Jersey & Guernsey Law Review – February 2013
BOOK REVIEW
A Dessain and M
Wilkins, Jersey Insolvency and Asset
Tracking, Key Haven Publications,
4th ed, 2012, ISBN 978-1-901614-55-8
1 The
law on insolvency in the Channel Islands has roots both in the customary law of
Normandy as well as influences from civil law developments in neighbouring
France and, more recently, in the influence, as far as corporate liquidation is
concerned, of comparable rules in the United Kingdom. Similar observations may
be made of the laws in relation to property, taking security and procedural
matters such as litigation and recovery, where the legal origins may lie
equally in civil and common law roots. As a mixed jurisdiction, the law in Jersey provides a fascinating insight into the
juxtaposition of rules from different legal families and how these are
articulated. Providing an understanding of these areas of law is the function
of this work, the fourth edition of a text first published in 1999, co-authored
by Anthony Dessain, senior partner in Bedells and a prominent Jersey advocate,
and Michael Wilkins, for many years the Viscount of the Royal Court in Jersey,
the official office-holder in bankruptcy in that jurisdiction. The six years
that have elapsed since the last edition have seen a number of changes in the
law in Jersey, which are reflected in the
updates in the text as well as in the provision of further commentary on key
issues that the authors deem necessary to elucidate the book’s contents.
2 The
text first offers a brief introduction to the Jersey legal system and court
structure, also providing a glimpse into the sources of Jersey
law and issues of validity and capacity. There then follows a very detailed
chapter on asset recovery and claimants’ rights around insolvency,
including litigation and enforcement issues. This chapter reveals the very
different concept of property in the Island,
which draws from the civil law insofar as property and co-ownership rights are
concerned. Security types, also canvassed here, illustrate the range of sources
used in Jersey law, showing civil law antecedents in real property interests, a
mixed heritage in the law relating to tangible movable security as well as the
Island’s own Security Interests (Jersey) Law 1983, covering intangible
movable security. The 1983 Law was an autochthonous development with a nod
towards the personal property security regime developed elsewhere in the
Commonwealth. The Commonwealth influence is now given greater expression in its
replacement, the Security Interests (Jersey) Law 2012, which is due to come
into force in 2013 and which is mentioned in some detail here. The interaction
between foreign and domestic security over property, especially
property situated in a jurisdiction other than where the security was created,
is dealt with here as well as issues in relation to enforcement, covering such
topics as torts, fraud, constructive trusts and tracing as well as other causes
of action. This ends with a section dealing with remedies and orders available
as well as the specific enforcement of judgments and arbitral awards.
3 Given
the likely root cause of any litigation that may be necessary, the next chapter
deals with directors’ duties
and liabilities under corporate, insolvency and other legislation, as well as
with issues of creditor and shareholder protection. The authors detail the many
statutory provisions underpinning control over directors’ behaviour and
the risk of their disqualification for breach of the rules. This is followed by
a chapter dealing with the specific issue of piercing the veil in the context
of the use of corporate bodies, which is particularly important given the
prevalence in Jersey of financial investments structured around bodies
established under corporate and trust laws, in the context of which piercing
the veil issues have also been raised. Major cases are referred to here, some
of which are of recent vintage, while the issue of corporate identity and the nature
of the separate legal entity continue to form themes in the case law,
particularly in the recent spate of vulture fund litigation, rendering the
discussion in this chapter particularly valuable.
4 Chapter
5 is a lengthy and major part of the work covering all that might be termed
“bankruptcy”, from winding-up procedures under company law to the
classic (cessions de biens and its
dependent enforcement procedures as well as
remise de biens) and modern (désastre) procedures in the law
of insolvency. There is a tremendous amount of detail in this chapter
explaining the functioning of the procedures, and the relevant provisions
underpinning them. They also deal with the case-law, illustrating the
court’s role in interpreting the law governing these procedures, many of
which have only been partially codified in statute and that at an early date,
for example the Laws of 1832 (cession de
biens) and 1839 (remise de biens).
Of note too is the continuing evolution of this jurisprudence, seen in a number
of recent cases, which are canvassed here, with reference also being made to
commentary on these procedures where available. What the whole chapter reveals
is not only the lack of a clear rescue procedure in Jersey, unsurprising given
the vintage of some of the procedures revealed here, but also how the older
procedures are being reworked in practice to deal with the enforcement of
creditors’ rights in the modern age, often with some success. Yet,
overall, what is interesting about these procedures is how often creditors’
access to them is restricted or qualified, leaving the debtor mostly in a
better position than he would be in many other jurisdictions.
5 The tome is then rounded off with two chapters on
cross-border insolvency, including how Jersey
courts have dealt with issues of co-operation and comity, as well as the impact
of human rights in insolvency, of more recent concern in the insolvency world.
To the material collected in the various chapters is then added further
commentary on issues raised in the text as well as appendices containing the
relevant laws. In summary, this is a very detailed text that offers a technical
and considered exposition of insolvency rules in Jersey.
It is well written and articulate, dealing with matters clearly and lucidly. For
these reasons, it should readily find a place on the shelves of anyone who has
dealings in that jurisdiction.
Paul J Omar, of
Gray’s Inn, Barrister, is a Visiting Professor at the Institute of Law,
Jersey