Jersey Law 4/1983
SECURITY INTERESTS (JERSEY) LAW, 1983.
____________
1
Interpretation
2
Creation of security
interest
3
Security agreement
4
Time of creation of security
interest
5
Priority between security
interests in same collateral
6
Effect of subsequent
bankruptcy of debtor
7
Cancellation or partial
discharge of security interest
8
Power of Sale
9
Termination of security
interest
10
Service of notices
11
Saving provisions
12
Security given under foreign
law
13
Loi (1880) sur la
propriété foncière
14
Exclusive application
15
Rules of court
16
Short title
A LAW to make provision for
the creation of security interests in respect of certain intangible moveable
property and with regard to capacity of persons to give security over certain property
under the law of another jurisdiction and for connected purposes, sanctioned by
Order of Her Majesty in Council of the
16th day of MARCH,
1983.
____________
(Registered on the
5th day of April, 1983).
____________
STATES OF JERSEY
____________
The 1st day of June,
1982.
____________
THE
STATES, subject to the sanction of Her Most Excellent Majesty in Council,
have adopted the following Law: -
ARTICLE 1
Interpretation
(1) In
this Law, unless the context otherwise requires –
“bearer certificate” means a certificate of title to
securities by the delivery of which (with or without endorsement) the title to
the securities is transferable;
“certificate of deposit” means a document relating to
money, in any currency, which has been deposited with the issuer or some other
person, being a document which recognises an
obligation to pay a stated amount to bearer or to order, with or without
interest, and being a document by the delivery of which, with or without
endorsement, the right to receive that stated amount, with or without interest,
is transferable;
“certificate of title to securities” means any document
of title whereby a person recognises the title of
another to securities issued or to be issued by the first-mentioned person, and
in the case of any such document with coupons (whether attached or on separate
coupon sheets) includes any coupons which have not been detached;
“collateral” means property that is subject to a
security interest;
“court” means the Inferior Number of the Royal Court;
“debtor” means a person who causes or permits a
security interest to be created in property in which he has an interest and
includes his successors and assigns;
“lease” means a lease, underlease
or other tenancy, assignment operating as a lease or underlease
of a corporeal hereditament, or an agreement for such
lease, underlease, tenancy or assignment;
“moveable property” means all property, wherever
situated, whether tangible or intangible, vested, contingent, or future, which
is not regarded by the law of Jersey as “immeubles”
and includes choses in action;
“negotiable instrument” means a bill, note or cheque within the meaning of the Bills of Exchange Act 1882
(45 and 46 Vict.c.61) or a certificate of deposit;
“obligation” includes a debt and also includes a contingent
obligation and a guarantee of payment or performance of an obligation;
“policy of life assurance” or “policy”
means any instrument by which the payment of moneys by or out of the funds of
an assurance company, on the happening of any contingency depending on the
duration of human life, is assured or secured; and “assurance
company” means any corporation, society or company carrying on the
business of assuring lives or survivorships, either alone or in conjunction
with any other object or objects;
“secured party” means a person who has a security
interest and includes his successors and assigns;
“securities” means shares, stock, debentures, debenture
stock, loan stock, bonds, units of a unit trust scheme, or other shares of the
investments subject to the trusts of such a scheme, but does not include
negotiable instruments;
“security agreement” means an agreement that makes
provision for a security interest under the provisions of this Law;
“security interest” means an interest in intangible
moveable property that secures payment or performance of an obligation under
the provisions of this Law;
(2) Where
in this Law there is a reference to an Article or Schedule by number only, and
without further identification, such reference shall be construed as a reference
to the Article or Schedule of that number contained in this Law.
(3) Where
in any Article or other division of this Law there is a reference to a
paragraph, sub-paragraph or clause by number or letter only, and without
further identification, such reference shall be construed as a reference to the
paragraph, sub-paragraph or clause of that number or letter contained in the
Article or other division of this Law in which such reference occurs.
(4) Unless
the context otherwise requires, where this Law refers to any enactment, the
reference is a reference to that enactment as amended, and includes a reference
to that enactment as extended or applied by or under any other enactment,
including any other provision of that enactment.
(5) In
paragraph (4) “enactment” includes the Bills of Exchange Act 1882
(45 and 46 Vict.c.61).
ARTICLE 2
Creation of security interest
(1) For
the purposes of this Law a security interest may be created only in intangible
moveable property other than a lease.
(2) A
security interest may be created in accordance with any one or more of the
methods of creation referred to in this Article.
(3) A
security interest in securities is created where the secured party (or some
person on his behalf other than the debtor or some person on behalf of the
debtor) has possession pursuant to a security agreement of the certificates of
title to such securities.
(4) A
security interest in a policy of life assurance is created where the secured
party (or some person on his behalf other than the debtor or some person on
behalf of the debtor) has possession pursuant to a security agreement of the
policy.
(5) A
security interest in moneys held in a bank account is created where the bank
which holds such account for its customer is the secured party and has control
of such account pursuant to a security agreement and its customer and the
debtor are one and the same person.
(6) A
security interest in any intangible moveable property other than a lease is
created where the secured party (or some person on his behalf other than the
debtor or some person on behalf of the debtor) –
(a) has
pursuant to a security agreement title to the collateral; and
(b) has
complied with the requirements of paragraph (8) as to the giving of notice.
(7) The
reference to title in paragraph (6) is a reference to title acquired –
(a) in
the case of a bearer certificate or a negotiable instrument, by delivery with
any necessary endorsement; and
(b) in
any other case, by assignment of the collateral (with or without a proviso or condition
for reassignment).
(8) Express
notice in writing shall be given by or on behalf of the secured party to the
person from whom the assignor would have been entitled to claim the collateral.
(9) Paragraph
(8) does not apply in the case of a bearer certificate or a negotiable
instrument.
(10) References
in this Article to a security agreement are references to a security agreement
which complies with the requirements of Article 3.
ARTICLE 3
Security agreement
(1) For
the purposes of this Law a security agreement shall –
(a) be
in writing;
(b) be
signed by the debtor; and
(c) specify
–
(i) the
name of the debtor;
(ii) the
name of the secured party;
(iii) particulars
of the collateral sufficient to enable it to be identified;
(iv) particulars
of any encumbrances affecting the collateral;
(v) the
events which are to constitute events of default; and
(vi) the
nature, duration and amount of the obligation payment or performance of which
is secured under the security agreement.
(2) Subject
to paragraph (1), a security agreement may be in such form and contain or refer
to such matters as shall be agreed between the parties to such agreement.
ARTICLE 4
Time of creation of security interest
A security interest may be created before or after the obligation
to which it relates comes into existence.
ARTICLE 5
Priority between security interests in same
collateral
(1) Priority
between security interests in the same collateral shall be determined by the
order of creation of security interests relating to the same collateral.
(2) Nothing
in this Article shall prevent the postponement by a secured party of his
rights.
ARTICLE 6
Effect of subsequent bankruptcy of debtor
(1) Upon
the debtor becoming bankrupt a security interest created within the period of
ten days immediately preceding his becoming bankrupt shall be void.
(2) Subject
to the provisions of paragraph (1), upon the debtor becoming bankrupt, where
the secured party (or some person on his behalf other than the debtor or some
person on behalf of the debtor) does not have title to the collateral –
(a) to
the extent that the collateral is sufficient, the amount due to a secured party
in respect of a security interest created under paragraph (3), (4) or (5) of
Article 2 shall be paid in priority to all other claims; and
(b) nothing
in this Law shall affect the vesting in the Viscount or other body or person,
under the law relating to bankruptcy, of the title of the debtor to the
collateral.
(3) Where
the secured party (or some person on his behalf other than the debtor or some
person on behalf of the debtor) has title to the collateral the provisions of
this Article other than paragraph (2) shall apply.
(4) Subject
to the provisions of this Article and without prejudice to the provisions of
Article 8, the debtor becoming bankrupt or he or his property being subjected,
whether in the Island or elsewhere, to any other judicial arrangement or
proceeding consequent upon insolvency shall not affect the power of a secured
party to realise or otherwise deal with the
collateral in the same manner as he would have been entitled to realise or deal with it if the debtor had not become
bankrupt or he or his property had not been subjected to any such judicial
arrangement or proceeding.
(5) Where
the moveable property of the debtor has been declared ‘en desastre’ –
(a) the
Viscount 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;
(b) the
proceeds of such sale of the collateral shall be applied by the Viscount in the
order referred to in sub-paragraph (b) of paragraph (6) of Article 8; and
(c) subject
to sub-paragraph (b), the court may make an order directing such vesting and
sale upon such terms and subject to such conditions as the court may think fit.
ARTICLE 7
Cancellation or partial discharge of
security interest
(1) After
discharge, payment or other performance of the obligation payment or
performance of which is secured, the debtor may notify the secured party that
he requires –
(a) subject
to the rights of other secured parties –
(i) possession
of the documents relevant for the purposes of paragraph (3) or (4) of Article
2;
(ii) control
of the account relevant for the purposes of paragraph (5) of Article 2;
(iii) title
to the collateral relevant for the purposes of paragraph (6) of Article 2;
as the case may be; and
(b) a
duly completed certificate of discharge of the security interest.
(2) Where
it is agreed to release part of the collateral upon payment or performance of
certain of the obligations referred to in the security agreement, payment or
performance of which is secured, then after payment or performance of such
obligations the debtor may notify the secured party that he requires a duly
completed certificate of discharge as to the part of the collateral released
from the security interest.
(3) Where
the secured party has refused or neglected to comply with a requirement made by
the debtor under paragraph (1) or (2) for a period of seven days after the date
on which a notice in writing of such requirement was given to or served on the
secured party, the debtor may apply to the court for an order under paragraph
(4).
(4) Where
an application is made under paragraph (3) the court may –
(a) make
an order requiring the secured party to comply with the requirement made by the
debtor to such extent, within such time and subject to such damages and
penalties as the court shall specify in the order; or
(b) make
such other order as it shall think fit.
(5) In
this Article” certificate of discharge” means a certificate of
discharge in the form given in the Schedule and “documents relevant for
the purposes of paragraph (3) or (4) of Article 2” means a certificate of
title to securities or a policy, as the case may be.
ARTICLE 8
Power of Sale
(1) An
event of default occurs upon the happening of an event which under the
provisions of the security agreement is an event of default.
(2) A
power of sale of the collateral arises after an event of default occurs.
(3) A
power of sale under this Article or any provision of a security agreement shall
not be exercisable unless the secured party has served on the debtor a notice
–
(a) specifying
the particular event of default complained of; and
(b) if
the default is capable of remedy, requiring the debtor to remedy it;
and the debtor fails to remedy the default, if it is capable of
remedy, within fourteen days after receiving such notice.
(4) Subject
to paragraph (5) and subject to any provision of the security agreement to the
contrary, a power of sale under this Article shall be exercised only on the
authority of an order of the court, which –
(a) shall
grant such order upon being satisfied that a power of sale has arisen and has
become enforceable under this Law;
(b) subject
to paragraph (6), may grant such order either unconditionally or upon such
conditions as the court may think fit; and
(c) may
grant an order directing the debtor to do such acts and things as to the court
may seem requisite for the effective execution of the power of sale.
(5) Unless
otherwise provided in the security agreement, paragraph (4) shall not apply in
respect of collateral which is money or is represented by a negotiable
instrument or moneys held in a bank account.
(6) Upon
a sale under this Article the secured party shall –
(a) take
all reasonable steps to ensure that the sale is made –
(i) within
a reasonable time; and
(ii) for
a price corresponding to the value on the open market at the time of sale of
the collateral being sold;
(b) apply
the proceeds of sale in the following order –
(i) in
payment of the costs and expenses of such sale;
(ii) in
discharge of any prior security interest;
(iii) in
discharge of all moneys 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 security interest was created, if paragraph (8) applies
to such subsequent security interests;
(v) as
to the balance (if any remains) in payment to the debtor, or in the event that
the debtor has become bankrupt or been subjected to any other judicial
arrangement consequent upon insolvency, to the Viscount, receiver or other
proper officer.
(7) For
the purposes of this Article moneys derived from collateral of the kind
referred to in paragraph (5) shall be applied as if such moneys were proceeds
of sale under paragraph (6).
(8) This
paragraph applies to the security interest of any secured party on whose behalf
(as well as on his own behalf) the secured party exercising the power of sale
was, immediately before the exercise of such power, holding possession of or
exercising control of documents or collateral (whether by himself or through
some person on his behalf) for the purposes of Article 2.
ARTICLE 9
Termination of security interest
(1) Subject
to paragraph (3), a security interest created under paragraph (3) or (4) of
Article 2 terminates when the secured party (or some person on his behalf not
being the debtor or some person on behalf of the debtor) ceases to have
possession pursuant to the security agreement of the documents relevant for the
purposes of paragraph (3) or (4) of Article 2.
(2) In
paragraph (1) “documents relevant for the purposes of paragraph (3) or
(4) of Article 2” means a certificate of title to securities or a policy,
as the case may be.
(3) Paragraph
(1) shall not apply where the secured party has a security interest in the same
collateral under paragraph (6) of Article 2.
(4) A
security interest created under paragraph (5) of Article 2 terminates when the
bank being the secured party ceases to have control pursuant to the security
agreement of the account relevant for the purposes of paragraph (5) of Article
2.
(5) A
security interest created under paragraph (6) of Article 2 terminates when the
secured party ceases to have pursuant to the security agreement title to the
collateral relevant for the purposes of paragraph (6) of Article 2.
ARTICLE 10
Service of notices
(1) This
Article shall have effect in relation to any notice or other document required
or authorised by or under this Law to be given to or
served on any person.
(2) Any
such document may be given to or served on the person in question –
(a) by
delivering it to him;
(b) by
leaving it at his proper address; or
(c) by
sending it by post to him at that address.
(3) Any
such document may –
(a) in
the case of a company, be given to or served on the secretary, clerk or other
similar officer of the company or any person who purports to act in any such
capacity, by whatever name called;
(b) in
the case of a partnership, be given to or served on a partner or a person
having the control or management of the partnership business.
(4) For
the purposes of this Article and Article 12 of the Interpretation (Jersey) Law,
1954 (meaning of service by post) in its application to
this Article, the proper address of any person to or on whom a document is to
be given or served shall be his last known address, except that –
(a) in
the case of a company or its secretary, clerk or other officer or person
referred to in subparagraph (a) of paragraph (3), it shall be the address of
the registered or principal office of the company;
(b) in
the case of a partnership or a person having the control or management of the
partnership business, it shall be that of the principal office of the
partnership;
and for the purposes of this paragraph the principal office of a
company registered outside the Island or of a partnership carrying on business
outside the Island shall be their principal office within the Island.
(5) If
the person to be given or served with any document mentioned in paragraph (1)
has specified an address within the Island other than his proper address within
the meaning of paragraph (4) as the one at which he or someone on his behalf
will accept documents of the same description as that document, that address
shall also be treated for the purposes of this Article and Article 12 of the
Interpretation (Jersey) Law, 1954 as his
proper address.
ARTICLE 11
Saving provisions
(1) The
rights of –
(a) a
holder in due course of a negotiable instrument other than a certificate of
deposit;
(b) a
bona fide purchaser of securities without notice of a security interest
affecting such securities;
(c) a
person who has taken a certificate of deposit in good faith and for value
without notice of a security interest affecting such certificate of deposit;
are to be determined without regard to this Law.
(2) Nothing
in this Law shall affect a lien.
ARTICLE 12
Security given under foreign law
(1) This
Article applies to security given after the commencement of this Law over
property situated outside the Island where such security is governed by foreign
law.
(2) A
person having capacity under such foreign law to give security to which this
Article applies shall be deemed to have capacity so to do under the Law of the
Island.
(3) In
this Article “foreign law” means any law other than the law of the
Island.
ARTICLE 13
Loi (1880) sur la propriété
foncière
Nothing in the “Loi (1880) sur la propriété
foncière” shall
affect the validity of a security interest.
ARTICLE 14
Exclusive application
For the avoidance of doubt it is declared that after the
commencement of this Law no security over intangible moveable property may be
created under the law of the Island except under the provisions of this Law.
ARTICLE 15
Rules of court
The power to make rules of court under the Royal Court (Jersey)
Law, 1948 shall include a power to make rules for the
purposes of this Law and proceedings thereunder.
ARTICLE 16
Short title
This Law may be cited as the Security Interests (Jersey) Law, 1983.
E.J.M. POTTER,
Greffier of the States.
SCHEDULE
(Article 7)
SECURITY INTERESTS (JERSEY) LAW, 1983
Certificate of discharge
|
I,
A.B. of (insert name and address of secured party) hereby certify that the
security interest created or provided by C.D. of (insert name and address of
debtor) under a security agreement dated the
day of
, 19
, is wholly discharged (or) is discharged in part as follows (here
state the description of the part of the collateral in respect of which the
security interest is discharged).
|
|
Dated:
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|
...........................................
Signature of secured party.
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