A Representation Brought by Oliver Passmore and Julie Melia v and The Dégrèvement of the Immovable Property of Caroline Beverley Elizabeth Powell (Née Chambers)

• Jurisdiction: Jersey
• Court: Royal Court
• Judge: Bailiff
• Judgment Date: 17 January 2019
• Neutral Citation: [2019] JRC 4
• Date: 17 January 2019

[2019] JRC 4

Royal Court

(Samedi)

Before:

T. J. Le Cocq, Esq., Deputy Bailiff, sitting alone.

In The Matter of a Representation Brought by Oliver Passmore and Julie Melia

and

And In The Matter of The Dégrèvement of the Immovable Property of Caroline Beverley Elizabeth Powell (NéE Chambers)

Advocate O. J. P. Passmore for the Representors.

Advocate J. Harvey-Hills for Jersey Home Loans Limited.

Advocate M. L. A. Pallot for Stephen Hill.

Authorities

Loi 1839 sur la Remise de Biens.

Loi (1880) sur la Propriétè Foncière.

Loi (2000) (Amendement No. 4) sur la Propriété Foncière.

HSBC -v- Ansbacher (Channel Islands) Limited [2007] JRC 167.

Halsbury's Law Vol 77, Mortgages.

Ansbacher Channel Islands Limited -v- HSBC Bank Plc [2007] JCA 228.

Gibbons -v- Gibbons [2011] JRC 033.

Re Reva Holdings Limited [2013] JRC 208.

Bradshaw -v- McClusky [1976] JJ 335.

In the matter of the remise de biens of Super Seconds Limited and others [1996] JLR 117.

Traite des Hypotèques 3rd edition 1709.

Doorstop Limited -v- Gilman and others [2012] (2) JLR 297.

Property —representation seeking a number of determinations in connection with the dégrèvement

Bailiff

THE DEPUTY

1 On 16 ^th August, 2018, Oliver Passmore and Julie Melia (“the Representors”) issued a representation seeking a number of determinations in connection with the dégrèvement of the immovable property of Caroline Beverley Elizabeth Powell (née Chambers) (“Mrs Powell”). The Representors were, on 22 ^nd April, 2016, appointed by the Court as Attournés in order to conduct the dégrèvement.

2 It is not necessary to set out at length the background to the dégrèvement. There have been a number of judgments of this Court in connection with it which have sufficiently set out the background in detail. In brief, however, the matter may be summarised for these purposes as follows:—

• (i) The immovable property of Mrs Powell in Jersey was known as La Vallette, Parcq De L’Oeilliere, Le Mont de la Pulente, St Brelade (“the Property”).

• (ii) Mrs Powell defaulted on various debts secured against the Property and after a significant period of indulgence an application was made for an adjudication of renunciation and thence dégrèvement.

• (iii) The hearing was due to take place on 6 ^th June, 2016, but prior to that hearing Mrs Powell applied for an order that her property be placed into the hands of the Court in accordance with the provisions of the Loi 1839 sur la Remise de Biens and the dégrèvement proceedings were accordingly stayed.

• (iv) On 31 ^st January, 2017, the Court granted Mrs Powell's application for a remise de biens and on 8 ^th August, 2017, the Court extended the remise de biens by a period of up to six months.

• (v) The remise de biens was unsuccessful and on 20 ^th April, 2018, Mrs Powell was deemed as a matter of law to have made cession of all her property movable and immovable and a stay on the dégrèvement proceedings was automatically lifted.

• (vi) A date was fixed for the dégrèvement hearing, namely 1 ^st June, 2018, which was then adjourned to 26 ^th June, 2018.

• (vii) At the dégrèvement hearing Stephen Hill trading as “Highbury Collection Services” (“the Intended Tenant”) as assignee of James Gray trading as James Gray Electrics declared that he accepted the tenancy of the Property.

3 The charges over the Property and those who held them were:-

• (i) Acorn Finance Limited (“Acorn”) pursuant to an Act of Court dated 21 ^st December, 2012, in the sum of £223,846.34 together with interest thereon;

• (ii) Charles Thacker and others practicing as Viberts pursuant to an Act of Court dated 25 ^th January, 2012, in the sum of £21,794.81 with interest thereon;

• (iii) Jersey Home Loans (“JHL”) pursuant to an Act of Court dated 14 ^th March, 2008, in the sum of £500,000 with interest thereon.

4 In addition, a declaration of privilege claim dated 22 ^nd May, 2018 was lodged by the Representors in the sum of £16,071.10 for costs and £4,141.20 for disbursements.

5 A number of issues have arisen relating to the discharge by the Intended Tenant as tenant après dégrèvement of the various charges and the questions for me to determine are whether the Intended Tenant is:-

• (i) Required to pay the legal costs incurred by JHL and Acorn as part of their secured debts over the Property;

• (ii) Only required to pay three years interest and the basis on which that interest may be charged; and

• (iii) Required to pay the amounts due prior to confirmation of his tenancy and whether a failure on the part of the Intended Tenant to pay those amounts requires the Attournés to summon the Intendant Tenant to appear before the Court to witness confirmation of the tenancy or whether, instead, the Intended Tenant should be treated as having renounced his acceptance of tenancy of the Property and the next secured creditor be asked whether it wishes to accept tenancy of the Property instead.

6 In essence, therefore, I am asked to determine what a tenant après dégrèvement must pay when he takes the tenancy and when he must pay it. This is of some substance, as the costs incurred by JHL and Acorn in and around the disputes before the Court over the dégrèvement of Mrs Powell are substantial sums. If it falls to the Intended Tenant to pay them, this will significantly increase the sum payable by the Intended Tenant over and above the figure specified as the debt in the various Acts of Court granting JHL and Acorn their charges over the Property.

7 JHL and Acorn argue, amongst other things, that they are entitled to their legal costs in full of vindicating and recovering their debt whereas the Intended Tenant maintains that he does not have to meet any of the costs of recovery incurred by JHL and Acorn but merely has to pay the capital outstanding of their charges, together with up to three years of interest.

8 8. Furthermore, the Representors seek confirmation from the Court that they are entitled to recover their costs of discharging their functions of Attournés from the Intended Tenant. In order to save unnecessary costs in the hearing before me, it was agreed that I would hear the question of the Attournés fees and costs first and that the Representors would thereafter withdraw from the proceedings remaining neutral on the other issues to be determined as between JHL and Acorn on the one part and the Intended Tenant on the other. Furthermore, whilst Acorn filed a skeleton argument they agreed with the submissions on the law advanced by JHL and they were not represented.

JHL's loan

9 JHL lent £500,000 to Mrs Powell to assist with the refinancing of the Property. It did so pursuant to a Facility Letter dated 4 ^th December, 2007.

10 The Facility Letter contained a number of provisions and provided essentially that the sum outstanding was available at JHL's discretion and repayable upon demand but otherwise repayable over a maximum term of 25 years with interest only payments in the meanwhile. There were provisions relating to the interest rate and confirmation that the outstanding interest would be debited to the mortgage account quarterly in arrears.

11 Clause 5 of the Facility letter states:—

• “5. As security for repayment of the advance and interest JHL Limited will require:—

• 5.1 A £500,000 first registered charge over the property…”

12 And, at clause 8, the Facility letter provides:—

“8. All legal costs, stamp duties and registry fees and other costs and expenses of whatever kind incurred by JHL Limited or JHL Limited's agents and the preparation, execution and operation of the advanced or any other documentation connected with the advance including the costs of any proceedings taken by us hereunder shall be for the account of and payable by you on demand.”

13 There was, thereafter, a bond executed between Mrs Powell and JHL which contains a proviso in the following terms:—

“Provided always that if any such capital or interest which term shall be deemed in this bond to include any interest payable on arrears of interest capitalised under the present proviso shall remain unpaid after the day on which the same ought to be paid then and in every case the interest so in arrears shall be capitalised and added for all purposes to the said capital hereby secured and shall henceforth bear interest at the highest rate specified in schedule 2 hereto…”

14 Nothing in the Facility letter or in the bond expressly states that any costs, which are expressed to be payable by the debtor, form part of the hypothecated sum. There is reference to capitalisation of interest and a number of references to the repayment of capital and interest but there are no references to the repayment of costs as part of the secured sum. On the surface of this documentation, it is not therefore clear to me that costs could be considered as part of the secured sum even between the lender JHL and Mrs Powell although they are clearly for her account. However the relationship between the tenant après dégrèvement and JHL (the former not being a party to the Facility letter or bond) is not governed by the loan documentation as such.

Law

15 The statute governing dégrèvement is, of course, the Loi (1880) sur la Propriétè Foncière (“the 1880 Law”). For ease of reference I will add an unofficial translation to the relevant Articles.

16 I start first by looking at the preamble to the 1880 Law which is in the following terms:—

“CONSIDéRANT que les Lois et Coutumes qui dans cette Ile régissent la propriété foncière, sont à plusieurs égards défectueuses, et qu’il est expedient d’y introduire des changements, dans le but de render plus sûr et plus facile le commerce de cette espèce de biens; les Etats ont résolu d’adopter le Règlement suivant pour avoir force de loi, moyennant la sanction de Sa Très Excellent Majesté en Conseil.”

Translation:

“CONSIDERING that the laws and customs in this Island governing land...