Rumasa S.A. and Williams & Humbert Ltd v W. & H. Trademarks (Jersey) Ltd and Six Others (Viscount Intervening)

CourtRoyal Court
JudgeTomes, Deputy Bailiff:
Judgment Date29 April 1986
Date29 April 1986
Tomes, Deputy Bailiff:

A.R. Binnington for the plaintiffs;

M.L. Sinel for the first, fifth and sixth defendants;

The second, third, fourth and seventh defendants did not appear and were not represented;

The Viscount appeared in person.

Cases cited:

(1) Cesena Sulphur Co. Ltd. v. Nicholson (1876), 1 Ex. D. 428; [1874-80] All E.R. Rep. 1102; 35 L.T. 275; 45 L.J.Q.B. 821; 1 T.C. 88; 25 W.R. 71.

(2) Davies v. British Geon Ltd., [1957] 1 Q.B. 1; [1956] 3 All E.R. 389; (1956), 100 Sol. Jo. 650, applied.

(3) De Beers Consol. Mines Ltd. v. Howe, [1906] A.C. 455; (1906), 95 L.T. 221; 22 T.L.R. 756; 75 L.J.K.B. 858; 13 Mans. 394; 5 T.C. 198; 50 Sol. Jo. 666, applied.

(4) Overseas Ins. Brokers Ltd., Re, 1966 J.J. 547.

(5) Egyptian Delta Land & Inv. Co. Ltd. v. Todd, [1929] A.C. 1; (1928), 140 L.T. 50; 44 T.L.R. 747; 98 L.J.K.B. 1; 72 Sol. Jo. 545; sub nom. Todd v. Egyptian Delta Land & Inv. Co. Ltd. (1928), 14 T.C. 119.

(6) Godfray v. Le Couteur, Royal Ct. (1858), 181 Ex. 63, unreported.

(7) Hilton, In re, [1909] 2 Ch. 548; (1909), 101 L.T. 229; 79 L.J. Ch. 7; 17 Mans. 19, applied.

(8) Le Montais, Re, Royal Ct. (1730), 92 Ex. 1, unreported, followed.

(9) Mirpuri v. Island Dev. Cttee., 1967 J.J. 825.

(10) Tett v. States of Jersey, 1972 J.J. 2249.

(11) Thomasson, In re, Royal Ct. (1984), 271 Ex. 163, unreported.

Legislation construed:

Royal Court Rules, 1982 (R. & O. 7026), r.4/8: The relevant terms of this rule are set out at page 315, lines 1-14.

Texts cited:

Halsbury's Laws of England, 4th ed., vol. 1, paras. 64-66, at 76; para. 74, at 90; vol. 7, para. 83, at 55.

Le Geyt, Manuscrits sur la Constitution, les Lois et les Usages de Jersey, vol. 1, at 29, 33 (1847).

Supreme Court Practice 1985, vol. 1, paras. 18/19/17-18/19/18, at 314-315.

Administrationsubject of administration ordercompanies power not limited to individuals but may order administration of property of company "absent from Island"company absent if managed principally from abroad even if registered on Island

Administrationelectorscourt's duty to convene electorsRoyal Court Rules, 1982, r.4/8(4) imposes no duty to convene electors when Viscount is appointed administrator since court will perform supervisory function of electors

Administrationapplication procedureex parte applicationnot contrary to rules of natural justice if party subject to administration order not given opportunity to be heard since Royal Court Rules, 1982, r. 4/8(4) expressly provides for ex parte applicationsrule of natural justice only applies to final decisions and appointment of administrator is provisional

Administrationapplication procedureex parte application not abuse of process of court if essential for protection of applicant that administrator appointed without knowledge of party subject to administration order

CourtsRoyal CourtViscountcosts of legal proceedingsViscount not entitled to costs of litigation arising out of functions as officer of Royal Court

The first defendant company sought to have the appointment of the Viscount as its administrator revoked.

The plaintiff companies were in dispute with the fifth and sixth defendants over the beneficial ownership of the first defendant company and, in particular, one of its assets, a valuable trade mark. Since the fifth and sixth defendants were in immediate control of the first defendant, the plaintiffs were concerned that their interests might not be adequately protected during the course of the dispute and they therefore obtained injunctions against the first, fifth and sixth defendants restraining them from, inter alia, assigning, transferring or otherwise parting with possession of the first defendant's assets. Subsequently, they applied to have an administrator appointed to the first defendant company and the Royal Court (Tomes, Deputy Bailiff and Jurats Picot and Myles) granted the application and appointed the Viscount. The company then brought the present proceedings seeking to have the appointment revoked.

The first, fifth and sixth defendants submitted that the appointment should be revoked because (a) the court had no power to appoint an administrator of property on the Island belonging to a company rather than to an individual since (i) the power to appoint an administrator predated the concept of a company and could, therefore, have no application to it, and (ii) the effect of appointing an administrator would be to vary the terms of the statute creating the company, which the court could not do; (b) even assuming that the court could appoint an administrator of a company, it could only do so where the company was "absent from the Island," which the first defendant was not since it was registered on the Island and had a secretary and legal advisers who were resident there; nothing in the Loi (1861) sur les Socits Responsabilit Limite required the directors of a Jersey company to be present on the Island; (c) in any case, the Viscount had not been validly appointed because the provisions of the Royal Court Rules, 1982, r.4/8(3), requiring that electors be convened to supervise his actions, had not been complied with; (d) the appointment of an administrator on an ex parte application by the plaintiffs was contrary to the rule of natural justice which required that the first defendant be given an opportunity to be heard; and (e) the appointment was also an abuse of the process of court because an ex parte application should only be made in extreme circumstances and in this case it was neither necessary nor expedient.

The plaintiffs submitted, inter alia, that the Viscount's administration of the first defendant company should continue because (a) the court did have the power to appoint an administrator of a company since (i) it was essential that the ancient institution of administration should adapt to take account of subsequent developments in the law such as the recognition of a novel form of "person," the company, and (ii) the effect of the Interpretation (Jersey) Law, 1954, art. 9 was that, in the absence of any contrary intention, references to "persons," in the Royal Court Rules, 1982, r.4/8, must be taken to include companies; (b) the first defendant had to be treated as "absent from the Island" even though it might be legally domiciled there by virtue of registration on the Island because (i) the test of absence was the factual one of the location of its controlling officers, and it was conceded by the first defendant that the fifth and sixth defendants operated from abroad, and (ii) if the court were unable to appoint an administrator within the jurisdiction who would be bound by the injunctions already issued, then the protection of the plaintiffs' interests provided by those injunctions would be severely limited, as the company would be able to assign the trade mark outside the jurisdiction with impunity; (c) the terms of the Royal Court Rules, 1982, r. 4/8(3) were inapplicable when the administrator appointed by the court was the Viscount because, as its officer, he was responsible to the court for his actions and there was, therefore, no need for electors to ensure that the administration was conducted properly; (d) there had been no infringement of the rules of natural justice since (i) the terms of the Royal Court Rules, 1982, r.4/8(4) which expressly allowed for an ex parte application, necessarily excluded the rule that a party whose rights were affected by a decision should be given an opportunity to be heard, and (ii) the rule only applied to final judgments and not to provisional orders, such as the Viscount's appointment, which might subsequently be revoked; and (e) there had been no abuse of the process of the court since the ex parte application had been necessary to secure the full protection of the plaintiffs' interests.

The Viscount sought (a) leave to intervene in the proceedings; (b) the amendment of the order appointing him so that he was not obliged in his management of the company to consult the plaintiffs' English lawyers; (c) the court's ratification of his past conduct as administrator; and (d) payment of his supplementary costs.

Held, dismissing the application and refusing to revoke the order appointing the Viscount as administrator:

(1) The appointment of the Viscount was validly made and he would be granted leave to intervene in the action. The court had the power to appoint an administrator of property belonging to a company as well as of that of an individual since (i) the ancient institution of administration was sufficiently flexible to take account of the law's recognition of a company as a novel form of property-holding "person," and (ii) under the Interpretation (Jersey) Law, 1954, art. 9, except where a contrary intention existed, "person" included "company" and there was no contrary intention in the Royal Court Rules, 1982, r.4/8 (page 314, lines 32-34; page 315, line 33 - page 316, line 3).

(2) It was true that the court could only appoint an administrator where the person or company whose property was subject to the administration was "absent from the Island." However, a company was not present on the Island merely because it was registered there. The test, which was similar to that used to determine whether a company was "resident" in Jersey for certain taxation purposes, was where the principal management of the company took place. In this case, it was conceded by the defendants that the company's operations were substantially controlled and directed by the fifth and sixth defendants from abroad and the company was therefore absent from the Island (page 316, lines 18-21; page 320, lines 6-17; page 320, lines 31-35; page 321, lines 30-33; page 322, lines 5-7).

(3) The provisions of the Royal Court Rules, 1982, r.4/8(3) were...

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