THE REMISE DE BIENS of BARKER on the representation of BARKER

CourtRoyal Court
JudgeTomes, Deputy Bailiff and Jurats Perrée and Hamon:
Judgment Date15 January 1987
Date15 January 1987
Tomes, Deputy Bailiff and Jurats Perre and Hamon:

A.P. Begg for the representor;

F.J. Benest for the autoriss;

R.A. Falle for the second creditor;

G.R. Boxall for the third creditor;

S.C.K. Pallot for the eighth and ninth creditors;

M.S.D. Yates for the tenth creditor.

Cases cited:

(1) American Cyanamid Co. v. Ethicon Ltd., [1975] A.C. 396; [1975] 1 All E.R. 504; (1975), 119 Sol. Jo. 136, followed.

(2) Barker, In re, 1987-88 J.J. 1, applied.

(3) Golder v. Socit des Magasins Concorde Ltd., 1967 J.J. 721, followed.

(4) Le Maitre v. de Feu, Royal Ct. (1850), 171 Ex. 508, unreported.

(5) Orion Property Trust Ltd. v. Du Cane Court Ltd., [1962] 1 W.L.R. 1085; [1962] 3 All E.R. 466; (1962), 106 Sol. Jo. 689, followed.

(6) Otto v. Lindford (1881), 18 Ch. D. 394; 51 L.J. Ch. 102; 30 W.R. 418, distinguished.

(7) Polini v. Gray (1879), 12 Ch. D. 438; 41 L.T. 173; 28 W.R. 360, distinguished.

(8) Walters v. Bingham, 1985-86 JLR 439.

(9) Wilson v. Church (1879), 11 Ch. D. 576; 48 L.J. Ch. 690; 27 W.R. 843, followed.

(10) Wilson v. Church (No. 2) (1879), 12 Ch. D. 454; 41 L.T. 296; 28 W.R. 284, distinguished.

Text cited:

Supreme Court Practice 1985, vol. 1, para. 29/1/13, at 461; para. 59/13/1, at 842.

Bankruptcyremise de bienspowers of autorissby Loi (1839) sur les remises de biens, art. 4, debtor gives unrestricted authority to autoriss to dispose of assets even against his will

Bankruptcyremise de biensextension of remiseno extension beyond one year against wishes of creditors since failure to conclude within year automatically results in dgrvement and repayment of creditors

Bankruptcyremise de biensstay of executionif creditors likely to be deprived of fruits of litigation, having regard to autoriss' extensive power under remise and desirability of concluding within one year, court may refuse to stay execution pending appeal

Injunctionsinterlocutory injunctionguidelines to be observedif court has jurisdiction to restrain dealings with fund pending appeal, must also be satisfied (a) applicant comes with clean hands; (b) merits of case are strong, i.e. there is serious question to answer; and (c) balance of convenience lies in favour of applicant

The representor sought to restrain the autoriss from action which might be taken consequent upon an earlier declaratory judgment of the court.

The representor having been allowed to make remise de biens contested the authority of the autoriss to dispose of his assets against his will, since he proposed an alternative sale, on the invitation of the autoriss, but refused to disclose the terms beyond that it would involve the sale of all his properties for a lower price than the autoriss could get for two of them. The Royal Court (Tomes, Deputy Bailiff and Jurats Perre and Hamon) ruled that the autoriss had the power both to dispose of assets at their discretion and, if necessary, against the will of the debtor, and to settle disputed claims. The representor served notice of appeal to the Court of Appeal and then made the present representation seeking an injunction restraining the autoriss from (a) selling or otherwise disposing of the representor's properties, and (b) settling the claims of the creditors discharged by the court. He prayed for such extension of the remise as might be necessary, or, which was raised in court, a stay of it.

The representor submitted that the court should exercise its discretion to restrain the autoriss from making any sales until the hearing of the appeal, which would otherwise be rendered nugatory, since the sales proposed by the autoriss would leave the representor and his family homeless, his wife without a job and himself without a business. He submitted that (a) the remise should be extended since the representor's unfettered right of appeal, the results of a sale prior to the appeal and the central nature of the issues on appeal, outweighed the postponement of the sale. A stay of the remise was requested at the hearing to prevent the year, normally given for a remise to run before dgrvement takes place, finishing while the representor was trying to pursue a point of law; in such a case time should not run against him. Alternatively that (b) a stay of execution under O.45, r.11 of the Rules of the Supreme Court should be brought into operation due to the continued correspondence between the parties on the subject of the alternative sale proposed by the representor; or (c) an injunction should be granted since the balance of convenience favoured the status quo and the damage to the representor which could ensue far outweighed the further wait the creditors, who were assured of eventual satisfaction, would endure. Whether the representation were phrased as an injunction or a stay, the court should look not at the label but the effect, and halt the proceedings until after the appeal.

The autoriss submitted that (a) the real question was whether there were very exceptional reasons for extending the remise beyond one year, which year would expire before the first possible appeal date; the fact that the autoriss had discretion to sell at will and the danger of the remise failing and sales being lost if, after a stay, the representor lost the appeal, should outweigh possible prejudice to the representor and the fact that the issue on appeal was of central importance; (b) no stay of execution should be granted because the correspondence since the judgment had not altered the autoriss' approach to the representor's proposals, which in fact clearly contemplated an unconscionable agreement, the terms of which had still not been disclosed to the court; (c) an injunction should not be granted since the balance of convenience was clearly in favour of the creditors.

The creditors submitted that (a) the application was a vexatious attempt to withdraw the authority given under art. 4 of the 1839 Law and an abuse of the process of the court, since the representor had continued to negotiate his proposed sale in opposition to art. 5 of the 1839 Law, and in breach of his undertaking to co-operate with the autoriss; (b) the representor had not come before the court with "clean hands" and there would be no serious prejudice to him if the application failed; in the circumstances he could not therefore appeal to equitable principles in favour of either an injunction or a stay; and (c) the balance of convenience was in favour of the creditors and favoured the refusal of an injunction since it was questionable whether the representor's proposed deal could satisfy the creditors in total, whereas the autoriss had negotiated excellent sales which could be lost if there were any significant delay. While the creditors would be paid interest on their debts, it was unreasonable to tie up their capital any longer than was necessary.

Held, dismissing the representation:

(1) Since by art. 4 of the Law of 1839 the representor gave unrestricted authority to the autoriss to dispose of his assets, and, in support of his application for an extension of the remise he had undertaken to co-operate fully with the autoriss, his continued attempts to have the properties sold to a person with whom he was personally negotiating breached that undertaking and he was obliged to accept the autoriss' proposed sale to the highest tenderer (page 15, lines 31 - page 16, line 2).

(2) The court would not grant an extension of the remise in this case which would extend the time beyond a year, because a remise that has not been successfully concluded within a year results, by operation of law, in a dgrvement, satisfying the creditors, and an extension would be against their will. Further, since the court could not go beyond or supplement the prayer of a party, it would not grant a stay of the remise itself, because such a stay was not included in the representation (page 16, lines 12-23).

(3) If the representation were regarded as seeking a stay of execution, the court would not exercise its unfettered discretion to grant such a stay. It should not deprive the creditors of the fruits of their litigation; that is, the funds to which they were entitled and, having regard to the authority of the autoriss under the remise, the representor's undertaking and the desirability of concluding the remise within one year, greater weight should be given to a prompt settlement and the satisfaction of the creditors (page 16, line 24 - page 17, line 2).

(4) If the representation were regarded as seeking an injunction, the terms sought, i.e. restraining the autoriss from selling or disposing of any of the representor's properties, would preclude a sale, even on the representor's terms, for an indefinite period and so would not be granted since it would prejudice the creditors. However, if it were to be considered as an appropriately phrased application, it would nevertheless still fail since even if the court had jurisdiction to grant the injunction, which it doubted, the case for restraining the autoriss from parting with the properties did not (a) satisfy the criteria of good faiththe representor had not come to the court with "clean hands," since he had failed to make a full disclosure of the nature of his proposed sale; (b) on the merits of the case the court was not satisfied that there was any serious question to be answered or any reasonable ground of appeal since the representor had consistently failed to provide any persuasive authority for his interpretation of the provisions of the Law of 1839; and (c) the balance of convenience clearly favoured the creditors, since the representor would, at worst, be left with more than sufficient funds to purchase a new home and business, while further delay could cause the remise to fail and the creditors to suffer considerable prejudice (page 16, lines 3-11; page 20, line 41 - page 21, line 15; page 22, lines 6-13; lines 26-29).

TOMES, DEPUTY BAILIFF: The representation of Mr. James Barker referred to...

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