater latitude in the approach of a Guernsey Court to the question of récusation for apparent bias given the comparative smallness of the community; ie the Court must needs be slower to find apparent bias for fear of disqualifying itself too frequently. However, this consideration would be reflected by the objective onlooker being deemed necessarily to have such factors in mind.
213 See also the case of de Carteret v Teale (2002) where a Jurat was recused, Lieutenant Bailiff Talbot was again presiding.
466 The Laws of Guernsey
TRIAL
Civil trials in the Royal Court are conducted before the Ordinary Court constituted by the Bailiff, alternatively the Deputy Bailiff or a Lieutenant Bailiff, sitting with a minimum of two but normally three Jurats.214 The main distinction between a civil trial in Guernsey and a civil trial in England is the presence of Jurats, whose function it is to determine issues of fact in a rôle broadly equivalent to that of a sophisticated juror.215 Inevitably this slows the progress of a trial somewhat given the need to explain what may often be taken for granted before a Judge sitting alone. The conduct of a Guernsey trial generally is more formal and less flexible procedurally. The Bailiff or Deputy Bailiff cannot shorten matters in quite the same way that a High Court Judge can by giving indications as to the strength or merit of different parts of a case, whether as regards evidence or argument. Reference should again be made to the Royal Court of Guernsey (Miscellaneous Reform Provisions) Law 1950 and the limitations of Guernsey law of evidence.216 Notwithstanding the experience of the Jurats there is still considerable diffidence exhibited concerning what evidence may and may not go before them and in what form. A further unusual feature of Guernsey civil trials is the practice of gathering together all the witnesses for all the parties at the beginning of a case in order that they may be sworn collectively; although exceptions may be made for good reason, for example in the case of an expert witness. It is a procedure that probably only contemplates a short trial and seems inappropriate for a case of any great duration. The trial itself progresses in the familiar way, with the Advocate for the plaintiff opening and calling his witnesses who are examined, cross-examined and reexamined. The Bailiff may also ask questions as may each Jurat, although it is less common for Jurats to question witnesses. If an issue of law arises which will take more than a short time to resolve and/or is sensitive the Jurats will retire, as a jury would in a criminal trial. When the plaintiff has called all his evidence he will close his case.217 The Advocate for the defendant may make a submission of no case to answer, again as in a criminal case. A submission may be made either if no case has been established in law or the evidence led is so unsatisfactory or unreliable that the Court should hold that the burden has not been discharged.218 In civil jury 214 It is important to distinguish other kinds of application and hearings which come before the Full Court, eg licensing matters. Here we are concerned only with civil trials proper. 215 There are only a handful of circumstances in which an English Judge is still likely to sit with jurors in a civil trial, comprising almost exclusively where there are allegations of libel, slander, malicious prosecution or false imprisonment. 216 See also the section on Royal Court trial under Criminal procedure. 217 Witnesses may be taken out of order but only, it would seem, if an opponent co-operates. It will often make sense to take experts together in order to save costs. This is again an area where a defendant can oppress by purporting to reserve the right to make a submission of no case to answer and therefore splitting the expert evidence. 218 See the cases of Young v Rank [1950] 2 KB 510 and Yuill [1945] P 15.
Civil Courts and Procedure 467 and, it is submitted, Jurat trials the Judge has a discretion whether to put the defendant to his election to choose between making a submission and calling no evidence or to proceed with his case.219 If the Judge chooses not to put the defendant to his election the submission may be made and evidence called by the defendant if it fails. If it seems that there might be merit in a submission it is difficult to understand why the defendant should risk losing the right to call evidence. The mischief surrounding such submissions might be dealt with by limiting strictly the length of the submission and requiring the defendant to elect in the alternative.220 In the normal course of events no such submission will be made and the defendant will proceed to call his evidence in the usual way. The defendant may choose to make an opening address if the case is either complex or lengthy. After the Advocate for the defendant has closed his or her case the plaintiff may exceptionally be permitted to recall a lay or expert witness to address a new issue which has arisen as a result of the defendant’s evidence. More usually the Advocate for the defendant will proceed to make his or her submissions, followed by the Advocate for the plaintiff. If there are lengthy submissions of pure law these may be dealt with in the absence of the Jurats, given that issues of law are for the Bailiff alone to determine. Submissions on the facts or issues of mixed law and fact must necessarily be heard by the Jurats. The Bailiff will then sum up the case to the Jurats by reminding them of the issues and the evidence and by directing them as to the law.221 The Bailiff will very often hear the Advocates beforehand, and in the absence of the Jurats, concerning the contents of his summing up; in particular he may seek guidance or suggestions as to the questions to be put to the Jurats for their determination. There may be argument concerning who is to decide what, particularly where an issue is mixed. Although the Jurats are the final arbiters of fact the Bailiff nevertheless has the power to withdraw issues from the Jurats in limited circumstances. The nature and extent of the power was considered in the English defamation case of Alexander v Arts Council of Wales & Anor. [2001] 4 All ER 205. At para 37 May LJ stated as follows: “There is of course a variety of possible circumstances in libel cases in which issues of law may arise for decision by the Judge. In so far as questions of this kind properly depend 219
Young v Rank ibid. See now also the recent English cases of Bentley v John Harris & Co. [2001] EWCA Civ 1724, Boyce v Wyatt Engineering (The Times 14 June 2001) and Miller v Cawley (The Times 6 September 2002). Where a party is put to his or her election and proceeds to make a submission of no case to answer, the question for the tribunal is whether or not the claimant has established his or her case by the evidence called on the balance of probabilities in the usual way; if the submission fails the case is at an end and the defendant will have lost. If a party is not put to his or her election the issue is whether the plaintiff ’s case has any real prospect of success, ie whether there is a case fit to go before a jury (or judge) of fact. If the submission fails the case proceeds in the normal way; if the submission succeeds the claim is dismissed. 221 Note also the case of Masters v Chief Constable of Sussex [2002] EWCA Civ 1482 and the English Court of Appeal’s criticism of a trial Judge’s failure to give a civil jury any or any sufficient assistance by way of reminding them of and drawing attention to the significance of expert medical evidence. 220
468 The Laws of Guernsey on an evaluation of evidence so as to determine material questions of disputed fact, these are matters for the jury. But . . . it is open to the Judge in a libel case to come to the conclusion that the evidence, taken at its highest, is such that a jury properly directed could not properly reach a necessary factual conclusion. In those circumstance, it is the Judge’s duty, upon a submission being made to him, to withdraw that issue from the jury. This is the test applied in criminal jury trials (see R v Galbraith [1981] 1 WLR 1039 at 1042C). In my view, it applies equally in libel actions. It is in substance the test which the Judge set himself to apply in the present case.”
This principle is of general application in Royal Court Jurat trials, whether civil or criminal. After the summing up the Jurats will retire to consider their decision but may return to open Court to ask questions or seek additional guidance from the Bailiff, who may in turn seek the views once more of the Advocates concerned. The Bailiff must not retire with the Jurats in the sense of retiring to deliberate with the Jurats, they must deliberate alone. When the Jurats have reached their conclusion they return to Court and give their decisions on the issue or issues individually. The Bailiff will then determine the final form of the judgment to be given in favour of the successful party or parties. He will then go on to consider the question of costs and any other ancillary matters such as payments into Court. The losing or otherwise dissatisfied Advocate should assess quickly whether it is likely he will wish to appeal. If there is such a possibility he ought, if possible,222 to apply for any leave to appeal he might require there and then, together with a stay of execution of the judgment (in any event there is no automatic stay on appeal). If in doubt as to whether leave is required it is generally safer to make the application. The right of appeal from the Royal Court to the Court of Appeal is considered elsewhere. Judgment Interest If a money judgment is awarded the claimant will invariably seek interest on the sums found due in order to compensate him or her for being kept out of the money. Where interest is governed by a material contractual provision it is this which will determine the sum payable, subject to what is said below. In the absence of such provision a successful party must rely upon the Judgments (Interest) (Bailiwick of Guernsey) Law 1985. Section 1 of the 1985 Law gives power to any Bailiwick Court exercising civil jurisdiction to include in a judgment for debt or damages interest at such rate as the Court thinks fit on the whole or any part of the debt or damages for the whole or any part of the period between the date when the cause of action arose and the date of the judgment. Only simple interest may be awarded, not compound. It is expressly provided that the statutory provisions are
222
An application may be made subsequently but it is more efficient to proceed immediately.
Civil Courts and Procedure 469 excluded whenever interest is payable as of right, whether by virtue of an agreement or otherwise. Note again however the Ordonnance donnant pouvoir à la Cour de Réduire les Intérêts Excessifs of 6 December 1930 which, as it says, confers power on the Court to reduce excessive interest rates. In practice the point will have been taken much earlier in the proceedings. By section 1(2) of the 1985 Law the Court is obliged to award interest on personal injury or fatal accident damages in excess of £200, unless there are special reasons why no interest should be given. In practice interest would prima facie be awarded in any event. There is more likely to be argument in larger cases as to whether interest should be reduced on the grounds of the claimant’s excessive delay in bringing his claim before the Court. Where there has been culpable delay the Court may reduce the interest period, see the case of Corbett v Barking Health Authority [1991] 1 All ER 498. It is obviously important when assessing any payment in to ensure that interest is taken into account (or not) on a like for like basis, equally interest must be taken into account when making a payment in. Section 2 of the 1985 Law provides that every judgment debt of the Court shall carry interest at the rate of 8 per cent per annum.223 The judgment debt rate is used in practice by the Court as the rate at which (prima facie) interest is awarded on damages in the absence of a contractual rate or good reasons why some other rate should be awarded (such as the fact that interest rates are now so low that 8 per cent would be unduly generous224). In personal injury claims interest would prima facie be awarded at the rate of 2 per cent on general damages225 from the date of service of the cause and at the rate of half the “appropriate” rate on special damages from the date of the accident to the date of trial. What is the appropriate rate is undecided in Guernsey law. In England it is usually taken to be half the special account rate, which was reduced from 8 per cent to 7 per cent with effect from 1 August 1999 and from 7 per cent to 6 per cent with effect from 1 February 2002. In Guernsey one would expect the Court to adopt the judgment interest rate as the appropriate rate and therefore to award 4 per cent on special damages. Where there are one-off items for special damage it is appropriate to claim full interest from the date upon which the item of expense or loss arose. All of this assumes though that English principles would be applied. There is, for example, no logic at all for awarding interest on general damages given that damages for pain, suffering and loss of amenity are assessed at the date of trial; nor is there any good reason why interest should be dependant upon service of proceedings. There are various other possible rates of interest which may be applied in any given case. In English case-law commercial rates have been adopted, so-called “true” interest rates and, where there is a breach of fiduciary duty, a “wilful default” 223
Reduced from 10% by the Judgments (Interest) Rules 1996. On a summary judgment application in the case of Sinclair et autres v Nicholson et autres (2002) 10 January Lieutenant Bailiff Talbot QC awarded only 6% for this reason. 225 Although there are moves to try to have this increased to 3% in England. 224
470 The Laws of Guernsey rate. This is a deliberately high rate of interest to ensure that no profit is made from a breach of fiduciary duty.226 There is, as yet, no equivalent of the punitive regimes introduced by the Late Payment of Commercial Debts (Interest) Act 1998 as amended and supplemented by the Late Payment of Commercial Debt Regulations 2002 (SI 2002/674). Costs Orders There is no great difference between English and Guernsey procedural law in the area of orders for costs, save that in interlocutory matters the Guernsey Court is slower to make a costs order in favour of one or other party, let alone a costs order which must be paid forthwith. It is much more common for costs to be reserved or to be in the cause. Orders such as plaintiff ’s or defendant’s costs in cause are less likely to be made, if only because they are not asked for—likewise orders that a party be responsible for any costs thrown away or that costs be in the application. There is in fact no reason in principle why a Guernsey Court should not make any of the various costs orders commonly made by an English Court. The following is an extract from RSC O62 r 4 defining costs orders and their effect: Term
Effect
“Costs”
(a) Where this order is made in interlocutory proceedings, the party in whose favour it is made shall be
Term
Effect
entitled to his costs in respect of those proceedings whatever the outcome of the cause or matter in which the proceedings arise; and (b) where this order is made at the conclusion of a cause or matter, the party in whose favour it is made shall be entitled to have his costs taxed forthwith; “Costs reserved” (Except in proceedings in the Family Division) the party in whose favour an order for costs is made at the conclusion of the cause or matter in which the proceedings arise shall be entitled to his costs of the proceedings in respect of which this order is made unless the Court orders otherwise; “Costs in any event” This order has the same effect as an order for “costs” made in interlocutory proceedings; “Costs here and below” The party in whose favour this order is made shall be entitled not only to his costs in respect of the proceedings in which it is made but also to his costs of the same 226
See Hanbury & Martin’s Modern Equity 16th edn (Sweet & Maxwell) pp 657–58.
Civil Courts and Procedure 471
“Costs in the cause” or “Costs in application”
“plaintiff ’s costs in the cause” or “defendant’s costs in the cause”
“Costs thrown away”
proceedings in any lower Court, save that where such an order is made by the Court of Appeal on an appeal from a Divisional Court the party shall not be entitled by virtue of that order to any costs which he has incurred in any Court below the Divisional Court; The party in whose favour an order for costs is made at the conclusion of the cause or matter in which the proceedings arise shall be entitled to his costs of the proceedings in respect of which such an order is made; The plaintiff or defendant, as the case may be, shall be entitled to his costs of the proceedings in respect of which such an order is made if judgment is given in his favour in the cause or matter in which the proceedings arise, but he shall not be liable to pay the costs of any other party in respect of those proceedings if judgment is given in favour of any other party or parties in the cause or matter in question; Where proceedings or any part of them have been ineffective or have been subsequently set aside, the party in whose favour this order is made shall be entitled to his costs of those proceedings or that part of the proceedings in respect of which it is made.”
Standard and Indemnity Costs Costs in the Royal Court and Court of Appeal may, as in England, be ordered to be paid on either a standard or an indemnity basis.227 Where costs are awarded on an indemnity basis any doubt as to the reasonableness of the amount claimed is resolved against the paying party and in favour of the recipient. On a standard basis any doubts are resolved in favour of the paying party. There is the further distinction that costs awarded on a standard basis permits recovery only of so-called “recoverable” costs in Guernsey. Until the reform of the costs rules in April 2000228 standard recoverable costs were only a small percentage of the actual litigation cost to a successful party. This promoted all manner of abuse by those concerned in Guernsey litigation. Weak claims could be brought without fear. Weak defences could be maintained with next to no meaningful costs penalty. Costs are now recoverable at a sufficiently high level, even on a standard basis,229 to be taken seriously at all stages in the litigation. As a result there is also a greater impetus to settle cases sooner rather than later. 227
Or partly so. See the Royal Court (Costs and Fees) Rules 2000, see below for a more detailed consideration of these rules. 229 In essence £167 per hour (during 2003) plus reasonable disbursements. 228
472 The Laws of Guernsey The provisions governing the making of costs orders on an indemnity basis are at RCCR R48(3) and (4): (3) . . . the Court may, in the circumstances mentioned in paragraph (4), order that costs or security for costs shall be paid on a full or partial indemnity basis. (4) The circumstances referred to in paragraph (3) are as follows: (a) where, in the special circumstances of the case, it is the opinion of the Court that costs should be ordered otherwise than on the basis provided by the Royal Court (Costs and Fees) Rules (2000); or (b) where any party has pleaded or otherwise pursued or defended an action, claim or counterclaim unreasonably, scandalously, frivolously or vexatiously, or has otherwise abused the process of the Court. An illustration of the application of 48(3)(a) is the case of Le Moigne v Hargetion (1998), a judgment of the then Deputy Bailiff in which he demonstrated his willingness to award a personal injury plaintiff a substantially higher proportion of his costs than the then recoverable basis would have permitted, an estimated and paltry 14 per cent of the actual cost. The power of the Court of Appeal to award indemnity costs was affirmed in the case of Laughton v Main [1995] 20 GLJ 92; see also Hulme v Matheson Securities (Channel Islands) Limited (Judgment No. 2) [1997] 24 GLJ 80 for a general discussion of indemnity costs in the context of what Southwell JA described as a “paradigmatic case for the making of an order for full indemnity costs”.230 A first instance example of the exercise of the discretion under 48(3)(b) is the case of Saromaje Limited v Janet Holdings Limited (2000) 11 January, a decision of the then Deputy Bailiff. It was held that the burden was plainly on the applicant to make out the 48(3)(b) criteria which were to be interpreted disjunctively. The Deputy Bailiff further held that there was no reason to qualify the word “unreasonably” which was to be given its normal meaning, while citing and relying upon the Hulme judgment.231 The Royal Court has power also to make wasted costs orders against Advocates or their firms personally; an example is the case of Havilland Estates Limited v Channel Islands Ceramics Ltd (No. 2) [1993] 15 GLJ 51 (reported more fully at p 33 of the same volume). See also dicta in the Court of Appeal case of Cosheril v Felix Shipping Limited (2001) 3 April on the potential liability of Advocates acting pro bono.232 230 See now also the judgment of Clarke JA on costs in the case of Stuart-Hutcheson v Spread Trustee Company Limited ibid where costs were ordered to be paid to a successful appellant beneficiary on a full indemnity basis. The Court of Appeal relied, indirectly, and inter alia, on RCCR 48. 231 See also the recent English case of Brawley v Marczynski [2002] 4 All ER 1067 where it was held by the English Court of Appeal that an order for indemnity costs could be made in favour of a legally aided party. 232 The Bailiff had earlier in the same Royal Court proceedings dismissed firmly an application for security for costs against an Alderney resident plaintiff of limited means. Note also the leading English case on wasted costs orders against Counsel, Medcalf v Mardell [2002] 3 All ER 721.
Civil Courts and Procedure 473 Flexible Costs Orders The Civil Procedure Rules have promoted an increasing degree of flexibility in the form of costs orders made in England, all with the overriding objective of making the costs order which justice requires in all the circumstances of the case. The English courts are increasingly more willing to look to the success or failure of parties on parts only of their cases or as regards individual issues as opposed to a broader less discriminatory approach. Nevertheless the development is evolutionary as opposed to revolutionary. The guiding principles continue in large part to be those set out in the case of Re Elgindata (No 2) [1992] 1 All ER 232. The relevant part of the Elgindata headnote is as follows: “The principles on which costs were to be awarded were (i) that costs were in the discretion of the Court, (ii) that costs should follow the event except where it appeared to the Court that in the circumstances of the case some other order should be made, (iii) that the general rule did not cease to apply simply because the successful party raised issues or made allegations that failed, but that he could be deprived of his costs in whole or in part where he had caused a significant increase in the length of the proceedings, and (iv) that where the successful party raised issues or made allegations improperly or unreasonably the Court could not only deprive him of his costs but could also order him to pay the whole or part of the unsuccessful party’s costs. The fourth principle implied, moreover, that a successful party who neither improperly nor unreasonably raised issues or made allegations which failed ought not to be ordered to pay any part of the unsuccessful party’s costs. . . .”
Note, however subsequent developments in English case law such as Summit Properties Ltd v Pitmans [2001] EWCA Civ 2020 where the Court of Appeal held that it was no longer necessary to show that a successful party had acted improperly or unreasonably in raising an issue or making an allegation to deprive him of his costs or to order him to pay the whole or part of the unsuccessful party’s costs of a particular issue. Of course this assumes that an issues based costs order is appropriate in the circumstances of the case; let alone to take the further exceptional step of ordering costs against the otherwise successful party. Everything turns on the circumstances of the individual case. These (developing) principles are applied in Guernsey. An example of a costs order tailored to the events of a case was the order made in Vardinoyannis v Ansol Ltd & Ors (2001) 20 November where certain costs were disallowed altogether and only 75 per cent of the successful parties’ recoverable costs awarded in circumstances where complaints of material non-disclosure were (partially) upheld on an application to discharge a freezing order.233 233 See also Jonathan Ross,“Apportionment of costs—winner does not take all” New Law Journal vol 152 no 7023 p 401 (15 March 2002) for an analysis of Court of Appeal decisions apportioning costs between parties according to their measure of success. See also the case of Budgen v Andrew Gardner Partnership [2002] EWCA Civ 1125 for dicta on the use of issue-based costs orders as an alternative to percentage costs orders.
474 The Laws of Guernsey
THE ROYAL COURT (COSTS AND FEES) RULES 1990
The Royal Court (Costs and Fees) Rules 1990 (as amended) have been superseded by the Royal Court (Costs and Fees) Rules 2000, save that they continue to determine the level of recoverable costs incurred before 18 April 2000. The 1990 rules govern first the Court fees payable in respect of civil (and criminal) proceedings. The fees relate to all stages of civil procedure and execution in the Royal Court. The sums are generally trifling. The rules also govern the level of Advocates’ recoverable fees in respect of civil proceedings. The maximum sums prima facie recoverable are set out in the schedule to the rules; although it is important to note that this limit is subject to any direction of the Court as to the extent to which costs are to be paid. There is scope to apply for higher costs to be paid which was perhaps (and probably still is) under-used. Thus by paragraph 3(3) the Court may, if it considers that the proceedings have been of exceptional complexity, certify that the maximum Advocate’s fee recoverable shall be such multiple of the fees specified in the schedule as the Court may direct. Likewise the rules make express reference to RCCR 48(3) and (4), ie the power to award costs on an indemnity basis already considered above.
THE ROYAL COURT (COSTS AND FEES) RULES 2000
This Order of the Royal Court came into force with effect from 18 April 2000 and replaces the 1990 rules, save where transitional provisions continue to have effect. The 2000 rules follow a similar pattern to the 1990 rules, albeit with important differences. Court fees are increased, but are still comparatively modest for the most part. Note however that Court time (including the hearing of an application) is chargeable at a rate of up to £140 per hour or part thereof, depending on the amount claimed.234 There is also a charge of £50 per half day on setting down, refundable if the date is vacated more than two weeks before. The charge is credited against the charge for Court time itself when incurred. Recoverable Advocates’ fees in respect of civil proceedings are increased substantially to a flat rate (unless the Court otherwise orders235) of £150 per hour.236 It is again noteworthy that this is subject to any direction of the Court as to the extent to which costs are to be paid. The former provision concerning multiples in complex cases is not repeated. Again express reference is made to rule 48(3). The presumptions concerning indemnity and standard orders for costs are spelt out. In any event the maximum fees recoverable are: 234 See paras 8(a) and 2(a) of the schedule together with the definition of “cause” at s 11(1). Whether a successful challenge could be mounted to these rules on, eg human rights grounds, remains to be seen. 235 Whatever this means. Perhaps it is intended that the Court may award a higher rate in a deserving case. 236 Adjusted by the Guernsey Index of Retail Prices each 1st January; accordingly the figure was £156 in 2001 and £161 in 2002; it is now £167.
Civil Courts and Procedure 475 “… the costs of and incidental to proceedings which have been incurred by the party to whom costs have been awarded and which are reasonable in amount and reasonably incurred.”237
There is some debate as to just how narrowly the expression “Advocates’ fees” should be interpreted. Some extremists would exclude the time charges of nonGuernsey qualified lawyers employed in Advocates’ offices. The better view is that such charges are included on the basis that an Advocates’ fees include the cost of such fee-earning staff. At what rate they should be allowed would be a matter for taxation, in the absence of agreement. There seems no reason why a barrister’s fees should not also be included where appropriate.238 By way of contrast it seems unlikely that the fees of a London solicitors’ firm involved in Guernsey litigation could be included, unless for the purpose of providing specialist advice or assistance, as opposed to the mere day-to-day conduct of a case.239 Witnesses’ allowances are reformed to the extent that one is able to include in a claim for costs the actual and reasonable remuneration lost and/or expense incurred. The same is true as regards “items” used for proceedings, ie models, plans, photographs, transcripts, documents and other “things”.240 A request for taxation must be made by the paying party within a period of one month immediately following the date upon which the opposing party’s bill of costs is received, with power to extend time only in exceptional circumstances.241 There is again provision for taxation either by the presiding Judge himself or a commissioner. Appeal against the taxation decision is either to the Bailiff if taxed by a commissioner or else the decision is appealable to the extent that the award of costs itself is appealable if the presiding Judge has taxed them.242
237
Rule 2(1). Ie for advising and pleading in truly specialist areas of law as opposed, say, to sitting behind an Advocate in court. 239 Perhaps with the exception of a case so large that the resources of an Advocate’s firm were inadequate to run the litigation, and even then discounted for duplication. 240 See the definition at 11(1). 241 See rule 5(1). This is a very real trap for the unwary. Requests for taxation are made to the judge in the case or, if unavailable, directly to the Bailiff, through his office. 242 Note the judgment of Lord Woolf CJ in Lownds v Home Office [2002] 4 All ER 775 on the English approach to taxing (assessing) costs on a standard basis. An English Judge will consider the global costs figure at the outset and proceed according to whether that figure appears to be proportionate or not. If proportionate it will normally be sufficient to show that the item was reasonably incurred; the cost for that item should (ipso facto!) be reasonable. If the global figure is disproportionate the Court must first be satisfied as to the necessity of each item and, if necessary, that the cost of the item was reasonable. “No greater sum can be recovered than that which would have been recoverable item by item if the litigation had been conducted proportionately”, per Lord Woolf at para 31. Note also the distinction made between the RSC and CPR and the absence of the (express) requirement of proportionality from the former, as in the Guernsey rules. However, it is submitted that the test of proportionality could be adopted as a measure of reasonableness without being stated expressly in the rules. Note also the distinction drawn by Lord Woolf between the standard and indemnity bases under the CPR, see para 6. 238
476 The Laws of Guernsey The transitional provisions are at rule 13 and state that the rules shall have effect in relation to costs incurred on or after the commencement date (18 April 2000) and regardless of when the proceedings began.243
REQUÊTE CIVILE
Another survival of old Guernsey procedure is the requête civile. This is the equivalent of an application to set aside a default judgment, but goes very much further in its potential usefulness. It is, in addition, a means of applying to the Ordinary Court to have a judgment set aside where it is alleged that the other party has obtained judgment by the means of fraud or some other wrongdoing or procedural error. A requête may also be made where it is desired to rely upon fresh facts or documents which were not available in the original hearing. It is not, properly speaking, an appeal challenging the merits of the original decision itself so much as a means of setting aside the decision for reasons unconnected with the conduct of the Court itself. It has the secondary effect of protecting the applicant from the arrest of his assets. There is a 1731 Ordonnance reforming and regulating the procedure to avoid what was plainly wholesale misuse at that time. Security must (prima facie) be lodged in the amount of the judgment together with the costs awarded against the applicant. This is to avoid prejudice to the successful party. The requête civile has been considered in two comparatively recent cases. In the case of Baines v Willey [1985] 2 GLJ 59 a default judgment made in absentee proceedings was set aside by consent pursuant to a requête. The question of the costs of the application was reserved and no security appears to have been required. In the case of Spillers Milling Limited v Jayboo Investments Limited [1987] 5 GLJ 66 a judgment was set aside pursuant to the requête civile of other judgment creditors of the defendant on the grounds that no monies were in fact due by the defendant to the plaintiff despite the judgment.244
ENFORCEMENT OF JUDGMENTS
The enforcement of judgments is considered in more detail in the sections concerning insolvency and saisie. In summary, the steps which may be taken include execution against the judgment debtor’s personalty through the agency of HM Sheriff,245 registration of the judgment (with leave) against any Guernsey realty of 243 See now also the Court of Appeal (Civil Division) (Costs and Fees) (Guernsey) Rules 2002 which follow a very similar pattern. 244 See RCCR 46. See also Pothier, Traité de la Procédure Civile, part III, s III, Art 1. 245 The use to which HM Sheriff may be put in executing any judgment is a developing area in Guernsey procedural law. There was some suggestion from the Bailiff in the Lister litigation that the Sheriff might be used as a quasi-receiver to bring proceedings to enforce a right of indemnity from another.
Civil Courts and Procedure 477 the judgment debtor (or his interest in any realty), arrest of a judgment debtor employee’s income, what amounts to Garnishee proceedings,246 and saisie proceedings for the seizure (and ultimate realisation) of the judgment debtor’s realty.247 Other possible targets include a judgment debtor’s ancillary relief rights against a former or separated spouse, sham asset protection structures and the right to be indemnified under whatever insurance may be in place. Again pension and other financial services products should be considered. Regard should be had also to asset tracing and other proprietary remedies as against third parties. Overseas enforcement should also be considered, see below. There seems no reason why Mareva-type injunctions should not be applied for and obtained in support of execution, as in England. Capital flight is a particular risk facing litigants in Guernsey. As noted already a consent judgment (vers amerci) has a lifetime of three years, whereas a default judgment (vers défaut) has a six year lifetime. Both may be renewed for successive periods upon application to the Royal Court before they have expired.248
ENFORCEMENT OF FOREIGN JUDGMENTS IN GUERNSEY 249
Recognition of Judgments It is important first to note the distinction between mere recognition of a foreign judgment and its actual enforcement. The Court must necessarily recognise every judgment it enforces but need not enforce every judgment it recognises. For example, a foreign Court’s declaration concerning an individual’s status is unlikely to be enforceable as such, recognition is enough. Similar principles apply to, say, a foreign judgment establishing title to a foreign immovable, or a judgment dismissing a claim; see generally Dicey & Morris, Conflict of Laws, 13th edn p 468 et seq. 246 It is inaccurate to say that Garnishee proceedings are known as such; again this is an area influenced by French law. The Guernsey equivalent is more in the nature of a saisie-attribution see Art 42 of the Loi n° 91-650 of 9 July 1991 Procédures Civiles d’Exécution as set out in the NCPC. In addition one could or would appeal to the French law notion of the action oblique whereby the creditor steps into the shoes of the debtor to enforce the debtor’s rights against third parties. Note also the potential of the action paulienne in order to defeat transactions intended to defeat exécution. See the 1991 Loi generally for possible assistance and ways of evolving Guernsey practice in this area, see also Alain Bénabent, Droit Civil Les Obligations 8th edn (Montchrestien). Certainly a Pauline action is known in Jersey law; see the Royal Court judgment of 17 January 2002 in the Esteem litigation. 247 But note carefully the dangers associated with the saisie procedure, in particular what amounts to an election preventing subsequent recourse to personalty. See the section on realty. 248 Again guidance on the subject of judgment execution generally can be obtained from Pothier, Traité de la Procédure Civile part IV; likewise the NCPC. Such sources are potentially of most use either to re-discover Guernsey procedure or else to develop Guernsey procedural law. 249 As to foreign arbitral awards see the Loi donnant effet à une Protocol sur l’Arbitrage 1925, the Loi ayant rapport aux Jugements Arbitraux Étrangers 1930, the Arbitration (Guernsey) Law 1982, as amended by the Arbitration (Amendment) (Guernsey) Law 1986, and the Arbitration (Internal Investment Disputes) (Guernsey) Order 1968.
478 The Laws of Guernsey Whether a foreign judgment will be recognised essentially turns on whether the judgment was that of a Court of competent jurisdiction over the person or property in issue; although the principle of the comity of nations and their courts is also influential. A foreign judgment may nevertheless be impeached for reasons which are considered below. Enforcement at Common Law The enforcement of judgments in England is now largely governed by a combination of statute and international convention. In Guernsey two mutually exclusive systems of enforcement prevail. The first is enforcement at common law, ie suing on the foreign judgment itself and applying for summary judgment if the case is placed on the pleading list;250 the second is enforcement pursuant to the Judgment (Reciprocal Enforcement) (Guernsey) Law 1957. If the 1957 Law does not apply the common law prevails, albeit drawing heavily on English precedent. At English common law foreign judgments would again be enforced only if the foreign Court was of competent jurisdiction. In deciding this issue the English Court would apply English rules of conflict, ie the lex fori, as opposed to the foreign law of conflicts. These English rules were expressed by Buckley LJ in the case of Emanuel v Symon [1908] 1 KB 302 as follows: “In actions in personam251 there are five cases in which the courts of this country will enforce a foreign judgment: (1) where the defendant is a subject of the foreign country in which the judgment has been obtained; (2) where he was resident in the foreign country when the action began; (3) where the defendant in the character of plaintiff has selected the forum in which he is afterwards sued; (4) where he has voluntarily appeared; and (5) where he has contracted to submit himself to the forum in which the judgment was obtained.”252
If a foreign judgment is sued upon it is impeachable only on the following limited grounds: (a) the foreign Court did not have jurisdiction to give that judgment;253 or (b) for fraud on the part of the party in whose favour the judgment was given; or (c) for fraud on the part of the Court pronouncing the judgment; or (d) where enforcement would be contrary to public policy; or 250 See the Court of Appeal judgment in Carroll v Highseal Windows Limited (2002) 18 April where this procedure was implicitly approved in relation to an English County Court judgment. 251 For actions in rem the question of jurisdiction is determined by the locus of the asset concerned at the time of the proceedings; see Dicey 13th edn p 508 et seq. Again it is much more rare that enforcement of an action in rem will be sought abroad for reasons such as the immovability of realty. This is as opposed to recognition. 252 See generally Dicey 13th edn p 487 et seq. 253 As determined by the lex of the Court in which the judgment is being sued upon.
Civil Courts and Procedure 479 (e) where the proceedings in which the judgment was obtained were contrary to natural justice. Failure to employ the 1957 Law machinery, if applicable, would also be a defence, albeit only a temporary one. In the absence of any one or more grounds of impeachment a foreign judgment which is final and conclusive on the merits may not be impeached for any error of fact or law; see generally Dicey & Morris 13th edn p 512. Enforcement Pursuant to the 1957 Law As opposed to suing on the foreign judgment the Judgment (Reciprocal Enforcement) (Guernsey) Law 1957 must 254 be employed if the judgment was made in a reciprocating country and is of a kind to which the Law applies. Reciprocating jurisdictions comprise England and Wales, Scotland, Northern Ireland, Italy, the Isle of Man, the Netherlands, the Netherlands Antilles, Surinam, Israel and Jersey. Pursuant to the 1957 Law a judgment may be registered if: (a) it is the judgment of a superior Court of a reciprocating country, (which also excludes a judgment given on appeal from an inferior Court);255 and (b) the judgment is final and conclusive, (it is irrelevant at this stage that an appeal may be pending, although this may be relied upon by the judgment debtor to set aside any resulting registration, see below); and (c) a sum of money is payable under the judgment, not being a sum payable in respect of taxes, fines or other penalties; and (d) the courts of the country of the original Court are deemed to have had jurisdiction to grant the judgment.256 It is a pre-condition to registration that the original Court be deemed to have had jurisdiction, see section 2. For this purpose the Law distinguishes between actions in personam, actions in rem, actions in respect of immovables and any other kind of action. A Court is deemed to have had jurisdiction in the case of a judgment given in an action in personam if: (a) the judgment debtor submitted to the jurisdiction of the original Court by appearing voluntarily other than for the purpose of protecting or obtaining the release of seized property or to dispute jurisdiction; or
254
See s 8. And hence County Court judgments are excluded, which is now a little out-dated given the County Court’s unlimited jurisdiction in, for example, tort and contract. 256 This is the combined effect of ss 2 and 3(2). 255
480 The Laws of Guernsey (b) the judgment debtor was plaintiff in or counterclaimed within the proceedings; or (c) the judgment debtor had agreed (eg in the contract sued upon or by the terms of a trust instrument) to submit to the jurisdiction of the original Court; or (d) the judgment debtor was resident within the country of the original Court or, if a company, had its principal place of business there; or (e) the judgment debtor had an office or place of business in the country of the original Court and the proceedings concerned a transaction which was effected through that office or place. An action in personam is deemed not to include any matrimonial cause or any proceedings connected with matrimonial matters, administration of the estates of deceased persons, insolvency, winding up of companies, lunacy or guardianship of infants.257 A Court is deemed to have jurisdiction in an action relating to immovable property or any action in rem if the relevant property was located within the country of the original Court at the time of the proceedings. In any other matter the original Court is deemed to have had jurisdiction if that jurisdiction is recognised by the (private international law) of Guernsey. The original Court will be deemed not to have had jurisdiction if the proceedings were in respect of immovable property located outside of the country of the original Court or if proceedings were contrary to any arbitration or other form of dispute resolution clause. This is unless the judgment debtor submitted to the jurisdiction, was plaintiff or counterclaimed in the proceedings or agreed to the jurisdiction of the foreign courts or Guernsey private international law holds that the foreign courts had jurisdiction in any event; ie the same criteria as before. The restrictive definition of an action in personam, the need to prove jurisdiction and the supervening pre-condition to registration that a sum of money be payable serves to exclude many judgments from registration. There are, occasionally, alternative routes to enforcement, eg section 426 Insolvency Act 1986. The 1957 Law itself is essentially concerned with simple money judgments. Registration of a Judgment A judgment creditor may apply to the Royal Court pursuant to the 1957 Law within six years of the date of the judgment, or the date of the last judgment given in appeal proceedings, for the judgment to be registered in the Royal Court. The judgment may not be registered if it has either been satisfied wholly or could not be enforced in the jurisdiction of origin. Once registered the judgment has the same force and effect as a judgment given by the Royal Court. However, the judgment may not be executed for as long as it is competent for a party to apply to have the registration 257
See s 1(2).
Civil Courts and Procedure 481 set aside or, where such an application is made, until the application is determined finally. In any event only the outstanding balance of any judgment may be registered, together with the reasonable costs of and incidental to registration. The Judgments (Reciprocal Enforcement) (Guernsey) Rules 1972, as amended by the Judgments (Reciprocal Enforcement) (Amendment) (Guernsey) Rules 1975, govern procedure under the Law. The foreign judgment creditor begins by applying to the Royal Court ex parte for leave to register the judgment. The application is supported by an affidavit which must exhibit a certified copy of the judgment and state, to the best of the information or belief of the deponent, that the judgment creditor is entitled to enforce the judgment, that the judgment is not satisfied (alternatively the outstanding amount if part satisfied), that the judgment is enforceable by execution in the original jurisdiction, that the judgment if registered would not be liable to be set aside under the provisions of section 6258 of the Law, and specifying the amount of interest due under the judgment. If the judgment is in a foreign currency the Guernsey equivalent must be specified by reference to the rate of exchange prevailing at the date of the judgment. If any part or parts of the judgment are not properly registrable within the terms of the Law the affidavit must distinguish between them. The Court may order security to be given by the applicant for the costs of any proceedings which may be brought to set aside the registration. If an order giving leave to register is granted it will also state the period during which an application may be made by the alleged judgment debtor to set the registration aside. The order will also state that the judgment may not be executed in Guernsey until after that time has elapsed. The time which must be specified is provided by the rules to be not less than 14 days from the date of service on the judgment debtor. If the judgment debtor is absent from the Islands of Guernsey, Herm and Jethou the period of 14 days is increased according to where in the world the judgment debtor is. The period is fixed by reference to the (now repealed but apparently still relied upon) 1936 Ordonnance au sujet des termes à écrire. This Ordonnance determined the period given to the Sergeant as Judicial Attorney to obtain instructions from an absentee defendant. Thus, if the judgment debtor is in Jersey the period is six days, eight days if in Britain but 180 days if in the South Sea Islands. For reciprocal enforcement purposes the 14 day period is extended by only half of the relevant terme à écrire. If, however, service is to be effected by substituted service the period must, in the alternative, be increased by sixty days, unless the Court otherwise directs. It follows that notice of the order permitting registration must be served on the judgment debtor. If the debtor is within the jurisdiction service is effected personally either by HM Sergeant or by substituted service with the leave of the Court. If the debtor is outside of the jurisdiction service must again be effected either personally by any person without leave, or by substituted service with leave. If, however, the person to be served is not a British subject and not within any part of Her 258
See below.
482 The Laws of Guernsey Majesty’s dominions, and subject also to any material convention,259 notice of the registration must be served by way of formal request to the Bailiff who in turn makes request of the Lieutenant Governor who will pass the (suitably translated) notice to the Foreign Office for onward transmission and service by the judicial authorities of the relevant jurisdiction. There are specific additional requirements for obtaining leave to effect substituted service; reasons must be given, the proposed means stated and the draft supplied of any intended newspaper advertisement. There is provision for obtaining substituted service via the foreign judicial authority also, (rule 7(2)(d)). The notice of registration must itself give full particulars of the judgment registered, the name and address for service of the judgment creditor or his Advocate, a statement of the right of the judgment debtor to apply to set aside the registration and the period during which such application must be made. The judgment debtor may then apply to set aside the registration and can apply also to extend the time during which the application may be made if he is late applying; (although the rules read as if the application must be made before the time has in fact expired, which is nonsensical; but see the amended rule 9(1) which plainly contemplates an application outside of the period). The application is made by way of summons supported by an affidavit. If the applicant persuades the Royal Court that an appeal is either pending or to be brought against the judgment the application may be adjourned or the registration set aside on such terms as the Court deems fit.260 By section 6(1)(a) of the Law a registration must be set aside if: (i) (ii) (iii) (iv) (v) (vi) (vii)
the judgment is not a judgment to which the Law applies, (eg a judgment in favour of a tax authority); or was registered in contravention of the provisions of the Law; or the courts of the country where the judgment was granted had no jurisdiction; or the judgment debtor did not receive sufficient notice of the original proceedings; or the judgment was obtained by fraud; or enforcement of the judgment would be contrary to public policy in Guernsey; or the rights under the judgment are not vested in the person applying to register.
By section 6(2)(b) the Court may set aside the registration if satisfied that the matter in dispute was the subject of an earlier (and inconsistent) judgment by a Court which also had jurisdiction. 259
Eg the Hague Convention on service of documents. A stay might be sought in proceedings upon a foreign judgment under common law on similar grounds. 260
Civil Courts and Procedure 483 If no such application is made the judgment creditor may apply ex parte for leave to enforce the registered judgment. The application must be supported by the appropriate proof of service; this will comprise the Sergeant’s certificate if personal service has been effected within the jurisdiction, alternatively an affidavit of service made by the person effecting service in whatever manner was authorised, whether within or without the jurisdiction, see the amended rule 9. A copy of any newspaper advertisement must be exhibited, alternatively any official certificate or declaration if formal channels were employed. Rule 10 governs the making of an application for a certified copy of a Royal Court judgment for registration abroad. If the application is granted an Act of Court is drawn up giving not only particulars of the judgment itself but also the manner of service (of the proceedings), whether any objections were made to the jurisdiction of the Royal Court, the grounds upon which the judgment was based, stating that the time for appealing has expired, whether any notice of appeal was entered and such other particulars as may be necessary to obtain execution overseas, together with the rate of judgment interest. Where the Law does apply to a judgment no alternative procedure may be used; ie it cannot be sued upon, as already noted, see section 8. Section 9 makes general provision for the conclusiveness of money judgments to which the Law applies as between parties for broader litigation purposes within the Island.
NON-CONTENTIOUS APPLICATIONS
There are specific procedural provisions for the many non-contentious applications to the Royal Court. The relevant Rules are to be found in the Royal Court (Non-Contentious Applications) Rules 1988 as amended by the Royal Court (Non-Contentious Applications) Amendment Rules 1989 and further amended by the Royal Court (Non-Contentious Applications) Amendment Rules 1990 and the Royal Court (Non-Contentious Applications) Rules 1995. Reference must also be made to Practice Direction No 4 of 1988 as itself varied and supplemented by Practice Direction No 4 of 1990. A final Practice Direction, No 1 of 1999, affected procedure substantially.261 Non-contentious applications are those of a largely formal nature which are unlikely to provoke opposition or dispute. They include applications for approval to register the memorandum and/or articles of a limited liability company, an application to alter or modify the articles of a limited company, applications for the registration, renewal and assignment of trademarks, applications to register leases, applications to register a will of realty, various other applications under the Companies (Guernsey) Law 1994 and applications for a certified copy of a judgment pursuant to section 11 of the Judgments (Reciprocal Enforcement) (Guernsey) Law 1957. 261
There is a general need to consolidate much-amended Guernsey law.
Applications for permission to register new companies are considered each Tuesday and Friday. All other non-contentious applications are dealt with on a Tuesday. A cause and supporting documentation are lodged together with the applying Advocate’s certificate that all necessary formalities have been complied with and consents obtained. In the case of company formation a Law Officer must have indicated that no objection is raised to the incorporation. An exception to this rule is where notice is required to be given and opposition called. A principal example of such an application is where a company wishes to change its name. Such applications are dealt with in open Court at the sitting of the Ordinary Court on a Friday morning. Counsel are no longer required to attend these applications any more than they are required to attend other noncontentious applications, save for good reason. If there is a problem with the application or objection is in fact made the applicant Advocate will be required to attend Court or the matter will be put over to another time.
19 Injunctions, Arrêts and the Clameur de Haro
T
HIS SUBJECT IS taken separately since in many respects it is a discrete area of procedural law, particularly in Guernsey where there survive elements with no modern equivalent in England, beginning with the Clameur de Haro1 itself.
THE CLAMEUR DE HARO
The Clameur de Haro is one of the most tangible and readily understandable aspects of ancient Norman customary law surviving in Guernsey today. The raising of the Clameur2 has the effect of an immediate prohibitory injunction requiring the person or persons the subject of the Clameur to cease the activity complained of. De Ferrière defines the Clameur de Haro as signifying in Normandy: “. . . une plainte, une demande que l’on fait de l’aide du Prince contre les forces & l’oppression d’autrui.”
He states also that “Haro” was itself the right of a Norman Seigneur HautJusticier3 to fine those who did not take hold of a wrongdoer against whom the cry of Haro had been raised. In such circumstances it was the duty of neighbours to come out and assist Justice physically, literally with might and main.4 No such positive duty would appear to survive today, regrettably. The popular view is that the appeal to “Haro” is a reference to Rollon, the first “Duke” of Normandy.5 This is the same Rollon who in 911 made the Treaty of St Clair sur Epte with Charles the Simple whereby the first tranche of the future Normandy was granted to the Normans; although the title of duke was not in fact adopted by the descendants of Rollon until the accession of Richard II in 996 AD.
1
The H is silent. Literally a great shout. 3 Lord High Justice. 4 See Book XII Terrien at p 503 as commented on by Thomas Le Marchant at vol 2 p 209. 5 Also known as Rollo, Rolf or Hrolfr. The attribution is disputed by Charles Tancrede in his paper, Le Clameur de Haro, Les éditions du Veilleur de Proue, 1999 who prefers the German hara become hierher (literally “here” or “hither”); he also draws parallels with the English hue and cry. See the paper generally for the history of this ancient remedy, including an account of its use in Guernsey today. 2
486 The Laws of Guernsey From its origins as a means of maintaining and even enforcing the peace the Clameur has evolved into a form of self-administered civil injunction for use in particular circumstances with certain attendant formal requirements. Raising the Clameur A complainant raises the Clameur by dropping to his knees at the site of the alleged wrongdoing in the presence of two witnesses and ideally the person to be injuncted6 and saying the following: “Haro, Haro, Haro à l’aide mon Prince; on me fait tort”
which translates as: “Haro, Haro, Haro, help me my Prince. I am being wronged.”
The claimant then recites the Lord’s prayer in French and, for good measure, the Grace.7 The Grace is probably not an absolute necessity. The claimant must then within twenty-four hours appear before the Bailiff and make an affidavit together with his two witnesses confirming that the Clameur has been duly raised.8 If there appears to be a prima facie lawful invocation of the remedy the Bailiff will order the Clameur to be registered at the Greffe. The plaintiff then has one year and a day in which to commence an action before the Royal Court seeking confirmation of the terms of the Clameur together with damages, which may include exemplary damages in an appropriate case. In default the cause of action upon which the Clameur is based will be prescribed. The defendant may apply for discharge of the Clameur. The circumstances in which the Clameur may be raised are restricted. It is essentially a remedy available to the owner or occupier of land to protect himself against trespass and nuisance. It was held in the Guernsey Court of Appeal case In re Kirk’s Clameur de Haro [1985] 1 GLJ 60 that the Clameur might properly be used by a person in possession of immovable property to restrain interference with his possession or enjoyment of it. It could not be used to recover possession once lost. It was left undecided whether the Clameur could be used to restrain interference with movable property. The Bailiff in an article from May 19909 suggests at least two instances in which the Clameur would be so available.
6 A person will not be bound by the Clameur until he has had notice of it, either by witnessing the Clameur or else by service of a subsequent notification via HM Sergeant. 7 See Appendix 8 for a fuller guide as to how to raise the Clameur. See generally Thomas Le Marchant vol 1 pp 328–30. See also Laurent Carey p 197. 8 He must also pay a Court fee of £50 and a registration fee of £15; see para 12(a) of the schedule to the Royal Court (Costs and Fees) Rules 2000. 9 [1991] 11 GLJ at p 31.
Injunctions, Arrêts and the Clameur de Haro 487 The Court of Appeal in Kirk stated also that certain particulars must be given as part of the declaration of the Clameur to be made to the Bailiff. These comprised the time and the place at which the Clameur was raised, the purpose of raising it, and the identity of the person or persons whom it was sought to restrain. It was further confirmed that the Bailiff had a discretion whether or not to permit registration of the Clameur in order to control a remedy otherwise so easily invoked and potentially burdensome. The current day utility of the Clameur is questionable. A much more practicable and certain way to proceed is to seek injunctive relief under Part I of the Law Reform (Miscellaneous Provisions) (Guernsey) Law 1987. Wrongly raising the Clameur puts one at risk as to costs or worse; (once upon a time a night in the lowest dungeon10 of Castle Cornet, since the Duke’s name could not be invoked in vain). Likewise there is a risk of litigation concerning whether the Clameur has been raised effectively; ie whether the legal and formal pre-conditions or requirements have been complied with. There are various arguments concerning whether the Clameur has to be raised in the presence of the person to be restrained.11 There are issues as to whether the wrong complained of must be occurring at the moment the Clameur is raised. The Bailiff took this view as regards a Clameur which it seems he himself witnessed concerning harmful deposits from a neighbouring greenhouse boiler. By contrast an injunction applied for inter partes will unambiguously either provide or not an interim remedy pending the resolution of the proceedings. Perhaps the only modern circumstances in which it is appropriate to raise the Clameur is where a wrong affecting land is imminent or actually occurring and there is insufficient time to go before the Bailiff in order to obtain an injunction and the damage threatened is either significant or in some sense irreversible; eg a wall is about to be demolished. Disobeying a Clameur properly raised would be punished as a contempt of Court.
THE ARRÊT
The arrêt12 or arrest is a form of interlocutory or execution remedy derived from customary law. There are various types of arrêt. An arrêt conservatoire or simple is used to freeze assets pending the determination of a claim. The word arrêt also describes the process of arresting a judgment debtor’s assets pending sale in support of the execution of a judgment (which might be termed an arrêt exécution). A third form of arrêt is the arrêt des gages or wages; this is the Guernsey equivalent of
10 A tremendous French word for dungeon is an “oubliette”, signifying literally that which is forgotten. 11 This appears to have been a reason for refusing registration of a Clameur reported in the Guernsey Press for 7 January 2002. Certainly notice must be given if the person to be injuncted is not present. 12 Pronounced “aray”.
488 The Laws of Guernsey an attachment of earnings order. The final and most interesting form is the arrêt of a person as a means of improving the chances of a debt being paid. The arrêt in support of execution and the arrêt de gages are common-place. In day to day practice the arrêt conservatoire or simple was potentially the most important, in the sense of preserving assets where otherwise a claim would be worthless. However, this form of arrêt has been largely eclipsed by the adoption in Guernsey of Mareva and Anton Piller-style injunctions and associated remedies. There are few remaining instances where an arrêt conservatoire would be more effective or appropriate than an injunction. Perhaps the best example would be the arrest of a particular and valuable tangible asset such as a boat or plane. The Arrêt Conservatoire or Simple The arrêt conservatoire or simple applies only to personalty.13 It is also commonly accepted that one can arrest only in respect of claims for liquidated sums, although it would be worth testing this proposition if circumstances so warranted.14 A leading case which considers the principles of an arrêt conservatoire is the 1989 Court of Appeal judgment Culture Farms Inc. v Achates Trust Limited 15 where it was said: “There is no doubt about the power of the Royal Court to freeze and, if necessary, seize the assets of a debtor so as to preserve them for the creditor . . . although Lord Denning MR . . . thought that injunctive relief in English law was a similar procedure to the saisie conservatoire in the civil law, we are of opinion that the same result is no doubt achieved, but by distinctly different juridical routes. It is one thing for an arrest order to freeze and seize assets. It is altogether another power in a Court to order a debtor (or a third party) not to part, or deal with assets pending determination at trial of the rights of the parties . . . the passage (Le Marchant Tome II p 119) stresses the importance of distinguishing between two sorts of arrest orders, those against a defendant, arresting his assets in his own hands, and those against third parties holding the defendant’s assets. Le Marchant envisages that while these are the two separate steps in the procedure for arresting assets, they should be joined, because the process involves ultimately the satisfaction of a money judgment. The quintessential feature of an arrest order is the seizure of a tangible asset, eg money in a bank account. No funds and no bank account, nothing there to seize. The arrest order is, in its historical tradition, a means to assist creditors to have available the fruits of their prospective judgment. It is not a device, developed in modern times, to achieve assistance, by way of injunctive relief, for plaintiffs pursuing claims against defendants.”
13 Realty is protected in other ways; notably by the registration of proceedings against the land concerned, see ss.6 & 7 Law Reform (Miscellaneous Provisions) (Guernsey) Law 1987 and the case of Moed v Cockram from July 1999, see further below. 14 There seems no reason why the amount of an arrest should not be fixed by reference to the lowest likely amount of an apparently well-founded claim for damages; note the active rôle taken by a French Judge in fixing both the sum in which a mesure conservatoire is authorised and the assets to which it will attach, see Art 212 Nouveau Code de Procédure Civile. 15 Noted at [1989] 7 GLJ 60.
Injunctions, Arrêts and the Clameur de Haro 489 The Court of Appeal distinguished between the arrêt and broader forms of injunctive relief then recently introduced by section 1 of the Law Reform (Miscellaneous Provisions) (Guernsey) Law 1987. It is possible to summarise by saying that a freezing order injunction operates in personam whereas the arrêt works in rem. The injunction is probably more effective as a result; certainly it is more general in consequence. There are interesting arguments in cases towards the end of the 1980s concerning the arrest of documents relating to the assets being frozen, typically bank accounts. There seemed to be some doubt as to whether documents could be arrested or seized at the same time, although plenty of orders were made to this effect. The issue was highlighted by the failure of Guernsey procedure to make proper provision for discovery at the time. The problem has been overtaken by the adoption of the Mareva régime and, in particular, the kind of orders commonly made ancillary to a freezing order. As regards applications for arrêts against banks the case of Morgan Stanley International v Alfio gave helpful guidance. This 1992 judgment of de Vic Carey QC, Deputy Bailiff as he then was, cited with approval the reasoning in the case of Bankers Trust Co. v Shapira [1980] 3 All ER 353 where Lord Denning stated: “This new jurisdiction must, of course, be carefully exercised. It is a strong thing to order a bank to disclose the state of its customer’s account and the documents and correspondence relating to it. It should only be done when there is good ground for thinking the money in the bank is the plaintiffs’ money, as for instance when the customer has got the money by fraud, or other wrongdoing and paid it into his account at the bank. The plaintiff who has been defrauded has a right in equity to follow the money. He is entitled, in Atkin LJ’s words to lift the latch of the bankers’ door . . . the plaintiffs must of course give an undertaking in damages to the bank and must pay all and any expenses to which the bank is put in making the discovery; and the documents, once seen, must be used solely for the purpose of following and tracing the money and not for any other purpose”.
In the case of Morgan Stanley the monies had been removed from the bank before the arrêt took effect. In the absence of any allegation of fraud or wrongdoing the much more detailed disclosure sought by the plaintiff was refused. The case is noteworthy for the fact that a basic disclosure order was made ancillary to the arrest and, more significantly, the principles of the Bankers Trust case were adopted, if not applying on the facts of the Guernsey case. It is noteworthy that modern French law employs various mesures conservatoires for the protection of claimants, amongst these is the saisie conservatoire which is akin to the arrêt conservatoire; see generally the Loi n° 91-650 of 9 July 1991 Procédures Civiles d’Exécution, set out in the Nouveau Code de Procédure Civile.
490 The Laws of Guernsey Applying for an Arrêt Conservatoire The pre-conditions for the grant of an arrêt are as follows: (i)
The claimant has a cause of action within Guernsey against the party who will ultimately be defendant to the substantive proceedings (this includes the intention to rely upon the reciprocal enforcement of judgment provisions or to sue in Guernsey on a foreign judgment); and (ii) the party who is to be defendant to the substantive proceedings has property within Guernsey which is capable of arrest; and (iii) there are good grounds for believing that unless the arrêt is effected those assets will be removed from Guernsey and the applicant will thereby suffer prejudice in his attempts to recover the debt said to be justly due. The application itself is almost always made ex parte and is very similar procedurally to an injunction application. Practice Direction No 3 of 1992 sets out the requirements for submitting (ex parte) applications for both arrêts conservatoire and injunctions. In the application the following must be addressed: (a) the applicant’s address for service, (b) security for costs and damages and/or undertakings as to costs and damages, (c) undertakings as to service of the arrest/injunction documentation and time limits therefor, (d) undertakings as to the time within which proceedings will be commenced, (e) undertakings as to the lodging of an original affidavit sworn by the plaintiff or some other senior agent or director with knowledge of the facts to replace a faxed copy or copies or draft or to supplement an affidavit sworn by the Advocate on instructions only, (f) permitting sufficient time for the defendant or parties affected by the proposed order to apply for a variation or lifting of the arrest or injunction before information is released, and (g) identification of those upon whom the order is to be served. A standard form of undertaking and order is attached to the Practice Direction.16 Further instruction was given by Practice Direction No 2 of 1993. This requires all applications for an arrêt or injunction to be made through HM Greffier. A copy of the sworn affidavit and order to be applied for must be submitted to HM Greffier together with copies of all supporting documents. HM Greffier will inform the Advocate of the time at which the application will be heard. At the hearing in Chambers the Advocate should present the original affidavit and any supporting exhibits. The Advocate must sign the side of the order applied for.17 HM Greffier will retain the copy of the order originally submitted together with original affidavits.
16 Although this is very basic in form and wholly inadequate for a modern Mareva or freezing order where current English precedents are usually adapted for local use. 17 A curious requirement, either to authenticate the document and/or to require the Advocate to consider rather more carefully precisely what he is asking the Court to do.
Injunctions, Arrêts and the Clameur de Haro 491 It follows that the applicant makes his application for an arrêt supported by an affidavit with a draft order and undertakings prepared, ready also to address the various matters which are likely to be of concern to the Court as highlighted by the Practice Directions. The affidavit should set out the debtor’s name and address as well as the amount and nature of the debt and depose to the fact that the creditor has requested payment (which request has gone unsatisfied), the fact that the debtor has goods in the jurisdiction capable of arrest, the likelihood that the assets will be removed if not arrested and the fact that removal of the assets will prejudice the applicant’s claim. The application is likely to fail if any of the above are not made out. Assuming the order is made the Sheriff will go out and effect the arrest in compliance with the terms of the order. He will then endorse a copy of the order with a report of his actions. The arrêt will again become perempt if no action is taken by the applicant within a year and a day. Typically an undertaking to issue proceedings is a precondition for the grant of an arrêt. The proceedings serve a double purpose: the plaintiff will seek both confirmation of the arrest and judgment for the amount concerned. Precedents from the mid-1980s vary in form but this is the net effect. It is a form of rolled-up procedure not only confirming the interlocutory relief but also seeking determination of the substantive issue, if there be any dispute. Of course if the debt is not disputed the plaintiff will prima facie be entitled to judgment and an order for sale of the seized goods may be obtained up to the value of the judgment debt and costs.18 As to arrêts of property in the hands of a third party the procedure is simplified. Here one is concerned only to freeze the assets and to obtain whatever information/documentation the applicant is entitled to. The goods are frozen in the hands of the third party by the order, ancillary orders may deal with information. If need be the third party may be summonsed to give the information required. The third party may also be ordered to deliver up the assets to the Court or to hold the same to the Court’s order. The defendant is summonsed at the same time to see the arrêt confirmed and/or judgment given or the assets otherwise handed over or made available to the plaintiff to make good the debt.19 Much of the above will be circumvented by the Mareva procedure. Whether the order is an arrêt or Mareva, it will not have effect until it has been served on or otherwise brought to the attention of the defendant or third party or any other party intended to be affected by the order. The defendant or party so affected will then be at liberty to apply to seek to have the order discharged or varied.
18 HM Sheriff is also summonsed at the same time to report on the arrest and himself see the arrest confirmed. 19 Again summonsing the Sheriff also.
492 The Laws of Guernsey Discharge The discharge of an arrêt or injunction by consent is the subject of Practice Direction No 2 of 1994. Notification is given by way of letter addressed to HM Sheriff. The letter must be signed by a member of the Guernsey Bar and a copy sent to HM Greffier to be placed with the Court Records. The Practice Direction also deals with the release of security for costs lodged in accordance with the terms of an arrêt or injunction. Application should be made by letter to HM Greffier and signed by a member of the Bar. The letter must contain an undertaking that all costs arising from the arrêt or injunction have been satisfied or will be satisfied forthwith out of the monies being returned. It is not uncommon to see the discharge of injunctions or release of security dealt with by consent order. Arrêts after Judgment This form of arrêt has already been considered under the heading of insolvency. In summary, where a judgment is unsatisfied the judgment creditor may deliver the Act of Court containing the judgment to the Sheriff together with her costs. The Sheriff will then effect an arrest of the judgment debtor’s personalty (initially by taking the equivalent of walking possession). If the judgment debt is still not satisfied the plaintiff may then apply to the Royal Court by summons served on the judgment debtor and Sheriff for confirmation of the arrest and an order for sale of the arrested goods up to the value of the judgment debt and costs. Notice of the proposed sale must be given in the Gazette Officielle. The sale itself takes place by public auction. The judgment creditor must then summons the Sheriff to Court for an order that the proceeds be paid to him, or at least as much as will satisfy the judgment debt. If other creditors are known of or appear and there are insufficient funds the defendant will be declared en état de désastre and a commissioner appointed. A similar procedure applies in the Magistrates Court for the satisfaction of Petty Debts. However the Sheriff may sell goods and hand over the proceeds without the necessity of an order of the Court. Arrêt of Wages An arrest of wages or arrêt des gages is another method of enforcing a judgment. If the plaintiff is sufficiently well organised and there is enough information before the Court a wage arrest can be ordered at the same time as the judgment, although not in the Magistrates Court where the defendant must be re-summonsed. The Court requires information concerning the legal identity of the judgment debtor’s employer, the debtor’s place of work, his rate of earnings, including overtime, his expenditure, other assets and debts. The Wage Arrest Order will state the rate of deduction. The monies so deducted from the employee’s wages must be paid to the
Injunctions, Arrêts and the Clameur de Haro 493 Greffier in the first instance. An 1860 Ordonnance limits the amount which may be deducted to one half of the judgment debtor’s gross earnings. A 1933 Ordonnance states that wages are not liable to arrest unless the Court has authorised such arrest after being informed of the nature of the debt and the means of the debtor. Again the amount to be arrested must not exceed half. Wage arrest is ineffective and unavailable against the self-employed. Arrêts des Personnes The 1929 Law Relating to Debtors and Renunciation makes limited provision for imprisonment for debt. By Article 1 no person is to be arrested or imprisoned for making default in the payment of a sum of money, save in the circumstances permitted by the Law. The exceptions to this general rule of non-imprisonment are: (a) default in the payment of a penalty; (b) default by a trustee or fiduciary in the payment of any sum in his possession or control which the Court has ordered him to pay; (c) default in payment for the benefit of creditors of any part of a debtor’s salary or income in respect of which the Court has ordered payment; and (d) default in payment of any sum in respect of the payment of which the Court is otherwise authorised to order imprisonment. Article 2 goes on to provide that the Court may order the payment of the whole of a debt at a fixed date or that payment shall be made by instalments of such amounts and at such times as it shall think fit. Every Act of Court ordering payment of debts either in full or by instalments may be revoked or varied by it at any time. This article, which is commonly overlooked, is of general use when defending a debtor who is having difficulty making payment of a judgment or other debt. Article 3 provides that the Court may commit to prison for a term not exceeding six weeks, or until payment of the sum due, any person who makes default in payment of any debt or instalment of any debt which the Court shall have ordered him to pay. The power is only exercisable where it is proved to the satisfaction of the Court that the person making default either has or has had since the date of the order the means to pay the sum in respect of which he has made default, and has refused or neglected, or refuses or neglects to pay the same. Imprisonment does not reduce the liability concerned. Payment of the debt entitles the prisoner to be discharged. The article is directed at conduct amounting to fraudulent evasion of the liability and/or contempt. Article 4 expressly concerns the arrêt of a person as an aid to ensuring the discharge of a debt.20 Article 4 provides that where a creditor proves to the satisfaction of the Bailiff that there is reason to fear that his debtor is about to leave the Island, the Bailiff may order the arrest of the debtor. The order is only to be granted 20
Whether the legislation is Convention compliant is doubtful.
494 The Laws of Guernsey in respect of a debt of £10 or more and upon an affidavit sworn before the Bailiff which must contain the debtor’s name and address, the amount and nature of the debt, the facts which lead the declarant to fear that the debtor is about to leave the Island, the fact that he has applied unsuccessfully to the debtor for payment of the sum due, and that the debtor’s absence from the Island would considerably prejudice the action he desires to commence. This last is the most difficult to justify in practice. If an order to arrest the person is granted the order is deemed to be the commencement of an action. The creditor who is thereby constituted plaintiff must apply within eight days for confirmation of the arrest, in default of which the debtor will be released. The debtor is not to be imprisoned if he provides security for the amount claimed, ie if he pays to the Sheriff the amount in dispute to be held pending resolution of the proceedings or any application he might make.21 Likewise the debtor may be released upon taking an oath before the Bailiff not to leave the Island without permission. A breach of the oath or attempted breach renders the debtor guilty of perjury and liable to arrest. In any event the debtor may apply to the Court for a declaration that he is insolvent. Upon the making of such an application the debtor must be released, although the application must be wellfounded. In essence the arrêt is not to punish the debtor but to ensure payment. If he truly cannot pay then prison is not appropriate or permissible since it will not improve the prospects of payment. INJUNCTIONS
There is no doubt that in customary law the Royal Court has power to grant final injunctions. It may be however that such injunctions should operate by stating a financial payment or penalty in the alternative to performance, as opposed to acting truly personally, ie with imprisonment for contempt in default.22 In the context of interim or interlocutory injunctions the arrêt developed to some extent as English procedure evolved more sophisticated interim remedies. Eventually the Law Reform (Miscellaneous Provisions) (Guernsey) Law 1987 gave express power 21
Alternative means of security would be contemplated also. French law is reticent when it comes to compelling a person to do something directly, preferring a financial alternative or inducement. Art 1142 of the Code Civil provides: “Toute obligation de faire ou de ne pas faire se résout en dommages et intérêts, en cas d’inexécution de la part du débiteur”. A similar rationale appears to underlie the supposed absence of specific performance as a remedy in Guernsey contract law. Again it would probably be unobjectionable if a financial alternative/penalty were to be stated; in all such instances the alternative/penalty would go to the claimant. One could look to French law to assess how Guernsey law either has evolved or should evolve in this area, see for example Art 1425 Nouveau Code de Procédure Civile concerning l’injonction de faire which contemplates the equivalent of specific performance of “une obligation née d’un contrat” where one of the parties is not dealing in the course of business. See also Art 33 of the Loi du 9 juill. 1991: “Toute juge peut, même d’office, ordonner une astreinte pour assurer l’exécution de sa décision”. Note in particular that specific performance was a remedy supported by Pothier in certain circumstances; see his Treatise on the Contract of Sale, Part II ch 1 art 5 §3. 22
Injunctions, Arrêts and the Clameur de Haro 495 to the Court to grant interim injunctions and largely overtook or eclipsed customary interim remedies as already noted.23 By section 1(1) of the 1987 Law where proceedings have been or are about to be instituted the Court may by order, at any time before it makes a final judgment in the proceedings or before the proceedings are otherwise concluded, grant an injunction requiring the respondent to do or not to do any thing. It is important to note that the 1987 Law does not concern final injunctions directly, although arguably it reflects powers which may be assumed in respect of final injunctions, subject to what is said above.24 By section 1(2) the injunction may be granted ex parte and may remain in force until discharged or until final judgment or such other time as specified. It may also be subject to conditions. By section 1(3) the Court may require the applicant to give undertakings. By section 1(4) a person who contravenes an injunction, a condition attached to it or any undertaking given is guilty of contempt and liable to be punished accordingly.25 By section 1(5) the Court may grant an injunction subject to such penalty as may be specified. If the respondent contravenes or fails to comply with either the injunction or any attached condition the penalty shall be enforceable against him. If it is a pecuniary penalty it is payable to the applicant. This is a very important distinction between Guernsey and English law. In English procedure no such penalty would be fixed as a part of the order itself. Even if contempt were subsequently proved and a fine imposed the sum payable would go to the Crown. By section 1(6) contempt proceedings are to be instituted by way of summons. By section 1(7) an injunction may in exceptional circumstances be granted notwithstanding that proceedings have not been and are not to be instituted before the Court. This is likely to be so where only an injunction is sought and no other relief. By section 2 the Court may vary or discharge any injunction, condition, penalty or undertaking. By section 3 the injunction application may be made ex parte, alternatively short notice may be given. There is an increasing reluctance to make orders ex parte given the advantage which has been taken of this procedure in the past. By section 4 none of the section 1–3 powers shall be exercised unless the Court is satisfied that it is just and convenient to do so.26 By section 5 nothing in the Law derogates from any remedy, right or power arising otherwise than under the Law. The Clameur and arrêt are therefore preserved together with customary law principles generally. The 1987 Law merely adds to the Royal Court’s powers. 23
The 1987 Law is at Appendix 3. It could be said that s 1 is so broadly drawn that what amounts to a final order could be made pursuant to its provisions. 25 This appears to be referring to an injunction granted pursuant to the 1987 Law only, although there is again no doubt as to the customary power of the Royal Court to punish contempt of its orders generally. 26 It is as well to bear in mind this statutory under-pinning of all that follows concerning interim injunctions. 24
496 The Laws of Guernsey Mandatory and Prohibitory Injunctions An injunction may be mandatory or prohibitory (or both). The mandatory injunction requires a party to do something, whereas the prohibitory injunction forbids a party to act in a certain way. A prohibitory injunction is more readily granted given that mere inaction is sufficient compliance by the subject of the order as opposed to the obligation to take positive steps to comply with a mandatory order. A mandatory order is much more likely to be uncertain as to what precisely is required. It is also more likely to change the status quo as the Court finds it at the outset of a case, (of course this factor ceases to have effect at the end of a trial). As noted already, there is a particular difficulty with Guernsey customary law in that specific performance seems to have been unknown as a remedy.27 A distinction must be made however between mandatory orders themselves and mandatory elements of orders made ancillary to a prohibitory injunction, eg disclosure orders made to police a freezing (prohibitory) injunction.28 Principles Upon Which Interlocutory Injunctions Will be Granted The leading case remains American Cyanamid v Ethicon [1975] 1 All ER 504 where Lord Diplock stated the principles to be applied as follows: 1 The plaintiff must establish that he has a good arguable claim to the right he seeks to protect; 2 the Court must not attempt to decide this claim on the affidavits; it is enough if the plaintiff shows that there is a serious question to be tried; 3 if the plaintiff satisfies these tests, the grant or refusal of an injunction is a matter for the exercise of the Court’s discretion on the balance of convenience. The principles set out in American Cyanamid were re-stated clearly by Browne LJ in the case of Fellowes & Son v Fisher [1976] 1 QB 122 as follows: 1 The governing principle is that the Court should first consider, if the plaintiff succeeds at the trial, whether he would be adequately compensated by damages for any loss caused by the refusal to grant an interlocutory injunction. If damages would be an adequate remedy and the defendant would be in a financial position to pay them, no interlocutory injunction should normally be granted, however strong the plaintiff ’s claim appeared to be at that stage; 2 if, on the other hand, damages would not be an adequate remedy, the Court should then consider whether, if the injunction were granted, the defendant 27
This is related to the under-developed equitable jurisdiction in customary law jurisdictions. The distinction between mandatory and prohibitory injunctions can in fact be a great deal more subtle than outlined here; for a very helpful overview of the distinctions and their consequences in interlocutory injunction proceedings see Lieutenant Bailiff Day’s judgment in Technocom Ltd v Roscomm Ltd (2003) 11 February. 28
Injunctions, Arrêts and the Clameur de Haro 497
3
4 5
6
7
would be adequately compensated under the plaintiff ’s undertakings as to damages. If damages in the measure recoverable under such an undertaking would be an adequate remedy, and the plaintiff would be in a financial position to pay them, there would be no reason upon this ground to refuse an interlocutory injunction; it is where there is doubt as to the adequacy of the respective remedies in damages that the question of the balance of convenience arises. The various matters which may need to be taken into consideration in deciding where the balance lies will vary from case to case; where other factors appear to be evenly balanced it is a counsel of prudence to take such measures as are calculated to preserve the status quo; the extent to which the disadvantages to each party would be incapable of being compensated in damages in the event of his succeeding at the trial is always a significant factor in assessing where the balance of convenience lies; if the extent of the uncompensatable disadvantage to each party would not differ widely, it may not be improper to take into account, in tipping the balance, the relative strength of each party’s case as revealed by the affidavit evidence adduced on the hearing of the application. This, however, should be done only where it is apparent upon the facts disclosed by evidence as to which there is no credible dispute that the strength of one party’s case is disproportionate to that of the other party; in addition to the factors already mentioned, there may be many other special factors to be taken into consideration in the particular circumstances of individual cases.
There are exceptions to the application of the American Cyanamid principles. Thus, where the position is that the grant or refusal of an interlocutory injunction will effectively end the action, it is appropriate for the Court in assessing the balance of convenience to investigate the degree of likelihood of the plaintiff succeeding at trial. However, such investigation need not, and should not, amount to a trial of the action. It is for the Judge to control the extent of the enquiry undertaken. Sometimes the relative strengths of the parties’ cases will be such that it would be illogical not to take the merits into account. The more specialist the area of law or distinct the form of injunction sought the more likely it is that there will be additional or different criteria by which an application should be measured. Thus the American Cyanamid principles have no application to the granting of Mareva relief.29 Note also the rather different principles which necessarily apply in the context of domestic violence injunction applications. Ex Parte Applications Guernsey Advocates and tribunals have in the past been criticised severely for making on the one part, and granting on the other, unjustifiable ex parte injunction 29
See Polly Peck International Plc v Nadir (No 2) [1992] 4 All ER 769.
498 The Laws of Guernsey applications. Unless there is a pressing and serious risk or threat to a person’s lawful rights and interests in circumstances where to make the application on notice would jeopardise those rights and interests yet further, an ex parte application ought not to be made. If an ex parte application is justified there is a strict duty upon the applicant (and his Advocate) to give full and frank disclosure of all material facts—material facts being those which either would or might affect the judgement of the Bailiff in the exercise of his discretion. There is an equal obligation not to make misrepresentations. In the case of Thompson v Thompson [1996] 22 GLJ 84 Neill JA stated the following: “On an ex parte application there is required from the Applicant a very high duty of candour. The duty rests both on the lay client and on the Advocate who represents the client. The Court must be fully informed as to the facts and considerations which are, or may be, material to the exercise by the Court of its coercive powers. I include the words ‘or may be’ because it will not suffice for an applicant and the legal advisers to purport to make a conclusive selection of the material facts and considerations. Ultimately, materiality is for the Court, so those preparing the application must consciously err on the side of inclusion rather than exclusion. If they are aware of a matter that could be material, they must investigate the underlying facts and, where necessary, ascertain the relevant law and procedure, whether of this forum or of an overseas jurisdiction. If the facts, law and procedure so ascertained are material in the sense described above, namely, obviously material or potentially material in the view of the Court, then full and transparent disclosure must be made.”
The duty of disclosure applies to material facts known to the plaintiffs and to any additional facts which would or should be known if proper enquiries were made. The required extent of such enquiries depends on all the circumstances of the case. The Court will ensure that the party seeking to obtain the injunction is deprived of any advantage derived from a breach of the duty as to disclosure. The question of whether an undisclosed fact or misrepresentation is sufficiently material to justify the immediate discharge of the injunction depends on the importance of the fact or matter to the issues in the case. The Court has a discretion to discharge, renew or replace the injunction. Where the duty is breached the order obtained is very likely to be set aside, certainly in the absence of an innocent explanation; other adverse consequences may also follow depending on the seriousness of the non-disclosure or misrepresentation. The undertakings given as a pre-condition to the grant of the order may also be employed against the applicant.30 It is noteworthy that in Guernsey practice there has been (and still is) a certain reluctance to fix a proper return date as opposed to merely giving leave to apply on notice to discharge or vary. It should go without saying that a defendant must be afforded a good and early opportunity to challenge the grant or continuation of an order made in his absence. 30 For the duty to make full and frank disclosure generally see Steven Gee QC, Mareva Injunctions and Anton Piller Relief 4th edn ch 8. For the effects of non-disclosure or material misrepresentation see p 138 et seq. See also the case of Brink’s Mat Ltd v Elcombe [1988] 1 WLR 1350.
Injunctions, Arrêts and the Clameur de Haro 499 MAREVA INJUNCTIONS
Mareva injunctions took their name from the case which engendered this kind of order31 and are now known as freezing injunctions or orders in England.32 A freezing order restrains the person or persons subject to the order from dealing with or otherwise disposing of their assets within the jurisdiction up to the value of the protected amount, usually the sum claimed in the proceedings about to be brought. The order may extend beyond the jurisdiction to become a world-wide order in certain circumstances. There is naturally a greater reluctance to make world-wide orders given their extra-territorial effect, although that effect is only because the order operates in personam; ie breach of the order abroad may be punished as a contempt before the Guernsey Court. It is not uncommon for freezing orders to be sought in other jurisdictions ancillary to the principal freezing order made where the substantive proceedings are to be issued. Such applications are common in Guernsey, often by way of assisting proceedings in London and vice versa. The granting of a freezing or Mareva injunction is a matter for the discretion of the Judge hearing the application. Because the application is almost invariably made ex parte the duty to make full and frank disclosure of all material facts applies, likewise the duty not to misrepresent. If it makes sense to talk of degrees of importance in complying with a duty which is strict in any event then it is particularly important to comply with the duty in the context of Mareva (and Anton Piller) applications; see in particular the case of Hulme v Matheson Securities (Channel Islands) Limited [1997] 24 GLJ 79 where Southwell JA stated: “A Mareva order is a draconian one (sic), freezing the defendant’s assets. It cannot be too often emphasised that it is the duty of a plaintiff seeking a Mareva order to make full and frank disclosure of the material facts, that is, material facts known to the plaintiff and any additional facts which should be known, having regard to all the circumstances of the case, if proper enquiries are made. The facts to be disclosed are those which are necessary to enable the Court to exercise its discretion properly. The material facts are to be disclosed in the affidavit or affidavits, and not in exhibits. If proper disclosure is not made: 1 the Court will ensure that the plaintiff is deprived of any advantage obtained from the breach of the duty of disclosure; 2 whether a fact not disclosed is sufficiently material to justify the immediate discharge of the injunction depends on the importance of the fact to the issues to be decided; 3 the Court may in its discretion continue the Mareva order or grant a new one.”
31 Mareva Compania Naviera SA v International Bulk Carriers SA “The Mareva” [1980] 1 All ER 213. For general guidance see paragraph 29/L/35A et seq. vol. 1 White Book 1999; in fact there is no reason in this context why the post-CPR jurisprudence should not be looked to. See also chs 2 and 3 of Gee, Mareva Injunctions and Anton Piller Relief, 4th edn. 32 One of the advantages of Guernsey as a jurisdiction is that its legal system is not a political fashion victim.
500 The Laws of Guernsey If the following threshold criteria are made out by the applicant the Court may grant a domestic freezing order (ie an order the effect of which is limited to the jurisdiction applied in): 1 the plaintiff has a good arguable case on a substantive claim over which the Court has jurisdiction; and 2 the defendant has assets within the jurisdiction; and 3 there is a real risk of dissipation or secretion of assets which would (otherwise) render the plaintiff ’s relief worthless. In the case of a “world-wide” Mareva injunction the Court will require additionally to be satisfied that there are no assets or insufficient assets within the jurisdiction to satisfy the claim and that there are assets outside the jurisdiction. In any event the statutory criteria at section 4 of the Law Reform (Miscellaneous Provisions) (Guernsey) Law 1987 must be made out. The Court must not exercise its powers under the Law “unless satisfied that it is just and convenient to do so”. For the purpose of rendering a Mareva injunction effective the Court may make ancillary orders. The Court will invariably grant an order requiring the defendant to make a (verified) statement disclosing his assets. The defendant is likely also to be required to give disclosure of documents supporting the statement of assets; for example copies of statements of all disclosed bank accounts.33 The Court may also order that specified interrogatories be answered. These ancillary orders serve a number of purposes. They assist a claimant to discover or confirm the existence, nature and location of assets. They may assist in clarifying ownership as well as the identity of third parties to whom notice of the order may need to be given (eg a previously unknown bank where funds are located). A freezing order alone would be of very limited value given the impossibility otherwise of knowing what assets there were and whether they had truly been frozen. It is common for such ancillary orders to result in further applications to the Court as more information comes to light. Disclosure orders may, and commonly are, made against third parties directly in order to uncover the full extent of a defendant’s assets. This will be in addition to binding the third party as regards the freezing order itself. Third parties who have knowledge of the order must not knowingly assist the defendant in the removal or disposal of assets or else risk committal proceedings. There is a considerable crossover in this context between the Mareva, Norwich Pharmacal and Bankers Trust jurisdictions. 33 See the case of Motorola Credit Corp v Uzan [2002] EWCA Civ 989 on the question of whether disclosure provisions should be suspended pending the hearing of an application to set aside an ex parte freezing order. Lord Justice Waller held that once it was accepted that a freezing order should continue pending the hearing, then prima facie the disclosure provision would not be stayed. This was so that the order might be policed properly and be effective. There is here the potential for unfairness to the defendant if subsequently the order is set aside. A possible solution would be for disclosure to be made to the Court in the first instance as opposed to the applicant. Only if the order were confirmed would the information be released.
Injunctions, Arrêts and the Clameur de Haro 501 Notwithstanding the above there are clear limits to the availability and extent of ancillary orders. Ancillary disclosure orders should only be made to the extent that their purpose is genuinely ancillary to the effective working or policing of the injunction as opposed, say, to investigating past dealings; see for example the case of Bekhor v Bilton [1981] QB 923 as cited with approval by the Royal Court of Jersey in Armco Financial Services Corporation v Donohue et autres (1999) 1999/185.34 It is essential, of course, that the freezing order is served effectively on the person or persons subject to the injunction and any third party who is intended to be bound by its terms. Personal service effected by the Sergeant is by far the best method if available in the circumstances of the case. The order itself should be endorsed with a penal notice warning of the consequences of failing to comply with the order, ie guilt of contempt and liability to imprisonment, sequestration of assets or a fine. Penal notices appear not to be a part of local practice, but they ought to be and the Court of Appeal is bound to impose such procedures as and when the opportunity arises. Care is required when drafting the order sought. In the case of Federal Bank of the Middle East Limited v Hadkinson [2000] 2 All ER 395 a Mareva injunction which used the words “his assets and/or funds” was held not to cover assets and funds which belonged, or were assumed to belong, beneficially to someone other than the person restrained. Rather, they were confined to assets and funds belonging to the defendant, and which were and should remain available to satisfy the claim against him. The plaintiff in fact requires the broadest possible disclosure of assets in which a defendant has any kind of direct or indirect interest given the likelihood of attempted asset protection measures. Thus it is common to see orders requiring a defendant to disclose assets he has settled or even given away. It is important to note that a Mareva order may be made after judgment as well as before. A post-judgment Mareva would be sought where there are grounds for believing that the judgment debtor intends to avoid execution. Equally a prejudgment Mareva may be continued after judgment for the same reasons. If a defendant was likely to dispose of assets prior to judgment his motivation to do so will be even greater after judgment. A post-judgment Mareva is a powerful aid to effective execution. Where the claim made by a plaintiff is a proprietary claim35 the Mareva injunction has an extra rôle to play. Here it is not just a means of identifying and freezing assets generally in order to render future relief meaningful; it is also a means of identifying and following specific assets themselves and freezing them either where they are or as the Court directs. Whether a claim is a proprietary claim or not will also affect the nature of disclosure order sought. If the claim is not a proprietary claim the disclosure ordered will be of a policing nature; ie an up-to-date account 34
See also the Royal Court of Guernsey judgments in Vardinoyannis v Ansol. Ie not just a claim for, say, damages but a claim to assets themselves as being or representing the plaintiff ’s assets. 35
502 The Laws of Guernsey of assets and location. If the claim is proprietary in nature the disclosure ordered is less restrictive. Interrogatories are particularly useful in this context. In any event, if the plaintiff is dissatisfied with the quality of disclosure given an order may be sought permitting cross-examination of the maker on his or her affidavit. It is important to bear in mind the typical exemptions to Mareva orders; in particular exemptions permitting the defendant to incur specified living costs, legal costs and to make payments in the ordinary course of business.36 Even if the Mareva order itself is not challenged the defendant may apply for an order permitting specified payments to be made; eg to discharge bona fide business commitments or other expenses. The order sought is known as an Angel Bell order.37 It is not uncommon for parties to agree régimes between themselves for payments to be made by a defendant on condition that specified information, documentation and notice is given in order to allow the plaintiff to assess the bona fides of what is proposed and an opportunity to apply to the Court to block the payment if need be.38 A Mareva order will usually permit variations as to the extent of the order which are agreed between the parties in writing. The Royal Court will generally adopt and adapt English precedents for Mareva orders (and undertakings) as they themselves evolve.39 For example it is likely to follow the recent case of Bank of China v NBM LLC [2002] 1 All ER 717 in giving protection to third party banks against potentially being placed in breach of local legal requirements if compelled to comply with a freezing order. This necessarily concerns only the world-wide element of a Mareva injunction where the need for such provisos has long been recognised.40 Likewise undertakings in the following form are also likely to be required where a world-wide order is granted: The Applicant will not without the leave of the Court begin proceedings against the Respondent in any other jurisdiction or use information obtained as a result of an Order of the Court in this jurisdiction for the purpose of civil or criminal proceedings in any other jurisdiction. The Applicant will not without the leave of the Court seek to enforce this Order in any jurisdiction outside the Island of Guernsey [or seek an Order of a similar nature including Orders conferring a charge or other security against the Respondent or the Respondent’s assets]. 36 Sometimes overlooked by Guernsey Advocates, leading to inevitable applications to vary by the defendant. 37 After the case Iraqi Ministry of Defence v Arcepey Shipping Co SA (The “Angel Bell”) [1981] QB 65. See also the Jersey case of Perczynski v Perczynski (2001) 22 May. 38 See Gee, 4th edn p 318 et seq. A defendant may also pay into court an amount equal to the freezing order sum or else provide a bond as the price of obtaining a discharge of the order (and pro rata). 39 See the Practice Direction supplementing CPR Part 25 and Appendix 5 of the Commercial Court Guide. 40 See the cases of Derby & Co Ltd & Ors v Wheldon & Ors [1989] 2 WLR 276, Baltic Shipping v Translink [1995] 1 Lloyds Rep 673 and Babanaft International Co SA v Bassatne & Anor [1989] 1 All ER 433.
Injunctions, Arrêts and the Clameur de Haro 503 An applicant is almost invariably required to give an undertaking in damages in case it should be found subsequently that the order should not have been granted;41 likewise security for costs must also be lodged. Historically only woefully inadequate security for costs has been required, a legacy of the very low level of recoverable costs prior to April 2000. There is no reason why the applicant should not also be required to fortify the undertaking in damages itself by production of a bond, payment into Court or otherwise.42 It is common for the applicant to have no assets within the jurisdiction. In Vardinoyannis v Ansol Ltd & Ors (2001) 20 November Lieutenant Bailiff Newman QC gave a lengthy judgment touching on the many legal principles brought into play when a freezing injunction is sought in the context of a complex multi-jurisdictional dispute. The judgment addressed in particular issues relating to jurisdiction, forum non conveniens, the requirement for double actionability, the effect of non-disclosure and the proper limits of ancillary disclosure orders. There are important dicta also concerning the torts of conspiracy and procuring a breach of contract.43
ANTON PILLER ORDERS 44
An Anton Piller Order 45 (now called a search order in England) permits an applicant to enter the respondent’s premises 46 in order to search for, inspect and seize material documents and other property infringing the applicant’s rights or otherwise relevant to the prospective plaintiff ’s claim against a defendant. It is most often deployed in patent, copyright and passing-off actions or where breach of confidence is alleged. The power can be invoked on an ex parte application in those rare instances where an applicant can show: 41
Certainly if the application is ex parte. See for example the case of Business Online Group Plc v MCI Worldcom Ltd [2001] EWCA Civ 1399, LTL 9/8/2001 and the approach adopted there, note however that this was a two Judge extempore judgment; see also the case of Vardinoyannis mentioned below where fortification was ordered. 43 In a later judgment in the same litigation (23 May 2002) the Lieutenant Bailiff ordered the Applicant to fortify his undertaking in damages in the sum of US$ 15 million. As to double actionability see the English case of Phillips v Eyre (1870) LR 6 QB 1: “. . .to found a suit in England for a wrong alleged to have been committed abroad, two conditions must be fulfilled. First the wrong must be of such a character that it would have been actionable if committed in England . . . Secondly, the act must not have been justifiable by the law of the place where it was done”, per Willes J. See also Chaplin v Boys [1971] AC 356. 44 For a specialist account of the topic the reader is again referred to Steven Gee QC, Mareva Injunctions and Anton Piller Relief 4th edn at p 243 et seq. 45 Once more from the case name, here Anton Piller KG v Manufacturing Processes Ltd [1976] Ch 55. Note the power to grant such orders was subsequently given a statutory footing by s 7 of the Civil Procedure Act 1997. 46 Note that in an appropriate case an Anton Piller order may be obtained against a third party, most likely in combination with a Norwich Pharmacal order. A gagging order may also be required so as to prevent the target of the substantive proceedings being tipped off before other steps are taken to secure the prospective plaintiff ’s position, eg through consequential freezing order applications. See generally pp 248–49 of Gee, 4th edn. 42
504 The Laws of Guernsey (i) an extremely strong prima facie case; and (ii) that the damage (potential or actual) is very serious for the applicant; and (iii) there is clear evidence that the respondent has in his possession incriminating documents or “things” and there is a real possibility that the material may be destroyed before an on notice application can be made (or rather enforced); and (iv) the harm likely to be caused by the execution of the Anton Piller order to the respondent and his business affairs is not excessive or disproportionate to the legitimate object of the order. The Court sits in private to determine the application since it is essential to the relief sought that the respondent should not have advance knowledge of the application or order and therefore an opportunity to destroy the relevant material. The applicant must act with care when enforcing the order; the making of the order is itself only justified where there is a paramount need to prevent a denial of justice to the applicant which cannot be met by an order for delivery up or preservation of the documents. The potential consequences for an applicant who has obtained an Anton Piller order either wrongfully or without sufficient justification are serious. An undertaking in damages is an inevitable pre-condition to the grant of such an order. Anton Piller applications are rare in Guernsey. The Court would follow English principles as set out at paragraph 29/L/77 and following of the 1999 White Book, although this is another area where there is no reason to remain set in the aspic of the Rules of the Supreme Court.47 Again American Cyanamid principles are not relevant given the enunciation of very specific guidelines which the Court should follow.48 There are standard forms for Anton Piller orders set out in the 1999 White Book and now the White Book Service 2001. These provide for an independent solicitor to attend and make a report on the execution of the order.49 An opportunity is provided to the defendant to contact his solicitor and, it seems, if he acts immediately, to apply to set aside the order. This would take place while the supervising solicitor remains on the premises.50 Where the premises to be searched are likely to be occupied by an unaccompanied woman and the supervising solicitor is a man then at least one of the people accompanying the supervising solicitor should be a woman. Typically it is the plaintiff ’s solicitor who actually executes the search itself. Various undertakings would be required to be given by the plaintiff, his lawyers and the supervising lawyer.
47 As matters stand there is a risk that the 1999 White Book will come to occupy a similar position in Guernsey law to that of Terrien for future generations of lawyers. 48 Eg Universal Thermosensors Ltd v Hibben [1992] 1 WLR 840; see generally Gee p 252 and following. 49 In Guernsey the Sergeant has performed the rôle of the independent solicitor. 50 See Gee, 4th edn p 255.
Injunctions, Arrêts and the Clameur de Haro 505 Intellectual Property Law Whilst on the topic of Anton Piller orders, the opportunity is taken to mention briefly Guernsey intellectual property law. The existing legislation dates back to 1911 (copyright) and 1922 (patents, registered designs and trademarks). Confidentiality and trade secrets are protected through the de facto incorporation into Guernsey common law of English common law principles; another comparatively recent example of this kind was in the area of passing off claims.51 New legislation is now in the course of preparation; see the policy letter at Billet d’État XXIII of 2002. Injunction Application Procedure The procedural requirements for (ex parte) injunction applications are the same as for arrêt applications and contained in Practice Directions No 3 of 1992, No 2 of 1993 and No 2 of 1994. These have already been considered in the context of arrêts. Note though that practice has, in many respects, moved on, particularly as to the form of the order likely to be made. Injunctions Pursuant to Financial Services Regulation There are various express powers contained within Guernsey financial services legislation permitting the Financial Services Commission to apply for and obtain injunctions either to enforce regulation and/or to protect the interests of financial services clients; see section 33 of the Protection of Investors (Bailiwick of Guernsey) Law 1987, section 35 of the Banking Supervision (Bailiwick of Guernsey) Law 1994 and section 33 of the Regulation of Fiduciaries, Administration Businesses and Company Directors, etc. (Bailiwick of Guernsey) Law 2000. These provisions are considered more fully in the section concerning financial services regulation in the Bailiwick.52 Anti-suit Injunctions An anti-suit injunction is intended to restrain an opponent from commencing or continuing proceedings in a foreign jurisdiction. An anti-suit injunction operates in personam as opposed to being directed at the foreign forum itself; it is therefore a pre-condition for the injunction that the Court has jurisdiction over the person to be restrained. Until recently no such injunction had been sought or granted in Guernsey; however it is now beyond doubt that the Royal Court will grant an 51 52
See the case of Planet Hollywood International Inc. v Mallard Country Club Hotel (1997). See now also equivalent powers under the 2002 Insurance Laws.
506 The Laws of Guernsey anti-suit injunction in appropriate circumstances.53 The Court will have regard to English case-law principles, although as ever it is not constrained by such.54 It follows that the circumstances where an anti-suit injunction may be granted are as follows: (a) where foreign proceedings would constitute an invasion of a legal or equitable right not to be sued abroad; (b) where foreign proceedings would be in breach of an agreement (typically an exclusive jurisdiction clause); (c) where foreign proceedings would be unconscionable (eg as an attempt to avoid a defence which would be available to the party under Guernsey law); (d) where the pursuit of the foreign proceedings would be vexatious or oppressive (eg because although there is another available forum for trial there would be injustice if the foreign proceedings were allowed to proceed).55 Again one would look to section 1 of the Law Reform (Miscellaneous Provisions) (Guernsey) Law 1987 for the statutory foundation of such orders.
53 See the judgment of Hancox LB in the case of Ashton v Ansol Limited (2002) 16 October where the power to grant such an injunction was accepted. An order had been obtained ex parte; the judgment was on the application to set aside. Note that the Bailiff, sitting as a single Judge of the Court of Appeal, subsequently refused a stay (pending appeal) of the effect of the Lieutenant Bailiff ’s order discharging the injunction. He also held that anti-suit injunction applications ought not to be made ex parte. Although the Court of Appeal subsequently overturned the Lieutenant Bailiff ’s judgment, the power of the Court to make anti-suit orders was not doubted. Southwell JA identified three principles: (1) whether the pursuit of the foreign litigation would be vexatious or oppressive; (2) whether the Royal Court was the natural forum for the determination of the dispute and (3) whether the injustice to the applicant if the respondent were allowed to pursue the foreign proceedings would outweigh the injustice to the respondent if not so allowed. The Court of Appeal judgment is dated 10th January 2003. 54 See also the Jersey case of EMM Capricorn Trustees Limited v Compass Trustees Limited (2001) 23 April 2001/87 in the context of trusts and generally. English common law principles are helpfully restated in the House of Lords decision of Donohue v Armco Inc. [2002] 1 All ER 749 at 759. 55 See generally for the identification and development of these categories Cheshire & North, Private International Law 13th edn (Butterworths) pp 359–73; likewise Dicey & Morris, Conflicts of Laws 13th edn. Cheshire questions whether (a) is a separate category and cites the view that the other categories are merely sub-categories of this over-arching principle. The categories are themselves not closed. See also the leading cases of Société Aérospatiale v Lee Kui Jak [1987] AC 871 (PC) and Airbus Industrie GIE v Patel [1999] 1 AC 119 (HL).
20 Conflict of Laws
A
NYTHING OTHER THAN the briefest of introductions to the Guernsey approach to private international law is, happily, beyond the scope of this work.1 In the context of litigation the rôle of Guernsey private international law is to resolve two principal questions in any given case having an international element: 1) Which Court has jurisdiction over the parties and substantive issues in the case?2 2) Which law should be applied to those substantive issues?3 Both questions are answered according to Guernsey private international law as the lex fori or law of the forum. It is likewise the lex fori which governs all procedural matters regardless of the eventual choice of proper law. What constitutes an “international element” for Guernsey as a non-sovereign entity calls for some explanation. It may be more accurate in this context to talk of an interjurisdictional element, since as soon as the parties or issues are connected with jurisdictions other than Guernsey (and even Alderney or Sark as opposed to Guernsey) you are very likely to be concerned with private international law issues; ie the questions of which Court has jurisdiction and what is the applicable law. Neither the Lugano nor the Brussels Conventions nor Council Regulation 44/2001 have any application in Guernsey. In essence Guernsey private international law draws upon English common law principles of private international law without the benefit of legislation equivalent to the Contracts (Applicable Law) Act 1990,4 the Civil Jurisdiction and Judgments Act 1991 or the Private International Law (Miscellaneous Provisions) Act 1995.5 It follows that a Guernsey 1 The experience of being compelled to learn the subject for the first time by joining the second term of a Master’s degree course at the University of Caen and being taught entirely in French was, shall we say, challenging. I am forever in debt to Mme Hélène Peroz and the humour she injected into this otherwise driest of subjects. 2 And if more than one, which of those courts ought to exercise jurisdiction. 3 Known as the lex causae, ie the law of the cause or the “proper law” of the dispute. Distinct issues or disputes within a single case may be determined according to different applicable laws, everything depends on the circumstances of the parties and their dealings; eg a case may concern a number of contracts and torts made, breached or committed in a number of jurisdictions. 4 Nor the conventions and protocol underlying this Act. 5 With the effect, for example, that the double actionability rule for torts survives in Guernsey private international law.
508 The Laws of Guernsey practitioner reads Dicey & Morris on the Conflict of Laws6 selectively. As in other areas an older edition of an English law text-book can sometimes be more helpful than the most up-to-date.7 It is very common for private international law issues to arise in Guernsey. For example, applications are regularly made for leave to serve out of the jurisdiction which in turn generate applications challenging the jurisdiction of the Royal Court or its appropriateness as a forum. These applications take the form either of seeking to set aside the leave given to serve out and/or an order staying the proceedings. In deciding these issues the Royal Court would be guided by leading English cases such as Spiliada Maritime Corp v Cansulex Ltd, “The Spiliada” [1986] 3 All ER 843 and Konamaneni v Rolls-Royce [2002] 1 All ER 979. The latter is a judgment of Mr Justice Collins concerning the attempt of a foreign company to bring a derivative action in England which also summarises helpfully the various legal principles involved in this context.8 It is noteworthy that a Guernsey Court will, of course, prima facie take jurisdiction over a Guernsey company. The extensive use of Guernsey companies for international business means that all manner of disputes may end up before the Royal Court.9 Other, non-Guernsey, parties may find themselves joined to Guernsey proceedings as necessary or proper parties to the proceedings. Although non-Guernsey parties may challenge both jurisdiction and allege forum non-conveniens the Guernsey company may only challenge the appropriateness of the forum. The Guernsey Court has jurisdiction as of right over Guernsey companies.10 In the context of succession it is established clearly that the law of the last domicile of a deceased will govern meubles11 whereas the lex rei sitæ or law of the location (of the thing) will govern immeubles. It follows that if a man dies 6 13th edn and 2nd supplement. Likewise the excellent Cheshire & North, Private International Law 13th edn (Butterworths). See also Butterworths’ International Litigation Handbook, a helpful sourcebook for relevant primary materials, albeit principally from a United Kingdom viewpoint. 7 See also the sections elsewhere in this book on service (RCCR r 7), enforceability of foreign judgments and anti-suit injunctions. See the case of Vardinoyannis v Ansol Limited (2001) 20 November for a Guernsey judgment where a number of private international law issues arose and were considered; likewise a subsequent judgment in the same litigation concerning forum non conveniens dated 24th May 2002. 8 In essence the burden is on a party over whom the Court prima facie has jurisdiction (ie one or more of the proposed defendants) to show that proceedings should be stayed on the ground of forum non conveniens; whereas the burden is on the party who requires leave to serve out on foreign wouldbe defendants (ie one or more of the plaintiffs) to establish that the forum is the appropriate forum, and clearly so. See also leading English cases on other conflicts issues; recent examples include Kuwait Oil Tanker Co v Al Bader & Ors [2002] 1 All ER (Comm) 351 as regards the double actionability rule and enforcement of foreign judgments and Hulse v Chambers [2001] 1 WLR 2386, where it was held that the quantification of damages is for the lex fori to determine, see likewise Roerig v Valiant Trawlers Limited [2002] 1 All ER 961. 9 The same applies to Alderney companies and the Court of Alderney. 10 In Vardinoyannis a Guernsey company was sued in Guernsey as an alleged conspirator with nonGuernsey co-defendants as a means, it would appear, of finding a workable jurisdiction; ie the Guernsey company was used as the peg upon which to hang the case. 11 Ie movable property as opposed to immovable; see the section on succession for a more detailed account of the distinction, which is more subtle than at first might appear.
Conflict of Laws 509 domiciled in France with realty in Guernsey, French law will determine who receives the money in his Guernsey bank account but Guernsey law will determine the succession to his land.12 As regards conflict of laws problems generally the approach of the Guernsey Court will again be that, in the absence of any Guernsey statutory or common law solution, English common law principles will most likely be adopted, unless those principles are demonstrably unsatisfactory, in which case other solutions and other systems of law would be considered, even an original solution. Certainly French droit international privé would be considered.13
12 See the section on succession law. See also Sonia Slater, “Cross-border estates: solving the difficulties” New Law Journal vol 152 no 7048 p 1374 (20 September 2002) for a summary of the issues from a UK perspective. 13 See for example Prof. Bernard Audit’s Droit International Privé 2nd edn (Economica, 2000).
21 Criminal Courts and Procedure INTRODUCTION
T
HE OVERWHELMING MAJORITY of criminal matters are dealt with by the Bailiwick’s courts of summary jurisdiction. These comprise the Court of the Sénéschal in Sark, the Court of Alderney1 and the Magistrate’s Court in Guernsey. The jurisdiction of each Court is limited geographically and by its sentencing powers. Offences range, as in England, from those which are “summary only” (ie offences that may only be dealt with at summary level, but note below the jurisdictional interplay between the three summary courts), to those which are “either way” offences (ie they may be dealt with either in a court of summary jurisdiction or on indictment, depending on the gravity of the matters alleged) to those offences which are so serious that they may never be disposed of by a summary Court, ie “indictable only” offences. The Court of the Sénéschal has the most restricted powers of sentence and the Guernsey Magistrate’s Court the least. All three courts send “either way” cases which are too serious either to be tried or sentenced at their respective summary level to the Royal Court. In the case of the Magistrate’s Court cases are simply committed for trial to the Royal Court sitting as a Full Court. In the case of Sark and Alderney, cases are initially sent to the Royal Court sitting as an Ordinary Court which may exercise the equivalent extra jurisdiction which the Guernsey Magistrate would have had. If the offence is still too grave the Ordinary Court will transfer it to the Magistrate for committal to the Full Court for disposal. There are rights of appeal from the summary courts to the Royal Court sitting as a Full Court. There are further rights of appeal from the Royal Court to the Court of Appeal and from there to the Privy Council.2 The Bailiwick’s criminal procedure will be familiar to any English qualified practitioner, likewise its sentencing powers.3 Often the procedure is the equivalent of a now superseded English model; but that is not to say it is any worse. The comparative lack of sophistication in Guernsey sentencing law is a positive advantage in some respects.4 Substantive Bailiwick criminal law is heavily influenced by 1
Summary courts in this context. Those rights are restricted, particularly in the case of appeals against sentence, see below. 3 Terrien Livre XII and Le Marchant are rarely cited in the criminal courts. 4 Nor is Guernsey sentencing policy (yet) determined by the level of her prison population, contrast R v Kefford (2002) Crim LR 432. The principal problem for Guernsey sentencing is the lack of a sufficient range of alternatives to custodial sentences, particularly in the case of drunks. 2
512 The Laws of Guernsey English law. Statutes are generally copied from English legislation, albeit with local differences. A number of offences remain common law offences. A surprising amount is assumed without being legislated in both substantive and procedural law, eg the entire bail regime.5
BAILIWICK COURTS OF SUMMARY JURISDICTION
Sark: The Court of the Sénéschal By section 23 of the Reform (Sark) Law 1951, as amended, the Court of the Sénéschal is the sole Court of justice in Sark with unlimited jurisdiction in civil actions and jurisdiction in criminal matters limited by the Sénéschal’s powers of sentence. Those sentencing powers are up to one month’s imprisonment and/or a fine not exceeding level 4 on the Sark uniform scale which currently stands at £500.6 A maximum of two months imprisonment and £1,000 in fines can be imposed on one occasion in respect of two or more offences.7 The Court itself is constituted by the Sénéschal sitting alone with the Greffier acting as Clerk. The Prévôt executes the judgments of the Court and collects all fines and fees. By section 16 of the Magistrate’s Court (Guernsey) Law 1954 if the Sénéschal considers that an offence with which a person is charged or the punishment appropriate to it, is beyond the Court’s competence, the case must be transferred to the Royal Court sitting as an Ordinary Court with a view to the matter being dealt with in accordance with the provisions of section 17. The net effect is that the Ordinary Court exercises the additional jurisdiction which the Guernsey Magistrate’s Court would have had if the matter had originated in Guernsey. It therefore has jurisdiction to hear and determine all criminal matters other than offences of treason, homicide, rape, robbery, piracy and perjury or incitement, conspiracy, or attempting to commit, or aiding and abetting the commission of, any of those offences. The Ordinary Court’s powers of punishment are likewise limited to the Magistrate’s Court maximum, ie imprisonment for a period not exceeding twelve months or a fine not exceeding level 5 on the Guernsey Uniform Scale; subject to any Law expressly stating otherwise.8 If the offence with which the accused is charged is an indictable only offence or one which the Ordinary Court believes is beyond its competence either to try or to
5 See below, but note that a statute is in the advanced stages of preparation. Likewise with Police powers. A number of reforms are anticipated in the near future given the eventual coming into force of the Human Rights (Bailiwick of Guernsey) Law 2000. Lord Woolf ’s Practice Direction of 8 July 2002, reported at [2002] 3 All ER 904 is a very helpful and extensive source for existing English procedure. See also Emmins on Criminal Procedure 9th edn (OUP). 6 See the Uniform Scale of Fines (Bailiwick of Guernsey) Law 1989. 7 See s 21(3) of the Reform (Sark) Law 1951, as amended by the Court of the Sénéschal (Increase in Jurisdiction and Transfer of Prisoners) Law 1971. 8 See below.
Criminal Courts and Procedure 513 sentence, or if the accused elects to be tried by the Royal Court9 or the prosecution so elects, the Ordinary Court must transfer the case to the Magistrate’s Court with a view to the accused being committed for trial on indictment before the Royal Court. The Magistrate’s Court may then commit the accused for trial before the Royal Court if satisfied that there is a prima facie case to answer. The Court of the Sénéschal when transferring an accused between the Court of the Sénéschal and the Ordinary Court or the Ordinary Court on transfer between the Ordinary Court and the Magistrate’s Court may detain the accused in custody, grant him bail, conditional bail or release him on oath for his appearance. The right of appeal from the Court of the Sénéschal in criminal matters is to the Royal Court of Guernsey sitting as a Full Court, (in civil actions it is to the Royal Court sitting as an Ordinary Court). The law and procedure relating to appeals is the same as for the Court of Alderney and the Magistrate’s Court, Guernsey, see below. Alderney: The Court of Alderney The Court of Alderney is constituted by any two or more Jurats in addition to the Jurat acting as Chairman of the Court; see section 8 of the Government of Alderney Law 1987 and that Law generally. The Court has an unlimited first instance civil jurisdiction, as in Sark. By section 12(1) of the 1987 Law the Court has criminal jurisdiction to try and determine a charge alleging an offence for which the maximum penalty permitted by law does not exceed its sentencing powers. Section 12(2) states that the Court of Alderney does not have jurisdiction to try and determine a charge alleging an offence of treason, homicide, piracy, rape, perjury or robbery. Where neither of these sub-sections apply, (ie it neither has jurisdiction under sub-section 1 but nor is it positively prohibited from dealing with the matter under sub-section (2) the Court may deal with the matter if it considers that any likely penalty will not exceed its sentencing powers. If the Court either does not have jurisdiction or considers that its sentencing powers would be inadequate the Court must consider whether there is a prima facie case against the accused. If there is a prima facie case the Court must transfer the matter to the Royal Court again sitting as an Ordinary Court. There is no express right of election as such by the accused before the Alderney Court. Section 13 of the 1987 Law, as amended by the Government of Alderney (Amendment) (No 1) Law of 1995 provides that the maximum penalty which the Court of Alderney has jurisdiction to impose in respect of any one offence is a sentence of imprisonment of three months and/or a fine of level 5 on the Alderney Uniform Scale (£5,000).10 As regards more than one offence the maximum penalty which the Court of Alderney has jurisdiction to impose on a person on any one 9 The accused may elect Royal Court trial whenever the offence charged carries a potential sentence in excess of 3 months imprisonment save where common assault is charged, see s 10(4) of the 1954 Law. 10 See the Uniform Scale of Fines (Alderney) Ordinance 2001.
514 The Laws of Guernsey occasion is imprisonment for terms not exceeding in the aggregate six months and/or fines not exceeding twice level 5, (ie £10,000). Appeal from conviction or sentence by the Court of Alderney is to the Royal Court of Guernsey. The relevant provisions are to be found in the Magistrate’s Court (Criminal Appeals) (Guernsey) Law 1988. The definition of Magistrate’s Court in that Law extends to the Court of Alderney and to the Court of the Sénéschal. Likewise the procedural law is set out in the Magistrate’s Court (Criminal Appeals) Rules 1989 and the Amendment Rules of the same year. All three courts therefore share the same procedural law in this regard. Any sentence of imprisonment imposed by the Court of Alderney which is in excess of seven days must be served in Guernsey, see section 20(3) of the Government of Alderney Law 1948, (three days in Sark). The original jurisdiction of the Guernsey Ordinary Court mirrors the relationship with the Court of the Sénéschal. The relevant provisions are again found in Part IV of the Magistrate’s Court (Guernsey) Law 1954. It follows that a person charged in Alderney with a serious offence faces the prospect of two sets of committal proceedings,11 (however brief they may in fact be), and appearing before three separate tribunals before reaching the Royal Court for trial.12 Note also that the original jurisdiction is just that; criminal proceedings can, where appropriate, be commenced before the Ordinary Court as opposed to either the Court of Alderney or Court of the Sénéschal. Guernsey: The Magistrate’s Court The principal Law governing the Guernsey Magistrate’s Court is the Magistrate’s Court (Guernsey) Law 1954, as amended by the Magistrate’s Court and Miscellaneous Reforms (Guernsey) Law 1996. The Magistrate’s Court has summary jurisdiction in criminal matters and jurisdiction in civil actions in accordance with the provisions of the 1954 Law. The Court is constituted by a Magistrate. The Magistrate may be a Jurat or an Advocate of five years standing or a barrister or solicitor of not less than five years standing. Assistant Magistrates may be appointed with all the powers and duties of the Magistrate. The Deputy Bailiff may also perform the functions of the Magistrate. By section 9 the Magistrate’s Court has jurisdiction to hold inquests into the cause of death.13 By section 10 the Court has jurisdiction to hear and determine all criminal matters other than offences of treason, homicide, rape, robbery, piracy or perjury; or incitement, conspiracy, or attempting to commit, or aiding and abetting the commission of, any of these offences. 11 It is not technically correct to talk of committal from the Alderney Court; it is really a remittal. 1991 Law statements will be tendered but if they are disputed a hearing will take place which will resemble closely committal proceedings. 12 Likewise with Sark. 13 Note the case of Kirk v Law Officers of the Crown (2002) 15 November where the Royal Court quashed an inquest verdict. The case is of general importance in the context of judicial review.
Criminal Courts and Procedure 515 The Court may impose a sentence of imprisonment for a period not exceeding 12 months or a fine not exceeding level 5 (currently £5,000) on the Uniform Scale or both.14 If an enactment provides a greater or lesser summary penalty then that greater or lesser penalty applies.15 Where an individual is convicted of more than one offence the maximum aggregate sentence of imprisonment which may be imposed cannot exceed twelve months.16 The 1954 Law (as amended) is silent as to the aggregation of fines. The better view is that fines can be aggregated, subject only to the scale limit per offence and the number of offences being dealt with, (in each case excluding any sentence of imprisonment in default of payment of any fine, see article 6 of the Loi par rapport aux Procédures en Crime 1877).17 Guernsey: The Juvenile Court The Juvenile Court in its current form was created by The Juvenile Court (Guernsey) Law 1989. The Court has a jurisdiction equivalent to that of a Magistrate’s Court for adults as regards criminal proceedings against juveniles (those under 17) and children (those under 14). Note that the Guernsey age of criminal responsibility is 10 and above.18 The Juvenile Court also has jurisdiction in child protection matters, principally jurisdiction to make care orders and school attendance orders, see the Children and Young Persons (Guernsey) Law 1967, as amended, and the Education (Guernsey) Law 1970. Thus by section 1(2) of the 1989 Law the Juvenile Court is required to deal with juveniles charged with offences, juveniles in need of care, protection or control and the securing of regular attendance at school of a juvenile brought before it under the 1970 Law. The Magistrate’s Court continues to deal with juveniles where they are charged jointly with a person of 17 or over or where an adult has accessory liability with a juvenile or where the Magistrate’s Court takes jurisdiction only to discover subsequently that the person concerned is a juvenile. By section 3 of the 1989 Law the Juvenile Court is required to have regard to the welfare of a juvenile when dealing with him or her and may, in a proper case, take steps to remove the juvenile from undesirable surroundings. The Juvenile Court is constituted by the Magistrate or Acting Magistrate who acts as Chairman and two other members. One member must be of the opposite sex to the majority, nothing in between is contemplated. The Chairman is the sole judge of law and procedure but every other matter is decided by a majority. No minority judgment is allowed to be given. 14
See the Uniform Scale of Fines (Bailiwick of Guernsey) (Amendment) Ordinance 1998. Note for example the much higher fines which may be imposed for sea fishery offences. Note however that the Magistrate can impose a total of up to 18 months imprisonment if also activating a previously suspended sentence of imprisonment (ie 12 months activation of 6 months suspended); see s 2 of the Criminal Justice (Power to Suspend Sentence) (Bailiwick of Guernsey) Law 1972. 17 The right of an accused to elect Royal Court trial, mode of trial and committal proceedings are dealt with below. 18 See s 15 of the Children and Young Persons (Guernsey) Law 1967. 15 16
516 The Laws of Guernsey By section 9 there is power to remand a juvenile in custody either at the States Prison (where special provision is made for juveniles) or with the States Children Board, (again the Children Board has secure facilities for this purpose). The 1989 Law is supplemented by the Juvenile Court (Criminal Cases) Rules 1990. These provide a special procedure for criminal proceedings concerning juveniles and children. There are additional requirements imposed upon the Court to ensure that the young person understands the process and has sufficient opportunity, whether by himself or by his parent or guardian or Advocate, to meet the charges. Thus the Court has a duty to explain the substance of a charge in simple language suitable to the age and understanding of the young person. In addition, before finally disposing of the case, the Court has an obligation to inform the child or young person of the manner in which it proposes to deal with the matter and to allow representations to be made. Whether a juvenile is tried as a juvenile or an adult depends upon when the juvenile attains the age of 17. It seems that the key date is when the substantive proceedings themselves are due to be determined. If the juvenile has reached the age of 17 then he will be dealt with by the Magistrate’s Court, otherwise by the Juvenile Court. Note however that sentencing limitations continue to have effect notwithstanding the fact that the young person has attained the age of 17. The key limitation is that no sentence of imprisonment may be imposed upon a person under the age of 21. In place of imprisonment a sentence of youth detention may be imposed, see the Criminal Justice (Youth Detention) (Bailiwick of Guernsey) Law 1990. There is a very broad range of sentencing options for a juvenile. These comprise the following: dismissal of the charge; a bind over to be of good behaviour; an order to pay damages, compensation and costs; probation; a supervision order; an order that the parent or guardian give security for the good behaviour of the offender; no order after conviction; special care order; fit person order; a fine; a compensation order; an attendance centre order; youth detention; a suspended sentence of youth detention; a suspended sentence of youth detention with a supervision order; deferment of sentence; restitution; confiscation of items involved in the commission of an offence and corporal punishment. The last option although technically still good as a matter of domestic law is not a current sentencing option given the stance of the European Court of Human Rights and Convention Law. Note that only a Juvenile Court may make a supervision order, see section 2(2) of the Law, which, in any event, may only be made in respect of a child or young person, ie a person less than 17 years old. The adult equivalent is the probation order which has very similar effect. Sentencing is considered in more detail below. Meanwhile it is noteworthy that the Loi relative à la Probation de Delinquants of 1929 contains a number of options which are particularly relevant to the sentencing of minors and should always be considered carefully by the Advocate making a plea in mitigation on behalf of a minor. The 1929 Law gives the Court power to dismiss the charge, make a conditional discharge or bind over the offender. In
Criminal Courts and Procedure 517 addition the Court may make a compensation order, a costs order and a probation order. Of these combinations under the 1929 Law only the bind over amounts to a conviction, hence their importance.
THE ADMINISTRATION OF JUSTICE (BAILIWICK OF GUERNSEY) LAW 1991
This is an important Law in the context of Bailiwick criminal procedure, containing a miscellany of reforming provisions of general application. Section 1 of the 1991 Law permits written statements to be adduced in evidence by either party to criminal proceedings, other than committal proceedings, subject to certain conditions being fulfilled. The statement must be signed and contain a declaration that it is true to the best of the knowledge and belief of the statementmaker who also declares that he knows he will be liable to prosecution if the statement is tendered in evidence and any part of it is false. A copy of the statement must be served on each of the other parties before the material hearing, none of whom serve a notice within seven days objecting to the statement being tendered in evidence. It follows that the notice must be served at least seven days before trial. These procedural requirements can be waived by agreement, save the necessity for a declaration as to truth. There are other less important formal requirements set out at section 1(3), for example that the age of a statement maker under 21 must be given. The service of a notice does not prevent the serving party from calling the witness. The Court retains power to require the statement-maker to attend Court to give evidence. Likewise a party may apply for the witness to be required to attend Court. This last provision appears to cover the circumstance where, for whatever reason, an objection was not initially made. Prima facie, the statement is to be read aloud and any documents or objects referred to in the statement are treated as exhibits. It is an offence to make a false statement, punishable by up to two years imprisonment. These provisions are based upon section 9 of the English Criminal Justice Act 1967 and are a valuable means of reducing the length of criminal trials by confining oral evidence to what is disputed. In practice the procedure is almost exclusively used by the prosecution. Another time-saving provision is found at section 2 of the 1991 Law which is based in turn on section 10 of the Criminal Justice Act 1967. This provides for formal admissions of fact to be made before or at the proceedings relevant to the matter concerned. The admission, once made, is conclusive evidence of the fact admitted and applies to all stages of the proceedings, including appeal. The procedure is much less commonly used but should always be considered whenever a complex case is to be tried. There is no reason why the parties should not correspond in order to identify what facts may be admitted in order to save Court time. An admission may, with the leave of the Court be withdrawn.19 This power to withdraw is likely to be exercised when an admission has been made in error or 19
See s 2(3).
518 The Laws of Guernsey new evidence has emerged to contradict the basis upon which the admission was originally made. Section 3 of the 1991 Law is likewise taken from section 101 of the English Magistrate’s Courts Act 1980. Where the accused in any criminal prosecution relies for his defence on any exception, exemption, proviso, excuse or qualification, whether or not it accompanies the description of the offence, the burden of proving the exception etc. is upon the accused. Where a burden of proof is placed upon an accused in criminal proceedings the standard of proof required is only that of the balance of probabilities, see the case of Islington Borough Council v Panico [1973] 1 WLR 1166. Section 4 of the 1991 Law abolishes the right of an accused to make an unsworn statement (from the dock). This ancient right dated back to the days when an accused was not allowed to give evidence in his own defence. The unsworn statement partially remedied this injustice. When the bar upon giving evidence was removed in the late nineteenth century this right was not abolished. Because the accused was not deemed to be giving evidence within the meaning of the Criminal Evidence Act 189820 he could not be cross-examined, whether as to his character or at all, and no matter how much he lambasted the prosecution witnesses. Of course, whenever the accused puts his own character in issue (whether by giving evidence, formerly making an unsworn statement or in any other way) the prosecution may adduce evidence of his bad character, see the case of R v Butterwasser [1948] 1 KB 4. By section 5 it is provided that a child of “tender years” called as a witness may give evidence without having to take an oath or affirm if the Court considers that he or she is sufficiently intelligent to justify the reception of his or her evidence and that he or she understands the duty of speaking the truth. The requirement that a corroboration warning be given in respect of the evidence of a child because of that fact alone is abolished. This does not in any way reduce the requirement for a corroboration warning to be given for other reasons.21 Section 6 is taken from section 123 of the Magistrate’s Court Act 1980 and provides that no objection shall be allowed to any charge or summons for any defect in its substance or form or for any variance between it and the evidence adduced by the prosecution at the hearing in the Magistrate’s Court. The literal unlimited scope of the section has been reduced by English case-law, an example being the case of Wright v Nicholson [1970] 1 All ER 12. A substantial defect may not be capable of amendment and may still be fatal to the proceedings, notwithstanding the terms of section 6, see for example the case of Marco (Croydon) Limited v Metropolitan Police [1984] RTR 24. Section 7 gives the Magistrate’s Court power to deal with anyone who insults or threatens the Magistrate, any witness, Officer of the Court or any person 20
Enacted in Guernsey (in French) as the Loi relative aux Preuves au Criminel 1923. But see now s 14 of the Criminal Evidence and Miscellaneous Provisions (Bailiwick of Guernsey) Law 2002 which abolishes the corroboration rules for the evidence of accomplices and alleged victims of sexual offences. 21
Criminal Courts and Procedure 519 having business in the Court during a Court sitting or on their way to or from the Court, likewise to deal with any person who wilfully misbehaves in Court. The Magistrate may direct an Officer of the Court or a Police Officer to take the offender into custody and detain him until the rising of the Court. The Magistrate may then, if he thinks fit, commit the offender to custody for up to one month or impose a fine not exceeding level 5. The Magistrate may revoke a committal order at any time.22 Section 11 of the 1991 Law creates an offence of torture, punishable by life imprisonment. The offence was created to comply with a UN obligation. By section 13 the Guernsey Police may detain a person in the Bailiwick wanted in the United Kingdom for up to 72 hours; however, the person must be taken before the Magistrate as soon as reasonably practicable. The Guernsey Officer must be in possession of a copy or facsimile of the UK warrant of arrest and be reasonably satisfied that it is authentic. The Magistrate is only concerned to investigate the prima facie authenticity of the copy or facsimile of the warrant, equally the Bailiff when considering any appeal from the Magistrate’s decision. The person must be released after the 72 hour period has expired if the warrant has not been executed lawfully upon him within that time.23 The 1991 Law has effect throughout the Bailiwick with the usual substitution of the Court of Alderney and the Court of the Sénéschal for the Magistrate’s Court, where appropriate. Section 14 contains general provisions governing the requirement to produce driving documents. There are minor provisions governing Terres à l’Amende, principally to move enforcement of private land parking penalties to the Petty Debts Court. Proceedings against corporations The Proceedings against Corporations (Guernsey) Law 1951 makes unsurprising provision for the prosecution of corporations before the Magistrate’s Court and their committal for trial to the Royal Court and generally. Insofar as possible their position is assimilated to that of a human defendant. Bail The question of remands either in custody or on bail and the underlying principles and procedures involved are governed by common law. There is, to date, no equivalent of the Bail Act 1976.24 English principles are followed regardless of this 22 It is of course prudent for the presiding Magistrate to allow a cooling off period before disposing of the matter, likewise an opportunity for the relevant person to seek legal representation if the incident was at all serious. 23 See also the Extradition Law 1848. 24 Although statutory bail provisions equivalent to those in English law are now to be introduced as a result of the Human Rights (Bailiwick of Guernsey) Law 2000. Such provisions are necessary if only to give the Court more certain powers, eg to combine a so-called doorstep bail condition with a curfew
520 The Laws of Guernsey lack of statutory foundation.25 The various Laws concerning the jurisdiction of the different criminal courts, transfers between them and appeals contain scattered provisions permitting transfers to be in custody or on bail, and for bail applications to be renewed before the superior Court. There is Guernsey case-law concerning Habeas Corpus.26 Whether a bail application may be renewed before the Bailiff if wrongly refused by the Magistrate is open to question; it is submitted that the Bailiff must have power to grant bail in such circumstances if only by grant of a writ of Habeas Corpus—alternatively some other form of prescriptive writ. It is difficult to conceive that there is no remedy whatsoever. Such ambiguities will be resolved by an eventual statutory régime. Abuse of Process Exceptionally, the defendant via his Advocate, may wish to allege that he should be discharged because an abuse of process has taken place. Under English law, and doubtless under Guernsey law also, the Magistrate has a discretion to discharge the accused without hearing the prosecution evidence if there has been delay in bringing the proceedings of such magnitude as to render them vexatious and an abuse of the Court’s process, see the case of Grays Justices, ex parte Graham [1982] QB 1239. In order to succeed the defence will usually have to demonstrate either bad faith on the prosecution’s part or genuine prejudice and unfairness to the accused. There is a substantial body of case-law on the question of whether an abuse of process has been made out or not. The question of abuse of process should be dealt with by the Magistrate before any substantive committal proceedings commence. Abuse of process generally only arises as an issue when serious offences are charged. Under English law there are time limits for bringing summary only criminal proceedings. In practice the prosecuting authorities would only bring proceedings after a substantial delay for a serious matter. A recent statement of the law concerning abuse of process is in the case of R v Feltham Magistrates Court, ex p Ebrahim [2001] 1 All ER 831. Here it was held that the Court had jurisdiction to stay proceedings for abuse of process in two categories of case; first where the defendant could not receive a fair trial and second where it would be unfair for the defendant to be tried, eg because of the prosecution’s misconduct. The facts of the case concerned two instances where video evidence of alleged crimes had been lost.
condition; ie the requirement that an accused present himself at the door of his premises if required to do so by a police officer during the hours of curfew, see the case of R (Crown Prosecution Service) v Chorley Justices (The Times 22 October 2002). 25 See the relevant paras of Archbold. 26 Kirk.
Criminal Courts and Procedure 521
MODE OF TRIAL
Where offences are triable only by the Royal Court, ie on indictment only, there is no issue as to the mode of trial, likewise where the offence is summary only. Where an offence is triable either way the venue for the trial, whether Royal Court or Magistrate’s Court must be determined.27 By s.10(4) of the Magistrate’s Court (Guernsey) Law 1954, as amended by the Magistrate’s Court and Miscellaneous Reforms (Guernsey) Law 1996, a person appearing before the Magistrate’s Court for an offence triable under section 1028 (other than an assault29) which renders him liable to imprisonment for more than three months may, before he pleads to the charge, but not otherwise, elect trial before the Royal Court. The Law Officers have an equal right to elect trial by the Royal Court. The Magistrate himself may also decline jurisdiction if he decides that by reason of the gravity of the alleged offence it would be more appropriate for the Royal Court to deal with it. It follows from the above that the Magistrate, prosecutor and accused must, in effect, be agreed that the matter should remain in the Magistrate’s Court for an offence triable either way to be dealt with by the Magistrate. Each has a veto. By way of contrast a summary only matter must be dealt with by the Magistrate and an indictable only matter must be dealt with by the Royal Court. Typically an accused who intends to plead guilty will wish the matter to stay in the Magistrate’s Court for a number of reasons; chief amongst these are the fact that the case will be disposed of quickly and the comparatively limited sentencing powers of the Magistrate. If either of the prosecutor or the accused elects Royal Court trial or the Magistrate declines jurisdiction then, prima facie, committal proceedings will take place. Summonsing Witnesses in the Magistrate’s Court If the defendant wishes to secure the attendance of a person present in the Island of Guernsey at the trial of a criminal matter before the Magistrate’s Court he may apply to the Magistrate for a summons to attend the trial to be served on the witness by HM Sergeant. The Magistrate must be satisfied that the facts the witness is to be called to prove are, or are likely to be, relevant to any material issue arising in the trial and that the witness is otherwise unlikely to attend. A fee of £3 is set.
27 We have already noted how serious Alderney and Sark cases reach this point in procedure, see above. 28 Ie an either way offence. 29 There is no equivalent of the Offences Against the Person Act 1861, it follows that the statutory offence of assault occasioning actual bodily harm is unknown. Guernsey criminal law relies heavily on common law offences, particularly for more serious offences.
522 The Laws of Guernsey GUILTY PLEAS AND SUMMARY TRIAL IN COURTS OF SUMMARY JURISDICTION
If the Magistrate has accepted jurisdiction because the offence is summary only or not so grave as to fall outside of the Court’s sentencing powers the defendant may either plead guilty or not guilty. An equivocal plea is treated as a not guilty plea. If a guilty plea is entered, the defendant or his Advocate (if he is represented) will make a speech in mitigation. Sentencing may be adjourned if the matter is sufficiently grave to warrant a possible custodial sentence in order that a social inquiry report (or other forms of report) can be obtained, where appropriate. There is an art to making a good speech in mitigation. The speech should be realistic but fearless and as short as possible, consistent with saying everything that ought (properly) to be said. Fine judgement is required as to the selection of material which will mitigate as opposed to aggravate. It is by no means unknown in Guernsey courts for speeches in aggravation to be made. Examples of normally good mitigation are as follows: previous good character, youth, (early) guilty plea,30 co-operation with the Police, restoration of any property stolen or damaged, remorse, and good references from school, work and persons of standing. There is nothing outstandingly peculiar to Guernsey as regards the procedure followed in a summary trial. The charge is read by the Clerk of the Court, the defendant indicates his plea (either by himself if in person or by his Advocate if represented31), the prosecutor introduces the case and calls his witnesses who are examined, cross-examined and re-examined in the usual way. The Magistrate (or Jurats in Alderney, or Sénéschal in Sark) may also ask questions. A submission of no case to answer may be made by the defendant at the close of the prosecution case; the prosecutor is usually permitted to respond. If the submission fails the defendant’s witnesses are called, beginning with the defendant himself if he is to give evidence. The defendant or his Advocate will then make a closing submission. If the Advocate has also made an opening statement introducing his case the prosecutor may be allowed to make a closing speech, but the defence has the last word. If the defendant is acquitted, that is an end of the matter.32 If he is convicted the Advocate or defendant may make a speech in mitigation before sentence is passed. COMMITTAL PROCEEDINGS
If the Magistrate has declined jurisdiction or the prosecution or defence has elected Royal Court trial, or else the matter is indictable only, a date will be fixed for committal proceedings to take place. 30 See the case of R v Barber (2001) Crim LR 998 where the English Court of Appeal suggested a discount of more than ⅓ for guilty pleas in either way offences before mode of trial was determined; ie very early guilty pleas. 31 In England the defendant would always enter his plea in person. 32 It is said that there is currently no power to award a successful defendant his costs; this is again an area ripe for challenge.
Criminal Courts and Procedure 523 The question for the Magistrate in committal proceedings is whether there is a prima facie case for the accused to answer, see section 10(6) of the 1954 Law.33 If there is, the accused must be committed for trial before the Royal Court. If there is no prima facie case the accused is entitled to be discharged. It should be noted that a discharge does not have the same effect as an acquittal. It would be possible for the prosecution to bring new criminal proceedings based upon the same criminal conduct and proffering the same charges. A discharge is not a foundation for the procedural bar based upon a plea of autrefois acquit. An alternative means of expressing the statutory test of a prima facie case is to consider whether there is a case to answer. This expression was explained by Lord Parker CJ in Practice Direction (Submission of No Case) [1962] 1 WLR 227: “A submission that there is no case to answer may properly be made and upheld: (a) when there has been no evidence to prove an essential element in the alleged offence; (b) when the evidence adduced by the prosecution has been so discredited as a result of cross-examination or is so manifestly unreliable that no reasonable tribunal could safely convict upon it”.
An authority also concerned with submissions of no case to answer is Galbraith [1981] 1 WLR 1039 where it was held by the Court of Appeal that the defence submission of no case to answer should be upheld (and the jury consequently directed to acquit) if, and only if, the prosecution evidence taken at its highest is such that a jury properly directed could not properly convict. Procedure on Committal Proceedings The procedure on committal proceedings is set out in the Ordonnance relative à la procédure en Matières Criminelles et en Matières d’Enquêtes of 1923. This Ordonnance permitted (for the first time) the accused to be present when prosecution evidence was given. The procedure may be referred to as an “old-style committal” by contrast with the more recent, paper-based “new-style” committal referred to below.34 Old Style Committals Article 1 of the Ordonnance provides that evidence given by prosecution witnesses shall be heard in camera and a written record made. The accused is entitled to be present and represented at his expense.35 The defendant or his Advocate is entitled to cross-examine the prosecution witnesses. There is an obsolete provision 33 “. . . the Court shall take the evidence of the witnesses in writing and shall, if satisfied that there is a prima facie case to answer, commit the accused for trial before the Royal Court . . .”. 34 Borrowing English nomenclature, which itself is dated. 35 There is now in place a thoroughgoing criminal legal aid scheme.
524 The Laws of Guernsey at article 2 requiring the accused and his Advocate to retire while the charges are formulated. Article 3 provides for (the accused to be brought back before the Court and) the charge to be read to him. The accused is asked if he has any response and a caution is administered in respect of anything he proposes to say in the following form: “Having heard the evidence, do you wish to say anything in answer to the charge? You are not obliged to say anything unless you desire to do so, but whatever you say will be taken down in writing and may be given in evidence against you upon your trial”.
The accused may make a statement which will be recorded in writing or he may choose to say nothing, the fact of which is itself recorded. A submission of no case to answer is likely to be made at this point. If it fails, the accused has the option to call witnesses, after which he may (again) address the Court. The accused appears not to have the right to give sworn evidence in committal proceedings. The 1923 Loi relative aux Preuves au Criminel seems only to have extended the right to give sworn evidence to proceedings before the Royal Court.36 In practice a defendant would be very unlikely to want to give evidence or to call any witnesses. Because of the low threshold set by the 1954 Law, it is only where a prosecution case is palpably weak that it is likely to fail at this point. Due to the rarity of successful challenges to committal proceedings a swifter procedure was introduced whereby live witnesses and hand-written depositions were replaced by sworn statements New Style Committals The relevant provisions are contained in the Committal Proceedings (Written Statements) Rules 1983 37 which provide that, notwithstanding any other provision, a written statement by any person shall be admissible in evidence on committal proceedings if certain pre-conditions are met. Those pre-conditions are either that the person making the statement has sworn to its truth before a person authorised to administer oaths, or that person makes a statement swearing to the truth of the statement before the Court at the committal proceedings. In addition a copy of the statement must have been given to each of the other parties to the proceedings before it is tendered in evidence and none of those other parties objects to its being so tendered. The Court may nevertheless require the maker of the statement to attend before the Court to give evidence. The Committal Proceedings (Written Statements) (Amendment) Rules 1986 no longer require that such statements be read aloud. It follows that a great proportion of committal proceedings take place very rapidly. In the vast majority of cases there will plainly be a prima facie case against the accused. 36 See Art 1(b). It seems unlikely that the Court would actually refuse to allow a defendant to give sworn evidence. The Law and Ordinance would now have to be construed in the light of the Art 6 Convention right to a fair and public hearing. 37 An Order of the Royal Court, No 2 of 1983.
Criminal Courts and Procedure 525 Overview of Committal Proceedings It is very much the exception and not the norm that there is a reasonable prospect of showing no prima facie case.38 There are, however, other reasons why a defendant might wish there to be committal proceedings. The defendant may want to test the prosecution case for possible weaknesses. Inconsistent evidence given by prosecution witnesses may be of use at trial. Whether these are proper reasons for full-scale committal proceedings is quite another matter. In any event there are positive disadvantages to old style committal proceedings for a defendant. They give prosecution witnesses a rehearsal who are likely to be more confident at trial as a result. The prosecution will be given forewarning of any weaknesses in its case and the defence will give away the nature of its case. In summary therefore the procedure for a committal will be as follows: the Deputy Greffier will call the case. The Advocate for the defendant will introduce himself. The Deputy Greffier will state the purpose of the proceedings. The prosecutor39 will make an opening statement introducing the matter to the Magistrate. The prosecutor will call his evidence and the Advocate will cross-examine and the prosecutor re-examine in the usual way. In a new-style committal this stage is replaced by the submission of written statements. It may be that there is a combination of live and written evidence. At the close of the prosecution case the charge is read to the accused who is asked whether he wishes to make a statement. It is at this point that the Advocate is likely to make a submission of no case to answer. The prosecutor may be, and usually is, permitted to respond to the submission of no case to answer. If the application of no case fails the defendant may call his own witnesses.40 The defendant’s Advocate makes a closing speech in the usual way. If he has also been permitted to make an opening speech the prosecutor has a right to make a closing speech too, although the defendant’s Advocate goes last. The Advocate will again submit that there is no case to answer or, rather, no prima facie case.41 If, as is commonly the case, the submission fails, the Magistrate will commit the accused for trial before the Royal Court either in custody or on bail.42 A bail application may be renewed to the Bailiff if refused by the Magistrate.
PLEA AND DIRECTIONS HEARING
A new feature of Guernsey criminal law procedure is the plea and directions hearing provided for in some detail by Practice Direction No 2 of 2003. When committing for trial the Magistrate will seek a (non-binding) indication of the 38
Although it is of course for the prosecution to establish the prima facie case. Invariably a Crown Advocate. 40 Again leaving open the question of whether he can himself give sworn evidence. 41 If no defence evidence has been called there would be no additional material to warrant a further submission. 42 See s 11 of the 1954 Law. 39
526 The Laws of Guernsey likely plea and what prosecution evidence is likely to be agreed by the defence. The Magistrate will commit the accused to appear in the Royal Court on a specified date for a plea and directions hearing (‘PDH’). The purpose of the PDH is to “ensure that all necessary steps have been taken in preparation for trial and to provide sufficient information for a trial date to be arranged”. The trial defence Advocate should appear when possible. The PDH should be fixed within 4 weeks of committal in custody and 6 weeks otherwise. At least 14 days notice of the PDH date should be given, unless a shorter period is agreed. Where the defendant intends to plead guilty “to all of the indictment” (his Advocate) must notify the probation service, the prosecution and the Court. If the plea is to be not guilty the defence must indicate to the prosecution which prosecution witnesses are required to attend trial and prima facie give this information at least 7 days prior to the PDH. If the plea is not guilty the prosecution must produce a case summary for the use of the Judge at the PDH; it should indicate the nature of the case and the legal and factual issues involved. There is no express requirement to serve the summary on the defence, but this can be inferred. The PDH itself will (normally) take place in open court with all defendants present. At the PDH the defendant(s)’ pleas are taken; if the pleas are guilty the matter will be adjourned for reports and sentencing. If the plea is not guilty the Advocates and Judge will, in effect, work through a list of matters to be addressed in preparation for trial. The Practice Direction has a questionnaire form attached for the defence Advocate to fill in before passing to the Crown Advocate for completion and submission to the PDH Judge for use at the hearing. The issues to be addressed comprise the following: the plea; how firm the plea is; whether other pleas are acceptable to the Crown; length of trial; whether there are human rights issues; the issues generally; issues relating to the capacity of the accused or witnesses; witnesses generally; what facts are or can be admitted; exhibits; schedules; points of law; issues relating to admissibility of evidence; use of screens; video equipment, tape; any other matter affecting the conduct of the trial significantly; any other work to be done; witness/Advocate availability; staggering of witnesses and any other business. A further directions hearing will be fixed for 14 days before the trial date to ensure that all outstanding matters have been attended to. If the defence Advocate is unable to obtain instructions from a defendant (who is out of custody) he should list the case for a mention. Reading the Practice Direction closely it seems to be intended that if the defendant does not appear at the hearing (presumably after notification by his own Advocate) the Judge will consider whether a warrant of arrest should be issued; although on what legal basis in the absence of breach of bail conditions or other legal requirement to attend Court is unclear. The PDH is a welcome development and likely to assist greatly in the case management of Royal Court criminal trials.
Criminal Courts and Procedure 527
ROYAL COURT TRIAL: THE RESPECTIVE RÔLES OF THE BAILIFF AND JURATS
A criminal trial before the Royal Court follows very similar procedure to a Magistrate’s Court trial save as regards the composition and functioning of the tribunal itself. The Royal Court comprises the Bailiff (or his Deputy or Lieutenant) and at least seven Jurats. The respective roles of the Bailiff and Jurats are set out in the Royal Court of Guernsey (Miscellaneous Reform Provisions) Law 1950. The Law has general application in some sections and specific application either to civil or criminal proceedings in others. By section 6(2)(a) the Bailiff is the sole judge of law and of questions of procedure in all causes and matters heard in a Court over which he presides. The Bailiff also has exclusive jurisdiction as to questions of costs. For the purposes of determining any question of which the Bailiff is the sole judge, the Royal Court is properly constituted if the Bailiff sits alone. (Hence the legal foundation for the constitution of the Ordinary Court every Friday morning at 9.30 am where only Bailiff ’s business is dealt with.) Likewise by the Royal Court (Criminal Procedure) Rules 1991 the Royal Court is deemed to be constituted by the Bailiff sitting alone for the taking and recording of the plea of a defendant in a criminal trial on indictment, or for the purposes of any application relating to bail after committal for trial of a defendant. During the trial the Bailiff presides over the Court as a Judge would in the presence of a jury in England. The Bailiff may ask questions of a witness as may a Jurat. The difference between Guernsey and English procedure is that a Jurat may ask questions of a witness directly as opposed to via the Judge in England. In the 1973 Court of Appeal case of Tilley it was held that questions of admissibility of evidence, both in criminal and civil proceedings, were to be dealt with by the Bailiff alone. This included deciding any preliminary question of fact incidental to the making of a finding on admissibility proper. In the 1972 case of Heywood the Court of Appeal held that the Bailiff should direct the Jurats no less fully than a Judge would a jury in England. By section 6(3) any matter which is within the competence of the Jurats to decide shall, if they are not of one opinion, be decided by a majority of the Jurats sitting. By section 6(4) the Jurats may, and at the request of any one of them, shall, retire from the Court for consultation immediately after the summing up. If during such consultation they require direction, advice or information, they must return to the Court for this purpose and their questions must be put to the Bailiff and the answers given in open Court. This applies both in civil and criminal cases. Likewise, by section 6(5), in all causes and matters, the Bailiff has a casting vote whenever the Jurats are equally divided. In practice Jurats sit in uneven numbers to avoid being hung. The Bailiff may find himself exercising a casting vote where a three Jurat Ordinary Court has been reduced to two by reason of illness in one of the three. Section 7 makes different provisions for the communication of the Jurats’ findings in criminal and civil cases. After the Jurats have consulted in a criminal case
528 The Laws of Guernsey the senior Jurat communicates to the Bailiff in open Court the finding of the Jurats as regards the guilt, innocence or insanity of the accused as the case might be. The Jurat also informs the Bailiff as to whether the voting was unanimous and, if not, the number of votes cast for each different finding. In a civil case the Jurats must give their individual decisions in open Court. After a verdict of guilty, the Bailiff and Jurats must confer in private as to the punishment to be imposed unless the punishment is fixed by law. Thereafter the Bailiff must announce the sentence of the Court and sentence the accused accordingly, see section 8(1): “Where a verdict of guilty is recorded against any person, the Bailiff and Jurats of the Royal Court shall . . . confer in private as to the punishment to be imposed and thereafter the Bailiff shall announce the sentence to the Court and shall sentence the accused accordingly.”
A case illustrating these procedures is the Court of Appeal case of Law Officers of the Crown v Warmisham [1995] 20 GLJ 19. Unlike in Jersey the Law Officers are no longer permitted to tender to the Court what were known as their “conclusions” as to punishment. If the facts upon which a defendant is to be sentenced are in dispute then a “Newton” hearing may take place. This takes the form of a trial with the issue being whatever is disputed as regards the prosecution’s account of the offence and its circumstances. Again it would be for the Jurats to decide the facts in dispute. If there is no Newton hearing, either because the facts are not in dispute or because the defendant declines the offer to give evidence in support of his disputed account, sentencing will take place in the usual way. Of course there may be a guilty plea or pleas, either to matters which are indictable only offences or either way offences which either the Magistrate or the Law Officers (or even the defendant) required be brought before the Royal Court. As regards pleas of guilty in the Royal Court regard should be had to a Practice Guidance Note dated 19 September 2000 which provide that all sentencing materials will be put before the Jurats once an unequivocal guilty plea has been entered and before Counsel addresses the Jurats in open Court; although the prosecution summary will only go before the Jurats if it is agreed. Counsel for the defendant may also lodge an outline of the defendant’s mitigation which will also be put before the Jurats in advance. Unless the presiding Judge directs, there is no obligation to serve a copy of the outline on prosecuting Counsel, although it would be better practice to do so in order to avoid unnecessary adjournments in the event that the prosecutor is taken by surprise.
SENTENCING
There is a broad range of sentencing options available to Guernsey Courts when considering the appropriate sentence for an offender. There are fewer options
Criminal Courts and Procedure 529 available to the Court of Alderney and the Court of the Sénéschal. In each case such options as exist are exercisable only within the confines of the Court’s original jurisdiction. Special Verdict Where a person43 due to be tried on indictment is found to be insane by the Royal Court, the Court must order him to be detained during Her Majesty’s pleasure.44 If such an order is made, the person concerned is detained in a mental hospital until further order. A special verdict of not guilty by reason of insanity may be entered if there is evidence given at the trial that the accused was so insane as not to be responsible for the crime with which he has been charged. The consequence is the same, detention in a mental hospital until further order. Custodial Sentences A sentence of imprisonment may only be imposed on a person aged 21 or above, see section 1(1) of the Criminal Justice (Youth Detention) (Bailiwick of Guernsey) Law 1990. Where a custodial sentence is being considered, and save in the clearest of cases or where a sentence of life imprisonment is mandatory, (in practice for an offence of murder, see the Homicide (Guernsey) Law 1965), the Court will generally request a Social Inquiry Report.45 This is especially so where the accused has not received a custodial sentence before. Both parole and remission are potentially available to a person serving a sentence of imprisonment. A prisoner is potentially eligible for release upon licence after serving either ten months imprisonment or one-third of his total sentence, whichever is the greater, see the Parole Review Committee (Guernsey) Law 1989 and the Parole Review Committee Ordinance 1991 (as amended in 1993). In addition, remission of up to one third of a sentence is available pursuant to section 22(1) of the Prison Administration (Guernsey) Ordinance 1998, made pursuant to powers granted by the Prison Administration (Guernsey) Law 1949, as amended. Remission is not available for a sentence of less than five days. Prisoners released on parole are released upon licence, to which is attached such conditions as the Parole Review Committee deems fit. The licence may be revoked either by the Committee if a condition of the licence is breached, or by the Court if the offender is convicted of any offence punishable with imprisonment committed during the licence period.46 43
As opposed to his Advocate. Note the statutory power of the Court of Appeal to substitute an order that a defendant be detained during Her Majesty’s pleasure where it appears to the Court that the appellant was not guilty by reason of insanity, see s 26(3) of the Court of Appeal (Guernsey) Law 1961. 45 In practice a report is ordered whenever a sentence in excess of 6 months is likely to be imposed. 46 There are circumstances also in which HM Procureur can order recall. 44
530 The Laws of Guernsey The 1998 Ordinance sets out in detail the rules and regulations of prison life. By way of example, under section 64 the Governor is required to allow reasonable facilities for the legal adviser of any prisoner who is party to legal proceedings, civil or criminal, to interview the prisoner with reference to those proceedings in the sight of, but not in the hearing of, an Officer. As regards any other legal business the interview may take place both in the sight and hearing of an Officer. There are increased rights for untried prisoners, appellant prisoners and civil prisoners. The Ordinance also contains requirements governing the education and training of young offenders. Special provision is made for custodial sentences passed in respect of young offenders. The law is found in the Criminal Justice (Youth Detention) (Bailiwick of Guernsey) Law 1990. As noted above, a person under the age of 21 may not be sentenced to imprisonment. Where a person aged between 14 and 20 is convicted of an offence punishable with imprisonment in the case of a person aged twentyone or over, a sentence of youth detention may be imposed. There are, however, a number of important pre-conditions which must be fulfilled. By section 1(2) the Court must consider, for reasons which have to be stated in open Court, that the only appropriate method of dealing with the offender is to pass a custodial sentence. By s.2(1) a Court may not pass a sentence of youth detention unless: (a) it is satisfied that the offender is unable or unwilling to respond to noncustodial penalties; or (b) a custodial sentence is necessary for the protection of the public or the prevention of crime; or (c) the offence was so serious that a non-custodial sentence cannot be justified. In addition, the Court is required to take into account any information relevant to the offender’s character and physical and mental condition, before passing a sentence of youth detention. By section 2(3) the Court must consider any report in respect of the offender by the States Children Board or the Probation Officer before sentencing an offender to a term of six months or more youth detention.47 In most other respects, a sentence of youth detention is assimilated to a sentence of imprisonment. Thus the maximum sentence of youth detention is the length of imprisonment specified in the relevant substantive Law. Likewise, consecutive sentences of youth detention may be imposed. A sentence of youth detention is imposed in default of payment of any fine. Sentences of youth detention may be suspended in the same way as sentences of imprisonment. Sentences of youth detention are automatically deemed to be sentences of imprisonment when the offender reaches the age of 21. If an offender has attained the age of 16 years and is exercising a bad or disruptive influence upon other inmates, he may be treated as if sentenced to imprisonment instead of youth detention. In any event he is deemed to be a prisoner for the purposes of the 1998 Prison Ordinance. 47
Note the confidentiality of such reports, see Practice Direction No 5 of 1988.
Criminal Courts and Procedure 531 A young offender is eligible for both parole and remission as if the sentence of youth detention were a sentence of imprisonment. However, when an offender is released from a sentence of youth detention exceeding 21 days he remains under the supervision of a Probation Officer for a period of three months from the date of release or until the date on which his sentence would have expired if he had not been granted remission, whichever is the later. In addition, where an offender is released on licence the period of supervision begins on the date his licence expires and ends on the date he would have been released if he had never been released on licence or granted remission. The maximum period of supervision is, in any case, twelve months. Whilst under supervision the young person must comply with any requirements attached to his supervision. Breach of any such requirements is an offence punishable with a custodial sentence of thirty days or a fine not exceeding level 4. There is the same right of appeal from a sentence of youth custody as from a sentence of imprisonment. Consecutive Sentences of Imprisonment Where an offender is convicted of two or more matters the Court should normally impose a separate sentence in respect of each charge or count. The sentences imposed may be ordered to run concurrently with each other, or consecutively, or there may be a mixture of concurrent and consecutive sentences. The Court should indicate which sentences are imposed in relation to each matter. A Court which passes a number of consecutive sentences should review the total of the sentences and consider whether the aggregate sentence is just and appropriate taking the offences as a whole. This is known as the “totality principle” of sentencing. The principle appears to be recognised wherever the offender has committed a series of offences of moderate gravity and has received an aggregate sentence equivalent to that which would have been imposed for an offence of a much more serious nature; likewise where the offender is relatively young and has not previously served a custodial sentence or where an offender who is sentenced to a long term of imprisonment for a serious crime is also liable to be sentenced to a much shorter term for some other matter. It is generally preferable to adjust sentences by ordering them to run concurrently rather than to pass a series of short consecutive sentences.48 The totality principle operates in tandem with the principle of proportionality as regards each offence and the offences taken together. An example of these principles in action is the case of Law Officers of the Crown v Peden, a 1991 judgment of the Court of Appeal noted at [1991] 11 GLJ 28.
48
See generally Archbold.
532 The Laws of Guernsey
Suspended Sentences All Bailiwick courts exercising criminal jurisdiction have power to impose suspended sentences of imprisonment. The law is contained within the Criminal Justice (Power to Suspend Sentence) (Bailiwick of Guernsey) Law 1972. By section 1(1) a sentence of imprisonment of up to two years may be suspended for a period of up to three years (no more than two years in practice). If the offender commits another offence punishable with imprisonment during the suspension period the convicting Court must consider his case and deal with him by one of the methods set out in section 2(1). Unless it would be unjust to do so in view of all the circumstances which have arisen since the suspended sentence was passed, including the facts of the subsequent offence, the Court must order that the suspended sentence take effect with the original term unaltered. Everything turns on the facts of each individual case. Thus where an individual re-offends by committing a comparatively minor offence punishable with imprisonment close to the end of a suspension period in circumstances where he has otherwise led a blameless life, there would be a good prospect of the suspended sentence remaining unactivated. Alternatively the Court may order that the suspended sentence is to take effect but with a shorter period of imprisonment substituted for the original suspended term. A further option is for the Court to order a new period of suspension, but not beyond a period of three years from the date of the original suspension order. Finally, the Court may make no order with regard to the suspended sentence. Again, it cannot be over-emphasised that the starting point is activation of the suspended sentence in full. If the suspended sentence was imposed by the Royal Court or the Court of Appeal the question of dealing with the suspended sentence must be referred to the Royal Court after the lower Court has dealt with the new offence. In addition the Royal Court has power to consider any suspended sentence which has not been dealt with by a Court convicting of a subsequent offence punishable with imprisonment. By the Criminal Justice (Suspended Sentence Supervision Orders) (Bailiwick of Guernsey) Law 1984 Bailiwick Criminal courts gained the additional power to impose a supervision order in tandem with a suspended sentence. The resulting amalgam is called a Suspended Sentence Supervision Order. The effect is to place the offender under the supervision of a Probation Officer for a period specified in the Order, which period must not exceed the suspension period of the suspended sentence. The offender must keep in touch with the person under whose supervision he has been placed and notify that person of any change in his address. Supervision orders in this context cease to have effect automatically if the suspended sentence is activated or if the supervision order itself is discharged or replaced pursuant to powers given under the Law. Where a person re-offends and a suspended sentence is dealt with by varying the period of suspension or by the making of no order the Court may make a replacement supervision order (for the
Criminal Courts and Procedure 533 longer period of suspension) or impose a supervision order for the first time. Where a person fails to comply with instructions given to him under the supervision order he may be apprehended and brought before the relevant Court and fined an amount up to level 4. There is no provision for any non-compliance with the supervision order to lead to activation of the suspended sentence. It should be noted carefully that a suspended sentence supervision order is distinct from Juvenile Court supervision orders which may only be made in respect of Juveniles and children. The Uniform Scale of Fines By the Uniform Scale of Fines (Bailiwick of Guernsey) (Amendment) Ordinance 1998 and the Uniform Scale of Fines (Alderney) Ordinance 2001 the current level of fines in Guernsey and Alderney are as follows: Level on the scale 1 2 3 4 5
Amount of Fine £200 £500 £1,000 £2,500 £5,000
In Sark the levels remain as follows: Level on the scale 1 2 3 4 5
Amount of Fine £50 £100 £200 £500 £1,000
In Sark the maximum financial penalty at present is fixed at level 4 (or 2 level 4 for more than one offence being punished on the same occasion). Loi Relative à la Probation de Délinquants The 1929 Probation Law concerns not only probation. By article 1(1) the Magistrate’s Court, notwithstanding that it is of the opinion that the charge is proved may, without proceeding to conviction, dismiss a charge or discharge the offender conditionally, if satisfied, having regard to the character, antecedents, age, health, or mental condition of the person charged or to the trivial nature of the offence, or to the extenuating circumstances under which the offence was committed, that it is inexpedient to inflict any punishment other than a nominal
534 The Laws of Guernsey punishment. A discharge is conditional upon the offender taking an oath (or finding bail) with or without sureties to be of good behaviour and to appear for conviction and sentence if called upon to do so at any time during a period of up to three years from the date of the order. If an offender is convicted on indictment the Court may again grant a conditional discharge but there is no option to dismiss the charge, presumably because the matter is necessarily of a certain degree of gravity. The dismissal of a charge is the end of the matter whereas a conditional discharge is closer in nature to a suspended sentence. However, a discharge does not amount to a conviction unless the matter subsequently comes back before the Court because of the offender’s failure to be of good behaviour.49 A conditional discharge is a particularly attractive way to deal with a person who is otherwise of good behaviour, who has committed a comparatively trivial offence and who stands to lose a great deal by a conviction. An example would be a young person with a good background embarking upon a career where the absence of a criminal record was important. Often it is possible to argue that the experience and shame generated by the proceedings themselves is sufficient punishment having regard to all the circumstances and the interests not only of the young person but, arguably more importantly, the interests of the community. It is always useful to consider what interest will in fact be served by punishing any given offender in a certain way. There is usually a clear benefit to society if a violent offender is imprisoned. However, it may well not be in the interests of society if a young person is convicted or otherwise punished in such a way as to blight their future. There is a risk of dealing with young people in such a way as to create a lifelong burden for the community in which they live. Article 1(3) contains a power to order the offender to pay damages for injury or compensation for loss in addition to the making of any dismissal or conditional discharge order. Likewise stolen property may be ordered to be restored. By article 2, when a conditional discharge is granted and an oath of good behaviour taken the Court may, in addition, make a probation order whereby the offender is placed under the supervision of a Probation Officer for a period of up to three years. The Court may also impose such other conditions as it deems fit having regard to the particular circumstances of the case in order to prevent a repetition of the same offence or the commission of other offences. The Probation Officer has a duty to visit or receive reports from the person under supervision, to see that he obeys the conditions of the probation order, to report to the Court as to his behaviour, to advise, assist and befriend the defendant and, where appropriate, to endeavour to find him suitable employment. The Court retains power to vary the terms of the probation order so as to extend the period of the order up to 49 Note however that in practice disposal under the 1929 Law will be referred to in subsequent proceedings; note also the provisions of the Rehabilitation of Offenders (Bailiwick of Guernsey) Law 2002 concerning 1929 Law disposals; see s 13(3) of the 2002 Law and paras 3 and 4 of the schedule to the Law and the rehabilitation periods there stated. Even when the court decides to dismiss a charge under s 1(1) of the 1929 Law there is a six month rehabilitation period. Arguably the 2002 Law makes it more difficult for a person to put a 1929 Law disposal behind them.
Criminal Courts and Procedure 535 a maximum of three years or to vary the conditions attached to the probation order. If the Court is satisfied by information on oath that the offender has failed to observe any of the probation conditions it may order that he be apprehended or be warned to appear before the Court. If the Court is then satisfied that he has failed to observe any of the probation order conditions the Court may, without further proof of his guilt, convict and sentence him for the original offence. The scheme of the Probation Law is, therefore, a series of graduated responses to offences where the circumstances of the offence or the person who would otherwise be convicted merits such treatment. At the bottom end of the scale the least serious of matters may be dismissed without more. A step up will be to discharge the offender requiring only an oath to be given to be of good behaviour. A further step up will be to make a probation order in addition for up to three years including whatever (stringent) conditions the Court thinks fit. The 1929 Law provisions apply to both young offenders and adult offenders and appears to extend only to the Island of Guernsey. Special Care Orders, Fit Person Orders, Parental Recognisances and Supervision Orders There are particular powers to deal with children and young persons under Part III of the Children and Young Persons (Guernsey) Law 1967. Any Court by or before which a child or young person is found guilty of an offence punishable in the case of an adult with imprisonment, has the power, in addition to any other powers, to make a special care order, a fit person order or a supervision order in respect of the child or young person, see section 5. A supervision order may not exceed three years, see generally section 10. Note that the child protection provisions of the 1967 Law have only limited application in Alderney and Sark, see section 38. Attendance Centre Orders By the Criminal Justice (Attendance Centre) (Guernsey) Law 1982 a Court may sentence an offender under the age of 21 to attend an attendance centre for a number of hours which will usually total 12. If the offender is under the age of fourteen the amount of hours ordered may be less than 12, likewise the amount of hours may be increased to a maximum of 24 hours depending on the circumstances of the individual offender. An attendance centre order may only be made when otherwise the Court would have power either to impose a sentence of youth detention or to deal with the offender for breach of a probation order under the 1929 Law. The Court has power to summons or order the arrest of an offender who has failed, without reasonable excuse, to attend the centre or who has breached any requirement of the Criminal Justice (Attendance Centre) Ordinance 1983. If the breach or failure is proved, the Court may revoke the attendance centre order and deal
536 The Laws of Guernsey with the offender in any manner in which he could have been dealt with by the Court if the order had not been made. The chief requirement of the Ordinance is that the person attending should obey any order given or instruction issued by the Officer in charge or any member of the attendance centre staff. The power to make an attendance centre order extends only to Guernsey courts. The legislation has no application in either Alderney or Sark. Bind Overs There is a more general common law power to bind over an offender after conviction. The effect of such a bind over is, in effect, a means of postponing a sentence on conditions. The power is to bind over an offender to come up for judgment when called upon. The offender must consent to the order and acknowledge himself to be bound by its terms. The general condition imposed is to be of good behaviour during the material period. In addition there is probably a common law power within the Bailiwick to bind over any person whose case is before the Court to be of good behaviour and to keep the peace. This power probably extends to witnesses and is independent of whether or not a conviction is ordered. A particular use of the bind over within the Bailiwick is to bind over an offender upon the additional condition that they leave the Bailiwick and not return for a specified period of years. A simple return to the Bailiwick regardless of any reoffending is likely to lead to the offender being sentenced for the original matter. Prohibition Orders Under the Intoxicating Liquor (Prohibition Orders) (Guernsey) Law 1960 the Ordinary Court and Magistrate’s Court may make what is called a prohibition order against a person convicted of an offence an element of which included being under the influence of drink where that person has also been convicted on at least one occasion in the previous 12 months of a like offence.50 Alternatively the Ordinary Court may make a prohibition order on the application of either relatives, friends, the Island Police Committee or the Douzaine of the Parish in which the person concerned resides. The order may also be made on the application of the convicted person himself. This is sometimes offered in mitigation of the sentence otherwise likely to be imposed.51 A photograph of the person subject to the prohibition order is circulated to every licensee. It is an offence knowingly to supply alcohol to a person subject to a 50
See ss 1(2) and 6. And is probably an ill-advised course to take if the defendant has a drink problem. It is not at all unknown to see a resulting suspended sentence activated within weeks or months with the prohibition order left intact and hanging over the defendant leading to further offences and time spent in prison. There are some well known local characters who risk spending a greater proportion of their lives in prison than murderers, simply because they are hopeless drunks. 51
Criminal Courts and Procedure 537 prohibition order, or to permit such a person to consume alcohol on licensed premises. It is an offence for the person who is “black-listed” even to receive alcohol, let alone obtain it himself, with a maximum sentence of imprisonment of up to fully six months for contravention of the order.52 There appears to be no limit upon the time during which a prohibition order may be made to run, two years seems to be standard. There is power to vary or revoke the order “from time to time”. No Order There is a general discretion not to take any action in respect of a matter. Again this might be because the offence is so trivial (ie the equivalent of an absolute discharge) or because it is a minor matter and the offender has been convicted at the same time of more serious offences which will be punished. In such circumstances there may be no useful purpose served by making any separate order. Deportation Orders There is power under the Immigration Act 1971, as extended to the Bailiwick by the Immigration (Guernsey) Order 1972 (as amended by the Immigration (Guernsey) (Variation) Order 1982) to make deportation orders, usually where there has been a breach of entry clearance conditions. Compensation Orders Bailiwick courts exercising criminal jurisdiction are given broad powers to make compensation orders by the Criminal Justice (Compensation) (Bailiwick of Guernsey) Law 1990. By section 1(1) a Court may, whether on application or of its own motion, make a compensation order requiring a convicted person to pay compensation for any personal injury, loss or damage resulting from the offence which he has been convicted of, or any offence taken into consideration when sentencing. Allowance can be made also for the terror and stress resulting from the offence or offences concerned. Damage to any recovered property where a Theft Law 53 offence is concerned may be compensated regardless of how the damage was caused. However, the circumstances in which a compensation order may be made for injury, loss and damage due to an accident arising out of the presence of a motor vehicle on a road are 52 The equivalent English legislation dating from much earlier in the 20th century carried a maximum sentence of a £200 fine. It must be doubtful whether the Guernsey legislation is human rights compliant. The idea that alcoholics can be ordered to quit their addiction in a small island where alcohol is so widely and otherwise lawfully available seems bizarre; add to that a not inconsequential sentence of imprisonment and the result borders on the cruel. 53 Theft (Bailiwick of Guernsey) Law 1983.
538 The Laws of Guernsey restricted to where the loss or damage resulted from an offence under the Theft Law. This is probably because of the independent requirement for third party insurance, or else the combined effect of the Motor Insurers Bureau uninsured drivers agreement and s.4 of the Loi par rapport à l’Assurance Obligatoire contre les Risques dits “Third-Party Risks” s’élevant de l’usage de Véhicules Automobiles 1936 (as amended), which are considered elsewhere. The maximum amount of compensation which may be ordered by the Magistrate’s Court, Court of Alderney or Court of the Sénéschal is £2,000. There are provisions requiring the amount of any compensation order to be taken into account when awarding civil damages as regards any amount actually paid, likewise the amount of civil damages that may be enforced as regards any unpaid balance. There are provisions permitting the Court to make compensation orders against the father, mother or guardian of a young person. Prima facie a compensation order must be made against the parent or guardian where the offender is less than fourteen.54
RIGHTS OF APPEAL
Appeals from the Magistrate’s Court, Court of Alderney and Court of the Sénéschal in Criminal Matters The Magistrate’s Court (Criminal Appeals) (Guernsey) Law 1988 confers a right of appeal against conviction or sentence or both in the Magistrate’s Court, the Court of Alderney and the Court of the Sénéschal to the Royal Court. There is, however, no right of appeal in certain limited circumstances. The most important of these are where the term of imprisonment imposed is seven days (or less) or a fine of £75 (or less). The summary Court may, notwithstanding, certify a question of law or of mixed law permitting an appeal regardless. In exceptional circumstances leave may be granted to appeal against conviction where the appellant has pleaded guilty. An appeal is commenced by notice of appeal which must be given within fourteen days of the date on which the decision appealed against is given.55 The notice must state the general grounds of the appeal. The time for giving notice may be extended by the Royal Court. The notice itself is given to HM Greffier in Guernsey, the Clerk of the Court of Alderney or the Greffier in Sark who copies it forthwith to HM Procureur together with copies of the relevant transcript and Act of Court. The summary Court has a discretionary power to suspend the sentence it has
54 Note also that a Criminal Injuries Compensation scheme along the lines of the Jersey model, itself based on the English model, is to be introduced; see the policy letter in Billet d’État XXIV of 2001 and the resolution relating thereto. It seems likely that there will be a prima facie time limit of 6 months for making an application. A maximum award of £100,000 is intended. 55 See r 1(3) of the Magistrate’s Court (Criminal Appeals) Rules 1989.
Criminal Courts and Procedure 539 passed until disposal of the appeal and may also grant bail.56 Before granting bail the Court must require the defendant to give an address for service of summonses and notices relating to the appeal, to provide such security or sureties as appear reasonable and/or acceptable to the Court and to make oath that he will remain in the Bailiwick (if so required) until the appeal is disposed of and that he will attend the hearing of the appeal. Wilful breach of any such oath is an offence triable summarily before the Royal Court and punishable by imprisonment and fine.57 There are provisions for legal aid to pursue an appeal.58 An appeal may be abandoned on giving not less than two days notice. There is a Practice Direction, No 1 of 1996, requiring HM Procureur to table a cause in the Interlocutory Court (on notice to the appellant or his Advocate, if represented) for a date to be fixed and directions to be given for the disposal of appeals from the three courts. The cause must be tabled for the next Friday sitting of the Interlocutory Court after the transcript of the hearing has been obtained and distributed. Somewhat oddly, an appellant in custody need not be summonsed to appear. In practice a date is simply fixed, unless there is good reason for such a preliminary hearing. On the hearing of the appeal itself the Royal Court may confirm, reverse or vary the decision appealed against, or remit the matter with its opinion to the summary Court or make such other order in the matter as may be just.59 The Royal Court may exercise any power which the summary Court might have exercised. The Royal Court may direct the summary Court to convict if a prosecutor’s appeal succeeds. The provisions of section 6(2) of the 1988 Law are particularly important to note: “If the appeal is against a conviction or a sentence, the preceding provisions of this section shall be construed as including power to award any punishment, whether more or less severe than that awarded by the Magistrate’s Court whose decision is appealed against, if that is a punishment which the Magistrate’s Court might have awarded.”
It follows that the Royal Court cannot substitute a sentence in excess of the Magistrate’s sentencing powers but can increase the sentence within those limits; this certainly focuses the mind when contemplating an appeal. An appeal to the Royal Court against sentence is, in effect, a re-sentencing. There are provisions for costs to be awarded to or against the appellant. Arguably only a very limited sum (£75) may be recovered by the successful appellant. Note that the 1988 Law fails to specify the grounds for appeal against conviction, at least so far as appeals to the Royal Court are concerned. The Royal Court has 56 See s 3(1) of the 1988 Law. The bail application can be renewed to the Royal Court if refused. Note that a driving disqualification remains in force pending appeal. 57 The appeal itself may also be dismissed, see s 3(5); although this would be harsh if in fact the appeal had merit. 58 Now eclipsed by a thoroughgoing and properly funded system of criminal legal aid. 59 See s 6 generally.
540 The Laws of Guernsey traditionally applied the grounds set out in section 25(1) of the Court of Appeal (Guernsey) Law 1961 which are, in any event, within Part III of the 1961 Law and expressly adopted as such by the 1988 Law for onward appeals to the Court of Appeal.60 The Court of Appeal applied the grounds in an appeal against a Magistrate’s Court decision in the case of Law Officers of the Crown v Diment [1993] 16 GLJ 86.61 The 1961 Law grounds are as follows: (i)
the verdict is unreasonable and/or cannot be supported having regard to the evidence; or (ii) the judgment should be set aside on the ground of a wrong decision of any question of law; or (iii) on any ground there was a miscarriage of justice. It is section 7 of the 1988 Law which provides for the further right of appeal from the Royal Court to the Court of Appeal, but only with the Court of Appeal’s leave. The appeal may be on any ground which involves a question of law alone or pursuant to a certificate granted by the Bailiff that sufficient grounds of appeal exist in the case. Notice of appeal must be lodged within 10 days of the decision appealed against; see section 30 of the Court of Appeal (Guernsey) Law 1961. Note that an appeal to the Court of Appeal against sentence appears to be excluded in this context by reference only to appeal against conviction or acquittal at section 7(1); ie there is no appeal beyond the Royal Court against a Magistrate’s sentence.62 Even if a section 25 ground is prima facie made out the Court of Appeal may apply the proviso at section 25(1) permitting it to dismiss an appeal if it considers that “no substantial miscarriage of justice” has actually occurred.63 Subject to this the Court of Appeal must, if it allows an appeal against conviction, quash the conviction and direct a judgment and verdict of acquittal to be entered. There appears to be no power to order a new trial. The Court of Appeal in Diment’s case emphasised that the right of appeal was against the conviction or acquittal by the Magistrate,64 not against the judgment of the Royal Court. The Court of Appeal might have to consider the Bailiff ’s reasons for dismissing the appeal against the Magistrate’s decision, or the Bailiff ’s directions to the Jurats when considering what its own conclusion about the Magistrate’s decision should be. Ultimately, however, the result had to depend upon whether the Court of Appeal considered that the Magistrate’s decision was 60
Considered in greater detail below. See also Law Officers of the Crown v Whales [1993] 16 GLJ 87. This should be challenged one day; note however the recent judgment of Richard Southwell QC JA, sitting as a single Judge of the Court of Appeal, in the case of Law Officers of the Crown v Guest (2002) 3 December where the absence of a right of appeal against sentence was accepted. It was also said that appeals to the Royal Court as to both conviction and sentence should be dealt with before any onward appeal to the Court of Appeal, save in exceptional circumstances. 63 It seems likely that the Royal Court would also assume an equivalent power to dismiss an appeal. 64 Or Sénéschal or Court of Alderney as the case may be. 61 62
Criminal Courts and Procedure 541 open to attack on any of the grounds set out in section 25 of the 1961 Law and not upon whether it considered any criticism could be made of the proceedings in the Royal Court. The Court of Appeal also noted in Diment that the question of whether or not there was evidence on which the Magistrate could properly convict the appellant was a question of law for the Bailiff alone as opposed to the Jurats. The issue for the Bailiff was whether there was evidence before the Magistrate which, if he believed it, could have satisfied him beyond reasonable doubt of the material particulars of the offence. The second ground of appeal (wrong decision of law) is plainly for the Bailiff alone. Any miscarriage of justice independent of the first two grounds is also likely to be a question of law.65 Accordingly there is no rôle for the Jurats to perform on an appeal against a Magistrate’s Court conviction. Appeals to the Court of Appeal in Criminal Matters There is a right of appeal in criminal proceedings before the Royal Court to the Court of Appeal. Here we are concerned with appeal from the Royal Court’s own jurisdiction to try and sentence alleged offenders. The principal Law is the Court of Appeal (Guernsey) Law 1961. Part I of that Law concerns the constitution of the Court of Appeal and provides that the Court shall be convened by the Bailiff and duly constituted if it consists of an uneven number of Judges, but not less than three. The Bailiff is a member ex officio of the Court of Appeal and presides when sitting. He may not sit in a case where he was a member of the tribunal appealed against. Part III deals specifically with criminal appeals. By section 24 a person convicted on indictment or summarily convicted in the Royal Court sitting as a Full Court may appeal to the Court of Appeal against his conviction on any ground of appeal which involves a question of law alone and, with the leave of the Court of Appeal or upon the certificate of the presiding Judge that it is a fit case for appeal against conviction, on any ground of appeal which involves a question of mixed law and fact or on any other ground which appears to the Court of Appeal to be a sufficient ground for appeal. With the leave of the Court of Appeal the person convicted may (also) appeal against sentence, unless the sentence is one fixed by law where there is, of course, no appeal against sentence, (as opposed to conviction). As noted above in a different context, by section 25 of the 1961 Law the Court of Appeal must allow an appeal against conviction if it: “thinks that the verdict should be set aside on the ground that it is unreasonable or cannot be supported having regard to the evidence, or that the judgment of the Court before whom the appellant was convicted should be set aside on the ground of a wrong decision 65 See the case of Renouf [1994] 18 GLJ 64 concerning the alleged failure of the prosecution to disclose an offer of reward monies to witnesses.
542 The Laws of Guernsey of any question of law or that on any ground there was a miscarriage of justice, and in any other case shall dismiss the appeal”.
Notwithstanding that the Court of Appeal may decide a point in favour of the appellant the Court may nevertheless dismiss the appeal if it considers that no substantial miscarriage of justice has actually occurred. Subject to this the Court must, if it allows an appeal against conviction, quash the conviction and direct a judgment and verdict of acquittal to be entered. On an appeal against sentence the Court of Appeal may quash the sentence passed “. . . and pass such other sentence warranted in law by the verdict, (whether more or less severe) in substitution therefor as it thinks ought to have been passed, and in any other case shall dismiss the appeal”.66 It cannot be over-emphasised enough that in all Guernsey criminal appeals the appellate Court has power to vary sentences upwards as well as downwards.67 The client must be warned of the danger. Equally, the rôle of the Court of Appeal on an appeal against sentence is to consider whether the sentence is manifestly excessive or wrong in principle as opposed to re-sentencing the defendant.68 Section 26 enables the Court of Appeal to allow a conviction or sentence to stand notwithstanding a defect in process. By section 30 an appeal to the Court of Appeal must be made within 10 days of the date of conviction.69 The time for appealing may be extended by the Court for good reason. Section 32 of the 1961 Law confers additional powers upon the Court to order the production of any document, exhibit or any other thing connected with the proceedings. The Court may also order witnesses to attend for examination, whether or not they were called at the original trial. The Court of Appeal has power to assign an Advocate to an appellant who does not have sufficient means to pay for legal representation.70 An appellant has the right to attend the hearing of his appeal notwithstanding the fact that he is in custody, unless his appeal concerns a question of law alone. It is the duty of HM Procureur or HM Comptroller to appear for the Crown on the hearing of every criminal appeal (whether personally or by a Crown Advocate). There are unsurprising provisions permitting orders for costs to be made in favour of the defendant and payable by the States. By section 37(1) the Court of Appeal may grant bail to an appellant pending the determination of his appeal. By section 40 of the 1961 Law a single Judge has power to extend the time within which notice of an appeal may be given, to assign legal aid to an appellant and to allow the appellant to be present at any proceedings. 66
See s 25(3). With the academic exception of the Privy Council. 68 At least this is the rôle of the English Court of Appeal, reiterated in the case of R v Gleeson [2001] All ER (D) 22, TLR 30 October 2001. It may be possible to argue that the Guernsey Court has a freer hand generally; contrast s 11(3) of the Criminal Appeal Act 1968. 69 As a matter of practice one would expect time to run from the date of sentencing if later than the date of conviction. 70 Again note that properly funded criminal legal aid is now available in Guernsey. 67
Criminal Courts and Procedure 543 Likewise a single Judge may grant bail. Failed applications may be renewed before the full Court of Appeal. By section 42 of the 1961 Law the Home Secretary71 has power, at any time, to refer a case or a particular point arising in a case, to the Court of Appeal. The power would be exercised in exceptional circumstances only; eg where significant fresh evidence emerges or the conviction of a co-accused is quashed. The power could be used if there existed sufficiently compelling grounds to suspect a miscarriage of justice. Court of Appeal procedure for criminal appeals is dealt with more fully in the Court of Appeal (Criminal Division) (Guernsey) Rules 1964. By Rule 2 an appeal to the Court of Appeal in criminal proceedings is commenced by giving notice to the Registrar of the Court of Appeal in the prescribed form. The Registrar of the Court of Appeal is in fact the Greffier. Provision is also made for a standard form of application for an extension of time for appeal. Where leave to appeal has been given by the Judge no notice of appeal is required, assuming that a notice of application for leave to appeal was originally lodged.72 An application for an extension of time must be accompanied by the proposed notice of appeal.73 Rule 6 permits the trial Judge to inform a convicted person that the matter is, in his opinion, one fit for appeal under the provisions of section 24 of the 1961 Law. By rule 7 the Registrar is to copy any notice of appeal to the trial Judge concerned who is required to deliver to the Registrar a copy of his notes of the trial and a report in writing to the Court of Appeal giving his opinion upon the case and any specific point arising upon it. This report is not to be disclosed to any other person without the leave of the Court.74 There are various powers vested in the Royal Court to suspend the effect of any disposal order or fine pending the outcome of an appeal, together with powers to require recognisances and sureties to be given in the interim. The Court of Appeal has power by rule 10 to grant bail to an appellant, whether conditionally or not. The Court also has power to revoke or vary bail. Recognisances may be registered against real property. By rule 12 the appellant or HM Procureur may apply to the Court for an order requiring any person to produce to the Registrar any document or exhibit or any other thing in the case for use upon the appeal. By rule 13(2)(a) a notification seeking to renew an interlocutory application made to a single Court of Appeal Judge to the full Court of Appeal must be made within five days of notification of the single Judge’s refusal. In default the refusal is final. Note however the general power under rule 17(1) whereby non-compliance on the part of an appellant with the 1964 Rules does not prevent the further prosecution of his appeal if the Court or the single Judge considers that such non-compliance was not wilful and that it may 71
Now the Lord Chancellor. Rule 3. Rule 4. 74 Whether such practices are procedurally fair is questionable and perhaps open to an Art 6 Convention challenge. 72 73
544 The Laws of Guernsey be waived or remedied by amendment or otherwise. There are standard forms attached to the Rules for use in conjunction with their provisions. A Comparison of Grounds of Appeal The Court of Appeal (Guernsey) Law 1961 was itself based upon the Criminal Appeal Act 1907 of England. The 1907 Act was replaced by the Criminal Appeal Act 1968 which made quite substantial changes to the grounds upon which an appeal may be allowed.75 Under English law a jury’s verdict may be set aside on the grounds that, in all the circumstances of the case, it was unsafe (or unsatisfactory76) or that the judgment of the Court should be set aside on the ground of a wrong decision on any question of law or that there was a material irregularity in the course of the trial. By contrast the Guernsey grounds of appeal remain as already noted, ie that: (a) the verdict was unreasonable and cannot be supported having regard to the evidence; or (b) the judgment of the Court should be set aside on the ground of a wrong decision of any question of law; or (c) on any ground there was a miscarriage of justice. The distinction between the two sets of grounds of appeal was highlighted in the case of Law Officers of the Crown v Ogier & Le Noury a 1989 judgment of the Guernsey Court of Appeal. A number of English cases were cited illustrating how appeals that could now succeed under the reformed English law would previously have failed. The best illustration was found in the case of R v Smith (1973) 58 Cr. App. R 106 where Scarman LJ, as he then was, observed: “Under the old law this appeal would have stood no chance: there was evidence to support the conviction and the verdict could not be said to be ‘unreasonable’ or such as ‘cannot be supported, having regard to the evidence . . .’”.
Accordingly there is a real possibility that Guernsey criminal appeals pursuant to this outdated Law might fail in circumstances where they would succeed before an English Court.77 Whereas in England the Court of Appeal may allow an appeal on the basis of a “lurking doubt” the Guernsey Court of Appeal is substantially more constrained. Whether this is justifiable given the probable absence of any policy decision in this regard is arguable. From a practical perspective the Guernsey practitioner will be required to research English law as it was left prior 75
Itself amended significantly by the Criminal Appeal Act 1995. Now removed from the English formulation. 77 And indeed now see the case of Guest v Law Officers of the Crown, a Court of Appeal judgment from January 2003. 76
Criminal Courts and Procedure 545 to the coming into force of the 1968 Act. This is illustrated by the Guernsey Court of Appeal case of Law Officers of the Crown v Collins (1989) where the Court interpreted the meaning of section 32(1)(b) of the Court of Appeal (Guernsey) Law 1961 by reference to English case-law concerning the identically worded section 9 of the Criminal Appeal Act 1907. The issue in the case concerned the exercise of the Court of Appeal’s discretion to allow further evidence to be called at the appeal. It was held that further evidence would only be admitted if the following conditions were fulfilled: (a) (b) (c) (d)
the evidence must be evidence which was not available at the trial; it must be evidence relevant to the issue; it must be evidence which was capable of belief; the Court must consider whether, if that evidence had been given at trial, there might have been a reasonable doubt in the mind of the jury (Jurats) as to guilt.78
Appeal to the Privy Council There is a further possible right of appeal to the Privy Council. The leave of the Privy Council is required to bring the appeal, (leave will not in practice be granted by the Court of Appeal), and is only likely to be given in cases of significant and general importance. The right is seldom exercised by a defendant and even more seldomly is leave given.79
MISUSE OF DRUGS THE MISUSE OF DRUGS (BAILIWICK OF GUERNSEY) LAW 1974
The Misuse of Drugs (Bailiwick of Guernsey) Law 1974 is the principal Bailiwick Law governing drug misuse. The scheme of the Law is to impose restrictions upon controlled drugs. Controlled drugs are defined by reference to Parts I, II and III of schedule 1 to the 1974 Law. Parts I, II and III correspond to what are further defined as Class A, B and C drugs. Class A represents the hardest drugs, for which penalties are the most severe, and Class C the softest drugs, attracting less severe penalties. In Class A the most familiar drugs are cocaine, diamorphine hydrochloride (heroin), opium and methylene-dioxymethylamphetamine (MDMA or
78 The leading English authority on the test to be applied by the Court of Appeal where fresh evidence has been received is now the House of Lords case R v Pendleton [2002] 1 All ER 524. 79 Note also the Royal Prerogative of Mercy, the exercise of which is beyond the scope of this work. See however s 42 of the Court of Appeal (Guernsey) Law 1961 which assumes the existence of the prerogative and provides a mechanism for referring a case, or a point in a case, to the Court of Appeal.
546 The Laws of Guernsey ecstasy); in Class B are found cannabis, cannabis resin, codeine and amphetamine;80 Class C includes phendimetrazine and pipradrol. The Law then provides that certain activities are prohibited and/or unlawful, subject to any Ordinance, licence (or order) to the contrary.81 There are detailed provisions by which the Board of Health may by order (and previously the States by way of Ordinance) authorise certain persons to carry on activities which would otherwise be unlawful. These typically extend to medical practitioners, dentists, veterinary surgeons and pharmacists. Stringent conditions are attached as regards the use which is made of controlled drugs by such persons, including requirements as to record keeping and security of storage; see generally also the Misuse of Drugs (Bailiwick of Guernsey) Ordinance 1976. In the absence of an order, Ordinance or licence rendering the activity lawful, conduct involving the production, possession or supply of controlled drugs is an offence, subject to any defences which might be available. The principal offences are as follows:82 By section 3(2) it is an offence to produce a controlled drug, or to be concerned in the production of a controlled drug. By section 3(3) it is an offence to supply or to offer to supply a controlled drug to another, or to be concerned in the supplying of a controlled drug to another or the making to another of an offer to supply such a drug. By section 4(2) it is an offence for a person to have a controlled drug in his possession. By section 4(3) it is an offence for a person to have a controlled drug in his possession, whether lawfully or not, with intent to supply it to another in contravention of any order or Ordinance. As regards offences of possession it is important to note the terms of section 32(3) whereby for the purposes of the 1974 Law: “. . . the things which a person has in his possession shall be taken to include anything subject to his control which is in the custody of another”.
Section 4(4)(a) and (b) provide defences to a possession offence if the person in possession of the controlled drug took possession of it for the purpose of preventing another from committing or continuing to commit an offence in connection with that drug and took all such steps as were reasonably open to him to destroy the drug or deliver it into the custody of a person lawfully entitled to take custody of it or took possession of it for the purpose of delivering it into the custody of a person lawfully entitled to take custody of it and thereafter acted accordingly. By section 5(2) it is an offence to cultivate a cannabis plant. By section 7 a person commits an offence if, being the occupier or being concerned in the man80
Note the proposals in England to re-classify cannabis and the consequential debate in Guernsey. See ss 2 & 3. Although the 1974 Law prohibits the importation and exportation of controlled drugs (subject to any Order, Ordinance or licence to the contrary) the related offences are to be found in the 1972 Customs Law, see below. 81 82
Criminal Courts and Procedure 547 agement of any premises, he knowingly permits or suffers certain drug-related activities to take place on those premises. The activities include producing or attempting to produce a controlled drug, supplying or attempting to supply a controlled drug to another, preparing opium for smoking, smoking cannabis, cannabis resin or prepared opium. Section 8 creates specific offences in connection with smoking or using prepared opium, frequenting a place used for the purpose of opium smoking or possessing opium smoking paraphernalia. Section 8A, inserted by the Misuse of Drugs (Amendment) (Bailiwick of Guernsey) Law 1995, creates offences prohibiting the supply of articles for administering or preparing controlled drugs. Part II of the 1974 Law contains detailed provisions permitting the Board of Health to make orders governing the use of controlled drugs for lawful purposes. There is power also to issue directions prohibiting individual persons who would otherwise be permitted to possess and supply controlled drugs from doing so. This concerns medical practitioners, dentists, vets and pharmacists where similar orders have been made against them in other jurisdictions or where they disobey or otherwise act in breach of Ordinances, orders or licences granted within the Bailiwick. A procedure is set out which includes reference to a Drugs Advisory Committee comprising members of the relevant profession with further supervision of the process by appointed referees. Part III of the 1974 Law contains various additional miscellaneous offences. There is a general offence at section 17 of contravening an order made by the Board of Health or the term of a licence. There are general offences of giving false information. Section 18 provides that it is an offence for a person to attempt to commit an offence under any other provision of the 1974 Law, or to incite or attempt to incite another to commit such an offence. By section 19 it is an offence within the Bailiwick to assist or induce the commission of a corresponding offence contrary to the law of another jurisdiction. Section 20 provides that a corporate body may be guilty of an offence under the Law if an offence is proved to have been committed with the consent or connivance of, or to be attributable to, any neglect on the part of any director, manager, secretary or other similar officer of the corporate body. Where a Police Officer has reasonable grounds to suspect that any person is in possession of a controlled drug in contravention of the 1974 Law he may search that person and may search any vehicle or vessel in which the Police Officer suspects that the drug may be found. The Police Officer may seize and detain anything found which appears to the Officer to be evidence of an offence contrary to the 1974 Law. The Bailiff may grant a warrant to a Police Officer permitting the Officer to search specified premises and to seize any controlled drugs found there or any documents evidencing controlled drugs transactions if the Bailiff is satisfied that there are reasonable grounds for suspecting the presence of controlled drugs in contravention of the 1974 Law on those premises or documents evidencing unlawful transactions, see section 22(4).
548 The Laws of Guernsey
There are general offences of obstructing the Police in the exercise of their powers of search. By section 23 the Police are given power to arrest without warrant any person who has committed or whom the Police, with reasonable cause, suspect to have committed an offence under the Law if the Police Officer concerned has reasonable cause to believe that the person will otherwise abscond or if he suspects that a false name and address has been supplied, or if the person’s name and address are unknown and cannot be ascertained by the Officer. Section 24 incorporates by reference schedule 3 to the 1974 Law as providing for the way in which offences under the Law are to be punished. The schedule sets out in table form the various offences and the associated maximum penalties on summary conviction or conviction on indictment. This schedule has been replaced several times since 1974 in order to increase the penalties. The current schedule is to be found in the Misuse of Drugs (Amendment) (Bailiwick of Guernsey) Law 1988, as amended by the Misuse of Drugs (Amendment) (Bailiwick of Guernsey) Law 1995. Sentences range from a maximum of six months’ imprisonment on summary conviction for a Class C offence up to life imprisonment for an offence involving a Class A drug. Summary conviction typically carries a maximum penalty of 12 months’ imprisonment for a Class A or B offence and six months for a Class C offence. Conviction on indictment carries a maximum of life imprisonment for a Class A or B offence and 10 years for a Class C offence. Fines may also be imposed in the alternative or additionally; on summary conviction the maximum is three times level 5 for Class A and B offences. It will be rare in practice that anything other than simple possession of small amounts of drugs will be dealt with by the Magistrate’s Court. By section 26 the Court may make a forfeiture order as regards anything shown to the satisfaction of the Court to have related to the offence. Anything forfeited may be destroyed or dealt with as the Court directs. Typically this will extend to drugs seized, associated paraphernalia and the like. It may, however, extend also to, say, a boat or a car. Section 27 provides a general defence to offences under sections 3, 4, 5 and 8 whereby it is a defence for the accused to prove that he neither knew of, nor suspected, nor had reason to suspect the existence of some fact alleged by the prosecution which it is necessary for the prosecution to prove if he is to be convicted of the offence charged. Thus it would be a defence for the accused to show that he did not know he was in possession of the substance which was the controlled drug, (the mere fact that you do not know the precise chemical composition of the substance is not generally enough, but see below.83) Section 27(3) expressly provides that it is no defence to show that there was not the requisite knowledge as regards a particular controlled drug. Thus a mistaken belief that a Class C drug was being carried as opposed to a Class A drug would be no defence, as opposed to (difficult) mitigation. By way of contrast section 27(3)(b) provides that a person shall be 83 See Archbold for the subtleties of arguments relating to possession and the required mental element.
Criminal Courts and Procedure 549 acquitted if he proves that he neither believed, nor suspected, nor had reason to suspect that the substance or product in question was a controlled drug.
THE CUSTOMS AND EXCISE (GENERAL PROVISIONS) (BAILIWICK OF GUERNSEY) LAW 1972
The Customs and Excise (General Provisions) (Bailiwick of Guernsey) Law 1972 contains general criminal offences connected with Customs and Excise matters as well as specific drug-related offences. The Law also contains provisions of general application to Customs and Excise covering areas such as administration, the importation of goods, duty on imported goods, exportation of goods, the duties of persons entering or leaving the Island and the prevention of smuggling. As regards drugs offences themselves the material provisions are as follows: A number of powers are given and offences created to enable Customs Officers to detect customs offences without obstruction. Thus by section 5 offences are committed by any person who obstructs, hinders, molests or assaults a Customs Officer engaged in the performance of any duty or in the exercise of any power conferred by the 1972 Law or who does anything to impede an Officer or rescues, damages or destroys any thing liable to forfeiture. Goods liable to forfeiture are those set out at section 22 and comprise goods imported without payment of duty, goods imported, landed or unloaded contrary to any prohibition or restriction for the time being in force (this would include controlled drugs), prohibited goods (which would again include controlled drugs) found to have been concealed in any manner on board any ship or aircraft, goods concealed in a container holding goods of a different description, or goods concealed or packed in any manner appearing to be intended to deceive an Officer. By section 12 it is an offence for a ship or aircraft to depart from any place whilst carrying on board without his consent any Customs or Police Officer.84 Likewise it is an offence contrary to section 37(3) to fire on any vessel, aircraft or vehicle in the service of Her Majesty or of the States while that vessel, aircraft or vehicle is engaged in the prevention of smuggling.85 Such occurrences are, mercifully, very rare in the Bailiwick and Bailiwick waters these days. Again section 37(1) provides that any person who by any means makes any signal or transmits any message from any part of the Bailiwick or from any ship or aircraft being a signal or message connected with the smuggling or intended smuggling of goods into or out of the Bailiwick commits an offence. By section 40 there is a particular penalty for going about smuggling when armed or disguised in any way.86 84
There is no future in such conduct. An offence is likely to be committed in any event. 86 Again it is now rare to find locals waving lanterns on the cliff-tops, let alone dressed up as John Silver. There was, however, considerable excitement in October 1937 when the SS Briseis went down off the west coast carrying a cargo of 7,000 casks of Algerian wine, some of which floated ashore; see p 72 of the book Guernsey Wrecks by Ray Dafter for an account of the consequences. 85
550 The Laws of Guernsey There are very broad powers of search given to Customs Officers by the 1972 Law. Section 8(1) gives power to a Customs Officer to board any ship within the limits of a port or any aircraft at a customs airport and “rummage” and search any part of the aircraft or ship. Any goods found concealed are liable to forfeiture. Any ship within three nautical miles of a Bailiwick Island or an aircraft within the Bailiwick or a vehicle within the limits of any port or aerodrome which is found to have been constructed, adapted or fitted in any manner for the purpose of concealing goods is liable to forfeiture; likewise any ship from which cargo is thrown overboard within the same area. A similar power of forfeiture exists when part of a cargo is found to be missing, whether from a ship or aircraft; see section 39. By section 57 any ship, aircraft, vehicle, animal, or container used for the carriage, handling, deposit or concealment of a thing liable to forfeiture and any other thing mixed, packed or found with the thing liable to forfeiture is also liable to forfeiture. There are special provisions for ships in excess of 250 tons. Schedule 1 of the 1972 Law contains procedural provisions relating to forfeiture. If the right to forfeit and condemn goods is challenged the Board of Administration must bring proceedings before the material Court (Ordinary Court, Court of Alderney or Court of the Sénéschal) to determine whether or not the object concerned was liable to forfeiture. There is a right of appeal. Section 56(1) expressly provides that any thing liable to forfeiture may be seized or detained by any Customs Officer or Police Officer. By section 68(1) a Customs Officer may examine and take account of any goods which are imported or which are brought to any place in the Bailiwick for exportation and may require any container to be opened or unpacked. Facilities for searching and any assistance required for examinations conducted by Customs Officers must be provided by or at the expense of the owner of the goods. By section 69 an Officer may take samples of any goods but is under an obligation to pay for the sample, if so required, at the wholesale price. By section 70 Customs Officers are entitled to visit all stores, dépôts and other places used by vendors, stockists, importers and agents of dutiable goods and all other places where such goods may be deposited. By section 70(2) the Bailiff may grant a search warrant if satisfied by information on oath given by a Customs Officer that there are reasonable grounds to suspect that any thing liable to forfeiture is kept or concealed in any building or place. By section 71 a Customs Officer may stop and search any vehicle or vessel where he has reasonable grounds to suspect that the vehicle or vessel is or may be carrying any goods which are chargeable with any duty which has not been paid or is in the course of carrying goods which are being unlawfully removed from or to any place or is carrying goods which are otherwise liable to forfeiture. By section 72, as substituted by the Customs and Excise (General Provisions) (Bailiwick of Guernsey) (Amendment) Law 1991, a Customs Officer is given extensive power to search persons. The Customs Officer must have reasonable grounds to suspect that the person is carrying an article which is either chargeable with duty which has not been paid, or the importation or exportation of which is
Criminal Courts and Procedure 551 prohibited or restricted. The Officer may detain the person for as long as may be necessary for the exercise of the search powers. The Officer may require the suspect to permit a search of any article he has with him and to submit to a search of his person, whether a “rub-down”, strip or intimate search. In the case of searches of the person the suspect has the right, and must be informed of his right, to require that he is taken before the Customs Officer’s superior Officer who must consider the grounds for suspicion and direct whether or not the suspect is to submit to the search. In the case of a strip or intimate search the suspect may require that he is taken before a Jurat or superior Officer. The suspect cannot insist upon being taken before a Jurat and it seems unlikely that the Customs Officer would agree to taking the suspect before a Jurat where a superior Officer was available. It is difficult to see why this alternative was given. A further limitation as regards an intimate body search is that it may only be carried out by a registered medical practitioner or a registered nurse. Customs Officers are not permitted to carry out such searches, which is probably a good thing. By section 75 there is the usual offence of knowing or recklessly making untrue declarations. By section 76 a general counterfeiting offence is created as regards customs documentation. It is important to note that many of the powers given by the 1972 Law are also exercisable by a Police Officer. Importation and Exportation of Controlled Drugs There are three offences under the 1972 Law carrying separate express penalties when connected with the prohibition set out at section 2 of the Misuse of Drugs (Bailiwick of Guernsey) Law 1974. Section 2(1) of the 1974 Law provides that the importation into, and exportation from, the Bailiwick of a controlled drug is prohibited, subject to Ordinances, orders and licenses granted for lawful purposes, typically medical purposes. For each of the three offences the maximum penalty is the same within the class of drug concerned. For a Class A drug the maximum summary penalty is a fine not exceeding twice level 5 or six times the value of the goods (whichever the greater) or imprisonment for a term not exceeding 12 months or both; on conviction on indictment the maximum penalty is life imprisonment or a fine or both. For a Class B drug the maximum sentence of imprisonment on indictment is 21 years, otherwise the maximum penalties are the same as for a Class A drug. For a Class C drug the maximum penalty on summary conviction is a fine not exceeding level 5 or six times the value of the goods, whichever the greater, or imprisonment for a term not exceeding six months or both, and on indictment a term of imprisonment not exceeding 10 years or a fine or both. The first of the offences is set out at section 23(1). This creates the offence of discharging, unshipping or landing in any place, or unloading from any aircraft, in the Island any goods imported, landed or unloaded contrary to any prohibition or restriction for the time being in force with respect to those goods. This extends to controlled drugs. Likewise it is an offence to assist or otherwise be concerned in
552 The Laws of Guernsey such unshipping, landing, unloading or removal or to be concerned in the importation of any goods contrary to any prohibition or restriction whether or not the goods are unloaded. It is a requirement of the offence that the person act with intent to evade the material prohibition or restriction. The second offence is found at section 30(2). This creates the offence of being knowingly concerned in the exportation or shipment as stores or in the attempted exportation or shipment as stores of any goods with intent to evade any prohibition or restriction. Stores are defined at section 1(1) as goods for use in a ship or aircraft, whether or not for sale by retail as merchandise to persons being carried. The third offence is found at section 77(1). The offence consists of knowingly, and with intent to evade any prohibition or restriction, acquiring possession of, or being concerned in, the carrying, removing, depositing, harbouring, keeping or concealing or dealing with any goods with respect to the importation or exportation of which any prohibition or restriction is in force. The section also contains the offence of being in any way knowingly concerned in any fraudulent evasion or attempt at evasion of any prohibition or restriction. The section expressly provides that the person concerned may be detained. By section 77A(1) of the 1972 Law (as inserted by the 1991 Law), any person who attempts to commit an offence punishable under section 23(1), 30(2) or 77(1) is guilty of an offence and liable on conviction to such fine or such term of imprisonment or to both such fine and such imprisonment as the Court may deem just. The penalty cannot exceed that which could have been imposed if the offence had been completed. By section 77A(2) the Court may convict of the attempt where the completed offence is charged but not made out. Section 23(1) is commonly known as improper importation. The section 77 offence is referred to as fraudulent evasion. All drug importation offences are generally charged under section 77. It is worth noting that the offence is under the 1972 Law and not section 2 of the 1974 Law, which merely states a prohibition without creating an offence. It is the combination of the 1972 Law offences and the 1974 Law prohibition that opens the way to the very substantial penalties provided for by the 1972 Law.
DRUG SENTENCING
The disposal of drug offending cases forms a discrete area of criminal sentencing jurisprudence. Although there are many points in common with general sentencing principles there are special additional considerations, together with a subtle re-evaluation of traditional forms of mitigation. For example, the fact that someone is of previous good character weighs heavily with a court in ordinary circumstances, whereas drug couriers are often selected precisely because they have no criminal history or else their individual circumstances are such that a court might be expected to deal less harshly with them. As a matter of policy these factors carry less weight with a drug sentencing court than normally they would;
Criminal Courts and Procedure 553 if only to discourage the organisers of drug smuggling from targeting and corrupting the innocent.87 The Royal Court has been consistently tough with drug offenders, periodically issuing sentencing guidelines for its own use and as a warning to those contemplating committing drug offences in the Bailiwick. Those guidelines have become harsher as the level of drug offending has increased. There is a determination within the Bailiwick to do what reasonably can be done to combat drug offending.88 A defendant is likely to go to prison quicker and for longer in any given circumstances from a Bailiwick court than from an English court, and this is particularly so for drug-related offences. The current drug sentencing guidelines are to be found in the case Law Officers of the Crown v Richards & Ors (2002) 18 April.89 The Bailiff presided over a five man Court of Appeal which included the Bailiff of Jersey. It was expressly stated that in formulating the new guidelines the jurisprudence of both Bailiwicks had been considered given the appropriateness of a common approach to sentencing policy and notwithstanding their constitutional independence. The growth in drug offending was noted and the determination not to relax previous policy restated. The importance of Richards is that “where appropriate” it replaces all previous guidelines.90 It recognised the deficiencies of the Oren guidelines, particularly their failure to state starting points before any appropriate discounts and, in effect, wiped the slate clean for future sentencing whilst not in fact varying very greatly from previous tariff levels. The Richards guidelines are concerned essentially with the three separate offences noted previously of (i) importation (ii) supply and (iii) possession of Class A and Class B drugs91 with intent to supply. The maximum sentences for these offences were noted; viz life imprisonment for importation of Class A drugs
87 Although note that these principles were not repeated in the most recent guideline case of Richards, see below. There seems little reason to doubt though that they still hold good. 88 Although perhaps not enough. Given the few points of entry to the Island one might have expected a very high proportion of flights and boats to be met by drug sniffer dogs. Whether Guernsey follows England in downgrading the criminality of cannabis remains to be seen. When a law becomes so discredited by continuous breach and lack of consensus there seems little purpose in maintaining the offence. The more obviously dangerous drugs will undoubtedly continue to be criminalised. 89 Earlier guidelines were issued in the cases of Law Officers of the Crown v Petit [1990] 10 GLJ 24 and Law Officers of the Crown v Oren [1994] 18 GLJ 13. Note also the case of Law Officers of the Crown v Barron (2002) 9 January which affected matters briefly before the even shorter lived guidelines of the Royal Court dated 11 April 2002 were replaced 7 days later by Richards. 90 This is the phrase used in the judgment. It was also said that: “It should from now on be unnecessary for counsel to refer the court to earlier cases in the Guernsey courts”. The exception is for very small quantities of drugs, where the Oren guidelines appear to survive. See also below. 91 In fact only cannabis resin is dealt with; previous guidance concerning amphetamine in the 11th April guidelines was expressly not added to. It follows that the sentencing remarks of the Deputy Bailiff in the case of Law Officers of the Crown v Francis (2002) 25 January are still relevant. Here a female courier pleaded guilty to importing 445 grams of amphetamine sulphate with 80% purity. A starting point of 7 years was applied and then reduced to 3 years due to substantial mitigation and frank mercy. The Bailiff has now just recently given new guidelines for amphetamine offences in the case of Law Officers of the Crown v Turner (2002) December.
554 The Laws of Guernsey and 21 years for importation of Class B; while the maximum sentence for the supply and possession of both classes of drug is life imprisonment. New starting points in the form of sentencing bands were stated; they represent the position as it would be after a full trial and conviction, but before any mitigation. Two chief factors were identified as determining the starting point; (a) the quantity of the drug and (b) the involvement or rôle of the defendant in the commission of the offence. The first can be seen as identifying the band and the second the prima facie position of the defendant within that band. The following bands were stated: Bands of Class B—Cannabis resin Up to 2 kgs 3–6 years 2–5 kgs 5–8 years 5–10 kgs 7–10 years 10–30 kgs 9–12 years Over 30 kgs 11 years upwards Bands of Class A drugs in powder form 1–20 grams 7–9 years 20–50 grams 8–10 years 50–100 grams 9–12 years 100–250 grams 10–13 years 250–400 grams 11–14 years Over 400 grams 14 years and upwards Bands of Class A drugs in tablet form 1–500 7–9 years 500–1,000 8–11 years 1,000–2,500 9–12 years 2,500–4,000 10–13 years 4,000–5,500 11–14 years 5,500 and over 14 years upwards The bands deliberately overlap in order to provide flexibility. It is noteworthy also that the Court emphasised the importance of the quantity of drugs as opposed either to street value or purity, save in cases of very high purity. Likewise the Court distanced itself from previous guidelines suggesting that English sentencing principles might apply where large quantities were intercepted in transit, saying that this could not be assumed. The clear implication is that Guernsey Courts reserve the right to punish as severely as seems appropriate to the circumstances of an exceptional case falling outside of the new bands. There are a number of matters which will aggravate either the offence or the sentencing court’s assessment of the extent of the criminal conduct. For example, the greater the degree of sophistication in the method of importation the more seriously the offence will be viewed. Particularly aggravating features are the use
Criminal Courts and Procedure 555 of the postal service or internal concealment. A previous history of convictions for drug offences will also cause the Court to deal more harshly with an offender. The closer the offender is to being the mastermind or organiser of drug importation and supply on a commercial scale again the graver the offence will be; indeed the bands themselves are unlikely to be severe enough for a person sufficiently high up the drug supply chain. The difficulty of knowing the exact rôle of a defendant was acknowledged; although the sentencing court reserved the right to “. . . draw such inferences as can be drawn from (the) circumstances”. Of course a defendant may give evidence concerning those circumstances if they are disputed.92 As to mitigation the Court recognised that the standard forms of mitigation would play their part; ie normal discounts would apply for a guilty plea, remorse, youth and co-operation.93 The Court made special mention of the importance of a guilty plea, even where the accused had little choice but to plead guilty. As a general rule a discount of one-third of the starting point would be allowed for an early guilty plea, with a more limited discount where there was no “sensible alternative to a guilty plea”.94 The Court emphasised also the potentially substantial discount available to those who made a genuine attempt to provide information helpful to the authorities. The Court adopted English principles in this context and therefore a discount of up to two-thirds, depending on the circumstances.95 The Court went further in saying that the co-operative defendant was not to suffer on account of extraneous circumstances over which he had no control; for example whether in fact he had to give evidence or not. The Richards guidelines do not touch on certain areas which have been the subject of dicta in the past, not all of them consistent; for example, the problem of female defendants with young children. In the 1997 case of Law Officers of the Crown v Geraldine Williams the presence of young children was disregarded as a special factor permitting the sentence to be reduced. By way of contrast, in the 1995 case of Law Officers of the Crown v McDonald the fact that the defendant had young children very plainly reduced the sentence imposed. There is a difficult balance to be struck between a proper concern for the effect on young children and the avoidance of a sentencing policy which encourages the recruitment of couriers falling within categories which it is believed will be dealt with leniently. It is suggested that other factors such as the degree of co-operation with the authorities will provide much more compelling mitigation.
92 Ie in a Newton hearing. Although note that a Newton hearing is for exceptional cases only. The court is entitled to reject a version of events as to the quantity or type of drugs which is beyond belief. The guidelines here adopt the principles from the English case of R v Gandhi (1986) Cr App R (S) 391. 93 Although again note the lesser weight which might attach to individual circumstances which may have led to the selection of the courier in the first place; see above. 94 In the region of one-quarter previously. A suspect in Guernsey once denied all knowledge of how the drugs he was carrying internally had got there; he claimed he had been to a stag party, he had been very drunk and, well, here he was. Eventually he saw the light, as did all of the drugs. 95 A two-thirds discount has been given to a defendant who gave evidence against a co-defendant.
556 The Laws of Guernsey The sentencing court might also look to earlier case-law where a defendant alleges that he or she acted under compulsion. Thus in the case of Law Officers v Mather & Cooper (1999) 22nd July the Court of Appeal held that Judges should be slow to regard pressure falling short of the level of threats or fear sufficient to establish the general defence of duress as mitigation, likewise courts should decline to permit couriers who were themselves drug addicts to rely upon this vulnerability as mitigation. The Richards guidelines themselves go on to repeat other established principles. Thus an erroneous belief as to the nature of the drugs which are the subject of the offence is not a mitigating factor in the absence of very exceptional circumstances. Here the Court preferred the course taken by the Jersey Court of Appeal in the case of Campbell Molloy & Mackenzie v Attorney-General [1995] JLR 136 as opposed to the English Court of Appeal. Again a claim that drugs were imported for personal use only where the quantities are beyond the very small quantities more usually consistent with such personal use is not generally good mitigation. Likewise the Court of Appeal expressly stated that it was not for the sentencing court to distinguish between different drugs in the same class. Without saying as much the Court appeared to have in mind the temptation to deal with cannabis more leniently than, say, amphetamine. It is not difficult to anticipate a time when cannabis becomes a Class C drug in the United Kingdom whilst remaining a Class B drug in Guernsey. Where two (or more) drugs are imported at the same time the Richards guidelines state that the combined quantity is the relevant factor in determining the extent of the criminal conduct which “. . . must be greater than if only one drug was imported”. The sentencing court must determine a total starting point by taking account of the overall quantity and, after taking account of any mitigation, impose a greater term of imprisonment than would otherwise have been passed for the most serious of the material offences if taken in isolation. The sentences for the offences are to run concurrently, as opposed to passing shorter consecutive sentences which might give out the wrong message. The Court of Appeal in Richards emphasised that any applicable discounts cannot simply be added to one another; ie a defendant who indicates an early guilty plea in a case which might otherwise have been difficult to prove and who also gives helpful information cannot expect to walk free; “. . . the court has to consider the totality of the sentence in the light of all the circumstances”. Again the Court was at pains to point out that it was: “. . . not attempting to establish for the Royal Court some sort of inflexible code, which covers all of the issues involved in sentencing for such offences, some of which must as yet be unknown and incapable of anticipation. These are general guidelines only. Sentencing is always a matter for the court’s discretion. It is an art and not a science.”
Where small quantities of drugs are involved the Royal Court guidelines in the case of Oren continue to apply by default. The relevant provisions are as follows:
Criminal Courts and Procedure 557 “The Court proposes to continue to separate cases involving possession and importation of small amounts for personal use from those involving importation and possession of amounts where there is direct evidence or it may be properly inferred that the offender intends to pass the whole or part of the consignment on to other persons. Generally it will be sufficient to deal with cases of importation or possession of small quantities of class B drugs for personal use by imposition of a fine of several hundred pounds depending on the amount and the circumstances of the offender. However, where a particularly sophisticated method of importation has been used whether by concealing in the body or otherwise or where the importation has involved a misuse of the postal service serious consideration should be given to imposing a sentence of immediate imprisonment. With regard to class A drugs for personal use the fines should be approximately oneand-a-half those appropriate for class B possessions and importations with consideration again being given to imprisonment of those who use sophisticated methods of importation.”
THE DRUG TRAFFICKING (BAILIWICK OF GUERNSEY) LAW 2000
The Drug Trafficking (Bailiwick of Guernsey) Law 2000 replaces the Drug Trafficking Offences (Bailiwick of Guernsey) Law 1988 and the Drug Trafficking (Amendment) (Bailiwick of Guernsey) Law 1992. The Law is fully 133 pages long and deserves some sort of prize for saying something quite simple at the greatest possible length and with needless complication.96 The Law is, in many respects, a very large accessory to the policing of the substantive drug offences themselves and, in particular, the confiscation of drug trafficking proceeds. Confiscation Orders Confiscation orders are dealt with by Part I of the 2000 Law and takes up almost half of the Law’s 76 sections. Drug trafficking and drug trafficking offences are very broadly defined by section 1 of the Law and comprise activities and offences amounting to drug trafficking either under Bailiwick law or a corresponding law in a foreign jurisdiction.97 Likewise the definition extends to conduct which would be an offence if it took place in the Bailiwick. The purpose of section 1 is to cast the confiscation net as widely as possible. Section 2 is the key provision of this Part of the Law. Where a defendant appears before the Royal Court to be sentenced in respect of one or more drug trafficking offences the Court must consider whether a confiscation order should be made if either HM Procureur asks the Court to do so or the Court considers, of its own motion, that it is appropriate to consider whether such an order should be made. 96
And of course copied from English legislation. The definition of “corresponding law” is to be found at s 31(1) of the Misuse of Drugs (Bailiwick of Guernsey) Law 1974. 97
558 The Laws of Guernsey By section 2(2) the Court must first determine whether the defendant has benefited from drug trafficking. By section 2(3) a person has benefited from drug trafficking if he has at any time received any payment or other reward in connection with drug trafficking carried on by him or another person. By section 2(4) if the Court determines that the defendant has benefited the Court must, before sentencing or otherwise dealing with him in respect of the offence or offences, determine the amount to be recovered from him by way of a confiscation order. The amount to be recovered under a confiscation order is determined by section 5. Section 5(1) states that the amount to be recovered is the amount the Court assesses to be the value of the defendant’s proceeds of drug trafficking. By section 5(3) the amount of a confiscation order is limited to the sum which might be realised at the time the confiscation order is made. What may be realised is defined by section 6(1) as the total of the values at that time of all the realisable property held by the defendant, less the total amount payable in pursuance of obligations having priority at that time. Realisable property is defined as any property held by the defendant and any property held by a person to whom the defendant has directly or indirectly made a gift caught by the 2000 Law. Obligations having priority are very narrowly defined and restricted to previously imposed fines and what would otherwise be preferred debts. The value of the drugs recovered is not taken into account following the Court of Appeal decision in Law Officers of the Crown v White [1993] 16 GLJ 88. Section 2(5) provides that the Court must then order the defendant to pay the amount to be recovered as determined under section 5. The Court must also take account of the confiscation order before imposing any fine or making any other order involving any payment by him or a forfeiture order pursuant to section 26 of the Misuse of Drugs (Bailiwick of Guernsey) Law 1974, as amended, (see above). Apart from this requirement the order is left out of account when determining the proper sentence. The standard of proof required to determine any question arising under the 2000 Law as to whether any person has benefited from drug trafficking or the amount to be recovered is that applicable in civil proceedings, ie the balance of probabilities.98 Section 3 gives power to the Court to postpone confiscation order determinations where further information is required99 or where the defendant appeals against conviction.100 When assessing the proceeds of drug trafficking section 4 provides that any payments or other rewards received by a person at any time in connection with drug trafficking carried on by him or another person are his proceeds of drug trafficking. Furthermore the Court is required to make certain assumptions when determining whether the defendant has benefited from trafficking and assessing the value of proceeds. The assumptions are that any property held by the defendant at 98
See s 2(7). Prima facie the postponement must not be longer than 6 months, see s 3(3) but note also the powers at ss 13 to 15. 100 Again there is a prima facie limit of 3 months. 99
Criminal Courts and Procedure 559 any time since his conviction or transferred to him at any time during the period of six years leading up to the commencement of criminal proceedings was received by the defendant as a payment or reward in connection with drug trafficking. Likewise any expenditure made within the same periods is deemed to have been met out of payments received in connection with drug trafficking. Any property received by the defendant is deemed to have been received free of any other interests in it. The burden therefore shifts to the defendant to displace the statutorily imposed assumptions and the Court is required to state its reasons if a required assumption is not in fact to be made.101 Section 7 provides that property is to be valued in accordance with its market value subject to any (admissible) encumbrances, alternatively the value of the asset to the defendant. Section 8 is another key provision concerning the property liable to attack. By this section a gift is “caught” (sic) by the Law if made by a defendant at any time during the six years leading up to the institution of criminal proceedings, or at any time if the gift was of property received by the defendant in connection with drug trafficking carried on by him or another or represented such property in his hands. Section 9 contains the central enforcement provision of the confiscation order régime whereby the Court may, if it thinks fit, order the defendant to be imprisoned in default of payment of the amount stated in the confiscation order. Invariably such a default sentence of imprisonment is ordered and is additional to the substantive punishment itself. Section 9(2) sets maximum periods of imprisonment which may be ordered for confiscation orders up to a certain amount. Thus where a confiscation order is for an amount of between £5,000 and £10,000 the maximum period of imprisonment which may be ordered to be served in default is six months. For a confiscation order exceeding £1 million the maximum period is 10 years. The extra sentence of imprisonment may be deferred upon such terms as the Court thinks fit; those terms generally relate to the time during which the monies must be paid. Where part payments are made the default period of imprisonment is reduced proportionately; however, serving the default term of imprisonment does not extinguish the liability to pay the confiscation order sum.102 Sums payable under confiscation orders carry interest at the judgment debt rate. Section 11 provides for the service of what amounts to a pleading called a prosecutor’s statement setting out relevant matters in connection with determining 101 In the case of Phillips v UK (2001) The Times 13 August, 11 BHRC 280 the European Court of Human Rights held that the statutory assumptions at s 4 of the English Drug Trafficking Act 1994 did not contravene Art 6 of the Convention. See now also the House of Lords cases of R v Rezvi [2002] 1 All ER 801 and R v Benjafield [2002] 1 All ER 815 to the effect that article 6(2) of the Convention (ie everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law) does not apply to confiscation proceedings under the English legislation. Confiscation proceedings were part of the sentencing process and did not involve a fresh criminal charge. Nevertheless the individual was protected by the general right under Art 6(1) to a fair hearing. The Act was a proportionate response to the problem it addresses. Arguments based upon Art 1 of the First Protocol were similarly disposed of. Undoubtedly this approach would be adopted by the Guernsey Court. 102 See s 9(8).
560 The Laws of Guernsey whether the defendant has benefited from drug trafficking and/or assessing the value of his proceeds of drug trafficking. The defendant may be required to respond to the statement and to give particulars of any matters on which he proposes to rely. If he fails to respond when required to do so he may be treated as accepting every allegation made save, curiously, any allegation that he has benefited from drug trafficking or that any payment or other reward was received by him in connection with drug trafficking carried on by him or another person. The required assumptions will still prevail though. By section 12 the Court may order the defendant to give to the Court such information as it may specify. If the defendant fails, without reasonable excuse, to comply with the order the Court may draw such inference from that failure as it thinks fit. Sections 13 to 15 give the Court wide powers to revisit firstly the question of whether to proceed with confiscation order proceedings, secondly to reassess whether the defendant has benefited from drug trafficking and thirdly to revise the assessment of proceeds of drug trafficking. There is a quasi-limitation period of six years from the date of conviction in which such powers may be exercised.103 Section 16 permits the Court to increase the value of a confiscation order where there has been an increase in the estimate of the amount which will be realised with the liquidation of the defendant’s assets, limited however to the original valuation of the total proceeds, unless also varied upwards pursuant to section 15. The corollary is at section 17 where power is given to reduce the amount of the confiscation order. In each case the default sentence of imprisonment will increase or decrease in line with the new level of the confiscation order. At section 18 there are what will doubtless be little-used provisions permitting compensation to be paid to defendants where proceedings do not result in convictions or convictions are subsequently quashed or there is a pardon. If a person dies or absconds after conviction of a drug trafficking offence the Court may proceed nevertheless to exercise its powers to make a confiscation order, likewise if the defendant absconds before conviction. In this last case the confiscation order may not be made within two years of the date of absconding.104 There are certain other pre-conditions to the exercise of these powers, including one that HM Procureur must have taken reasonable steps to contact the absconder. Unlikely images are brought to mind involving postcards. There are powers to vary a confiscation order made under section 19 where the absconder is found, likewise power to pay compensation if he is subsequently acquitted. Sections 25, 26, 27 and 28 provide supplemental means to assist the enforcement of an anticipated confiscation order. Where proceedings have been instituted in the Bailiwick against a defendant or an application has been made under one of sections 13 to 19 and the proceedings or application have not been concluded and 103
Note the pre-conditions for the exercise of the powers. Although the House of Lords has now held that there is a discretion to proceed with the trial of a defendant who is voluntarily absent from the outset, likewise that this is not inconsistent with Convention rights; see the case of R v Jones [2002] 2 WLR 524. 104
Criminal Courts and Procedure 561 the Court is satisfied that there is reasonable cause to believe either that the defendant has benefited from drug trafficking or that the grounds for a revised assessment of a confiscation order or certification of an increase in realisable property exist the Court may make either a restraint order or a realty charging order or a personalty charging order. A restraint order is an order whereby the Court may prohibit any person from dealing with any realisable property held by a specified person, whether the property is described in the order or not. The order may also apply to property transferred to that person after the order is made. HM Sheriff may be appointed as receiver to take possession of any such realisable property and to manage the property in accordance with the Court’s directions. Any person holding property may be directed to give possession of it to HM Sheriff. Where a restraint order has been made HM Sheriff or an Officer of Police may seize realisable property to prevent its removal from the Bailiwick.105 A realty charging order is defined by section 27(2) as an order imposing a charge on any realisable property consisting of real property situated in the Bailiwick for securing the payment of money to the Crown. The order may be made both in anticipation of the making of a confiscation order and after the confiscation order; this seems to be by contrast to the restraint order.106 Prior to the making of a confiscation order the amount which may be charged against the realty is the value of the property itself and thereafter the amount of the confiscation order. In both cases the realty charging order is to be registered forthwith either in the Livre des Hypothèques, Actes de Cour et Obligations at the Greffe in Guernsey, or in the Alderney Land Register, or at the Greffe in Sark, as the case may be. A realty charging order has the same effect as a Preliminary Vesting Order in favour of the Crown; however the Crown remains entitled to levy execution against the defendant’s personalty notwithstanding.107 A personalty charging order may be made against any interest in real property situated in the Bailiwick not being real property itself, eg a long lease, any interest in securities of the States of Guernsey, the States of Alderney or the Chief Pleas of Sark, any Bailiwick company, any corporate body registered in a register kept in the Bailiwick, any interest in units of any collective investment scheme where registration is carried on in the Bailiwick, any interest in a Bailiwick-registered vessel and against dividends or interest payable in respect of the above. The personalty charging order has effect as an absolute assignment to the Crown of the interest 105 See s 26(6). This provision appears to be the underlying purpose of the power; ie to go out once the order has been made and to seize property in order to prevent its removal. See also the case of CPS v Compton LTL 27 November 2002 for the power of the Court to pierce the corporate veil in appropriate circumstances when making a restraining order. 106 There is no equivalent express provision for the restraint order, although there seems no reason why, in principle, a restraint order should not be used as an accessory to enforcement of a confiscation order; much turns on the point at which proceedings are deemed to have been concluded. In any event a simple injunction could be sought. 107 Note that both restraint and realty charging orders may be obtained ex parte if the circumstances justify such an application, see s 25(5).
562 The Laws of Guernsey concerned, alternatively a security interest within the meaning of the Security Interests (Guernsey) Law 1993. The order can again be made before or after the making of a confiscation order itself. Sections 29 to 31 provide for the realisation of property where a confiscation order has been made which has not been satisfied and is not subject to appeal. The Court may again appoint HM Sheriff as receiver and empower HM Sheriff to enforce any of the charges imposed pursuant to sections 27 and 28. Realisation of property would, of course, extend also to restrained property. Realisable property subject to a restraint order or the proceeds of property realised by HM Sheriff is excluded from a person’s estate for the purposes of désastre proceedings. Likewise where realisable property is held by a Bailiwick company its liquidator may not exercise his powers in relation to property which is subject to a restraint order or has been realised by HM Sheriff. The effect of these provisions is to give absolute priority to the enforcement of confiscation orders over the interests of any creditors. As regards the property rights of third parties affected by confiscation proceedings see the case of R v Norris [2001] 1 WLR 1388. A wife had given evidence in confiscation proceedings brought against her criminal defendant husband. The Crown Court Judge had rejected her claim. The House of Lords held that this was no bar to the wife (re-)asserting her property claims in civil proceedings.108 A curiously weak exemption from civil liability is given to HM Sheriff which does not extend even to negligent acts. Presumably this is to avoid strict liability in conversion only. Provision is made by section 35 for an ordinance to be made permitting the enforcement of foreign confiscation orders which are described by the Law as “external confiscation orders”. The scheme is to apply relevant provisions of the Bailiwick law directly to external confiscation orders in order to permit efficient enforcement.109 By section 36 a parallel procedure appears to be provided whereby external confiscation orders may, on the application of HM Procureur, be registered by the Ordinary Court with a view, it seems, to enforcement within the Bailiwick. THE VIENNA CONVENTION
Part II of the 2000 Law incorporates the Vienna Convention into domestic law.110 By section 38 an offence is created of manufacturing or supplying a scheduled 108 See also Commissioners of Customs & Excise v A [2002] EWCA Civ 1039 where it was held that proceedings to enforce a confiscation order did not preclude the Court from making a property adjustment order in ancillary relief proceedings. Note that quite a complex jurisprudence has grown up concerning confiscation orders generally; see for example the technical requirement under the equivalent English legislation for a formal postponement order to be made with regard to confiscation proceedings before a sentence is passed; see R v Mills LTL 15 January 2002. 109 See the Drug Trafficking (Bailiwick of Guernsey) Law (Designated Countries and Territories) Ordinance 2000 and the Drug Trafficking (Designated Countries and Territories) (Amendment) Ordinance 2002. 110 The United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances signed in Vienna 20 December 1988. The Convention is an attempt to strengthen international co-operation in combating the illicit trade in drugs. Signatory countries were required to
Criminal Courts and Procedure 563 substance knowing or suspecting that the substance is to be used in or for the unlawful production of a controlled drug. This is a reference to substances specified in schedule 1 characterised by their usefulness in the manufacture of controlled drugs. The offence created is an either way offence with a maximum sentence of 14 years imprisonment on conviction on indictment. Provision is made for regulations controlling the production and transportation of scheduled substances. An offence is also created of failing to comply with the proposed regulations or furnishing false information. Sections 40 to 43 concern offences at sea. Section 40 provides that anything which would constitute a drug trafficking offence if done on land in the Bailiwick constitutes that offence if done on a ship registered in the Bailiwick. The necessary implication being that it matters not where the ship actually is.111 A broad offence is created by section 41(2) whereby a person on a ship who has a controlled drug in his possession or is in any way knowingly concerned in the carrying or concealing of a controlled drug on a ship, knowing or having reasonable grounds to suspect that the drug is intended to be imported or has been exported contrary to section 2(1) of the Misuse of Drugs (Bailiwick of Guernsey) Law 1974 or the law of any other state or territory is guilty of an offence. The ship concerned must be either a Guernsey ship, a British ship, a ship registered in a Convention State or a ship not registered in any country or territory at all. Sentences for the section 41 offence range from life imprisonment on conviction on indictment for a Class A drug to five years on indictment for a Class C drug. Enforcement powers are given by section 42 and schedule 2 of the 2000 Law. However the schedule 2 powers may only be exercised within Bailiwick territorial waters. Those powers comprise essentially the right to board, search, take samples of and test whatever is found, together with the power to arrest the vessel and crew and to take them to a Bailiwick port. Reasonable force may be used. A general exemption from civil or criminal liability is given to enforcement officers acting in good faith and on reasonable grounds; offences are created for those obstructing or failing to comply with an enforcement officer’s requirements. HM Procureur may authorise a Convention state to exercise powers corresponding to the schedule 2 powers in relation to a Guernsey ship.112 Section 43 states that proceedings under Part II or schedule 2 in respect of an offence on a ship may be taken, and the offence may for all incidental purposes be treated as having been committed, within the Bailiwick.
incorporate certain measures into their domestic legal systems. The first paragraph of the preamble to the Convention sets the scene: “Deeply concerned by the magnitude of and rising trend in the illicit production of, demand for and traffic in narcotic drugs and psychotropic substances, which pose a serious threat to the health and welfare of human beings and adversely affect the economic, cultural and political foundations of society, . . .”. 111 By way of example this corresponds to the obligation at Art 4(1)(a)(ii) of the Convention. 112 Ie when a Guernsey ship is outside Bailiwick waters.
564 The Laws of Guernsey Mutual Assistance Sections 44 to 49 contain provisions for mutual assistance between the Bailiwick and other jurisdictions as regards service of process, provision of evidence, search and seizure of material relevant to an overseas investigation and enforcement of external forfeiture orders.113 The provisions permit summonses to be served requiring persons to appear as defendants or witnesses in criminal proceedings, albeit with limited legal effect. Letters of request may also be sent and received permitting evidence to be obtained in or on behalf of a foreign jurisdiction. The preconditions to the issue of a search warrant in support of an overseas investigation are that criminal proceedings have been instituted against a person in the requesting Convention State or a person has been arrested and the conduct constituting the alleged offence would constitute a drug trafficking offence if it had occurred in any part of the Bailiwick and there are reasonable grounds for suspecting that there is on premises in the Bailiwick occupied or controlled by that person, evidence relating to the offence other than matter subject to legal professional privilege.114 Importation or Exportation of Drug Trafficking Money Part III of the 2000 Law concerns the importation or exportation of drug trafficking money. By section 52 an Officer of Police may, with the consent of HM Procureur, seize and detain any money which is being imported into or exported from the Bailiwick if the amount concerned exceeds £10,000 and the Police Officer has reasonable grounds for suspecting that it represents, whether directly or indirectly, any person’s proceeds of drug trafficking or is intended for use in drug trafficking.115 Detention of the money in excess of 48 hours must be authorised by the Bailiff or, in Alderney, by the Chairman of the Court of Alderney or the Sénéschal in Sark. Periods of detention may not exceed three months at a time and the total period may not exceed two years. There are powers to direct the release of monies in appropriate circumstances. Note that there is no equivalent provision, as yet, in the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law 1999, although there is more than one way to skin a cat.116 113 See also the Drug Trafficking (Bailiwick of Guernsey) Law (Enforcement of External Forfeiture Orders) Ordinance 2000. 114 See now also the Criminal Justice (International Co-operation) (Bailiwick of Guernsey) Law 2001 which makes general provision for international co-operation in criminal investigations. 115 See the case of HM Customs v Duffy (2002) Crim LR 583 for a failed attempt to avoid this provision. The three respondents were booked on a flight to Malaga sitting next to each other. Two respondents were carrying £7,000 each and the third £6,000 which they claimed was spending money for a one week holiday. It was held that the reality of the situation was to be considered. Here the common source and common destination of the monies meant that there was in reality a single exportation exceeding the £10,000 threshold. If the respondents had truly been unconnected there could have been no aggregation. 116 Eg by invoking powers vested in the Guernsey Financial Services Commission. It would also take no great stretch of the imagination to use purely civil remedies with HM Procureur acting in a representative capacity, ie as partie publique. See also the Theft (Bailiwick of Guernsey) Law 1983 which is considered in detail below.
Criminal Courts and Procedure 565 By section 53 the Ordinary Court may order the forfeiture of any money seized under section 52 if satisfied that the money directly or indirectly represents any person’s proceeds of drug trafficking or that it was intended the money should be used in drug trafficking. The standard of proof is again that applicable to civil proceedings. There is a right of appeal against a forfeiture order to the Full Court. The appeal must be made within thirty days of the forfeiture order and takes the form of a re-hearing. Offences Connected with Drug Trafficking Proceeds Part IV of the 2000 Law creates offences in connection with the proceeds of drug trafficking. They target, in particular, dishonest professionals who assist drug traffickers with the management or disposal of their drug trafficking proceeds. By section 57 a person is guilty of an offence if he conceals or disguises any property which directly or indirectly represents his proceeds of drug trafficking or if he converts or transfers that property or removes it from the Bailiwick for the purpose of avoiding prosecution for a drug trafficking offence or the making or enforcement of a confiscation order. A similar offence is created where the purpose is to assist any person to avoid prosecution or the making or enforcement of a confiscation order. Section 58 creates an offence of entering into or being concerned in an arrangement whereby a person’s retention or control of the proceeds of drug trafficking is facilitated or those proceeds are used to obtain funds for a person or to acquire property by way of investment, knowing or suspecting that the person concerned is a person who carries on or who has carried on drug trafficking or who has benefited from drug trafficking. By section 59 it is an offence to acquire or use property or have possession of it knowing that it is or represents another person’s proceeds of drug trafficking. It is a defence if adequate consideration has been given for such property. By section 60 it is an offence not to disclose to a Police Officer, as soon as is reasonably practicable, knowledge or suspicion acquired in the course of a trade, profession, business or employment that another person is engaged in drug money laundering. This is a particularly strong offence based, as it is, on inactivity. By section 61 a person is guilty of an offence if he discloses to another person information likely to prejudice a drug money laundering investigation where he either knows or suspects that an Officer of Police is acting or proposing to act in connection with such an investigation. The offence is known colloquially as “tipping-off ”. There are various defences provided to these offences based upon lack of knowledge of the true nature of the drug trafficking proceeds, or that what was done was done with the consent of the Police or that disclosure was made to the Police of the material event as soon as reasonably practicable or that there was a reasonable excuse for failing to do so. There is a general immunity given to those making
566 The Laws of Guernsey disclosures to the Police of drug money laundering activities where otherwise they might be in breach of any obligation as to secrecy. Legal advisers are exempted from disclosure obligations where legal professional privilege applies, but this expressly excludes actions with a view to furthering any criminal purpose. It is noteworthy that offences under this Part of the Law require guilty knowledge. Enforcement and Miscellaneous Provisions Part V of the Law contains miscellaneous and supplemental provisions. By section 63 an Officer of Police, with the consent of HM Procureur, may apply on oath to the Bailiff for an order that a person in possession of material likely to be of substantial value to an investigation, which does not consist of items subject to legal professional privilege or excluded material, must produce the material to the Police Officer or give access to it. Excluded material means personal records or journalistic material held in confidence. Personal records are very narrowly defined to include records relating to a person’s physical or mental health and any counselling he may have received. By section 64 an Officer of Police, again with the permission of HM Procureur, may apply to the Bailiff on oath for a warrant to enter and search premises for the purposes of an investigation into drug trafficking. Again there are a set of preconditions to be fulfilled comprising either non-compliance with a section 63 order or reasonable grounds for suspecting a specified person has carried on or has benefited from drug trafficking and it is not practicable to communicate with the person entitled to produce the material or to grant access or that the investigation would be seriously prejudiced unless an Officer of Police could secure immediate access to the material. In the alternative there must be reasonable grounds for suspecting that there is on the premises material likely to be of substantial value to the investigation and communication is impracticable or the investigation will be seriously prejudiced. Where a warrant is granted material may be seized and retained, save items subject to legal professional privilege or excluded materials. By section 66 there are tipping-off offences concerning section 63 and section 64 orders. By section 67 power is given to obtain material in the possession of a States department. Section 73 contains transitional provisions. Part I, ie the provisions as to confiscation orders, do not apply to any proceedings for an offence committed before the date upon which the 2000 Law comes into force,117 or in relation to proceedings instituted before that date. The 1988 and 1992 Laws118 continue to apply in such circumstances. Schedule 4 sets out in greater detail the general transitional provisions and savings. In essence anything done under or for the purposes of any 117 1 January 2001, see the Drug Trafficking (Bailiwick of Guernsey) Law 2000 (Commencement) Ordinance 2002. 118 The Drug Trafficking Offences (Bailiwick of Guernsey) Law 1988 and the Drug Trafficking (Amendment) (Bailiwick of Guernsey) Law 1992.
Criminal Courts and Procedure 567 provision repealed or revoked by the 2000 Law has effect as if done under any corresponding provision of the 2000 Law. The net effect of the transitional provisions is that the replaced or revoked Laws continue to have effect as regards proceedings instituted but not concluded before the commencement date of the new Law but anything done within such proceedings or earlier proceedings has effect under the equivalent provisions of the new Law. The chief change from the 1988 to the 2000 Law is to remove the positive obligation to investigate the possibility of making a confiscation order in every case. By section 1(1) of the 1988 Law the Court was required to embark upon confiscation order proceedings whenever a person appeared before it to be sentenced in respect of one or more drug trafficking offences. Under the 2000 Law the Court is only required to embark upon confiscation order proceedings where HM Procureur applies or the Court otherwise deems it appropriate to do so. The only Guernsey Court of Appeal case to look at the earlier Drug Trafficking Offences (Bailiwick of Guernsey) Law 1988 in any detail was the case of Law Officers of the Crown v Ribeyre (2000) 5 April where the defendant attempted to appeal the making of a confiscation order and associated sentence in default. His appeal was dismissed but the workings of the Law were explained. It was noted, in particular, that the determination of the total value of a defendant’s proceeds of drug trafficking acted as a ceiling to the amount of the confiscation order. The amount in fact ordered to be paid would be limited to the value of realisable property at the time of the making of the confiscation order, but if that value was subsequently found to be higher the Court could, on application, increase the amount to be confiscated up to the new realisable value but could not exceed the assessed total value of proceeds of drug trafficking. That valuation may itself be separately reassessed under (s 15 of the 2000 Law). The Court is therefore concerned to identify the total potentially eligible to confiscation but then to order the amount which can in fact be realised. If either estimate proves to be inaccurate variation is possible.
MONEY LAUNDERING AND RELATED LEGISLATION
The Bailiwick is particularly sensitive to allegations that it either harbours or promotes money laundering. The combination of the Financial Services Commission and a raft of powerful criminal and regulatory legislation goes a considerable way to rebut any such charges.119 No one could doubt seriously the determination of Guernsey to combat financial crime. The focus in this section is on the criminal legislation but reference must also be made to the section concerning financial services regulation. There is a real sense in which the criminal and the regulatory régimes form a single body of legislation in this context. The regulatory legislation is not only concerned with ensuring competence and prudence but also the 119 It is fair to say that the Bailiwick trades upon its good reputation. Accordingly it guards that reputation zealously whilst also insisting on a level playing field with continental jurisdictions, notably Switzerland. This is the stance it has taken in successful negotiations with the OECD.
568 The Laws of Guernsey prevention of crime, which brings it into close contact with the more purely criminal legislation relating to financial crime and the tools provided to combat it. The central criminal laws currently in force begin with the Criminal Justice (Fraud Investigation) (Bailiwick of Guernsey) Law 1991.120 THE CRIMINAL JUSTICE (FRAUD INVESTIGATION) (BAILIWICK OF GUERNSEY) LAW 1991
The Fraud Investigation Law mirrors equivalent provisions in the Criminal Justice Act 1987121 (which extended to Guernsey for a time). English case-law both as regards the 1987 Act and other similar provisions in English statute law is therefore of assistance in understanding the Guernsey provisions. By section 1(1) of the 1991 Law certain pre-conditions are required to exist before HM Procureur may act. It must appear to him on reasonable grounds that there is a suspected offence involving serious or complex fraud, wherever committed, and that there is good reason to exercise the conferred powers for the purpose of investigating the affairs, or any aspect of the affairs, of any person. It is noteworthy that the fraud need only be serious or complex. It need not be both, nor need it be of particularly high value. A key aspect of the Law is the fact that it may be used to assist the investigation of serious or complex fraud wherever committed. If HM Procureur is satisfied of these preliminary matters he may issue notices in writing requiring information to be furnished and/or documents to be produced with regard to any matter relevant to the investigation. The notices may be addressed to the person whose affairs are to be investigated. A notice requiring information may also be issued to any other person who HM Procureur has reason to believe has relevant information. Likewise a notice may be served upon any person as regards documents. The notice must specify the time and place at which the requirements of the notice must be complied with. The notice must specify the documents concerned or at least state specified classes of documents. If documents are produced HM Procureur may take copies or extracts from them and may require the person producing them to provide an explanation of any of them. If documents are not produced HM Procureur may require the person served with the notice to state where they are. See generally section 1(2) and (3). By section 1(4) the Bailiff may issue a warrant authorising the Police to enter and search premises and to take possession of any specified documents if HM Procureur satisfies the Bailiff on information on oath that there are reasonable grounds for believing that: (i)
a person has failed to comply with an obligation under s.1 to produce them; (or)
120 Note that the drug trafficking proceeds provisions of the Drug Trafficking (Bailiwick of Guernsey) Law 2000 should also be recalled in this context.
Criminal Courts and Procedure 569 (ii) it is not practicable to serve a notice in relation to them; or (iii) the service of such a notice might seriously prejudice the investigation; and (in each case) (iv) that the documents are on the premises specified in the information. A statement obtained from a person in response to a requirement imposed upon him by the 1991 Law may only be used against him in a prosecution for an offence of making a false or misleading statement in response to a requirement of the Law contrary to section 1(12) or when being prosecuted for some other offence where the person concerned makes an inconsistent statement.122 There is an important saving by section 1(8) whereby a person cannot be required to disclose information or produce documents protected by legal professional privilege, save that a lawyer may be required to give the name and address of his client. By section 1(9) a person cannot be required to breach an obligation of confidence unless that person consents to the disclosure or production or HM Procureur has authorised the requirement to be made. This applies typically to a banker who may therefore be required to breach his confidential obligation, and usually is. Section 1(10) gives power to HM Procureur to authorise any person to exercise on his behalf all or any of the powers conferred by section 1 of the 1991 Law. This extends to members of foreign Police forces investigating overseas crimes with a Channel Island connection. As a matter of good practice a member of the Island Police should be present if officers from another jurisdiction are concerned; this should be insisted on if time and circumstances permit. Typically some notice is given of the intention to serve a notice under the 1991 Law depending upon the respectability of the person or institution to be served.123 The location where information is to be supplied, questions to be answered, documents to be produced and accounts given of those documents is usually the office of the person served with the 1991 Law notice. There are various offences set out in the 1991 Law ranging in seriousness from failing without reasonable excuse to comply with a requirement imposed by the 1991 Law to falsifying, concealing, destroying or otherwise disposing of documents which a person knows or suspects are or would be relevant to an investigation. The former is a summary only offence with a penalty of up to six months imprisonment or a fine not exceeding level 5 or both whereas the latter carries a potential sentence of imprisonment of up to seven years or a fine or both. The Criminal Justice (Fraud Investigation) (Bailiwick of Guernsey) (Amendment) Law 2002 has filled a lacuna in the 1991 Law by adding at section 2A a “tipping off ” offence in relation to a 1991 Law investigation. Here the maximum penalty on conviction on indictment is five years imprisonment and/or a fine. 121 122 123
As amended. Whether this is any protection at all is considered under the section on the Insurance Laws. See now also the case of Holland v HM Procureur discussed below.
570 The Laws of Guernsey By s.2 of the Law HM Procureur or a person duly authorised under section 1(10) of the Law may disclose information obtained pursuant to the Law to any other person or body for the purposes of any investigation of an offence or prosecution in the Bailiwick or elsewhere. In addition information may be disclosed to a competent authority or to the Administrator of the States of Guernsey Income Tax Authority. A competent authority is broadly defined as “any person or body having supervisory, regulatory or disciplinary functions in relation to financial services, any profession or any area of commercial activity” and includes any person having corresponding functions under the law of any country or territory outside the Bailiwick. A competent authority also includes “any person appointed to investigate the affairs of a company in the Bailiwick or elsewhere”.124 A person cannot be compelled under the Law to produce a witness statement or deposition. However, he may be compelled to answer questions or furnish information with regard to any matter relevant to the investigation and/or to provide an explanation of any documents actually produced to the authorised officers executing the notice. Those answers will be recorded. The terms of the notice itself should be considered very carefully; likewise any warrant. If either the notice or warrant are too widely drawn or lack the specificity required by the Law then there may be grounds for challenge. Particular attention should be had to English case-law concerning the validity of search warrants and remedies when unlawful searches are made. The likely areas of challenge include the failure of a warrant to state on its face the grounds permitting its grant pursuant to the Law; an allegation that no reasonable Bailiff, properly informed, could have found that the conditions for the grant of the warrant were made out; the drawing of a warrant too widely and the grant of a warrant so wide that it amounts to a fishing expedition.125 Equally it is important to note in this context and elsewhere that a financial services institution served with a (1991 Law) notice is not only prima facie obliged to act upon it but also entitled to rely upon it and to comply with the notice.126 Until the 1998 Court of Appeal case of Bassington v HM Procureur 127 it was believed there was no judicial remedy or other legal accountability as regards the exercise by HM Procureur (or HM Comptroller) of the 1991 Law powers. Bassington is a landmark decision in Guernsey law because it confirms the existence of judicial review as a remedy. The 1991 Law also happened to be the background to the case.128 124
See the amendments made to s 2 of the 1991 Law by the 2002 Amendment Law noted above. See for example the case of R v Home Secretary ex parte Fininvest [1996] 1 WLR 743. 126 See the English case of Barclays Bank Plc v Taylor [1989] 1 WLR 1006; see also what is still the leading English expression of the banker’s duty of confidentiality in the case of Tournier v National Provincial [1924] 1 KB 461. In Rea Bros. (Guernsey) Limited v SEC [1986] 3 GLJ 59 the Deputy Bailiff held (unsurprisingly) that banks owed a contractual duty of privacy to their customers; see also [1986] 4 GLJ 61. 127 [1998] 26 GLJ 86. 128 See also the Jersey case of Acturus Properties Limited v HM Attorney General (2001) 12th January, where a similar conclusion was reached in the equivalent Jersey context. The chances of a successful challenge are likely to be slim. See the section on the review of administrative decisions. 125
Criminal Courts and Procedure 571 Guidance as to the issue of 1991 Law notices was given by the Bailiff in the case of Holland v HM Procureur:129 “I would . . . hope that two lessons are learnt from this case. Firstly, that these notices must be served in good time to enable persons who receive them to obtain advice and raise proper queries concerning them. Secondly, the notices should be accompanied by a side letter from the Law Officer giving as much detail with regard to the background of the investigation as is deemed appropriate. I accept that the detail of what is appropriate in any particular case may have to be reviewed further in the future.”
The Bailiff also observed that he saw “nothing in the 1991 Law that precluded the investigation of serious and complex fraud upon governments whether in their capacity as tax collector or otherwise”; ie the fact that the offences being investigated were fiscal was irrelevant.130 The 1991 Law has force throughout the Bailiwick.
DISCLOSURE OF INFORMATION
By contrast the Money Laundering (Disclosure of Information) (Guernsey) Law 1995 has effect only in Guernsey, although an identical Law for Alderney was made in 1998. There is now also the Money Laundering (Disclosure of Information) (Sark) Law 2001. By these Laws it is expressly legislated that no obligation of secrecy or confidence shall be regarded as being contravened by a person disclosing any reasonable suspicion or belief that money or other property is, or is derived from or represents, the proceeds of criminal activity; likewise the disclosure of any information or document relating to any such money or property, any transaction concerning it or the parties to any such transactions. A person may also disclose any fact or matter upon which the suspicion or belief is based. By section 2 the disclosure must be made either to a Law Officer, a Police Officer, a Customs Officer or an Officer of the Guernsey Financial Services Commission authorised to receive such disclosures. There is no tipping-off offence provided for in this Law, but note the possibility of committing an offence under the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law 1999 or the Drug Trafficking (Bailiwick of Guernsey) Law 2000. The information disclosed is passed to the Financial Intelligence Service which, in turn, passes the information to the National Crime Investigation Squad for entry into their computer data base.
129
The judgment is dated 21 October 2002. See also the extension of extradition to fiscal offences by the European Convention on Extradition (Fiscal Offences) (Amendment) Order 2002. 130
572 The Laws of Guernsey
FALSE DOCUMENTS AND DOMICILE
The False Documents and Domicile etc. (Bailiwick of Guernsey) Law 1998 creates offences in relation to the provision of false documents, addresses or personal identities or the provision of any advice, service or facility for obtaining such. It is also an offence under the Law for a person to hold himself out or to cause or permit himself to be held out as being domiciled or resident in the Bailiwick falsely. It is an offence to issue an advertisement offering to provide any document, address or personal identity which is false. The word “document” is defined in the interpretation section (s 13) as anything purporting to be: (a) a passport or other statement indicating name, nationality, domicile, residence, address or rights of residence; (b) a driving licence or vehicular licence, registration plate or registration book; (c) any document or other statement of qualification or academic or professional achievement; (d) any document or other statement issued by or on behalf of a bank or similar institution; (e) any other document of a prescribed class or description. Guidance is given as to the meaning of the word “false”. A document includes information recorded in any form. There are wide enforcement provisions in Part II of the Law. The Bailiff may issue a search warrant if there are reasonable grounds for suspecting that there are on any premises documents likely to be of relevance to establishing whether or not an offence has been committed under the Law. A person acting under the authority of such a warrant may inspect and examine the premises and also require any person on the premises to reply to such questions and to furnish such information and documents as the Officer considers necessary for the purposes of his investigation. The Officer may also take copies of all such documents and seize them if necessary to protect them from interference or destruction. The Officer may require any other person to provide an explanation of all such documents. Section 6(5) provides that no obligation or duty of confidence shall be regarded as being contravened when a person complies with the requirements of the 1998 Law. By section 6(6) a person is entitled to refuse to disclose or produce information or documents where these would otherwise be protected by legal professional privilege, again a lawyer may be required to give the name and address of a client. There are familiar offences concerning the obstruction of an investigation or the making of false statements. There is a general defence of taking all reasonable steps and exercising all due diligence to avoid committing an offence under the Law. In practice it is difficult to see how this could be made out, save where the accused has himself been deceived.
Criminal Courts and Procedure 573 Penalties under the Law range from imprisonment for one month in Sark to three months in Guernsey and Alderney to two years on conviction on indictment. Fines may also be imposed not exceeding the usual level maximum in each summary Court and an unrestricted amount on indictment.
THE CRIMINAL JUSTICE (PROCEEDS OF CRIME) (BAILIWICK OF GUERNSEY) LAW 1999 131
The Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law 1999132 is the principal Law combating money laundering in the Bailiwick. It follows closely the form of the 1988 Drug Trafficking Offences Law, now superseded by the Drug Trafficking (Bailiwick of Guernsey) Law 2000. Confiscation Proceedings Section 1 of the 1999 Law makes a distinction between criminal conduct for the purposes of the Law and drug trafficking. The 1999 Law concerns only criminal conduct other than drug trafficking. Drug trafficking has its own, albeit very similar, régime. Familiar provisions as to confiscation orders, postponed determinations, the assessment of the proceeds of criminal conduct and the amount to be recovered under a confiscation order follow. As with drug trafficking the Court must, if HM Procureur so requests, determine first whether the defendant has benefited from criminal conduct. If such a determination is made the Court must then determine in accordance with section 5 the amount to be recovered from the defendant who must be ordered to pay that amount. The amount to be recovered is the amount the Court assesses under section 5 to be the value of the defendant’s proceeds of criminal conduct. The amount must be limited to the amount which is capable of being realised from the liquidation of realisable property. When assessing the proceeds of criminal conduct under section 4 the Court is required to assume that any property held by the defendant at any time since his conviction or transferred to him during the period of six years ending with the commencement of criminal proceedings was received by him as a result of, or in connection with, criminal conduct carried on by him. Likewise any expenditure is assumed to have been met out of payments received by him in connection with criminal conduct. The property itself is assumed to have been received free of any other
131 Compare and contrast the UK Proceeds of Crime Act 2002 and the creation of an Assets Recovery Agency. Note the new concept of a “civil recovery order” which can be made if the court is satisfied that the material property was obtained through unlawful conduct (and whether or not criminal proceedings have been brought). 132 As amended by the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) (Amendment) Ordinance 2002; which has removed the requirement for HM Procureur’s consent to disclosures of information at s 44 of the unamended Law.
574 The Laws of Guernsey interest in it. These assumptions may be rebutted by the defendant if sufficient proof is adduced by him.133 Throughout the whole confiscation order proceedings the prosecution is required only to prove matters on the balance of probabilities as opposed to the heavier criminal standard of proof. This is obviously as opposed to the substantive criminal offence itself. By section 8 gifts made by the defendant at any time during the six years leading up to the commencement of criminal proceedings against him are also caught by the Law and taken into account as forming part of the value of his proceeds of criminal conduct. Likewise such gifts are liable to realisation in the execution of the confiscation order. The chief indirect means of enforcing any resulting confiscation order is again the imposition of a sentence of imprisonment in default of payment of the amount ordered to be paid by the Court. That sentence of imprisonment may be up to ten years where the amount of the confiscation order exceeds £1,000,000. The fact that such a default sentence is served does not prevent the order being enforced by any other means in addition. Thus if the defendant serves ten years consecutive to the substantive sentence imposed upon him and the prosecuting authorities subsequently discover the relevant proceeds of crime in a previously unknown bank account those monies may be seized notwithstanding the fact that the defendant has also served the sentence of imprisonment fixed in default. Note that the default term must always be served consecutively. The mechanism of serving a prosecutor’s statement is identical to the drug trafficking procedure as is the power to require the defendant to give information specified in an order made by the Court. There is the same power to reconsider the possibility of making a confiscation order, alternatively to re-assess whether the defendant has benefited from criminal conduct or to review the assessment of the proceeds of that criminal conduct; likewise the power to certify any increase in the value of realisable property within the limits of the total value previously identified. This does not prohibit a wholesale reassessment of that value. There are familiar provisions concerning the downwards variation of a confiscation order where realisable property proves to be inadequate; likewise the possibility of compensation. There is power to make a confiscation order where the defendant has either absconded or died. The same armoury in support of enforcement is available under the 1999 Law and comprises the restraint order, the realty charging order and the personalty charging order. Realisation of property is effected by the appointment of HM Sheriff or orders to persons holding realisable property to deliver the same to HM Sheriff. As with drug trafficking, property which is subject to a restraint order and all property in the hands of HM Sheriff is excluded from a person’s estate for the purposes of désastre. Equivalent provisions apply to a company and winding up.
133 Note again the case of R v Rezvi [2002] 1 All ER 801 for the failed Convention challenges to provisions of this nature.
Criminal Courts and Procedure 575 There is provision for the enforcement of external confiscation orders by, inter alia, registration in the Royal Court.134 Substantive Offences Under the 1999 Law Part II creates substantive offences in connection with the proceeds of criminal conduct and comprise the following: s 38 s 39 s 40 s 41
concealing or transferring proceeds of criminal conduct; assisting another person to retain the proceeds of criminal conduct; acquisition, possession or use of proceeds of criminal conduct; tipping-off.
These offences are identical to their drug trafficking counterparts. Maximum sentences range from imprisonment for a period not exceeding 12 months or a fine of up to level 5 or both on summary conviction to imprisonment for a term not exceeding fourteen years or a fine or both on conviction on indictment. A person is again protected if making a disclosure to a Police Officer of a suspicion or belief that any funds or investments are derived from or used in connection with criminal conduct. This protection extends not only to potential civil liability as regards breach of any confidential obligation but also as regards criminal liability if the disclosure is made before any criminal act is committed and the act is done with the consent of the Police or disclosure is made at the earliest reasonable opportunity on the discloser’s own initiative. These defences apply in respect of section 39 and 40 offences only. Part III contains various miscellaneous and supplemental provisions including power under section 45 for the Bailiff to order a person to produce material of a particular description to a Police Officer to take away or simply to give a Police Officer access to it. Production cannot be ordered of material which is covered by legal professional privilege. Alternatively, a search warrant may be issued by the Bailiff when, principally, an investigation might be prejudiced seriously unless a Police Officer can secure immediate access to the material. There are the usual offences of prejudicing an investigation. The 1999 Law is distinguishable from the drug trafficking Law by the fact that it does not contain the Vienna Convention provisions relating specifically to drug matters. Likewise there is no equivalent broad power, as yet, to seize cash as permitted by section 52 of the Drug Trafficking Law 2000. The 1999 Law instead makes specific provision permitting the Advisory & Finance Committee to make regulations in respect of the duties and requirements to be complied with by financial services businesses for the purposes of forestalling and preventing money 134 See also the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) (Enforcement of Overseas Confiscation Orders) Ordinance 1999 and the Criminal Justice (Proceeds of Crime) (Enforcement of Overseas Confiscation Orders) (Amendment) Ordinance 2002.
576 The Laws of Guernsey laundering (and terrorist financing). Those regulations are now set out in the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Regulations 2002 which themselves make reference to very much longer guidance notes.135
THE CRIMINAL JUSTICE (PROCEEDS OF CRIME) (BAILIWICK OF GUERNSEY) REGULATIONS 2002
Regulation 1 provides that no person in the course of any financial services business carried on by him in or from within the Bailiwick of Guernsey, may form a business relationship or carry out a one-off transaction, with or for another unless that person maintains identification, record-keeping and internal reporting procedures in accordance with the regulations and such other procedures of internal control and communication as may be appropriate for the purposes of installing money laundering and terrorist financing avoidance procedures as well as preventing money laundering and terrorist financing. There are positive requirements also to make employees aware of the procedures and the legislative framework; likewise to provide training and to maintain procedures for the fulfilment of notification requirements under the regulations. It is a criminal offence to contravene regulation 1, punishable on conviction on indictment by a sentence of up to two years imprisonment and/or a fine. Individual officers of a company or partners are also vulnerable to prosecution. In determining whether a person has complied with any of the requirements of regulation 1 the Court may take account of the guidance notes. What is a financial services business is set out in the schedule to the 1999 Law, as (now) substituted by paragraph 9 of the 2002 regulations and includes any person or body carrying on or providing services in or from within the Bailiwick of Guernsey in relation to (inter alia): (a) lending (including many forms of credit); (b) financial leasing; (c) money service businesses, including money transmission services, currency exchange (bureaux de change) and/or cheque cashing; (d) provision of financial guarantees; (e) trading for account customers (whether spot, forward, swaps, futures, options or otherwise) in money market transactions, foreign exchange, commodity futures and so on; (f) participating in securities issues; (g) settlement and/or clearing services for financial assets; (h) money broking/changing; (i) providing individual and/or collective portfolio management; (j) providing safe custody services; 135 The Guidance Notes on the Prevention of Money Laundering and Countering the Financing of Terrorism, issued by the GFSC.
Criminal Courts and Procedure 577 (k) accepting repayable funds other than deposits; (l) financial services businesses already subject to the regulatory laws; ie banking, investment, insurance and fiduciary business.136 The amended schedule broadens the definition of a financial service business to include businesses previously omitted and, in particular, financial service businesses not already regulated by the Commission, notably bureaux de change. The regulations impose notification requirements relating to the business, its ownership, control, money laundering reporting officer, criminal convictions of controllers and the types of financial service business carried out. Prima facie, lawyers, accountants and actuaries providing services of the kind set out at (a)–(k) above are included, save where such services are incidental to the provision of the relevant professional advice or services; which, so far as Advocates are concerned, is most if not all of the time. Regulations 3 to 7 state more fully the requirements for establishing the necessary procedures for the avoidance and prevention of money laundering and terrorist financing. The guidance notes themselves contain a great deal more information. The Financial Services Commission has produced a useful loose-leaf handbook137 which combines the following materials: (a) The Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Regulations 2002; (b) Guidance Notes138 on the Prevention of Money Laundering and Countering the Financing of Terrorism, themselves comprising general guidance under the headings of the duty of vigilance; verification (know your customer); recognition of suspicious customers/transactions; reporting of suspicion; keeping of records and training. There follow sections specifically directed at banking, investment business, fiduciary services and insurance with appendices summarising the relevant laws together with other training materials. The handbook is required reading for anyone concerned with financial services business in the Bailiwick.
THE EUROPEAN CONVENTION ON EXTRADITION (FISCAL OFFENCES) (AMENDMENT) ORDER 2002
By this United Kingdom statutory instrument139 the European Convention on Extradition (Fiscal Offences) Order 2001 was amended to extend the territorial 136
See the full list; these are only extracts. Known locally as the “Rainbow Book” on account of its spectral cover. Many of the materials can be downloaded from the GFSC website at www.gfsc.guernseyci.com. 138 Ie the guidance notes referred to in the regulations. 139 No 1830 of 2002. 137
578 The Laws of Guernsey application of the Second Additional Protocol to the European Convention on Extradition 1978 to the Channel Islands and Isle of Man. The net effect is to abrogate the common law rule that a (Guernsey) Court will not enforce foreign revenue laws to the extent that fiscal offences140 are now prima facie extraditable.
PREVENTION OF TERRORISM LEGISLATION
A detailed account of the Bailiwick’s anti-terrorism legislation is beyond the scope of this work. The legislation is, in any event, closely modelled on English legislation. The principal Law is the Terrorism and Crime (Bailiwick of Guernsey) Law 2002 which makes extensive provision for the following: (a) the proscription of organisations; (b) the prohibition of fund raising, terrorist money laundering and financial support for terrorism generally; (c) the seizure of terrorist assets; (d) terrorist investigation powers; (e) the obtaining of information and evidence; (f) counter-terrorist powers; (g) terrorist offences; and (h) police powers generally. On a day-to-day basis the most important provisions to be aware of are the positive duties imposed pursuant either to section 12 or section 15 to disclose to the Police knowledge relating to the commission or suspected commission of offences under the Law relating to terrorist fund raising, the use of money or other property for the purposes of terrorism, the making of funding arrangements for terrorism, or the entering into or becoming concerned in an arrangement which facilitates the retention or control of terrorist property (money laundering). The conditions for the duties arising vary slightly according to whether the subject is connected with financial services businesses or not, but the fundamental obligation is the same. It is an offence not to make the disclosure punishable on conviction on indictment by a sentence of up to 5 years imprisonment and/or a fine, but subject to certain statutory defences. Since 11 September 2001 the Terrorism (United Nations Measures) (Channel Islands) Order 2001 and the Al-Qa’ida and Taliban (United Nations Measures) (Channel Islands) Order 2002 have also come into force. These Orders create various offences in relation to activities supporting terrorism and provide extensive investigatory and enforcement powers.
140
Ie essentially offences in connection with taxes.
Criminal Courts and Procedure 579
THE THEFT (BAILIWICK OF GUERNSEY) LAW 1983
The Theft (Bailiwick of Guernsey) Law 1983 follows closely the English Theft Act 1978. The basic definition of theft is found in section 1 and comprises the dishonest appropriation of property belonging to another with the intention of permanently depriving the other of it. There is great potential complexity and scope for legal argument in respect of almost every element of the basic offence.141 What is noteworthy is the wide definition of property which, by section 4(1), includes money and all other property, real or personal, including things in action and other intangible property. By section 7 a person guilty of theft is, on conviction, liable to imprisonment for a term not exceeding ten years. By section 8 the statutory offence of robbery is created. This comprises stealing with the use of force or putting another in fear of being subjected to force. The maximum penalty is life imprisonment. Section 9 contains the offence of burglary which is complete as soon as a person enters a building or part of a building as a trespasser with intent to commit not only an offence of stealing but also with intent to inflict grievous bodily harm, rape or to cause unlawful damage to the building. Alternatively the offence is complete when a person enters a building or part of a building as a trespasser and steals or attempts to steal anything in the building or inflicts or attempts to inflict on any person grievous bodily harm. The offence of burglary is itself aggravated if a firearm, imitation firearm, offensive weapon or explosives are used. Aggravated burglary may be sentenced by imprisonment for life whereas simple burglary is punishable by imprisonment for up to 14 years.142 Section 12 contains the offence of taking a motor vehicle or other conveyance without authority. This is an easier allegation to prove than theft because there is no requirement to prove an intention to deprive permanently. Joy-riding would be charged in this way. By section 15(1) a person who by any deception dishonestly obtains property belonging to another with the intention of permanently depriving the other of it is liable to imprisonment for a term not exceeding 10 years.143 Deception extends not only to words but also conduct as to fact or as to law. Section 16(1) creates the offence of obtaining a pecuniary advantage by deception. This is restricted to obtaining employment, better pay, the opportunity to win money by betting, the opportunity to borrow by way of overdraft or to take out a policy of insurance or to improve the terms of the borrowing or insurance. The more general offence of obtaining services by deception is at section 17. The Theft 141 Note by way of example the extent of the case-law on the meaning of “appropriation”. The latest in a long line of cases is R v Hinks [2000] 4 All ER 833, where it was said by the House of Lords that appropriation is a neutral word comprehending any assumption of the owner’s rights. 142 See in this context the English sentencing guideline case of R v McInerney LTL 20 December 2002, which provoked a strong reaction at the time. 143 Ie obtaining by deception.
580 The Laws of Guernsey (Bailiwick of Guernsey) (Amendment) Law 1999 inserted section 17(2A) in order to extend the meaning of an obtaining of services to the circumstances where a person is induced to make a loan, or to cause or permit a loan to be made. The Theft Law has special relevance for financial crime in a number of the later sections. Thus by section 19(1) it is an offence for a person dishonestly, with a view to gain for himself or another, or with intent to cause loss to another, to destroy, deface, conceal or falsify any account or any record or document made or required for any accounting purpose. Likewise it is an offence to make use of any account, record or document which is known to be misleading, false or deceptive in a material particular. A sentence of up to seven years may be imposed for these offences which are commonly known as false accounting. By section 20 a body corporate may be guilty of the deception offences or false accounting. By section 21 it is an offence for a company officer to publish a written statement or account which, to his knowledge, is or may be misleading, false or deceptive, with an intention to deceive members or creditors of the company about its affairs. By section 22(1) it is an offence to destroy, deface or conceal any valuable security, will or any other specified document if this is done dishonestly and with a view to gain for oneself or another or with intent to cause loss to another. What is a valuable security is defined very broadly to include any document creating, transferring, surrendering or releasing any property right. A separate offence is created where a person dishonestly by any deception procures the execution of a valuable security with a view to gain for himself, or another, or with intent to cause loss to another. Section 23 sets out the offence of blackmail, which comprises the making of any unwarranted demand with menaces. Section 24 creates the offence of making off without payment. Section 25 contains the more significant offence (at least in the context of financial crime) of handling stolen goods. The word “goods” is again broadly defined to include money and every other description of property except land, and includes things severed from land by stealing.144 As with “property” the relevance lies in the fact that money is included within the definition. By section 25(1) a person handles stolen goods if, knowing or believing them to be stolen goods, he dishonestly receives the goods or dishonestly undertakes or assists in their retention, removal, disposal or realisation by or for the benefit of another person, or if he arranges to do so. A term of imprisonment of up to 14 years may be imposed for this offence, ie a potentially greater penalty than theft itself. This reflects the fact that a handler may be responsible for a great many thefts and be in a similar relationship to the thief as the drug dealer is to the courier.145 By section 27(1) the 1983 Law provisions relating to goods which have been stolen apply whether the stealing occurred in the Bailiwick or elsewhere, provided that the stealing (if not an offence under the 1983 Law) amounted to an offence where and at the time when, the goods were stolen. Accordingly there would be no 144 145
See s 42(2). See R v Barnett [2002] EWCA Crim 454 for a recent case in which handling was considered.
Criminal Courts and Procedure 581 difficulty proving an offence of handling goods stolen in England. Likewise, references to stolen goods include any other goods which directly or indirectly represent stolen goods, typically the proceeds of any disposal or realisation of the stolen goods.146 The significance is obvious in the context of transfers of stolen money to the Bailiwick. By section 32 exceptional provision is made for the admission of evidence relating to previous convictions or previous criminal conduct where a person is being proceeded against for handling stolen goods. By section 31(1) the Bailiff may grant a warrant to search for and seize stolen goods if satisfied by information on oath that there is reasonable cause to believe that any person has such goods in his custody or possession. Section 33(1) contains important provisions whereby the Court may order anyone having possession or control of stolen goods to restore them to any person entitled to recover them. The person entitled to recover may make application himself. The section is deliberately broad and extends not only to the person convicted of an offence but anybody who, at the time of conviction, has possession or control of the goods concerned, eg a bank. A conviction is a pre-condition to the exercise of these powers but it is sufficient that the property concerned relates only to another matter which the accused has asked to be taken into consideration.147 The Court has additional powers over monies found in the possession of an accused upon his arrest. These monies may be ordered to be paid to any person who would otherwise be entitled to recover goods from the accused. Alternatively the monies may be used to compensate a purchaser in good faith or a lender otherwise deprived of whatever has been recovered by the principal victim. Orders made pursuant to section 33 have suspended effect until either the time for appealing has expired or the appeal has been dealt with. There is no need to suspend a section 33 order if there is in fact no dispute as to the right to have the property restored, delivered or transferred.148 There are general provisions permitting accessories and abettors to be charged, tried and punished as principal offenders. These extend to any person who knowingly and wilfully aids, abets, counsels, procures or commands the commission of an offence under the 1983 Law. There is a separate penalty for anyone who acts with the intention of impeding the apprehension or prosecution of a person either knowing or believing him to be guilty of an offence under the 1983 Law. By section 38 a general offence of attempting to commit an offence under the 1983 Law 146
See s 27(2). The taking into consideration procedure (referred to as TICs) is a means by which an accused can wipe his slate clean relatively cheaply at the same time as being dealt with for the substantive criminal matters of which he has been convicted and/or is to plead guilty to. He is free to start a new life after serving whatever sentence is imposed for all the matters he has been convicted of and asked to be taken into consideration; at least this is the theory. Very serious matters would not be dealt with in this way. The procedure is popular with the Police because it improves their clear-up figures. The procedure may be adopted by agreement with the Police where there are a great many offences of a similar kind, eg multiple thefts from an employer. Sample charges are brought with the remainder taken into consideration. 148 See generally s 34. 147
582 The Laws of Guernsey is created. There is the usual power of a Court to convict of the attempt if the completed offence is not made out. The combination of section 33 (orders for restitution) and section 27 would permit a Bailiwick Court to order the restitution of stolen goods within the Bailiwick notwithstanding the fact that the stealing occurred outside of the jurisdiction; likewise the search warrant procedure at section 31 could be applied. These powers are additional potential weapons against financial crime within the Bailiwick which could be used in conjunction with the Criminal Justice (Fraud Investigation) (Bailiwick of Guernsey) Law 1991 and the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law 1999. The Theft (Bailiwick of Guernsey) (Amendment) Law 1999 adds two potentially important offences to the 1983 Law. By a new section 15A a person is guilty of an offence if by any deception he dishonestly obtains a money transfer for himself or another. By section 27A a person is guilty of an offence if he dishonestly retains a wrongful credit. These sections appear to be intended to overcome difficulties with the original Theft Law and Act in the context of theft of monies on deposit. The first offence is akin to a theft offence and the latter to a handling offence. The section 27A offence is broad in its possible application. A credit is wrongful not only when it derives from theft but also if it is the result of a section 15A offence or if it derives from blackmail or stolen goods. Given the broad definition in particular of goods to include money there is scope for imaginative and effective use of this provision. It should be noted that the 1983 Theft Law applies throughout the Bailiwick.
INSIDER DEALING
Guernsey has legislation criminalising insider dealing in company securities modelled closely on the equivalent English statute; see the Company Securities (Insider Dealing) (Bailiwick of Guernsey) Law 1986 as amended by the Company Securities (Insider Dealing) (Bailiwick of Guernsey) Law 2001 (concerning chiefly the provision of assistance to other jurisdictions). There is, as yet, no equivalent of the civil offence under the Financial Services and Markets Act 2000.149
GENERAL BAILIWICK CRIMINAL LEGISLATION THE CRIMINAL DAMAGE (BAILIWICK OF GUERNSEY) LAW 1983
The Criminal Damage (Bailiwick of Guernsey) Law 1983 follows closely the English Criminal Damage Act 1971. The basic offence is created by section 1(1): 149 But note the provisions of the Protection of Investors (Bailiwick of Guernsey) (Amendment) Law 2002.
Criminal Courts and Procedure 583 “A person who without lawful excuse destroys or damages any property belonging to another intending to destroy or damage any such property or being reckless as to whether any such property would be destroyed or damaged shall be guilty of an offence.”
Section 1(2) contains the aggravated criminal damage offence of intentionally or recklessly damaging property intending or being reckless as to whether the life of another would be endangered. This offence must be charged as arson when associated with fire and replaces the former common law offence.150 Other offences include making threats to destroy or damage property or possessing anything with intent to destroy or damage property. By section 12 the Bailiff has power to grant a search warrant permitting a Police Officer to enter premises and search for and seize anything which either has been or is intended to be used to destroy or damage property belonging to another. By section 13 the Magistrate’s Court is expressly given jurisdiction to hear and determine any offence created by the 1983 Law, save for an offence of criminal damage where the accused either intended or was reckless as to the fact that the life of another would be endangered. There are familiar provisions permitting secondary parties, ie accessories and abettors, to be charged and punished as principal offenders; likewise attempted criminal damage offences are offences in their own right. There is power to convict of alternative offences within the Law or as between a completed and attempted offence.151
THE SUMMARY OFFENCES (BAILIWICK OF GUERNSEY) LAW 1982 (AS AMENDED)
The Summary Offences (Bailiwick of Guernsey) Law 1982, as amended, creates a number of everyday offences designed chiefly to maintain public order. There is no Public Order Act as such and where offences are not found within this Law they are still charged as being contrary to the common law, for example, affray. The 1982 Law is the source for many of the most popular crimes committed in these Isles and applies throughout the Bailiwick. At section 1 there are offences, amongst others, of begging, behaving in a disorderly or indecent manner in a public place (whether drunk or not), attending Court in a state of drunkenness, and being found in a building, enclosed area or vessel and failing to give a good account of oneself,152 tampering with the moorings of a vessel, loitering or soliciting for the purposes of prostitution, using 150
See ss 1(3) and 20(1). See R v Cakmak [2002] EWCA Crim 500 for a recent case containing general comments about criminal damage as an offence, albeit the facts of the case were unusual. The defendants had threatened self-immolation on the London Eye. 152 There is a clear potential Convention challenge to this offence in particular given that the mere exercise of the right to silence would, presumably, be sufficient to convict. See generally R v Lyons [2002] 4 All ER 1028. 151
584 The Laws of Guernsey threatening, abusive or insulting words or behaviour in any public place and carrying an offensive weapon without lawful authority or reasonable excuse. An unfashionable offence which somehow survives even in these liberal times is found at section 1(k). A person commits an offence who, being able to maintain himself and his family, wilfully refuses or neglects to do so, causing his family to become chargeable to the States. It is unlikely that such a charge would now be brought, save in the clearest of circumstances. All the above offences are potentially punishable with a fine of up to level 3 or imprisonment not exceeding three months or both. In practice drunk and disorderly offences are the most common. Typically these are punished with a comparatively modest fine but persistent offenders will find themselves serving short periods of imprisonment.153 Anyone found carrying an offensive weapon could expect to be dealt with severely within the limits of the 1982 Law. Section 2 sets out various offences in connection with animals, fireworks and public disturbances. The whole section was substituted by a 1990 amendment. There is a very general offence at section 2(1)(e) whereby it is an offence to make or contribute to the making of a noise or disturbance to the annoyance of persons in a neighbourhood. Likewise, and most importantly in Guernsey, it is an offence to interrupt or disturb a religious service. By section 3 there are two offences concerning failure, without good reason, of a witness to attend the Magistrate’s Court to give evidence. By sub-section 3(b) it is an offence to fail to assist a Police Officer in the execution of his duty when requested by that Officer to do so.154 By sub-sections 3(c) and (d) it is an offence to be found (lying) drunk in the open air, a public place, in a building or on property belonging to another. These section 3 offences are punishable by a fine not exceeding level 1 or imprisonment not exceeding two weeks or both. Why the offences appear in the same section is unknown, there is no obvious link between them; albeit one might account for another. Sections 4 and 5 provide for the punishment of fraudulent mediums and the owners of stray animals. Section 1(j) contains the offence of exposing to view in a public place any obscene print, picture or other indecent exhibition. Section 6 permits the forfeiture and destruction of any such article upon conviction. 153 Although note that the persistent drunk can find himself in a downward custodial spiral through the combined effects of this Law and the Intoxicating Liquor (Prohibition Orders) (Guernsey) Law 1960, see above. 154 Note that there is no qualification to this obligation; ie there is no let out on the basis of reasonable excuse, fear for one’s future health or anything else for that matter. Guernsey expects, etc.
Criminal Courts and Procedure 585 OFFENCES AGAINST POLICE OFFICERS
The Offences Against Police Officers (Bailiwick of Guernsey) Law 1963 as substantially amended by the Offences Against Police Officers (Bailiwick of Guernsey) (Amendment) Law 1996 contains the two fundamental offences protecting officers in the execution of their duty. By section 1(1) it is an offence to assault an Officer of Police in the execution of his duty or any person assisting a Police Officer. By section 1(2) it is an offence to resist or obstruct wilfully a Police Officer acting in the execution of his duty or any person assisting a Police Officer. The offence of assault carries a sentence of up to two years imprisonment or a fine or both (on conviction on indictment). The obstruction offence carries a maximum sentence of up to three months imprisonment or a fine not exceeding level 5 or both. By section 2 it is an offence knowingly and wilfully to aid, abet, counsel, procure or command the commission of either of the above offences. Secondary offenders may be tried and punished as principal offenders. These offences, particularly the offence of assault, are regarded very seriously within the Bailiwick. The Court will do what it can to assist and protect the Police in the lawful execution of their duties. It should be noted that the reputation of the Island Police has not suffered in the same way as in England. Codes of Practice for the Detention, Interview and Treatment of Persons in Custody At the time of writing there is no equivalent in Guernsey statute law of the Police and Criminal Evidence Act 1984.155 However, Codes equivalent to the 1984 Act Codes regulating the detention, treatment and questioning of persons by Police Officers have been adopted as a matter of practice by the Guernsey Police.156 It is fair to say that the Police operate the Codes as if they had a statutory foundation. The Codes confer rights ranging from access to a lavatory, food and medical treatment to making detailed provision for juveniles, those suffering from mental incapacity and foreign nationals. The most important provisions concern the manner in which a person’s custody is to be recorded and interviews conducted. 155 But note that legislation is very likely to be introduced imminently and may already be in force by the time of publication; see the policy letter of the Advisory & Finance Committee in Billet d’État XIX of 2002. The legislation will be called the Police Powers and Criminal Evidence (Bailiwick of Guernsey) Law 2002 and will follow closely the English statute, as amended. The Guernsey legislation will therefore concern the following matters: powers to stop and search persons and vehicles; powers of entry, search and seizure; power to enter premises to arrest and search; powers of arrest and detention; police bail; questioning and treatment of persons; samples for forensic examination and evidence in criminal proceedings. Note that an equivalent of the Regulation of Investigatory Powers Act 2000 is also to be introduced governing areas such as: the interception of communications; the acquisition of communications data; intrusive surveillance; covert surveillance in the course of specific operations; the use of covert human intelligence sources (eg agents, informants, undercover officers); and access to encrypted data. 156 The formal title of the Codes is as follows: Codes of Practice for the Detention, Treatment and Questioning of Persons by Police Officers, revised November 1996.
586 The Laws of Guernsey The Codes confirm also the right of an accused to receive advice from an Advocate. The circumstances in which the exercise of that right may be delayed or an interview proceed in the absence of an Advocate are set out. Provision is made to permit an Advocate to be excluded from the interview, but only where his conduct is such that the investigating Officer is unable properly to put questions to the suspect. The investigating Officer must first consult with an Officer not below the rank of Chief Inspector or, if not available, Inspector, who will decide, after speaking to the Advocate, how the interview should proceed. If the Advocate is to continue to be excluded an opportunity must be given to the suspect to consult with another Advocate. The failure to administer cautions or to conduct interviews at the Police station or to record interviews in a proper manner are matters which in England would most likely lead to a challenge to the admissibility of the evidence. Without express statutory sanction for breaches of a self-imposed Code one would have to rely upon the Guernsey Courts’ inherent jurisdiction to exclude evidence in certain restricted circumstances. Alternatively it may be that a Crown Advocate would agree that the evidence should not be relied upon by the prosecution following the spirit of section 78 of the Police and Criminal Evidence Act 1984. The common law discretion of the Court to exclude improperly obtained confessions was well established in English criminal law long before the Police and Criminal Evidence Act 1984. In the case of Ibrahim v R [1914] AC 599 it was stated that: “It has long been established as a positive rule of English criminal law that no statement by an accused is admissible in evidence against him unless it is shown by the prosecution to have been a voluntary statement in the sense that it has not been obtained from him either by fear of prejudice or hope of advantage exercised or held out by a person in authority”.
The principle extends to statements obtained by oppression, see the case of Callis v Gunn [1964] 1 QB 495. Oppression was described as importing “something which tends to sap and has sapped, that free will which must exist before a confession is voluntary”; see also the case of R v Priestley (1965) 51 Cr App R 1 and paragraph 27-01 of Phipson on Evidence 14th edition (which is often more helpful as regards Guernsey law than the current 15th edition). The leading case as to the existence of any general discretion to exclude evidence is that of R v Sang [1980] AC 402 where the following certified question was posed in the context of evidence obtained by the use of an agent provocateur: “Does the trial Judge have a discretion to refuse to allow evidence, being evidence other than evidence of admission, to be given in any circumstances in which such evidence is relevant and of more than minimal probative value?”
Four of the five members of the House of Lords answered as follows:
Criminal Courts and Procedure 587 1 A trial Judge in a criminal trial has always a discretion to refuse to admit evidence if in his opinion its prejudicial effect outweighs its probative value; 2 Save with regard to admissions and confessions and generally with regard to evidence obtained from the accused after the commission of the offence, the Judge has no discretion to refuse to admit relevant admissible evidence on the ground that it was obtained by improper or unfair means. The Court is not concerned with how it was obtained. It is no ground for the exercise of discretion to exclude that the evidence was obtained as the result of the activities of an agent provocateur. This is, prima facie, how the law stands in Guernsey. The broader 1984 Act power conferred upon English Judges in the light of Sang to exclude unfair evidence is another instance where Guernsey law has fallen behind English law, whether intentionally or not,157 and subject to any willingness on the part of the Court to develop Guernsey common law in reliance on the principles set out in the case of Morton v Paint [1996] 21 GLJ 61. Meanwhile, it is interesting to note in passing that when part 1 of the Criminal Justice (International Co-operation) Act 1990 was near-copied to become the Criminal Justice (International Co-operation) Law 2001, section 3(8) of the Act: “In exercising the discretion conferred by s 25 of the Criminal Justice Act 1988 (exclusion of evidence otherwise admissible) in relation to a statement contained in evidence taken pursuant . . .”
Became the following at section 3(7) of the Law: “. . . in exercising any discretion to exclude evidence otherwise admissible in relation to a statement contained in evidence taken pursuant . . .” (emphasis added)
Without, of course, saying what that discretion might be, since it is otherwise essentially unknown in Guernsey Law (save for the very limited common law powers noted above). There is no equivalent to the English statutory provision which the Act refers to;158 hence the draftsman’s difficulty when copying the Act.159
JURISDICTION IN CASES OF HOMICIDE
By the Criminal Jurisdiction (Guernsey) Law of 1986 a person may be tried for murder or manslaughter within the Bailiwick where the conduct complained of 157
Other examples include the broader criminal grounds of appeal under modern English law, see
above. 158 S 25 is at Part II of the CJA 1988, which prima facie permits first hand hearsay to be adduced in criminal proceedings if certain pre-conditions are met, eg the witness is dead. 159 It is not unknown for such drafting quirks to cause a Court to infer subsequently that whatever power or discretion is implied must therefore exist. Perhaps in this case it should.
588 The Laws of Guernsey either occurred within the Bailiwick or caused the death of a person within the Bailiwick, notwithstanding that the material conduct took place outside of the Bailiwick or its territorial waters.
REHABILITATION OF OFFENDERS
Legislation following closely the equivalent English legislation was approved by the States on 30 January 2002.160 The scheme of the legislation is to provide rehabilitation periods of varying lengths for offenders, or rather their offences. After the expiry of the period, and subject to possible extension through the commission of other offences during that time, the rehabilitated offender is deemed for all purposes in law to be a person who has not committed, or even been charged with, the material offence(s). There are certain sentences which cannot be rehabilitated; these comprise principally a sentence of life imprisonment or imprisonment or youth detention exceeding 30 months. The offender is protected from being required to disclose “spent” convictions; it is also an offence to publish the fact of spent convictions. However, convictions are never spent so far as some forms of judicial proceedings are concerned, including criminal proceedings and proceedings relating to children. The States may also by ordinance limit the protection afforded by the Law; such powers would be exercised in respect of sensitive forms of employment, typically relating to children or other situations where a person would have responsibility for the vulnerable, for example employment in a nursing home for the elderly. Rehabilitation periods range essentially from between six months and 10 years in length, depending upon the severity of the sentence, and half the material period where the sentence was imposed upon a person under the age of 18 as at the date of conviction.161
160
See Billet d’État I of 2002 and the Rehabilitation of Offenders (Bailiwick of Guernsey) Law 2002. It is noteworthy that the Law appears to concern not just Bailiwick offences but offences wherever committed; see para 6(b) of the Schedule. 161
22 Evidence in Civil and Criminal Proceedings in Guernsey 1 INTRODUCTION
T
HE GUERNSEY LAW of evidence was caught in a Victorian time-warp until 2003, and still is so far as civil proceedings are concerned. A number of nineteenth century Laws adopted then current English principles. Apart from further tinkering in the early twentieth century (largely to adopt other nineteenth century English provisions) little more was done. Guernsey did not enact legislation equivalent to the English Civil Evidence Acts 1968 and 1972, let alone a Civil Evidence Act 1995.2 The strict rule against admitting hearsay to evidence remains very largely intact, save for proceedings concerning children and only now in respect of criminal proceedings. It is very surprising that the rule prohibiting hearsay should have been relaxed first in criminal cases.3 The area has been long overdue for reform. The cost and difficulty of civil litigation without a Civil Evidence Law is increased greatly; strict rules of evidence also give difficult and unco-operative opponents very considerable opportunities to obstruct the progress of a claim. The law relating to criminal and civil evidence is considered in a single chapter given that the central Victorian statute deals with the subjects together.
LOI RELATIVE AUX PREUVES 1865
This 1865 Order in Council is a collection of what now appear to be fundamental rules governing the law of evidence. It seems that the person responsible for drafting this Law had in mind various reforms of the English law of evidence that had taken place earlier that century.4 For example the Civil Rights of Convicts Act 1828 1 I do not attempt here to give an account of the law of evidence of Alderney and Sark; it is suggested that as a matter of evolved custom and practice essentially English common law principles would be followed. 2 Although a Civil Evidence Law following the lines of the 1995 Act now seems very likely to be introduced. 3 See the Criminal Evidence and Miscellaneous Provisions (Bailiwick of Guernsey) Law 2002, the projet for which was approved on 31 May 2002 and which came into force with effect from 20th January 2003. A Law broadly equivalent to the Police and Criminal Evidence Act 1984 is also in the course of preparation; the extent to which it will concern the law of evidence remains to be seen. 4 He was also familiar with French law, see below.
590 The Laws of Guernsey had rendered convicts capable of acting as witnesses after they had served their sentence, unless they had been found guilty of perjury. The Evidence Act 1843 provided that no person from that time on should be excluded from giving evidence in any proceedings on account of a conviction. Again it was the Evidence Act 1843 which abolished the rule by which those with a pecuniary or proprietary interest in the outcome of proceedings were incompetent to act as witnesses in them, ie very often the parties themselves. Competence and Compellability of Witnesses5 By Article 1 of the 1865 Law6 every individual is, prima facie, competent as a witness save for proper reason. Various former categories of disqualification from being a witness were set aside by Articles 2 to 8, these included the blind, the deaf, the pre-pubescent, convicts and those with an interest in civil proceedings. Article 11 expressly provides that in a civil case one party may call an opposing party; this can be useful if, for example, the defendant is the only person with knowledge of essential facts grounding the claim.7 Article 13 confirms that merely being related (to a party) is no reason to render a witness incompetent. This is subject however to other statutory provisions which continue to govern the circumstances in which spouses may give evidence or may be compelled to give evidence for or against each other. In England a spouse is both competent and compellable as a witness in civil proceedings. In criminal proceedings she is a competent witness for the prosecution but not compellable, save in certain circumstances relating to offences of a violent nature against that spouse or offences of a violent or sexual nature in respect of a person who was under 16 at the time; see section 80(2A) and (3) of the Police and Criminal Evidence Act 1984, as amended by the Youth Justice and Criminal Evidence Act 1999. A spouse is always competent to give evidence on behalf of a spouse or his co-defendant and is compellable on behalf of the spouse unless he or she is also charged in the proceedings.8 The Guernsey position in criminal proceedings is less certain given the number of different statutes and statutory provisions with something to say on the topic, none of which add up to a coherent whole. It is, however, clear enough that the compellability of a spouse on behalf of the prosecution is severely limited, and in certain regards the competence also. By Article 14 of the 1865 Law a spouse can be 5 I am grateful to Graeme McKerrell, Crown Advocate, for his assistance with this topic. I had the good fortune to attend Caen University with Graeme, whose sense of humour helped sustain us all. 6 Which is written in French; most laws and ordonnances from before c.1930 are written in French, sometimes an English translation is supplied. 7 For example, where the victim of an accident has no memory of the event. The danger lies in the fact that you are unlikely to know precisely what the opposing party will say, nor can you cross-examine your own witness, unless he is shown to be hostile, see below. It is more prudent to serve interrogatories long in advance of trial. 8 S 80(2) and (4) of the 1984 Act, as amended.
Evidence in Civil and Criminal Proceedings in Guernsey 591 heard9 as a witness in criminal proceedings relating to alleged offences of violence against that spouse. Whether this amounts to compellability on behalf of the prosecution is debatable. The article reads as an enabling provision as opposed to anything more. A wife may also give evidence where any criminal charge concerns an allegation that the husband has neglected or abandoned his family, such offences do remain theoretically chargeable under Guernsey law. It is implicit that apart from article 14 a spouse is not a compellable (or even competent) witness in criminal proceedings, certainly not on behalf of the prosecution. Article 30 provides that a spouse called as a witness is not permitted to reveal a communication made to him or her by the other spouse during the marriage.10 The prohibition survives any subsequent dissolution of the marriage and was confirmed by article 3 of the Loi Supplémentaire à la Loi relative aux Preuves 1901 which states that no witness is bound to reveal what has been communicated to him or her by his or her spouse (nor to reply to any question tending to demonstrate that the witness has committed a crime or has been guilty of adultery). Old English case-law most likely continues to apply, see page 204 and following of Cross on Evidence 7th edition. The protection afforded to matrimonial communications was re-re-affirmed by Article 1(e) of the Loi relative aux Preuves au Criminel 1923. The 1923 Law is in fact the only unambiguous source for the compellability of a spouse on behalf of the prosecution. Article 3 provides that the spouse of a person accused of violence towards his conjoint or of having abandoned his family or who is charged with an offence under specific legislation prohibiting incest and protecting women, children and young persons may be summonsed to give evidence in support of the charge (or against it) without the consent of the accused.11 This is in contrast to Article 1(d) which more clearly provides that none of the 1923 Law provisions can compel a spouse to give evidence, save as provided by the 1923 Law or save pursuant to the formal demand of the accused. The Law ends on a note of real ambiguity at Article 3(2) whereby it is said that nothing in the 1923 Law alters any common law provision whereby a spouse may be compelled to give evidence without the agreement of the accused, but fails to state what those provisions are. Article 15 of the 1865 Law provides that if the evidence of a party to civil proceedings is admissible then so also is that of his or her spouse. The effect is very broad given the abolition of the rule prohibiting evidence to be given by an interested party; see Article 8 of the 1865 Law as well as Article 1 of the Loi Supplémentaire à la Loi relative aux Preuves 1901 which also purported to abolish 9
“. . . la femme peuvent être entendus . . .” “. . . ne sera pas reçu a révéler une communication que lui aurait fait sa femme pendant la mariage . . .”. This bar appears to apply also in civil proceedings. Presumably one can distinguish ancillary relief proceedings on the basis that the spouse or ex-spouse is not “appelé comme témoin”, ie called as a witness. He or she gives evidence in her own behalf. Equally it seems highly unlikely that a spouse would be forbidden to give evidence of a matrimonial communication which an accused or party positively wanted to adduce (assuming no other ground of inadmissibility). 11 Bigamy was added in 1930. 10
592 The Laws of Guernsey the rule that a person could not give evidence in his own cause, likewise making spouses competent. There is a considerable degree of overlap between the two Laws’ provisions. Note again the effect of Article 30 of the 1865 as regards communications made during mariage.
LOI RELATIVE AUX PREUVES AU CRIMINEL 1923
It is important to note that the 1923 Law is, very nearly, a word for word translation of the English Criminal Evidence Act 1898. It follows that one could look to English case-law on the equivalent (and unamended) provision for guidance on any issue arising under the 1923 Law. In addition to the matters already noted the Law made an accused a competent, but not compellable, witness in his own defence. The Law expressly states that the failure of the accused (or his spouse) to give evidence must not be the object of any comment by the prosecution. This is, of course, no longer the law in England, see section 35 of the Criminal Justice and Public Order Act 1994. If an accused does choose to give evidence he may be asked any question in cross-examination notwithstanding that it would tend to incriminate him as regards the offence charged. However, it is unlikely that a defendant would give evidence if he was going to do anything other than deny his guilt vigorously. In theory he could rely upon the right not to give a self-incriminating answer, but this would amount to an admission of guilt in the eyes of the Jurats. By contrast, where an accused does give evidence he must not be asked, nor be required to answer, any question tending to show that he has committed or been convicted of or charged with any offence other than that charged, or that he is of bad character, unless one of three conditions applies. The first is that the evidence of the other offence is admissible evidence to show that he is guilty of the offence with which he is charged (in practice this means similar fact evidence). The second is that he has personally, or by his Advocate, asked questions of the prosecution witnesses with a view to establishing his own good character, or has given evidence of his good character, or the nature or conduct of the defence is such as to involve imputations on the character of the prosecutor or the witnesses for the prosecution. In essence the defendant must either have put his own character in issue or have called into question the character of his accusers. Here the admission into evidence of his own bad character goes only to credibility rather than guilt, although English case-law is full of sophistry concerning this distinction—socalled forbidden lines of reasoning and the practical reality of the effect such information has upon jurors’ minds. The third condition is that the defendant has given evidence against a co-accused. Again, evidence of bad character would go only to credit. Each of these conditions is disjunctive. If any of the three is made out the defendant is likely to lose the “shield” which the Law otherwise provides. There is English case-law to the effect that a warning should be given by the trial Judge if the conduct of the defence is putting the shield at risk. However it must be
Evidence in Civil and Criminal Proceedings in Guernsey 593 remembered that the admissibility of any such evidence as to character is always subject to the overriding requirement that it be relevant. The Law concludes with a provision that the accused is, without more, entitled to give evidence from the place where the other witnesses have given evidence in the trial. Miscellaneous 1865 Law Provisions Governing Witnesses Article 17 of the 1865 Law states that the coutume requires witnesses to be summonsed by the Sergeant either personally or at their home. It is good practice to ensure that personal service has taken place if a witness summons is required to secure the attendance of a witness. Article 18 states the fundamental principle that those who are competent witnesses may not refuse to testify. Article 19 requires witnesses to be sworn. Article 21 requires objections to any witness to be put before they are sworn. Article 22 provides inflexibly that the opposing party will not bear the costs associated with his opponent calling witnesses in excess of the number 12.12 Whether this extends only to witness expenses as opposed to legal costs incurred during the additional period is not clear. Certainly such a provision is due for repeal given the potential injustice which could result in the event of lengthy and complex litigation. Article 23 provides that the Law Officers have power to detain a witness in criminal proceedings for a felony who is about to leave the Island. The witness may be detained for up to three days, during which time his evidence may be taken.13 There is a more general power to take security from a witness against his appearance in Court. The justification for exercising such powers (if ever they would be exercised) will be much reduced through the coming into force of the Criminal Evidence and Miscellaneous Provisions (Bailiwick of Guernsey) Law 2002 permitting (conditionally) the admission of first hand hearsay where, inter alia, the statement maker is outside the Bailiwick. Article 24 makes what now appears to be very obvious provision permitting examination-in-chief, cross-examination and re-examination of a witness, with further questioning only by leave of the tribunal. A similar provision exists at article 2 of the 1901 Law. Article 25 provides that a witness is protected by the privilege against selfincrimination.14 No witness may be compelled to reveal what could subject him to criminal proceedings. Likewise, by Article 26 a witness is not bound to reveal a fact which would demean his public reputation, unless it goes to a material issue in the case. If the witness nevertheless waives these privileges and answers, his answer is final and evidence may not be adduced to demonstrate that the response is false or 12 Why the figure 12 should have been selected is unclear; perhaps the number had a biblical resonance; 12 tribes, 12 apostles and, separately, 12 Jurats. 13 Whether this provision is Convention compliant seems rather doubtful. 14 How this interrelates with various more modern provisions, particularly in regulatory laws, remains to be worked out.
594 The Laws of Guernsey inexact; of course this is no protection against subsequent proceedings for perjury. The provision was enacted at a time when the accused could not give evidence in his own defence, with the consequence that there is something of a conflict within Guernsey law as to the power to cross-examine on character. Article 28 contains the useful provision that an inconsistent out of Court statement may be put to the witness and, if denied, adduced in evidence. Article 29 expressly states that Advocates must not reveal privileged communications with their clients when themselves giving evidence. The provision also extends to “procureurs et mandataires”. The article does not go on to say what privileged communications there may be between the latter and their client. In modern law it may well be that there are no such privileged communications. Article 31 provides that Police Officers are not bound to reveal the identity of those who have provided them with information (ie informants). The article should, it is suggested, be read as merely permissive and not as providing a blanket immunity. The provision is necessarily subject to the overall obligation to ensure a fair hearing. If a fair hearing could not take place without the informant being identified the prosecution would have to elect whether to make the identification or, ultimately, abandon the prosecution. Overseas Witnesses Article 40 of the 1865 Law gives power to the Court to order the examination under oath of overseas witnesses before one or more persons authorised to that end by the Court. In practice this would involve the appointment of a Commissioner or other quasi-judicial figure to travel to where the witness was and to hear the evidence as if convening the Guernsey Court in that place. Of course this assumes the co-operation of the witness.15 Again this provision will be of less relevance with the coming into force of the Criminal Evidence and Miscellaneous Provisions (Bailiwick of Guernsey) Law 2002. Ill or Otherwise Departing Witnesses in Criminal Proceedings By Article 2 of the Loi par Rapport aux Procedures en Crime of 1877 the Law Officers may apply to the Ordinary Court for the evidence of a prosecution witness who is either ill or due to leave the Island to be taken in advance of a criminal trial. In the case of Le Billon noted at [1986] 4 GLJ 23 the Bailiff held that such evidence should be taken before the Bailiff sitting alone and in camera.16 The accused and his Advocate must be present and may cross-examine the witness. The resulting deposition is admissible at the subsequent trial. See also the 1865 Law. Again 15
See below for the various alternatives to this procedure. Why the evidence should have to be taken in camera is unclear. It is probable that the case would be decided differently today. It would seem more sensible for the Court to be constituted as if for the trial; ie with the same Judge and Jurats as would eventually hear the case. 16
Evidence in Civil and Criminal Proceedings in Guernsey 595 this provision will be of much less significance with the coming into force of the Criminal Evidence Law 2002. Witnesses in Action Subject to the specific provisions of Guernsey law all people are therefore prima facie both competent and compellable witnesses for either party in both criminal and civil proceedings. Those who are not competent as a matter of basic principle include the very young17 and those with mental disability to the extent that they do not have lucid intervals. Those who are competent but either not compellable or of limited compellability include, as we have seen, spouses, an accused and coaccused. A spouse may not be competent in the particular circumstances of the case, depending upon one’s view of the material Laws. It is important to remember that there is no property in a witness. No party has a right to monopolise a witness or exclude another party from interviewing, proofing or calling a witness, (assuming the witness is willing to co-operate, if he will not attend Court voluntarily he may be summonsed). But note that a party cannot, in normal circumstances, cross-examine his own witness. It is only where the Judge permits the witness to be treated as hostile that cross-examination is allowed, eg where there is deliberate departure from a signed proof.18 A hostile witness is one who bears a hostile animus to the party calling him, to the extent that he will not give his evidence fairly or truthfully. In the case of Clarke v Saffrey (1824) Ry & M 127 Best CJ held that: “If a witness by his conduct shows himself decidedly adverse, it is always in the discretion of the Judge to allow a cross-examination.”
The witness may then be asked leading questions, challenged as regards the means of his knowledge and tested as to the accuracy of his memory, perception and generally. It remains to be determined quite how far a Guernsey court would go in permitting a party to discredit his or her own witness. Note the combined effect of these principles and the 1865 Law provision permitting one party to call the other as a witness. There is a further general rule that the answers given by a witness to questions put to him in cross-examination concerning what are called collateral facts must be treated as final. The answers may or may not be accepted by the Jurats but the cross-examiner must take them for better or for worse and cannot contradict them by other evidence. The test of whether a question is collateral or not was set out Pollock CB in the case of A-G v Hitchcock (1847) 1 Exch 91: 17 But note s 3 of the Children and Young Persons (Miscellaneous Provisions) (Guernsey) Law 1991 which permits children of “tender years” to give unsworn evidence in civil proceedings; see also Art 3 of the 1865 Law. 18 These principles are derived from English law of evidence and would inevitably be adopted by a Guernsey Court.
596 The Laws of Guernsey “The test whether a matter is collateral or not is this: if the answer of a witness is a matter which you would be allowed on your own part to prove in evidence—if it has such a connection with the issues, that you would be allowed to give it in evidence—then it is a matter on which you may contradict him.”
There are a number of exceptions to this principle. Facts showing that a witness is biased or partial in relation to the parties or the cause may not only be elicited in cross-examination but, if denied, be proved independently. Likewise, a witness other than a criminal defendant may be cross-examined as to whether he has been convicted of a criminal offence, and if he either denies or does not admit the fact or refuses to answer, the cross-examining party may prove any such conviction, together with the circumstances of the offence. If a witness is suffering from a mental disability it may be permissible to call psychiatric evidence to show that he is incapable of giving reliable evidence. It is important to note that a party to civil proceedings may, prima facie, be cross-examined on his or her relevant previous convictions.19 Judicial Notice of United Kingdom Documents At Article 32 of the 1865 Law is a general provision permitting judicial notice to be taken of the authenticity of judicial or official documents emanating from the United Kingdom.
THE PAROL EVIDENCE RULE
Article 35 of the 1865 Law contains what in English law would be known as the parol evidence rule.20 The Guernsey article provides that where there is a written agreement no witness evidence is admissible against or beyond the contents of the document.21 It seems probable that English law would be followed as to the many exceptions to this rule set out at paragraphs 42-19 and following of Phipson on Evidence 15th Edition. This appeared to be the approach of the Court of Appeal in the Guernsey case of National Westminster Bank Finance (CI) Limited v Hougue Fouque Property Company Limited (1972). However, the judgment does not refer to Article 35 at all but adopts English principles directly. The broad nature of the exceptions to the English rule concern public documents, private documents when informal or not intended to express the whole agreement, additional terms, collateral agreements and warranties, terms annexed 19
See generally the case of Watson v Chief Constable of Cleveland Police LTL 12 October 2001. The word is the same in French “la parole”, albeit the word has no special legal meaning. One could talk of “paroles d’avocats”, indeed there is a book of that name edited by Daniel Soulez-Larivière published by Hermann, Éditeurs des Sciences et des Arts (2001). 21 “. . . contre ou outre le contenu de la pièce.” The word outre has several senses. It can also mean “besides”. 20
Evidence in Civil and Criminal Proceedings in Guernsey 597 by usage or law, terms implied by law, the true nature of a transaction and relationship between the parties, the true nature of an interest under the agreement (whether joint, common or several), a relationship of principal or agent, principal or surety, evidence to prove a penalty as opposed to liquidated damages, invalid or conditional documents, fraud, illegality, mistake, recitals, bills, promissory notes, wills, consideration, and subsequent rescission or variation of the transaction. The English rule is, in reality, a colander and there seems no good reason to imagine that its Guernsey equivalent should be any more watertight given the injustice that the inflexible application of the rule would cause.22 As against this the statutory provision is, admittedly and prima facie, unambiguous. It may be that, as in English law, the rule could be circumvented by the perceived existence of a collateral contract; ie the written contract itself would not be challenged, it would merely take its place alongside another agreement. Another possibility would be to seek rectification of the written instrument.23 With sufficient will and, if need be, the assistance of the Morton v Paint principles in combination with de Ferrière’s definition of coutume24 Article 35 should present no obstacle to a just result in any given case. Interestingly, this is another area where a Guernsey Court could be expected to look to French law for guidance given that the draftsman of the 1865 Law appears to have had at least half an eye on the Code Civil of the time.25 Thus Article 1341 of the Code Civil requires all actes exceeding a sum fixed by decree (800 euros26) to be notarised or otherwise signed, with no evidence being admissible “contre et outre le contenu aux actes” (ie against and beyond the content of (the written instrument)). This phrase is nearly identical to the expression used in the 1865 Law. There follow various express exceptions to the Article 1341 requirement in the articles which follow, in particular at Article 1347 where there is reference to “un commencement de preuve par écrit” (“partial written proof ”); there is also a general exception operating against traders (commerçants). It seems more than merely coincidental that at Article 38 of the 1865 Law there is a provision akin to Article 1341 (or a mini Statute of Frauds) requiring certain forms of transaction to be in writing if they are to be enforceable. These include a guarantee or surety, an agreement to honour a prescribed obligation, an agreement to discharge an obligation when the person concerned has obtained renonciation and the agreement of a person to discharge a debt contracted for during his minority and therefore otherwise unenforceable. Even more strikingly, Article 39 contains exceptions to Article 38 which must have been drawn from French law. Thus the first exception is again where there is 22 Note the conclusion of the English Law Commission in their 1976 report on the parol evidence rule (No 154) to the effect that there was no need to dispose of the rule legislatively, it had all but been disposed of already. 23 Perhaps the neatest solution, and one that avoids the parol evidence rule altogether in English law. 24 For which see the section on customary law in the opening chapters. 25 There follows a certain degree of speculation given the difficulty of reconstructing an 1865 Code Civil. 26 The figure was 5,000 F until 1 January 2002.
598 The Laws of Guernsey a partial written proof of the transaction emanating from the defendant; the phrase used is the identical “commencement de preuve par écrit”. The second exception is where the plaintiff has lost the document which would otherwise entitle him to sue because of an unforeseen event resulting from force majeure.27 The third circumstance is where the necessary document was in the possession of the defendant who has failed to produce it when required to do so.28 It follows from this that other provisions of the Code might be looked to; in particular Articles 1156–1164 concerning the interpretation of contracts. Article 1156 provides: “On doit dans les conventions rechercher quelle a été la commune intention des parties contractantes, plutôt que de s’arrêter au sens littéral des termes.”
Which translates as: “In contracts one must look for what was the common intention of the contracting parties, rather than stop at the literal sense of the terms.”
Which again suggests another way of circumventing the effect of article 56 of the 1865 Law; ie that there is latitude in the meaning of the words themselves. This is again consistent with English case law and dicta of Lord Hoffmann in cases such as Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd.29
THE HEARSAY RULE IN GUERNSEY LAW
Article 36 of the 1865 Law makes the bald statement that hearsay is not admissible in evidence except in the special cases recognised by law:30 “Les oui-dire31 ne sont pas recevables en preuve excepté dans les cas spéciaux reconnus par la loi.”
Which translates as: “Hearsay is not admissible in evidence except in the special cases recognised by law.” 27
Again see the wording of Art 1348 CC. See Art 1347 CC for a provision which appears to come close to this exception. There are other French exceptions at Art 1348 including the material or moral impossibility of having produced a document in writing, likewise a qualified right to rely instead on a copy. 29 [1997] 3 All ER 352. 30 This must now be read as being subject, in criminal proceedings, to the Criminal Evidence and Miscellaneous Provisions (Bailiwick of Guernsey) Law 2002. Curiously there is no express repeal of inconsistent 1865 Law provisions, although the power to make Rules of Court for “such supplementary, incidental, transitional and consequential provision as may appear to be necessary or expedient” is very broadly drawn. 31 Hearsay. Note the continued use of the expression “voir dire” in England. 28
Evidence in Civil and Criminal Proceedings in Guernsey 599 Naturally the Law does not define the expression “special cases recognised by law”; however it seems reasonable to assume that exceptions to the hearsay rule longestablished under English common law would be included. Given the AngloFrench origins of the 1865 Law one could also argue for any exceptions long-established in French law. To the extent that any exceptions can be demonstrated in Guernsey law (and there are a number in modern statute law) then of course these constitute special cases. It follows that it is essential both to know what is and is not hearsay as well as the likely exceptions to the hearsay rule, such as they are. What is hearsay may be defined as an out-of-court statement the truth of which goes to the issues in the proceedings in which it is sought to be adduced. The English Civil Evidence Act 1995 defines hearsay as “a statement made otherwise than by a person while giving oral evidence in the proceedings which is tendered as evidence of the matters stated”.32 In what is currently the leading Guernsey case on Article 36, Webber v Allied Dunbar Assurance Plc,33 the Court adopted the following definition from Cross and Tapper 8th edn (1995) at p564: “An assertion otherwise than one made by a person while giving oral evidence in the proceedings is inadmissible as evidence of any fact asserted.”
All of the following are, prima facie, hearsay: a letter, email, business records, computer records, comments made to a witness and conversation overheard by a witness. The list of possible examples is near endless. However, a careful and subtle distinction has to be made between hearsay and out-of-court statements where one is not concerned with the truth of the statement. A very basic example would be if a witness gave evidence that he had heard the defendant shout, “what’s he bloney doing him, eh?”34 just prior to a head-on collision. Here you are not concerned with the truth of the statement, only the fact that the words were said. The statement would be admissible as well as highly probative.35 Put differently, the statement is not being adduced in its own right as evidence of any fact asserted. It is the fact of the exclamation that is important, not the descriptive quality of the words. In Webber a very conservative approach was adopted by the Court in that the strict and extensive operation of the hearsay rule was upheld while also taking a restrictive view of what could and could not be achieved with the inbuilt exception to article 36, ie special cases recognised by law. It was held that the use of witness statements and expert reports at trial would fall foul of Article 36, even where the witness appeared in person to verify their statement or report and to be 32
S 1(2)(a). (2001) 16 August; a first instance interlocutory judgment of Lieutenant Bailiff Talbot QC. A notice of appeal was served but the substantive proceedings settled. The author must admit an interest in that he appeared for the Applicant and failed to persuade the Court in effect to circumvent Art 36. 34 This phrase illustrates aspects of the local English dialect and underlying French constructions. 35 Doubtless some would say that even this was hearsay. 33
600 The Laws of Guernsey cross-examined; furthermore, the general power at RCCR 43 to give directions as to the hearing of any action could not itself be used to circumvent Article 36, notwithstanding the special status of Orders of the Royal Court given the preservation of the Royal Court’s law-making powers under section 64(1)(b) of the Reform (Guernsey) Law 1948.36 The Webber case illustrates well the extent of the problems with unreformed Guernsey procedural law. The difficulties that the judgment causes for the conduct of substantial civil litigation are obvious. The reality is that Guernsey has greater need of a liberal evidence régime than England given the extra challenges of assembling expert witnesses in particular. Meanwhile, Webber does not bind the Royal Court. In the absence of more thoroughgoing reform, it is to be hoped that practice and procedure can evolve to avoid the more substantial difficulties thrown up by the judgment, if only to allow expert reports into bundles and to be led in chief. In any event the Webber judgment does not alter the proposition that (inter alia) long-established English common law exceptions to the hearsay rule would be applicable equally in Guernsey procedural law. Those exceptions are outlined below.
EXCEPTIONS TO THE HEARSAY RULE 37
Admissions The fundamental exception to the hearsay rule in both civil and criminal cases is that a party’s out-of-court statement is admissible against him if it is (a) relevant and (b) adverse to his case, ie it is an admission. By way of contrast it is only very rarely that an out-of-court statement is admissible in support of its maker, (see the section on self-serving statements). Admissions made out-of-court by an accused in criminal proceedings are subject to special conditions of admissibility and are usually called confessions. A distinction can be drawn between confessions and admissions. Confessions may be contradicted or explained, unlike admissions whose function in civil proceedings is, without more, to bind the maker. In civil proceedings one distinguishes between formal admissions made in pleadings (or correspondence) and informal admissions constituting the exception to the hearsay rule proper. Admissions form the single most important common law exception to the hearsay rule. In the context of civil proceedings it is especially important to consider admissions made by other persons which might affect or otherwise bind a party; in particular the admissions of nominal, representative or real parties, 36 One must, of course, distinguish evidence that is agreed, which may be “read” to the Court; see para 19 of the Webber judgment. Note also the terms of s 12 of the Royal Court of Guernsey (Miscellaneous Reform Provisions) Law 1950. 37 I acknowledge my reliance on both Phipson and Cross, particularly in this section.
Evidence in Civil and Criminal Proceedings in Guernsey 601 admissions of predecessors in title, and admissions of partners, joint-contractors, co-trustees, and agents. Other categories of exception following similar principles comprise statements made in the presence of a party and documents found in his possession. Acts and Declarations in Pursuance of a Common Purpose and the Admissibility of Confessions Against a Co-accused Where two people are engaged in a common enterprise, the acts and declarations of one in pursuance of that common purpose are admissible against the other, (see generally paragraph 25-10 and following of Phipson on Evidence 14th edition). The rule applies in both civil and criminal cases and whether or not there is a criminal charge of conspiracy. The condition permitting the admissibility of the evidence of one against the other is the existence of the common enterprise. A fundamental distinction is drawn between this principle and the equally important principle that a confession by one defendant is not evidence against another, see paragraph 27-23 of Phipson on Evidence 14th edition.38 Notwithstanding this rule of evidence, where two defendants are tried together the statement of one defendant may be read, regardless of the fact that it implicates the other. A person’s own confession remains admissible against him, but the Bailiff must warn the Jurats that a defendant’s confession is not evidence against the co-accused. A confession of an agent is not evidence against his principal nor the confession of a principal evidence against his agent or of one accomplice against another, except in the limited circumstances in which it is proved that an agent was acting with the defendant’s authority in pursuit of a common purpose with the defendant.39 This seems to require that the confession itself is made with authority and in pursuit of the common purpose. The further distinction is drawn that if one of two or more co-defendants gives evidence, what he says becomes evidence for all purposes of the case and is receivable for or against the other or others. Cross 40 summarises the position succinctly in the following terms: “The out-of-court admission of a co-defendant, co-plaintiff, or co-accused is not admissible evidence against his fellow party to the litigation by virtue of the mere fact that they are joint parties or said to be jointly involved in a particular transaction.”
38 These principles, which can seem to conflict, generally apply to quite different material. The former (acts and declarations) typically concerns events contemporaneous with the origin of the issues in the case, whereas the latter (confessions) is usually connected with a subsequent investigation; at least in criminal proceedings. 39 In this way the admissibility of admissions in civil cases is reconciled with the principle set out here. There is the extra subtlety in civil law that very often one will be saying that the statement of the servant or agent is, or is deemed to be, the master’s or principal’s statement. The servant or agent will commonly not be a party to the proceedings at all. 40 Cross on Evidence, 7th edn.
602 The Laws of Guernsey Cross goes on to state that the rule operates not only to bar the use of such an admission as evidence-in-chief, but also to prevent use being made of the admission in cross-examination of the third party. The principle applies in all cases and is well illustrated in the context of divorce proceedings where there might be a finding that A committed adultery with B by reason of A’s out-of-court admission, although there is no finding that B committed adultery with A because the admission of A is not admissible against B. Statements by Deceased Persons Statements by deceased persons form a further important class of common law exceptions to the hearsay rule. There are six categories of oral or written declaration made by persons since deceased which are admissible in proof of the facts declared. Those categories are: (a) (b) (c) (d) (e) (f)
declarations against interest; declarations in the course of duty; declarations as to public rights; declarations as to pedigree; dying declarations in cases of homicide; declarations by testators as to their wills.
The exceptions apply equally in civil and criminal proceedings, save for dying declarations in cases of homicide although there seems no good reason why this should be so, see generally paragraph 30-01 and following of Phipson on Evidence 14th edition. Declarations of deceased persons may also be admissible under the principle of res gestae, see below. Statements in Public or Official Documents, Corporation Books and Published Works, Ancient Documents as Evidence of Ancient Possession A further class of common law exceptions to the hearsay rule comprises statements contained in public or official documents which, subject to qualifications, are generally prima facie, though not conclusive, evidence of the truth of the facts recorded. These exceptions have equal application in both civil and criminal proceedings. The general grounds for the exceptions are that the statements and entries have been made by authorised agents of the public in the course of their official duties and the facts recorded are of public interest or notoriety. The principal documents of this kind are: (a) laws and state papers generally; (b) government gazettes; (c) public registers;
Evidence in Civil and Criminal Proceedings in Guernsey 603 (d) (e) (f) (g)
public inquisitions, surveys, assessments and reports; official certificates; corporation, company, and banker’s books; published histories, maps, dictionaries, tables etc.
Perhaps the exception as regards corporation, company and banker’s books deserves the closest attention. Entries in the public books of corporations and public companies made by the proper officer are, at English common law, prima facie evidence, even against strangers, of the public acts of the corporation or company. The books must have been kept publicly as the corporation books, and the entries made by the usual officer or his substitute. Copies of entries in bankers’ books, ie ledgers, day-books, cash-books, accountbooks and all others kept in the ordinary course of the bank’s business, whether by the bank making the entries or its successors and whether for daily use or occasional reference, are receivable in all legal proceedings as prima facie evidence of the entries,41 or of the matters, transactions, and accounts recorded therein, upon proof (usually by a bank officer) that: (a) the book was, at the time of the entry, one of the ordinary books of the bank; (b) it is in the custody or control of the bank; and (c) the entry was made in the ordinary course of business. Testimony in Former Trials At English common law, depositions and oral testimony given by a witness were admissible in both civil and criminal proceedings in a subsequent trial in proof of the facts stated provided that: (a) the proceedings were between the same parties or their privies; (b) the same issues were involved; (c) the party against whom, or whose privy, the evidence is tendered had on the former occasion a full opportunity of cross-examination, and (d) the witness is incapable of being called in the second trial. The position remains the same under English Law in criminal proceedings. In civil proceedings the Civil Evidence Act of 1968 superseded the common law which was itself superseded by the Civil Evidence Act 1995.
41
See also s 5 of the Bankers’ Books Evidence (Guernsey) Law 1954, as amended (see below).
604 The Laws of Guernsey Self-serving Statements Self-serving statements or previous consistent statements are not generally admissible in evidence. In the case of R v Coll (1889) 25 LR Ir 522 Holmes J stated: “The evidence of a witness cannot be corroborated by proving statements to the same effect previously made by him; nor will the fact that his testimony is impeached in crossexamination render such evidence admissible. Even if the impeachment takes the form of showing a contradiction or inconsistency between the evidence given at the trial and something said by the witness on a former occasion it does not follow that the way is open for proof of other statements made by him for the purpose of sustaining his credit. There must be something either in the nature of the inconsistent statement, or in the use made of it by the cross-examiner to enable such evidence to be given.”
The principal exceptions to this general principle are as follows: (a) complaints in sexual cases; (b) statements rebutting an allegation of recent fabrication; (c) statements forming part of the res gestae. The first exception extends to cases of rape, indecent assault and similar offences where the fact that the alleged victim made a complaint shortly after the event of the matters charged against the defendant, together with the particulars of the complaint, are admissible as evidence for the prosecution, not to prove the truth of the matters stated, but to show that the alleged victim’s conduct in complaining was consistent with her testimony and, where consent is an issue, to show that her conduct was inconsistent with her consent. The second exception is explained in the case of Fox v General Medical Council [1960] 1 WLR 1017 where it was held that: “If, in cross-examination, a witness’s account of some incident or set of facts is challenged as being a recent invention, thus presenting a clear issue as to whether at some previous time he said or thought what he has been saying at the trial, he may support himself by evidence of earlier statements by him to the same effect. Plainly the rule that sets up the exception cannot be formulated with any great precision, since its application will depend on the nature of the challenge offered by the course of cross-examination and the relative cogency of the evidence tendered to repel it.”
There are further exceptions whereby statements made on arrest are admissible either against the accused as confessions or in support of the accused because they show his reaction when incriminating facts were first put to him, see the case of R v Storey (1968) 52 Cr App R 334. Similar principles apply when an accused is challenged to give an explanation of recovered and potentially incriminating articles. Equally, evidence of the identification of the accused by witnesses out-ofcourt is admissible in criminal trials.
Evidence in Civil and Criminal Proceedings in Guernsey 605 Arguably, self-serving statements are not exceptions to the hearsay rule because principally they go to credit. It is not the truth of the self-serving statement which is at issue, at least in theory. These are fine distinctions in circumstances where the important thing for the trial lawyer is to know whether the statement is admissible or not. We turn to the third exception which is itself an important exception to the hearsay rule. Res Gestae The basis of the principle of res gestae is that acts, declarations and incidents which are relevant to the fact or transaction in issue are admissible in evidence. Sir Frederick Pollock defined res gestae as meaning “neither more nor less than part of the story”. In the law of evidence res gestae is both a rule of relevance and an exception to the hearsay rule by which statements forming part of the res gestae are admissible if, for example, they accompany and explain some relevant act or relate to the statement maker’s contemporaneous state of mind or physical sensations. In the case of Ratten v R [1972] AC 378 the Privy Council stated that the expression could be used in at least three different ways: “1 When a situation of fact (eg a killing) is being considered, the question may arise when does the situation begin and when does it end. It may be arbitrary and artificial to confine the evidence to the firing of the gun or the insertion of the knife, without knowing in a broader sense what was happening. Thus in O’Leary v The King evidence was admitted of assaults prior to a killing committed by the accused during what was said to be a continuous orgy. As Dixon J said at p 577: ‘Without evidence of what, during that time, was done by those men who took any significant part in the matter and especially evidence of the behaviour of the prisoner, the transaction of which the alleged murder formed an integral part could not be truly understood and isolated from it, could only be presented as an unreal and not very intelligible event.’ 2 The evidence may be concerned with spoken words as such (apart from the truth of what they convey). The words are then themselves res gestae or part of the res gestae, ie are the relevant facts or part of them. 3 A hearsay statement is made either by the victim of an attack or by a bystander indicating directly or indirectly the identity of the attacker.”
A good Guernsey example where evidence was held to be res gestae and therefore admissible was the manslaughter case of Law Officers v Le Prevost (1980). Here the Bailiff admitted to evidence the statement of a woman who had run out of a kitchen saying: “Will you help?—Bert’s hitting the old man”. The Bailiff ’s decision was upheld by the Court of Appeal. A spontaneous hearsay statement relevant to an issue and made by the victim of an attack or a bystander was admissible in evidence, provided that the risk of concoction or distortion could be excluded, a principle which had been confirmed by Ratten.
606 The Laws of Guernsey A more recent example of the application of the rule is found in the case of Law Officers of the Crown v Benford [1993] 15 GLJ 82. Here the maker of the hearsay statement was (theoretically) available to give evidence, he was a co-accused. In such circumstances it was held that the Judge had to go on to consider whether such a statement should be admitted despite the fact that the maker was not to be called. Statutory Exceptions to the Hearsay Rule There are two important exceptions to the hearsay rule in proceedings concerning children. By section 11(7) of the Domestic Proceedings and Magistrate’s Court (Guernsey) Law 1988 a report concerning access, custody or whether a supervision or care order should be made is admissible in evidence, notwithstanding any evidential rule or law. In practice this permits the Court to receive written reports without the maker of the report being present, likewise it permits the report to contain what would otherwise be second-hand hearsay. A broader exclusion of the ordinary rules of evidence is found at section 2 of the Children and Young Persons (Miscellaneous Provisions) (Guernsey) Law 1991. This provides that in any proceedings in which the Court is empowered to make any order relating to the care, protection or control of a child or young person, evidence given in connection with the upbringing, maintenance or welfare of a child or young person shall be admissible notwithstanding any rule of law relating to hearsay. This same Law provides by section 3 that where in any civil proceedings any child of tender years called as a witness does not, in the opinion of the Court, understand the nature of an oath, his evidence may nevertheless be heard if the Court considers that he understands it is his duty to speak the truth and has sufficient understanding to justify his evidence being heard. A recent exception to the hearsay rule is found at section 3(7) of the Criminal Justice (International Co-operation) (Bailiwick of Guernsey) Law 2001 whereby evidence obtained from a foreign jurisdiction for use in Bailiwick criminal proceedings is (at least prima facie) admissible without more. There are various (mostly minor) statutory exceptions to the hearsay rule dotted around Guernsey legislation, some of which have been noted elsewhere. These exceptions are often found in regulatory statutes as a way of facilitating the formal proof of a state of affairs.
THE CRIMINAL EVIDENCE AND MISCELLANEOUS PROVISIONS (BAILIWICK OF GUERNSEY) LAW 2002
Confessions apart, the principal exception to the hearsay rule in criminal proceedings is now42 the Criminal Evidence and Miscellaneous Provisions (Bailiwick of 42
The Law was registered on 20th January 2003.
Evidence in Civil and Criminal Proceedings in Guernsey 607 Guernsey) Law 2002. The principal effect of this Law is to make certain forms of hearsay evidence conditionally and prima facie admissible in criminal proceedings. The legislation borrows heavily from the English Criminal Justice Act 1988 and the Police and Criminal Evidence Act 1984, both as amended. The 2002 Law respects exceptions already made to the hearsay rule by the Criminal Justice (International Co-operation) (Bailiwick of Guernsey) Law 2001, noted briefly above.43 First Hand Hearsay The first form of evidence to benefit from the 2002 Law is so-called “first hand hearsay”; by this is meant a statement made by a person in a document where that statement would be admissible in evidence if oral evidence to like effect was given directly. It follows that the written statement “I was told by Peter that Benjamin was in the rehearsal room” would be inadmissible even under the new Law, as opposed to the statement “I saw Benjamin in the rehearsal room”. A document is defined as broadly as possible at section 13 as “anything in which information of any description is recorded”. It follows that a conventional written statement would of course be included, but also video recordings, tape recordings, emails or any other form of information-bearing media. Assuming that the statement qualifies thus far there are further pre-conditions to admissibility, any one of which prima facie renders the statement admissible: (a) The statement maker is dead or physically or mentally unfit to attend as a witness; or (b) The statement maker is outside of the Bailiwick in circumstances where either it is not “reasonably practicable” to secure his attendance; or (c) All reasonable steps have been taken to find the statement maker but he cannot be found; or (d) The statement was made to a police officer or some other person acting under a duty to investigate offences44 and the statement maker does not give evidence either through fear or because he is being “kept out of the way”; The policy behind (a), (b) and (c) is sufficiently clear. The concern at (d) is to allow evidence to be admitted notwithstanding subsequent intimidation or obstruction of the prospective witness. See generally section 1. Business Documents The second form of evidence rendered potentially admissible to criminal proceedings can be categorised broadly as “business documents”. Section 2 is concerned with documents (again as defined broadly by s 13): 43
See also below. This would include, for example, officers of the Financial Services Commission investigating possible regulatory offences. 44
608 The Laws of Guernsey (a) Created or received by a person in the course of a trade, business, profession or other occupation, or as the holder of a paid or unpaid office; where (b) the information contained in the document was supplied by a person (whether or not the maker of the statement) who had, or may reasonably be supposed to have had, personal knowledge of the matters dealt with. If the information in the document was supplied only indirectly then each person through whom the information was supplied must have received it in the course of a trade, business, profession or other occupation or as the holder of an office. It follows that multiple hearsay is within the scope of section 2. The statement must additionally satisfy one more of five conditions to qualify for admissibility, the first four are as for section 1, ie: (a) The statement maker is dead or physically or mentally unfit to attend as a witness; or (b) The statement maker is outside of the Bailiwick in circumstances where either it is not reasonably practicable to secure his attendance; or (c) All reasonable steps have been taken to find the statement maker but he cannot be found; or (d) The statement was made to a police officer or some other person acting under a duty to investigate offences and the statement maker does not give evidence either through fear or because he is being kept out of the way; The fifth is particular to business documents and, in practice, the most likely to be relied upon: (e) The person who made the statement cannot reasonably be expected (having regard to the time which has elapsed since he made the statement and to all the circumstances) to have any recollection of the matters dealt with in the statement. If a document satisfies the section 2 criteria it is prima facie admissible in criminal proceedings “as evidence of any fact of which direct oral evidence would be admissible”. There is some subtlety here. Unlike section 1 the document stands independently of the maker of the statement contained within the document. The requirement that direct evidence would have been admissible is not a requirement that the statement maker him or herself should have been able to give that evidence. This is necessarily so since the statement maker will often have no direct knowledge of what is being recorded. The distinction between sections 1 and 2 can be illustrated by taking the example of two notes written by a GP. In the first note the GP writes an account of his findings after examining a patient. In the second note he writes down the history of a complaint as told to him by a patient. The GP then becomes so ill he cannot give evidence. The first note would be admissible under section 1 but not the second because it is double hearsay. Both notes would be
Evidence in Civil and Criminal Proceedings in Guernsey 609 admissible under section 2 because the document was created by the doctor in the course of his profession. The policy behind section 2 is that business documents should be admissible in circumstances where they are likely to be reliable through the absence of any interest of the record maker in recording anything other than what occurred or else ought properly to have been recorded. Discretion Not to Admit to Evidence Assuming therefore that a statement in a document has qualified under either sections 1 or 2 the Court still retains a discretion pursuant to section 3 “if having regard to all the circumstances the court is of the opinion that in the interests of justice a statement . . . nevertheless ought not to be admitted, it may direct that the statement shall not be admitted”. The Court is required in particular to have regard to four broad criteria: (i)
the nature and source of the statement-containing document and its likely authenticity; (ii) the extent to which the statement appears to supply evidence which otherwise would not be available readily; (iii) the relevance of the evidence to any issue likely to have to be determined; (iv) the risk of unfairness to the accused having regard in particular to the inability to controvert the statement if its maker does not attend in person to give evidence. Where a statement prima facie admissible under sections 1 or 2 is prepared for the purposes of a criminal investigation or criminal proceedings the statement may not be given in evidence without the leave of the Court.45 Leave must not be given unless the Court is of the opinion that the statement ought to be admitted “in the interests of justice”. Again the Court is required to consider specified criteria: (i) the contents of the statement; (ii) the risk of unfairness to the accused having regard in particular to the inability to controvert the statement if its maker does not attend in person to give evidence; (iii) any other circumstances that appear to the court to be relevant. Assuming the ultimate admissibility of a statement it may be proved either by production of the document itself or a copy (no matter how many times removed from the original) authenticated in such manner as the Court approves.46 Section 6 expressly preserves any existing exception to the hearsay rule in criminal proceedings; likewise it preserves “any power of a court to exclude at its 45 46
S 4. S 5.
610 The Laws of Guernsey discretion” a statement otherwise admissible by virtue of ss.1 or 2. This is one of those provisions which suppose powers which are not necessarily assured under Guernsey law, for example in the absence to date of a provision equivalent to section 78 of the Police and Criminal Evidence Act 1984 (at least at the date of writing).47 More significantly, section 6 incorporates the schedule to the Law which expressly preserves the rights of a party faced with a statement admitted under the Law to challenge the statement as if it had been given directly and in person ie to adduce evidence: (a) going to credibility, (b) (with leave) of matters which could have been put in cross-examination as relevant to credibility and (c) of inconsistent statements. There are various supplemental provisions concerning evidence in the Law. These include allowing documents to be proved by enlargements of microfilm copies, the admissibility of handwriting comparison evidence and the drawing up of Rules of Court to allow evidence and glossaries to be put forward in such a manner as to facilitate comprehension of the issues in a case or else technical terms. None of these provisions affect admissibility itself. Expert Evidence By contrast section 9 is of fundamental importance and is a further significant relaxation of the hearsay rule in criminal proceedings. Section 9(1) states boldly: “An expert report shall be admissible as evidence in criminal proceedings, whether or not the person making it attends to give oral evidence in those proceedings.”
This can fairly be characterised as a very substantial step for a jurisdiction where, at the time of writing, an expert report cannot go into the bundle for a civil trial, even if the expert is to attend and give evidence.48 It is plainly contemplated that an expert’s report should be admissible notwithstanding the attendance of the expert in person; this is as much a matter of convenience and time-saving as anything else. If it is not proposed to call the expert in person the report is not admissible without leave. Again there are criteria which the Court must consider when deciding whether to give leave, these are familiar from before: (i) the contents of the report; (ii) the reasons why the report maker is not to give oral evidence; (iii) the risk of unfairness to the accused having regard in particular to the inability to controvert the statement if its maker does not attend in person to give evidence; (iv) any other relevant circumstance. 47 See above under the heading: Codes of practice for the detention, interview and treatment of persons in custody. 48 See the judgment in Webber v Allied Dunbar Plc (2001) 16 August at para 45. Again reform is likely in the not too distant future, indeed it is irresistible given the Criminal Evidence and Miscellaneous Provisions (Bailiwick of Guernsey) Law 2002. In any event Webber is vulnerable to challenge.
Evidence in Civil and Criminal Proceedings in Guernsey 611 There is a further important safeguard at section 9(4) in that the report, if admitted, is only evidence of any fact or opinion of which the report maker could have given oral evidence. Ie any ground of inadmissibility had the expert been present continues to apply. It should be noted generally that grounds of inadmissibility not related to the question of hearsay would continue to apply to any evidence adduced under the evidence provisions of the 2002 Law; eg that the evidence was not relevant. Section 11 allows for Rules of Court to be made for advance disclosure by any party of expert evidence in criminal proceedings. Although it is tempting to see the 2002 Law as being exclusively for the benefit of the Law Officers it is important to note that the provisions apply equally to evidence to be adduced on behalf of a defendant. Note that any issue of admissibility under the 2002 Law would be determined by the Judge in the absence of the Jurats. Assuming admissibility of the evidence it would be for the Judge to give the Jurats appropriate guidance concerning the quality of documentary hearsay evidence and the weight, if any, to be given to documentary hearsay evidence in all the circumstances of a case.49 Miscellaneous It is convenient to mention here the miscellaneous provisions which give the 2002 Law half of its title. These include the abolition of corroboration rules, such as they may have been in Guernsey common law. The presiding Judge is not/no longer required to warn the Jurats about convicting the accused on the uncorroborated evidence of a person merely because that person is an alleged accomplice of the accused or the alleged victim of a sexual offence said to have been committed by the accused. The year-and-a-day rule is likewise abolished; this was the conclusive common law presumption (again whether or not it ever applied in Guernsey is no longer relevant) that a death was not caused by an act or omission which occurred more than a year and a day before the demise of the victim. By section 16 provisions of the Protection of Children (Bailiwick of Guernsey) Law 1985 are extended to indecent pseudo-photographs. By section 17 the presumption that a boy under the age of 14 is incapable of sexual intercourse is abolished prospectively. PRESERVATION OF TESTIMONY
It is preferable to avoid having to rely upon an exception to the hearsay rule if the evidence to be adduced is important to a case. In any event the exceptions are so restrictive (at least in civil proceedings) that very often the Guernsey lawyer will have no choice but to find alternative means to adduce the evidence if the relevant witness cannot be called for whatever reason. 49 Para 3 of the Schedule merely provides that “in estimating the weight, if any, to be attached to such a statement regard shall be had to all the circumstances from which any inference can reasonably be drawn as to its accuracy or otherwise.”
612 The Laws of Guernsey There are two very useful and important Guernsey Laws permitting a party to preserve oral evidence in an admissible form for use in civil proceedings. They allow either the party himself or any other witness to give evidence before trial, or even before substantive proceedings have been commenced. The evidence taken is admissible and useful for all purposes as if it had been given at the eventual trial. Plainly the impact of such evidence is likely to be reduced because the tribunal eventually hearing the case will only have the evidence in written form. However, this is infinitely preferable to having no evidence at all and may very well make the difference between being able to bring a claim or not. The first of the two laws is the Loi relative à l’Examen des Témoins à Futur 1908. Article 1 of this Law has as its premise the fact that in a civil case the Court may order the examination of witnesses before a Commissioner Jurat in place of the Court and in advance of the trial. Article 2 provides that the evidence is to be given under oath or affirmation. Each page of the deposition must be signed by the Jurat.50 There is provision for replacing the Jurat if need be. The Jurat is entitled to the usual fees which would be payable to the Court for this service. By the Loi Supplémentaire à la Loi relative aux Preuves 1924 a broader power to preserve not only evidence but a whole case was given. The Law expressly covers the circumstances where a cause of action or other legal right depends upon a future condition precedent which has not yet been fulfilled (if ever). The person claiming such putative interest or right, whether real or personal, may nevertheless begin a civil action in order to preserve or perpetuate whatever testimony might be material to the proof of his claim. In the same year an Ordonnance was made governing the procedure for the application of these laws entitled Ordonnance réglant la procédure à suivre pour l’examen des témoins etc. dated 5 April 1924. The material provisions are found at chapter two of the Ordonnance. By paragraph 1 the Court may, on the application of a party, order a deposition to be taken from a witness where it appears he will be unable to give evidence because either he is on the point of leaving the Island, in danger of death or there is some other valid reason. A Commissioner is appointed to take the evidence, (eg a Jurat or Lieutenant Bailiff); a date, place and time are fixed for the evidence to be given and the witness is summonsed by the party wishing to call him. If the witness is ill the deposition could be taken in his home or at his bedside.
50 In modern practice the evidence is tape-recorded; it follows that no long-hand note is required, let alone that each page of it be signed. In a recent case the evidence was taken before a Lieutenant Bailiff in the witness’ home. The evidence was tape recorded and a typed transcript produced subsequently. That transcript could be certified by the Commissioner, if it were felt necessary. Given the age of these Laws it is really for the parties to reach a sensible agreement as to how to proceed within the spirit of the legislation having regard to technological developments. For example, there seems no good reason why such evidence should not be video recorded for later use in Court.
Evidence in Civil and Criminal Proceedings in Guernsey 613 Paragraph 2 provides for the examination, cross-examination and reexamination of the witness.51 Questions as well as answers are recorded, together with objections as to the admissibility of evidence. Paragraph 5 requires objections to the witness to be stated before he is sworn. The witness will still give his evidence, but subject to later adjudication on the objection. Paragraph 3 requires the deposition to be signed by the witness; a record must be made of any refusal to do so. Each page of the deposition must be signed by the Jurat.52 There are stringent provisions governing the failure of the party calling the witness to appear, or his opponent, or even the witness himself. In the first case the party loses his right to examine the witness. In the second case he loses his right to cross-examine. In the third case the witness may be arrested by order of the Jurat. The Greffier, (who sits as Clerk to the Commissioner), must deliver the completed deposition to the Bailiff and each of the parties. The Bailiff will rule on any objections raised in the deposition. By paragraph 10 the 1924 Ordonnance power to preserve evidence or whole cases in advance of substantive proceedings is confirmed. The same procedure applies in so far as it is applicable. It is conceivable that there may be no opposing party in such circumstances, although it would add weight to the evidence if the putative defendant is invited to attend to cross-examine; ie he would be served with proceedings in the normal way. Paragraph 11 confirms that any such evidence taken pursuant to the Ordonnance serves before all courts as testimony within the proceedings; however the mere fact that this procedure has been followed does not free the witness from giving evidence at trial if that is possible, eg where the witness has made an unexpected recovery. It follows that these Laws should be used whenever it is feared that evidence is at risk of being lost, whether because of illness, absence, untraceability of a witness or the simple passage of time. Most obviously they extend to the circumstances where a prospective claimant is himself at risk of dying or becoming unable to give evidence. EVIDENCE IN MATRIMONIAL PROCEEDINGS
There are various scattered provisions in Guernsey law governing evidence in proceedings where, typically, the interests of the husband and wife are opposed. There are special provisions concerning the taking of evidence of adultery given the sensitivity of the issues, see Articles 61 and 62 of the Matrimonial Causes Law 1939 and Rule 46 of the Matrimonial Causes Rules 1952.53 Similarly delicate issues are 51 Note the assumption that the prospective defendant will be involved. In most cases it will be appropriate to issue substantive proceedings and apply within those proceedings for an order pursuant to the 1908 Law and 1924 Ordonnance. The evidence will carry more weight if the defendant has had an opportunity to cross-examine. 52 Again such formalities are inconsistent with modern recording methods and may be dispensed with by agreement between the parties. 53 Note also in this context Art 30 of the 1865 Law.
614 The Laws of Guernsey the subject of the Matrimonial Matters (Evidence) (Guernsey) Law 1953 rendering admissible the evidence of a husband or wife to prove whether marital intercourse took place. There are similar provisions concerning bigamy in the Loi Supplémentaire à la Loi relative aux Preuves au Criminel 1930.
EVIDENCE OF OPINION
English common law principles would again be applied in the absence of any statutory provision governing (expert) opinion evidence. The only provision of the Royal Court Civil Rules which makes express reference to experts assumes a great deal which is unsaid anywhere else in Guernsey primary or secondary legislation, including Orders of the Royal Court.54 Accordingly the starting point is that the opinions, inferences or beliefs of individuals are, prima facie, inadmissible in proof of material facts. The evidence is excluded, whether or not it is hearsay, on the basis that opinions are worthless if founded on no evidence or, alternatively, because they usurp the function of the tribunal whose rôle alone it is to draw conclusions of law or fact.55 The first exception to the general rule is that evidence of general reputation is admissible to prove the existence of public rights, pedigree, mariage and identification. Likewise, and much more importantly in practice, the opinions of expert witnesses are admissible whenever the subject matter of their expertise requires special knowledge, study or experience to generate an informed and authoritative opinion, see generally chapter 32 Phipson on Evidence 14th edition. Given the absence of any detailed guidance in Guernsey procedural law as to how an expert should go about his or her task it is again appropriate to look to English practice. Although there is no question of the very specific procedural requirements of Part 35 of the Civil Procedure Rules applying to Royal Court litigation,56 an expert instructed in Guernsey litigation would be well advised to follow the general requirements of English law and procedure. Regard could and should be had to publications such as the Civil Procedure Working Party Code of Guidance on Expert Evidence,57 the relevant sections of the Commercial Court Guide 6th edn and Part 35 CPR generally. Certainly the expert will come to no 54 RCCR 43(b). Note what was read into this provision at para 43 of the Webber v Allied Dunbar judgment; however, the rule contains no substantive provision permitting expert evidence to be adduced nor was the legislature involved, if reference to the States was intended. The RCCR is an Order of the Royal Court exercising its inherent law-making power preserved by s 64(1)(b) of the Reform (Guernsey) Law 1948. It appears that the draftsmen of the RCCR assumed the English common law position. Note again however the effect of s 12 of the Royal Court of Guernsey (Miscellaneous Reform Provisions) Law 1950. 55 A distinction must be made between inadmissible opinion evidence and the attempts of witnesses to express, as best they can, what they experienced, which are, of course, admissible. 56 At least not without reform of the RCCR. 57 Available on the Expert Witness Institute website at www.ewi.org.uk/code_of_guidance.asp.
Evidence in Civil and Criminal Proceedings in Guernsey 615 harm in following English guidance; in particular the duty at 35.3 to “help the court on the matters within his expertise” which duty “overrides any obligation to the person from whom he has received instructions or by whom he is paid”. See also the Practice Direction supplemental to Part 35. It is noteworthy that the position of the expert witness has become such that parties to substantial litigation will often engage additionally an expert advisor whose rôle it is to advise and assist in a partisan manner, but who will not (and could not now) be put forwards as an expert witness because of his lack of independence.58 BANKERS’ BOOKS EVIDENCE (GUERNSEY) LAW 1954
By this Law any party to legal proceedings (whether civil or criminal) before any Court in the Islands of Guernsey and Alderney may apply to the appropriate Court for an order that the applicant be at liberty to inspect and take copies of any entries in a banker’s book within the Islands. The application may be made ex parte 59 or on notice, but any order must be served not less than three clear days before the date set for compliance. The Guernsey legislation follows closely the English Bankers’ Books Evidence Act 1879. In English case-law a distinction is made between cases where the bank account is that of a party to the proceedings and where the bank account belongs to a third party. Likewise the principles to be applied vary as between civil and criminal cases. Subject to proof that the book was a banker’s book, a certified copy of the entry proves itself. The bank is not a compellable witness except pursuant to Court order. ELECTRONIC TRANSACTIONS
Sections 1–9 of the Electronic Transactions (Guernsey) Law 2000 came into force on 1st March 2001.60 In essence the Law facilitates electronic business by putting electronic transactions on a footing equal with existing transactional methods. It appears here because of its strongly evidential flavour. Section 1 provides as follows: “Information shall not be denied legal effect, validity, enforceability or admissibility solely because it is in electronic form.”
Specific provisions follow for contracts, declarations, statements, signatures, documents, and information incorporated by reference to like effect. Section 8(1) 58 Note in passing the important case of Clough v Tameside and Glossop Health Authority [1998] 2 All ER 971 concerning waiver of legal professional privilege in documents supplied to an expert. Considerably greater care is required when instructing an expert than previously. 59 The usual criteria for determining when it is and is not appropriate to proceed ex parte apply here also. 60 See the Electronic Transactions (Guernsey) Law 2000 (Commencement) Ordinance 2001. See also the Electronic Transactions (Sark) Law 2001 and the Electronic Transactions (Alderney) Law 2001; note that the latter is subject to a list of matters exempted by the Electronic Transactions (Exemptions) (Alderney) Order 2002 which includes conveyances, leases, wills, declarations of trust, negotiable instruments, affidavits, notices of cancellation of utilities and the rules, practices and procedures of a court or tribunal, including pleadings, judgments and orders.
616 The Laws of Guernsey provides that any law requirement for a document to be in writing, or requirement for a signature, seal, attestation or notarisation, or that documents be retained is satisfied by the making or keeping of the equivalent in electronic form. Section 8(2) makes the interesting provision that if a law requires or permits information or a document “to be given, produced, served, sent or delivered . . . giving, producing, serving, sending or delivering the information, the document or copy thereof in electronic form or by electronic means satisfies the law”. The word “law” expressly encompasses both statutory and customary law. Note however that by section 9(1) a person cannot be compelled to do or accept anything in electronic form, although such obligation can be imposed by Ordinance pursuant to section 9(2).61
THE TRIBUNALS OF INQUIRY (EVIDENCE) (GUERNSEY) LAW 1949
This Law gives power to any tribunal established by the States for inquiry into a definite matter to enforce the attendance and examination of witnesses under oath, the compulsory production of documents and the issue of letters of request to examine witnesses out of the Island. A procedure is established whereby those not complying with the tribunal’s directions may be punished by the Royal Court. Prima facie the tribunal must sit in public.
OBTAINING EVIDENCE IN GUERNSEY
It is common for parties to proceedings in other jurisdictions to seek evidence, information or other assistance in support of those proceedings. There exist a number of statutory and inherent powers which may be called upon in such circumstances. The most obvious are the ancillary powers when making a Mareva order to require disclosure of assets backed up by the documents necessary to police the order, see also Anton Piller, Bankers Trust and Norwich Pharmacal orders, all of which have been considered elsewhere; likewise the various regulatory and anti-money laundering Laws. It is important to note that section 426 of the Insolvency Act 1986 is applied by statutory instrument to Guernsey.62 The net effect is that where a Court in the United Kingdom, Jersey or Isle of Man requests assistance under its insolvency law, the Guernsey Court must assist in relation to any matters specified in the request, applying the insolvency law applicable by either Court, in relation to comparable matters falling within its jurisdiction. This gives, in practice, very broad powers. Assistance of a more general kind may be requested in extra-jurisdictional civil proceedings pursuant to the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters dated 18 March 1970, which was extended to 61 See generally an article by Peter Harris in the Jersey Law Review [2001] 5 JL Review 234 concerning the equivalent legislation in Jersey. 62 See the Insolvency Act 1986 (Guernsey) Order 1989 SI No 2409 of 1989.
Evidence in Civil and Criminal Proceedings in Guernsey 617 Guernsey.63 This is in turn reflected by the extension of the Evidence (Proceedings in Other Jurisdictions) Act 1975 to the Bailiwick, with certain modifications.64 Under the 1975 Act the Royal Court, Court of Alderney or Court of the Sénéschal may assist a requesting Court to obtain evidence within the Bailiwick for the purposes of civil proceedings which either have been instituted before the requesting Court or whose institution before that Court is contemplated. In giving effect to any such application the Bailiwick Court applies its own procedural law governing the collection of evidence, subject to the requesting Court’s overall power to adjudicate eventually on questions of relevance and admissibility.65 Note that the United Kingdom declared pursuant to article 23 of the Convention that it would not execute letters of request issued for the purpose of obtaining pre-trial discovery of documents. There are three routes whereby a request for assistance may be made to the Royal Court. The first, Hague Convention route, is by letter of request directed to the Bailiff; the second is the formal diplomatic procedure via the UK Foreign and Commonwealth office which transmits the request to the Lord Chancellor’s Department which in turn passes the request to the Lieutenant Governor who then communicates it to the Bailiff. The third route is to send the letter rogatory direct to Guernsey Advocates to make the application on behalf of the party concerned. The provisions of the Act apply between Courts in different parts of the Bailiwick.66 The 1975 Act also provided for criminal proceedings but has been superseded in this regard by the Criminal Justice (International Co-operation) (Bailiwick of Guernsey) Law 2001.67 The 2001 Law makes comprehensive provision for mutual service of process and provision of evidence, together with powers to search for and seize evidence on behalf of the proper authorities of another jurisdiction. The Guernsey Police Officer conducting a search may be accompanied by a person 63 The convention is in force in Anguilla, Argentina, Aruba, Australia, Barbados, Bulgaria, Cayman Islands, China, Cyprus, Czech Republic, Denmark, Djibouti, Estonia, Falkland Islands, Finland, France, French Guiana, French Polynesia, Germany, Gibraltar, Guadeloupe, Hong Kong, Isle of Man, Israel, Italy, Jersey, Latvia, Norway, Poland, Portugal, Saint Pierre and Miquelon, Singapore, Slovak Republic, Sovereign Base Areas of Akrotiri and Dhekelia, Spain, Sweden, Switzerland, United Kingdom, United States and Venezuela. 64 See the Evidence (Proceedings in Other Jurisdictions) (Guernsey) Order 1980 SI No 1956 of 1980. The Order also extended the Evidence (European Court) Order 1976 to the Bailiwick. 65 See the case of England v Smith [1999] TLR 850 concerning an application by a foreign liquidator. 66 By the Oaths and Evidence (Guernsey) Order 1966 the Oaths and Evidence (Overseas Authorities and Countries) Act 1963 was extended to the Bailiwick of Guernsey. This Act provided for the taking of evidence for foreign civil proceedings or international courts and tribunals, and for the administration of oaths and the doing of notarial acts by representatives of a protecting power acting on behalf of the United Kingdom in foreign countries. The order is (probably) still in force. The 1975 Act does not itself appear to apply to requests made between the Islands and the United Kingdom, instead common law principles of comity apply to like effect. 67 And rules. The Law came into force on 1 July 2001, see the Criminal Justice (International Co-operation) (Bailiwick of Guernsey) Law 2001 (Commencement) Ordinance 2001. The rules are the Royal Court (International Co-operation) Rules 2002. These provide inter alia for evidence to be taken by either the Bailiff, a Lieutenant Bailiff or a Jurat sitting alone. There are provisions also for evidence to be taken in camera.
618 The Laws of Guernsey authorised by HM Procureur (ie the foreign investigating officer). Evidence seized is to be transmitted to the court, tribunal or authority requesting assistance. The 2001 Law envisages witness evidence being taken in Guernsey for onward transmission to the other jurisdiction. There is an interesting provision at section 5 whereby a prisoner already serving a sentence in the States Prison, or even merely awaiting trial, may be transferred outside of the Bailiwick for the purpose either of giving criminal evidence or of being “. . . identified in, or otherwise by his presence assisting, such proceedings or the investigation of an offence”. The prisoner must consent, or an appropriate person on his behalf, if the prisoner’s youth, physical or mental condition mean that it is inappropriate for him to act for himself.68 The equivalent UK provisions to the 2001 Law are to be found at part I of the Criminal Justice (International Co-operation) Act 1990. Again English case-law would be looked to if similar issues arose in Guernsey which had already been considered in that jurisdiction. For example section 3(5) of the Law states that evidence obtained by virtue of a letter of request under the Law may not be used for any purpose other than that specified in the letter, save with the consent of the relevant foreign authority. The material provision is identical in the English Act69 and was considered in the case of Barlow v BOC Ltd & Ors.70 The English Court of Appeal held that the prohibition did not bar the use of the evidence in civil proceedings brought by the alleged victims of the fraud which was the subject of the criminal proceedings. This case would be very persuasive should the same issue arise in Guernsey. By section 5 of the Extradition Act 1873 the United Kingdom Home Secretary has power to require a “Police Magistrate or a Justice of the Peace to take evidence for the purposes of any criminal matter pending in any Court or Tribunal in any foreign state”. This appears to be an additional power to that now provided under the 2001 Law and differs in that the request is made directly to the Bailiff who refers the matter to the Law Officers.71
68 It is anticipated that the appropriate person would be someone other than a Police or Law Officer; equally it is (only) implicit that the return of the prisoner in at least as good a condition as when he left is expected. 69 S 3(7) of the Act. 70 [2001] 3 WLR 1687. 71 Two cases concerning the 1975 and 1873 Acts respectively are Rea Brothers (Guernsey) Limited v Securities & Exchange Commission [1986] 3 GLJ 59, (see also the Court of Appeal judgment in the same case dated 17 October 1986), and Re Boulbain [1988] 6 GLJ 167. Both concerned applications on behalf of US agencies and were dismissed as amounting to no more than fishing expeditions.
23 Guernsey Law of Realty and Leases1 INTRODUCTION
R
EALTY AND LEASES are taken together even though in Guernsey law a lease is not realty but personalty;2 it is a contractual, personal right as opposed to a right in rem.3 There is no notion of leases being or becoming interests in land if certain formal requirements are met. It is fair to say that the whole of Guernsey law relating to landlord and tenant is largely undeveloped; which is not necessarily a disadvantage having regard to the excessive complexity of the topic in English law. In essence the long commercial or residential lease is unknown; principally because of the difficulty of taking good security in respect of any premium payable. Although leases are commonly used they tend to be of short fixed duration or else periodic tenancies. Unlike England the flying freehold is institutionalised and takes the place of the long residential lease. These are all matters which are examined in greater detail below. By contrast Guernsey’s law of realty has a very ancient history. It is an area of Guernsey law where, par excellence, Norman customary law continues to exert a strong influence. English land law has little direct influence, even where English notions have, historically, been adopted and adapted to local circumstances.4 The feudal origins of Guernsey land law are still felt even at the beginning of the third millennium.5 As Normandy expanded either through grant from the French Crown, conquest or a combination of the two, so land was in turn granted to prominent warriors, noblemen or the Church, besides the substantial ducal
1 I acknowledge here with thanks the very great help Geoff Mahy gave to me in preparing for the Guernsey bar finals conveyancing paper. A great deal of what is said here about Guernsey conveyancing has its origins with him. 2 See also the Ordonnance des Biens Meubles et Immeubles, Recueil D’Ordonnances Tome III 231 which sets out the principles by which meubles and immeubles are distinguished (as opposed to personalty and realty). 3 The same is true in modern French law, save for a few well defined exceptions such as the bail emphyéotique whereby a tenant is granted a term of between 18 and 99 years at a low rent on condition that he carries out specified major works to the land, see Art L451-1 C. rur. 4 See dicta of the Bailiff of Jersey in the Guernsey Court of Appeal case of Waterman v McCormack (2002); English notions of joint tenancy and tenancy in common were firmly put to one side in favour of Guernsey jurisprudence relating to “joint ownership” and “ownership in common”. 5 For an entertaining account of fiefs and feudal tenures see Edith Carey, The Channel Islands 2nd edn (1924) ch 3; see also L James Marr, A History of the Bailiwick of Guernsey (Phillimore 1982) part II.
620 The Laws of Guernsey domain itself.6 Land was sub-divided in further grants leading to subinfeudation or else re-allocated as a result of forfeiture or for want of an heir (escheats) leading to a hierarchical system with the duke at its head. Guernsey was divided into a number of fiefs; a substantial fief was owned by the Abbey of Mont-St-Michel, another subsequently returned to and remained with the Crown. Yet other areas of land to this day remain directly held from the Crown by way of a form of long lease.7 Even today the fief to which a parcel of land belongs is recorded in the conveyance. Until the 1980s a feudal due of 2 per cent of the purchase price was payable in Guernsey to the Seigneur of the fief in order to secure the necessary permission for sale or transfer of land.8 The payment is now made to the government as part of the taxation payable when land is transferred.9 In Sark the feudal due remains intact and payable to the Seigneur of Sark.10 It is no coincidence at all that the other area of Guernsey law still heavily influenced by Norman customary law is the law of succession. There is a very real sense in which the law of succession formed an indissoluble union with the law of realty, at least until the nineteenth century. Peter Jeremie’s work on Real Property11 is in fact devoted almost exclusively to the topics of wills and succession. The closeness of the relationship between the laws of succession and realty is illustrated by the fact that in Guernsey the registration of a will of realty12 remains sufficient to prove title. Although the link between succession and realty was weakened in the twentieth century one subject can still not be understood fully without at least an appreciation of the other. The reason is to be found in a key principle underpinning Norman customary law—the notion that realty, and in particular inherited realty, must be kept both within the family and intact.13 The concept of family meant, in reality, the male line, and again more specifically, the male line through the eldest son; this to the near complete exclusion of females for whom separate provision was made on marriage. A family traced its history through the male, not the female line, if only for the simple reason that the family name would not be transmitted by a daughter. Norman customary law evolved a complex series of rules determining succession14 to land with distinctions being made between 6 The Duchy of Normandy, more or less corresponding to its present-day boundaries, comprised successive grants of land from an appeasing or defeated French Crown in the years 911, 924 and 933 made to Rollon, the first “Duke” who was succeeded by his son Guillaume Longue Epée in 933. 7 So-called fee farm land, again most likely originating in the Crown’s gift to a favoured individual entitled to farm the dues payable by the occupiers of the land. 8 This due is known as congé and is considered in greater detail below. 9 Although about to become subsumed into document duty, the Guernsey equivalent of stamp duty. 10 Sark’s feudal structures remain much the most intact of any of the Channel Islands with the Seigneur still playing an important rôle in daily life and maintaining a true relationship with Her Majesty the Queen, the Seigneur’s feudal overlord. 11 2nd edn (1866). See also the minutes of his evidence set out in the Report of the Commissioners Appointed to Inquire into the Civil, Municipal and Ecclesiastical Laws of the Island of Jersey 1861. 12 It will be recalled that prima facie two wills must be made in Guernsey, one of realty and one of personalty. 13 Ie not sub-divided into smaller and ultimately non-viable economic units. One can talk of the feudal and familial imprints of the Norman coutume. 14 Ie inheritance.
Guernsey Law of Realty and Leases 621 categories of land, ie propres, acquêts, and conquêts15 with additional (but more relaxed) rules for realty within towns.16 It necessarily followed that because the law determined who would or could inherit land there was little or no rôle for testamentary succession to realty; certainly where there were surviving family members, especially descendants. It follows that Norman succession to realty was principally ab intestat ie a system based upon forced heirship. This finds expression in the customary principle that le mort saisit le vif; ie that death seises the living (of the deceased’s realty) without the need for any other formality. The right of an individual to dispose of family land in particular was severely restricted. Family interests were protected by the right to buy back land sold by a relative,17 or else re-adjustment between heirs if one was favoured improperly during the lifetime of the deceased. Strong echoes of customary principles are still found in modern Guernsey law through (i) the restrictions on testamentary freedom where a deceased has surviving descendants18 (ii) the interest of a surviving spouse until re-marriage (or death, if sooner) in one half of the deceased’s realty19 (iii) the continuing survival of the retrait lignager, albeit very restricted, and (iv) the rules governing intestate succession to realty. Norman customary principles are in contrast to Roman law where the concern was for the pater familias who alone was sui juris. The family’s patrimoine belonged only to him.20 Accordingly testamentary succession predominated with no distinction made between assets in terms of their origin or nature, nor between men and women let alone between elder and younger children. Unsurprisingly Guernsey law of realty is another area where the influence of French law is still strong and ought to be stronger. Ordinances concerning life interests in land and the distinction between realty and personalty already noted above were taken directly from the Code Civil.21 There seems little doubt that the law relating to servitudes could also draw from modern French law. In any serious dispute concerning realty one could properly look to modern French law for possible assistance, although obviously not binding a Guernsey court.
15 A propre (pronounced prop) being true inherited family land, the acquêt being acquired land, typically by way of purchase, a conquêt being an acquêt acquired after marriage, and therefore subject to a matrimonial régime. 16 Called bourgages; in French a bourg is a large village or town; hence Cherbourg; the same Latin/Norman antecedents produced British town names such as Burgh le Marsh in Lincolnshire and Sedbergh in Cumbria. 17 The retrait lignager, literally the (right of) lineal re-taking; considered in detail below. 18 See s 4 of the Law of Inheritance 1954 and the section on succession law generally. 19 S 3 of the 1954 Law, reflecting the historical droit de douaire (surviving widow’s dowry) or droit de viduité, (surviving widower’s right of enjoyment of his deceased’s wife’s realty). 20 Hence patrimony. 21 See the Rapport sur le Droit Coutumier à l’Égard de l’Usufruit établi sur les Immeubles of 1854 and the Ordonnance des Biens Meubles et Immeubles of 1852.
622 The Laws of Guernsey
BAILIWICK CONVEYANCING
Each of the three main Islands comprising the Bailiwick of Guernsey, namely Guernsey, Alderney and Sark, have distinctive systems of conveyancing; again there is a parallel with the differences in their respective laws of succession. Sark remains the most faithful to its customary antecedents while Guernsey has refined and formalised aspects of its conveyancing system and Alderney operates a significantly different system. It is proposed to outline the main features of each system.
GUERNSEY CONVEYANCING
Until the end of 1969 Guernsey conveyances were drafted in French.22 On 3 October 1969 the Guernsey Bar adopted codes of instruction and specimen forms of conveyance in English by way of a helpful 69 page booklet. However, it is obviously still important to be able to read French to a fairly advanced level in order to deduce title and investigate obligations in conveyances from before that time. A table of French terms of art found in Guernsey conveyances prior to 1970 is set out at appendix 6.23 There are other historical matters which must be understood in order to make sense of Guernsey conveyancing. Rentes and Old Guernsey Currency Conveyances invariably refer to rentes or wheat rentes, they are also mentioned in every set of conditions of sale.24 Historically rentes were used as a means either of securing borrowing against or purchasing land. A rente was an obligation to pay a certain amount, originally in kind, usually a wheat rente.25 There were two forms of rente. The rente foncière was made between the vendor and purchaser of realty and amounted to a sale with all or part of the purchase price converted into a prima facie perpetual charge of so much rente per annum. The rente hypothèque was made between an owner of realty and a lender as opposed to a purchaser. Historically there were important distinctions between the two forms of rente relating to the 22 See the Conveyancing (Guernsey) Law 1969 and the Conveyancing Order 1969 which led to the change. 23 Note that it is still lawful to convey in French. Every so often a client will request that a conveyance is so drafted, for whatever reason—if only to maintain tradition. 24 The contract of sale as opposed to the conveyance. 25 Even English wheat, see the case of Jeremie v de Havilland (1814) (Privy Council). Note that Guernsey rentes performed a similar function to rentcharges in English land law; the use of rentcharges to purchase property was apparently especially popular in Manchester, Bath and Bristol, see (1975) Law Com. No. 68.
Guernsey Law of Realty and Leases 623 right to redeem or of retrait. These distinctions became meaningless after 1929 when any rente became redeemable at any time at the election of the landowner.26 The price of the rente would be fixed using a measure known as a “quarter”; a quarter was itself sub-divided into bushels, denerels and quints as appears from the table below: Quarter Bushel Denerel Quint
1 4 6 5
One quarter One twenty-fourth One one-hundred and twentieth
There are five quints in a denerel, six denerels in a bushel and four bushels in a quarter. Accordingly a quint was 1/120th of a quarter, a denerel was 1/24th of a quarter and a bushel was ¼ of a quarter. As Guernsey developed a money-based economy so rentes came to be expressed in monetary terms. This required quarters of rente to be converted into currency. The earliest currency likely to be encountered is the livre tournois. This was eventually replaced by the Guernsey pound. There were fourteen livres tournois to the Guernsey pound. The Guernsey pound itself was replaced or, more strictly speaking, re-valued to parity with the English pound in 1921. The pre-1921 rate of exchange was Guernsey £1 19 English shillings and a half penny, ie 95.21p. It follows that 14 Livre Tournois Guernsey £1 95.21p sterling.27 There is obviously no need to convert figures first expressed in pounds after 1921. No new rentes are created these days. Because rentes were not indexed their values are typically nominal, given the effect of inflation. Very few rentiers28 trouble to collect rentes. The chief interest in rentes is to capitalise them for redemption purposes; ie to rid the material land of their encumbrance. Some banks insist upon this. If the rente is pre-1948 in origin it is redeemable in the manner provided for in the relevant conveyance of rente, alternatively twenty-four times the annual rente figure if no redemption multiplier is stated but, in any event, at no greater rate than twenty-four times the annual payment. After 1948 any new rentes are redeemable at the stated rate (ie multiple) or twenty-four times the annual figure if none is given. If no figure is given for the currency equivalent of the rente for capitalisation purposes the rate of 80p (16 shillings) per quarter is adopted. 26 Loi relative au Rachat de Rentes 1929, as amended by the Loi relative au Rachat de Rentes 1947. See also Jeremie, Real Property (1866) p 166 et seq concerning the retrait foncier, now of historical interest only. It is noteworthy that rentes were a means of avoiding treizième, the feudal due payable on transfer of land. During the 1960s rentes even offered tax advantages to UK residents. 27 More properly speaking the new Guernsey pound, which equals £1 sterling. It remains to be seen what will happen as and when the Euro is adopted by the United Kingdom; inevitably Guernsey would align its currency with the Euro, perhaps through adopting a new currency called the Guerno on a 1:1 basis. More likely it would simply adopt the Euro. 28 A rentier being the owner of a rente.
624 The Laws of Guernsey It follows that if wheat rente of ten quarters per annum is payable on a piece of land but nothing more is said the redemption figure will be calculated as follows: Ten quarters 80p per annum 24 ie £8 24 £192. To this must be added the current year figure of £8 producing a total redemption price of £200. By contrast if the ten quarters’ rente per annum are expressed to be payable at the rate of 28 livres tournois per quarter the following calculation applies: 28/14 Guernsey £2; 2 95.21p £1.9042 10 quarters £19.042 24 £457.008 plus current year £476.05 to redeem. It is important to note that in the standard conditions of sale a purchaser warrants that the land will be conveyed free of rentes in default of which the vendor must pay to the purchaser an amount equivalent to the rente redemption figure and up to 6 years of annual payments. A rente is an interest in land; accordingly it is discharged by conveyance of the rente to the owner of the land, the effect of which is to discharge the rente. The name given to such a conveyance was an amortissement, literally a capitalisation. Given the cost of a formal conveyance and the small amounts at stake an informal procedure is usually adopted whereby the redemption figure is paid29 and a receipt given by the rentier for the discharge of the rente incorporating a promise to make a formal conveyance if so required. In any event a rente becomes prescribed if not paid and/or enforced for a period of 20 years.30 Unpaid arrears of rentes become prescribed after nine years. A further and important hang-over of rentes is the fact that what would be known as freehold land in England is known as land prise à rente in Guernsey notwithstanding the fact that no rente as such is paid, other than the purchase price outright. Again a conveyance in French will refer to the bailleur and preneur 31 as opposed to vendor and purchaser. Lending is no longer secured by rentes but bonds, to which we return later. Poulage and Quarantaine Occasionally one will see reference to feudal dues payable to the seigneur of the fief by owners of land situated upon the fief. Two such dues were known as poulage 29
Or such smaller sum as may be negotiated. See the Loi Relative à la Prescription Immobilière of 1909. Although note the complexity of Guernsey prescription law in the context of realty concerning mere non-user and the passage of time; see p 398. 31 Ie the language of bailment, which survives in English law as regards objects; the bailleur being the person who bails (at a price—the rente) and the preneur being the person who takes (upon payment of the price—rente). 30
Guernsey Law of Realty and Leases 625 and quarantaine. Poulage was the obligation to pay a due of one or more chickens to the feudal lord; obviously and originally payable in kind the payment could be made in currency at the conversion rate of 9 shillings for a pair of capons and 7s. 2d. for a pair of hens. Quarantaine was a quarantaine d’œufs, or 4s. 9d. in money terms. Other more exotic feudal dues or redevances included a chaplet of roses and even a dozen butterflies.32 All such feudal dues are, to all intents and purposes, obsolete.33 Units of Measurement The traditional measure of land area in Guernsey is the vergee. The vergee itself comprises forty perches. There are 2½ vergees to the acre, it follows that one vergee is .4 of an acre or 0.162 of a hectare. The perch was also known in England as a measure of length, particularly for land, being 5½ yards. A square perch was 30¼ square yards. The perch had its origins in old French which itself derived from the Latin pertica, a pole. The vergee and perch are still in common use in Guernsey today. Land Non en Perchage, Fee Farms & Franc Fiefs The Domesday Book was the great historical account taken by Duke William of his newly conquered lands and was a pillar of the feudal establishment he created. Similar accounts on a much smaller scale were taken from time to time by seigneurs of fiefs in Guernsey. These were known as Livres de Perchage; taking their name from the unit of measurement referred to above. By way of example in the Fief de Longue, a sub-fief of Fief Le Comte, livres were produced in 1873, 1914 and finally in 1949. They are no longer produced given the obsolescence of feudal dues generally. As noted already modern conveyances continue to state the fief in which a parcel of land is situated. Occasionally one will see in a conveyance34 the letters “nep” or the words “non en perchage”; this indicates that the property is not within any fief at all. The best example of this is the Braye du Valle, an area of land reclaimed from the sea in 1808 and formerly separating part of the parish of the Vale from the rest of the Island of Guernsey. Congé is payable on land non en perchage in the usual way.35 Although fee farm land is not in any fief, it is not in practice described as non en perchage. Congé is not payable given that this land is held by way of leases of varying lengths (although renewable every 21 years) at token rents directly from the 32
See Edith Carey ibid p 57. Save for the purposes of examination papers. HM Receiver General abandoned collection of poulage, quarantaine and chefrentes with effect from 10 October 1980. 34 Again particularly in examination papers. 35 Congé is a feudal due payable for permission to transfer realty, it is now paid to the States of Guernsey, see below for a more detailed account of this and other costs associated with Guernsey conveyancing. 33
626 The Laws of Guernsey Crown. The leases are administered by the Crown Officers; the best known fee farms are Lihou Island and the Grande Mare area. Sometimes land will be found partly on a fief and partly on fee farm land. This requires some negotiation with the Law Officers concerning the appropriate amount of congé to be paid. Franc fiefs are fiefs which are exempt from congé; there are few of them and they are not of great significance. There is one such called Le Franc Manoir Le Marchant in the vicinity of the offices of a certain firm of Advocates. The Open and Local Markets Guernsey’s residential housing market is divided into two; the open market and local market. The history of the origins of the division is beyond the scope of this book. In essence the owners of properties above a certain rateable value had the option of electing to place their dwelling upon an open market register which is now effectively closed; the quid pro quo was their own prima facie restriction to this market. The open market is, as its name implies, open to all. Anyone with a right to live in the United Kingdom36 may buy an open market property and live in it and work in Guernsey. Because of this valuable right and also because of their higher rateable value open market properties tend to be significantly more expensive than local market properties. Indeed the purpose in dividing the markets was to offer some protection to local residents. By way of contrast, local market property can be purchased by anyone but may only be lived in by someone who is either a qualified Guernsey resident in their own right, or a licence holder from the Housing Authority or else within one of the exceptions provided for by the Housing (Control of Occupation) (Guernsey) Law 1994.37 The only relevance from a conveyancing point of view is considered below and comprises the need for further checks to ensure that an open market registration remains good. The Contract Court The Contract Court38 is held every Tuesday and Thursday morning at 9.30 am and sits in the Magistrate’s Court.39 A Lieutenant Bailiff (typically a senior Jurat) sits, usually with 4 other Jurats. The purpose of the Court is to witness the parties’ verbal ratification of conveyances and other formal legal documents requiring execution in this manner. The most notable other examples of documents coming
36
Or, conditionally, EU rights of abode. For example the lowly English husband of a Guernsey woman, whose status during the first 10 years of Island life is no higher than that of a bondsman. 38 Commonly referred to as the Conveyancing Court. 39 The Contract Court after Easter Monday is always cancelled. 37
Guernsey Law of Realty and Leases 627 before the Court are bonds securing borrowing against Guernsey realty and wills of Guernsey realty.40 Every conveyance must be prepared and overseen by an Advocate. It is typically the purchaser’s Advocate who draws up and signs the conveyance in the left-hand margin of the first page. On the day for completion the parties attend the Court and the Advocate for the purchaser, or his conveyancing clerk, introduces the parties and the conveyance to one of the Jurats. The vendor’s Advocate or his conveyancing clerk is also present, if indeed the vendor is represented. The transaction is explained and the Jurat satisfies him or herself that: (a) there is nothing obviously inappropriate as to what is proposed (b) the parties appear to have sufficient understanding of the transaction and (c) they confirm the transaction. It is fair to say that the Jurat’s examination is necessarily little more than cursory. The requirement to appear is itself a considerable safeguard. The key thing to note is that the parties themselves do not sign conveyances placed before the Contract Court. Apart from the Purchaser’s Advocate it is only the Jurat who signs; the Advocate or his clerk obtains two more Jurat signatures to each conveyance after releasing their client so that a total of three Jurats sign, one of whom must be the Lieutenant Bailiff.41 The Contract Court has its origins in a society which was largely illiterate; hence the oral tradition and signature only by those present likely to have been able to comprehend such documents in earliest times. It is not uncommon for other persons playing some part in a conveyance to appear before the Contract Court; for example a representative of a bank to release property being sold from a bond, or else a neighbour to resolve an ambiguity over a border. A great deal goes on trust, even the simple fact of identity. In a small community this is not generally a problem. Absentee purchasers or vendors may act by way of power of attorney granted to an Advocate or some other individual. Alternatively their consent to a transaction may be taken in advance of completion at an earlier Contract Court and noted by the Jurat. The Greffe The Greffe is both the Court office responsible for the administration of the Royal Court and Magistrate’s Court as well as being the Island’s principal registry. It is as a registry that the Greffe plays a fundamental part in the conveyancing process. Copies of all conveyances are kept in enormous bound volumes in the Greffe’s strong-room; it is also here that bonds are registered, even changes of name. Note that it is not the properties or titles themselves which are registered, only documents. The Greffe is not a registry in the sense of the English Land Registry. Guernsey conveyancing equates to conveyancing of unregistered title in England. 40 A bond is the equivalent of a mortgage, albeit with some important differences; see the section below on bonds. Note that a will of realty must be signed by the testator, unlike conveyances and bonds; see further below. 41 A will requires only two Jurat signatures.
628 The Laws of Guernsey Again it is at the Greffe that the conveyancer may search for civil claims registered in the Livre des Hypothèques, Actes de Court et Obligations or any registered lease (ie registered in the sense of making it public knowledge through the act of registration). It is also noteworthy that all public company records are kept at the Greffe; it is only very ancient records that are removed to the Island’s Archive.42 The Cadastre The Cadastre43 is another registry and located in Smith Street, St Peter Port. The Cadastre maintains a register of each and every parcel of land in Guernsey, essentially for rating purposes, but also for the fixing of fair rents, although this function is seldom used in practice. It is, if you like, a modern Domesday Book for the Island; the modern equivalent of a Livre en Perchage. It gives both the rateable value of each property and the annual rental value.44 The present Cadastre dates back to 1924 although some records go back to 1912. The Cadastre contains a great deal of very practical information for conveyancers when conducting their searches. It is much easier to locate a property in the Cadastre as opposed to the Greffe; principally because it is indexed according to the property not the date of a transaction or the names of the parties concerned. An individual property can be found by reference to a large scale map with each title marked and numbered upon it.45 The Cadastre entry will enable the conveyancer to discover the history of the site; it is likely to disclose when various improvements were made and amenities added to the property (all such improvements requiring a re-assessment of rateable value),46 it will also indicate the identity of neighbours and neighbouring property. It will summarise the transaction history 47 of the property making it a great deal easier for the conveyancer to find the necessary documents at the Greffe. There is a further ledger which can be cross-referred to from the Cadastre sheet for the property giving a summary of the transaction by the conveyancer concerned. The last transaction recorded is likely to be where the conveyancer starts in the Greffe.
42
Island Archives Service, 29 Victoria Road, St Peter Port. The word Cadastre is simply a French word for a public registry, and in particular what amounts to a rating registry. 44 Again of little practicable use; it is not the commercial rental value. 45 Note also the Digimap; a pastiche of aerial photographs taken of Guernsey and put together into a single computer-stored and enhanced map of the whole Island. It is very helpful to conveyancers. 46 So-called “S” references. 47 So-called “T” references. 43
Guernsey Law of Realty and Leases 629
The Conveyancing (Guernsey) Law 1996 The Conveyancing (Guernsey) Law 1996 sets out the formal requirements of an agreement for the sale or other disposition of Guernsey realty; the key provision is at section (1) which reads as follows: “An agreement for the sale or other disposition of real property can be made only in writing and only by incorporating all the terms which the parties have expressly agreed in one or more documents or, where Conditions of Sale are exchanged, in each”.48
The Law goes on to provide that terms may be incorporated into the documents by being set out in them or by reference to some other document. There is a further requirement that the incorporating document(s) or, where Conditions of Sale are exchanged, one of the incorporating documents must be signed by or on behalf of each party to the agreement. The provisions do not apply to agreements made in the course of a public auction or in any other agreement of a description specified by order of the Royal Court.49 The provisions of section 1 have no effect upon the creation or operation of resulting, implied or constructive trusts.50 A disposition is broadly defined at section 1(6) to include the grant of a usufruit or droit d’habitation or the making of a devise, bequest or appointment in a will. A disposition also includes the creation, variation or discharge of a servitude, wayleave or covenant. Real property is defined as meaning any estate, charge or real interest in or over real property but does not include a lease. Accordingly one may still create an oral tenancy. The Conveyancing Process Itself: The Conditions of Sale The conveyancing process begins with the conditions of sale. These are in standard form as adopted by the Guernsey Bar, although special conditions are often added if circumstances so require. Typically those conditions might require the conveyance to grant new rights; for example where the vendor is retaining adjoining land.
48 Compare and contrast the apparent source for this Law, viz the Law of Property (Miscellaneous Provisions) Act 1989. The key purpose of the English Act was to remove the effect of the words “or more” found in the Guernsey section. It seems that in Guernsey the intention was to do away with oral agreements to sell land. 49 As is commonly the case there are no such provisions to date 50 These kind of provisions are capable of causing great mischief. They allow it to be said, for example, that you can therefore have resulting, implied or constructive trusts of Guernsey land, whereas the reality is that the words have simply been copied from the equivalent English statute regardless of whether they are appropriate in a Guernsey context. Here the closing words of s 2(5) of the Law of Property (Miscellaneous Provisions) Act 1989 have been copied. There is no intentional development of Guernsey law through such provisions.
630 The Laws of Guernsey In Guernsey conveyancing the conditions are often prepared by an estate agent on behalf of the vendor, or else by the vendor’s Advocate. By contrast the purchaser’s Advocate will prepare the conveyance itself. There is good psychological reason behind this. The vendor has most to gain by securing the transaction and identifying clearly what is to be sold. The purchaser has most to gain by ensuring that the conveyance expresses itself as it should. It sometimes happens that the purchaser will have signed the conditions of sale before instructing an Advocate; ideally they will not have done, albeit there are generous let outs for a purchaser in the conditions. By way of contrast the vendor is generally bound as soon as the conditions are signed. It is a tolerably effective means of preventing gazumping. The standard conditions of sale contain a number of covenants and warranties on the part of the vendor as follows: (a) the absence of past or present dispute relating to the property or its contents; (b) sole absolute ownership by the vendor of the contents; (c) development at the property carried out in accordance with the required permissions and licences; (d) current lawful use of the property; (e) if the property is an open market property then Part IV of The Housing (Control of Occupation) (Guernsey) Law 1994 applies and nothing has arisen which would entitle the Authority to remove the dwelling from the Register or alter the inscription relating thereto; (f) no notices or orders relating to the property and in particular relating to its development, use or occupation have been served; (g) the vendor’s covenants shall be true as at completion and will remain in full force and effect notwithstanding completion. Of fundamental importance is the vendor’s obligation to prove and convey good unencumbered title to the property, although the purchaser expressly takes subject to and with the benefit of all rights and servitudes currently subsisting. The special provisions concerning rentes have already been noted. The Conditions of Sale also impose an operative date. Although the vendor is bound from the outset the purchaser is not bound to proceed until (5pm on) the operative date. Until that time the purchaser may withdraw for any of the following reasons: (a) absence of finance facilities satisfactory to the purchaser enabling the purchaser to complete the conveyance; (b) dissatisfaction with a survey report;51 51 This reason is sometimes exploited in an attempt to force a price reduction, failing which the purchaser threatens to withdraw.
Guernsey Law of Realty and Leases 631 (c) dissatisfaction with a report in respect of property matters prepared by his Advocate or surveyor; (d) failure to receive written confirmation from the Housing Authority that a licence satisfactory to the purchaser will be issued on Completion to enable the purchaser to occupy the dwelling.52 Each or any of the above may be excluded by the parties as giving a purchaser the right to withdraw; it is a matter for the parties. Generally all exceptions remain effective. The expression “property matters” is a shorthand for enquiries as to title. The reference to a licence at (d) is a licence granted by the Housing Authority under the Housing (Control of Occupation) (Guernsey) Law 1994.53 The standard conditions require a deposit of 10 per cent of the purchase price to be paid on signing the conditions of sale.54 The purchase price comprises both the amount to be paid for the property itself together with the amount to be paid for contents. This distinction between the elements of the purchase price assumes greater importance in Guernsey law because of the fact that neither congé nor document duty is payable on the contents element of the purchase price. It is a fact of life that one finds surprisingly high prices being paid for very ordinary and rather worn curtains and carpets; albeit serious offences are committed if contents are over-valued intentionally. The deposit also doubles as the measure of liquidated damages if the purchaser fails to complete; likewise the same measure is adopted if the vendor fails to complete. There is no additional liability for either party in the event of default.55 It is open to the parties to agree a different level of deposit; although there is a risk that if the deposit is set too high it may become unenforceable as a penalty. Sometimes a purchaser will want to set a deposit deliberately high in order to deter the vendor from accepting a subsequent better offer. The higher the deposit the higher the offer would have to be to make default worthwhile.56 On completion the deposit (less estate agent’s commission) is released to the vendor together with the balance of the purchase price. Vacant possession is to be given on completion unless special conditions provide otherwise. The property and contents remain at the vendor’s risk until completion. The vendor is obliged to maintain the property and contents pending completion and to insure the property. If an insured risk materialises the purchaser has the option to withdraw from the sale and require the return of the deposit.57 Rents, rates and taxes are apportioned between the purchaser and vendor as at completion. 52
In practice this reason is commonly deleted, when appropriate. See the section on housing control and right to work legislation. It is held by the estate agent. 55 At least this is the better view. 56 The purchaser would have to be confident of being able to complete; eg if his own purchaser’s default caused him to default he might find himself significantly out of pocket. 57 Nor is the vendor in breach of the conditions only because he is unable to reinstate the property or repair or replace the contents prior to completion. If the purchaser does not withdraw he takes the benefit of the insurance. 53 54
632 The Laws of Guernsey It is not uncommon for a purchaser to hold off signing the conditions of sale until satisfied that he or she will in fact proceed; ie they will already have satisfied themselves as to the four matters which would give them the right to withdraw in any event. The advantage for the purchaser is to avoid parting with the deposit, the risk is of losing the property. Conveyancing Searches and Enquiries The purchaser’s Advocate and his or her conveyancing clerk become involved at or about this stage. He or she will receive the conditions of sale and, ideally, the estate agent particulars together with any documents of title which are made available. If the conditions have not already been signed execution might be deferred whilst initial searches and checks are carried out, depending upon the risk of losing the property.58 The conveyancer will often send out to his client a booklet explaining the conveyancing process and the roles and responsibilities of those involved; the booklet will explain in outline form much of what appears below. A questionnaire is also often sent in order to obtain the information the conveyancer will require, it seeks information in particular about the purchaser’s residential qualifications.59 In day to day practice there are only two sets of circumstances where a vendor will be unable to produce title documents. The first is where the property is inherited in the absence of a will of realty; ie where there is intestate succession to real property. The second is where the property or part of it has never properly been conveyed. For example a piece of garden enclosed by the property owner in circumstances where older documents show that the portion enclosed fell outside of the boundaries as formerly drawn. Typically this arises in circumstances where adverse possession is alleged. There are risks inherent for the purchaser in both sets of circumstances; in the first that there is an unknown or even concealed sibling, in the second that prescription has not been made out. The conveyancer will draw attention to any such concerns.60 The vendor’s warranties are, of course, only worth as much as the vendor, assuming he can be located and proceeded against at all. Assuming the conditions have been signed the conveyancer would expect to receive from the vendor’s Advocate documents proving title, at the very least the last conveyance or will of realty.61 After checking the conditions carefully, the conveyancer’s first task is to prepare a report as to property matters concerning, principally, the question of title and any noteworthy conveyancing features of the property to be purchased. The conveyancer may begin his or her search at the 58
If only to check that the figures add up to the correct purchase price. It will be recalled that anyone can buy a Guernsey local market property but it is only those with Guernsey residential qualifications or a licence who can live in such property. This is by contrast with open market property. Whether a different system of regulation eventually emerges remains to be seen. 60 As to the risk of unknown heirs it may be possible for the purchaser to obtain insurance. 61 Together with the Act of Court by which the will was registered. If no documents are provided the conveyancer must make his own searches and order copy documents from the Greffe. 59
Guernsey Law of Realty and Leases 633 Cadastre. A great deal of information can be gleaned from the Cadastre records, as already noted. The conveyancer will then move from the Cadastre to the Greffe records. There are in fact several categories of search which the conveyancer will conduct at the Greffe. The conveyancer will carry out a vendor’s search back to when the property was last conveyed, or further back if there has been a partage.62 What you are looking for essentially is confirmation of the right of this vendor to sell this property, as opposed to researching the property itself. It is often sufficient simply to go back to the last conveyance. This part of the exercise includes searching against the name of the vendor to see if there are any transactions or other obligations he or she has effected in respect of the property. The conveyancer will conduct the property or title search itself. Here one is examining the land as a parcel of land to see precisely what it is the purchaser will acquire and whether that corresponds with the expectation as given expression by the conditions of sale. Local practice is to go back 40 years unless there is good reason to go back further.63 If need be it is possible to trace back to c.1870, prior to which time conveyances tended not to state the way in which title had descended, making further anterior research difficult. Again it is not properties as such which are registered. A prudent conveyancer will also check conveyances of neighbouring land to ensure that the boundaries correspond; ie that there is common understanding along each of the boundaries as to their definition. If the conveyances do not agree the problem must be raised with the purchaser. If a boundary dispute can be anticipated this must be brought to the client’s attention. It may be possible to resolve the issue prior to or even at completion through a further conveyance between the neighbours/new neighbours resolving the boundary line or even through the neighbour appearing at completion to confirm the boundary.64 The conveyancer will also be looking for rights and servitudes. If there are general rights and servitudes clauses the conveyancer will look back to see what is behind the general clause; ie where the right or servitude originated and what it is. Sometimes there is nothing; the general clause may have arisen through nothing more than a desire to cover all possibilities. The next search is the bond search; here one would go back to the date of the last conveyance to ensure that all the bonds associated with that period of ownership (which continues until completion) have been or will be removed. One might go back further if the last period of ownership has been brief, or if in any doubt. The bond book system goes back to 1900 or so and is easy to use because it is straightforwardly alphabetical by name of the person giving the bond. The book 62
Typically a division of inherited land between heirs; see below. Note also in this context the rôle of prescription (limitation); a combination of unchallenged ownership and uninterrupted possession for 20 years would make a purchaser very confident, see the section on prescription and the Loi Relative à la Prescription Immobilière of 1909. 64 But note the limitations of the latter procedure; see the case of Sparkes v Lancaster [1992] 13 GLJ 44, upheld on appeal at [1993] 15 GLJ 38. A conveyance or conveyance by way of exchange is by far the safer and surer route to resolve a potential boundary dispute. 63
634 The Laws of Guernsey entry gives the name of the debtor at the top, the names of the creditors and the property charged. Note that the amount registered by way of bond may not be the amount actually due and owing. Guernsey bonds tend to be expressed for the amount of loan advanced at the time and/or for a maximum figure. It is common that the actual debt due is less. Note also that bonds are not registered against individual properties but against individuals. They prima facie bind all of the bondgiver’s realty at the time the bond is consented to, unless restricted to specific property; see further below. The system of indexing at the Greffe is not easy to follow given the changes that have taken place over the years. For example, there were two forms of registration for conveyances before 1924 known as lire and date, reflected in different retrait periods.65 The two systems were replaced by date alone in 1924.66 Both indices must be checked prior to 1924, if researches must go back that far. Likewise, between 1924 and 1949 conveyances are not indexed within each letter grouping. A search requires one to look through every conveyance for each of these years within the relevant letter groups. Between 1950 and 1966 there was a similar system but with a purchasers’ index summarising the transaction and shortening the task. A largely unchanged system continued until 1970 when conveyancing changed to English, with a more straightforward system of indexing from 1971. It is important to search also conveyances and bonds which have not yet been entered into the permanent indices. There is something known as the Brown Book or Day Book containing conveyances which date back approximately one month. These are not indexed and have to be gone through one by one. The equivalent for bonds is known as the Black Book but dates back as much as one year. It is important to check generally against all the names used by a female owner, including maiden name and, in particular, any former married name. It is noteworthy that in French conveyancing the maiden name would have been used for the woman in any event; but this tradition lapsed with the change to conveyancing in English.67 When the purchaser’s Advocate sends the draft conveyance to the vendor there is normally a list at the top (in pencil) of the bonds to be paid off/extinguished at completion. The conveyancer will check Greffe records generally to ensure that no other matter has been registered against the property, in particular any claim proceeding through the Royal Court. Again this is searched via the vendor’s name. The conveyancer will visit the premises themselves and take particular note of the boundaries with neighbouring properties; this may require considerable effort on the
65 If lire the conveyance was read in court and retrait was available for a period of only 1 year as opposed to fully 10 years for date. The right to retrait is now much restricted. See the section on retrait for a more detailed account. 66 See Art VIII of the Loi relative au Retrait Lignager, aux Appropriements, et à la Lecture de Contrats aux Plaids d’Héritage 1924. 67 Common law relating to names and the use of a husband’s name by a woman is another area where, if an issue arose, French law would be relevant.
Guernsey Law of Realty and Leases 635 part of the conveyancer.68 He or she will keep an eye out for obvious signs of servitudes or anything else of note. Planning matters are often expressly (and prudently) excluded by the conveyancer from his terms of reference. A client should be advised strongly to instruct a surveyor both to report on the state of the premises themselves and any planning issues, for example confirmation that any works done to the property were carried out in accordance with permissions obtained.69 Likewise the purchaser will be concerned to know about any intended development nearby and the possible use of land which appears as if it may one day be developed; eg land occupied by greenhouses and/or disused or under-used industrial premises. A written authority is often obtained from the vendor’s Advocates to inspect IDC records even though the conditions purport to include the necessary authority. Of course the zoning of the land will be known from the IDC detailed development plans, subject to any subsequent changes. Notwithstanding the exclusion of planning matters the conveyancer would draw attention to any potentially harmful matter which did in fact occur to him or her when inspecting the premises; for example the fact that a neighbouring roof or feature overhangs the premises, issues of maintenance and access when boundary features are shared. It is particularly important to ensure that proper rights exist for services crossing neighbouring land.70 Rights and servitudes are examined carefully on site. Sometimes it is appropriate to make enquiries of a neighbour. The conveyancer should also check to see whether a property is listed as an ancient monument. If so, the consequences should be explained to the client. Any further planning investigations into whether the property is, for example, in a conservation area are again matters which the conveyancer will commonly refer to the purchaser and his surveyor. If the property to be conveyed is an open market property this will be disclosed by the fact that a number will be entered in a box designed for the purpose near the top of the first page of the conditions. The conveyancer will check that the registration of the property as an open market property remains valid; this involves both checking the register (the inscription should be in part A of the authority’s card index system) personally and having a member of the Housing Authority staff inspect the premises to ensure that no physical alterations have been made which would disqualify the premises. Occasionally searches throw up issues which cannot be resolved. For example, on the west coast of the Island there are dunes which owners of coastal properties have to pass through to get to the public highway. It is not known who owns these 68 Geoff Mahy recalls with some fondness crawling through thick hedges to identify the likely boundary line. 69 It is also prudent for the purchaser to have the surveyor check the property’s services, not only as to their sufficiency and condition but also where they run, in order to ensure that there are adequate rights supporting their existence and maintenance. 70 Again the use of a surveyor should be recommended. There is a limit to what the conveyancer can be expected to discover on site and report upon.
636 The Laws of Guernsey dunes. Likewise there are houses on a common in the North West of the Island which are landlocked. If there is a sufficiently significant defect in title but the purchaser wishes to proceed some comfort may be obtained from a title indemnity policy. This is usually a single premium policy paid by the vendor which goes with the property.71 The conveyancer will write to the client reporting the results of the searches and site visit and drawing attention to any matters which require further investigation whether with the Advocate instructed on behalf of the vendor or via a surveyor or whatever. The following outline could be followed: (a) Cadastre search: (i) details on current Cadastre sheet; (ii) rating changes since 1947; (b) Title, historical creation of boundaries, rights and servitudes: after setting out the history one would normally expect to see comment upon it. It is particularly important to draw attention to any rights and servitudes, especially if they are in any way onerous; (c) Boundaries/site inspection: draw attention to anything out of the ordinary or otherwise unsatisfactory; eg you may have noted what may be physical evidence of a right being exercised; (d) Ancient monuments listing: refer to any such listing and summarise briefly the extra obligations this imposes; (e) Zoning/IDC; planning/surveying matters are usually left to the surveyor, and the client advised to instruct one; (f) Open market registration and its currency; (if applicable) (g) Services; gas, electricity, water, foul drainage, cesspits and any other connecting media; (h) General observations. An important and legitimate function of the report is to ensure that the purchaser’s attention is drawn to all matters within the scope of the responsibility of the conveyancer if only to avoid future liability. Again the importance of advising that a surveyor be instructed cannot be underestimated. Particular care is again required with services which travel or may travel across land which will not be purchased, ie neighbouring or retained land. It is not uncommon for the purchaser’s conveyancer to act for the lending bank as well, although in Guernsey institutional lenders tend to use the same Advocates for every transaction. It is more likely to be by chance that an Advocate acts for 71 If possible the sum insured should be increased with each sale to take account of increases in the sale price.
Guernsey Law of Realty and Leases 637 both in any given transaction. The bank’s Advocate will always carry out bond searches against the borrower. However, as regards property and bond searches against the vendor banks tend in practice to rely upon the searches made by the purchaser’s Advocate. This is perhaps not ideal given that the bank will look to its own Advocate if anything goes wrong. It is unlikely to be sufficient for that Advocate to say that he or she relied upon the searches of another. In essence, the lender’s Advocate is concerned for the security of the bank. The higher the proportion of borrowing to the value of the property the higher the risk will be of loss. The Advocate is concerned to ensure that there is vacant possession, unless of course the transaction is a replacement or additional bonding of the property, alternatively that the bank is informed fully about, and consents to, any sitting tenant or other proposed occupier. The bank should be made aware generally of any matter reasonably discoverable and likely significantly to affect the value of the security. Drafting the Conveyance Assuming that (i) the conveyancer’s searches have not thrown up anything unacceptable or insuperable and (ii) the purchaser has secured adequate finance and (iii) a satisfactory survey report has been obtained (assuming a surveyor has been instructed) and (iv) if relevant, confirmation has been received that the property remains open market registered alternatively confirmation that a satisfactory housing licence will be issued, the operative date will come and go and the transaction proceeds. The purchaser’s conveyancer usually drafts the conveyance.72 Great care, skill and minute attention to detail is required in drafting. There is a common structure to most forms of conveyance which comprises the following: (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k)
parties, (vendor then purchaser); recitals;* property to be conveyed and habendum clause; boundaries of the property; previous rights and servitudes;* general rights and servitudes;* title; consideration; vendor’s guarantee of title; possession clause; attestation and congé clause.
72 The chief exception would be a scheme of development, in particular the sale of apartments in a block of flats. Here the vendor’s Advocate will invariably produce the schedule setting out the owners’ rights and obligations, together with draft conveyances or forms for the purchaser’s Advocate to adopt or follow. See the section below on horizontal conveyancing.
638 The Laws of Guernsey Those items marked with an asterisk may not be required in every case; subject to this every basic Guernsey conveyance follows the same pattern. An example of such a basic conveyance is at appendix 7. Conveyances become more complicated in direct proportion to the complexity either of the title to be conveyed or the transaction, various examples of which are examined below. Reference should again be made to the booklet Conveyances in English as approved by Members of the Guernsey Bar 3 October 1969.73 The draft conveyance should be seen and approved by both the client purchaser and, of course, the vendor’s and lender’s Advocates. Completion The process moves forwards towards completion in the contract Court. The bonds to be released or cancelled will have been identified. If a vendor is unrepresented the purchaser’s Advocate will usually make the necessary arrangements for bonds to be released or cancelled. Any new bond or bonds to be given will be drawn up, see the section below on bonds. If there is more than one vendor they may be represented separately, for example a divorcing couple. The purchaser’s Advocate must be careful to deal with both. It is particularly important to ensure that any purchase monies are paid in accordance with the wishes of both Advocates acting; it is essential that a good receipt is obtained from both owners. The client will be informed precisely what sums in addition to the deposit he or she must pay to the Advocate in order to complete the transaction, this comprises the balance of the purchase price together with Advocate’s fees, document duty, Court fees and congé.74 If the client is also selling property on the same day there will be an accounting exercise to go through in order to identify the necessary additional sum which must be paid, if any. Again it is important that the client knows exactly what is required. This includes ensuring that he or she will be present physically at Court on the completion date or else obtaining their consent at a previous Court or else obtaining a power of attorney. Systems vary as between banks concerning the handling of sums to be loaned. Some banks pay the amounts concerned to the purchaser’s own current account. The purchaser will then supply a cheque drawn on his or her account for the purchase price, (either to his Advocate or to the vendor, subject to what is said below). Alternatively the lending institution will pay the loaned monies directly to the Advocate’s account. The amount of honesty and trust involved is a feature of the Guernsey conveyancing system. We have already seen that substantial cash deposits are held by vendors’ estate agents. At completion itself Advocates will often pay the purchase 73 Albeit the language employed in conveyancing is being brought up-to-date; note also the use of definition clauses. 74 As noted already, congé is a once feudal due now payable to the States of Guernsey as opposed to seigneurs. See below for a fuller account of the costs associated with purchasing Guernsey realty.
Guernsey Law of Realty and Leases 639 price from their own account without having the client’s cleared funds first. Again the clearing of bonds is very much taken on the assurance of the vendor’s bank that it will so act. It is the privilege of a small society where people are known to each other to carry on in this way. Obviously there are limits to the amount which either can or should be taken on trust by Advocates, particularly given money laundering avoidance and reporting obligations. Cleared funds would always be required for the completion of a high value open market purchase without borrowing by a non-resident. The Advocate must also perform effective know your client procedures. Every so often a firm has been caught out by clients who turn out to be men of straw. Rapid Court action and saisie proceedings supply the remedy where an Advocate unexpectedly finds that he or she has funded the purchase of a defaulting client.75 Because completion very often does not involve cleared funds there is a general understanding between the Advocates’ firms that they will not bank each others’ cheques where that other drawer firm banks. This allows three to four days for cheques to clear, in which time the client’s or lending institution’s cheque will clear, all being well. Where there are particular concerns the Advocate will demand cleared funds into his or her account before completion. Likewise if it is proposed that the purchaser’s own cheque be given on completion a vendor may demand an Advocate’s cheque or even cleared funds instead. Advocates cheques are treated by the recipient as being the equivalent of cleared funds in the same way as a bank draft. The procedure at the Contract (or Conveyancing) Court has already been considered. The transaction is introduced, consents taken and the key handed over, literally on the spot, cheques are produced separately later in the morning. The vendor’s Advocate will produce the appropriate Dwellings Profit Tax certificate;76 typically to the effect that no DPT is due.77 After the substantive transaction itself has been dealt with the vendor and his Advocate withdraw while any new bond to be made by the purchaser is also produced to the Jurat. The purchaser’s Advocate or clerk is left with the conveyance and any new bond that has been made. The bond is given to a representative of the lending institution’s Advocates. The purchaser’s Advocate or clerk will then leave the conveyance itself in the Greffe’s outer office for endorsement as to the Court fees, document duty and congé payable. Systems vary but typically the Advocate or clerk will return to their office and give three copies of the conveyancing account/fee note to an accounts clerk together with any cheques received that day for recording and accounting purposes. 75
Subject of course to the vagaries of saisie as a remedy. A 1970s measure designed to combat property speculation. The tax is payable at the rate of 100% of the profit made on the sale of a dwelling but the tax is avoided easily and lawfully through owning the property beyond a certain period of time, one year as a minimum (if combined with occupation); see below for a fuller account. 77 A congé slip is also produced; this duty is more often than not payable, albeit at the rate of only 2%, see below. 76
640 The Laws of Guernsey The conveyancing document comes back from the Greffe later that day with the amount to be paid endorsed on the front. A single cheque is paid that same day for all the firm’s conveyances and bonds. Towards 4pm on each conveyancing day the firms’ conveyancers go to the strong room of the Greffe taking their day’s documents. They pass them between each other and check to see that everything corresponds and that there are no irregularities. This acts as a safeguard of kinds against the possibility of a vendor who has attempted to sell his property twice or who has secured borrowing against a property he has just purported to sell. Conveyances and bonds together are deposited in a tin box which is locked at 4pm by the Clerk to the strong room. All documents so deposited will be deemed registered on that day.78 All conveyancers acting for banks will want to see that the corresponding conveyance goes into the box with the bond. Without the conveyance the bond cannot be registered because it is valueless and without effect, notwithstanding the loan. When the registration process is complete the original and now receipted conveyance will be returned, which may in turn be forwarded to the clients. The Greffe retains its own copy. Bonds stay with the Greffe unless and until withdrawn by the creditor. There is some debate as to when precisely the conveyancing process is complete. Some argue for the moment when the conveyance is signed by the Jurats in Court; others when the documents are deposited in the tin box later that day, yet others when the transaction is registered. It is rare that anything will in fact turn on such distinctions. The better answer would appear to be the moment when formalities are complete in the Contract Court. Conveyancing from a Vendor’s Perspective In the normal course of events there is little for the vendor’s Advocate to do. Typically the conditions of sale will have been completed by the estate agent. Whether they have been signed or not it is prudent to check the conditions carefully and to draw attention to the covenants which the vendor is required to give. If a vendor is also purchasing another property with the same Advocate it is common for no separate charge to be made given that there should not be a great deal of extra work on the sale. If there was in fact an unusual amount of work to be done ordinary time charges would be made. If the proposed transaction is complex the vendor’s Advocate is likely to take a much more prominent rôle; this is particularly so in the sale of a newly developed block of flats or where, for example, only part of a holding is being sold and so on. In the sale of a development the vendor’s Advocate would usually draft the schedule and a standard conveyance document and charge accordingly. 78 Although in the case of a bond not so as to catch any realty conveyed away by the purchaser on the same day; again see the section on bonds.
Guernsey Law of Realty and Leases 641 It is prudent to discuss with a vendor client the date and manner in which the sale proceeds will be received. If the sum is substantial it may not be acceptable to wait the customary three to four days for cheques to clear. Cleared funds would have to be requested. Note however that even cleared funds will not be given on the completion date itself given that documents for registration and the conveyancers’ cross-checking does not take place until 4pm and after bank hours for money transfers to be effected. The vendor’s Advocate must consider Dwellings Profits Tax and whether any tax is payable in respect of the proposed transaction. Given that DPT will always be lawfully avoidable (given time) the Advocate would be expected to advise the client carefully should the tax prima facie be payable, see the section concerning DPT below. As noted already, the vendor’s Advocate or conveyancer is also present in Court at completion.79 After producing the DPT certificate the key is handed over; the purchaser’s (Advocate’s) cheque made payable to the vendor’s Advocate is produced later in the morning, although a bank’s cheque may be made available at Court. If it is a straight sale the vendor’s Advocate will produce his own cheque to the client which will be net of legal fees and other costs of sale. If the vendor is also buying on the same day a more complicated accounting process takes place whereby the proceeds of sale will go towards the purchase price together with any additional borrowing, which is typically paid into the now purchasing Advocate’s account by the bank concerned. Alternatively the client may personally have put his Advocate in additional funds to complete the purchase. The Advocate later accounts in writing to the client. Again the extent of trust should be noted. Cheques are often passed without cleared funds backing them. Registration Obligations The Cadastre Law 1947 requires notification to the Cadastre within 15 days of the following events: (a) (b) (c) (d)
the conveyance of a property or usufruit; registration of a will of realty; a partage (the owner of the first lot bears the notification obligation); a saisie (the person taking the final vesting order bears the notification obligation).
Where an intestate owner of realty dies the Cadastre must be notified within one month. There is a general obligation to notify changes and additions to the property. Material changes will lead to rating revaluation. 79 Again prima facie the vendor must be present physically, as with the purchaser consent can be taken at an earlier sitting or a power of attorney given.
642 The Laws of Guernsey
OTHER FORMS OF CONVEYANCING TRANSACTION: THE DÉLAISSANCE
It is a maxim of Norman customary law that nul n’est tenu de rester dans l’indivision; ie that no-one may be compelled to remain in co-ownership.80 There are three means of ending the undivided ownership; délaissance, partage or licitation.81 Partage is a physical division of premises. Licitation is a judicial auction. Partage may be agreed or imposed. Licitation is in practice only ever imposed given the ease with which a sale may proceed by agreement. We return to partage and licitation below. Délaissance means literally an abandonment or renunciation.82 Today it is the name given to a conveyance between co-owners.83 A délaissance arises where joint owners wish to go their separate ways by agreement. As part of the financial settlement the husband might transfer his interest to his (ex) spouse;84 again délaissance is common between separating unmarried partners. More complicated délaissances are found between, say, sibling co-owners of family business premises. A délaissance is, in essence, the transfer by one existing co-owner of his or her interest in the material land to one or more other existing co-owners of the same land. The opposite of a délaissance would be the transfer of the whole or part of an existing interest to someone who was not already a co-owner. One of the attractions of the délaissance is the fact that it does not attract congé.85 However, attempts to avoid congé by the artificial use of délaissances are likely to be uncovered. A basic conveyance by way of délaissance opens as follows: “This conveyance by way of délaissance is made this . . . day . . .”
and goes on to define the vendor and purchaser. The notional vendor is the coowner transferring his or her interest to his co-owner purchaser. There then follows a series of recitals describing the co-owned property and explaining how the co-proprietors came to own it. A final recital will state that the parties have agreed that the premises shall vest solely in the purchaser and his or her heirs upon the terms which follow. The key provision of the conveyance itself is as follows:
80 See Art 815 Code Civil for the modern French law statement of the same principle: “Nul ne peut être contraint à demeurer dans l’indivision et le partage peut être toujours provoqué, à moins qu’il n’y ait été sursis par jugement ou convention.” 81 To this could be added a consent order in matrimonial proceedings. 82 From the verb délaisser. 83 In French language conveyancing délaissance was also the name given to conveyances of fee farm land. 84 Note also that a Court order in ancillary relief or judicial separation proceedings can itself perform the function of a conveyance to vest title in the same way as the registration of a will of realty upon death. The Advocate must consider carefully the most cost and tax efficient means of achieving whatever has been agreed or ordered. 85 See below for a fuller account of conveyancing costs.
Guernsey Law of Realty and Leases 643 “That the Vendor hereby conveys for an estate of inheritance to the Purchaser accepting for himself and his heirs all such right title interest or share present and future vested or contingent to which the Vendor is or may be entitled in the said premises to the intent that henceforth the said premises shall vest exclusively in the Purchaser for an estate of inheritance in the same way as if he had originally acquired the same for himself and his heirs”.86
The reference to an “estate of inheritance” is common throughout Guernsey conveyancing and indicates the giving of the greatest possible estate in the land that can be held, ie the equivalent of freehold in English conveyancing. Save for good reason boundaries are not usually set out in a délaissance since there is no need. There follows a general rights and servitudes clause and, where the parties are or are still married,87 the following: “That the Vendor hereby abandons and renounces all rights of enjoyment or other rights which he might have or might claim in respect of the said premises or any part thereof should he survive the Purchaser.”
The purpose of this clause is to avoid the possibility that a not yet ex-spouse purchaser might die before the final order for divorce has been obtained, thus giving the vendor a one-half interest in the property until re-marriage (or death, whichever the sooner), notwithstanding the délaissance.88 The délaissance will go on to state the consideration paid together with the vendor’s acknowledgement of receipt. The purchaser expressly assumes sole liability in respect of any outstanding bonds.89 The purchaser gives an indemnity to the vendor as regards claims made under the bonds, likewise an indemnity as regards any rentes and other encumbrances. It is provided that the purchaser will enter into exclusive possession of the premises on the day of conveyance and the délaissance concludes with the usual witness clause. The bank’s90 co-operation is required to the extent that the vendor is to be released from any bond registered in its favour. The bank may agree to cancel a bond as against the vendor alone, although there is a concern (probably illfounded) that the bank’s security would thereby be restricted to the share of the property originally held by the purchaser alone, the vendor’s share having been released by the bank. Often a bank will require the purchaser to make a new bond as regards the whole of the property in order to avoid uncertainty. The bank may be required to attend in order to consent to the release either of part of a property or the vendor from a bond; obviously the bank cannot be compelled either to agree to any release or to attend. The bank’s judgment will be influenced largely by the 86 87 88 89 90
The wording will be different if an undivided share is being transferred; see below. Or where there is any question of succession rights. Ie through the effect of s 3 of the Law of Inheritance 1954. Ie as between the former co-owners. Or any other secured lender.
644 The Laws of Guernsey extent of the borrowing secured by the bond and the proportion of the borrowing to the equity. Typically the amount of money involved in a délaissance will be small given the probable extent of the borrowing secured against the property. Partage Partage is defined by de Ferrière as: “. . . la separation, division & distribution qui se fait d’une chose commune entre plusieurs copropriétaires, ou d’une succession commune entre cohéritiers.”91
Partage is increasingly rare in practice since it assumes that the relevant landholding is both large enough, valuable enough and sufficiently suitable for division to make the exercise worthwhile, as opposed to outright sale and division of the proceeds. It is rare that this combination of factors exists these days. Even if it did you would still require one or more of the co-owners actually to want partage. A partage is most likely to arise between heirs who are co-owners of realty by reason of an intestate succession. Thus, if a landowner died leaving only descendants his realty would vest in the descendants immediately upon death following the adage le mort saisit le vif. The heirs would remain co-owners until one or more bought out the others (délaissance) or division was agreed (partage)92 or, in default of agreement, one or more brought an action seeking either partage or licitation (judicial auction). It is noteworthy that under French law there are exceptions to the principle that no-one can be compelled to remain in co-ownership; whether any of these would be upheld in customary law remains to be seen. The principal example relates to agricultural land.93 Where a partage is required it takes the form of a deed of division declaring the lots agreed between the co-heirs (co-owners) together with any new rights to be granted as between the neighbouring landholdings arising from the partage. In earlier times the deed would set out a detailed account between the lots to explain in detail the partage.94 In current practice the agreement between the parties is deemed sufficient evidence of the adequacy of the lots. The partage or deed of division is registered at the Greffe and is as effective a document of title as a
91 “The separation, division and distribution which is made of a common possession between several co-owners or of a common inheritance between co-heirs.” 92 The customary methodology would be to have the youngest heir create the lots; on the basis that the heir with the last choice will create the fairest lots, the eldest would have the first choice and so on (l’aîné lotit et le puîné choisit). These days one would look for general agreement and probably the professional assistance of a surveyor and/or estate agent. 93 See Art 815-1 Code Civil and Art L 323-6 Code Rural. 94 A good example is the partage of realty belonging to Thomas Bourgaize Snr. of Côtes Aumonts, Saint Sauveur dated 31 December 1841. This is actually a partage par avance de succession, ie in anticipation of death, but the same conveyancing principles apply.
Guernsey Law of Realty and Leases 645 conveyance. Again it is made before the Contract Court in the same way as a conveyance. The general vesting clause and operative provision of a partage conveyance is as follows: “That (subject to the enjoyment of the said . . . as aforesaid95) the said real estate is hereby divided between the said co-heirs in the lots hereinafter set forth and subject to the conditions herein contained to the intent that any part of the said real estate hereby vested in any of the said co-heirs shall vest in him or her exclusively for an estate of inheritance”.
Conveyance by Way of Exchange It is surprisingly common in Guernsey for land owners to exchange properties; perhaps it is a function of a small society in which people know each other and their respective aspirations or where it is still more likely that family homes will be passed down the generations. It follows that there is in Guernsey an established form of conveyance by way of exchange in which a single conveyancing document provides for mutual transfers and any additional consideration; for example, an older couple might exchange their larger property for a smaller property owned by a younger couple with an additional lump sum being paid by the younger couple to make up the difference in value. The form of the conveyance is a rather unwieldy marriage of two conveyances into a single document. The inability to define the parties as purchaser and vendor goes some way to explaining the practical difficulties. There is instead a cumbersome opening defining the parties and stating that they dispose of their property on behalf of themselves, the survivor of them and the heirs of such survivor and that they acquire on behalf of themselves and their successors in title before duplicating the key elements of a conveyance of each property ending with an expanded attestation clause. Two original documents setting out the conveyance by way of exchange are produced to the Contract Court at completion. Both are signed by the Lieutenant Bailiff and Jurats but only one is registered. This is so that both parties have a document of title. Only one registration fee is payable (albeit this is a trivial amount); Court fees are payable on both (again trivial sums). The registered document goes to the party taking the higher valued property. A particular form of conveyance by way of exchange occurs when neighbours wish to define a boundary by exchanging whatever land is necessary in order to produce either a new or newly agreed boundary. The operative clause would be as follows:
95 This clause would be inserted where the partage was subject to the life interest of, say, a surviving spouse.
646 The Laws of Guernsey “That Mr Caparne hereby conveys for an estate of inheritance to Miss Cheesewright and Miss Cheesewright hereby conveys for an estate of inheritance to Mr Caparne96 all such right, title and interest, present or future, vested or contingent to which they are respectively entitled in such small parcels of land situate bordering the boundary between their respective properties as is necessary to effect that the boundary shall henceforth cease to exist as presently constituted and be replaced by a new boundary line (“the new boundary”) demarcated on site by the new wall that shall be party and shown on the plan attached hereto marked in red”.
Conveyance by Way of Gift There is no particular difficulty from a purely conveyancing point of view with a conveyance by way of gift. The legal effect is less certain to the extent that Norman, or rather Guernsey, customary law may still limit the ability of a person to make lifetime gifts of realty. The protection afforded by Norman customary law where gifts of realty were made was distinct from the right of retrait where land had been conveyed for consideration, albeit often appreciably below the market rate. Following the scheme of the Law of Inheritance 1954 it may well be that a lifetime gift of realty is unimpeachable, but only so long as the donor stays within the bounds of what he may lawfully do by will; ie if he attempts to give all his realty to a mistress in circumstances where there are surviving descendants a challenge could follow.97 The conveyance itself would open with the words: “This conveyance by way of gift . . .” and go on to identify the donor and donee (as opposed to vendor and purchaser). The conveyance would then follow the standard form, save that there would be no consideration clause. The cost of Guernsey Conveyancing98 We consider here the costs connected with the purchase and sale of land in Guernsey.99 The topic is made more complicated by the fact that this area is currently under review and certain to change. At present there are two principal costs associated with Guernsey conveyancing; the first is congé, or more properly treizième;100 the other is document duty. Both are payable to the States.101 The essence 96
Cheesewright and Caparne are two celebrated painters of Bailiwick landscapes. See also the case of In re Kurzschenkel (2000) 16th March for related considerations in the context of personalty. 98 My thanks to Nicholas Le Poidevin of Ozannes for his assistance with this section. 99 As opposed to a conveyance by way of share transfer; and also as opposed to charges associated with bonds (mortgages) which are considered later. 100 Treizième is the ancient feudal due payable to a seigneur when land is alienated; it means literally “thirteenth”. In Sark the charge is truly a thirteenth. Congé merely means permission or authorisation; ie permission to sell. Although the terms are used interchangeably it is payment of the treizième which results in the congé. 101 Note that treizième was in fact paid to seigneurs until the 1980s and the compromise eventually struck under the Feudal Dues (Guernsey) Law 1980. 97
Guernsey Law of Realty and Leases 647 of the current scheme is that treizième is payable by the purchaser at the rate of 2 per cent of the purchase price.102 Document duty is additionally payable by the purchaser at the rate of 1 per cent.103 In future document duty will essentially replace treizième through an increase to 3 per cent in the document duty rate and the abolition of treizième.104 There are currently various exceptions to the requirement to pay treizième.105 Treizième is not payable in the following circumstances: (a) where the land to be acquired is fee farm land or forms part of a franc fief;106 (b) where there is a partage between heirs; (c) where there is a bona fide délaissance; (d) where the transaction takes place within one year of a previous transaction upon which treizième has been paid; save that treizième is payable on any positive difference in the price; (e) likewise in a conveyance by way of exchange treizième is payable only by the party taking the higher valued property and only on the cash difference in value, if any; (f) where the transaction is a bona fide gift. Note that document duty is payable in full on an inter vivos gift of realty; it is also payable on a conveyance by way of exchange on the full value of each property in the normal way. In each case it is calculated by reference to the value of the realty. By way of contrast only token sums are payable for a document (other than a will, where again only a token sum is charged) creating a usufruit or for a partage or conveyance by way of délaissance between co-owners.107 Where a délaissance occurs other than between co-owners the standard document duty rate for a conveyance applies. 102 And only on the realty element of the price; ie excluding the amount paid for personalty, such as carpets and curtains. 103 Document duty is not payable where the value of the transaction does not exceed £150,000, see generally the Document Duty (Amendment) Ordinance 2001; see also the Document Duty Ordinance 1992 and the Document Duty (Amendment) Ordinance 2000 as well as the Document Duty (Guernsey) Law 1973, as amended. Note also the Budget Report and Debate for 2003 as a result of which Document Duty has been reduced to 0.5% for simple conveyances where the value of the transaction is between £150,000 and £250,000. 104 See the Feudal Dues (General Abolition of Congé) (Guernsey) Law 2002 and the policy letter in Billet d’État No. XX of 2002. It seems likely that existing concessions in respect of document duty will be carried through to the eventual document duty rates, subject to what is said below. 105 And it remains to be seen whether all of these exceptions will be carried through to the reconstituted document duty. Certainly the policy letter intends that the exemptions for fee farm land and franc fiefs should be removed; albeit with a transitional concession of what is likely to be a 1% reduction in document duty for a period of 5 years. Again it is intended to restrict the £150,000 threshold to transactions for the purchase of domestic dwellings as opposed to, say, fields and plots. In any event the threshold is all but irrelevant to purchasers of domestic dwellings given their high cost. 106 As opposed to land merely non en perchage. It can also happen that land is partly on a franc fief and partly not; in such circumstances an agreement must be negotiated with HM Comptroller. 107 In each case £5.
648 The Laws of Guernsey The States Housing Authority will pay a grant to qualifying first time buyers in respect of treizième and document duty.108 There is a sliding scale of payments available according to the price of the property being purchased. Price inflation is such that the grants are largely of academic interest only. In addition to treizième and document duty there are also the following costs for the purchaser comprising: (a) a Court fee of £22.50 per conveyance; (b) a registration fee payable to the Greffe of £2.50 per conveyance plus 30 pence per page, ie a 3 page document would cost £3.40; (c) legal fees at a tariff rate of £110 plus 0.75% legal scale fees109 calculated by reference to the realty element of the transaction price.110 All of the above charges are payable by a purchaser. Where there is a conveyance by way of exchange the clients are charged the full bar tariff based on the respective values acquired. It is in fact quite common for a single firm to represent both parties on an exchange.111 Apart from this a vendor incurs only his own legal costs which are usually charged on the normal time basis, if at all.112 A vendor will also incur dwellings profits tax in certain defined circumstances.
DWELLINGS PROFITS TAX
Dwellings Profits Tax (DPT) was intended to prevent the worst excesses of property speculation at about the time when the price of realty first increased substantially. The law is found in the Dwellings Profits Tax (Guernsey) Law 1975, as amended by Laws in 1983 and 1989. DPT is, as its name suggests, a tax on profits made from the sale of dwellings.113 It does not apply to commercial premises. There is a further specific exemption at section 9(1)(o) of the 1975 Law for the sale or disposition of premises where as little as 70 per cent of the floor area is devoted to business use, ie where up to 30 per cent is used for residential as opposed to business purposes, for example the shop with a small flat above. There is a conditional exemption for the business part of a mixed use property.114 108
There is also limited provision for grants in relation to plots of land. There has been some public misunderstanding in the past as to the charges made by Advocates; they are in fact considerably less than is charged by the estate agent in the vast majority of transactions. 110 Where stage payments are agreed on the purchase of flats the percentage is charged on the aggregate. 111 Rule 49 of the Advocate’s Rules of Professional Conduct states that an Advocate may act for both seller and buyer on a transfer of land, or for both lessor and lessee, or for both lender and borrower, provided the Advocate obtains the informed consent of both parties to his or her acting. 112 See above. 113 Note that DPT also prima facie applies to the grant or assignment of a lease or sub-lease of a dwelling at a premium, likewise to the sale of a usufruct or life interest, although s 2(2), as amended, immediately disapplies the law from transactions where an annual rental is payable and fixed at arm’s length. These are essentially anti-avoidance provisions. See generally s 2. 114 See s 8. 109
Guernsey Law of Realty and Leases 649 Where the tax is payable it is prohibitive in effect, being chargeable at the rate of 100 per cent of the profit as determined by the Law’s provisions.115 In essence one takes the sale proceeds and deducts the sale costs before making the following further deductions: (a) the original purchase price paid by the vendor (note that DPT has no application to the contents element of the sale price; it is a tax on profits from the sale of realty only); (b) purchase costs; (c) renovations/repair costs; (d) the cost of any redemption made of rentes; and (e) what amounts to an indexation allowance. It follows that, even where the tax is chargeable, the vendor should be left no worse off than before the acquisition and sale, assuming that the property sells for a sufficiently high price to recoup his outlay. DPT is obviously not chargeable on any loss, and indeed losses can be carried forward to other transactions and set off against profits which would otherwise be chargeable. However, the essential feature of DPT is how readily and lawfully avoidable it is; save in the most pressing of circumstances. The tax is not payable if the owner has owned the relevant property interest for five years or more. Furthermore, the tax is not payable if either the owner or his spouse has occupied the dwelling as his or her only or main residence for any continuous period of twelve months or more. For some years the tax could be avoided if the shares in a company owning the relevant property were transferred, as opposed to the property itself being conveyed. This loophole was closed in two stages. The 1983 Law substituted a new section 2 of the 1975 Law. By section 2(1)(e) the tax appears116 to have been applied to the disposal or transfer of shares at a time when the company concerned owned a dwelling and, in the opinion of the Administrator, one of the accruing benefits was the avoidance or reduction of liability to DPT. However the way the subsection was drafted permitted a share transfer of a company which had owned a dwelling for more than five years to escape DPT. This was addressed by the 1989 Law which inserted a new section 9(4) removing the five year exemption from a company where the controlling interest had been acquired less than five years before the date of the material property disposition, although note that the 12 month residence exemption was extended to the beneficial interest owning occupier. There are potential exemptions also for the sale of dwellings acquired by way of lifetime gift or inheritance,117 likewise for chargeable profits accruing to a charity.118 115
See ss 3A, 4, 5–8. The sub-section is not drafted clearly and it is certainly arguable that it fails to achieve whatever seems to have been intended. 117 S 9(1)(c). 118 S 9(2). 116
650 The Laws of Guernsey A further important exemption applies to properties either constructed, reconstructed, repaired or renovated in the ordinary course of a business.119 This exemption covers both builders and developers of property. The (re)constructor, repairer or renovator must have spent not less than 20 per cent of the selling price on the relevant works. Income Tax is chargeable on the business profits in the usual way, notwithstanding exemption from DPT.120 See section 9 generally for the full list of exemptions from liability. The Advocate acting for the vendor must always consider whether DPT is payable in the context of any conveyancing transaction. The Income Tax Authority must be informed of any transaction to which the Law applies not less than 28 days prior to the date of the intended conveyance.121 The information requirements are set out at section 13(1) and comprise the basic details necessary to assess potential liability to DPT. If tax is payable the Income Tax Authority will serve a notice to that effect. Note that a conveyance will not be signed by the Royal Court (ie the conveyance cannot be completed) without proof (invariably in the form of a certificate from the Income Tax Authority) either to the effect that the transaction is exempt or that tax is chargeable and has been paid, or is payable at a later date pursuant to the exercise of the discretion of the Income Tax Administrator, see section 13(6). In practice the Advocate provides a colour coded certificate to the Income Tax Authority according to the DPT status of the proposed vendor. If truly no exemptions apply because, for example, the property is to be sold within the first year of ownership, there is an appropriately coloured grey form. There are two further forms which accompany the grey form. The first states the price paid for the realty and personalty respectively. The second comprises a claim for expenses to be set against profit on the sale of the dwelling, as noted above. Usually one or more exemptions apply. The Advocate will certify five year plus ownership by an individual owner given that this will be a matter of simple public record. For other categories the vendor personally will sign. If there does appear to be a potential liability the Advocate must advise the client carefully as to the exemptions, whether they apply and how liability might be avoided lawfully. There are general and sweeping anti-avoidance provisions at section 17, as amended, followed by enforcement provisions and criminal sanctions for failing to comply with the Law’s requirements, principally the requirement to provide the Income Tax Authority with the information it requires in order to assess potential liability to tax.
CONVEYANCE BY WAY OF SHARE TRANSFER
Although the percentages charged by way of congé and document duty are small they still amount to considerable sums of money in higher value property trans119 120 121
See s 9(1)(n). This is the quid pro quo. In practice the ITA is informed of all proposed conveyances of dwellings.
Guernsey Law of Realty and Leases 651 actions. Conveyancing by way of share transfer developed as a means of avoiding such liability. The property is first conveyed to a company formed for the purpose, usually a Guernsey company taking the name of the property. If it is the existing owners of the property who will also be owners of the company the consideration is likely to be nominal.122 If, however, the purchasers are unrelated and acquire the property through a company the normal full consideration will be paid together with congé and document duty. In each case the use of a company is with a view to future transactions.123 In each case ownership of the property now vests in the company as opposed to the individuals concerned who now become owners of the shares in the company.124 When the owners wish to sell the property they sell the shares in the company, not the property itself; this is effective to transfer ownership of the company and therefore (indirectly) ownership of the property. There is no conveyance as such, no appearance at the Contract Court and no addition or alteration to the Greffe’s conveyancing records.125 Despite the attraction for a purchaser of not having to pay congé or document duty there is a significant additional risk in this form of conveyancing for the simple reason that the purchaser is acquiring a company whose history will largely be unknown to him. The purchaser prima facie acquires the company warts and all and risks being surprised by undisclosed liabilities of the company. The Advocate acting for the purchaser makes what limited searches can be made against the company126 in addition to the normal vendor, title and bond searches. The client purchaser must be warned of the extra risk involved; although a simple failure to warn would not of itself lead to future liability for the Advocate. The potential claimant would still have to prove that the failure to warn had caused the loss; ie that he would not have purchased the company if the warning had been given. A sophisticated client may already appreciate the risk; many clients will proceed regardless of the risk. If the client is concerned about proceeding by way of share transfer he can offer instead to purchase the property itself from the company in order potentially to qualify as a bona fide purchaser for value without notice; obviously accepting the extra costs involved. Other reasons for transferring property to a company include the possibility of avoiding forced heirship rules. Shares in a company are personalty, not realty.127 Again property might be transferred to a company as part of assets settled on trust, 122
And therefore the congé and document duty payable. Although there can be other reasons for wishing to hold realty through a company; these are considered briefly below. 124 Or else the beneficial owners of the shares if they are held by nominees. In subsequent conveyances it is not uncommon to see an entry made in the directors’ loan account to reflect the sum paid by the purchasers/new directors of the company. The benefit of any such entry is assigned on the subsequent sale of the shares. 125 As opposed to the Greffe company records which will reflect the change of directors and shareholders. 126 If a Guernsey company this will be restricted to Greffe records for the company itself as well as discovering whether the company is involved in any current litigation; specific enquiries can also be made of the vendors. 127 Although care has to be taken as regards légitime; ie forced heirship rights over personalty. See generally the section on succession. 123
652 The Laws of Guernsey alternatively for asset protection purposes. The transaction itself is set out in a share transfer agreement which is littered with warranties by the vendor as to the existing good standing of the company. However, such warranties are only as good as the ability to recover from the vendor if a problem arises subsequently. The greater the deception the more likely it is that the vendor has disappeared or else is unlikely to be good for the money. Completion typically takes place in one of the two Advocates’ offices. The deposit is released to the vendor and the balance of the purchase price paid in the agreed manner. The vendor: (a) delivers duly executed share transfers to the persons specified by the purchaser, together with the share certificates themselves; (b) delivers an indemnity in respect of liability for tax and any other claims against the company arising before completion; (c) delivers the company seal, minute books, register of directors and secretaries, register of members, index of members, register of annual returns, and all documents relating to the accounts and title of the company; (d) appoints such persons as the purchaser requires as directors and secretary;128 (e) delivers the written resignations of the existing directors and secretary together with waivers of any claim against the company for loss of office or otherwise; (f) gives vacant possession of the realty and delivers up any relevant personalty. Examples of common warranties are as follows: The company: (a) has not agreed to issue any shares, debentures or other securities in respect of the company other than those disclosed; (b) has not given any guarantee in respect of which it remains actually or contingently liable; (c) has good unencumbered and marketable title to the property, subject to and with the benefit of all rights and servitudes subsisting; (d) has complied with all requirements of Guernsey company law to date and to the date of completion; (e) has no mortgage, charge, lien or other encumbrance, save as disclosed; (f) has not engaged in any dispute, arbitration or litigation, save as disclosed; (g) has effected all necessary insurances which shall remain in force and are enforceable; (h) has not granted any power of attorney, save as disclosed; (i) has complied with all obligations imposed by the Income Tax and Social Security Laws; (j) has complied with all requirements imposed by the States or any States 128
Before himself resigning in order to avoid an interregnum.
Guernsey Law of Realty and Leases 653 Committee or authority or any building regulations or the like; (k) has prepared all accounts in accordance with generally accepted accounting principles, which accounts give a fair view of the position of the company being sold; (l) has not entered contracts of a long, unusual or onerous nature nor acquired any other significant obligations which have not been disclosed (either at all or since the last balance sheet was prepared); and warrants that: (m) there is nothing which has not been disclosed, which if disclosed, would affect the purchaser’s judgment as to whether to purchase the company. The key covenant which a vendor of the shares of a property owning company gives is as follows: “The vendors covenant to indemnify the purchaser and as a separate obligation to indemnify the Company against all obligations and liabilities of or incurred by the Company its employees servants or agents prior to the completion date whether contractual tortious fiscal or otherwise and including (but without prejudice to the generality of the foregoing) all rates taxes insurance premiums and other expenses and outgoings, save as provided for in the statement.”
In essence the purchaser is looking for the maximum protection possible against matters arising subsequently out of the company’s history prior to completion. Again the warranties only have the worth of the person who gives them; that person may conceivably leave the Island penniless, never to return, within a week of completion. Equally a vendor will look to limit his liability both in time and amount.
BONDS
A bond in Guernsey is the name given to the means by which realty is charged with the repayment of capital borrowing and interest. It combines the features of an English loan agreement and mortgage without in fact conferring any interest in realty. The right conferred by a bond is personalty and, prima facie, the relevant prescription period is six years from the date upon which repayment falls due. Considerable care is required in determining when precisely under Guernsey law time starts to run. English common law was modified by statute, but no equivalent legislation was enacted in Guernsey. Under old English common law a debt payable on demand was, without more, due and owing from the date upon which the monies were advanced, as opposed to any later date when a demand was actually made. Time started to run immediately, much to the surprise of some
654 The Laws of Guernsey lenders. It seems however that this prima facie rule could be displaced in the circumstances of any given case, a mortgage being one such possible circumstance. All that is necessary to note here is the uncertainty attending these matters. Fortunately in the case of the vast majority of bonds interest is payable with the effect that each payment of interest interrupts the running of the prescription period by reason of Article 3 of the Loi relative aux Prescriptions 1889 which reads as follows: “Le paiement d’intérêts reconnus par le débiteur sur une pièce par écrit portant intérêt, aura l’effet d’interrompre la prescription courante contre la dite pièce”.129
The bond itself is made in writing and confirmed and ratified before the Contract Court, again without actually being signed by the giver of the bond.130 Guernsey bonds are almost invariably expressed as securing all the personalty and realty of the bond giver, both present and future.131 In practice the personalty is rarely of very great significance; there is also debate as to the precise circumstances in which a person can charge personalty effectively under Guernsey customary law.132 As to realty there is consensus that the only property bound by the bond is the realty owned by the giver of the bond at the time when the bond is made.133 As noted already, bonds are deposited for registration in the Greffe box on the day of the transaction. All documents so deposited will be deemed registered on that day.134 There is some slight dispute as to whether the bond is effective at the moment when the borrower gives his consent before the Jurat or when it is registered. The better view is that the bond only binds third parties when registered. Bonds registered on the same day have equal priority, exceptionally rare in practice, otherwise priority is determined by date of registration at the Greffe. It is noteworthy that if the lender sues upon the debt secured by the bond he is likely to institute saisie proceedings which affect all the borrower’s realty in any event. However, the security of the lender or his priority amongst other creditors by virtue of the bond extends only to the realty to which the bond attached, ie again the realty owned by the borrower when the bond was given, save where the bond was a specific bond in which case it extends only to the specific realty. In practice any lending bank will insist upon a first charge and is also likely to require its consent to be given for any subsequent bond to be granted. Occasionally where the security is manifestly sufficient it may be that a bondholder agrees to give priority 129 Literally: “Payment by a debtor of interest acknowledged in respect of a written document bearing interest will interrupt the running of prescription against the said document”. 130 There are exceptions, certain lenders require borrowers to sign in addition. 131 The effect of the bond could be limited to, say, a specific property if the lender was willing. 132 See the introduction to the section on security interests. 133 Again for no particularly compelling reason. As with all such assumptions this would be worth challenging in the right case. 134 Again not so as to catch any realty sold by the purchaser on the same day. In practice if a person is both selling and buying on the same day the bond he consents to will be registered on the following day so as not to attach to the property he has sold.
Guernsey Law of Realty and Leases 655 to a subsequent bond. A typical and reasonably straightforward bond might read as follows: “THIS BOND given this 4th day of July 2002 by Pierre de La Rue, son of Thomas, of Le Taudis, Rue Minable in the parish of Saint Peter Port (hereinafter referred to as ‘the Borrower’ which expression where the context so permits shall include the heirs, executors and administrators of the Borrower) in favour of SAND BANK LIMITED, whose registered office is situated at 24 Brock Street, in the parish of Saint Peter Port, Guernsey (hereinafter called “the Bank” which expression where the context so permits shall include its assigns) WITNESSETH as follows: THAT the Borrower hereby acknowledges being indebted to the Bank in the sum of one million pounds (£1,000,000) (hereinafter referred to as “the principal sum’) which the Borrower hereby covenants to repay to the Bank on demand together with all such other sums as may be due and owing from the Borrower to the Bank at the time thereof; THAT pending repayment of the principal sum the Borrower hereby covenants to pay interest on the principal sum at the rate of three per cent (3%) per annum above the base rate of Sand Bank Limited from time to time, such interest to be payable monthly in arrears together with such other banking charges payable by the Borrower to the Bank pursuant to its terms and conditions for the time being in force; THAT the Borrower covenants: (a) to keep all property hereby charged in a good state of repair and condition; (b) to permit the Bank or its duly appointed agents to inspect the property hereby charged at any time upon reasonable notice being given; (c) to insure and keep insured with a reputable insurer as approved by the Bank all the property hereby charged against loss or damage to the property whether by fire or otherwise and such other risks as the Bank may from time to time require; (d) to deliver a copy of the insurance policy, certificate and evidence that any premium required thereunder has been paid as and when such insurance is effected and renewed and, in any event, not less than annually; (e) to apply all monies received in respect of any insurance claim made in respect of the property hereby secured to the repair or reinstatement of the said property alternatively to hold the said monies on trust for the Bank; THAT if the Borrower should fail to effect insurance in respect of the property hereby secured the Bank may do so at the expense of the Borrower; THAT the Borrower hereby covenants with the Bank not to consent to the registration of any further charge or charges against the property hereby charged during the currency of this Bond without the prior consent in writing of the Bank; THAT the Borrower will not sell, let, sub-let, part with possession or otherwise dispose of the property hereby secured or any part thereof without the prior consent in writing of the Bank; THAT a demand or notice hereunder shall be made in writing signed by an officer of the Bank and may be served on the Borrower either personally or by post to the Borrower at his address or place of business last known to the Bank which service shall be effective notwithstanding that such written notice is returned undelivered and notwithstanding the death of the Borrower; THAT notwithstanding anything herein contained to the contrary the principal sum and interest thereon hereby secured shall become immediately payable: (i) if the Borrower shall fail to pay any instalment of interest on the due date or
656 The Laws of Guernsey within twenty-one days of the due date; (ii) if a Preliminary Vesting Order shall be taken against the Borrower; (iii) if the Borrower shall commit any breach of the conditions herein contained; IN WITNESS WHEREOF the Borrower appeared before the undersigned LieutenantBailiff and the Jurats of the Royal Court of this Island of Guernsey on the day and year first above written and confirmed and ratified this Bond on the security of all his real and personal property present and future.”
If a guarantee is also to be incorporated words to the following effect would be included: “The Guarantor135 hereby guarantees to the Bank on demand the repayment of the monies due to the Bank by the Borrower together with interest thereon and the performance and observance by the Borrower of all or any of the provisions conditions and obligations herein contained so as to give effect thereto (but without prejudice to all or any of the rights of the Bank): (a) the Guarantor hereby waives all or any of his rights at law including (but without prejudice to the generality of the foregoing) the ‘droit de discussion’ and the ‘droit de division’136 or any other right whereby the Guarantor may have required the Bank either to pursue the Borrower prior to enforcing the guarantee hereunder or whereby the liability of the Guarantor might otherwise have been reduced or apportioned; (b) the Guarantor hereby covenants with the Bank to observe and perform all obligations of the Borrower whether express or implied under and by virtue of this Bond and in particular as if the Guarantor were herein named therefor; (c) that as between the Guarantor and the Bank the Guarantor is hereby deemed to be a principal debtor and principally obliged for the monies hereby secured and interest thereon and the obligations herein contained and the property hereby charged by the Guarantor shall be principal and not collateral security and accordingly the liabilities of the Guarantor by virtue hereof and the security on the property hereby charged shall not be affected by any act or extension of time for repayment or other indulgence granted or shown to the Borrower or by any other modification hereof or any other matter or thing whereby the liabilities of the Guarantor as guarantor or of the property charged hereby would but for this provision have been discharged; (d) the Guarantor hereby waives his right to participate in the proceeds of any security or securities held or acquired by the Bank or in any monies which may be received by the Bank whether from the Borrower or any other source in and towards the reduction of the monies hereby secured unless and until all such monies have in full been received by the Bank.”
135 As defined. Note that the Guarantor’s obligation is, like the borrower himself, usually expressed to be on the security of all his real and personal property, present and future. The relevant words appear in the witness clause. 136 These rights are considered in the section on saisie under the heading, marshalling of claims. Essentially they comprise common law rights to require a creditor to pursue first the principal creditor and secondly to divide the liability guaranteed with any co-guarantors.
Guernsey Law of Realty and Leases 657 It is not uncommon to see a very wide ranging power of attorney contained within a bond whereby the Bank is appointed attorney for the borrower to manage the property or to take whatever step that the bank deems fit either to protect its interest or to realise its security. In practice such clauses are of limited use given the need to establish good title to a prospective purchaser’s Advocate, the need to obtain vacant possession and the possible existence of other secured creditors. In reality a secured creditor will have to go to Court to realise his security in any event which, in practice, means saisie proceedings. The system of registration and indexation of bonds has already been considered above. It is for the vendor’s Advocate to ensure that bonds to be released are in fact released. There is a bond cancellation book which once signed by the bank’s official cancels the bond. However the bank must produce the original or else it will have to apply to the Court for leave to cancel. Original bonds remain in the Greffe until drawn out by the creditor. Many banks withdraw their bonds for their own safe-keeping. An alternative route is to arrange for the release of a bond. This is typically used where, for example, two properties are secured and one is to be sold, or where a single property is to be split. The debt, or at least a part of it, will survive the conveyance and therefore the need remains for security. The release is effected in respect of the property disposed of only. Often there will be a part payment of the amount secured in order to obtain the bank’s agreement to the release. The bank manager or authorised official attends the Contract Court. He is called forward at the material time and indicates the bank’s approval of the transaction and agreement to the release of the property from the bond. This is reflected in the conveyance which will say words to the following effect: “ . . . and also appeared Sand Bank Limited (by Mr George Plover, one of its Managers) who released the premises hereby conveyed from all charge by virtue of the Bond consented to by the vendor in the said Bank’s favour.”
The cost of entering into a bond comprises the following charges: Document duty: Court fee: Registration fee: Advocate’s charges:
payable at the rate of 0.5% of the amount secured; £22.50; typically between £3 and £6; £25 basic charge plus £3 per £1,000 on the first £10,000 and thereafter £2 per £1000.
Where a guarantee is also prepared a fee of half the amount of the bond legal fee is commonly charged in addition.
658 The Laws of Guernsey
CONVEYANCING IN ALDERNEY
Conveyancing in Alderney is fundamentally different to Guernsey conveyancing for historical reasons. In June 1940 Alderney’s population was evacuated in its entirety and did not return until after the Second World War. During that time the Germans established slave labour camps in Alderney where terrible crimes were committed.137 When the civilian population returned they found the Island’s infrastructure devastated. A Commissioner was appointed to determine the extent of land holdings and ownership. Claims were made and adjudicated upon. A Register was compiled comprising all inhabited and cultivated land in the Island. The decisions of the Commissioner were known as “awards” which were entered in the Land Register. Parcels of Alderney land are still known as awards. The Register is kept in loose-leaf format comprising several sections for each property entry. The form corresponds closely to that of the equivalent English registers. The freehold land is itself the subject of a sheet in the Register followed by further sheets as appropriate concerning any lease affecting the property, any rente or other charge. Properties are indexed according to the name of the owner for the time being. There is an index map in addition. As a result conveyancing in Alderney is a much more straightforward process than in Guernsey.138 It is common to convey without the assistance of an Advocate and instead rely upon the estate agent.139 Parties wishing to convey property exchange conditions of sale which are very close in form to the conditions used in Guernsey. The parties must appear personally or by an agent before the Alderney Land Registrar (the Clerk of the Court of Alderney). The purchaser must produce cheques in payment of the various costs and charges associated with Alderney conveying. The cost of Alderney conveyancing is in fact higher than in Guernsey. The equivalent of congé is payable but at a rate of 4 per cent as opposed to 2 per cent in Guernsey. Payment is made to the States of Alderney. In addition document duty at the same Guernsey rate is payable and goes to the States of Guernsey.140 In addition there is a registration fee payable 137 See L James Marr, A History of the Bailiwick of Guernsey (Phillimore) p 179. See also Charles Cruickshank, The German Occupation of the Channel Islands (Guernsey Press) pp 200 et seq. There is a brief but powerful autobiographical account by John Dalmau, Slave Worker in the Channel Islands. 138 Although it would be possible to put in place the same system of registration in Guernsey it would be a very substantial and costly undertaking. 139 Although it should be made clear precisely whose agent the agent is and for what purposes. 140 Note also that equivalent charges are levied pursuant to the Share Transfers (Alderney) Law 1994 where the underlying asset of the company is Alderney realty; likewise note that the Duty on Long Leases (Alderney) Law 1994 imposes a composite duty on dealings with long leases. A long lease is a lease for 21 years or more certain and any other lease which may be renewed so as to bring the aggregate term to 21 years or more. There are exemptions which include certain trust dealings, inheritance, dealings motivated by natural love and affection between husband and wife, parents and children and dealings pursuant to an Order of the Matrimonial Causes Division of the Royal Court, provided it is declared that no leasehold duty is payable. Note also that there is no general Dwellings Profits Tax as in Guernsey (having been repealed). There is instead the New Dwellings Profits Tax (Alderney) Law 2001 which has a very similar impact to the Guernsey tax but is restricted to dwellings less than 5 years old.
Guernsey Law of Realty and Leases 659 at the rate of 0.05 per cent of the value of the transaction with a minimum charge of £30 and a maximum charge of £250. Search fees may also be payable. Cheques should not be personal cheques, they should either be an Advocate’s cheque or a banker’s draft. The balance of the purchase price must also be paid. Bonds may be cancelled by production of a suitably worded letter from the creditor,141 together with a small cancellation fee payable to the States of Alderney. When registering a bond document duty of 0.5 per cent is again payable to the States of Guernsey in the usual way, together with a registration fee payable to the States of Alderney and any search fees. The owner of the land to be encumbered must indicate his consent to the imposition of the charge. This is a matter of course in any non-contentious matter. The conveyance itself is in fact drafted by the Registrar. It is in the form of a straightforward transfer of the registered interest concerned. The Registry entry is then amended to reflect the transfer of the interest to the purchaser. The purchaser acquires the land or interest comprised in the award he has purchased subject to any registered interest over that land, eg in the case of freehold land subject to any registered leasehold interest, charge or rente. The purchaser will inevitably be aware of what the award comprises and any adverse right over it through the simple means of inspecting the Registry entry. The legislation creating the Alderney Land Register and its operation is found in the Alderney Land and Property etc Law 1949.142 Section 16(2) sets out the circumstances in which the Registrar will make an entry in the Register to give effect to a change of ownership as follows: (a) where directed by the Court, or on appeal by the Royal Court; (b) upon written application made by one of the parties to a written agreement or upon the written or oral application made jointly by the parties; (c) upon application made either by the legal personal representative of a deceased person or by the person to whom the interest to which the application relates has passed under a will or upon application made in virtue of a right of dower or franc veuvage; (d) where there is intestacy, upon application made by the person to whom the property has passed, not being property which vests in the Clerk of the Court pursuant to the particular provisions in Alderney law for intestacy. By section 17 the Registry entries as to the award itself are conclusive evidence of ownership and boundaries. This provision was distinguished by the Royal Court in the case of Baron v Watts (1994) when considering the extent of a parcel of land created by the sub-division of an award. Furthermore, registration is 141 The explanatory leaflet produced by the Alderney Land Registry refers to a “discharge document or confirmatory letter of release”. 142 And see also the Court of Alderney Rules of Court made with reference to the Law; these make detailed provision for the register itself together with other matters arising under the Law; including ss 16 & 22, see below.
660 The Laws of Guernsey provisional during the three month retrait period. The Clerk has various obligations to inform purchasers of the right of retrait. By section 22(1) where there is doubt, dispute or difficulty in any matter affecting the Register, the Registrar or any other person interested in the matter may apply for directions to the Court of Alderney. The Registrar must comply with any directions given by the Court or on appeal by the Royal Court. This indirect provision provides for a judicial remedy as regards any dispute concerning the Alderney Land Register together with a right of appeal to the Royal Court, Guernsey. Again guidance is given by the case of Baron v Watts as to the manner in which these matters should be dealt with. There is provision at section 25 for the rectification of the Register in certain defined circumstances.
CONVEYANCING IN SARK
Sark conveyancing is very much closer to Guernsey conveyancing, save that it is still carried on in French.143 Sark conveyancing is generally conducted via Guernsey Advocates. The costs associated with Sark conveyancing reflect the Island’s better preserved feudal state. Sark is divided into forty tenements or holdings of land. This division dates back to 1565 and the original grant of Sark to Helier de Carteret, Seigneur of St Ouen in Jersey, by Queen Elizabeth on condition that he should cause the Island to be inhabited by “forty men at least, our subjects”. The Queen also sent “six belles pièces d’artillerie” from the Tower of London to assist with the defence of the Island which had become something of an attraction for pirates, corsairs and French invaders.144 The owner of a tenement is entitled as of right to a seat in the Island’s parliament, known as Chief Pleas. Upon sale of a tenement a congé or treizième is payable to the Seigneur; however it is truly onethirteenth of the price of the realty, unlike Guernsey’s 2 per cent. The same exemptions from congé apply in Sark as historically in Guernsey, ie where there is a further conveyance within a year, where the conveyance is by way of délaissance etc. However, the Seigneur’s permission is still required. Leases have been carved out of certain tenements and these take free of the obligation to pay treizième; see the case of Surcouf v de Carteret (1999). There is no document duty payable, only a small registration fee in the region of £30. Conveyancing takes place before the Sénéschal; Sark has its own Greffe and Greffier.
143 At least for the time being, note the effect of the Conveyancing (Sark) Law 2002 which lays the foundation for conveyancing in English, albeit conveyancing in French will still be permitted. The 2002 Law was itself based on the Conveyancing (Guernsey) Law 1969. 144 See generally Edith Carey, The Channel Islands 2nd edn (1924 A&C Black Ltd) ch 13. There remain rather conflicting obligations for tenement owners both to possess a musket and to respect modern firearms legislation.
Guernsey Law of Realty and Leases 661
RETRAIT LIGNAGER 145
The right of retrait lignager 146 forms an ancient part of Guernsey customary law.147 It is the right of a family member to redeem land sold to another on condition of payment to that other person of the purchase price and costs. There were two forms of retrait, namely retrait foncier and retrait lignager. Both survive in modern Guernsey law but the former is now of no practical significance. Retrait foncier was the right of a landowner to redeem a rente within a year and a day of its sale. Since all such rentes are now redeemable at any time the landowner chooses, the specific right to redeem within a year and a day of the sale of the rente is irrelevant. Much more significant is the retrait lignager. This right exists throughout the Bailiwick in slightly different forms. The common features are that a relative of the vendor of realty may bring an action against the purchaser in order to have the relevant realty vested in that relative,148 but on condition that the realty purchase price together with other costs incurred by the purchaser be reimbursed within a certain short period. Upon payment of the necessary sums the realty is vested in the relative. The vendor is unaffected since he or she retains the purchase price paid, this is unless the original sale was at an undervalue or otherwise than for the full market value at arm’s length. Here a vendor may lose substantially through the intervention of a relative. Particular care is required when advising upon any transaction or series of transactions where realty is to be sold at a value likely to attract the attention of a prospective retrayant. The vendor should either not proceed or satisfy himself that no relative will in fact retrait; the vendor must be warned of the dangers.149 There is, of course, no right to retrait against a company since a company has no relatives.150 Advocate Peter Jeremie was scathing in his criticism of the nineteenth century right to retrait:151 “In truth, the system itself is fundamentally vicious, and, if tolerated, should be restricted to heirs in a direct line and to real property inherited. What advantages can compensate 145
Literally “lineal re-taking”. The word retrait is also used as if it were a verb; ie to retrait. 147 See Terrien Livre VIII ch XXVI p 316 and Thomas Le Marchant vol 1 p 353 et seq. See in particular Mme. Poirey’s paper: Le droit coutumier à l’épreuve du temps. L’application de la coutume de Normandie dans les iles anglo-normandes: le retrait lignager, which appeared in the Revue historique de droit français et étranger 75(3) juill.–sept. 1997 at p 377. It was also published separately as an extract by Éditions Dalloz. The paper is important not only for its account of retrait but also for identifying and citing a great many sources for (Channel Island and) Norman customary law. 148 The retrayant, ie the person exercising the right to retrait. 149 One possible way to avoid the problem is to join the potential retrayants to the conveyance and thereby obtain their agreement not to exercise their rights. 150 It remains to be seen whether the right to retrait could be maintained in the face of a transaction where a company was employed in an attempt to avoid the possibility of retrait. 151 For the 18th century see Laurent Carey p 200 et seq. 146
662 The Laws of Guernsey for the evils it entails, for the bad feeling it creates in families, the litigation and amount of guilt—not to say of crime—it engenders?”152
Jeremie was writing at a time when the right to retrait could be exercised up to 10 years after the relevant sale if the conveyance was registered pour date as opposed to lire, ie if it was not read out in open Court. Jeremie’s violent complaints against the system of retrait were founded upon the resulting uncertainty in transactions affecting land together with the scope for fraud and sham arrangements of all kinds. Many of Jeremie’s objections have since been met by the reform of the law relating to retrait in Guernsey. By the Loi relative au Retrait Lignager, aux Appropriements, et à la Lecture de Contrats aux Plaids d’Héritage 1924 the right of retrait lignager was abolished, save in certain limited circumstances.153 A distinction was drawn between the right to retrait an acquêt and a propre.154 By Article 1(a) of the 1924 Law only the descendants of the vendor may exercise the right of rétrait over an acquêt. By contrast a larger class of relatives may exercise the right of retrait over a propre comprising, in addition to descendants, brothers, sisters, nephews and nieces related by blood to the vendor, see Article 1(b).155 By Article 2 the right to retrait must be exercised, in any event, within one month of registration of the relevant conveyance. It follows that a purchaser of Guernsey realty is best advised not to spend any significant sum on his property until after a month has passed. In Alderney the classes of potential retrayant are again limited according to whether the land is acquêt or propre; only descendants may retrait against acquêts while the same larger class may retrait against propres as in Guernsey. The distinction between Alderney and Guernsey is the fact that the retrait period is three months from registration in Alderney rather than the single month of Guernsey.156 In Sark the right to retrait is enjoyed by a wider class of relatives up to, but excluding, the seventh degree of relationship using the canonical method.157 The 152
Peter Jeremie, On Real Property (1866) p 163. For other laws concerning retrait see the Loi relative au Retrait Foncier 1857, the Loi relative aux Bordages 1857 and the Loi relative à la Péremption d’Instance, aux Retraits et à la Prescription 1941. The last suspended time for péremption, retrait and prescription from 1 July 1940 onwards and was approved by a certain Feldkommandantur Schumacher. All periods of suspension had come to an end by 1 January 1946. The 1857 Law provides that where retrait is allowed the Court order must require the purchase monies to be consigned to the Greffe by 3pm on the following day. 154 It will be recalled that a propre is familial inherited land whereas an acquêt is merely acquired land. Note however that in Guernsey law a propre is land inherited by intestate succession only, since willed land is deemed to be acquêt following the case of Norris, but note the different position in Sark. Whether Norris was correctly decided is questionable. 155 Note that parents cannot retrait, unlike in Jeremie’s time; see ibid p 164. 156 See Arts 19 and 20 of the Alderney Land and Property etc. Law 1949 and Arts 1 and 2 of the Loi relative aux Retrait Lignager, aux Appropriements, et à la Lecture de Contrats aux Plaids d’Héritage (Auregny) 1949 (which is plainly copied from the 1924 Guernsey law of the same name). 157 This is as opposed to using the civil method. The canonical method involves counting only the longest number of steps between the relative and the common ascendant, whereas in the civil method one counts all the steps up and down between the two. 153
Guernsey Law of Realty and Leases 663 right to retrait must be exercised within 40 days of registration. There are formal requirements that the retrayant state on oath that he is not buying the property on behalf of another and furthermore that the purchase money has not been provided by a third party. There is no distinction between acquêts and propres in the context of retrait in Sark. Any relative up to the seventh degree may retrait against either. The Sark case of Rang v Wakley [1987] 6 GLJ 290158 contains useful guidance as to the amounts repayable to the unlucky purchaser. In addition to the purchase price, treizième, legal fees connected with the purchase and insurance charges the Royal Court also allowed on appeal the purchaser’s legal costs in the retrait proceedings, travelling expenses, surveyor’s fees and travelling expenses connected with the conveyance itself. Whether the costs of the retrait action would be allowed to the purchaser in every case is open to doubt. The party to litigation who knows he cannot successfully oppose an action ought, if given the opportunity, to be willing to compromise the claim without involving the Court any more than is strictly necessary. It is noteworthy also that the retrayant is only bound to repay the realty purchase price as opposed to any sum paid on account of personalty. Given the habit of exaggerating the price of personalty in order to reduce treizième a purchaser is likely to find him or herself out of pocket through being left in possession of carpets, curtains and the like ostensibly worth many thousands of pounds but, in reality, fit only for destruction. Some protection is given to a purchaser by including in the conditions of sale a requirement that the vendor reimburse the purchaser the amount paid in respect of personalty if the right to retrait is exercised by a relative. This is on condition that the personalty is given back to the vendor with an appropriate adjustment in respect of any lost or damaged personalty. Of course this remedy depends upon being able to pursue the vendor. A more difficult area concerning retrait is the question of priority between competing retrayants. This area of law has not been worked out fully in Guernsey. It would seem that only one action to retrait may be maintained in respect of realty. It was quite common to give transactions security by having a relative bring an action to retrait which was not pursued but had the effect of barring any other would-be genuine retrayant. It would seem that the closest relative wishing to retrait within any permitted class has the right to pursue the action.159 If an action is commenced by a more distant relative it would seem that the closer relative may take over the action within the period allowed for retrait. The case of Hamon v Rault (1972) concerned a situation where the retrayant relative acted against a purchaser who was himself a relative in the same degree. In Hamon a sister sought to retrait against her brother who had purchased land from their father. It was held 158 In the Law Journal the name of the case is given as Smith v Rang. A contemporaneous Guernsey Press report from 16th January 1986 gives further insight into the facts of the case. 159 Note the terms of Art 1(b) of the 1924 Guernsey law “. . . auront selon leur priorité de degré le droit de retrait lignager”; (“. . . will have according to their priority of degree the right of retrait lignager”).
664 The Laws of Guernsey that the sister was permitted to retrait to the extent of buying an equal share of the realty from her brother. Note that there is no right to retrait when land is sold by judicial auction,160 nor where land is merely exchanged without any sum being paid (see Jeremie page 162). If land is simply given away the remedy of the relatives would appear to be to bring an action against the donee to recover the land on behalf of the donor’s putative heirs. In practice the issue does not arise.
LÉSION ULTRADIMIDIAIRE
Lésion ultradimidiaire161 or simply lésion is the Guernsey customary law equivalent of an equitable remedy permitting an unconscionable bargain to be set aside.162 However, lésion in its historical form is of both very limited and inflexible application. It is either available or not according to a mathematical formula. The leading Guernsey case is that of Watson v Trouteaud [1987] 5 GLJ 16 where Pothier’s formulation of the doctrine was expressly cited and adopted, while the more general English doctrine of unconscionable bargain was rejected. The Jersey case of Beadle v Snell [1999] JLR 1 sets out the history of what is known in that jurisdiction by the more prosaic appellation déception d’outre moitié de juste prix, for reasons which become clear below.163 Collins JA helpfully set out what amounts to a history of the doctrine in Norman customary law, beginning with Le Rouillé’s Grand Coustumier du Pays & Duché de Normandie etc., 2nd ed. and proceeding via Terrien, Hoüard, Basnage and Le Geyt to Pothier. For Pothier: “Although any injury whatever renders contracts inequitable, and consequently vicious164 and the principle of moral duty (le for interieur) induces the obligation of supplying the just price;165 persons of full age are not allowed in point of law to object to 160 We consider judicial auction separately; this is a remedy which a co-owner may seek in order to bring the state of co-ownership to an end. See licitation. 161 Lésion means literally lesion; as in the English injury or wound. In a legal context it means a material prejudice which results for one party when exploited by another. The word ultradimidiaire derives from the Latin ultra (beyond) and dimidius (half). Merlin defined lésion as “Dommage, tort, préjudice qu’on souffre en quelque marché, en quelque contrat” ie “Damage, wrong, prejudice that one suffers in some bargain, in some contract”. 162 And most likely in Alderney and Sark law also. 163 The case went to the Privy Council, see Snell v Beadle [2001] 2 WLR 1180. Note what was said by the Privy Council concerning Jersey customary law generally, much of which could be said equally about Guernsey customary law. 164 Ie in the sense of flawed—literally that which is contaminated by vice. In French law the integrity of a person’s agreement to contract is of central importance. Note in particular Art 1109 Code Civil. “Il n’y a point de consentement valable, si le consentement n’a été donné que par erreur, ou s’il a été extorqué par violence ou surpris par dol”, which translates as : “There is no valid agreement if consent has been given only by mistake or extorted by force or through improbity”. French contract law talks of vices du consentement. 165 It is noteworthy that Pothier often considers what is morally right in addition to and quite often as opposed to rights which are enforceable judicially; see the Eloge of Pothier at the beginning of Evans’ translation of the Treatise on Obligations at p 19 vol 1.
Guernsey Law of Realty and Leases 665 their agreements as being injurious, unless the injury be excessive, a rule wisely established for the security and liberty of commerce, which requires that a person shall not be easily permitted to defeat his agreements; otherwise we should not venture upon making any contract for fear that the other party, imagining himself to be injured by the terms of it, would oblige us to follow it by a lawsuit. That injury is commonly deemed excessive which amounts to more than a moiety of the just price. And the person who has suffered such injury may within (10 years) obtain letters of rescission for annulling the contract.”166
In his Treatise on the Contract of Sale Pothier added: “In order that there may be ground for this rescission, it is necessary, first, that the thing sold should be an estate or an immovable right, the sale of movables not being subject to rescission . . . . . . it is necessary, secondly, that, by the contract, there should be a lesion in the price of more than one half of the just price. For example, if the just price of an estate is 20,000 livres, it is necessary, that it should be sold for a price less than 10,000 livres, in order to give rise to a rescission. . . . In order to know whether the contract includes a lesion sufficient to give rise to a rescission, we ought neither to regard the situation nor the present value of the estate; but we ought to estimate what the estate is worth, at the time of the contract, having regard to its situation, and to the value of estates at that time. And, therefore, this estimation ought to be made by experts, who have knowledge of the situation of the estate, at the time of the contract. . . . In order, thirdly, to give rise to this rescissory action, it is necessary that the seller should be within the time of restitution. This period is ten years, like that of all rescissory actions. . . .”167
It follows that, where an agreement for the sale of realty is made which, on the facts known at the time of the contract, undervalues the realty by one half or more, the contract may be set aside at the instance of the owner (or former owner). Pothier expressly excludes the application of the doctrine to the sale of meubles or movables;168 likewise to the compromise of disputes, aleatory contracts generally,169 contracts where the “excess above the intrinsic value is the price of affection”, and sales of the right of succession. Leases also are excluded, given that 166 See Pothier, Treatise on the Law of Obligations, or Contracts vol 1 pt 1 ch 1 Art 3 s 4; here taken from p 21 of Evans’ translation. 167 See paras 340, 344, 345 and 348 of Pothier’s Treatise on the Contract of Sale trans LS Cushing (originally published by Charles C Little & James Brown of Boston in 1839 and re-printed by the Lawbook Exchange, Ltd Union, New Jersey 1999). Note that the likely prescription period for lésion in respect of realty would appear to be 20 years under Guernsey law; see the Loi Relative à la Prescription Immobilière of 1909, equally one could argue for 6 years on the grounds that the action relates to a contract as opposed to realty directly. For Pothier the issue did not arise. It will always be prudent to act as swiftly as circumstances permit. See also Pothier, Traité de la Procédure Civile part 5, ch IV, Art 2, s 5 for lésion and ch IV generally on the topic of the nullity of obligations and rescission. 168 Although there is some doubt as to how absolute this exclusion was; Pothier himself cites a contrary view, see also Terrien p 329 and the case of the diamond purchased for 4,000 livres. 169 Ie contingent contracts; contracts where the mutual consideration is in some sense inherently uncertain or subject to chance.
666 The Laws of Guernsey “leases only convey a disposition of the fruits, and are in the nature of movables”.170 Note however that the threshold for lésion is reduced to one-quarter of the “just price” in the case of partitions between co-heirs or co-proprietors on the grounds that there are “certain agreements in which equality is more particularly requisite”.171 In modern French law the Code Civil provides that lésion does not vitiate agreements save for certain forms of contract or in respect of certain persons.172 Thus in the context of realty art. 1674 requires the vendor to have suffered lésion beyond seven-twelfths of the (true) price.173 The other circumstances in which lésion is potentially available comprise principally contracts concluded by an incapable; a partage in which a party receives less than three-quarters of his (true) share; certain contracts of maritime assistance, and contractual provisions governing Advocate’s fees.174 Lésion is also available where the hapless purchaser pays more than three-quarters of the true value of manure.175 There is perhaps some scope for the development of Guernsey law in this context. Ultimately though Pothier is so adamant and modern French law itself so constrained that there is little extrinsic authority to support much evolution. Of course that is no bar of its own for a principled development of Guernsey common law. Equally, and to use a non-technical expression, there is more than one way to skin a cat, whether in English, French or Guernsey law.
CO-OWNERSHIP OF GUERNSEY REALTY
The law governing the co-ownership of realty in Guernsey is again customary lawbased, albeit with English flavouring and a domestic twist.176 In the now leading case of Waterman v McCormack (2002)177 the Guernsey Court of Appeal resolved a number of issues in this context, while at the same time rejecting the suggestion that English common law on the topic should influence the Court even if the concept of joint ownership had been imported from English law.178 170 See generally Pothier, Treatise on the Law of Obligations, pp 22 & 23 of Evans’ translation at paras 36, 37, 38 & 39. 171 Ibid p 22 para 35. 172 See Art 1118 CC. 173 Ie to have contracted to receive five-twelfths of the true price or less. 174 See generally Alain Bénabent, Droit Civil Les Obligations 8th edn (Montchrestien) paras 166 to 171. There are a number of other instances mentioned. 175 As the result of a law dated 8 July 1907 set out beneath Art 1683 CC; presumably on the basis that the subject matter of the purchase should not necessarily govern the quality of the bargain. 176 There are potentially distinctions between Guernsey, Alderney and Sark law in this context because of the different forms of conveyance used. One would expect Sark law to be close to Guernsey law. 177 Advocate Alison Ozanne appeared for the successful appellant. See also now the Royal Court decision on appeal from the Court of Alderney in Pirito v Curth (2002) 27 September, a decision of the Deputy Bailiff. 178 The Court suggested an alternative source in the customary law notion of “communité de biens” without deciding the true source; instead it relied upon Guernsey jurisprudence.
Guernsey Law of Realty and Leases 667 The essential starting point is the fact that individuals179 may co-own Guernsey realty. The Court of Appeal identified two forms of co-ownership which it named joint ownership and ownership in common. The Court expressly adopted this nomenclature in preference to the approximate equivalents in English law of the joint tenancy and tenancy in common. Joint ownership arises where co-owners have an equal interest in the whole of the property, subject to a right of survivorship. By contrast ownership in common arises where the co-owners enjoy undivided shares in whatever stated proportion (or else equal proportions). Whether there is joint ownership or ownership in common is determined by reference to the habendum clause in the conveyance. If joint ownership is intended the clause will be along the following lines: “T the Vendor hereby conveys for an estate of inheritance to the Purchasers accepting for themselves, the survivor of them and the heirs of such survivor . . . etc.”
Whereas if ownership in common is intended the clause will be in this or similar form: “T the Vendor hereby conveys for an estate of inheritance to the Purchasers in undivided shares of one-quarter to the Purchaser Le Mesurier and three-quarters to the Purchaser Perchard180 . . . etc.”
The fundamental principle under either form of co-ownership is summarised by the customary maxim that “nul n’est tenu de rester dans l’indivision”; ie no one is bound to remain a co-owner.181 A co-owner of Guernsey realty is free to bring to an end the state of co-ownership by three separate methods: (a) by simple agreement leading, say, to a délaissance;182 (b) suing for a partage183 of the property, if the same is capable of sensible division; (c) suing for a licitation184 to be ordered; ie a judicial auction of the property to the highest bidder with division of the sale proceeds between the former coowners. In the absence of or pending such final determination of co-ownership the Court of Appeal in Waterman addressed the question of how severance of a joint interest could be achieved; ie how the right of survivorship could be ended given the potentially disastrous consequences of death for the estate of the original 179 180 181 182 183 184
Or persons generally, whether natural or not. Or whatever the shares are. The principle holds good in modern French law, subject to well defined exceptions. A conveyance between co-owners, see above. Division, again see above. From the Latin, licitor, to bid for. A licitatio was a bidding at a sale or auction.
668 The Laws of Guernsey co-owner or even for an acquirer or chargee of the same co-ownership interest. Perhaps surprisingly the Court concluded that alienation of one co-owner’s joint interest did not bring about an automatic severance of the joint interest itself. If a person sold or charged his share of the joint ownership interest to a third party the third party took the interest subject to the right of survivorship which depended not on the mortality of the third party but that of the vendor or hypothecating former joint interest owner. The solution for the purchaser or chargee is again to seek partage or licitation from the Court. The only exception to this principle identified by the Court of Appeal is where an interim vesting order has been made in saisie proceedings against the interest of a co-owning joint interest holder. Here a severance is effected by operation of law alone. Of course it is unsatisfactory that a co-owner should take the risk of dying prior to the final determination of the action for partage or licitation; accordingly a practice has evolved of seeking severance of the joint ownership by way of application at the outset of the proceedings and pending the outcome of how the division is in fact to be effected and in what proportions. This severance is obtained almost as of right; indeed it is hard to imagine circumstances where it could properly be denied. Where there is ownership in common the conveyance will most likely define the (undivided) shares of the co-owners. In default there would be a strong presumption of equality. The difficulty which emerged in Guernsey law was to know the true consequences of joint ownership when severance in fact occurred, whether by court action or the making of an interim vesting order. The Court of Appeal in Waterman held forcefully by reference to existing Guernsey case-law that: “Subject to the proviso below, in the event of a severance of joint ownership, the parties are entitled to the property, or to the proceeds of sale of the property in equal shares. The proviso is that there seems to us no reason in principle why the parties to a conveyance into joint ownership should not, if they so wish, make different provision for the sharing of the property or the proceeds of sale in the event of severance. Such provision would obviously be included in the habendum.”
It follows that severance of a joint interest leads, without more, to an equal entitlement between the co-owners, regardless of their financial or other contributions to the acquisition or maintenance of the property concerned. The Court of Appeal followed existing Guernsey case-law where equal shares to realty had been recognised notwithstanding the disparity of contributions.185 Ironically the Court cited Halsbury’s Laws of England186 in support of the proposition that a decision which had been followed for a long time would generally be followed by courts of higher authority.
185 See the cases of Carpenter v Field Aviation Limited (1982) 11 January & Barclays Bank v Curry [1996] 22 GLJ 40. 186 Vol 37 4th edn re-issue para 1245.
Guernsey Law of Realty and Leases 669 Of course such an outcome is readily avoidable by purchasers of Guernsey realty. Unless a purchaser truly intends that, come what may, he is content for the other(s) to have an equal share on severance, the habendum should state the proportions which each is to have in that event, or else the proportions must be stated from the outset; ie the purchasers must be owners in common. Every prospective joint owner purchaser must be advised carefully as to the possible consequences; in particular the risk that the co-owner or his creditor will be entitled to an equal share of the property or proceeds of sale regardless of true contribution. The right of survivorship must itself be explained carefully. There is one way in which the position has been left uncertain by the Court of Appeal. It expressly left open the following question: “. . . whether a private arrangement outside the conveyance could validly be made to the same effect.”
In practice it has proved that all manner of “private arrangements” are being alleged by those who would otherwise do badly by the Waterman judgment. This is unfortunate and likely to take a great deal of Court time until the question is answered, and if in the affirmative, what the formal and other requirements for such “arrangements” might be. The Deputy Bailiff in the subsequent case of Pirito v Curth (2002) 27 September, a judgment of the Royal Court on appeal from the Court of Alderney, stated that: “. . . any respective entitlements, derived from a private arrangement, must, in accordance with the Court of Appeal’s reasoning, be unambiguously defined, so as to leave no room for misunderstanding, and thus to avoid the potential for lengthy retrospective, investigatory arguments deprecated by that Court.”
This must be right, assuming of course that a private arrangement is capable of varying the effect of the habendum at all, which must itself be in doubt given section 1 of the Conveyancing (Guernsey) Law 1996, ie the requirement that an agreement for the sale or other disposition of real property can be made only in writing and only by incorporating all the terms which the parties have expressly agreed in one or more documents. The public interest requirement for certainty in transactions concerning realty is of great importance, if not paramount.187 PARTAGE AND LICITATION
As already noted, and in the absence of agreement, a party wishing to bring co-ownership to an end must seek, but is entitled to, the remedy of partage, 187 See now also the Court of Appeal judgment in Roger v Roger (2003) 10 January. The case confirmed proprietary estoppel as a part of Guernsey law; but note that the claimant was not (of course) a co-owner, hence the equitable nature of the claim. Note also that Pirito proceeded to the Court of Appeal in April 2003, result unknown at the time of writing.
670 The Laws of Guernsey alternatively licitation, depending on the circumstances. Partage means the physical division of the jointly owned land and is potentially available as a remedy if such division is feasible having regard to the geography of the land, the structure of the building or buildings, the effect upon value and the lawful interests of other co-owners. Partage will be ordered if it is reasonably requested in all the circumstances of the case.188 The leading case in this regard is that of Greening v Zabiela [1992] 14 GLJ 40 where it was held: “As a matter of general principle . . . there is a presumption that when proceeding to divide up a property held in undivided ownership the preferred route is that of partage. As in this case the plaintiffs are asking for a licitation and the defendant is challenging this and saying that a partage is possible it is in my judgment for the plaintiffs to satisfy the Court that the partage is not practicable and the licitation is the appropriate route. The defendant having argued for a partage will not, in the event that the Jurats are not satisfied that a licitation is appropriate be able to resist a demand for a partage. The procedure for this would be that the defendant would be required to prepare two lots. The plaintiffs would then have the first choice as to which lot they choose to take. . . .”.189
Pothier described licitation as follows: “When several persons succeed in common to an estate or other thing, which cannot be divided without being depreciated, or acquire it in common by some title, whatever it may be, as by purchase, legacy, donation etc., any one of them may oblige the others to sell by licitation, that is to say, by suffering the whole to be adjudged to him among them, who will give the highest price for it. This licitation is made by the co-heirs or coproprietors, in presence of a notary. If any of them proves that he has not the means of bidding, and demands, in consequence, that the offers of strangers should be admitted . . . his demand ought to be allowed. When some one of the co-heirs or co-proprietors is a minor, it is necessary to the validity of the licitation, that the offers of strangers should be received; and the licitation ought also, in such case, to be made before the Judge, who should adjudge the estate to the highest and last bidder.”190
This statement essentially holds good for Guernsey law today, save that the auction prima facie takes place before a Commissioner Jurat. The (adult) co-owners may agree between them that only they may bid for the jointly owned property; it is much more likely however that the auction will be public with the highest bidder taking the property in the usual way. There is nothing to prevent a sale by private treaty at any time up to the auction if the co-owners so agree. Pothier noted of licitation that: 188 Whether by the applicant or respondent. More often than not the respondent will request partage as opposed to licitation—if it was simply a question of money it is less likely that disagreement would have arisen. 189 With adjustments being made where the property is held in unequal shares. Note the subtle power of the customary requirement that the person who creates the lots does so in the knowledge that he will not choose first. 190 See Pothier, Treatise on the Contract of Sale, Part VI, ch II § II para 516 (trans by LS Cushing (1839) and re-printed by the Lawbook Exchange Limited in (1999)).
Guernsey Law of Realty and Leases 671 “When several legatees or several acquirers dispose in this manner (ie by licitation) of an estate, which is bequeathed to them in common, or which they acquire in common, the party, who becomes the adjudicatary, is considered to have been directly the legatee or acquirer of the whole of the estate, subject only to the charge of making an allowance to his co-legatees or co-acquirers of their share in the price, to which the estate may be carried by the licitation to be made between them. It follows from these principles, that the licitation between co-heirs or other coproprietors is not, in our law, a contract of sale . . . since . . . the adjudicatary does not properly speaking acquire any thing from his co-heirs or co-proprietors.191 From which, it follows, 1, that these licitations do not give rise to any profit of sale;192 2, they do not give rise to redemption;193 and, 3, that the adjudicatary is not bound by the hypothecations of the individual creditors of his co-licitants. The particular creditors of each of the parties can only intervene to the licitation and seize the right of their debtor, for the purpose of receiving in his place the part, which will come to him in the price of the licitation . . .”.194
Again all these observations would hold good in modern Guernsey law. It is noteworthy that licitation remains a part of modern French law; Article 827 Code Civil provides: “Si les immeubles ne peuvent être commodément partagés ou attribués dans les conditions prévues par le présent code, il doit être procédé à la vente par licitation devant le tribunal . . .”.195
Applying to the Court A co-owner seeking to put an end to the state of co-ownership would make claims in the alternative as follows:196 191 In a different context note also the case of Nicholson v Clarke (1984) where the Court of Appeal confirmed the grant of a tenancy of premises by the assignee of a co-heir acting alone. Despite subsequent notice given by the co-heirs that rent should be paid to them rather than the assignee alone the tenants continued to pay only the assignee. It was held that the co-heirs merely had concurrent rights of occupation of the premises with no right to oust the co-heir or his tenants. The order for eviction amounted to an ouster and was accordingly not a remedy to which the co-heirs were entitled. 192 Profits de vente; and therefore potentially relevant to the assessment of DPT in the rare case where DPT might otherwise apply. 193 Right of retrait. 194 Pothier, ibid part VII, Art VII § 638 et seq. See also generally Merlin’s lengthy article in his Répertoire Universel et Raisonné de Jurisprudence 4th edn (1813). Merlin traced the origins of licitation to Roman Law and thought it probable that the concept originated with the Greeks. 195 “If the realty cannot conveniently be divided or attributed in the circumstances envisaged by the present code, it must proceed to sale by licitation before the tribunal”. See generally Arts 815–42; also Art 1686. Jersey case law is also of interest, see Le Sueur v Le Sueur [1968] JLR 889, Ritson v Slous [1973] JJ 2341, In re LF Morgan Ltd [1987/88] JLR 336, Fallaize v Fallaize [1996] JLR 261 and Haas v Duquemin [2002] JLR 27. These cases all concern the right of joint owners to bring indivision to an end and/or the right to licitate and the few exceptions to such rights. 196 Unless of course the applicant co-owner insists upon either partage or licitation to the exclusion of the other, or else the facts permit of only one solution.
672 The Laws of Guernsey “. . . T C: (i) order the defendant to participate in the licitation of the Premises before a Commissioner of the Court (hereafter ‘the Licitation’); (ii) direct whether the public should be admitted to bid at the Licitation; I (iii) order the defendant to participate in the partage of the Premises before a Commissioner of the Court (hereafter ‘the Partage’); A (iv) order the defendant to join in the execution and completion of such documentation as may be necessary to give legal effect to the Licitation, alternatively, Partage; (v) All within such time and upon such penalty and other terms as the Court deems fit.”
Again a preliminary application is likely to be made197 to sever the joint ownership and therefore bring to an end the right of survivorship. These issues most commonly arise where former unmarried partners separate and a co-owned home must be divided. It is obviously important that unmarried partners are advised carefully as to the advantages and disadvantages of the different forms of co-ownership and the consequences should they separate. Although these matters are important also for married co-owners the ancillary relief regime under the Matrimonial Causes Law 1939 has a considerable impact upon strict rights of ownership in the event of separation and divorce.
USUFRUIT 198
A usufruit 199 is a form of life or fixed term interest in property, typically realty. Guernsey law relating to usufruit was “codified” by ordinance in a way very similar to the law distinguishing meubles from immeubles.200 Reports concerning these subjects were commissioned by the Court at approximately the same time and it is noteworthy that Écrivain Jean Le Mottée was an author of both. As regards usufruit the Ordinance is dated 16 January 1854 and entitled Rapport sur le Droit Coutumier à l’Égard de l’Usufruit établi sur les Immeubles.201 The Ordinance comprises thirty-seven statements of principle concerning the nature of a usufruit, the rights of the usufruitier,202 the obligations of the usufruitier, how the usufruit is brought to an end and, finally, a section on the droit d’habitation.203 There is little to distinguish this summary of the Guernsey law of usufruit from modern French law as expressed in Articles 578 to 624 of the Code Civil.204 A close 197
And should be made in the absence of compelling reasons. Pronounced “usufree”. 199 The English word is usufruct. The person with the right of enjoyment of a usufruct is called a usufructuary, a word which merits careful pronunciation. The French terms are more elegant and adopted here. 200 See the Ordonnance Des Biens Meubles et Immeubles, Recueil D’Ordonnances Tome III 231. 201 “Report on the customary law concerning the usufruct of realty.” 202 Usufructuary. 203 “Right of occupation.” 204 The droit d’habitation is the subject of Arts 625 to 635 of the Code Civil. 198
Guernsey Law of Realty and Leases 673 study of the Ordinance shows that it follows and, indeed, borrows heavily from, the Code. Thus the definition of a usufruit at paragraph 1 of the Ordinance is taken directly and word for word from the definition found at Article 578: “L’usufruit est le droit de jouir des choses dont un autre a la propriété, comme le propriétaire lui-même, mais à la charge d’en conserver la substance”.
Which translates as: “A usufruit is the right to enjoy property belonging to another as if its owner, but at the expense of preserving the substance of that property”.
The essential idea is that the usufruitier enjoys what is typically a life interest over land (or any other specified property) during which time he may use the property as if he were the owner, but only to the extent that the inherent value of the asset is not diminished. According to Roman law the three constituent rights of ownership comprised the rights of usus, fructus and abusus. The first was the right to use property, the second to enjoy its fruits and the third to dispose of it. The usufruit confers and combines the first two rights but not the third, hence ususfructus which becomes usufruit in French. Accordingly the usufruitier may consume the fruit of an apple tree but not cut it down. He may let the house and keep the rent but not sell it. A usufruit may be created in a number of different ways. The surviving spouse has (prima facie) a usufruit over one-half of the realty of his or her deceased spouse’s Guernsey realty until re-marriage (or death, whichever the sooner) by operation of law.205 A usufruit may be created expressly by will, alternatively by gift, sale or reservation of interest, eg when land is conveyed by one person to another but the vendor retains a life interest. A usufruit may be for life or any lesser specified term. A usufruit of land once created may be sold, given away or otherwise dealt with as realty, it is an interest in land. However it will come to an end either when the contractual term expires or with the death of the original usufruitier, whichever the earlier. There are detailed provisions in the Ordinance concerning the use which a usufruitier may make of fruits and trees which are of lesser relevance today. Of more significance are the obligations of a usufruitier as set out between paragraphs 23 and 29. The usufruitier is bound to carry out all repairs by way of maintenance to the property, with the exception of major repairs which are defined narrowly as repairs to structural walls and archways, replacement of beams and entire roofs, and the replacement of dykes and boundary walls. Neither the owner nor the usufruitier is obliged to rebuild what has simply fallen into dilapidation through the passage of time or has been destroyed by accident or act of God. The Ordinance is silent as to the obligations of the owner. This too reflects modern French law under which no express obligation is imposed upon the reversioner. 205
See the section on succession.
674 The Laws of Guernsey On the contrary, it is stated at paragraph 21 of the Ordinance that the usufruitier has no right to any compensation or indemnity for the improvements he has carried out, notwithstanding any increase in value to the property. It follows that whilst the Ordinance excludes the “grosses reparations”206 from the “obligations” of the usufruitier there is no corresponding imposition of a positive duty in this regard on the owner. This is deeply unsatisfactory and leads to all manner of conflict between a usufruitier and an owner who fails to maintain the structure of the relevant buildings. French law provides only a partial solution in that if the usufruitier carries out repairs for which the owner is responsible he may (or rather his estate may) recoup the expense at the end of the usufruit out of the amount by which the value of the property has increased, if at all. This means that the usufruitier must fund the works of repair with only an uncertain prospect of recovering the sums expended after his or her lifetime. There is no more reason why Guernsey law should follow unsatisfactory modern French law than it should follow unsatisfactory English law. It is suggested that a Guernsey Court would be free to develop Guernsey customary law in this area to provide an effective remedy for the usufruitier against the neglectful owner.207 It is noteworthy that the opportunity was taken when drafting the Real Property (Succession) (Sark) Law 1999 to include a general power for the Court to determine issues between a surviving spouse with the Sark successoral right of a lifetime enjoyment of one-third of the realty of a deceased spouse and the owner.208
HORIZONTAL CONVEYANCING IN GUERNSEY (THE FLYING FREEHOLD)
The long lease of residential premises taken at a premium is unknown in Guernsey given the difficulty of taking effective security over what is in Guernsey law only personalty and in the absence also of any established right of relief from forfeiture.209 Notwithstanding these legal obstacles public policy required that a means be found to permit the long-term multiple occupation of large houses converted into flats, alternatively purpose built blocks of flats. The route chosen by the Guernsey legislature was to formalise and place on a proper footing the flying freehold. The resulting legislation was the Real Property (Reform) (Guernsey) Law 1987. It is noteworthy that, as elsewhere in Guernsey law, the drafting of a bespoke 206
Literally large works of repair. Again one would appeal to the principles set out in Morton v Paint. There is no good reason to regard the Ordinance as an exclusive code set in stone. 208 See ss 11 and 12. For a general account of modern French law in this area see Louis Bach, Droit Civil (13th edn (Editions Sirey) p 477 et seq. and Gérard Cornu, Droit Civil Introduction Les personnes Les biens 10th edn (Montchrestien) p 503 et seq. 209 At least as matters stand. Note however the curious entry of relief from forfeiture into Sark property law via what will be s 57B of the Matrimonial Causes Law (Guernsey) 1939 as inserted by the Matrimonial Causes (Amendment) (Guernsey) Law 2002, albeit in very specific circumstances only. See also the uncertainty concerning the fate of leases in the context of saisie proceedings; note the dicta of the Deputy Bailiff in the first instance judgment of Waterman v McCormack (Selwood v Madely) (2001). 207
Guernsey Law of Realty and Leases 675 Guernsey legislative solution resulted in a concise, workable and even elegant solution to the problem. Section 1 confirms the ability to own, for an estate of inheritance, real property which is wholly or otherwise either above or below any other real property, ie a flat or apartment. Sections 2 to 17 provide for the creation and enforcement of what are known as “charged covenants”. Charged covenants are the equivalent of leasehold covenants enforceable between the occupiers of a divided building upon certain conditions being met. Charged covenants may be either positive or negative in nature. They run with the land and therefore survive for the benefit or burden of successors in title. A distinction is made between dominant and servient tenements. The former has the benefit of a charged covenant and the latter the burden. To be enforceable the covenant must be expressed to be a charged covenant in the document creating the covenant and must have been made for the benefit of other land specified in that document.210 The document must be registered at the Greffe in the Livre des Contrats. The charged covenant itself is not separately registrable by virtue of section 16. Section 3 expressly provides that a charged covenant is enforceable by the owner for the time being of the dominant tenement against the owner for the time being of the servient tenement as if it were a covenant made directly between them. Section 4 permits the owner of the dominant tenement to apply to the Court for an order permitting him to enter the servient tenement in order to inspect for possible breaches of charged covenants. Section 5 governs the circumstances in which such an order may be made; the order must be necessary and otherwise just and reasonable in all the circumstances. By section 6, if the owner of a dominant tenement is satisfied that the owner of a servient tenement is in breach of a charged covenant, whether as a result of such an inspection or not, he may cause to be served a signification211 upon the servient tenement owner specifying the breach alleged, the measures to be taken to remedy the breach and a reasonable time within which those measures must be taken. If the servient tenement owner fails to take the specified steps the dominant owner may again apply to the Court for an order authorising him to enter the servient tenement for the purpose of taking necessary measures to remedy the breach. The cost of the exercise is recoverable from the defendant as a debt. Section 8 sets out the pre-conditions for such an order to be granted. The Court must be satisfied that (i) there is a breach of the charged covenant and (ii) unless an order is made the breach will not be remedied within a reasonable time and (iii) that it is just and reasonable to make the order. Sections 9 and 10 permit the registration of inspection order or remedy order proceedings in the Livre des Hypothèques, Actes de Cour et Obligations. The registration gives the dominant tenement owner priority for any expenses and costs 210 211
See s 13. Ie a formal notice served by the Sergeant.
676 The Laws of Guernsey incurred, together with any damages awarded, in respect of the breach over any other obligation registered on or after the date of registration. It is an offence for the servient tenement owner to obstruct a person acting under the authority of a Court order made pursuant to these provisions. Section 12 permits enforceability between the owners of sub-divided portions of dominant and servient tenements. Section 14 expressly preserves any other remedy, right or power arising other than by operation of the Law. Hence the implicit assumption of a right to claim damages for breach of charged covenants. Conveyances of buildings in multiple occupation follow the standard form in the body of the conveyance itself. They differ in that a very substantial schedule is attached comprising the various rights and obligations necessary to govern the use of the premises. Particular care is taken with rights relating to the running of services, rights of support, prohibitions on making any structural alteration and shared obligations in respect of common parts. Unlike properties occupied by long leaseholders, flying freeholders are often the owners of the structure surrounding their part of the building;212 this includes the services running through that part of the building. A flying freeholder might own the roof but often one sees the roof divided into shares, likewise the foundations. Where however there is a large development the structure may be owned by a management company with the freeholder owning the internal space and internal decorative finishes. Here the freeholder’s position is much closer to that of the long leaseholder. Typical flying freehold covenants include the following: (a) not to use any flat save as residential accommodation; (b) not to obstruct common parts; (c) not to do, or suffer to be done, anything which may become a nuisance to the other occupiers; (d) not to maim, injure or deface the main walls, timbers or other structural parts; (e) not to lessen or diminish the support, cover, load-bearing capacity or protection given or now afforded by any part of the building to any other part; (f) to maintain the owner’s parts in such a sound state of structural repair and condition as shall at all times ensure the maintenance of adequate support cover and protection to the remainder of the building; (g) not at any time to make any structural alterations which might adversely affect the building; (h) not to effect any maintenance of structural elements without giving notice, save in emergency; (i) to maintain in good order and condition such of the services as are laid in or pass through the owner’s premises; (j) not to cause or permit any obstruction of the services; 212 Of course a long leaseholder may separately own a share of the freehold either directly or via a management company; but he does not own the share qua leaseholder.
Guernsey Law of Realty and Leases 677 (k) not to cause or permit the escape of gas or water from any pipe or appliance; (l) to maintain the exterior of the owner’s parts in good repair and wind and watertight; (m) to contribute towards the expenses incurred in maintaining in good condition the common parts and services; (n) to contribute towards the expenses incurred in maintaining the common parts; (o) to insure the owner’s parts and to hold on trust the proceeds of any insurance policy for himself and the other owners to expend the same on rebuilding, repairing or otherwise reinstating the owner’s property; (p) not to play music between stated hours; (q) not knowingly to permit any form of structural decay, whether caused by dampness, infestation, fungal growth or otherwise to exist within the owner’s parts or to spread therefrom;213 (r) not to use, sell, lease, charge or otherwise deal with or dispose of (his flat), except as a single unit of residential accommodation destined in perpetuity for the accommodation of a single family or group of persons living ‘en famille’; (s) not to interfere in any way with the free passage of light, as at present, to any window in the building; (t) to cover floors with a suitable covering in order to minimise noise. Flats above ground floor level will be granted rights of way by the lower flats in order that access may be obtained. An example of such a clause is as follows: The owners of Flats 7 and 8 shall: (a) have right of way on foot, pushing a perambulator or similar wheeled conveyance, and such right of access as may be necessary from time to time over the lobby and staircase in order to gain access between their respective flats, the entrance hall and steps and Brock Street as aforesaid; (b) contribute in equal shares to the reasonable cost from time to time of keeping the interior and decoration of the lobby and staircase in a good clean and tidy condition at all times. A suitable clause to establish covenants as charged covenants for the purposes of the 1987 Law is as follows: “All the covenants in this schedule are charged covenants for the purposes of the Real Property (Reform) (Guernsey) Law 1987 as from time to time amended or re-enacted and are made by each owner for the benefit of the other owners and any other parts of the property capable of receiving the benefit thereof.” 213
Perhaps capable of happier expression.
678 The Laws of Guernsey
SERVITUDES
Article 637 of the Code Civil defines a servitude as follows: “. . . une charge imposée sur un héritage pour l’usage et l’utilité d’un héritage appartenant à un autre propriétaire.”
Which translates as: “. . . a charge imposed upon an interest in land for the use and utility of an interest in land belonging to another owner.”
This definition is good also in Guernsey law.214 Servitudes arise in a number of different ways. Modern French law distinguishes between (i) servitudes deriving from “la situation des lieux” (how places are situated), for example the right/obligation to permit rainwater to flow from higher land to lower land; (ii) servitudes established by law, for example rights relating to party walls; and (iii) servitudes established by human action215 (fait de l’homme). Guernsey law would recognise these categories. As with English law, so Guernsey would be influenced by the Code Civil to the extent that it represented a development of customary principles as opposed to any very specific legislative provision of modern origin.216 The Royal Court is of course not bound by French law. What distinguishes Guernsey law is the survival to the present day of the principles expressed clearly at article 607 of the Coutume Redigée:217 “Droiture de servitudes de vûës égoûts de maisons & autres choses semblables, par la Coûtume generale de Normandie, ne peut être aquise par posseission & joüissance, futelle de cent ans sans titre; mais la liberté se peut raquerir par la possession de quarante ans continuels contre le Titre de Servitude”.
This provision translates as follows: “By the general custom of Normandy rights of servitude such as views, household drainage and other similar rights cannot be acquired by possession218 and enjoyment even for a hundred years without title; however freedom from such servitudes may be regained by forty years’ continuous possession against the owner of the servitude”. 214 See generally Laurent Carey p 215 for an 18th century account of the topic in Guernsey law. For a comparatively recent case concerning servitudes see Smith v Slawther [1998] 26 GLJ 79. 215 Which might comprise an express grant or prescription, but see below. 216 See Gérard Cornu, Droit Civil Introduction Les personnes Les biens 10th edn (Montchrestien) para 1415 et seq. and Louis Bach, Droit Civil 13th edn (Editions Sirey) p 484 et seq. for general accounts of the modern French law of servitudes. See also 19th century authors such as Pardessus, Traité des Servitudes and Fournel, Traité du Voisinage. 217 Ie the 1583 revision of the Grand Coutumier. 218 As distinct, for example, from the situation of the place, operation of law or, say, express grant.
Guernsey Law of Realty and Leases 679 The above represents an accurate statement of current Guernsey law save that the prescription period for immeubles has since been reduced to twenty years. The strange nature and imbalance of this provision was notable even in the early 18th century; thus Pesnelle remarked as follows: “Cet article est composé de deux parties, dont chacune renferme une maxime fort remarquable.”219
The leading modern Guernsey case in this context is that of Singleton v Le Noury [1990] 9 GLJ 48. The Court of Appeal confirmed that: “. . . under Guernsey Law a servitude cannot be acquired by prescription. The Court accepts that the coutume does develop over the centuries. The maxim ‘coûtume fait loi et la meilleure loi est la coûtume du pays’ refers to such development. But such development cannot change the fundamental and substantive common law and the principle of ‘nul servitude sans titre’220 and ‘droit de servitudes de vues, égouts de maisons, et autres choses semblable par la coûtume générale de Normandie ne peut estré acquise par possession ou jouissance, fut-elle de cent ans, sans tître’ as set out in the writings of Laurent Carey, Basnage and Bérault are part of our coûtume or fundamental common law and cannot be altered by judicial decision.”
On the facts of the Singleton case the Court was willing to uphold the Jurats’ determination of the width of the right of way but found that no right to run a cable over a driveway either had been or could have been acquired by prescription. All that the defendant enjoyed was a right of way which, although adapting to modern forms of traffic, could not be extended to the running of services, whether by prescription or otherwise. By contrast a right or even a part of a right may be extinguished by prescription. Thus in the case of Slawther v Smith [1994] 18 GLJ 30 it was held that a right of way with a wheelbarrow had been lost by prescription in circumstances where a right of way on foot had survived.221 There are, however, subtleties concerning the basic rule nul servitude sans titre. As was pointed out in the case of Kingsway Limited v Bell [1987] 6 GLJ 141 by the Bailiff: “The word (titre) may not necessarily mean ‘a document of title’; there are some servitudes which depend on the operation of law, such as the right to rebuild a party wall must of necessity in certain cases require one co-owner to go on to the other co-owner’s land. . . .” 219 “This article comprises two parts, each of which reinforces a truly remarkable maxim.” See Pesnelle, Coutume de Normandie 1st edn (1704) p 563. 220 “No servitude without title.” 221 Although a mere right in land (a droit réel) may be lost by prescription, it will be recalled that ownership of land itself (a droit immobilier) cannot be lost by simple non-user, ie extinguished in vacuo. The right of ownership may only be displaced by the acquisition of a prescriptive title over the land by another; see the case of Vaudin v Hamon [1974] AC 569. The distinction is perhaps fine but important.
680 The Laws of Guernsey As with modern French law there are a number of instances where rights and servitudes arise which do not require any formal title. Thus where land is “enclavé”222 the owner of the land so afflicted has a right of way by operation of law across the shortest route, consistent with common sense and minimal harm, to the public highway.223 In the unusual case of The Rector and Churchwardens of St Saviour v Traisnel & Bougourd [1989] 7 GLJ 51 it was held that the Church had a right of way through German-built tunnels on neighbouring land to that portion of the tunnels under the Church itself. Such right as may have existed was long prescribed but this did not affect the existence of a right of way by operation of law. The Code Civil was cited and the principles applied to the facts of the case.224 The St Saviour case is also of interest for its affirmation of the principle that a servitude may be created by the French legal principle of “destination du père de famille”. This is the idea that arrangements akin to rights and servitudes made for the benefit of parcels of land in common ownership survive a subsequent division of ownership as rights and servitudes enforceable at law.225 Equally it is possible to detect a certain distaste for relying too closely on the Code Civil where the basic principles of Guernsey customary law are sufficiently clear. At page 17 of the Singleton judgment Sir Charles Frossard stated: “This Court is of (the) opinion that the Code Civil has no application in this case. The commentators on the coûtume set out in detail the law to be applied.”
Nevertheless it seems reasonable to look to the Code Civil to see how modern Guernsey law should evolve. Articles 637 to 710 concern servitudes generally; note in particular the prohibition on “aggravation” at Article 702. This appropriately named concept describes the circumstances where the use made by the owner of the servitude exceeds or departs from his right; eg where a dominant tenement has been divided in two with a consequent (and unacceptable) increase in use of the servitude. Such a cause of action exists also in Guernsey law with remedies ranging from injunctions to awards of damages and even extinction of the offending servitude, all depending on the circumstances of the case. It follows from all of the above that considerable care must be taken to ensure that a purchaser obtains the enforceable rights he or she requires to make use of the material land. Where a vendor retains neighbouring land it is likely that a series of rights and servitudes will have to be created between the two holdings. Equal care is required when acting on behalf of such a vendor. Particular attention is required to ensure that services do not run over neighbouring land or else that there are enforceable rights to keep, use and maintain the 222
“Enclosed”. Although potentially subject to the obligation to pay compensation for such use and the cost or appropriate share of the cost of maintaining the way. 224 See Arts 682–85. 225 See Louis Bach, Droit Civil 13th edn (Editions Sirey) p 486 and Gérard Cornu, Droit Civil Introduction Les personnes Les biens 10th edn (Montchrestien) para 1471 et seq. See also Arts 692 et seq. Code Civil. 223
Guernsey Law of Realty and Leases 681 same. Such service rights are sometimes referred to as way-leaves. It is important to provide that all rights are to be unaffected by any subsequent increase or change in use or sub-division of the parcel of land benefiting from the right in order to avoid future complaints of aggravation.
THE DISCHARGE OF COVENANTS
Sections 18 to 23 of the Real Property (Reform) (Guernsey) Law 1987 permit applications to be made to the Royal Court seeking either the discharge or modification of covenants affecting land in Guernsey. Although these provisions are found in the same Law which created charged covenants they are not restricted to charged covenants but apply generally. Section 18 provides as follows: “An owner of any land who, by virtue of his ownership thereof, is bound to comply with or has the benefit of a covenant, may apply to the Court for an order that the covenant be discharged or modified in the manner specified in the order.”
By section 19 the Court may only make an order pursuant to section 18 if it is satisfied that it would be oppressive or unreasonable if the covenant were not to be discharged or modified. The Court must have regard to all the circumstances and, where appropriate, the matters set out at section 20. These comprise the following: (a) whether the cost or burden of compliance with the covenant is disproportionate to any advantage or benefit which might be derived from compliance; (b) whether the cost or burden of the covenant has increased so as to throw a fresh and unexpected burden onto the land; (c) whether the covenant is obsolete; (d) whether the covenant impedes some reasonable use of the land; (e) whether the covenant secures any practical advantage to any person entitled to the benefit of it; (f) whether there has been any express or (more likely) implicit agreement to the discharge or modification; (g) whether, if the covenant were to be discharged or modified, money would be an adequate compensation for any loss or disadvantage likely to be suffered by any person entitled to the benefit of the covenant as a result of the discharge or modification.226
226 There are as yet unresolved issues as to what compensation a defendant is entitled to. It can happen that the discharge or modification itself may not have a great impact on land value, by contrast with the building that a successful application might make way for. The strict wording of the section appears to exclude such considerations.
682 The Laws of Guernsey By section 21 any order to discharge or modify a covenant may direct the applicant to pay to any person entitled to the benefit of the covenant such compensation as may be specified. It seems likely that any order would be expressed conditionally; ie that on payment of the specified sum the covenant be discharged or modified as the case may be. If the price is set too high the dominant tenement holder must have the option of not proceeding. There is scope for quite subtle argument concerning costs in such circumstances. Certainly this is an area of law where the early use of offers made without prejudice, save as to costs, should be encouraged. There seems no reason why a detailed written offer should not accompany a payment into court of the compensation offered (if any) subject to the terms set out in the letter. It ought to be clear who has, in effect, won and lost by regard to the parties’ best offer and counter-offer prior to trial. It should be noted that an application may also be made by the owner of a dominant tenement. However, this is subject to section 22 whereby the Court may not exercise its powers to increase the cost or burden of compliance with a covenant227 unless: (a) the covenant requires the payment of sums of money towards the maintenance, repair or insurance of land; (b) those sums have, since the covenant was created, become inadequate for that purpose; and (c) there are mutual covenants requiring the sums paid to be expended on the maintenance, repair or insurance of the land. In other words the cost or burden of a covenant may only be increased where the covenant concerned represents one half of a mutual obligation, the cost of which has increased in circumstances where there is no agreement or other mechanism providing for the increased expense (whether governing outlay or recovery of outlay). Note that the limitation only applies if the cost or burden increases, as opposed to a mere variation without material increase. It follows that a dominant owner might apply to vary the course of a right of way but will fall foul of section 22 if the burden would thereby increase. By section 23 the Court may stay proceedings to enforce a covenant where the defendant makes application pursuant to section 18 to discharge or modify the covenant. There is provision whereby applications made pursuant to the Law may be dealt with summarily by the Court.
TERRES À L’AMENDE
The concept of terre à l’amende is another distinct feature of Guernsey law. The owner of an area of land which is declared to be “terres à l’amende”, literally 227
As distinct from compensation.
Guernsey Law of Realty and Leases 683 “penalty land” is entitled to bring proceedings in the Petty Debt Court to recover a fine of £50 from any unlawful trespasser, typically people who have parked their cars unlawfully on the relevant land. It is Guernsey’s equivalent of the wheel-clamp but via the more civilised means of permitting a landowner to become his own traffic warden with ticket issuing powers. A unilateral application is made to the Ordinary Court.228 The cause will state the identity of the claimant and the area of land to be declared terres à l’amende. A plan showing the proposed terres à l’amende is invariably attached. Permission is sought in the application to publish a notice on two occasions in the Gazette Officielle to the effect that the land has become terres à l’amende and any trespassers thereon are liable to prosecution. At the hearing the Advocate for the applicant identifies the land concerned and explains the reason why the application has been made. Typically the applicant is in Court in case the tribunal has any questions or wishes to hear evidence. If the application is granted the notices must be published and a sign erected stating that the land is terres à l’amende and that trespassers will be liable to prosecution or words to that effect.229 There is of course no true prosecution. The relevant laws are found in an Ordinance from 1786, subsequently amended, an Ordinance from 1938, an Ordinance of 1969 and an Ordinance of 1991. It is this last Ordinance which fixed the amount recoverable under the 1786 Ordinance at £50. The Administration of Justice (Bailiwick of Guernsey) Law 1991 provides that the £50 penalty is recoverable as a petty debt pursuant to sections 12 to 14 of the Magistrate’s Court (Guernsey) Law 1954. As a matter of practical enforcement the owner of terres à l’amende also notifies the Vehicle Registration and Licensing Department who will issue a code number for the area concerned. This permits the owner of the terres à l’amende to obtain from the Department the name and address of the registered owner of any vehicle parked unlawfully on the area concerned.230 The owner of the terre typically has a book of tickets printed up which he will use in the same way as a traffic warden. In effect the owner looks for the trespasser to pay without the trouble of going to Court at all. Note that the penalty status of the land lasts only for 10 years from the date of the material Act of Court or until six months after the termination of the applicant’s property interest (whether owner, usufruitier or occupier), whichever period expires soonest.231
228 Bailiff or Deputy Bailiff sitting with, in practice, a minimum of 3 Jurats. See now Practice Direction No 6 of 2002 which concerns, inter alia, terres à l’amende applications. The net effect is to require applications to be listed first on a Friday; non-controversial applications will be granted by the Bailiff sitting alone and without more. 229 Note that IDC permission is required to put up the sign. See the 1938 Ordinance referred to below for the wording. 230 At a small cost, currently £10. 231 Again see the 1938 Ordinance.
684 The Laws of Guernsey LANDLORD AND TENANT LAW
There is very little Guernsey landlord and tenant law, whether statute or case-law. The reason why varies according to the area under consideration. For example, long leases at a premium are all but unknown in Guernsey for the simple reason that they do not provide good security for a lender. A comparatively recent case to draw attention to this was a judgment of the Bailiff on appeal from the Court of the Sénéschal in Sark,232 where it was held that long leases of Sark “freehold” land233 could be made validly. The effect was that treizième (the duty payable to the Seigneur on transfer of a tenement) would be avoided in such circumstances. The Bailiff noted the position with regard to long leases in Guernsey: “Avoidance of congé in Guernsey has not taken place to any great extent. The reason for this may be that in Guernsey one can encumber freeholds by a very effective hypothecation system of bonds and in the older days rente hypothèques. If one takes a long lease of a Guernsey [property] one is faced with the difficulty of raising money on the leasehold interest created because there is no relief from forfeiture for breach of covenant. Lenders who wish to be secured therefore do not enjoy the same protection as they have with a charge over the freehold.”234
Instead, and as already noted, there is the flying freehold under the Real Property (Reform) (Guernsey) Law 1987, which in a very real sense takes the place of the long lease of residential premises in Guernsey. As to fixed term tenancies of shorter duration or periodic tenancies there is no security of tenure as such beyond the strict contractual entitlement. There is simply no equivalent of the English Rent Act 1977 or the Housing Act 1988; there is no notion of a statutory tenancy. Assuming that the correct notice has been given to determine a periodic tenancy, or that a fixed term tenancy has come to an end or else that there is a material breach of the tenancy agreement the landlord is entitled to possession or an eviction order as it would be termed in Guernsey. It is instead the eviction process itself which Guernsey law regulates. Again one would still look to Terrien and Thomas Le Marchant for the principles involved.235 Both are quite clear that a periodic tenancy must first be determined by notice served by the Sergeant: 232
Surcouf v de Carteret (1999). Ie tenements. See also the comments of the Deputy Bailiff on the subject of leases and saisie in the first instance judgment in Selwood v Madely (2001), although note that the case was overturned on appeal on its central issue; see Waterman v McCormack (2002). There seems no reason in principle why relief from forfeiture should not evolve in Guernsey common law, however there will be few lenders willing to take such a chance. 235 See Terrien Livre VII ch 9 at p 244 and Thomas Le Marchant Tome 1 pp 272 et seq. See also Terrien Livre VIII. Of more purely historical interest is the account of the different forms of action given by Josué Le Marchant, Ébauche du Style de Procéder p 43 et seq. Note their similarity to modern French forms of action, see Art 2282 Code Civil and Art 1264 NCPC. For both the Action Possessoire is in fact a means of defending possession as opposed to obtaining possession; likewise both refer to such an action as a “complainte”, again both know an action called réintégrante (Le Marchant) and réintégrande (Code Civil). 233 234
Guernsey Law of Realty and Leases 685 “Un louager qui tient et continue un louage d’an en an, sans détermination de tems, ne peut estre mis hors de son louage sans estre averti de vuider trois mois devant, par le ministère de son sergeant; et ne peut aussi le locataire laisser le louage vacant au locateur sans pareil advertissement et en mesme temps fait; que si le locataire après le dit advertissement donné et le temps expiré, refuse de sortir, il peut y estre constraint par Justice; et peuvent les Juges, en ce cas ayant esgard ou à la grandeur du louage, ou au long-temps qu’il a duré, ou à la qualité des parties, ou à autres justes causes, donner et arbitrer quelque temps en outre au dit locataire à vuider et sortir du dit louage. Mais lorsqu’un louage est fait à certain temps déterminé, il n’est besoin de sommation de part ni d’autre, du locataire ou locateur, pour quitter ou reprendre le louage après le dit temps escheu. Et de plus, si le dit louager manque à payer son louage au terme assigné et coustumier de payer convenu entre le locateur et lui, il en peut estre mis hors par voye justiciaire, sans le dit advertissement; et doivent les trois mois d’advertissement commencer avec les termes ordinaires de l’an, Pasques, la Saint Jean, la Saint Michel, et Noel.”236
Which translates as: “A tenant who rents and continues a tenancy from year to year without a fixed term cannot be put out of his (premises) without first being given three months notice to quit through the office of the sergeant;237 nor can the tenant surrender the tenancy to the landlord without like notice of the same duration; but if the tenant after the said notice has been given and the time expired, refuses to quit, he can be compelled to do so by Justice; and in this case the Judges may, having regard whether to the value of the tenancy, or to the length of time it has lasted, or to the quality of the parties, or to other just reasons, give and award some time in addition to the tenant to empty and vacate the said premises. But when a tenancy is made for a fixed duration, there is no need to serve a notice to quit on either side, landlord or tenant, whether to quit or re-take possession after the time has elapsed. And in addition, if the said tenant fails to pay his rent at the assigned and customary time agreed between the landlord and himself, he can be put out by judicial process, without the said notice; and the three months notice must commence with the usual terms of the year, Easter, the (feast of) Saint John, Saint Michael and Christmas.”238
All of the above requirements apply to a modern day eviction action before the Guernsey Court. A notice to quit of the length appropriate to the tenancy period must first be served by the Sergeant in order to determine a periodic tenancy.239 No notice is required if the tenancy is for a fixed term which has expired240 or else
236
Thomas Le Marchant, Tome 1 pp 273–274. Terrien is more flexible and refers to giving notice of “un terme”; which can be interpreted as a tenancy period, although note that Le Marchant treats this as equivalent to a quarter. In practice the period of notice required is determined by reference to English common law periods, see eg Woodfall: Landlord and Tenant; see also the excellent Evans & Smith, The Law of Landlord and Tenant 6th edn (Butterworths) pp 278 et seq. 238 Ie equivalent to the English quarter days of 25 March, the Feast of the Annunciation or Lady day (Easter itself is the first Sunday after the full moon following the spring equinox as a result of the Council of Nicæa 325 AD); 24 June, Midsummer day and also the Feast of St John the Baptist; 29 September, the Feast of St Michael the Archangel or Michaelmas; and 25 December, Christmas day. 239 Unless agreed otherwise between the parties, see the case of Berry v Crabb [1988] 6 GLJ 143. 240 Note however the risk that a new periodic tenancy may have arisen. 237
686 The Laws of Guernsey if eviction is sought on the grounds of unpaid rent.241 There would also be no reason to serve a notice to quit if some other sufficiently material breach of the tenancy agreement was relied upon.242 Assuming that the tenant remains in possession the landlord will issue a summons at the end of the notice period (if notice is required) or forthwith. Assuming that the landlord is prima facie entitled to possession an eviction order will be made. If the tenant is in default only a modest delay will be allowed, if any, before the Sheriff will be permitted to evict the tenant.243 Where a periodic tenancy has merely come to an end the customary principle of the Court having a discretion to allow time before the tenant must vacate has been enshrined in legislation. That legislation extends also to expired tenancies for a fixed period. By section 2 of the very literally titled Law Giving the Court Increased Power to Stay Execution in Actions for Eviction 1946,244 when a tenant or subtenant of a dwelling-house or other premises is proceeded against for eviction the Court may, having taken into consideration the position of the parties and all the circumstances of the case, make an order that execution of any order for eviction from the premises be suspended during such time and upon such conditions as the Court may consider reasonable. This gives the Court a very broad discretion to delay the landlord’s remedy by any length of time it deems appropriate; that delay can extend to years if the Court takes a dim enough view of the landlord or else has considerable sympathy for the tenant. For example, in the 1997 case of Atticday Ltd v Ogier the Court suspended eviction for a period of fully seven years. Note however that the Law applies only to tenancies or sub-tenancies. A mere licence would not qualify. It follows that there is scope for considerable argument as to whether the material agreement is a lease or a licence. Again it seems likely that English case-law would be influential in the absence of customary or French authority.245 241 See the case of Bodman v Gorselands Limited (1991). It is said that in Guernsey law payment of rent and the right of a lessee to possession go hand in hand, regardless of any other disputes between the parties. Accordingly, the moment that rent is withheld the landlord can proceed to evict and is entitled to an eviction order forthwith, however long stayed. Equally, and in the absence of express provision prohibiting deduction from rent, there seems no reason why a well-founded set-off should not defeat the eviction claim. 242 Although note the case of Domaille v Harbour View Oriental Restaurant Limited [1996] 22 GLJ 41 which seems to have required a notice equivalent to a s 146 notice under the Law of Property Act 1925 to be served upon a tenant and a subsequent failure to remedy the breach complained of before eviction could be sought. The facts of this case concerned rubbish being left in the vicinity of a property. How the decision was reached in the absence of equivalent Guernsey legislation is not clear. 243 The form of the proceedings is in fact to seek “. . . permission from the Royal Court to use the services of HM Sheriff to evict the defendant from the Premises, he having no right to remain therein not having complied with a Notice to Quit dated 26 September 2002 and served by HM Sergeant on 27 September 2002 terminating his tenancy on 31 October 2002”. 244 Alderney has legislation in identical form to the 1946 Guernsey Law. See the Law Giving the Court Increased Power to Stay Execution in Actions for Eviction 1947. Sark would operate according to customary principles. 245 See an article by HW Wilkinson in the New Law Journal for 12 October 2001 (vol 151 no 7003 p 1489) for a helpful review of English case-law; see in particular the case of Aslan v Murphy (No 1) [1989] 2 EGLR 58, likewise the case of Bankway Properties v Pensfold-Dunsfold [2001] 1 WLR 1369 and the purposive English approach to sham agreements. See also Evans & Smith ibid ch 3.
Guernsey Law of Realty and Leases 687 If the true licensee is not protected by the 1946 Law then a sub-tenant is; for example where there is a defaulting or even absent tenant. Prima facie this would leave a non-defaulting sub-tenant in a difficult position. Unless the landlord and sub-tenant reach agreement the sub-tenant will nevertheless be eligible to seek extra time under the 1946 Law. It would most likely be a condition that rent be paid directly to the landlord during the period of grace before eviction. Although there is no equivalent to the English Landlord and Tenant Act 1954 the 1946 Law does apply to commercial premises; see the case of Sarnia Marketing Limited v Normandy Laundries Limited [1989] 8 GLJ 63. By section 3 of the 1946 Law the Court is required to take into account inter alia the following prescribed matters when considering whether to suspend execution of an eviction order and, if so, for what period and upon what terms: (a) whether there is any unpaid rent or other breach of tenancy or sub-tenancy obligations; (b) whether there is suitable alternative accommodation available; (c) whether the tenant, sub-tenant or any other person residing or lodging with him has been guilty of conduct which is a nuisance or annoyance to neighbours; (d) whether the condition of the premises has deteriorated owing to the act, neglect or default of the tenant or sub-tenant; (e) whether the tenant or sub-tenant has been convicted of using the premises or allowing them to be used for immoral or illegal purposes; (f) whether the tenant or sub-tenant has given notice to quit and in consequence the landlord has contracted to sell or let the house with serious prejudice resulting if the landlord cannot obtain possession; (g) whether the premises are licensed for the sale of intoxicating liquor and the tenant or sub-tenant has committed an offence as the holder of the licence or otherwise conducted himself unsatisfactorily; (h) whether the dwelling-house is so overcrowded as to be dangerous or injurious to the health of the “inmates” and such could have been abated by the tenant or sub-tenant taking steps to remove any sub-tenant or lodger. There is also a requirement in practice to obtain a report from the Housing Authority if residential occupiers are concerned. The Court will want to know whether those liable to be evicted are eligible for States Housing and, if so, the likely time it would take to re-house them. Save where there has been serious default, execution is generally delayed for a minimum of weeks and often months. It is invariably a condition of the stay that current rent (or whatever higher rent is fixed by the Cadastre246 or conceivably
246
See below.
688 The Laws of Guernsey argued for by the landlord) is paid and (if requested by the landlord) that the conditions of the now superseded lease observed.247 Section 4 of the 1946 Law provides that any person with the benefit of an order delaying execution may apply to the Court to vary the order. The Court may make such order as seems reasonable; again a very broad discretion. The pre-condition for the power being exercised is that the applicant must show a change of circumstances. Although it is not expressly provided, the landlord should be served with any such application. The licensee or mere lawful occupier is not entirely without protection. The 1954 Stay of Evictions (Amendment) Law gave the Court an additional power to suspend for a period of up to six months the execution of an eviction order against an occupier whose occupation was not “in its inception unlawful”. The 1954 Law would give protection, for example, to those left behind by a departed tenant or sub-tenant who were neither tenants nor sub-tenants themselves. Given that the 1954 Law expresses itself as extending the powers of the Court under the 1946 Law it is arguable that the s.4 power to vary the period of suspension applies also to a 1954 stay, although this would circumvent the apparently clear intention of the 1954 Law. In any event it seems unlikely that any extension would be for very long. An occupier whose occupation was unlawful from the beginning is without protection, save only that it is implicit from both customary law and statute that court process must be used in order to evict occupiers, certainly occupiers whose occupation was (at least initially) lawful.248 In addition there is an Order of the Royal Court249 which provides that HM Sheriff is to take over the functions exercised by the Island Police and Constables of the parishes as regards the execution of eviction orders. Where HM Sheriff executes an eviction order and is unable to deliver the personalty to the person who is the subject of the order he may remove the personalty into storage for safe keeping. If the property remains unclaimed after fourteen days HM Sheriff must advertise in La Gazette Officielle to the effect that the personalty has been removed to storage and inviting interested persons to notify him or her of their claims. If the property remains unclaimed after 21 days HM Sheriff may dispose of the personalty in such manner as he or she thinks fit. In any event a person claiming personalty must pay the reasonable charges and expenses of storage before being permitted to remove it.250 247 Only to this limited extent could it be said that there is any kind of statutory tenancy; in any event it endures only until the time after which eviction is permitted. A new tenancy will eventually arise if the landlord neglects to evict when the time comes. 248 There is no equivalent of the Protection from Eviction Act 1977; but note the comment of the Bailiff in the case of In re a patient (2001) 23 February, a judgment on appeal from the Court of the Sénéschal, where he observed that: “Persons living in a patient’s property are protected from eviction, to the extent that a court order would have to be obtained to remove them . . .”. This suggests some general customary right not to be evicted without court process, at least where the occupation is lawful initially. 249 The Eviction Procedure Rules 1989. See now also Practice Direction No 6 of 2002 which gives guidance concerning, inter alia, eviction actions. 250 Note however the landlord’s hypothèque tacite, considered in the context of preferred debts.
Guernsey Law of Realty and Leases 689 It is a curious feature of Guernsey eviction proceedings that rent claims seem to be pursued separately. There is no obvious reason why this should be so. Agricultural Tenancies In the case of Marshall v Camp [1988] 6 GLJ 142 it was held by the Bailiff that the 1946 and 1954 Laws did not apply to agricultural tenancies;251 accordingly the Court did not have power to grant a stay of execution of the eviction order. Note however that leases of agricultural land are by custom annual tenancies running from 10 October in one year to 9 October in the next. A whole year’s notice is, without more, required. Accordingly if notice was given on 3 October a period of 53 weeks would have to elapse before eviction could be sought. If notice were given on 17 October almost two years would have to pass.252 Rent Control There is rent control legislation in Guernsey; see the Rent Control (Guernsey) Law 1976, as amended by the Rent Control (Amendment) (Guernsey) Law 1993. It follows reasonably closely equivalent rent control provisions found in the old English Rent Acts. The Law applies to dwelling-houses occupied by not more than one household where the rateable value does not exceed £50 or such sum as the States may from time to time by Ordonnance prescribe. The Law also applies to houses in multiple occupation. The maximum rent is called the recoverable rent and is assessed by the Rent Officer on the application of either the landlord or the tenant. The recoverable rent is entered in a register compiled by the Rent Officer. There are various criminal offences which are committed by a landlord, or any other person, who demands payments or premiums unauthorised by the Law. There is provision for annual review of registered rents. The 1993 Law appears to have been intended to deal with various abuses. Thus the Rent Officer was enabled to proceed to make a determination notwithstanding the termination or purported termination of the tenancy. A tenant must have been in lawful occupation for at least three months before referring the question of rent to the Rent Officer. A landlord is not permitted to commence eviction proceedings within 12 months of the latest assessment, re-assessment or review of the decision of the Rent Officer or the determination of any (outstanding) appeal.253 However, this provision does not apply if the Ordinary Court is: “. . . satisfied that the eviction proceedings are founded upon matters wholly independent of the operation of this Law.” 251 Whether the exclusion would extend also to, say, a farmhouse is less certain. It may be that only land itself was in mind. 252 See the Guernsey press report of Marshall v Camp for 15 January 1988. 253 See s 14, as amended.
690 The Laws of Guernsey The scheme of the legislation is therefore to permit a tenant to seek a rent determination whilst potentially providing a minimum level of protection before eviction proceedings may be issued. The 1946 legislation would then also apply. What is or is not wholly independent is a difficult question depending largely on the motivation of the landlord. Arguably all of the usual grounds for seeking eviction are wholly independent of the operation of the rent control legislation; eg the expiry of a fixed term tenancy or even the determination of a periodic tenancy by the required notice to quit. Note however that the recoverable rent registration does not lapse for 5 years254 which might deter a Landlord from evicting the tenant on the basis that he cannot lawfully recover a greater rent in any event.
254
See s 3A as inserted by the 1993 Law.
24 Guernsey Law of Tort and Contract
T
HERE IS A sense in which this work has turned full circle. It began with customary law and it ends with customary law. Guernsey tort and contract law are essentially customary law-based in the broader sense of ongoing common or case-law. This is necessarily so given the comparative lack of legislation in both areas. By comparison with England there are no equivalents to the Law Reform (Frustrated Contracts) Act 1943, the Law Reform (Personal Injuries) Act 1948, Occupiers’ Liability Act 1957, Misrepresentation Act 1967, Employer’s Liability (Defective Equipment) Act 1969,1 Supply of Goods (Implied Terms) Act 1973, Consumer Credit Act 1974,2 Congenital Disabilities (Civil Liability) Act 1976, Torts (Interference with Goods) Act 1977, Unfair Contract Terms Act 1977, Sale of Goods Act 1979, Highways Act 1980, Supply of Goods and Services Act 1982, Administration of Justice Act 1982, Occupiers’ Liability Act 1984, Latent Damage Act 1986,3 Minors’ Contracts Act 1987, Consumer Protection Act 1987, Access to Neighbouring Land Act 1992, Defamation Act 1996, Protection from Harassment Act 1997, Late Payment of Commercial Debts (Interest) Act 1998 and the Contracts (Rights of Third Parties) Act 1999; let alone legislation with origins in Europe such as the Unfair Terms in Consumer Contracts Regulations 1999. The list is daunting; yet in every case, literally every case, Guernsey common law must produce its own solutions. The possibilities in this regard are, prima facie, wide-ranging. The leading case and example is that of Morton v Paint 4 where the Court of Appeal held that Guernsey common law had evolved to produce a solution equivalent to the Occupiers’ Liability Act 1957 without such legislation ever having been incorporated into Guernsey law. The Court was particularly influenced by developments in Australian case-law where the same result as the English Act had been achieved independently of statute. Australian case-law was cited by the Guernsey Court as illustrative of how case-law could and should develop.5 The essential point was that: “It would not be appropriate to leave Guernsey law in the state reached by English law nearly 40 years ago, which was justly criticised as something of a blot on English 1 2 3 4 5
But see the Health and Safety at Work (General) (Guernsey) Ordinance 1987. Which is no loss at all; rarely can a more impenetrable piece of legislation ever have been enacted. Although note the terms of the Law Reform (Tort) (Guernsey) Law 1979. [1996] 21 GLJ 61; the tribunal comprised Blom-Cooper, Southwell, & Sumption JJA. Australian Safeway Stores (Pty) Ltd v Zaluzna (1987) 162 CLR 479.
692 The Laws of Guernsey jurisprudence and requiring urgent reform. For the Guernsey Courts to cling to obsolete English common law cases which ceased to be authoritative in England and Wales nearly 39 years ago would not be in the interests of those who live in Guernsey or their visitors.”6
Guernsey common law had to develop and could not stand still if Guernsey law was to serve the interests of the people of Guernsey; as it must. What Morton illustrated more generally was a principled model of how Guernsey common law should go about that process of development. It is a frequent criticism that Channel Island customary or common law is uncertain and its development dependant on a more or less arbitrary selection of Norman, French, English, or other, mostly common law jurisdiction, legal principles.7 The reality is that neither Guernsey nor Jersey are sufficiently large jurisdictions to be wholly independent jurisprudentially, even taking account of their international business case-loads. In circumstances where modern English jurisprudence is more amenable to the influence of other jurisdictions than previously it is that much more appropriate that small jurisdictions look externally for solutions if either there is no pre-existing solution in their domestic law or else no appropriate original solution; which will be a significant proportion of the time. This is not to undermine the ultimate freedom of such jurisdictions to make their own law; but the charge of arbitrariness is avoided by a principled approach to the process of legal development, although that approach will itself be susceptible to development in the same way as the law. The approach may also differ according to the branch of law under consideration, as for Guernsey tort and contract law.
TORT, CONTRACT AND CUSTOMARY LAW
Ancient customary law has little direct contemporary influence on modern Guernsey tort and contract law8 for the simple reason that customary law itself had little to say on the subjects, certainly the Norman coutumiers themselves. Terrien provides little more than a starting point, albeit an important one in terms of setting a course.9 French customary law jurisdictions were compelled to look elsewhere, principally to Roman law. All of this is well illustrated in the work of 6 Per Southwell JA ibid. The case has already been cited at length in the section concerning the rule of precedent in Guernsey law. 7 See in particular John Kelleher’s important article: The Sources of Jersey Contract Law, Jersey Law Review [1999] 3 JL Review 1; see also the Jersey Law Commission Consultation Paper, “The Jersey Law of Contract”, dated October 2002. 8 The law relating to leases and realty is considered separately to general tort and contract law. 9 See for example book VII of Terrien which is entitled D’Obligations & Contrats but contains little of relevance to today’s contract and tort law save for ch.V and the unenforceability of a debt “s’il n’y eut droite cause de promettre”; ie if there was not proper cause to (make the) promise. See also book VIII ch.1, referred to below. This is not to overlook the clameur de Haro, which takes the form of an interim remedy as opposed to substantive law.
Guernsey Law of Tort and Contract 693 Robert-Joseph Pothier10 a figure still central to Guernsey (and Jersey) Law. There are three pillars of Pothier’s massive body of work; a re-editing of Justinian’s Digest of Roman Law, his Coutume of Orléans and Treatise on Obligations with it various sub-treatises. Each of these three works would constitute substantial contributions to jurisprudence in their own right, let alone when taken together. It is the confluence in the single person of Pothier which is of special interest in the present context. In Pothier it can be said that Roman law, customary law and “modern” law meet. There is a sense in which his Treatise represents a synthesis of Roman law and French law, loosely defined, as it had evolved since Roman times; ie an amalgam of customary law, Roman law, statute, day-to-day jurisprudence and practice. Brissaud makes the following introductory remarks to the topic of obligations in his History of French Private Law: “The principles of the old Germanic and Customary law are . . . found to have almost entirely given way to the Roman theories. No other portion of legislation has been Romanized to this extent. Is this a sufficient reason for believing that this evolution has taken place merely under the influence of Roman law? No, indeed! No more here than anywhere else has Roman law been a direct cause of juridical changes. It has not been imitated in the same way as a pupil copies his master, in a spirit of servile respect. Its action, which has been great, has only been exercised where the ground was prepared for it, where evolution took place spontaneously and independently. But the evolution was peculiarly facilitated by Roman influence, gaining therefrom a concisely defined object, precise formulæ, and a fixed plan; from an obscure growth, slow, uncertain, and groping it became a conscious work. The real cause of the change which led the old law back to the Roman theories, as far as obligations were concerned, was the substitution . . . of a contractual system for the system of strict custom; the one accords with a social state as simple as that of the late Middle Ages; the other accords with societies which, like ours, are more complex.”11
Pothier stands full square within this tradition and remains of fundamental importance to Channel Island contract law, but his influence was felt also in the law of tort, which is perhaps overlooked. The fact that Guernsey’s modern law of obligations owes little to ancient customary law serves also to distinguish, at least partly, the dicta of Lord Wilberforce in the Privy Council case of Vaudin v Hamon,12 which concerned Sark realty and prescription periods. Lord Wilberforce stated: 10 1699–1772; French jurist, professor of law at the University of Orléans and magistrate. It is hard to underestimate his standing among his contemporaries and subsequently, not just in France but throughout Europe and the common law jurisdictions. Dupin in his 1827 edition of Pothier said this: “Peu d’hommes, en effet, ont su se concilier à un aussi haut degré, l’estime de leurs contemporains et le respect de la postérité” which translates as: “Indeed, few men have attained to such a high degree the esteem of their contemporaries and the respect of future generations”. See also the eulogy to Pothier which is to be found at the beginning of the Evans translation of the Treatise; see below. 11 Jean Brissaud, A History of French Private Law trans Rapelje Howell (first published by Little, Brown & Co (1912) and re-printed by William S Hein & Co (1999)) pp 452–53. 12 [1974] AC 569.
694 The Laws of Guernsey “While it may be true, in a very general sense, that there is some basic similarity between Roman Law, at various periods, the various customary laws applicable in different parts of France, the Civil Napoleonic Code, the law applicable in Jersey and that which governs in Guernsey, this similarity is of a too general sense and approximate character to be of much assistance in a particular case: it covers, quite clearly, large differences in matters not only of detail but of principle. . . . Thus, although as this Board has pointed out in La Cloche v La Cloche (1870) LR 3 PC 125, it is proper to look at related systems of law, and commentators on them, in order to elucidate the meaning of terms, the particular legal provision under examination in any case, in this case the Guernsey law as to prescription, must in the end be interpreted in the light of its own terminology, context and history.”13
Vaudin was cited with approval by the Bailiff of Jersey when giving the (single) judgment of the Guernsey Court of Appeal in Waterman v McCormack (2002), a case concerning the nature of joint ownership of realty under Guernsey law. The Bailiff put to one side arguments based upon English notions of joint tenancy and tenancy in common and the French customary law concept of communité des biens in favour of Guernsey jurisprudence relating to “joint ownership” and “ownership in common”. In any event, Guernsey’s modern law of obligations has antecedents sufficiently close and common to modern English and French law that both may be looked to. Guernsey Tort Law The influence of English law on Guernsey tort law is profound, at least today.14 It is the dominant influence in circumstances where Norman and French law is hardly, if ever, referred to. However this is not to say that Guernsey tort law is the same as English tort law, far from it; there are many and subtle differences. Wherever there is an English statute there is likely to be a difference; even where there is an equivalent statutory provision borrowed from English statute the drafting is often subtly different and extra care is required. Even in a pure case-law context English law does not bind Guernsey law which remains free to reject an inadequate solution or else favour another. Guernsey tort law has its own origins and existence independent of English tort law. Again in Morton Southwell J stated as follows:15 “In Guernsey the hierarchy of the Courts and the doctrine of precedent requires the Royal Court and the Court of Appeal to follow the decisions of the Privy Council, when hearing appeals from the Courts of Guernsey. Privy Council decisions on appeals from other commonwealth jurisdictions are not binding, but are persuasive authority on the common law where relevant circumstances in Guernsey do not differ markedly from 13
This passage is cited more fully under the heading: The rule of precedent in Guernsey law. Again see Morton v Paint ibid. 15 Ibid at 55E. Reference should again be made to the fuller citation in the section concerning the rule of precedent. 14
Guernsey Law of Tort and Contract 695 those in the other jurisdictions. The decisions of the House of Lords are not binding on the Guernsey Courts, but insofar as the Guernsey Courts follow English decisions on the common law, the decisions of the House of Lords carry considerable weight and it would only be in rare cases that the Guernsey Courts would not follow such a decision of the House of Lords.”
Note however that in the Jersey Court of Appeal case of Picot v Crills [1995] JLR 33 Le Quesne JA went much further and held that the Jersey Court of Appeal had “no authority” to review House of Lords decisions as to the question of an Advocate’s immunity from suit holding that: “It is common ground that excepting any point upon which a local rule has been established, on questions of liability for negligence the law of Jersey follows the law of England. This means that on these questions the Jersey courts apply the whole law of England. It does not mean they are free, following not any local rules (of which ex hypothesi there are none) but their own preference, to accept some features of English law and reject others ... . . . when once the House of Lords has declared the requirements of public policy affecting a particular relationship, it is for the House of Lords alone to acknowledge any change of those requirements. It is not for lower courts to give effect to their own, possibly differing, ideas of how public policy has changed or should change. . . . I agree, of course, that our system gives scope for judges to develop or change the law; but the scope is not unlimited. One of the limitations, as I understand them, is that judges are not free to develop the law in a manner inconsistent with decisions of the supreme tribunal binding upon them.”
In a dissenting judgment Blom-Cooper JA16 stated as follows: “Is this court bound, under the doctrine of precedent, loyally and unquestioningly to apply the legal principles developed and explained by the House of Lords in Rondel v Worsley17 and Saif Ali v Sydney Mitchell & Co.? The question is not susceptible of an easy answer. . . . The courts of Jersey as a general rule decide questions of tortious liability by direct reference to the development of the common law of England . . . That would seem to import the decisions within the hierarchy of English courts. I acknowledge, along with Le Quesne JA that this court cannot pick and choose which bits of English law it incorporates. Yet the final court of appeal for this Island is the Judicial Committee of the Privy Council, which will normally follow a decision of the House of Lords . . . . So far as I am aware, there has been no decision emanating from the Board to the like effect of Rondel v Worsley. And on the question of an application to strike out a claim, this court is effectively the final court of appeal, subject only to the special leave to appeal procedure, grantable only by the Judicial Committee. This court is free to decide whether in 1995 there is any immunity for advocates from suits of negligence. . . . Where the decision rests on judicially recognizable, mutable considerations of public policy, the compulsion to follow suit is lessened, if not removed. It also seems to me not right for any court to opt out of doing what is right and just, on the ground that the resolution of a problematical 16 17
Who also sat in Morton. [1967] 3 All ER 993. LJ Blom-Cooper, as he then was, appeared for the (unsuccessful) appellant.
696 The Laws of Guernsey legal principle must await the arrival of the day, maybe far distant, when the length of an aspiring litigant’s purse or the resources of the legal aid fund are to hand, sufficient to finance the costs of litigation all the way up to the final court of appeal. . . . My assessment is that the common law of England (as adapted to Jersey) can survive without conferring any special privilege on lawyers.”
Frossard JA agreed with the judgment of Le Quesne JA but gave no reasons. It is suggested that Blom-Cooper JA’s views reflect more closely the position under Guernsey law; it is further suggested that even his comments go further in binding Jersey tort law to English tort law than would be the case for Guernsey tort law. Plainly a Guernsey court is not bound by the House of Lords.18 There is no good reason why Guernsey law should labour under demonstrably bad English case-law; the attachment of Le Quesne JA to Rondel v Worsley is a case in point given the eventual abandonment of the case in England itself some five years later.19 It is suggested that Guernsey tort law is both freer to develop and to select its influences than may in fact have been credited previously. The history of Guernsey tort law is beyond the scope of this work, save to note that in the case of Smith v Harvey (1981) 14 May the Guernsey Court of Appeal stated as follows as regards the tort of negligence:20 “No doubt the English law of negligence has, and has had, an influence on the development of the law of negligence in Guernsey, but it is by no means evident that the ground of action is an import from England to the Island. . . . it appears to us that the roots of the action for damages based on negligence can be traced in the earlier law of Guernsey . . . In Terrien at p 25821 there is recognition of a ground of action not only in delict but also in quasi-delict. This is in the context of actions mobiles, and he refers expressly to de damno data as a class of action. It is true that the matter is developed in Terrien’s commentary beyond the precise scope of the Coutûme de Normandie, but his recognition of the action is still significant. There is a similar passage in Le Marchant (p 297), referring to délict ou quasi-délict. Counsel for the plaintiff made reference to De Ferrière and Hoüard in so far as the Custom of Paris, with which they were strictly concerned, may throw light on the meaning and scope of the terms used in the Custom of Normandy which was inherited by Guernsey. These references to the use of the term quasi-délict reinforce the view that an action on negligence (sic) was recognised in the early law of Guernsey.”
Terrien himself cited Justinian’s Institutes which themselves date back to late 533 AD and perhaps places in perspective all such debates as to the more recent origins of laws;22 but what is particularly noteworthy is the fact that Pothier also has a section entitled “Des délits and quasi-délits”23 under which he stated: 18
It is suggested that neither is the Royal Court of Jersey. See the House of Lords case of Arthur JS Hall & Co v Simons [2000] 3 All ER 673; 7 Law Lords sat. 20 The Court comprised Sir Godfray Le Quesne QC and the future Lords Clyde and Hoffman. 21 Book VIII ch 1. 22 See also Justinian, The Digest of Roman Law, Theft, Rapine, Damage and Insult, trans CF Kolbert (Penguin) for an accessible introduction to Roman “tort” law as illustrated by the relevant portions of the Digest. 23 Traité des Obligations Pt 1, ch 1 sect II § II. 19
Guernsey Law of Tort and Contract 697 “On appelle délit le fait par lequel une personne, par dol ou malignité, cause du dommage ou quelque tort à une autre. Le quasi-délit est le fait par lequel une personne, sans malignité, mais par une imprudence qui n’est pas excusable, cause quelque tort à un autre.”
Pothier goes on to state later in the same section: “Non-seulement la personne, qui a commis le délit ou le quasi-délit, est obligée à la réparation du tort qu’elle a causé; celles, qui ont sur leur puissance cette personne, telles que sont les pères, mères, tuteurs et précepteurs, sont tenues de cette obligation, lorsque le délit ou quasi-délit a été commis en leur présence, et généralement lorsque pouvant l’empêcher, elles ne l’ont pas fait: mais si elles n’ont pu l’empêcher, elles n’en sont point tenues. . . . On rend aussi les maîtres responsables du tort causé par les délits de leurs serviteurs ou ouvriers qu’ils emploient à quelque service. Ils le sont même dans le cas auquel il n’aurait pas été en leur pouvoir d’empêcher le délit ou quasi-délit, lorsque les délits sont commis par lesdits serviteurs ou ouvriers dans l’exercice des fonctions auxquelles ils sont employés par leurs maîtres, quoiqu’en l’absence de leurs maîtres; ce qui a été établi pour rendre les maîtres attentifs à ne servir que de bons domestiques. A l’égard des délits ou quasi-délits qu’ils commettant hors de leurs fonctions, les maîtres n’en sont point responsables.”
Evans24 translates Pothier’s section heading as: “Of Injuries and Negligencies” and the above extracts as follows: “Injury (delictum) is when a person by fraud or malignity causes any damage or wrong to another. Quasi delicta, are facts by which a person causes damages to another, without malignity, but by some inexcusable imprudence.”
And: “Not only is the person who has committed the injury, or been guilty of the negligence, obliged to repair the damage which it has occasioned; those who have any person under their authority, such as fathers, mothers, tutors, preceptors, are subject to this obligation, in respect of the acts of those who are under them, when committed in their presence, and generally when they could prevent such acts, and have not done so; but if they could not prevent it then they are not liable . . . Masters are also answerable for the injury occasioned by the wrongs and negligence of their servants; they are even so when they have no power to prevent them, provided such wrongs or injuries are committed in the exercise of the functions in which the servants are employed by their masters, although in the master’s absence. This has been established, to render masters careful in the choice of whom they employ. With regard to their wrongs, or neglect not committed in these functions, the masters are not responsible.”
24 William David Evans Esq Barrister. His translation was published first in 1806 and re-printed by the Lawbook Exchange Ltd of Union, New Jersey in 2000.
698 The Laws of Guernsey If one then turns to the relevant articles of the Code Civil one finds the following: Article 1382 “Tout fait quelconque de l’homme, qui cause à autrui un dommage, oblige celui par la faute duquel il est arrivé, à le réparer. Article 1383 Chacun est responsable du dommage qu’il a causé non seulement par son fait, mais encore par sa négligence ou par son imprudence. Article 1384 On est responsable non seulement du dommage que l’on cause par son propre fait, mais encore de celui qui est causé par le fait des personnes dont on doit répondre, ou des choses que l’on a sous sa garde. . . . Le père et la mère, en tant qu’ils exercent l’autorité parentale sont solidairement responsables du dommage causé par leurs enfants mineurs habitant avec eux. Les maîtres et les commettants, du dommage causé par leurs domestiques et préposés dans les fonctions auxquelles ils les ont employés. . . .” Which translates as follows: Article 1382 “Every human act whatsoever which causes damage to another obliges the person by whose fault that damage has occurred to make it good. Article 1383 Each person is responsible for the damage he has caused not only by his own (positive) act but also by his negligence or carelessness. Article 1384 A person is responsible not only for damage caused by his own action but also damage caused by the acts of persons on behalf of whom that person must answer or for objects which that person has within his control. . . . Mothers and fathers to the extent that they exercise parental authority are jointly responsible for damage caused by their minor children living with them. Masters and principals, for damage caused by their domestics and employees in the employments for which they were engaged . . .” Pothier’s influence on the authors of the Code is not doubted, certainly in the context of contract law; likewise the similarities between Pothier’s work in this context and the Code are obvious. The similarity between Pothier’s work and modern English notions of tort law hardly needs to be stated. Again this is not the place for a comparative historical study of Anglo-Norman-Franco law of obligations25 but Plucknett notes that:
25 For a history of French private law see Brissaud, ibid; for histories of English law and the law of obligations in particular see CHS Fifoot, History and Sources of the Common Law (Stevens & Sons Ltd 1949); Theodore Plucknett, A Concise History of the Common Law (Little, Brown & Co 1956) and David Ibbetson, A Historical Introduction to the Law of Obligations (OUP 1999).
Guernsey Law of Tort and Contract 699 “All through the eighteenth century English lawyers were reading Continental works on natural law and jurisprudence, while English scholars were themselves producing comparative studies of their own and foreign systems. Particularly interesting to them were the works of Pothier which circulated widely in England and America, both in the original French and in translation.”26
There were other influences also, Ibbetson identifies Grotius, Pufendorf, Burlamaqui and Barbeyrac in the context of tracing the “crystallization” of the English law of negligence.27 The essential point is to recognise a common heritage to some greater or lesser extent underlying Anglo-Franco tort law notions. Even the English use of the word tort itself belies French and Roman influences. If Guernsey law is currently influenced heavily by English law in the context of tort then English law was itself influenced by French law which was in turn the product of Roman law, various bodies of customary law, statute law and day-to-day jurisprudence. The increasing influence of “European” law on current English law should also be borne in mind, this is particularly noteworthy in the context of consumer protection and human rights law, to the extent that it affects indirectly private law rights. That French law is no longer a powerful influence in the context of tort has more to do with the development of French tort law than anything else. French tort law has evolved more as a function of social and political policy than pure jurisprudence.28 From being essentially fault-based, French tort law has evolved through a combination of statute and purposive construction of the Code Civil towards what amounts to near strict liability for the causation of loss and damage; this is particularly so in the context of accidents at work and damage caused by objects.29 The law relating to road traffic accidents has, for example, been placed on a statutory footing which appears anything but satisfactory, at least viewed from a distance.30 French tort law is so dependant on a very particular reading of the Code Civil (itself a statute), modern French statute, and French governmental and judicial policy that its appropriateness as a general source for modern Guernsey tort law would be doubtful in any event. When the content of French tort law is also considered this conclusion is fortified.
26
Ibid p 300. Ibid p 166. This is to some extent a truism. The same could be said, but not so forcefully, of English law, particularly in the context of health and safety at work law, which again goes to make the point given that the relevant English regulations owe their genesis to EU directives. It is no accident that Guernsey common law does not follow English law into such areas; at least not directly. 29 As to the latter this is the notion of “fait de la chose” or “act of a thing”; see art. 1384 and the arrêt Jeand’heur. 30 See Loi No 85-677 of 5 July 1985. The absence of fault on the part of the driver is not a defence as against a non-driving victim; only the inexcusable fault of a victim aged between 16 and 70 is exculpatory and then only if this was the exclusive cause of the accident. If the victim is less than 16 or more than 70, liability is all but strict save, in effect, for suicides. This vignette should be sufficient to illustrate the problem. 27 28
700 The Laws of Guernsey To the extent that modern French tort law can offer persuasive or satisfactory solutions there is no reason why those ideas should not be considered on their own merits; experience merely suggests that French tort law currently has little to offer as against English tort law when viewed in the round. It remains possible though that French law may assist with particular issues. French tort law remains a valid source; at least potentially. One should also not overlook the fact that what English law would regard as independent torts are often addressed by French law as a part of the law of contract.31 For all that English tort law is a powerful influence it is not an exclusive source, let alone panacea, for Guernsey tort law. English tort law has its own problems and struggles still to produce satisfactory or consistent solutions to age-old problems. Where there is an English statute it is an indicator that the common law got into difficulty. There is again the example of occupiers’ liability, but others include contributory negligence (at common law it amounted to a complete defence), the doctrine of common employment (at common law the master was not liable for harm caused by one employee to another employee engaged in a common employment), lost years claims (the idea that a deceased’s estate may claim for earnings in the lost years (in addition to the dependants)) and the liability of highway authorities for accidents (at common law there was no liability for nonfeasance as opposed to misfeasance). English case-law constantly throws up problems, some of which are resolved and some not; causation is a particular problem for English case-law as illustrated by the recent case of Fairchild v Glenhaven Funeral Services Ltd 32 where the House of Lords overturned Court of Appeal decisions and disapproved the dictum of Lord Bridge in the case of Wilsher v Essex Area Health Authority.33 A further example is the case of Gregg v Scott [2002] EWCA 1471 (29 October), a decision of the English Court of Appeal in the context of a clinical negligence claim on the question of whether proof of probability of less than 51 per cent was a sufficient foundation to sound in damages; ie whether the worsening of the prospects for a patient falling short of showing on the balance of probabilities that the (ultimate) outcome would have been different is enough. The Court of Appeal considered conflicting common law jurisdiction decisions and House of Lords authority and held, reluctantly, that it was not. A Guernsey Court might not agree. It is not uncommon for there to be some distinction between Privy Council and House of Lords decisions; these reflect divergences in the evolution of common law jurisdictions’ jurisprudence and again draw attention to the fact that English courts have no monopoly over the best legal solutions. A recent example is A v Bottrill, a Privy Council case on appeal from the Court of Appeal of New 31 See eg Art 1134 and the requirement to execute contracts in good faith. Note also the general principle of non-cumul des deux ordres de responsabilité; ie one cannot rely upon a concurrent tort duty in French law if the parties’ relationship is already governed by contract. 32 [2002] 3 All ER 305. Note also the extent to which Lord Bingham cited continental European authority as well as the case-law of common law jurisdictions. 33 [1986] 3 All ER 801 at 881–82.
Guernsey Law of Tort and Contract 701 Zealand.34 Lord Nicholls distinguished between English jurisprudence on the topic of exemplary damages “still toiling in the chains of Rookes v Barnard”35 as opposed to courts in (other) common law countries which had “remained true to the underlying rationale of the exemplary damages jurisdiction”. Guernsey law enjoys a relationship with English law akin to that of New Zealand law36 but with the extra dimension of it customary and French law heritage. Guernsey law is as free, if not freer because of that more diverse heritage, to develop its common law as it deems fit having regard to such domestic precedent as there may be and the needs and interests of existing Guernsey society. Equally, if an English tort case-law answer is manifestly just and reasonable then it is likely to be adopted by a Guernsey Court, and vice versa. It is not unknown for whole areas of English tort law to be imported, particularly if they are case-law based, as with conspiracy.37 It is suggested that there is a principled hierarchy of authority for the determination of Guernsey tort law as follows: (1) (2) (3) (4) (5) (6)
Guernsey statute and case-law; English case-law (and statute); Jersey case-law; the case-law of other common law jurisdictions; French law; wider European law.
The position of Jersey law is justified by the common experience and position in the world of the two jurisdictions; arguably it should appear higher, perhaps equal with English law. The reference to English legislation is explained by the fact that, although such legislation cannot be applied directly, it can in some sense set a benchmark for the standard to be achieved in a common law context, eg in a health and safety at work claim. French law is still referred to given that there are areas where French tort law may yet be preferred over English law as a source; particularly in the area of relations between neighbours and landholdings. It should be emphasised that there is no bar to French ideas being imported, if warranted. Guernsey Contract Law The hierarchy of authority is different for Guernsey contract law. Pothier has a great deal more to say about the law of contract as opposed to tort. Modern French 34
[2002] 3 WLR 1406. [1964] AC 1129. 36 At least for as long as New Zealand retains the Privy Council as its ultimate appellate Court. 37 See the judgment of Newman LB in the case of Vardinoyannis v Ansol (2001) 20 November. Similarly in both Guernsey and Jersey with the tort of passing off. See also the direction of the Deputy Bailiff, now Bailiff, concerning the law of nuisance in the case of Dadd v Guernsey Rifle Club [1993] 15 GLJ 62, which was upheld on appeal. Note however that French tort law may yet have something to offer in the context of relations between land owners/occupiers; see below. 35
702 The Laws of Guernsey law likewise has more to offer, albeit the extent of that influence has yet to be worked out fully in Guernsey law.38 Modern English and French contract law are also much closer together than English and French tort law. Pothier is here, indisputably, a figure of central importance for both jurisdictions, if only historically. Ibbetson states of English law: “Around 1800, the rather half-hearted tentative sallies in the direction of a theorized law of contract were superseded by more full-blooded attempts to fit the Common law into an apparently rational framework. . . . in the last decade of the 18th century there started to appear a steady stream of treatises on the law of contract—Powell (1790), Newland (1806), Comyn (1807), Colebrooke (1818), Chitty (1826), followed by Addison (1847), Leake (1867), Pollock (1876), Anson (1879)—in which fundamental questions of the nature of contractual liability had to be addressed. The model from which judges and writers derived their inspiration was the Traité des obligations of the French jurist Robert-Joseph Pothier, first published in 1761 and translated into English in 1806.”39
It is still this self-same Traité which exerts a considerable direct influence in present-day Guernsey (and Jersey) contract law. The influence is disguised on a dayto-day basis by the fact that in many cases modern French and English contract law will produce the same result; but one must have a knowledge of both systems of law in order to know where a difference is likely to emerge and to what extent one could or should maintain that the distinction, whether French or English (or other common law), is a part of Guernsey law. It must be conceded that there is in fact comparatively little Guernsey contract law jurisprudence; most civil claims settle or are resolved other than by a full trial. In the twentieth century there were cases such as Priaulx v Le Ray (1931) where the principles of lésion ultradimidiaire and marché déraisonnable were maintained; likewise C&G Developments Limited v Duquemin (1965) 15 October, a judgment of the Guernsey Court of Appeal in which both Pothier and Dalloz were referred to with apparent approval.40 It is suggested that there is a principled hierarchy of authority for Guernsey contract law as follows: (1) (2) (3)
Guernsey statute and case-law; Jersey case-law; Pothier/(leading pre-1804 French jurists);
38 See generally St John Robilliard’s “The Guernsey Law of Contract—an Explanation” Jersey Law Review, February 1998 where the essentially pragmatic approach of Guernsey law was emphasised. 39 Ibid p 220. 40 See Robilliard, ibid. See also the brief judgment of Talbot LB in the case of De Carteret v Teale (2002) 27 August, where it was held, in the circumstances of the particular case, that the influence of “French Customary Law” on Guernsey law was to be preferred to English law where there was a difference; albeit there would be “other cases where a contrary conclusion may be proper to be reached”. Lieutenant Bailiff Talbot went on to state: “The more difficult question is: what is Guernsey Law, in the absence of very much assistance from earlier cases or indeed textbooks?”. It was held that cause was required as opposed to consideration. The category of contrat de bienfaisance was also recognised.
Guernsey Law of Tort and Contract 703 (4) English case-law; and modern French contract law; (5) the case-law of other common and civil law jurisdictions. The Guernsey Court will again look first to Guernsey statute and precedent followed, it is suggested, by Jersey precedent. Beneath this Pothier (and the leading pre-1804 French jurists to a lesser extent) appear next. This is justified historically and by the fact that both modern French and English contract law can be seen as branches spreading from this common trunk. Given the overlay of statute, governmental policy and other local factors in those countries it is still appropriate to look back to Pothier as in some sense a purer source for Guernsey contract law; a surer foundation or set of first principles. It may well be that Pothier still provides an adequate and self-sufficient solution on the facts of any given case; but equally it will be valid also to look to modern French and English law to see if either system has evolved a better or more appropriate solution from those common principles. Nor is there anything new in this; in 19th century Guernsey cases Advocates would refer to French and English authority interchangeably.41 It is no more appropriate that Guernsey contract law should remain lodged in Pothier’s admittedly special aspic than, say, the aspic of old English common law in the context of tort. There must again be some souplesse in the exercise; one is not ultimately in search of an unbroken line of reasoning or authority in every case going back to the Grand Coutumier, l’Approbation or even Le Marchant; indeed to do so would be futile. Instead the ambition is to detect or derive legal principle from those authorities that Guernsey contract law is itself derived from and which may be applied to the facts of whatever case is before the Court in order to do justice between the parties and, hopefully, to be of general usefulness. The ultimate goal is to serve the ends of justice in a changing society. It will be noted that English case-law and modern French contract law are tied at fourth equal in the above list. Much will turn on the area of contract law under consideration and the relative attractiveness of the solutions presented by the competing systems. It is also an unfortunate yet undeniable fact that English law is more easily accessible to today’s Guernsey Advocate than French law; although the Jersey Law Commission’s observation that: “There is, of course, the practical problem that the vast majority of Jersey lawyers now receive their legal training in England and French law is therefore to them an alien concept”.42
does not have the same force in Guernsey given that would-be Guernsey Advocates must still attend Caen University; indeed French contract law is studied and examined at degree level in French. It is for the Guernsey lawyer to assist the Court in 41 42
See Robilliard, ibid. Ibid at p 7.
704 The Laws of Guernsey developing Guernsey contract law in the most appropriate way. This means that the Guernsey Advocate must be familiar not only with Chitty but also (inter alia) Articles 1101–1369 of the Code Civil. There is nothing here that is inconsistent with an Anglo-Saxon-dominated business environment when the common heritage of Anglo-American and French contract law is appreciated.43 A Guernsey court would look for business efficacy in any commercial context; again it is a mistake to assume that that only English law can do this. As with tort law it is easy to overlook the considerable difficulties English courts seem to have in resolving quite fundamental issues which ought perhaps to have been determined conclusively long ago. A recent example is the case of Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd 44 where the English Court of Appeal, in a detailed 42 page judgment referring to 44 other cases, concluded that there was in fact no equitable jurisdiction to grant rescission of a contract on the ground of common mistake where that contract was valid and enforceable on ordinary principles of contract law. The case of Solle v Butcher 45 was disapproved after half a century whilst the Court went on to suggest that: “Just as the Law Reform (Frustrated Contracts) Act 1943 was needed to temper the effect of the common law doctrine of frustration, so there is scope for legislation to give greater flexibility to our law of mistake than the common law allows”.46
Which hardly amounts to legal certainty. By way of contrast Articles 1108 to 1110 of the Code state as follows: Article 1108: Quatre conditions sont essentielles pour la validité d’une convention: Le consentement de la partie qui s’oblige; Sa capacité de contracter; Un objet certain qui forme la matière de l’engagement; Une cause licite dans l’obligation. Article 1109: Il n’y a point de consentement valable, si le consentement n’a été donné que par erreur, ou s’il a été extorqué par violence ou surpris par dol. Article 1110: L’erreur n’est une cause de nullité de la convention que lorsqu’elle tombe sur la substance même de la chose qui en est l’objet. Elle n’est point une cause de nullité, lorsqu’elle ne tombe que sur la personne avec laquelle on a intention de contracter, à moins que la considération de cette personne ne soit la cause principale de la convention.” 43 Indeed Pothier’s marble relief portrait is one of 23 to appear over the gallery doors of the House Chamber in the Capitol, Washington DC as a figure whose work helped to establish the principles underlying American law; Blackstone also features. 44 [2002] 4 All ER 689. 45 [1949] 2 All ER 1107. 46 Per Lord Phillips MR.
Guernsey Law of Tort and Contract 705 Which translate as follows: Article 1108: Four conditions are essential to the validity of a contract: The agreement of the party who binds himself; His capacity to contract; A sufficiently certain object for the contractual undertaking; A lawful purpose or raison d’être 47 for the obligation. Article 1109: There is no valid agreement if consent has been given only by mistake or extorted by force or through improbity. Article 1110: Mistake does not nullify a contract unless it goes to the substance itself of a contract’s object. Mistake is not a cause of nullity when it relates solely to (the identity of) the person with whom one intended to contract; unless the identity of that person was the principal cause of the agreement. Again this is not the place to embark upon an examination of the relative merits of English and French law of mistake and when each will and will not nullify a contract; the above merely serves to illustrate the clarity with which the Code can express itself and the potential complexity and uncertainty of English case-law. At the same time the common threads of both legal systems are apparent; there is no dichotomy or reason to commit Guernsey law irrevocably to one or other system as opposed to developing Guernsey law by reference to both English and French law where there is no pre-existing solution in Guernsey law or persuasive Jersey authority.48
THE JERSEY LAW COMMISSION CONSULTATION PAPER
The Jersey Law Commission has recommended in a consultation paper49 that English contract common law be incorporated by statute into Jersey law. This overlooks, however, the fundamental rôle which various statutes play in English contract law.50 It is difficult to see how one could import sensibly English case-law wholesale without additionally importing those statutes central to the area of law concerned. It is difficult to understand why one should want to, given English case-law’s own problems. It would also have the effect of sacrificing jurisdictional independence. The Commission appeals to Guernsey’s sixteenth century example 47 The word “cause” is a term of art in French law not susceptible to translation by a single English word. 48 It is most unlikely for example that a Guernsey Court would follow the Jersey case of Hotel de France v Chartered Institute of Bankers (21 December 1995) in holding that a party must apply to the court for the résolution of a contract. See also the debate in articles in the Jersey Law Review for June and October 2000 between Advocates Le Cocq and Kelleher of the Jersey Bar. 49 Dated October 2002. 50 In particular the Law Reform (Frustrated Contracts) Act 1943, Sale of Goods Act 1979, Misrepresentation Act 1967 and the Unfair Contract Terms Act 1977.
706 The Laws of Guernsey of l’Approbation while there is a view in Guernsey that this was in fact responsible for stultifying the development of Guernsey law for some considerable time thereafter. Difficulties identified by the Jersey Law Commission relating to ascertaining Jersey contract law included the problem of the inaccessibility to laymen of the French language. Arguably modern law has become so complex that the language it is written in is something of an irrelevance for the layman, it is largely impenetrable to him in English in any event.51 If the French language is a problem then it would be an easy matter for judgments to include translations of extracts taken from French authorities. In addition there are a number of texts written in English on French law,52 there have also been English translations of the Code Civil.53 Pothier’s Treatise on Obligations and his Treatise on the Contract of Sale were translated into English in the 19th century and reprinted as recently as 2000 in the case of the former and 1999 in the case of the latter.54 In any event we should make a greater effort with the French language. The Commission complained of the lack of certainty in Jersey contract law; but this assumes certainty in English law, which is not the case. There is also the fundamental reality that English contract law will itself inevitably move closer to the European model; it simply makes no sense for Channel Islands law to abandon its own continental European heritage in such circumstances. A European contract law code is on the agenda of the European Union and is a real possibility, if not in the immediate future.55 The Package Travel, Package Holidays and Package Tours Regulations 1992, the Commercial Agents (Council Directive) Regulations 1993 and the Unfair Terms in Consumer Contracts Regulations 1999 are merely indicators of the extent to which EU law will eventually be incorporated into English domestic law. CONCLUSION
Guernsey tort and contract law has its origins in Norman and French law. French law and French jurists, in particular Pothier, have influenced English law. English law will itself inexorably move closer towards European as opposed to common law models as time passes. Guernsey law looks first to whatever domestic precedent it may already have, but in default looks to the law of other jurisdictions for 51
See again the Great Peace judgment if any persuasion on this point is required. Eg Barry Nicholas, The French Law of Contract 2nd edn (Clarendon Press); John Bell, Sophie Boyron and Simon Whittaker, Principles of French Law (OUP); and the helpful, if brief, Christian Dadomo and Susan Farran, French Substantive Law (Sweet & Maxwell). 53 See The French Civil Code, trans Professor John Crabb (revised edn as amended to 1 July 1994) (Kluwer Law International, The Hague). 54 Both by the Lawbook Exchange Limited of Union, New Jersey. See their website at www. lawbookexchange.com. 55 A draft code has already been produced, although it is non-mandatory; see The Principles of European Contract Law, produced by the Commission on European Contract Law which is available at http://www.cbs.dk/departments/law/staff/ol/commission_on_ecl/index.html. 52
Guernsey Law of Tort and Contract 707 possible solutions, with particular regard to Jersey law. French tort law has less to contribute in this context than English tort law whereas in contract law the balance is, or should be, more even. In any event Guernsey law is fundamentally free within a principled hierarchy of authority to make its own case-law by adopting those solutions which appear most sound and most appropriate to its own society and circumstances.
25 Epilogue
T
HE BAILIWICK OF Guernsey enjoys the great privilege of being a nearindependent community of 60,000 people living on an archipelago off the western coast of Europe. The Islands are shortly to celebrate the 800th anniversary of the historical events underpinning that privileged status. The Bailiwick has survived for as long as it has through maintaining and respecting its traditions, customs and laws; it must continue to do so to justify the retention of its status. Although the Islands’ core business and regulatory laws have been maintained carefully there is a sense in which other areas of Guernsey law have been neglected. The introduction of the Human Rights (Bailiwick of Guernsey) Law 2000 has served already as a catalyst for the reform of many areas of domestic law, but there is still much to be done both in the context of substantive and procedural law. There is a temptation whenever a new statute has to be introduced simply to adopt and adapt the closest English model; it is to be hoped that such temptation will be resisted where the English model does not show itself clearly to be superior to other models, which ought also to be considered. Guernsey ought additionally to be willing to consider original models where appropriate. Likewise in the development of Guernsey case-law. English courts have no monopoly over legal truth given the evidence of ever-increasing complexity, uncertainty and even inconsistency. Guernsey law is essentially free to make its own law, albeit having regard to a principled hierarchy of authority appropriate to the area of law under consideration. The potential for modern French law to contribute to Guernsey law ought to be considered as a matter of course. Ironically, Guernsey law may be better placed than English law to adapt to the greater degree of harmonisation of European law which the Union will inevitably bring, even if the Bailiwick continues to remain, as is very likely, outside of the Union itself.
Appendix 1 THE ROYAL COURT CIVIL RULES, 1989 ARRANGEMENT OF RULES R
PART I Service of Documents 1. 2. 3. 4. 5. 6. 7. 8.
Service within the jurisdiction on an individual. Service within the jurisdiction on a body corporate Service on the States. Sergeant to make relation of mode of service. Effect of Sergeant’s relation. Substituted Service within the jurisdiction. Service out of the jurisdiction. Service in other manner permitted by law.
PART II Commencement of Proceedings 9. 10. 11. 12. 13. 14. 15. 16.
Cause to be tabled. Summons to be served on defendant. Plaintiff ’s élection de domicile. Failure to appear. Defended actions to be inscrite. Defendant’s élection de domicile. Defences. Judgment in default of defences.
PART III Summary Judgment 17. 18. 19. 20. 21. 22.
Applications and grounds for summary judgment. Notice of application for summary judgment. Application to be supported by affidavit. Court may give judgment for plaintiff. Stay of execution. Defendant may show cause.
712 The Laws of Guernsey 23. 24. 25. 26.
Court may give leave to defend. Applications and grounds for summary judgment on counterclaim. Further conduct of action. Costs.
PART IV Counterclaims and Consolidation, etc 27. Counterclaims. 28. Consolidation or severance of actions.
PART V Parties to Proceedings 29. 30. 31. 32. 33. 34.
Actions by or against infants, etc. Representative proceedings. Class members. Costs in representative proceedings. Third parties. Removal or joining of parties.
PART VI General Conduct of Proceedings 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45.
Amendment of pleadings. Striking out. Further and better particulars. Interrogatories. Discovery of documents. Inspection of documents. Orders for inspection. Informal discovery and inspection. Orders for directions. Discontinuance and withdrawal of actions. Payment into Court.
PART VII Requêtes Civiles 46. Requêtes civiles.
PART VIII General Provisions 47. Mode of making application to court. 48. Costs and security therefore. 49. Witness summons.
Appendix 1 713 50. 51. 52. 53. 54. 55. 56. 57. 58. 59. 60.
Péremption. Recovery of penalties or amendes. Computation of time limits. Extension or abridgement of time. Affidavits. Court may direct summary procedure. Commencement of actions. Repeals. Interpretation. Citation. Commencement and transitional.
THE ROYAL COURT CIVIL RULES, 1989 THE ROYAL COURT, in exercise of the powers conferred upon it by Article 64 of the Reform (Guernsey) Law, 19481 and section 12 of the Royal Court of Guernsey (Miscellaneous Reform Provisions) Law, 19502 and of all other powers enabling it in that behalf, hereby orders:—
PART I Service of Documents 1. Service within the jurisdiction of a document on an individual shall be effected by the Sergeant— (a) à personne; (b) à domicile; (c) where, in the action to which the document relates, the individual has made an élection de domicile in accordance with rule 11 or 14, by leaving the document there; or (d) where an élection de domicile has been made in any document— (i) upon which the action is founded; or (ii) which relates to the action or to the subject-matter thereof, being a document to which the individual was a party, by leaving the document there. 2. Service within the jurisdiction of a document on a body corporate shall be effected by the Sergeant— (a) by leaving the document at the registered office in the Island of the body corporate; (b) where the body corporate has no such registered office but carries on business in the Island, by leaving the document at any place of business in the Island of the body corporate; or (c) in accordance with rule 1(c) or (d), as if the references therein to the individual were references to the body corporate.
1 2
Ordres en Conseil vol XIII p 288. Ordres en Conseil vol XIV p 388.
714 The Laws of Guernsey 3. Service of a document on the States of Guernsey or any committee thereof shall be effected by the Sergeant by leaving the document at the Chambers of the Law Officers of the Crown. 4. The Sergeant, having effected service of a document in accordance with rule 1, 2 or 3, or having attempted so to effect service shall make his relation as follows— (a) in the case of service in accordance with rule 1(a) or (c), 2(a) or (b) or 3, with the letter “A”; (b) in the case of service in accordance with rule 1(b) or (d), where the Sergeant left the summons à domicile with a person who appeared to him to be a reliable adult and who undertook to bring the document to the attention of the person to be served, with the letter “B”; (c) otherwise, with the letter “C”. 5. A relation under rule 4— (a) with the letter “A” or “B”, shall enable the matter to proceed in all respects; (b) with the letter “C”, shall enable the matter to be tabled, but nothing more, unless, when the matter is tabled— (i) the party who was to be served appears (in person or by his Advocate); or (ii) the Court is satisfied that that party has notice of the document or that service of the document was good, in either of which cases the matter may proceed in all respects. 6. (1) Where service within the jurisdiction of a document in the manner required by these rules would, but for the provisions of this Rule, be impracticable or would entail undue expense, the Court may make such order for substituted or other service, or for the substitution for service of notice, by advertisement or otherwise, as it thinks just. (2) A party applying for an order under paragraph (1) shall file an affidavit in support of his application. 7. (1) The Court may give leave to effect service of a document out of the jurisdiction. (2) The Court shall not make an order under paragraph (1) unless satisfied (by affidavit or otherwise) that the matter to which the document relates— (a) is properly justiciable before the Court; and (b) is a proper one for service out of the jurisdiction. (3) An order of the Court under paragraph (1) shall state— (a) the form, manner and time in which and conditions subject to which service is to be effected; and (b) the minimum period which must elapse between the date of service and the date upon which the matter may be pursued. (4) Where the Court makes an order under paragraph (1), proof of service in accordance with the order shall be by affidavit or, where service was effected by the Sergeant, by the relation of the Sergeant. 8. The provisions of rules 1 to 7— (a) are in addition to, and not in derogation from, the provisions of any enactment or rule of Court relating to the service of documents; (b) do not apply where the Court orders service in some other manner.
Appendix 1 715
PART II Commencement of Proceedings 9. (1) In every action a cause shall be tabled before the Court. (2) The cause shall contain a statement of the material facts on which the plaintiff relies for his claim, but not the evidence by which those facts are to be proved. (3) At each successive stage in the action, the plaintiff shall add to the cause a sufficient reference to the last appointment made by the Court in the action, including the date and short particulars of the tenor thereof. 10. (1) A plaintiff intending to table a cause shall give notice of the fact to the defendant by serving a summons upon him. (2) The summons— (a) shall be served not less than 2 days before the day of the tabling of the cause; (b) shall state the date and time appointed for the tabling of the cause; (c) shall contain or have annexed to it a copy of the cause; and (d) shall be signed by an Advocate. 11. (1) The cause shall state the plaintiff ’s élection de domicile. (2) If at any time the Court is satisfied that service cannot be effected at the domicile elected by the plaintiff it may, on the application supported by affidavit of any defendant to the action, order that the action be dismissed. (3) The Court may at any time order the plaintiff to make an élection de domicile or to amend the élection de domicile made by him. (4) The plaintiff may at any time change the élection de domicile made by him; but the change is not effective until written notice thereof is given to the Greffier and to all other parties to the action. (5) The plaintiff ’s élection de domicile, and any amendment or change validly made thereto under paragraph (3) or (4), shall remain valid until the action is terminated (whether by final execution of the judgment or otherwise). 12. (1) If the plaintiff does not appear at the time appointed for the tabling of the cause, the Court may dismiss the action. (2) If the defendant does not appear when the cause is tabled, the Court may give judgment against him. 13. Where the cause is tabled and the defendant intimates his intention to defend the action, the Court shall, if it is appropriate to do so, order that the cause be inscrite on le Rôle des Causes à Plaider. 14. (1) The defendant shall, on the first tabling of the cause, make an élection de domicile. (2) If the defendant does not comply with paragraph (1), the Court may give judgment against him. (3) If at any time the Court is satisfied that service cannot be effected at the domicile elected by the defendant it may, on the application supported by affidavit of the plaintiff, give judgment against the defendant.
716 The Laws of Guernsey (4) The Court may at any time order the defendant to make an élection de domicile or to amend the élection de domicile made by him. (5) The defendant may at any time change the élection de domicile made by him; but the change is not effective until written notice thereof is given to the Greffier and to all other parties to the action. (6) The defendant’s élection de domicile, and any amendment or change validly made thereto under paragraph (4) or (5), shall remain valid until the action is terminated (whether by final execution of the judgment or otherwise). 15. (1) The defendant shall, unless the Court orders otherwise, table his defences to the action upon being required to do so by a summons served on him in that behalf by the plaintiff. (2) The summons for defences— (a) shall be served on the defendant not less than 4 days before the day upon which the defences are to be tabled; (b) shall state the date and time appointed for the tabling of the defences; and (c) shall be signed by an Advocate. (3) Defences to a cause or counterclaim shall, as before, be divided into exceptions, niances and prétentions. (4) Pleadings subsequent to such defences shall be successively styled répliques and dupliques. (5) The Court may allow a party acting in person to table defences or subsequent pleadings styled otherwise than as hereinbefore provided. 16. Where the defendant does not table his defences in accordance with rule 15(1), the Court may give judgment against him.
PART III Summary Judgment 17. (1) The plaintiff may, at any time after inscription of the action on le Rôle des Causes à Plaider, apply to the Court for summary judgment against the defendant. (2) The grounds of the application shall be that the defendant has no defence— (a) to the plaintiff ’s claim, or to any particular part thereof; or (b) to the claim or part thereof except as to the amount of damages claimed. 18. (1) A plaintiff intending to apply for summary judgement under rule 17 shall give notice of the fact to the defendant by serving a signification upon him. (2) The signification— (a) shall be served not less than 4 days before the day of the application; (b) shall state the date and time appointed for the hearing of the application; (c) shall be signed by an Advocate; (d) shall contain or have annexed to it a copy of the application and of the affidavit under rule 19; and (e) shall contain a statement of the effect of the application, if successful. 19. An application under rule 17 shall be supported by an affidavit— (a) verifying the facts on which the claim or part thereof is based; and
Appendix 1 717 (b) stating that, in the deponent’s belief, there is no defence to the claim or part thereof, or no defence except as to the amount of damages claimed, and the reasons for such belief. 20. Unless on the hearing of the application under rule 17 the Court dismisses the application, or the defendant satisfies the Court that there is an issue or question in dispute which ought to be tried or that there ought for some other reason to be a trial, the Court may give such judgment against the defendant on the claim or part thereof as the Court thinks just. 21. The Court may by order, subject to such conditions, if any, as it thinks just, stay execution of any judgement given under rule 20 until after the trial of any counterclaim set up by the defendant in the action or of any separate action commenced or to be commenced by the defendant against the plaintiff. 22. (1) A defendant may show cause against an application under rule 17 by affidavit or otherwise to the satisfaction of the Court. (2) The Court may order a defendant showing cause (or, where the defendant is a body corporate, any director, manager, secretary or similar officer thereof or any person purporting to act in any such capacity)— (a) to produce any document; (b) if it appears to the Court that there are special circumstances making it desirable that he should do so, to attend and be examined on oath. 23. The Court may by order give the defendant against whom the application under rule 17 is made leave to defend the claim or part thereof subject to such conditions, if any, as it thinks just. 24. (1) Where in any action the defendant sets up a counterclaim he may, at any time thereafter, apply to the Court for summary judgment against the plaintiff on the counterclaim. (2) The grounds of the application shall be that the plaintiff has no defence— (a) to the counterclaim, or to any particular part thereof; or (b) to the counterclaim or part thereof except as to the amount of damages claimed. (3) Rules 18 to 23 apply to an application under paragraph (1) subject to the following modifications— (a) references to rule 17 shall be construed as references to rule 24; (b) references to the plaintiff and defendant shall be respectively construed as references to the defendant and plaintiff; (c) references to the claim shall be construed as references to the counterclaim; and (d) in rule 21 the words “any counterclaim set up by the defendant in” and the words “or of any separate action commenced or to be commenced by the defendant against the plaintiff ” are omitted. 25. (1) Where an application (whether or not successful) has been made under rule 17 or 24, the Court may make such order as to the further conduct of the action as it thinks just.
718 The Laws of Guernsey (2) Where an application under rule 17 or 24 succeeds, the applicant may proceed with the claim or counterclaim (as the case may be) as respects the remainder thereof or against any other defendant thereto. 26. On an application under rule 17 or 24— (a) where it appears to the Court that the applicant knew that the defendant or plaintiff (as the case may be) was relying on a contention which would entitle him to unconditional leave to defend, the Court may dismiss the application with costs; (b) in any other case, the Court may make such order as to the costs of the application as it thinks just.
PART IV Counterclaim and Consolidation, etc 27. (1) A defendant may, by his defences tabled in any action, and provided that his defences are signed by an Advocate, set up a counterclaim against the plaintiff. (2) The counterclaim shall have effect as a cross-action, enabling the Court to pronounce a final judgment in the action both on the plaintiff ’s claim and on the counterclaim. (3) The Court may order that a counterclaim be struck out or tried separately if satisfied that the subject matter thereof ought not to be disposed of by way of counterclaim but in an independent action. (4) A counterclaim may be proceeded with and shall remain inscribed on le Rôle des Causes à Plaider notwithstanding that the plaintiff ’s claim is stayed, discontinued or dismissed or that judgment is given for the plaintiff on his claim. (5) The plaintiff shall, unless the Court orders otherwise, table his defences to the counterclaim upon being required to do so by a summons served on him in that behalf by the defendant. (6) The summons for defences to the counterclaim— (a) shall be served on the plaintiff not less than 4 days before the day upon which the defences to the counterclaim are to be tabled; (b) shall state the date and time appointed for the tabling of the defences; and (c) shall be signed by an Advocate. (7) Where the plaintiff does not table his defences in accordance with paragraph (5), the Court may give judgment against him on the counterclaim. 28. (1) Where two or more actions or counterclaims are pending before the Court and it appears to the Court— (a) that some common question of law or fact arises in all of them; (b) that the rights to relief claimed therein are in respect of or arise out of the same transaction or series of transactions; or (c) that for some other reason it is desirable to make an order under this rule, the Court may order the actions or counterclaims to be consolidated (crocheté), or to be tried at the same time or one immediately after another, or that any of them shall be stayed until any other of them is determined. (2) Where in the same action or counterclaim— (a) there are claims in respect of two or more causes of action or there are two or more plaintiffs or defendants; and
Appendix 1 719 (b) it appears to the Court that inconvenience, embarrassment or delay may result, the Court may order that the action or counterclaim be severed and that there shall be separate trials. (3) An order under paragraph (2) may be made notwithstanding that the action or counterclaim has at some stage of the proceedings been consolidated under paragraph (1).
PART V Parties to Proceedings 29. (1) An infant or person under legal disability may not be a party to, intervene in, or make or resist any application in any proceedings before the Court except by his tuteur or curateur, as the case may be. (2) Anything which in the ordinary conduct of any proceedings is required or authorised by these rules to be done by a party to the proceedings shall or may, if the party is an infant or person under legal disability, be done by his tuteur or curateur, as the case may be. 30. (1) Where numerous persons have the same interest in any proceedings, one or more of them— (a) may sue or be sued; or (b) may be appointed by order of the Court to defend, for or on behalf of all or any of them (2) A judgment or order given in proceedings under this rule— (a) shall be binding on all persons represented; but (b) shall not be enforced against a person not a party to the proceedings without leave of the Court. (3) On an application for leave under paragraph (2)(b), the person against whom enforcement is sought may dispute the application on the grounds that, by reason of facts and matters peculiar to his case, the judgment or order should not be enforced against him. 31. (1) Where— (a) the rights or obligations (whether present, future, contingent or unascertained) of any members of a class (including any persons unborn) depend upon the construction which the Court may put upon a document; (b) the identity of any of the members is unknown or difficult to ascertain; and (c) the Court considers that in order to save expense or for some other reason it is convenient to have the question of construction determined before the identity of the members is ascertained the Court may by order appoint one or more persons to represent the members or any of them, and the persons represented shall be bound by any order or judgment of the Court given in the proceedings. (2) Where in any other case any members of a class have an interest in any proceedings, the Court may by order, if it appears expedient to do so having regard to— (a) the nature and extent of their interest; and (b) the difficulty of ascertaining their identity, appoint one or more persons to represent them or any of them, and the persons represented shall be bound by any order or judgment of the Court given in the proceedings.
720 The Laws of Guernsey 32. The Court may, in any proceedings in which or in respect of which an appointment has been made under rule 30 or 31, make such order as to the costs of the proceedings as it thinks just. 33. (1) Where in any action the defendant claims— (a) against a person not a party to the action any contribution or indemnity; (b) against such a person any relief or remedy relating to or connected with the original subject matter of the action and substantially the same as some relief or remedy claimed by the plaintiff; or (c) that any question or issue relating to or connected with the original subject matter of the action should be determined not only between the plaintiff and himself, but also between either or both of them and a person not a party to the action, the defendant may join that person as a third party by serving upon him a summons in that behalf signed by an Advocate. (2) The Court may make such order as it thinks just in relation to the joining of the third party as to— (a) the filing of the pleadings; (b) the delivery of affidavits; and (c) any other incidental matter. (3) Where a third party is joined, he shall from that time be a party to the action as if he were a defendant sued in the ordinary way by the party who joined him, and the provisions of these rules shall apply accordingly. (4) Where judgment (by default or otherwise) is pronounced against the third party, the judgment shall not affect the rights of the original parties to the action as between themselves. (5) Where a third party is joined, the Court may, at or after the trial of the action (or, if the action is decided otherwise than by trial, on an application by summons), give such judgment as the nature of the case may require for the defendant against the third party or for the third party against the defendant. (6) Where judgment is pronounced— (a) against a defendant; and (b) for the defendant against a third party, the judgment against the third party shall not be executed without leave of the Court, whether or not the judgment against the defendant has been wholly or partially satisfied. (7) Where in any action the defendant claims in his defences— (a) against a person already a party to the action any contribution or indemnity; (b) against such a person any relief or remedy relating to or connected with the original subject matter of the action and substantially the same as some relief or remedy claimed by the plaintiff; or (c) that any question or issue relating to or connected with the original subject matter of the action should be determined not only between the plaintiff and himself, but also between either or both of them and a person already a party to the action, the Court may order that that person be joined as a third party, and the provisions of paragraph (2) shall apply accordingly. (8) Where a third party is joined, and he makes such a claim as is mentioned in paragraph (1) or (7), this rule shall apply as if the third party were a defendant; and
Appendix 1 721 similarly where any other person to whom by virtue of this paragraph this rule applies as if he were a third party makes such a claim. 34. (1) The Court may in any proceedings order that— (a) any person who has been improperly or unnecessarily made a party, or who has ceased to be a proper or necessary party, shall cease to be a party; (b) any person— (i) who ought to have been joined as a party; or (ii) between whom and any party to the proceedings there exists a question or issue arising out of or relating to or connected with any relief or remedy claimed in the proceedings which, in the opinion of the Court, it would be just and convenient to determine as between him and that party as well as between the parties to the proceedings, shall be joined as a party. (2) No person shall be joined as a plaintiff without his consent.
PART VI General Conduct of Proceedings 35. No party to an action may amend his pleadings except with the consent of all other parties or by leave of the Court. 36. (1) The Court may order any cause, counter-claim or other pleadings, or anything therein, to be struck out or amended on the grounds that— (a) it discloses no reasonable cause of action or defence as the case may be; (b) it is scandalous, frivolous or vexatious; (c) it may prejudice, embarrass or delay the fair trial of the action or any other proceedings; or (d) it is otherwise an abuse of the process of the Court; and the Court may order the claim or counterclaim to be stayed or dismissed or judgment to be entered accordingly, as the case may be. (2) The Court may also order a cause or counterclaim to be struck out for want of prosecution. 37. (1) The Court may order any party to an action to furnish another party with further and better particulars of any claim, defence or other matter stated in his pleadings, or with a further and better statement of the nature of the case on which he relies. (2) An order under paragraph (1) shall not be made before the tabling of the defences unless in the opinion of the Court the order is necessary or desirable to enable the defendant to plead or for some other special reason. (3) Where the applicant for an order under paragraph (1) did not apply by letter for the particulars or statement required by him, the Court may refuse to make the order unless of opinion that there were sufficient reasons for not applying by letter. (4) All further and better particulars and statements, whether or not given in pursuance of an order under paragraph (1), shall be filed by the party furnishing them with the Greffier within 24 hours of being furnished to the requesting party. (5) “Defences” and “defendant” in paragraph (2) include defences and a defendant to a counterclaim.
722 The Laws of Guernsey 38. (1) The Court may, on the application of any party to the proceedings, give leave to serve upon any other party interrogatories relating to any matter in question between them in the proceedings. (2) A copy of the proposed interrogatories shall be annexed to the signification by which notice of the intended application under paragraph (1) is given. (3) Interrogatories shall, unless the Court orders otherwise, be answered by affidavit within 14 days of being served. (4) If the person upon whom the interrogatories are served answers any of them insufficiently, the Court may order him to make a further answer by affidavit or on oral examination. (5) The interrogatories and answers thereto shall be annexed to the pleadings. 39. (1) The Court may, on the application of any party to the proceedings, order any other party— (a) to furnish the applicant with a list of the documents which are or have been in his possession, custody or power relating to any matter in question between them in the proceedings; (b) to verify the list by affidavit. (2) An order for discovery under paragraph (1) may be limited to such documents or classes thereof, or to such only of the matters in question, as may be specified or described in the order. (3) If it is desired to claim that any documents are privileged from production, the claim must be made in the list of documents with a sufficient statement of the grounds of privilege. 40. A party who furnishes another party with a list of documents under rule 39(1) must— (a) allow the other party to inspect the listed documents (other than those which are claimed to be privileged from production) and to take copies thereof; and (b) when furnishing the list, give the other party written notice specifying a time (which shall be within 7 days of furnishing the list) and place at which the documents may be inspected. 41. (1) Where a party who furnishes a list of documents under rule 39(1)— (a) fails to give written notice in accordance with rule 40(b); (b) claims that any of the listed documents are privileged from production; or (c) offers inspection at a time or place which in the opinion of the Court is unreasonable, the Court may, on the application of the party entitled to inspection, make an order for the inspection and copying of the documents in question at such time and place and in such manner as it thinks just. (2) Where a party to the proceedings makes reference to a document in his pleadings or affidavits, the Court may, on the application of any other party, make an order for the inspection and copying of the document at such time and place and in such manner as it thinks just. 42. Before applying for an order under rule 39(1) or 41(1) or (2), a party may apply by letter or otherwise to the other party for the discovery or inspection of documents.
Appendix 1 723 43. The Court may by order give directions as to the hearing of any action or any question raised by the pleadings, including any exception, fin de non-recevoir or other preliminary point in issue, and may (without prejudice to the generality of the foregoing)— (a) order that any facts specified or described in the order shall be proved by affidavit; (b) order that not more than a specified number of expert witnesses may be called; (c) order that the evidence of a particular witness shall be taken by commission; and (d) order the manner in which such evidence is to be taken. 44. (1) No party may— (a) discontinue or withdraw an action, counter-claim or any claim therein; or (b) withdraw his defences or any part thereof, except with the consent of all other parties to the action or by leave of the Court. (2) Subject to the terms of any order by which leave to discontinue or withdraw is granted, the fact that a party has discontinued or withdrawn an action, counterclaim or claim is not a defence to a subsequent action, counterclaim or claim. (3) Where a party— (a) is liable to pay any costs in respect of an action, counterclaim or claim which has been discontinued or withdrawn under paragraph (1); and (b) before payment of such costs, brings or makes an action, counterclaim or claim for the same or substantially the same cause of action, the Court may order the action, counterclaim or claim to be stayed until the costs are paid. 45. (1) A party to an action may at any time pay into Court a sum of money in satisfaction of any claim made against him in the action. (2) The payment into Court shall be made by lodging the sum of money with the Greffier. (3) The Greffier shall— (a) deposit the money with a person registered under section 4 of the Protection of Depositors (Bailiwick of Guernsey) Ordinance, 1971,3 as amended;4 and (b) within 7 days of the making of the payment, give notice of the payment to the other parties to the action. (4) No payment into Court may be withdrawn except with the consent of all other parties to the action or by leave of the Court. (5) Unless the payment into Court is disclosed to the Court by the party who made the payment, the fact of payment shall not be so disclosed until all questions of liability and of the amount of damages or indebtedness have been determined. (6) Without prejudice to the Court’s complete discretion to make such order as to costs as it thinks just, the Court, when awarding costs, may take the fact and date of payment into Court into account.
3 4
Recueil d’Ordonnances Tome XVII p 225. Recueil d’Ordonnances Tome XVIII p 55; Tome XXI p 524.
724 The Laws of Guernsey
PART VII Requêtes Civiles 46. (1) A requête civile shall henceforth be presented to and determined by the Ordinary Court or, where the order from which relief is sought was made by the Full Court, or by the Full Court. (2) A requête civile shall be presented by way of petition and shall be signed by the petitioner or his Advocate. (3) A requête civile shall not be presented except by leave of the Court on application made ex parte. (4) A person given leave under paragraph (3) shall give notice to the respondent that he intends to present a requête civile by serving a signification upon him. (5) The signification— (a) shall be served not less than 2 days before the day of the hearing of the petition; (b) shall state the date and time appointed for the hearing; and (c) shall contain or have annexed to it a copy of the requête civile. (6) The Court may at any time order the petitioner— (a) to deposit with the Greffier a monetary sum, or security therefore; (b) to give security for costs, in such amount, on such terms and in such manner as the Court thinks just.
PART VIII General Provisions 47. (1) Where the Court has power to make an order under these rules, the order may be made— (a) at any stage of the proceedings; (b) of the Court’s own motion or on the application of any party to the proceedings; (c) on such terms (including terms as to costs and security therefore) as the Court thinks just. (2) A person intending to apply to the Court for an order under these rules shall give notice of the fact to the opposite party to the application by serving a signification upon him. (3) The signification— (a) shall be served not less than 2 days before the day of the application; (b) shall state the date and time appointed for the hearing of the application; (c) shall contain or have annexed to it a copy of the application; and (d) shall be signed by an Advocate. (4) The provisions of this rule do not apply to the extent that contrary provision is made elsewhere in these rules. 48. (1) The Court may in any action (a) make such order as to the cost of the proceedings, or of any stage of or application in the proceedings;
Appendix 1 725
(2)
(3)
(4)
(5)
(b) order any party to give security for costs in such amount, on such terms and in such manner, as the Court thinks just. An order under paragraph (1)(b) for the giving of security for costs may provide that— (a) the proceedings shall be stayed until the security is given; (b) if the security is not given within such time as may be specified in the order, the proceedings may be dismissed by order of the Court. Notwithstanding the provisions of the Royal Court (Costs and Fees) Rules, 1981 or of any other rule of Court or enactment, the Court may, in the circumstances mentioned in paragraph (4), order that costs or security for costs shall be paid on a full or partial indemnity basis. The circumstances referred to in paragraph (3) are as follows— (a) where, in the special circumstances of the case, it is the opinion of the Court that costs should be ordered otherwise than on the basis provided by the Royal Court (Costs and Fees) Rules, 1981; or (b) where any party has pleaded or otherwise pursued or defended an action, claim or counterclaim unreasonably, scandalously, frivolously or vexatiously, or has otherwise abused the process of the Court. In the event of any difference or dispute between the parties as to the costs recoverable under an order of the Court under paragraph (3), the difference or dispute shall be referred to Her Majesty’s Procureur, whose decision is final.
49. Every summons to a witness shall, unless the Court orders otherwise, be served by the Sergeant à personne on the witness not less than 4 days before the day of the hearing in question. 50. Where an action becomes périmée— (a) the Court’s powers under rule 48 are not prejudiced; and (b) any party to the action may apply to the Court for an order that the action be restored. 51. Notwithstanding the provisions of any enactment or rule of Court, rule 12(2) shall apply in relation to an action for the recovery, forfeiture or enforcement of a penalty or amende. 52. (1) In calculating any time limit set by these rules, no account shall be taken of a nonbusiness day within the meaning of section 1(1) of the Bills of Exchange (Guernsey) Law, 1958, as amended.5 (2) For the purposes of these rules, “day” does not mean a clear day. 53. (1) The Court may, on such terms as it thinks just, by order extend or abridge the period within which a person is required or authorised by any order or direction of the Court to do any act, and may (subject to paragraph (3)) extend any such period notwithstanding that the application for extension is made after the expiration of that period. (2) Any such period may be extended by consent in writing without an order of the Court in that behalf. 5
Ordres on Conseil vol XVII p 384; vol XXIV p 84.
726 The Laws of Guernsey (3) The Court may not extend any such period upon an application made after the expiration of that period if the failure to act within the period has resulted in judgment being given. 54. An affidavit for the purposes of these rules— (a) if made in the Island of Guernsey, Herm or Jethou, shall be made before the Bailiff, Deputy Bailiff or Lieutenant-Bailiff, before any Jurat of the Royal Court or before a notary public; (b) if made in the Island of Alderney, shall be made before any Jurat of the Court of Alderney or before a notary public; (c) if made in the Island of Sark, shall be made before the Sénéschal or before a notary public; (d) if made elsewhere, shall be made before a British consular officer or before any person authorised by law in that place to administer an oath for any judicial or other legal purpose; (e) if the deponent is serving in any of the regular armed forces of the Crown, shall be made before an officer holding a commission in any of those forces. 55. Notwithstanding the provisions of these rules or of any other rule of Court or enactment, the Court may order that any proceedings or any stage thereof shall be dealt with summarily. 56. For the purposes of these rules an action commences when the summons is handed by the plaintiff to the Sergeant. 57. The legislation set out in column 1 of the schedule to these rules is repealed to the extent set out in column 2 thereof. 58. (1) In these rules, except where the context requires otherwise— “Advocate” means an Advocate of the Royal Court of Guernsey; “the Court” means the Ordinary Court or the Full Court, as the case may require; “élection de domicile” means an élection de domicile in the Island of Guernsey; “Full Court” means the Royal Court sitting as a Full Court; “Greffier” means Her Majesty’s Greffier of the Royal Court or any of his deputies; “Her Majesty’s Procureur” includes Her Majesty’s Comptroller; “leave of the Court” means leave of the Court given by order, and “leave” shall be construed accordingly; “Ordinary Court” means the Royal Court sitting as an Ordinary Court; “Sergeant” means her Majesty’s Sergeant of the Royal Court or any of the Deputy or Assistant Sergeants. (2) The Interpretation (Guernsey) Law, 19486 applies to the interpretation of these Rules as it applies to the interpretation of an enactment.
6
Ordres en Conseil vol XIII p 355.
Appendix 1 727
(3) Any reference in these Rules to an enactment, rule or order is a reference to that enactment, rule or order as amended, extended, re-enacted or applied by or under any other enactment, rule or order (including these Rules).
SCHEDULE Repeals 1 The legislation repealed
2 Extent of repeal
The Ordinance of 1836 entitled “Style de Procéder. Abolition de plusieurs Délais, etc.”7 The Ordinance of 1851 entitled “Des Exceptions et Fins de Non-Recevoir”.8 The Ordinance of 1851 entitled “Rôle des Causes à Plaider”9 The Ordinance of 1854 entitled “Style de Procéder”10 The Ordonnance au sujet des termes à écrire, 193611 The Orders of the Royal Court of 1949 entitled “Procedure for the Appointment of one person to represent others in certain proceedings before the Court”12 and “Procedure for permitting substituted or other service, or for notice instead of service, in certain cases”13 The Royal Court (Security for Costs) Order, 195714
In s 13, the paragraph headed “En Cour Ordinaire”. The whole Ordinance Sections 1 to 3 The whole Ordinance The whole Ordinance The whole orders
The whole order
KH TOUGH, Her Majesty’s Greffier
7 8 9 10 11 12 13 14
Recueil d’Ordonnances Tome II p 470. Recueil d’Ordonnances Tome III p 177. Recueil d’Ordonnances Tome III p 207. Recueil d’Ordonnances Tome III p 335. Recueil d’Ordonnances Tome VIII p 307. ORC vol 1 p 3. ORC vol 1 p 4. ORC vol 1 p 177.
Appendix 2 THE LAW REFORM (TORT) (GUERNSEY) LAW 1979 THE STATES, in pursuance of their Resolution of the twenty-eighth day of January, nineteen hundred and seventy-two, have approved the following provisions which, subject to the Sanction of Her Most Excellent Majesty in Council, shall have force of law in the island of Guernsey.
PART I Contributory Negligence Apportionment of Liability in Case of Contributory Negligence 1. (1) Where any person suffers damage as the result partly of his own fault and partly of the fault of any other person or persons, a claim in respect of that damage shall not be defeated by reason of the fault of the person suffering the damage, but the damages recoverable in respect thereof shall be reduced to such extent as the court thinks just and equitable having regard to the claimant’s share in the responsibility for the damage: Provided that— (a) this subsection shall not operate to defeat any defence arising under a contract; (b) where any contract or enactment providing for the limitation of liability is applicable to the claim, the amount of damages recoverable by the claimant by virtue of this subsection shall not exceed the maximum limit so applicable. (2) Where damages are recoverable by any person by virtue of the foregoing subsection subject to such reduction as is therein mentioned, the court shall find and record the total damages which would have been recoverable if the claimant had not been at fault. (3) Section eighteen of this Law (which relates to proceedings against and contribution between joint and several tortfeasors), shall apply in any case where two or more persons are liable or would, if they had all been sued, be liable by virtue of subsection (1) of this section in respect of the damage suffered by any person. (4) Where any person dies as the result partly of his own fault and partly of the fault of any other person or persons, and accordingly if an action were brought for the benefit of the estate under the Law of 1936, the damages recoverable would be reduced under subsection (1) of this section, any damages recoverable in an action brought for the benefit of the dependants of that person under the provisions of the Fatal Accidents Law shall be reduced to a proportionate extent. (5) Where, in any case to which subsection (1) of this section applies, one of the persons at fault avoids liability to any other such person or his legal personal representative by pleading Part II of this Law or any other enactment or rule of law limiting the time within which proceedings may be taken, he shall not be entitled to recover any damages or contributions from that other person or legal personal representative by virtue of the said subsection.
730 The Laws of Guernsey Saving for Past Cases 2. This Part of the Law shall not apply to any case where the acts or omissions giving rise to the claim occurred before the date of the coming into force of this Part of this Law. Interpretation of Part I 3. In this Part of this Law, except where the context otherwise requires, the following expressions have the meanings hereby respectively assigned to them, that is to say:— “court” means, in relation to any claim, the court by or before whom the claim falls to be determined; “damage” includes loss of life and personal injury; “dependant” means any person for whose benefits an action could be brought under the Fatal Accidents Law; “fault” means negligence, breach of a duty imposed by an enactment or other act or omission which gives rise to a liability in tort or would, apart from this Part of this Law, give rise to the defence of contributory negligence.
PART II Limitation of Actions Limitation of Action in Tort 4. (1) Notwithstanding the provisions of any enactment or any rule of law, an action founded on tort shall not be brought after the expiration of six years from the date on which the cause of action accrued. (2) This section shall have effect subject to the provisions of the next succeeding section. Time Limit for Personal Injuries 5. (1) This section applies to any action for damages for negligence, nuisance or breach of duty (whether the duty exists by virtue of a contract or of provision made by or under an enactment or independently of any contract or any such provision) where the damages claimed by the plaintiff for the negligence, nuisance or breach of duty consist of or include damages in respect of personal injuries to the plaintiff or any other person. (2) Section four of this Law shall not apply to an action to which this section applies. (3) Subject to section eight of this Law, an action to which this section applies shall not be brought after the expiration of the period specified in subsections (4) and (5) of this section. (4) Except where subsection (5) of this section applies, the said period is three years from— (a) the date on which the cause of action accrued, or (b) the date (if later) of the plaintiff ’s knowledge. (5) If the person injured dies before the expiration of the period in subsection (4) of this section, the period as respects the cause of action surviving for the benefit of the estate of the deceased by virtue of section one of the Law of 1936 shall be three years from— (a) the date of death, or (b) the date of the legal personal representative’s knowledge. whichever is the later. (6) In this section, and in section six of this Law, references to a person’s date of knowledge are references to the date on which he first had knowledge of the following facts—
Appendix 2 731 (a) that the injury in question was significant, and (b) that that injury was attributable in whole or in part to the act or omission which is alleged to constitute negligence, nuisance or breach of duty, and (c) the identity of the defendant, and (d) if it is alleged that the act or omission was that of a person other than the defendant, the identity of that person and the additional facts supporting the bringing of an action against the defendant, and knowledge that any acts or omissions did or did not, as a matter of law, involve negligence, nuisance or breach of duty is irrelevant. (7) For the purposes of this section an injury is significant if the plaintiff would reasonably have considered it sufficiently serious to justify his instituting proceedings for damages against a defendant who did not dispute liability and was able to satisfy a judgment. (8) For the purposes of the said sections a person’s knowledge includes knowledge which he might reasonably have been expected to acquire— (a) from facts observable or ascertainable by him, or (b) from facts ascertainable by him with the help of medical or other appropriate expert advice which it is reasonable for him to seek, but a person shall not be fixed under this subsection with knowledge of a fact ascertainable only with the help of expert advice so long as he has taken all reasonable steps to obtain (and, where appropriate, to act on) that advice. (9) For the purposes of this section “legal personal representative” includes any person who is or has been a legal personal representative of the deceased, including an executor who has not proved the will (whether or not he has renounced probate) and regard shall be had to any knowledge acquired by any such person while a legal personal representative or previously. (10) If there is more than one legal personal representative, and their dates of knowledge are different, paragraph (b) of subsection (5) of this section shall be read as referring to the earliest of those dates. Time Limit for Actions Under Fatal Accidents Law 6. (1) This section has effect subject to section eight of this Law. (2) An action under the Fatal Accidents Law shall not be brought if the death occurred when the person injured could no longer maintain an action and recover damages in respect of the injury (whether because of a time limit in this Law or in any other Law, or any other reason). Where any such action by the injured person would have been barred by the time limit in section five of this Law, no account shall be taken of the possibility of that time limit being overridden under section eight of this Law. (3) An action under the Fatal Accidents Law shall not be brought after the expiration of three years from— (a) the date of death, or (b) the date of knowledge of the person for whose benefit the action is brought, whichever is the later. (4) Subsection (3) of this section shall not apply to an action for which a period of limitation is prescribed by or under any Law other than this Law, and section five of this Law shall not apply to an action under the Fatal Accidents Law. (5) An action under the Fatal Accidents Law shall be one to which section nine of this Law (persons under disability) applies.
732 The Laws of Guernsey Dependants Subject to Different Time Limits 7. (1) This section applies where there is more than one person for whose benefit an action under the Fatal Accidents Law is brought. (2) Paragraph (b) of subsection (3) of section six of this Law shall be applied separately to each of them, and if that would debar one or more of them, but not all, the court shall direct that any person who would be so debarred shall be excluded from those for whom the action is brought unless it is shown that if the action were brought exclusively for the benefit of that person it would not be defeated by a defence of limitation (whether in consequence of section nine of this Law (persons under disability), or an agreement between the parties not to raise the defence, or otherwise). Court’s Power to Override Time Limits 8. (1) If it appears to the court that it would be equitable to allow an action to proceed having regard to the degree to which— (a) the provisions of section five or six of this Law prejudice the plaintiff or any person whom he represents, and (b) any decision of the court under this subsection would prejudice the defendant or any person whom he represent, the Court may direct that those provisions shall not apply to the action, or shall not apply to any specified cause of action to which the action relates. (2) The Court shall not under this section disapply subsection (2) of section six of this Law except where the reason why the person injured could no longer maintain an action was because of the time limit in section five of this Law. (3) In acting under this section the court shall have regard to all the circumstances of the case and in particular to— (a) the length of, and the reasons for, the delay on the part of the plaintiff; (b) the extent to which, having regard to the delay, the evidence adduced or likely to be adduced by the plaintiff or the defendant is or is likely to be less cogent than if the action had been brought within the time allowed by section five or as the case may be six of this Law; (c) the conduct of the defendant after the cause of action arose, including the extent if any to which he responded to requests reasonably made by the plaintiff for information or inspection for the purpose of ascertaining facts which were or might be relevant to the plaintiff ’s cause of action against the defendant; (d) the duration of any disability of the plaintiff arising after the date of the accrual of the cause of action; (e) the extent to which the plaintiff acted promptly and reasonably once he knew whether or not the act or omission of the defendant, to which the injury was attributable, might be capable at that time of giving rise to an action for damages; (f) the steps, if any, taken by the plaintiff to obtain medical, legal or other expert advice and the nature of any such advice he may have received. (4) In a case where the person injured died when, because of section five, he could no longer maintain an action and recover damages in respect of the injury, the court shall have regard in particular to the length of, and the reasons for, the delay on the part of the deceased. (5) In a case under subsection (4) of this section, or any other case where the time limit, or one of the time limits, depends on the date of knowledge of a person other than the plaintiff, subsection (3) of this section shall have effect with appropriate modifications, and shall
Appendix 2 733 have effect in particular as if references to the plaintiff included references to any person whose date of knowledge is or was relevant in determining a time limit. (6) A direction by the court disapplying the provisions of subsection (2) of section six of this Law shall operate to disapply the provisions to the same effect in section one of the Fatal Accidents Law. (7) In this section “the court” means the court in which the action has been brought. Extension of Limitation Oeriod in Case of Disability 9. (1) If on the date when any right of action accrued for which a period of limitation is prescribed by this Law, the person to whom it accrued was under a disability, the action may be brought at any time before the expiration of six years from the date when the person ceased to be under a disability or died, whichever event first occurred, notwithstanding that the period of limitation has expired: Provided that— (a) this section shall not affect any case where the right of action first accrued to some person (not under a disability) through whom the person under a disability claims; (b) when a right of action which has accrued to a person under a disability accrues, on the death of that person while still under a disability, to another person under a disability, no further extension of time shall be allowed by reason of the disability of the second person. (2) If the action is one to which section five or subsection (3) of section six of this Law applies subsection (1) of this section shall have effect as if for the words “six years” there were substituted the words “three years”. (3) If the action is one to which section ten of this Law applies subsection (1) of this section shall have effect as if for the words “six years” there were substituted the words “two years”. Time Limit for Claiming Contribution Between Tortfeasors 10. (1) Where under section eighteen of this Law a tortfeasor (in this section referred to as “the first tortfeasor”) becomes entitled after the date of the coming into force of this Part of this Law to a right to recover contribution in respect of any damage from another tortfeasor, no action to recover contribution by virtue of that right shall be brought after the end of the period of two years from the date on which that right accrued to the first tortfeasor. (2) For the purposes of this section the date on which a right to recover contribution in respect of any damage accrues to a tortfeasor (in this subsection referred to as “the relevant date”) shall be ascertained as follows, that is to say:— (a) if the tortfeasor is held liable in respect of that damage by a judgment given in any civil proceedings, the relevant date shall be the date on which the judgment is given; (b) if, in any case not falling within the preceding paragraph, the tortfeasor admits liability in favour of one or more persons in respect of that damage, the relevant date shall be the earliest date on which the amount to be paid by him in discharge of that liability is agreed by or on behalf of the tortfeasor and that person, or each of those persons, as the case may be; and for the purposes of this subsection no account shall be taken of any judgment given on appeal in so far as it varies the amount of damages awarded against the tortfeasor.
734 The Laws of Guernsey Postponement of Limitation Period in Case of Fraud or Mistake 11. Where, in the case of any action for which a period of limitation is prescribed by this Law, either— (a) the action is based upon the fraud of the defendant or his agent or of any person through whom he claims or his agent; or (b) the right of action is concealed by the fraud of any such person as aforesaid; or (c) the action is for relief from the consequences of a mistake; the period of limitation shall not begin to run until the plaintiff has discovered the fraud or the mistake, as the case may be, or could with reasonable diligence have discovered it. Amendment to Fatal Accidents Law 12. In section 3 of the Fatal Accidents Law the words “et que tout” and all the words from those words to the end of that section are hereby repealed. Amendment as to Proceedings or Causes of Action Surviving Against Estates of Deceased Persons 13. In section one of the Law of 1936 (which provides, amongst other things, for the survival, with certain expectations, of all causes of action against a deceased person’s estate), so much of subsection (3) as provides that proceedings in respect of causes of action in tort which by virtue of that section survive against the estate of a deceased person are not to be maintainable unless the cause of action arose not earlier than six months before the death of the deceased is hereby repealed. Provision as to Pending Actions 14. Nothing in this Part of this Law shall affect any action commenced before the date of the coming into force of this Part of this Law. Interpretation of Part II 15. (1) In this Part of this Law, except where the context otherwise requires, the following expressions have the meanings hereby respectively assigned to them, that is to say:— “action” includes any proceedings in a court; “parent” has the same meaning as in the Fatal Accidents Law as extended by subsection (2) of section two of the Fatal Accidents (Guernsey) Law, 1960; “personal injuries” includes any disease and any impairment of a person’s physical or mental condition, and “injury” and cognate expressions shall be construed accordingly. (2) For the purposes of this Part of this Law a person shall be deemed to be under a disability while he is a minor or of unsound mind. (3) A person shall be deemed to claim through another person, if he became entitled by, through, under, or by the act of that other person to the right claimed. (4) In the Fatal Accidents Law any reference to injury includes any disease and any impairment of a person’s physical or mental condition and section six of this Law shall be construed accordingly.
Appendix 2 735
PART III Amendment to the Law With Respect to Proceedings in Tort Between Husband and Wife Actions in Tort Between Husband and Wife 16. (1) Notwithstanding the provision of any enactment or any rule of law and subject to the provisions of this section, each of the parties to a marriage shall have the like right of action in tort against the other as if they were not married. (2) Where an action in tort is brought by one of the parties to a marriage against the other during the subsistence of the marriage, the court may stay the action if it appears that no substantial benefit would accrue to either party from the continuation of the proceedings. (3) Provision shall be made by the Royal Court by Order for requiring the court to consider at an early stage of the proceedings whether the power to stay an action under subsection (2) of this section should or should not be exercised. Interpretation and Saving 17. (1) The references in subsection (1) of the last preceding section to the parties to a marriage includes references to the persons who were parties to a marriage which has been dissolved. (2) This Part of this Law does not apply to any cause of action which arose, or would but for the subsistence of a marriage have arisen, before the date of the coming into force of this Part of this Law.
PART IV Proceedings Against and Contribution Between Tortfeasors Proceedings Against and Contribution Between Joint and Several Tortfeasors 18. (1) Where damage is suffered by any person as a result of a tort (whether a crime or not)— (a) judgment recovered against any tortfeasor liable in respect of that damage shall not be a bar to an action against any other person who would, if sued, have been liable as a joint tortfeasor in respect of the same damage; (b) if more than one action is brought in respect of that damage by or on behalf of the person by whom it was suffered, or for the benefit of the estate, or of the dependants of that person, against tortfeasors liable in respect of the damage (whether as joint tortfeasors or otherwise) the sums recoverable under the judgments given in those actions by way of damages shall not in the aggregate exceed the amount of the damages awarded by the judgment first given; and in any of those actions, other than that in which judgment is first given, the plaintiff shall not be entitled to costs unless the court is of opinion that there was reasonable ground for bringing the action; (c) any tortfeasor liable in respect of that damage may recover contribution from any other tortfeasor who is, or would if sued have been, liable in respect of the same damage, whether as a joint tortfeasor or otherwise, so, however, that no person shall be entitled to recover contribution under this section from any person
736 The Laws of Guernsey entitled to be indemnified by him in respect of the liability in respect of which the contribution is sought. (2) In any proceedings for contribution under this section the amount of the contribution recoverable from any person shall be such as may be found by the court to be just and equitable having regard to the extent of that person’s responsibility for the damage; and the court shall have power to exempt any person from liability to make contribution, or to direct that the contribution to be recovered from any person shall amount to a complete indemnity. (3) For the purposes of this section— (a) the expression “dependants” means the persons for whose benefit actions may be brought under the Fatal Accidents Law, and (b) the reference in this section to “the judgment first given” shall, in a case where that judgment is reversed on appeal, be construed as a reference to the judgment first given which is not so reversed and, in a case where a judgment is varied on appeal, be construed as a reference to that judgment as so varied. (4) Nothing in this Part of this Law shall— (a) apply with respect to any tort committed before the date of the coming into force of this Part of this Law; or (b) affect any criminal proceedings against any person in respect of any wrongful act; or (c) render enforceable any agreement for indemnity which would not have been enforceable if this section had not been enacted.
PART V General Interpretation, Repeal, Citation and Commencement General Interpretation 19. (1) In this Law, unless the context otherwise requires, the following expressions have the meanings hereby respectively assigned to them, that is to say:— “enactment” includes any enactment of the Parliament of the United Kingdom; “the Fatal Accidents Law” means the Law entitled “Loi relative à la Compensation qui pourra être accordée aux Familles de Personnes dont la Mort aura été causée par Accident” registered on the twenty-eighth day of December, nineteen hundred; “the Law of 1936” means the Law Reform (Miscellaneous Provisions) (Guernsey) Law, 1936. (2) Except in so far as the context otherwise requires, any reference in this Law to any other enactment shall be construed as a reference to that enactment as repealed and re-enacted, amended, extended or applied by or under any other enactment including this Law. Repeal 20. The Law set out in the left hand column of the Schedule to this Law is hereby repealed to the extent set out in the right hand column of the said Schedule. Citation 21. This Law may be cited as the Law Reform (Tort) (Guernsey) Law 1979.
Appendix 2 737 Commencement 22. This Law shall come into force on such day as the States may by Ordinance appoint and different days may be so appointed for the coming into force of different Parts of this Law.
Section twenty SCHEDULE Repeal Enactment Repealed The Married Women’s Property Law, 1928 Extent of Repeal Section thirteen, except so far as it relates to criminal proceedings. Section twenty-two.
Appendix 3 THE LAW REFORM (MISCELLANEOUS PROVISIONS) (GUERNSEY) LAW 1987 THE STATES, in pursuance of their Resolution of the 26th day of November, 1986, have approved the following provisions which, subject to the Sanction of Her Most Excellent Majesty in Council, shall have force of law in the Island of Guernsey.
PART I Interim Injunctions Power to Grant Interim Injunctions 1. (1) If proceedings have been or are to be instituted before the Court, the Court may by order, at any time before it makes a final judgment in the proceedings or before the proceedings are otherwise concluded, on the application of any person who is, or as the case may be will be, a party to the proceedings (such person being referred to in this Part of this Law as “the applicant”), grant an injunction addressed to another person (such other person being referred to in this Part of this Law as “the respondent”) requiring the respondent to do or not to do any thing. (2) The injunction— (a) may be granted ex parte; (b) shall remain in force until— (i) it is discharged under section 2 of this Law; (ii) the Court makes a final judgment in the proceedings or the proceedings are otherwise concluded; or (iii) such other time or the happening of such other event as may be specified; and (c) may be granted subject to such conditions as may be specified. (3) The Court may require the applicant to enter into such undertakings on such terms as may be specified including, where the injunction is to be granted before proceedings are instituted, an undertaking to institute proceedings within such period as may be specified. (4) A person who contravenes or fails to comply with— (a) an injunction; (b) any condition subject to which an injunction is granted; (c) any undertaking entered into by him under subsection (3) of this section, is, in addition to any penalty to which he may be liable under subsection (5) of this section, guilty of a contempt of court and liable to be proceeded against and punished accordingly. (5) The Court may grant an injunction subject to such penalty as may be specified, and if the respondent contravenes or fails to comply with— (a) the injunction; (b) any condition subject to which the injunction was granted, the penalty shall be enforceable against him and, if it is a pecuniary penalty, payable to the applicant.
740 The Laws of Guernsey (6) Proceedings under subsection (4) of this section for a contempt of court or under subsection (5) of this section for the enforcement of a penalty shall be instituted by way of summons issued by the applicant, or by the respondent where the contempt is that of the applicant, and shall be dealt with by the Court. (7) An injunction may in exceptional circumstances be granted notwithstanding that proceedings have not been and are not to be instituted before the Court. Variation and Discharge of Injunctions 2. The Court may by order, on the application of either party vary or discharge— (a) an injunction; (b) any condition or penalty subject to which an injunction is granted; (c) any undertaking entered into by the applicant under section 1(3) of this Law. Notice of Applications 3. (1) The Court may direct that an application for an injunction under section 1 of this Law or for an order under section 2 of this Law shall be heard notwithstanding that notice of the application has not been served upon the other party to the application. (2) Where the Court does not make a direction under subsection (1) of this section, the Court may direct that the period of time which must elapse between service upon the other party of notice of the application and the hearing of the application shall be reduced to such period as may be specified. Grounds for Granting Injunction 4. The Court shall not exercise any power conferred by section 1, 2 or 3 of this Law unless satisfied that it is just and convenient to do so. 5. Nothing in this Part of this Law derogates from any remedy, right or power arising otherwise than under this Law.
PART II Registration of Interlocutory Matters Leave of Court Required to Register Interlocutory Matters 6. An act or order of the Court made, in any proceedings, before the Court makes a final judgment in the proceedings or before the proceedings are otherwise concluded, including an order for an adjournment, shall not be registered in the Livre des Hypothèques, Actes de Cour et Obligations— (a) without the leave of the Court; and (b) unless the provisions of Part IV of this Law have (where appropriate) been complied with. Orders for Leave to Register 7. The order of the Court by which leave to register is given under section 6 of this Law— (a) may be made ex parte; (b) may limit the pecuniary amount which may be registered to such amount as may be specified; (c) may be varied or revoked on the application of either party to the proceedings; (d) may direct that the registration shall be removed—
Appendix 3 741 (i) after such time; (ii) upon such contingency or event; (iii) upon the deposit with the Court by the defendant to the proceedings of security of such amount, as in each case may be specified.
PART III Protection of Minors’ Property Administration of Minors’ Property 8. (1) On the application of any person mentioned in section 9 of this Law the Court may, if in its opinion it would be just and for the benefit of a minor to do so— (a) appoint any person (such person being referred to in this Law as an “appointed person”) to hold and administer any relevant property; (b) give such directions to any person as in its opinion are necessary— (i) to achieve the holding by an appointed person of the relevant property in respect of which he has been appointed, including a direction to deliver or transfer the relevant property to him; (ii) to enable the appointed person to administer the relevant property; (c) order that any person holding or administering any relevant property, including an appointed person, shall— (i) deposit with the Court security in respect of the relevant property of such amount and in such form as the Court may determine; (ii) deliver to the Court an inventory of any relevant property held by or administered by him; (iii) deliver to the Court accounts in respect of the relevant property, at such times or at such intervals and in respect of such periods as the Court may determine; (iv) deliver up to the Court all books, papers and other documents relating to any relevant property held by or administered by him; (d) in the event of any loss, dissipation or diminution in the value of any relevant property resulting from the act or default of any person holding or administering it, including an appointed person, order that any security deposited with the Court by that person in respect of the relevant property under paragraph (c)(i) of this subsection, or any part of that security be sold (if appropriate) and paid over for the benefit of the minor to whom the relevant property belonged, or who was entitled to it, or for whose benefit it was held or administered, as the case may be; (e) order that any person shall not hold or administer any relevant property; (f) order the settlement by any person of any expenses and fees of an appointed person incurred by him in holding and administering relevant property. (2) The provisions of subsection (1) of this section are in addition to, and not in derogation from, the law and custom relating to guardianship and tutelle. Persons Who May Apply 9. An application to the Court under section 8 of this Law may be made by the mother, father or guardian of the child in relation to whose property the application is to be made, Her Majesty’s Procureur or Comptroller, or any other interested party.
742 The Laws of Guernsey (Part IV is not reproduced)
PART V General Provisions Applications Under Parts 1 and 2 17. An application under part I or II of this Law shall for the purposes of section 6(2)(a) of the Royal Court of Guernsey (Miscellaneous Reform Provisions) Law, 1950 be deemed to be a matter of procedure. Rules of the Royal Court 18. The Royal Court may by Order make rules— (a) dealing with all procedural and incidental matters arising under this Law; (b) generally for carrying this Law into effect; (c) for the purposes of Part III of this Law, as to— (i) the administration of relevant property by appointed persons; (ii) the form in which inventories and accounts to be delivered to the Court under section 8(i)(c)(ii) and (iii) of this Law are to be. Interpretation 19. In this Law— “applicant” has the meaning given by section 1(1) of this Law; “appointed person” means a person appointed by the Court under section 8(1)(a) of this Law to hold and administer relevant property; “the Court” means the Royal Court sitting as an Ordinary Court and, in Parts I, II and IV of this Law, includes the Matrimonial Causes Division of the Royal Court; “minor” means a person under the age of 18 years; “relevant property” means any property, other than immovable property, which belongs to a minor, to which a minor is entitled or which is held for the benefit of a minor, and includes the income of such property; and “respondent” has the meaning given by section 1(1) of this Law. Citation and Commencement 20. This Law may be cited as the Law Reform (Miscellaneous Provisions) (Guernsey) Law 1987 and shall come into force on such day as the States may by Ordinance appoint; and different days may be appointed for the coming into force of different provisions.
Appendix 4 THE TRUSTS (GUERNSEY) LAW 1989 AS AMENDED BY THE TRUSTS (AMENDMENT)(GUERNSEY) LAW 1990 PART I Preliminary Existence of a Trust 1. A trust exists if a person (a “trustee”) holds or has vested in him, or is deemed to hold or have vested in him, property which does not form, or which has ceased to form, part of his own estate:— (a) for the benefit of another person (a “beneficiary”), whether or not yet ascertained or in existence; (b) for any purpose which is not for the benefit only of the trustee. Validity of Trusts 2. Subject to the provisions of this Law, a trust is valid and enforceable in Guernsey. Proper Law of Trust 3. Subject to sections 46 and 52, the proper law of a trust is:— (a) the law chosen by the settlor to be the proper law, the choice being expressed or implied in the terms of the trust; or (b) if no law is so chosen, the law with which the trust has its closest connection at the time of its creation. Jurisdiction of Court 4. The court has jurisdiction in respect of:— (a) a Guernsey trust; (b) a foreign trust:— (i) a trustee of which is resident in Guernsey; or (ii) any property of which is situated or administered in Guernsey; or (iii) the terms of which provide that the court is to have jurisdiction.
PART II Provisions Applicable Only to a Guernsey Trust Application of Part II 5. This Part of this Law applies only to a Guernsey trust.
744 The Laws of Guernsey Creation, Validity and Duration of Guernesey Ttrusts Creation of a Trust 6. (1) A trust other than a unit trust may be created by oral declaration, by an instrument in writing (including a will or codicil), by conduct, or in any other manner whatsoever. (2) A unit trust may be created only by an instrument in writing. (3) No technical expressions are needed for the creation of a trust. Property Which May be Held on Trust 7. (1) Any property may be held on trust. (2) A trustee may accept property to be held on trust from any person. Beneficiaries of a Trust 8. (1) A beneficiary shall be:— (a) identifiable by name; or (b) ascertainable by reference to:— (i) a class; or (ii) a relationship to another person, whether or not living at the time of the creation of the trust or at the time by reference to which, under the terms of the trust, members of a class are to be determined. (2) The terms of a trust may provide for the addition of a person as beneficiary, or for the exclusion from benefit of a beneficiary. (3) The terms of a trust may impose an obligation upon a beneficiary as a condition of benefit. (4) A settlor or trustee of a trust may also be a beneficiary thereof. Disclaimer of Beneficial Interest 9. (1) Subject to the terms of the trust, a beneficiary may disclaim his interest or any part of it, whether or not he has received any benefit from it. (2) A disclaimer shall be in writing and, subject to the terms of the trust:— (a) may be temporary; and (b) may, if the disclaimer so provides, be revoked in the manner and circumstances specified thereby. (3) A disclaimer is not effective until received by a trustee. Nature of Beneficial Interest 10. The interest of a beneficiary is personal property and, subject to the terms of the trust, may be dealt with or charged accordingly. Enforceability of Trust 11. (1) Subject to sub-sections (2) and (3), a trust is valid and enforceable in accordance with its terms. (2) A trust is invalid and unenforceable to the extent that:— (a) it purports to do anything contrary to the law of Guernsey; (b) it confers or imposes any right or function the exercise or discharge of which would be contrary to the law of Guernsey;
Appendix 4 745
(3)
(4) (5)
(6)
(c) it has no beneficiary identifiable or ascertainable under section 8(1), unless it is created for a charitable purpose; or (d) the court declares that:— (i) it was established by duress, fraud, mistake, undue influence or misrepresentation or in breach of fiduciary duty; (ii) it is immoral or contrary to public policy; (iii) its terms are so uncertain that its performance is rendered impossible; or (iv) the settlor was, at the time of its creation, incapable of creating such a trust. Where some of the terms of a trust are invalid but others are not:— (a) if the terms cannot be separated, the trust is invalid; (b) if the terms can be separated, the court may declare that the trust is valid as to the terms which are valid. Where a trust is partially invalid, the court may declare what property is and what property is not to be held subject to the trust. Property as to which a trust is invalid shall, subject to any order of the court, be held by the trustees in trust for the settlor absolutely or, if he is dead, for his personal representative. An application to the court under this section may be made by any person mentioned in section 63(2).
Validity of Trusts and Dispositions Thereto 11A. (1) Where a person (the “settlor”) creates a Guernsey trust, or during his lifetime makes any transfer or disposition of property or any interest therein to a Guernsey trust:— (a) neither the trust nor the transfer or disposition is invalidated by any foreign rule of forced heirship or by reason of the fact that the concept of trusts is unknown to or not admitted by the law of a jurisdiction other than Guernsey; (b) the settlor shall be deemed to have had capacity to create the trust or to make the transfer or disposition if he had capacity to do so under:— (i) Guernsey law; (ii) the law of his domicile or nationality; or (iii) the proper law of the transfer or disposition. (2) In sub-section (1) “foreign rule of forced heirship” means any rule of law of a jurisdiction other than Guernsey which, in order to protect or give effect to the rights of any person or class of persons to inherit, succeed to or share in the settlor’s property or any interest therein on his death, purports to remove or restrict the settlor’s right to encumber, alienate or otherwise deal in his property or any interest therein during his life-time and includes any judicial or administrative order of a jurisdiction other than Guernsey intended to enforce or implement any such rule. (3) This section applies:— (a) whenever the trust, transfer or disposition in question arose or was made; (b) notwithstanding any other provision of this Law.
746 The Laws of Guernsey Duration of Trust 12. A trust shall terminate on the expiration of 100 years from the date of its creation, unless:— (a) it is a trust for a charitable purpose; or (b) it is terminated sooner. Appointment, Retirement and Discharge of Trustees Number of Trustees 13. (1) The number of trustees of a trust shall not be less than two, unless:— (a) only one trustee was originally appointed; (b) a corporate trustee resident in Guernsey is acting; or (c) the terms of the trust provide otherwise. (2) A trust shall not fail on the ground that there is no trustee or less than the number required by sub-section (1). Appointment of New or Additional Trustees 14. (1) Where the terms of a trust contain no provision for the appointment of a new or additional trustee, such a trustee may be appointed by:— (a) the existing trustee; (b) the last remaining trustee; (c) the personal representative or liquidator of the last remaining trustee; or (d) the court. (2) Subject to the terms of the trust, a trustee appointed under this section has the same functions, and may act in all respects, as if he had been originally appointed a trustee. (3) A trustee with power to appoint a new or additional trustee who fails to exercise the power may be removed from office by the court. (4) On the appointment of a new or additional trustee, anything necessary to vest the trust property in him jointly with his co-trustees (if any) shall be done. No Renunciation after Acceptance 15. (1) A person appointed as trustee need not accept the appointment, but he shall be deemed to have done so if he knowingly intermeddles with the trust or its affairs. (2) A person appointed as trustee may, before acceptance (actual or deemed):— (a) disclaim the appointment by notice in writing to the settlor or to the other trustees; or (b) if the settlor is dead or cannot be found, and there are no other trustees, apply to the court for relief from the appointment, whereupon the court may make such order as it thinks fit; but if the person appointed does not act under paragraph (a) or (b) within a reasonable period of time of becoming aware of the appointment, he shall be deemed to have accepted it. Resignation or Removal of Trustees 16. (1) A trustee other than a sole trustee may resign his office by delivering a written notice of resignation to his co-trustees.
Appendix 4 747 (2) Subject to sub-section (3), a resignation takes effect upon delivery of the notice. (3) A resignation:— (a) given to facilitate a breach of trust; or (b) which would result in there being no trustee or less than the number required by section 13(1); has no effect. (4) A trustee ceases to be a trustee immediately upon:— (a) his removal from office by the court; (b) his resignation taking effect; or (c) the coming into effect of, or the exercise of a power under, a provision in the terms of the trust under or by which he is removed from, or otherwise ceases to hold, his office. (5) A person who ceases to be a trustee under this section shall do everything necessary to vest the trust property in the new or continuing trustees. (6) Sub-sections (1) and (2) are subject to the terms of the trust. Position of Continuing Trustees on Reduction in Number of Trustees 17. Subject to the terms of the trust, where the number of trustees falls below the number required by section 13(1):— (a) the necessary number of additional trustees shall be appointed; and (b) until the required number is reached, the existing trustee shall act only to preserve the trust property. Duties of Trustees General Fiduciary Duties 18. (1) A trustee shall, in the exercise of his functions, observe the utmost good faith and act en bon père de famille. (2) A trustee shall execute and administer the trust, and shall exercise his functions thereunder, in accordance with the provisions of this Law and, subject thereto:— (a) in accordance with the terms of the trust; (b) only in the interests of the beneficiaries or charitable purpose, as the case may be. Duty to Get In and Preserve Trust Property 19. A trustee shall, subject to the terms of the trust and to the provisions of this Law:— (a) ensure that the trust property is held by or vested in him or is otherwise under his control; and (b) preserve and enhance, so far as is reasonable, the value of the trust property. Duty Not to Profit from Trusteeship 20. A trustee shall not:— (a) derive, directly or indirectly, any profit from his trusteeship; (b) cause or permit any other person to so derive any such profit; or (c) on his own account enter into any transaction with his co-trustees, or relating to the trust property, which may result in any such profit, except:—
748 The Laws of Guernsey (i) with the approval of the court; (ii) as permitted by the provisions of this Law; or (iii) as expressly provided by the terms of the trust. Duty to Keep Accounts 21. A trustee shall keep accurate accounts and records of his trusteeship. Duty to Give Information 22. (1) Subject to the terms of the trust, a trustee shall, at all reasonable times, at the written request of any beneficiary (including any charity named in the trust) or of the settlor, provide full and accurate information as to the state and amount of the trust property. (2) In its application to a trust arising from a document or disposition executed or taking effect before the commencement of this Law, sub-section (1) shall only operate for the benefit of a beneficiary whose interest in the trust property becomes vested before the commencement of this Law, but this sub-section shall not prejudice any rights that the beneficiary may have under the terms of the trust. Duty to Keep Trust Property Separate 23. A trustee shall keep trust property separate from his own property and separately identifiable from any other property of which he is trustee. Duty of Co-trustees to Act Together 24. (1) All the trustees of a trust shall, subject to the terms of the trust, join in the execution of the trust. (2) Subject to sub-section (3), no function conferred on trustees shall be exercised unless all the trustees agree on its exercise. (3) The terms of a trust may empower the trustees to act by a majority. (4) A trustee who dissents from a decision of the majority may require his dissent to be recorded in writing. Impartiality of Trustees 25. (1) Where a trust has:— (a) more than one beneficiary or charitable purpose; or (b) a beneficiary and a charitable purpose, the trustees, subject to the terms of the trust and to sub-section (2), shall be impartial and shall not execute the trust for the advantage of one at the expense of another. (2) Sub-section (1) does not prejudice the exercise of a discretion conferred upon a trustee by the terms of the trust. General Powers of Trustees Powers of trustees in relation to property 26. Subject to the provisions of this Law and to the terms of the trust, a trustee has, in relation to the trust property, all the powers of a beneficial owner.
Appendix 4 749 Power to Sue 27. A trustee may sue and be sued as trustee. Consultation by Trustees 28. (1) A trustee may consult professional persons in relation to the affairs of the trust. (2) The terms of a trust may require a trustee to consult or obtain the consent of another person before exercising any function. (3) A person shall not, by virtue of being so consulted or giving or refusing such consent, be deemed to be a trustee. Delegation by Trustees 29. (1) A trustee shall not delegate his functions unless permitted to do so by the provisions of this Law or by the terms of the trust. (2) Except where the terms of the trust specifically provide to the contrary, a trustee may:— (a) delegate the management of trust property to, and appoint, investment managers whom the trustee reasonably considers to be competent and qualified to manage the investment of the trust property; (b) appoint professional persons to act in relation to the affairs of the trust, or to hold any trust property; and (c) authorise any such manager or person to retain any commission or other payment usually payable for services of the description rendered. (3) A trustee who, without any breach on his part of section 18(1), makes or permits the continuation of a delegation or appointment under sub-section (2), is not liable for any loss to the trust arising from the delegation or appointment. Powers of Attorney 29A. (1) Unless the terms of the trust provide to the contrary, a trustee may, by power of attorney, delegate for a period not exceeding twelve months the performance of any trust or function vested in him (alone or jointly) as trustee. (2) A trustee who delegates a trust or function by a power of attorney under this section is referred to in this section as the “donor”; and the person to whom the trust or function is delegated is referred to as the “donee”. (3) The persons who may be donees include corporate trustees but not (unless a corporate trustee) the only other co-trustee of the donor. (4) A power of attorney under this section shall be in writing and:— (a) shall, if the donor is an individual, be signed by him, or by his direction and in his presence, in the presence of a witness, who shall also sign; or (b) shall, if the donor is a corporate trustee, be sealed by the donor, in accordance with its articles of association. (5) Within seven days of giving a power of attorney under this section, the donor shall give written notice thereof to:— (a) every other person who, under the terms of the trust has power (alone or jointly) to appoint a new trustee; and (b) every co-trustee. (6) The notice under sub-section (5) shall state:— (a) the date of commencement and duration of the power of attorney; (b) the name and address of the donee;
750 The Laws of Guernsey (c) the reason for giving the power of attorney; and (d) the trust or function delegated. (7) Failure to comply with sub-section (5) or (6) shall not of itself, in favour of a person dealing with the donee, invalidate anything done by the donee. (8) The donor is bound by and liable for all acts or defaults of the donee done or purportedly done under the power of attorney as if they were his own acts or defaults. (9) For the purpose of performing the trust or function delegated, the donee may exercise any function conferred on the donor as trustee by law or by the terms of the trust, other than the power to give powers of attorney under this section. Remuneration and Expenses of Trustees 30. (1) Unless authorised by:— (a) the terms of the trust; (b) the consent in writing of every beneficiary; or (c) an order of the court, a trustee is not entitled to remuneration for his services. (2) A trustee may pay from the trust property, and may reimburse himself from the trust property for, all expenses and liabilities properly incurred in connection with the trust. Power to Appropriate 31. Subject to the terms of the trust, a trustee may, without the consent of any beneficiary, appropriate trust property in or towards satisfaction of the interest of a beneficiary in such manner and in accordance with such valuation as he thinks fit. Corporate Trustee May Act by Resolution 32. A corporate trustee may:— (a) act in connection with a trust by a resolution of the corporate trustee or of its board of directors or other governing body; or (b) by such a resolution appoint an officer or employee to act on its behalf in connection with the trust. Non-disclosure of Deliberations 33. A trustee is not (subject to the terms of the trust and to any order of the court) obliged to disclose documents which reveal:— (a) his deliberations as to how he should exercise his functions as trustee; (b) the reasons for any decision made in the exercise of those functions; (c) any material upon which such a decision was or might have been based. Liability for Breach of Trust Liability for Breach of Trust 34. (1) Subject to the provisions of this Law and to the terms of the trust, a trustee who commits or concurs in a breach of trust is liable for:— (a) any loss or depreciation in value of the trust property resulting from the breach; and (b) any profit which would have accrued to the trust had there been no breach.
Appendix 4 751 (2) A trustee may not set off a profit accruing from one breach of trust against a loss or depreciation in value resulting from another. (3) A trustee is not liable for a breach of trust committed by another person prior to his appointment. (4) A trustee is not liable for a breach of trust committed by a co-trustee unless:— (a) he becomes or ought to have become aware of the breach, or of the intention of his co-trustee to commit the breach; and (b) he actively conceals the breach or intention, or fails within a reasonable time to take proper steps to protect or restore the trust property or to prevent the breach. (5) Where trustees are liable for a breach of trust, they are liable jointly and severally. (6) A trustee who becomes aware of a breach of trust to which sub-section (3) applies shall take all reasonable steps to have the breach remedied. (7) Nothing in the terms of a trust shall relieve a trustee of liability for a breach of trust arising from his own fraud or wilful misconduct or gross negligence. (8) This section is in addition to section 70. Beneficiary May Relieve or Indemnify Trustee 35. (1) A beneficiary may:— (a) relieve a trustee of liability to him for a breach of trust; (b) indemnify a trustee against liability for a breach of trust. (2) Sub-section (1) does not apply if the beneficiary:— (a) is a minor or a person under legal disability; (b) does not have full knowledge of all material facts; or (c) is improperly induced by the trustee to act under sub-section (1). Trustees of More Than One Trust 36. (1) A trustee is not, in the absence of fraud, affected by notice of any instrument, matter, fact or thing in relation to a trust if he obtained notice of it by reason of his acting or having acted for the purposes of another trust. (2) A trustee of a trust shall disclose to his co-trustees any interest which he has as trustee of another trust if any transaction in relation to the first mentioned trust is to be entered into with the trustees of the other trust. Dealings by Trustees with Third Parties 37. (1) Where, in a transaction or matter affecting a trust, a trustee informs a third party that he is acting as trustee, a claim by the third party in respect of the transaction or matter shall (subject to sub-section (3)) extend only to the trust property. (2) If the trustee fails to inform the third party that he is acting as trustee and the third party is otherwise unaware of the fact:— (a) he incurs personal liability to the third party in respect of the transaction or matter; and (b) he has a right of indemnity against the trust property in respect of his personal liability, unless he acted in breach of trust. (3) Nothing in this section prejudices a trustee’s liability for breach of trust or any claim for breach of warranty of authority. (4) In this section “third party” means a person other than a settlor, trustee or beneficiary of the trust.
752 The Laws of Guernsey Constructive Trusts 38. (1) A person who derives a profit from a breach of trust, or who obtains property in breach of trust, shall be deemed to be a trustee of the profit or property, unless he derives or obtains it in good faith without notice of the breach of trust. (2) A person who becomes a trustee by virtue of sub-section (1) shall deliver up the profit or property to the person properly entitled to it. (3) This section does not exclude any other circumstances in which a constructive trust may arise. Position of Outgoing Trustees 39. (1) When a trustee resigns or is removed:— (a) he shall, subject to paragraph (b), duly surrender all trust property held by or vested in him or otherwise under his control; (b) he may require that he be provided with reasonable security for liabilities (existing, future, contingent or otherwise) before surrendering the trust property. (2) A trustee who complies with sub-section (1) is relieved of liability to any beneficiary, trustee or other person interested under the trust for any act or omission in relation to the trust property or to his functions as a trustee, except any liability:— (a) arising from a breach of trust to which the trustee (or, in the case of a corporate trustee, any of its officers or employees) was a party or was privy; (b) in respect of an action to recover from the trustee (or, in the case of a corporate trustee, any of its officers or employees) trust property or the proceeds thereof in his possession. Protective Trusts, Class Interests and Certain Powers Protective Trusts 40. The terms of a trust may make the interest of a beneficiary:— (a) liable to termination; (b) subject to a restriction on alienation or dealing; or (c) subject to diminution or termination in the event of the beneficiary becoming bankrupt or any of his property becoming liable to arrest, saisie, or similar process of law. Class Interests 41. Where a trust is in favour of a class of persons then, subject to the terms of the trust:— (a) the class closes when it is no longer possible for any other person to become a member of the class; (b) a woman over the age of 60 years shall be deemed to be no longer capable of bearing a child; and (c) where the interest of the class relates to income, and no member of the class exists, the income shall be accumulated and, subject to section 12, retained until a member of the class exists or the class closes.
Appendix 4 753 Power of Variation 42. (1) The terms of a trust may be varied in any manner provided by those terms. (2) This section is in addition to sections 52 to 56. Power of Accumulation and Advancement 43. (1) Subject to section 12, the terms of a trust may direct or authorise the accumulation for any period of all or part of the income of the trust. (2) Subject to sub-section (3), income which is not accumulated shall be distributed. (3) Subject to the terms of the trust and to any prior interest or charge affecting the trust property, the trustees may:— (a) where a beneficiary is a minor (whether or not his interest is vested):— (i) accumulate the income attributable to the beneficiary’s interest pending attainment of full age; (ii) apply the income or part of it to or for the maintenance, education or other benefit of the beneficiary; (b) advance or apply for the benefit of a beneficiary part of the trust property prior to the happening of the event upon which the beneficiary is to become absolutely entitled thereto. (4) Subject to the terms of the trust:— (a) any trust property advanced or applied under this section shall be brought into account in determining the beneficiary’s share in the trust property; and (b) no part of the trust property so advanced or applied shall exceed the beneficiary’s vested, presumptive or contingent share in the trust property. (5) The receipt of a guardian of a beneficiary who is a minor or a person under legal disability is a sufficient discharge to the trustees for a payment made to or for the benefit of the beneficiary. Power of Appointment 44. The terms of a trust may confer on the settlor, trustees or any other person power to appoint or assign all or any of the trust property or any interest in it to, or for the benefit of, any person (whether or not a beneficiary of the trust immediately prior to the appointment or assignment). Power of Revocation 45. (1) A trust and any exercise of a power under a trust may be expressed to be capable of:— (a) revocation, in whole or in part; or (b) variation. (2) No revocation or variation prejudices anything lawfully done by a trustee in relation to the trust before he receives notice of the revocation or variation. (3) Subject to the terms of the trust, if the trust is revoked in whole or in part, the trustees shall hold the trust property, or that part of the trust property which is the subject of the revocation, as the case may be, in trust for the settlor absolutely or, if he is dead, for his personal representative. Change of Proper Law 46. (1) The terms of a trust may provide for the proper law of the trust to be changed from the law of Guernsey to the law of another jurisdiction. (2) Sub-section (1) is without prejudice to the powers of the court under section 52.
754 The Laws of Guernsey Failure, Lapse and Termination of Trusts Failure or Lapse of Interest 47. Subject to the terms of the trust and to any order of the court, where:— (a) an interest lapses; (b) a trust terminates; (c) there is no beneficiary and no person who can become a beneficiary in accordance with the terms of the trust; or (d) property is vested in a person otherwise than for his sole benefit, but the trusts upon which he is to hold the property are not declared or communicated to him; the interest or property concerned shall be held by the trustees in trust for the settlor absolutely or, if he is dead, for his personal representative. Termination of trusts 48. (1) On the termination of a trust, the trust property shall, subject to sub-section (2), be distributed by the trustees within a reasonable time in accordance with the terms of the trust to the persons entitled thereto. (2) The trustees may however require that they be provided with reasonable security for liabilities (existing, future, contingent or otherwise) before so distributing the trust property. (3) Without prejudice to the powers of the court under sub-section (4), and not withstanding the terms of the trust, where all the beneficiaries are in existence and have been ascertained, and none is a person under legal disability or minor, they may require the trustees to terminate the trust and distribute the trust property among them. (4) The court, on the application of any person mentioned in section 63(2), may:— (a) direct the trustees to distribute, or not to distribute, the trust property; or (b) make such other order in respect of the termination of the trust and the distribution of the property as it thinks fit. Powers of the Court Appointment of Resident Trustees 49. (1) Where there is no trustee resident in Guernsey, a beneficiary may apply to the court for the appointment of a person, resident in Guernsey and nominated in the application, as an additional trustee. (2) The court:— (a) if satisfied that notice of the application has been served on the existing trustees; (b) having heard any representations of the existing trustees, of the settlor or his personal representatives, of the other beneficiaries, and of any person described in section 28(2); and (c) having ascertained that the person nominated is willing to act, may appoint that person as an additional trustee.
Appendix 4 755 Power to Relieve Trustees from Personal Liability 50. The court may relieve a trustee wholly or partly of liability for a breach of trust, whether committed before or after the commencement of this Law, where it appears to the court that the trustee:— (a) has acted honestly and reasonably; and (b) ought fairly to be excused:— (i) for the breach of trust; (ii) for omitting to obtain the directions of the court in the matter in which the breach arose. Power to Make Beneficiaries Indemnify 51. Where a trustee commits a breach of trust at the instigation, at the request or with the concurrence of a beneficiary, the court, whether or not the beneficiary is a minor or a person under legal disability, may impound all or part of his interest by way of indemnity to the trustee or any person claiming through him. Variation, etc. of Trusts Variation of Trusts on Behalf of Minors, etc 52. (1) The court, on the application of any person mentioned in section 63(2), on behalf of:— (a) a minor or a person under legal disability having, directly or indirectly, an interest, vested or contingent, under a trust; (b) any person unborn; (c) any person, ascertained or not, who may become entitled, directly or indirectly, to an interest under a trust, as being (at a future date or on the happening of a future event) a person of any specified description or a member of any specified class; or (d) any person, in respect of an interest that may accrue to him by virtue of the exercise of a discretionary power on the failure or determination of an existing interest; may, subject to sub-section (2), approve any arrangement which varies or revokes the terms of a trust or enlarges or modifies the powers of management or administration of any trustees, whether or not there is another person with a beneficial interest who is capable of assenting to the arrangement. (2) The court shall not approve an arrangement on behalf of a person mentioned in sub-section (1)(a), (b) or (c) unless the arrangement appears to be for his benefit. Approval of Particular Ttransactions 53. Where, in the management or administration of a trust, a transaction is, in the opinion of the court, expedient, but cannot be effected because the necessary power is not vested in the trustees by the terms of the trust or by law, the court, on the application of any person mentioned in section 63(2):— (a) may confer upon the trustees, generally or in any particular circumstances, the necessary power, on such terms and subject to such conditions as the court thinks fit; and
756 The Laws of Guernsey (b) may direct the manner in which, and the property from which, any monies authorised to be expended, and the costs of any transaction, are to be paid or borne. Charitable Trusts—“cy-pres” 54. Where trust property is held for a charitable purpose and:— (a) the purpose has been, as far as may be, fulfilled; (b) the purpose cannot be carried out, or not according to the directions given and to the spirit of the gift; (c) the purpose provides a use for part only of the property; (d) the property, and other property applicable for a similar purpose, can be more effectively used in conjunction, and to that end can suitably, regard being had to the spirit of the gift, be applied to a common purpose; (e) the purpose was laid down by reference to an area which was then, but has since ceased to be, a unit for some other purpose, or by reference to a class of persons or to an area which has for any reason since ceased to be suitable, regard being had to the spirit of the gift, or to be practicable in administering the gift; (f) the purpose has been adequately provided for by other means; (g) the purpose has ceased to be charitable (by being useless or harmful to the community or otherwise); or (h) the purpose has ceased in any other way to provide a suitable and effective method of using the property, regard being had to the spirit of the gift, the property, or the remainder of the property, as the case may be, shall be held for such other charitable purpose as the court, on the application of Her Majesty’s Procureur or the trustees, may declare to be consistent with the original intention of the settlor. General Power to Vary 55. (1) Where trust property is held for a charitable or public purpose, the court, on the application of Her Majesty’s Procureur or the trustees, may approve any arrangement which varies or revokes the purposes or terms of the trust or enlarges or modifies the powers of management or administration of the trustees, if it is satisfied that the arrangement:— (a) is now suitable or expedient; and (b) is consistent with the original intention of the settlor and the spirit of the gift. (2) The court shall not approve an arrangement under sub-section (1) unless satisfied that any person with a material interest in the trust has had an opportunity of being heard. Trusts Created by Order in Council 56. Sections 52 to 55 do not apply to trusts created by an Order in Council of Her Majesty. Permitted Investments Power to Prescribe Permitted Investments 57. (1) The Committee may by order provide that trustees may only invest trust property on the securities and investments prescribed by the order.
Appendix 4 757 (2) The terms of a trust may:— (a) exclude the provisions of an order under sub-section (1); (b) authorise the trustees to invest trust property on securities and investments other than those prescribed by any such order; (c) restrict the powers of investment which trustees would otherwise enjoy under any such order. (3) The powers of investment conferred by an order under sub-section (1) or by the terms of a trust do not derogate from the duties imposed on trustees by ss.18 to 23. (4) An order under sub-section (1):— (a) may prescribe securities and investments specifically or by general description; (b) may provide that an investment shall not be made unless a person described in or specified by the order is consulted and recommends the investment; (c) may be amended or revoked by a subsequent order thereunder; (d) may make different provision for different trustees, trusts and trust property or different classes thereof; (e) may contain such incidental and supplemental provision as (in the opinion of the Committee) is necessary or expedient for the purposes of the order; (f) shall be laid before a meeting of the States as soon as possible after being made; and if at that or the next meeting the States resolve to annul the order, it shall cease to have effect, but without prejudice to anything done under it or to the making of a new order. (5) An order under sub-section (1) shall not apply to a trust created before the order comes into operation.
PART III Provisions Applicable Only to a Foreign Trust Application of Part III 58. This Part of this Law applies only to a foreign trust. Enforceability of Foreign Trusts 59. (1) Subject to sub-section (2), a foreign trust is governed by, and shall be interpreted in accordance with, its proper law. (2) A foreign trust is unenforceable in Guernsey to the extent that:— (a) it purports to do anything contrary to the law of Guernsey; (b) it confers or imposes any right or function the exercise or discharge of which would be contrary to the law of Guernsey; or (c) the court declares that it is immoral or contrary to public policy.
PART IV Provisions of General Application Application of Part IV 60. This Part of this Law applies to a Guernsey trust and, where the context admits, to a foreign trust.
758 The Laws of Guernsey Rules of Royal Court 61. The Royal Court may by order make rules dealing with all procedural and incidental matters arising under this Law, and generally for carrying this Law into effect. Applications for Directions 62. A trustee may apply to the court for directions as to how he should or might act in any of the affairs of the trust, and the court may make such order as it thinks fit. General Powers of Court 63. (1) On the application of any person mentioned in sub-section (2), the court may:— (a) make an order in respect of:— (i) the execution, administration or enforcement of a trust; (ii) a trustee, including an order as to the exercise by a trustee of his functions, the removal of a trustee (if, for example, he refuses or is unfit to act, or is incapable of acting, or is bankrupt or if his property becomes liable to arrest, saisie, or similar process of law), the appointment, remuneration or conduct of a trustee, the keeping and submission of accounts, and the making of payments, whether into court or otherwise; (iii) a beneficiary, or any person connected with a trust; (iv) any trust property, including an order as to the vesting, preservation, application, surrender or recovery thereof; (b) make a declaration as to the validity or enforceability of a trust; (c) rescind or vary an order or declaration under this Law, or make a new or further order or declaration. (2) An application under sub-section (1) may be made by Her Majesty’s Procureur, a trustee, a settlor, a beneficiary, a person described in section 28(2), or, with leave of the court, any other person. (3) Where the court appoints or removes a trustee under this section:— (a) it may impose such requirements and conditions as it thinks fit, including requirements and conditions as to the vesting of trust property; (b) subject to the court’s order, a trustee appointed by the court has the same functions, and may act in all respects, as if he had been originally appointed a trustee. Powers of Court in Event of Default 64. If a person does not comply with an order of the court under this Law requiring him to do anything, the court may, on such terms and conditions as it thinks fit, order that the thing be done by another person, nominated for the purpose by the court, at the expense of the person in default (or otherwise, as the court directs); and a thing so done has effect in all respects as if done by the person in default. Payment of Costs 65. The court may order the costs and expenses of, and incidental to, an application to the court under this Law to be paid from the trust property or in such manner and by such persons as it thinks fit. Nature of Trustee’s Interest 66. (1) Subject to sub-section (2):—
Appendix 4 759 (a) the interest of a trustee in the trust property is limited to that which is necessary for the proper performance of the trust; and (b) the trust property does not form part of the trustee’s estate. (2) Where a trustee of a trust is also a beneficiary thereof, sub-section (1) does not apply to his interest as a beneficiary. Following Trust Property 67. Without prejudice to the personal liability of a trustee, trust property which has been charged or dealt with in breach of trust, or the property into which it has been converted, may be followed and recovered unless:— (a) it is no longer identifiable; or (b) it is in the hands of a bona fide purchaser for value without notice of the breach of trust or a person (other than the trustee) who derived title through such a purchaser. Bankruptcy of Trustees 68. Where a trustee becomes bankrupt, or upon his property becoming liable to arrest, (saisie) or similar process of law, his creditors shall have no recourse against the trust property except to the extent that the trustee himself has a claim against it or a beneficial interest in it. Protection for Persons Dealing with Trustees 69. (1) A bona fide purchaser for value without notice of a breach of trust:— (a) may deal with a trustee in relation to trust property as if the trustee were the beneficial owner thereof; and (b) is not affected by the trusts on which the property is held. (2) A person paying or advancing money to a trustee is not concerned to see:— (a) that the money is wanted; (b) that no more than is wanted is raised; or (c) that the transaction or the application of the money is proper. Liability of Directors of Corporate Trustee 70. (1) Where a breach of trust is committed by a corporate trustee which:— (a) is a trustee of a Guernsey trust; (b) is resident in Guernsey; or (c) is carrying on business in Guernsey or from an address in Guernsey, every person who, at the time of the breach, was a director of the trustee shall, subject to sub-section (2), be deemed to be a guarantor of the trustee in respect of any damages and costs awarded by the court against the trustee in respect of the breach. (2) The court may relieve a director of all or part of his personal liability as a guarantor if he satisfies the court that he ought fairly to be so relieved because:— (a) he was not aware of the breach of trust or of the intention to commit it and, in being not so aware, was neither reckless nor negligent; or (b) he expressly objected, and exercised such rights as he had by way of voting power or otherwise as a shareholder or director or other officer of the company, so as to try to prevent the breach of trust. (3) For the purposes of sub-section (1):— (a) “director” includes a person occupying the position of director by whatever name called, a person in accordance with whose directions or instructions
760 The Laws of Guernsey the directors of the corporation or of a corporation of which it is a subsidiary (or any of them) are accustomed to act, and a person who alone or with or through an associate is entitled to exercise or control the exercise of one third or more of the voting power at a general meeting of the corporation or of a corporation of which it is a subsidiary; (b) “subsidiary” means a corporation in respect of which another corporation is entitled to exercise or can control the exercise of one third or more of the voting power; (c) in paragraph (a) “associate”, in relation to a person, means any relative, partner or other person who is, has been or may be influenced by that person. Limitation and Prescription 71. (1) No period of limitation or prescription applies to an action brought against a trustee:— (a) in respect of any fraud to which the trustee was a party or was privy; or (b) to recover from the trustee trust property or the proceeds thereof:— (i) held by or vested in him or otherwise in his possession or under his control; or (ii) previously received by him and converted to his use. (2) Subject to sub-section (1), the period within which an action founded on breach of trust may be brought against a trustee by a beneficiary is:— (a) three years from delivery of the final accounts of the trust to the beneficiary; or (b) three years from the date on which the beneficiary first has knowledge of the breach of trust; whichever period first begins to run. (3) Where the beneficiary is a minor or a person under legal disability, the period referred to in sub-section (2) does not begin to run until his minority or disability, as the case may be, ceases.
PART V Supplemental Application of Law 72. (1) Subject to section 74, and except where provision to the contrary is made, this Law applies to trusts created before or after the commencement of this Law. (2) This Law, apart from sections 52 to 56, does not apply to a trust in so far as there is vested in the trustees any interest in real property in the Bailiwick of Guernsey. Interpretation 73. (1) In this Law, unless the context otherwise requires:— “bankrupt” in relation to:— (a) an individual, includes an individual whose affairs have been declared in a state of “désastre” by his arresting creditors at a meeting held before a Jurat as Commissioner of the Royal Court, and an individual in respect of whom a declaration of insolvency has been made under the Loi ayant rapport aux Débiteurs et a la Renonciation, 1929;
Appendix 4 761 (b) a corporation, includes a corporation which is insolvent, and “bankruptcy” “beneficiary”
shall be construed accordingly; means a person entitled to benefit under a trust, or in whose favour a power to distribute trust property may be exercised; “breach of trust” means a breach of any duty imposed on a trustee by this Law or by the terms of the trust; “Committee” means the States Advisory & Finance Committee or such other authority, board, committee or council of the States as the States may by resolution appoint for the purposes of this Law; “corporate trustee” means a trustee which is a corporation; “corporation” means a body corporate wherever incorporated; “court” means the Royal Court sitting as an Ordinary Court; “foreign trust” means a trust the proper law of which is not the law of Guernsey; “functions” includes rights, powers, discretions, obligations, liabilities and duties; “Guernsey trust” means a trust the proper law of which is the law of Guernsey; “he”, “him” and “his” in relation to a corporation, include “it” and “its”; “Her Majesty’s Procureur” includes Her Majesty’s Comptroller; “insurance” includes assurance; “interest” in relation to a beneficiary, means his interest under a trust; “minor” means a person who has not attained full age; “personal representative” means the executor or administrator of the estate of a deceased person; “profit” includes gain or advantage; “property” (a) means property of any description, wherever situated, including any share therein, but does not (except in sections 52 to 56 and 74) include real property in the Bailiwick of Guernsey; (b) in relation to rights and interests, includes rights and interests whether vested, contingent, defeasible or future; “provisions of this Law” includes the provisions of any order hereunder; “settlor” means a person who provides trust property or makes a testamentary disposition on trust or to a trust; “terms of a trust” means the written or oral terms of a trust, and any other terms applicable under its proper law; “trust” includes:— (a) the trust property; and (b) the functions, interests and relationships under a trust;
762 The Laws of Guernsey “trustee”
has the meaning given by section 1, and includes a corporate trustee; “trust property” means property held on trust; “unit trust” means a trust established for the purpose, or having the effect, of providing, for persons having funds available for investment, facilities for the participation by them as beneficiaries under the trust in any profits or income arising from the acquisition holding, management or disposal of property. (2) For the purposes of this Law, a corporation is resident in the place in which it has its registered office. (3) Any reference in this Law to an enactment is, unless the context otherwise requires, a reference to that enactment as amended, extended, re-enacted, or applied by or under any other enactment, including this Law. Savings 74. (1) Nothing in this Law:— (a) affects the functions under any provision of law of Her Majesty’s Sheriff or of any guardian or attorney; (b) validates an otherwise invalid transfer or disposition of property to a trust; (c) affects the validity of anything done in relation to a trust before the commencement of this Law; (d) affects the validity of a trust arising from a document or disposition executed or taking effect before the commencement of this Law; (e) derogates from any right of a minor to repudiate a transaction on attaining full age. (2) Nothing in this Law derogates from the powers of the court which exist independently of this Law:— (a) to set aside, vary or reduce any transfer or other disposition of property, testamentary or otherwise; (b) in respect of trusts, trustees or trust property; (c) to make an order relating to matrimonial proceedings; (d) to make an order relating to the avoidance of fraud on creditors. (3) Nothing in this Law derogates from the provisions of:— (a) article 29 of the Law entitled “Loi sur les Successions, 1840”; (b) the Law entitled “Loi supplémentaire à la Loi des Successions, 1890”; (c) section 12 of the Married Women’s Property Law, 1928. (4) Nothing in this Law affects a personal representative acting as such. (5) No transfer or disposition of property to a trust is invalidated by application of the principle of “donner et retenir ne vaut”. Citation 75. This Law may be cited as the Trusts (Guernsey) Law, 1989. Commencement 76. This Law shall come into operation on the twenty eighth day after the date of its registration on the records of the Island of Guernsey.
Appendix 5 THE OATH AND ARTICLES, RULES OF CONDUCT AND CODES GOVERNING THE GUERNSEY ADVOCATE The Oath and Articles of a Guernsey Advocate On being called to the Guernsey Bar the aspirant must take the following oath:15 Vous jurez et promettez sur la foi et le serment que vous devez à Dieu que bien et fidelement vous exercerez l’office et la charge d’Avocat de la Cour Royale de cette Île de Guernesey comme à telle charge appartient et en conformité aux articles qui viennent d’être lus. You swear and promise on the faith and oath you owe to God that well and faithfully you will exercise the office and the charge of Advocate of the Royal Court of this Island of Guernsey as to such charge appertaineth and in conformity with the articles which are about to be read.
The Articles are as follows: Premièrement, que loyaument16 et diligemment ils exerceront l’office de conseil contre quelconque personne que ce soit; Firstly, that lawfully and diligently they will exercise the office of counsel against any person whomsoever; Qu’ils ne soutiendront en demandant ni en defendant aucunes causes, s’ils ne les trouvent en leurs consciences être bonnes & loyales; That they will not maintain, whether as plaintiff or defendant, any cause which they do not in good conscience believe to be good and in conformity with the law; Que s’il vient à leur connaissance par quelque manière que ce soit, que la cause soit mauvaise, en quelque état qu’elle soit, plus n’y advocasseront, et du tout la délaisseront; That if it should come to their attention by whatsoever means that the cause is bad, they will pursue it no further and abandon it entirely, regardless of its status; Qu’en leurs plaideries, soit en demandant ou en defendant, en repliquant ni autrement, ils ne proposeront et ne controuveront aucuns faits, que leur maître ou son attourne ne leur ait dit et affirme être vrais; That in their pleadings, whether on behalf of the plaintiff or the defendant, whether in reply or otherwise, they will not put forward nor will they fabricate any facts which their master or his attorney have not told them and affirmed to be true; Qu’en conseillant, ni en plaidant, ils ne proposeront ni allégueront fait, coutume, usage, registre, ou autre chose, s’ils ne croient que se soit raison et droiture; That neither when advising nor pleading, will they put forward or allege any fact, custom, usage, register or any other thing which they do not believe to be correct and honest; S’ils savent en aucune chose être le droit du Roi, ou lui toucher en aucune manière, ils en avertiront la Cour;
15 Or rather acknowledge it; the oath is administered to rather than spoken by the individual, who raises his or her right hand but otherwise remains mute, whilst perhaps nodding at the appropriate moment. 16 The word loyal in French is also synonymous with the words faithful and honest.
764 The Laws of Guernsey If they become aware of a Crown right in any thing, or that which otherwise concerns the Crown, they will inform the Court of it; Qu’ils ne feront point marché avec leurs parties, ou leurs attournes, d’aucune quantité de la cause, ou d’avoir aucune part ou portion de la cause contentieuse; That they will not make any bargain with their clients, or their attorneys for any amount of the cause, or have any share or portion of a contentious matter; Qu’ils ne demeureront en la Cour pour conseiller, ou dire leur opinion à fin de juger en aucune manière en la cause où ils auraient été paravant avocats ou conseillers; That they will not remain in Court to advise or state their opinion in judgment in any way with respect to a cause where previously they have been Advocates or advisers; Item, quand la Court leur demandera leur advis d’aucune chose, ils en réponderont loyaument toute haine ôtée. Likewise, when the Court asks of them their opinion in any matter they will reply honestly and impartially.17
The Rules of Professional Conduct The Oath and Articles are supplemented by the Rules of Conduct themselves. Rule 1 is the single most important rule and states that an Advocate shall not do anything in the course of practising as an Advocate, or permit another person to do anything on his or her behalf, which breaches, compromises or impairs or is likely to breach, compromise or impair any of the following: (a) the Advocate’s Oath and Articles; (b) the Advocate’s independence or integrity; (c) the Advocate’s duty to the Court; (d) a person’s freedom to instruct an Advocate of his or her choice; (e) the Advocate’s duty to act in the best interests of the client; (f) the good repute of the Advocate or of the Guernsey Bar; (g) the Advocate’s proper standards. Other particularly important rules are as follows: Rule 2: An Advocate is an officer of the Court, and should conduct himself or herself appropriately, both in professional and private life; Rule 4: An Advocate shall not enter into professional partnership with a person other than an Advocate; Rule 5: As a matter of conduct, a partner is prima facie responsible for the acts or omissions of the firm, and this extends to the acts or omissions of staff; Rule 14: An Advocate is generally free to decide whether to accept instructions from any particular client; however an Advocate should not accept instructions in circumstances in which that client owes costs to another Advocate for work undertaken in connection with the same matter, unless there is a genuine dispute over those costs; Rule 17: An Advocate must not act or continue to act in circumstances where the client cannot be represented with competence or diligence; the commentary to the rule states that the provision applies where an Advocate has insufficient time to devote to the matter or insufficient experience or skill to deal with the instructions; 17
Literally, all ill-feeling put aside.
Appendix 5 765 Rule 21:
An Advocate who has accepted instructions on behalf of a client is bound to carry out those instructions with diligence and must exercise reasonable care and skill; Rule 22: An Advocate must keep his or her client’s business and affairs confidential;18 Rule 23: It is an implied term of the retainer that an Advocate is under a duty at all times to observe the Rules of Professional Conduct; Rule 23A: This amendment to the rules came into effect on 6 July 2000 and provides as follows: “It is an implied term of the retainer that an Advocate is under a duty at all times to observe the provisions of all Guernsey laws and Guernsey codes of conduct in respect of the services rendered to the client.” The commentary reads as follows: “This means that Advocates not only have to comply in their dealings with their clients with the provisions of the common law and with all Orders in Council and Ordinances but with all Guernsey codes of conduct and guidelines—for example in respect of money laundering.” It is noteworthy that there is scope for conflict between the requirements of certain regulatory laws and legal professional privilege; that conflict extends to the Rules of Professional Conduct themselves. Rule 26: An Advocate must not terminate his or her retainer with the client except for good reason and upon reasonable notice; Rule 27: On termination an Advocate should, subject to any lien, then deliver to the client all papers and property to which the client is entitled or hold them to his or her order and account for all funds of the client then held by the Advocate. The commentary goes on to provide that a client is not entitled to his or her Advocate’s notes. The commentary states also that there is no lien over papers and documents for costs that are excessive or unreasonable. Where a genuine dispute over costs arises the Advocate formerly instructed should not insist on his or her lien if it is necessary for the proper continuing conduct of the matter that the successor Advocate have the papers; Rule 30: On taking instructions the Advocate should give clients the best information possible about the likely cost of the matter, unless the circumstances do not allow such information to be given; Rule 33: Where clients are personally liable for the costs,19 in appropriate cases the Advocate should inform clients every six months of the approximate amount of the costs to date, whether or not they have set a limit, and in appropriate cases an interim bill should be delivered; Rule 34: Where the matter is contentious a client should be informed at the outset of the case and at appropriate stages thereafter of the following: (i) the types of recoverable costs; (ii) that in any event they will be personally responsible for payment of their own Advocate’s bill of costs in full regardless of any order for costs made against opponents; (iii) the probability that if they lose they will have to pay their opponent’s recoverable costs as well as all their own; 18 19
See also rules 51–54 which give fuller guidance concerning confidentiality. Ie for the fees of their Advocate.
766 The Laws of Guernsey
Rule 35: Rule 38:
Rule 40:
Rule 43:
Rule 44: Rule 46:
Rule 47:
Rule 48: Rule 49:
Rule 50:
Rule 55:
(iv) that even if they win, their opponent may not be capable of paying what they have been ordered to pay; (v) that recoverable costs are unlikely to cover all the actual costs, even if successful.20 In all matters an Advocate should consider with clients whether the likely outcome will justify the expense or risk involved; An Advocate who is retained or employed to prosecute any action or other contentious proceeding shall not enter into any arrangement to receive a contingency fee in respect of that proceeding; An Advocate’s bill of costs should contain sufficient information to identify the matter to which it relates and the period covered. The commentary to this Rule provides that if a contentious bill is disputed a client has the right to require the Advocate to deliver a bill containing detailed items, providing the client makes the request before being served with any summons for the recovery of costs included in the bill; This is a surprising rule whereby it is unprofessional conduct for an Advocate to undertake work at a reduced rate where the Guernsey Bar have established by resolution a tariff for that work;21 An Advocate must not act where his or her own interests conflict with the interests of a client or a potential client; Subject to Rule 49 an Advocate or firm of Advocates should not accept instructions to act for two or more clients where there is a conflict or a significant risk of a conflict between the interests of those clients; If an Advocate or firm of Advocates has acquired relevant knowledge concerning a former client during the course of acting for that client, the Advocate or the firm must not accept instructions to act against that client; An Advocate or firm of Advocates must not continue to act for two or more clients where a conflict of interest arises between those clients; An Advocate may act for both seller and buyer on a transfer of land, or for both lessor and lessee, or for both lender and borrower, provided the Advocate obtains the informed consent of both parties to his or her acting; see also the case of Clark Boyse v Mouat [1993] 4 All ER 268 (Privy Council); Where a client intends to make a gift inter vivos or by will to his or her Advocate, or to that Advocate’s partner, or a member of staff or to the families of any of them, and the gift is of a significant amount, either in itself or having regard to the size of the client’s estate and the reasonable expectations of prospective beneficiaries, the Advocate must advise the client to be independently advised as to that gift and if the client declines, must refuse to act; An Advocate is under a duty to carry out the terms of a retainer with care and skill, proper diligence and promptness and to keep the client properly informed;
20 In fact they will not cover actual costs given the level of standard recoverable costs. Even on an indemnity basis it may well be that full actual costs are not recovered. The shortfall is still, prima facie, payable by the client; assuming that the costs are properly chargeable at all. 21 This relates to conveyancing; the tariff rate is in fact set low, certainly by comparison with estate agents, not to mention the government itself.
Appendix 5 767 Rule 57:
Advocates must not act, whether in their professional capacity or otherwise, towards anyone in a way which is fraudulent, deceitful or otherwise contrary to their position as Advocates, nor must Advocates use their position as Advocates to take unfair advantage for themselves or another person; Rule 59: When writing a letter before action, an Advocate must not demand anything other than that recoverable under due process of law; Rule 63: An Advocate who fails to honour a professional undertaking is prima facie guilty of professional misconduct; Rule 65: An Advocate will be held personally liable to honour an undertaking given on behalf of anyone, unless liability is expressly and clearly disclaimed in the undertaking itself. The commentary distinguishes a mere statement of a client’s intentions or an agreement between Advocates as agents for their clients which is manifestly without the assumption of any personal liability; Rule 68: Where an Advocate in partnership gives an undertaking in the course of his or her practice, all partners are responsible for its performance; Rule 71: An Advocate must act towards other Advocates with frankness and good faith consistent with his or her overriding duty to the client. It is said in the commentary that this extends to correspondence. An Advocate must not write offensive letters to other members of the profession;22 Rule 72: An Advocate should not interview or otherwise communicate with any party who to the Advocate’s knowledge has retained an Advocate to act in the matter except with that other Advocate’s consent; Rule 74: Advocates who act in litigation, whilst under a duty to do their best for their client, must never deceive or mislead the Court; Rule 78: An Advocate must not make or offer to make payments to a witness contingent upon the nature of the evidence given or upon the outcome of a case; Rule 80: Where a client, prior to or in the course of any proceedings, admits to his or her Advocate that the client has committed perjury or misled the court in any material matter in relation to those proceedings, the Advocate must decline to act further in the proceedings, unless the client agrees fully to disclose his or her conduct to the court; Rule 81: An Advocate must comply with any order of the court which the court can properly make requiring the Advocate or the firm to take or refrain from taking some particular course of action; Rule 83: An Advocate who appears in court or in chambers in civil proceedings is under a duty to say on behalf of the client what the client should properly say for himself or herself if the client possessed the requisite skill and knowledge; Rule 84: Where the Rules are silent or ambiguous as to any matter of conduct, an Advocate shall be bound mutatis mutandis by the relevant rules and principles of professional conduct from time to time obliging English barristers and solicitors. Ultimately there is no substitute for reading the Code in full, together with the commentary.
22
God forbid!
768 The Laws of Guernsey The Advocate’s Publicity Code 2000 This code replaces the former Rules governing advertising by Advocates. In essence an Advocate may publicise his or her services in any way. However nothing in the code authorises any breach of the Rules of Professional Conduct23 and Advocates must not publicise their practices in any manner which may reasonably be regarded as being in bad taste. Likewise, publicity must not be inaccurate or misleading in any way. The Code prohibits, inter alia, the publication of success rates, regulates what can and cannot be said about charges and urges care in avoiding the holding out as partners or Advocates those who do not possess that status.
The Advocates’ Accounts Rules 1989 These Rules take the form of an Order of the Royal Court and govern how client money must be dealt with by an Advocate. Client’s money must be paid into a client account. There are limitations on what money may be paid into the client account. In essence it must only be trust or client money as opposed to the Advocate’s own money. The monies that may be withdrawn from the account are also regulated; eg monies taken for the discharge of the Advocate’s fees. Accounts must be kept. HM Procureur has a right to inspect all books of account and documents relating to any client of the Advocate upon there being prima facie evidence that a ground for complaint exists and provision for the cost of the exercise. Nothing in the Rules deprives an Advocate of any recourse or right against monies standing to the credit of a client account. There are very similar rules entitled the Advocates’ Trust Accounts Rules 1989 There is a third set of rules, the Advocates’ Accounts (Deposit Interest) Rules 1989. These concern the holding of larger sums of money for a client and require sums of a certain size held for a certain time to be placed on deposit earning interest. There is a presumption that an amount exceeding £3,000 which is unlikely to be reduced below that amount during two months should be placed on deposit or otherwise earn interest. The client has a remedy in that he may require the Advocate to obtain a certificate from the Chambre de Discipline stating whether or not interest ought to have been earned for him and, if so, the amount thereof.
23
See rule 11 in this context.
Appendix 6 Expressions Used in Guernsey Conveyances Drafted in French anglicé appartenant de assujettis et astreints (et) auront les dits preneurs avoisinantes ayants belle bille boisseaux (en) bon argent comptant borne cache chasse clos comme héritière en partie comme par dessus comme sus est dit compteur courtil curer dame de ce bail délaissance du fidèicomis
anglicised belonging to subjected to the third purchasers shall have the (right/enjoy) neighbouring cause successors in title (a) yard; note that it is masculine (a) lot bushels in cash boundary mark or marker small track or road small track or road enclosure as heiress in part as over as stated above meter a small field to cleanse Mrs the premises hereby conveyed conveyance between trustees e.g. one trustee retires and another is appointed, the former transfers the trust property to the latter
de leur libre et franché volonté ont reconnu et confessé avoir fieffé et baillé à rente d’eux du survivant des deux et des hoirs de tel survivant en fin et perpétuité d’héritage à . . . demoiselle désert
of their free will have recognised and declared that they have conveyed for themselves, the survivor of them and the heirs of such survivor in perpetuity of inheritance to . . . Miss area of scrubland or otherwise unuseful land
desservant (le) dit bail tel qu’il se pourporte avec ses issues et entrées, fossés et reliefs, murailles, libertés, franchises et servitudes, tout et autant comme en peut compéter et
serving the said sale such as it purports to be with its exits and entrances earth bank hedges and reliefs, walls, freedoms and servitudes as much as belongs to the said vendors,
770 The Laws of Guernsey appartenir aux dits bailleurs, preneurs à rente des dites prémisses de ce bail (entr’autres prémisses) du dit . . .
purchasers of the premises hereby conveyed together with other premises from the said . . .
(la) dite somme de rente demeurera amortie en fin et pour jamais
the said sum of wheat rent remains extinguished forever
(les) dites prémisses de ce bail
the premises hereby conveyed
(les) dits preneurs les hoirs du survivant des deux et ayants-cause
the said purchasers, the heirs of the survivor of them and their successors in title henceforth right of way to devolve Esquire drain in perpetuity of inheritance
dorénavant droit de passage échoir écuyer égout en fin et perpétuité d’héritage entre les mains desquels et des hoirs du survivant des deux la dite somme de rente demeurera amortie en fin et pour jamais
entretemps faisant un retour fait feu fidèicomis fidèicommissaire fossé froment froment de rente gisant
gouttière hachée hautgard héritage icelles icelui jaonière louage maisonette ménage
into the hands of whom and of the heirs of the survivor of them the said sum of rent will remain capitalised finally and forever; (ie no rente will be payable in the future) in the meantime making a return/paying back done (the) late trust trustee earth bank hedge wheat wheat rente lying; this is referring to the boundaries; French language conveyancing is the opposite to English language conveyancing in this regard—in French conveyances you go to the neighbouring feature and work from the compass point inwards whereas in English conveyancing you work from the compass point outwards gutter(ing) hatched a stackyard (for hay or straw) real estate the same the same (masculine) furzebreak tenancy a small cottage or bungalow small field or vegetable garden
Appendix 6 771 mitoyenne moitié et moitié murailles (les) murailles entre deux ont comparu paraphé en double par dessus parterre pignon (se) pourporte prise à rente procureur
puits puits perdu relief
savoir est souffriront
surplombant (en) teint rouge tous et tels autres droits (le) tout joignant ensemble tuyau venelle vidange vivier vuider
shared (used to describe a party feature) half and half (used to describe a feature divided down the middle) walls the walls between have appeared initialled in duplicate over flowerbed or small garden gable purport (a) conveyance (an) attorney; ie a person holding a power of attorney, also referred to as “le constituant bailleur” well cesspit the right to go onto neighbouring land in order to maintain a boundary feature, eg to trim a hedge namely/to whit and they shall allow (the purchasers will respect certain rights reserved or agree the creation of new rights) overhanging coloured red all such other rights the whole adjoining and together pipe another Guernsey word meaning alley emptying fishpond to empty
The following phrases indicate the key parts of a French conveyance: “savoir” precedes a definition clause; “savoir est” precedes the definition clause; “gisant” precedes the boundary clause; “et auront” precedes the rights and servitudes clause; “le dit bail” precedes the title clause; “fait”/”la dite vente” precedes the consideration clause; “quitte et exempt” key words in the title indemnity clause. See also the Conveyancing Order 1969, an Order of the Royal Court which provides some additional assistance as to the use of French terms and their English equivalents.
Appendix 7 A BASIC GUERNSEY CONVEYANCE 24 THIS CONVEYANCE made this 25th day of June two thousand and two between GEORGE LE BOUTILLIER,25 son of Henry Albert, of the Manor House, Gosselin Road, in the parish of Saint Peter Port (hereinafter referred to as “the Vendor”, which expression where the context so permits shall include his heirs) of the one part and JOHN TUPPER,26 son of Arthur John, and ELODIE MARIE TUPPER (née Simon) his wife, both of Havelet House, Upper Colborne Street, in the parish of Saint Peter Port (hereinafter referred to as “the Purchasers”, which expression where the context so permits shall include their successors in title) of the other part; WITNESSETH: THAT the Vendor hereby conveys for an estate of inheritance to the Purchasers accepting for themselves the survivor of them and the heirs of such survivor ALL THOSE PREMISES (hereinafter referred to as “the premises hereby conveyed”) comprising A DWELLING-HOUSE known as the MANOR HOUSE, GLASSHOUSE, OUTBUILDINGS and GARDENS the whole adjoining and situate at Gosselin Road, in the said parish of Saint Peter Port on Fief le Roi; THAT the premises hereby conveyed are BOUNDED: on or towards the North by Gosselin Road; on or towards the East by Rue Briard; on or towards the South by a field owned by the Reverend Jacques Louis Victor Cachemaille27 and wife, the wall between belonging to the premises hereby conveyed; and on or towards the West by a dwelling-house known as Furibond, outbuildings and land owned by George Métivier28 and wife, the fence between party; THAT the Purchasers shall have all such rights as heretofore granted or reserved and shall be subject to all such servitudes as heretofore granted or reserved insofar as such rights and servitudes subsist;
24 With acknowledgements to the book by L James Marr, Guernsey People (Phillimore, 1984) from where the biographical details of those named in this otherwise fictional conveyance are taken. The names of spouses and other relatives are also fictional. 25 (1783–1867) Responsible for introducing gas lighting to St Peter Port, reforming and re-building Elizabeth College and the construction of the Commercial Arcade. 26 (1727–1795) The first Guernseyman to achieve the rank of Major-General in the British Army; became Commandant-in-Chief of the Royal Marines. He commanded a battalion at Bunker’s Hill during the War of American Independence and participated in Admiral Rodney’s victory at the Battle of the Saints in 1782. 27 (1804–1877) Vicar of Sark from 1835. He developed a profound fear of the sea upon seeing a ship carrying Pierre Le Pelley, Seigneur of Sark, disappear after being swallowed up by a huge wave off l’Eperquerie. He never left Sark again. He was a prolific diarist leaving a rich source of information about life in Sark in the 19th century. 28 (1790–1881) Guernsey poet and author of the Dictionnaire Franco-Normand. He made a study of Guernsey patois perceiving it to be a genuine survival of Norman-French.
774 The Laws of Guernsey THAT this conveyance comprises all right title and interest in the premises hereby conveyed vested in the Vendor as purchaser thereof from William Le Hurel29 and wife by conveyance registered on the 18th March 1965; THAT this conveyance is made in consideration of the payment by the Purchasers of the sum of SIX HUNDRED AND SEVENTY THOUSAND POUNDS (£670,000) the receipt whereof the Vendor hereby acknowledges; THAT the Vendor hereby covenants to indemnify the Purchasers against all rentes and encumbrances except chefrentes and manorial dues and against all defects in title; THAT the Purchasers shall enter into possession of the premises hereby conveyed on this day; IN WITNESS WHEREOF the said parties appeared before the undersigned Lieutenant Bailiff and Jurats of the Royal Court of this Island of Guernsey on the day and year first above written and confirmed and ratified this Conveyance, the Purchasers having produced a congé from Her Majesty’s Receiver General in discharge of liability to pay Treizième.
Lieutenant Bailiff
29 Rolls of the Assizes held in the Channel Islands in 1309 show that William Le Hurel was fined for taking the King’s rabbits; there is no mention of his guinea pigs.
Appendix 8 HOW TO PERFORM THE CLAMEUR Ensure carefully that the circumstances are such that it is appropriate to raise the Clameur at all.30 On the assumption that it is, take two witnesses, kneel in their presence at the site of the offending conduct (and ideally in the presence of the alleged wrongdoer) and state: “Haro! Haro! Haro! à l’aide mon Prince! on me fait tort.”31 Then say the Lord’s prayer as follows: Notre Père qui es aux cieux; Ton nom soit sanctifié, Ton règne vienne; Ta volonté soit faite sur la terre comme au ciel. Donne-nous aujourd’hui notre pain quotidien; et nous pardonne nos offences, comme nous pardonnons à ceux qui nous ont offensés. Et ne nous induit point en tentation, mais délivre-nous du mal. Car à Toi est le règne, la puissance et la gloire, aux siècles des siècles. Amen! Then say the grace: La Grace de Notre Seigneur Jesus Christ; la dilection de Dieu, et la communication de Saint Esprit soit avec nous tous eternellement. Amen.32 And proceed to the Royal Court to register the Clameur within 24 hours.
30
See the section on the Clameur in the main text for guidance. “Haro! Haro! Haro! Help me my Prince. I am being wronged.” A quite different form of grace for use by, say, the Greffier at a Chief Pleas dinner (or indeed for use at any meal) is as follows: “Bénis, Seigneur, ces biens de Ta Providence, et dispose nous à les reçevoir avec reconnaissance.” 31 32
Bibliography Atkin’s Court Forms, 2nd edn, Butterworths A, B, Droit International Privé, 2nd edn, Economica, 1997 B, L, Droit Civil, 13th edn, editions Sirey, 1999 B, B & W, Principles of French Law, OUP, 1998 B, A, Droit Civil, Les Obligations, 8th edn, Montchrestien, 2001 Bingham & Berryman’s Motor Claims, 11th edn, Butterworths, 2000 Bowstead & Reynolds on Agency, 17th edn, Sweet & Maxwell, 2001 B, AJ, Minority Shareholder’s Remedies, CUP, 2002 B, A History of French Private Law, trans Rapelje Howell, Little, Brown & Co, 1912, reprinted William S Hein & Co, 1999 Bullen & Leake and Jacob’s Precedents of Pleadings, 12th edn, Sweet & Maxwell (the current edition is the 15th) C, E, The Channel Islands, 2nd edn, 1924 C, L, Essai sur les Institutions, Lois et Coûtumes de l’Île de Guernesey, 1889 Cheshire & North’s Private International Law, North & Fawcett, 13th edn, Butterworths, 1999 C, M, The Normans, Blackwell, 2000 Chitty on Contracts, ed Hugh Beale, 28th edn, Sweet & Maxwell, 2000 Civil Procedure, Sweet & Maxwell, 2002 Clerk & Lindsell on Torts, Anthony Dugdale, 18th edn, Sweet & Maxwell, 2001 Code Civil, Dalloz, 2003 Code de Commerce, Dalloz, 2002 C, G, Droit Civil Les personnes Les biens, 10th edn, Montchrestien, 2001 C & T, Cross on Evidence, 7th edn, Butterworths, 1990 (the current edition is the 9th) C, C, The German Occupation of the Channel Islands, Guernsey Press, 1975 D & F, French Substantive Law, Key Elements, Sweet & Maxwell, 1997 D, Slave Worker in the Channel Islands F, Dictionnaire de Droit et de Pratique, 1779 D & M, The Conflict of Laws, 13th edn, Sweet & Maxwell, 2000 D, Les lois civiles dans leur Ordre Naturel, 1777 D, J, History of Guernsey, Longman, Brown, Green and Longmans, 1841 E & S, The Law of Landlord and Tenant, 6th edn, Butterworths, 2002 F, Lexique du Moyen Age, Armand Colin, 1995 F, History and Sources of the Common Law, Tort and Contract, Stevens & Sons, 1949 F, The Law of Torts, 9th edn, 1998 G, J, Traité de la Renonciation par Loi Outrée et de la Garantie, 1845 G, Mareva Injunctions and Anton Piller Relief, 4th edn, Sweet & Maxwell, 1998 G, Principles of Modern Company Law, 6th edn, Sweet & Maxwell, 1997 H & M, Modern Equity, 16th edn, Sweet & Maxwell, 2001 H, CH, Norman Institutions, Frederick Ungar Publishing Co, 1918 H, The Law of Trusts, 3rd edn, Sweet & Maxwell, 1998
778 The Laws of Guernsey I, A Historical Introduction to the Law of Obligations, OUP, 1999 J & W, European Convention on Human Rights, 3rd edn, OUP, 2002 J, P, On Real Property and Taxation in Guernsey, 1866 J, P, A Short History of Guernsey, 4th edn, Guernsey Press Co, 1994 J, The Digest of Roman Law; Theft, Rapine, Damage and Insult, trans CF Kolbert, Penguin, 1979 L M, J, Ébauche du Style de Procéder Devant la Cour Royale de l’Île de Guernesey, 1804 L M, T, Remarques et Animadversions sur l’Approbation des Lois et Coutumier de Guernesey, 1826 L P, JH, The Norman Empire, OUP, 1973 L & B, Lindley & Banks on Partnership, 18th edn, Sweet & Maxwell, 2002 MB et al, Butterworths’ International Litigation Handbook, Butterworths, 1999 M, LJ, Guernsey People, Phillimore, 1984 M, LJ, A History of the Bailiwick of Guernsey, Phillimore, 1982 M & S, Jersey Law of Trusts, 3rd edn, 1993 M, P, Droit International Privé, 6th edn, Montchrestien, 1998 (the current edition is the 7th) M, Répertoire Universel et Raisonné de Jurisprudence, 4th edn, 1813 N, The French Law of Contract, 2nd edn, Clarendon Press, 1992 N, SN, The Origin and Development of Jersey Law, An Outline Guide, rev edn, 1999 Nouveau Code de Procédure Civile, Dalloz, 2001 O, The Ecclesiastical History of Orderic Vitalis, ed and trans Marjorie Chibnall, Oxford Medieval Texts, 1968–1980 P, Coutume de Normandie, 1st edn, 1704 Phipson on Evidence, gen ed MN Howard, 14th and 15th edns, Sweet & Maxwell, 1990 & 2000 P, A Concise History of the Common Law, 5th edn, Little, Brown & Co, 1956 P, Lois et Coutumes de l’Île de Jersey, 1928 P, Oeuvres de Pothier contenant Les Traités du Droit Français, ed by Dupin, 1827 vol 1 Traité des Obligations vol 2 Traité du Contrat de Vente vol 9 Traité de la Procédure Civile vol 10 Coutumes d’Orléans P, Treatise on the Contract of Partnership, trans Owen Davies Tudor, Philadelphia, 1854, reprinted William S Hein & Co, 1994 P, Treatise on the Contract of Sale, trans LS Cushing, Boston, 1839, reprinted Lawbook Exchange Ltd, 1999 P, Treatise on the Law of Obligations or Contracts, trans William Evans, London, 1806, reprinted Lawbook Exchange Ltd, 2000 P, S M, The Loss of Normandy 1189–1204, 2nd edn, MUP, 1960 P, S M, The Thirteenth Century 1216–1307, 2nd edn, Oxford History of England, 1962 R, E, The Vikings, rev edn, Penguin, 1998 R, T, The Normans, Tempus Publishing, 1999 S, L, History & Community, CUA Press, 1997 S, J, Emmins on Criminal Procedure, 9th edn, OUP, 2002 Supreme Court Practice 1999, Sweet & Maxwell, 1998
Bibliography 779 T, G, Commentaires du Droict Civil tant public que privé, observé au pays & Duché de Normandie, 1574 U, The Story of the Channel Islands, Faber & Faber W, Le Roman du Rou, trans Glyn Burgess, Société Jersiaise, 2002 W, Treatise on the History, Laws and Customs of Guernsey W, Misplaced Trust, 2nd edn, 2002 W, Landlord and Tenant, gen ed K Lewison, Sweet & Maxwell, 2002
Biographical Note: Gordon Dawes was born in Brighton, England on 18 March 1965. He was educated at Winchester College before going up to Exeter College, Oxford in 1984 as an Open Scholar to read Theology; thereafter he converted to law by taking a Diploma in Law at the City University, London before going on to the Inns of Court School of Law. He undertook his pupillage at, and in September 1990 became a tenant in, the Chambers of Eric Somerset Jones QC before going to Guernsey in July 1998 with his Guernsey-born wife. He joined Ozannes in August 1998 and attended Caen University in 2000 taking the Certificat des Etudes Juridiques Française et Normande. He took and passed the Guernsey Bar exams in the same year and was called to the Guernsey Bar in July 2001 upon completion of the required 3 year residential period. He became a partner of Ozannes with effect from 1st January 2003 and specialises in civil litigation with a particular emphasis on commercial litigation as well as personal injury and clinical negligence cases. His wife is also a Guernsey Advocate (and will ever be more senior on account of her birthright). He is the father of two small daughters; his interests include classical music, aviation, formula 1 motor-racing and the law.
Index Acquêts acquêts and propres; 173 Administrative law challenge to financial regulation powers; 293 review of decisions; 45 Administration business regulation see Financial services regulation Adoption see Family law Advocates accounts rules; 768 articles; 763 oath; 763 publicity code; 768 rules of professional conduct; 764 Affidavits requirements; 443 Anti-suit injunctions generally; 505 Anton Piller orders see Injunctions Arrêts application; 490 conservatoire; 488 discharge; 492 generally; 487–494 judgment, after; 492 personnes, arrêt des; 493 wages, arrêt of; 492 Bailiff history of office; 23 rôle; 25 Banking regulation see Financial services regulation Bankruptcy see Insolvency Borrowing see Control of Borrowing Care proceedings see Family law Chief Pleas (Sark) composition; 38 Children see Family law Child protection see Family law Civil courts Court of Alderney; 381 Court of Appeal; 386
Court of the Sénéschal; 382 Judicial Committee of the Privy Council; 394 Magistrate’s court, civil jurisdiction; 379 Royal Court; 384 Civil procedure absentee proceedings; 424 address for service; 428 affidavits; 443 amendment of pleadings; 454 appeal to Court of Appeal; 386 appeal to Privy Council; 394 appeal to Royal Court; 381, 382 automatic strike out; 450 cause; 425 commencement of proceedings; 424 consolidation of actions; 441 contribution proceedings; 405 costs bases; 471 costs orders; 470 flexible orders; 473 indemnity costs; 471 rules; 474 standards costs; 471 counterclaim; 437 Court of Appeal; see Court of Appeal (Civil) defences; 434, 437 discovery; 452 élection de domicile; 428 ending proceedings; 462 evidence, exchange of; 456 exceptions; 435 de fond; 435 de forme; 435 déclinatoire; 436 dilatoire; 436 péremptoire; 436 fin de non recevoir; 436 foreign judgments, enforcement of; 477 at common law; 477 reciprocal enforcement; 478 recognition; 477 generally; 375–483 indemnity costs; 471 interest; 468 interlocutory applications; 442 interrogatories; 457 judgment, enforcement of; 476 limitation; see Prescription non-contentious applications; 483 payments into court; 461 péremption; 450
782 Index Civil procedure (cont.): perimée; 450 pleading list; 427 pre-action discovery; 420 preliminary matters; 419 prescription; see Prescription Privy Council; see Judicial Committee of the Privy Council récusation; 464 reform in Alderney and Sark; 383 registration of claims; 429 requête civile; 476 rôle des causes à plaider; 428 rôle des causes en preuve; 452 security for costs; 430 service; 423 service out of the jurisdiction; 423 set-off; 438 setting aside judgment; 476 sources; 377 standard costs; 471 statement of claim; see cause strike out; 448 summary judgment; 445 summons for defences; 433 tabling of cause; 427 third party proceedings; 439 trial; 466 trial date, application for; 463 vexatious litigants; 441 without prejudice offers; 459 witness list; 452 witness summonses; 458 witnesses; 458 Clameur de Haro generally; 485 performing the clameur; 775 Code Civil influence; 10 Companies accounting obligations; 303 amalgamation of; 329 articles; 300 alteration; 308 commence business, right to; 306 criminal offences; 327 directors’ duties and liabilities; 312 disqualification of directors; 325 dissolution by Greffier; 317 document duty; 302 formation; 299 general meetings; 306 generally; 299–334 guarantee, companies limited by; 328 inspection of records; 305 liquidation; 318 remedies against officers; 324 migration of; 330
meetings; 307 members; 300 memorandum; 300 alteration; 308 minority shareholder protection; 314 valuation; 316 name; 300 change of name; 309 protected cell companies; 327 record keeping; 303 registered office; 303 seal; 303 share capital, protection of; 310 reduction; 312 shareholder rights, variation of; 312 shares, financial assistance for acquisition of own; 332 shares, purchase of own; 333 third parties; 306 winding up; 318 compulsory winding up; 320 general provisions; 323 voluntary winding up; 319 Confidential information generally; 362 Conflict of laws generally; 507- 9 Constitution generally; 17–43 Constitution (Alderney) constitutional position; 34 constitutional provisions; 35–7 Constitution (Guernsey) constitutional position; 17 good government; 20 Lord Chancellor’s Department; 19 privileges and immunities; 18 treaty making powers; 22 Westminster powers; 21–2 Constitution (Sark) constitutional position; 37 Contract law common heritage; 704 customary law; 693 European trends; 706 generally; 691–707 influences; 702 Jersey Law Commission; 705 Pothier, significance of; 692, 702 Control of borrowing borrowing control law 1946; 261 control of borrowing ordinance; 262 generally; 261–5 Control of development see Planning law Court of Alderney composition; 35 jurisdiction; 36, 381
Index 783 Court of Appeal (Civil) admission of new evidence; 388 appeals against decisions of fact; 392 appeals against exercise of discretion; 392 awards of damages; 390 civil division; 386 generally; 386–94 grounds of appeal; 391 interlocutory applications; 390 jurisdiction; 386 leave to appeal; 387 notice of appeal; 388 principles determining appeals; 392 procedure; 388 security for costs; 390 Court of Appeal (Criminal) generally; 541–5 grounds of appeal; 544 powers on appeal; 542 power to grant bail; 542 power to refer case to; 543 right of appeal; 541 Court of the Sénéschal composition; 38 jurisdiction; 38, 382 Court structure Bailiwick courts; 41 civil courts; 379 interrelationship; 41 Criminal courts Court of Alderney; 513 Court of Appeal; 541 Court of the Sénéschal; 512 Judicial Committee of the Privy Council; 545 Juvenile Court; 515 Magistrate’s Court; 514 Royal Court; 527 Criminal damage generally; 582 Criminal procedure abuse of process; 520 appeal, right of; 538 Court of Appeal, to; 541 Royal Court, to; 538 bail; 519 codes of practice for persons in custody; 585 committal proceedings; 522 new style; 524 old style; 523 procedure; 523 corporation, proceedings against; 519 generally; 511–88 guilty pleas; 522 homicide, jurisdiction; 587 mode of trial; 521 rehabilitation of offenders; 588 Royal Court trial; 527 sentencing; 528
absolute discharge; 533 attendance centre; 535 bind over; 536 compensation order; 537 conditional discharge; 533 consecutive sentences; 531 custodial sentences; 529 deportation order; 537 dismissal of charge; 533 fines; 533 fit person order; 535 no order; 537 parental recognisance; 535 probation; 533 prohibition order; 536 special care order; 535 special verdict; 529 supervision order; 535 suspended sentences; 531 summary courts; 512 summary trial; 522 witnesses, summonsing of; 521 Customary law as common law; 11 contract; 691 generally; 6–11 landlord and tenant; 684 meaning; 6 Norman customary law; 7 realty; 619 sources; 7, 8, 9 succession; 167 tort; 691 Data protection generally; 298 Death decree, presumption of; 105 Debt power to re-schedule; 239 Désastre see Insolvency Directors corporate trustee director, liability of; 164 disqualification of; 325 duties and liabilities; 312 regulation of; 274 see Financial services regulation see Companies Domestic violence see Family law Drugs confiscation orders; 557 customs and excise; 549 drug sentencing; 552 drug trafficking; 557 drug trafficking money; 564 drug trafficking proceeds; 565
784 Index Drugs (cont.): enforcement of drug trafficking provisions; 566 importation and exportation; 551 misuse of; 545 mutual assistance; 564 Vienna convention; 562 Ecclesiastical Court jurisdiction; 42 Electronic transactions electronic transactions law; 615 Empêchement d’agir generally; 399, 404 Employment law appeal; 351 Board of Industry advice and codes; 358 compensation for unfair dismissal; 359 complaint procedure; 348 continuous employment; 346 contractual rights; 340 dismissal; 348 employment protection; 344 generally; 339–62 notice of termination; right to receive; 345 preferred debt; 351 private international law; 361 reference to Royal Court; 351 reform; 361 restraint of trade; 362 statement of pay, right to; 343 statement of reasons for dismissal, right to; 345 remedies; 351 Sunday shop working; 362 termination, effective date of; 346 unfair dismissal, compensation for; 359 dismissed unfairly; 351 determination; 354 procedural fairness; 357 procedure; 361 reasonableness of employer; 355 written particulars, right to; 342 European Union relationship with; 39, 40 Evidence 1865 Law; 589 admissions; 600 bankers’ books; 615 electronic transactions; 615 exchange of; 456 expert evidence; 610, 614 generally; 589–618 hearsay rule; 598 hearsay rule, exceptions to; 600 criminal evidence; 606 generally; 600–11 statutory exceptions; 606 judicial or official documents; 596
matrimonial proceedings; 613 obtaining evidence in Guernsey; 616 civil evidence; 616 criminal evidence; 617 letter of request; 617 mutual assistance; 617 opinion, evidence of; 614 parol evidence rule; 596 preservation of testimony; 611 res gestae; 605 self-serving statements; 604 statements by deceased persons; 602 statements in public etc. documents; 602 testimony in former trials; 603 tribunals of inquiry; 616 witnesses; 458, 590 compellability; 590 competence; 590 departing; 594 generally; 589–618 ill; 594 in action; 595 overseas; 594 Execution of judgments execution and arrest; 220 foreign judgments; 477 generally; 220, 476 realty; see Insolvency and Saisie Executive reform; 29–30 systems of government; 29 Extradition execution of warrant; 519 fiscal offences; 577 Family law access; 81 adoption; 115, 121 affiliation proceedings; 89 Alderney provisions; 91 care proceedings; 109 care plans; 119 criteria; 109 fit person order; 110 interim measures; 118 interim orders; 112 place of safety; 112, 118 rights of appeal; 113 secure accommodation; 120 special care order; 110 supervision order; 111 child protection; 108, 113, 606 children; 99 costs; 105 custody; 81 divorce; 95 domestic violence; 83, 88 enforcement; 87, 108
Index 785 evidence; 606, 613 ex parte orders; 85 financial provision; 80, 100 formation of marriage; 79 generally; 79–121 ground for divorce; 95 guardianship; see Guardianship interim measures; 118 judicial separation; 98 legitimacy; 79 Magistrate’s Court proceedings; 80 married women’s property; 107 matrimonial causes; 92, 105 Matrimonial Causes Division; 92 Matrimonial Causes Rules; 102 nullity of marriage; 99 ouster orders; 84 periodical payments; 81 presumption of death; 105 protection of children; 108 reciprocal enforcement; 108 reconciliation; 95 representation; 118 rights of appeal; 87 separate representation; 118 taxation of maintenance payments; 216 taxation of spouses; 215 unmarried father; 82, 118 Fatal accidents bereavement award, absence of; 409 class of claimants; 407 contributory negligence; 409 estate, claims of the deceased’s; 409 legislation; 407 lost years claims; 408 Fiduciary regulation see Financial services regulation Financial services regulation administration business regulation; see fiduciary regulation banking regulation; 272 directors, regulation of; see fiduciary regulation fiduciary regulation; 274 advertising; 282 appeal; 281 controllers; 280 exemptions; 276 investigative powers; 282 licensing; 277 notice of decisions; 280 regulated activities; 275 revocation of licence; 279 financial services commission; 267 civil liability; 268 generally; 267–98 insurance business regulation; 285 appeal; 294
application for licence; 286 challenge to regulation; 293 civil liability; 296 codes and regulations; 296 financial guarantee insurance regulation; 297 licence; 287 names, regulation of; 288 offences; 295 regulatory powers; 291 regulatory régime; 286 representatives, liability for; 290 regulation of; 289 solvency margins; 289 investors, protection of; 269 Guarantee companies limited by; 328 Guardianship adults; 131 Alderney; 131 curatelle; 131 customary guardianship; 123 duties of guardian; 124 generally; 123–35 minors; 123, 127 powers of guardian; 124 statutory guardianship; 127 tutelle; 123 Health and safety at work law civil liability; 372 codes of practice; 372 compulsory insurance; 373 dangerous substances; 373 electricity; 368 first-aid and welfare; 367 general ordinance obligations; 369 generally; 363–73 growing properties; 368 ionising radiations; 369 miscellaneous provisions; 367 pits; 369 quarries; 367 sources; 363 English common law; 364 English legislation; 366 Guernsey common law; 365 Guernsey legislation; 366 woodworking machinery; 368 History historical background; 5 Housing Control generally; 51–62 housing control legislation; 51 housing licenses; 53 rights of appeal; 55 Human rights law human rights legislation; 47
786 Index Immigration controls; 62 requirements; 62 Immovables see Meubles and Immeubles Income Tax agents; chargeable to tax; 210 appeals; 218 allowances for non-residents; 211 degrees of residence; 204 determination of residential status; 203 double taxation relief; 208 exempt companies; 206 generally; 201–18 guardianship, taxation of persons under; 213 international business companies; 207 liability to Guernsey income tax; 202 maintenance payments, taxation of; 216 non-resident; 203 partnerships, taxation of; 212 personal representatives, taxation of; 215 resident’s liability to income tax; 205 revocable settlements; 214 right of appeal; 218 settlements on children; 214 social security; 218 spouses, taxation of; 215 trustees, taxation of; 213 Inheritance see Succession Injunctions 1987 Law; 494, 739 anti-suit injunctions; 505 Anton Piller orders; 503 ex parte applications; 497 financial services regulation, pursuant to; 505 generally; 485–506 jurisdiction to grant; 494 mandatory injunctions; 496 Mareva injunctions; 499 principles for grant; 496 procedure; 505 prohibitory injunctions; 496 Insider dealing generally; 582 Insolvency debt, power to re-schedule; 239 désastre; 219 commissioner, appointment of; 221 dividend; 227 execution and arrest; 220 merits of procedure; 227 non-preferred debts; 226 preferred debts; 223 priority of debts; 222
secured creditors; 223 special cases; 226 generally; 219–50 imprisonment for debt; 230, 493 insolvency; 231 creditors’ meeting; 231 declaration of; 231 income; 238 pension income; 238 preferences; 233 proving debts; 233 renunciation; 235 spouse as creditor; 238 state of; 229, 234 saisie; 240 final vesting order; 248 interim vesting order; 244 marshalling claims; 246 preliminary vesting order; 241 procedure; 240 register of claims; 245 summonsing debtor; 243 Insurance business regulation see Financial services regulation Intellectual property law generally; 505 Interest excessive interest, reduction of; 239 judgment interest; 468 Investment regulation see Financial services regulation Judicial Committee of the Privy Council generally; 394 procedure; 395 right of appeal; 394, 545 Judicial review review of decisions; 45 Landlord and tenant law agricultural tenancies; 689 customary law, and; 684 fixed term tenancies; 684 notice to quit; 685 periodic tenancies; 684 quarter days; 685 relief from forfeiture; 684 rent control; 689 stay of eviction; 686 Legislation (Alderney) legislative process; 35 Legislation (Guernsey) legislative process; 30 Orders in Council; 32 Legislation (Sark) legislative process; 39 Limitation see Prescription
Index 787 Limited partnerships see Partnership Liquidation see Companies Mareva injunctions see Injunctions Marriage see Family law Meubles and Immeubles nature and distinction; 170 Money laundering legislation confiscation proceedings; 573 disclosure of information; 571 false documents and domicile; 572 fraud investigation; 568 proceeds of crime; 573, 576 regulations; 576 terrorism; 578 Movables see Meubles and Immeubles Parliament see States of Alderney, States of Deliberation and Chief Pleas Partnership limited liability partnerships; 335 limited partnerships; 334 partnership law; 337 Party politics absence thereof; 29 Personal injury claims limitation; 401 prescription; 402 Planning law generally; 63–78 Planning law (Alderney) planning control; 76 Planning law (Guernsey) ancient monuments; 69 application for permission; 67 detailed development plan; 63 draft legislation; 70 enforcement; 69 planning control; 64 rights of appeal; 68 use classes; 65 Planning law (Sark) planning control; 76 Police offences against; 583 Pothier contract law, influence on; 701 importance; 693 jurist; 10 tort law, influence on; 696 Traité des Obligations; 10, 693
Powers of attorney generally; 134 Precedent rule of precedent; 13 Preferences see Insolvency Preferred debts generally; 223 see Insolvency Prescription 1979 Law; 729 boats and planes; 406 droits immobiliers; 397 droits personnels et mobiliers; 400 empêchement d’agir; 399 fatal accident claims; 402 executors and administrators, claims against; 406 generally; 396 personal injury claims; 401 trust claim; 156 trustees, claim against; 405 unfair dismissal; 406 Prison custodial sentences; 529 parole; 529 remission; 529 Privy Council see Judicial Committee of the Privy Council Procedural law see Civil procedure see Criminal procedure Propres propres and acquêts; 173 Protected cell companies generally; 327 Public Trustee generally; 165 Realty, law of Alderney conveyancing; 658 conveyance precedent; 773 co-ownership of Guernsey realty; 666 covenants, discharge of; 681 customary law origins; 619 easements; see servitudes flying freehold; 674 French conveyancing terms; 769 Guernsey conveyancing; 622 bonds; 653 Cadastre; 628 completion; 638 conditions of sale; 629 contract court; 626 cost of conveyancing; 646 damages; 631 délaissance; 642 deposit; 631
788 Index Realty, law of (cont.): Guernsey conveyancing (cont.): drafting the conveyance; 637 dwellings profits tax; 648 exchange; 645 fee farm land; 625 formal requirements; 629 franc fiefs; 625 gift; 646 Greffe; 627 local market; 626 mortgage; see bonds open market; 626 non en perchage; 625 partage; 644 poulage; 624 quarantaine; 624 registration; 641 rentes; 622 searches and enquiries; 632 share transfer, conveyance by way of; 650 history; 619 horizontal conveyancing; 674 lésion ultradimidiaire; 664 licitation; 669 partage; 644, 669 retrait lignager; 661 Sark conveyancing; 660 servitudes; 678 terres à l’amende; 682 usufruit; 672 Restraint of trade generally; 362 Right to Work right to work legislation; 60 Royal Court civil jurisdiction; 385 composition; 385 criminal trial; 527 rule making power; 386 Royal Court Civil Rules Royal Court Civil Rules 1989; 711 see Civil Procedure Saisie see Insolvency Security for costs see Civil procedure Security interests generally; 251–60 1979 Law; 252 1993 Law; 254 discharge of security; 257 formal requirements; 255 insolvent creditor; 257 methods of creation; 254 priority; 256 private international law; 258 sale and application of proceeds; 256
sale, power of; 258 saving provisions; 258 typical agreement; 259 Sentencing see Criminal procedure Shareholders see Companies Shares see Companies Sources for Guernsey Law common law; 11 contract law; 692 customary law; 6 English law; 11 French law; 10 generally; 6–16 Guernsey legislation; 12 Jersey law; 692 tort law; 692 States Committees existence and function; 29 procedural rules; 32 States of Alderney composition; 35 States of Deliberation (Guernsey) composition; 26–7 legislative provisions; 28 procedural rules; 32 Succession Law avoidance; 195 common traits; 168 composition of estate; 174 distinction between meubles and immeubles; 170 generally; 167–99 origins; 167 prescription; 197 professional fees; 179 proper law; 172 propres and acquêts; 173 rectification of wills; 198 will, formalities for; 176 winding up of estates; 198 Succession (Alderney) intestate succession; 188 personalty; 190 realty; 188 testate succession; 186 personalty; 187 realty; 186 wills, formal requirements; 178 Succession (Guernsey) intestate succession; 182 personalty; 185 realty; 182 testate succession; 179 personalty; 181 realty; 179
Index 789 wills, formal requirements; 178 Succession (Sark) personalty; 193 realty; 190 wills, formal requirements; 178 Summary offences generally; 582 Taxation see Income tax Terrorism prevention of; 577 Theft generally; 577 Third party rights against insurers generally; 409 Tort law customary law, tort and; 692 fatal accidents; see Fatal accidents generally; 691–707 health and safety; see Health and safety at work influences; 694 limitation; see Prescription prescription; see Prescription Tracing trust law provision; 155 Trustees appointment; 142 Beddoe application; 151 constructive trusteeship; 161 disputes; 151 duties; 143 exclusion of liability; innocent recipients; 162 liability; 157 liability to third parties; 160 outgoing trustee; 163 powers; 147 public trustee; 165 relief from liability; 159 retirement; 142 taxation; see Income tax trustee’s interest; 155 Trusts, the law of assistance of court; 150
Beddoe application; 151 constructive trusts; 161 costs; 154 court control; 153 court, direction of; 150 creation; 140 disputes, kinds of; 151 existence; 138 failure; 148 forced heirship; 141 generally; 137–66 innocent recipients; 162 perpetuity rule; 142 prescription; 156 proper law; 140 protective trust; 141 rectification; 153 retrospective effect of law; 165 sham; 138 taxation; see Income tax termination; 148 terms; 139 tracing; 155 trust, the; 137 Trusts Law 1989; 743 trustee; see Trustees variation; 149 Uninsured drivers 1936 Law insurer; 411, 417 conditions precedent to MIB liability; 412 generally; 410 limitations on MIB liability; 415 MIB agreements; 410 service of MIB; 415 Untraced drivers generally; 418 Wills formal requirements; 177 pre-conditions for validity; 176 rectification of wills; 198 see Succession law Wrecks and military remains protection; 76
