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Bankruptcy (Desastre) (Jersey) Order 2006: Amendment: Law drafting instructions

A formal published “Ministerial Decision” is required as a record of the decision of a Minister (or an Assistant Minister where they have delegated authority) as they exercise their responsibilities and powers.

Ministers are elected by the States Assembly and have legal responsibilities and powers as “corporation sole” under the States of Jersey Law 2005 by virtue of their office and in their areas of responsibility, including entering into agreements, and under any legislation conferring on them powers.

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  • demonstrating that good governance, and clear lines of accountability and authority, are in place around decisions-making – including the reasons and basis on which a decision is made, and the action required to implement a decision

  • providing a record of decisions and actions that will be available for examination by States Members, and Panels and Committees of the States Assembly; the public, organisations, and the media; and as a historical record and point of reference for the conduct of public affairs

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A decision made 11 April 2018:

MINISTERIAL DECISION REFERENCE:    MD-C-2018-0059

DECISION SUMMARY TITLE:  Law drafting request for an amendment to the Bankruptcy (Désastre) (Jersey) Order 2006 to (1) add the Republic of  Ireland as a prescribed country or territory for the purposes of giving assistance to a foreign court; and (2) to increase the prescribed limits for certain priority claims.

DECISION SUMMARY AUTHOR:

Lead Policy Adviser:  Private Wealth

IS THE DECISION SUMMARY PUBLIC OR EXEMPT?  

Public

REPORT TITLE:  Amendment to the Bankruptcy (Désastre) (Jersey) Order 2006

REPORT AUTHOR OR NAME OF PERSON GIVING REPORT:  (if different from Decision  Summary Author)

Lead Policy Adviser:  Private Wealth

IS THE REPORT PUBLIC OR EXEMPT 

Public

DECISION AND REASON FOR THE DECISION:

The Chief Minister approved the instruction of the Law Draftsman to prepare an amendment to the Bankruptcy (Désastre) (Jersey) Order 2006 to make two changes:-

(1)     To add the Republic of Ireland as a relevant country or territory for the purposes of giving assistance to the Irish courts pursuant to Article 49 of the Bankruptcy (Jersey) Law 1990 (the ‘Law’), it being noted that the Irish Court may act in aid of the Royal Court of Jersey in any bankruptcy matter before the Royal Court on a request for such assistance being made by the Royal Court, thereby reflecting principles of mutual co-operation and reciprocity;

(2)     To increase the prescribed limits for certain priority claims, namely (a) wages and salary and (b) holiday pay and bonuses under Article 32 of the Law, by application of the Jersey Cost of Living Index to the relevant figures.

 

RESOURCE IMPLICATIONS: Law Drafting time will be required to draft this proposed amendment.  There are no other resource implications for the States of Jersey as a result of this decision.

ACTION REQUIRED:

That law drafting instructions be sent by the Financial Services Unit to the Law Draftsman requesting that the amendment to the Bankruptcy (Désastre) (Jersey) Order 2006 be drafted.  

 

SIGNATURE:

 

 

SENATOR IAN GORST

POSITION:

 

 

CHIEF MINISTER

 

 

 

DATE SIGNED

EFFECTIVE DATE OF THE DECISION

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Bankruptcy (Desastre) (Jersey) Order 2006: Amendment: Law drafting instructions

REPORT

BANKRUPTCY (DÉSASTRE) (AMENDMENT) (JERSEY) ORDER 2018

Two amendments are proposed to the Bankruptcy (Désastre) (Jersey) Order 2006 (the “2006 Order”) to make two changes:-

(1)    To add the Republic of Ireland as a relevant country or territory for the purposes of giving assistance to the Irish courts pursuant to Article 49 of the Bankruptcy (Jersey) Law 1990 (the ‘Law’); and

(2)    To increase the prescribed limits for certain priority claims, namely (a) wages and salary; and (b) holiday pay and bonuses, under Article 32 of the Law, by application of the Jersey Cost of Living Index to the relevant figures.

 

1.  Addition of Ireland as a relevant country or territory for the purposes of Article 49.

 

Article 49 of the Law states as follows:-

49      Assistance for other courts in insolvency matters

(1)     The court may, to the extent it thinks fit, assist the courts of a relevant country or territory in all matters relating to the insolvency of a person, and when doing so may have regard to the extent it considers appropriate to the provisions for the time being of any model law on cross border insolvency prepared by the United Nations Commission on International Trade Law.[113]

(2)     For the purposes of paragraph (1), a request from a court of a relevant country or territory for assistance shall be sufficient authority for the court to exercise, in relation to the matters to which the request relates, any jurisdiction which it or the requesting court could exercise in relation to these matters if they otherwise fell within its jurisdiction.[114]

(3)     In exercising its discretion for the purposes of this Article the court shall have regard in particular to the rules of private international law.

(4)     In this Article “relevant country or territory” means a country or territory prescribed by the Minister.[115]

 

The current countries or territories prescribed in Article 6 of the 2006 Order are:-

(a)    Australia

(b)    Finland;

(c)     Guernsey;

(d)    the Isle of Man; and

(e)    the United Kingdom.

Thus assistance may be given by the Royal Court to a court of those named jurisdictions in matters of insolvency, to the extent that the Royal Court considers it fit.

The Viscount has indicated that it has come to her attention that whilst the Republic of Ireland has included Jersey in its equivalent legislation, Ireland has not been included as a prescribed territory for the purposes of the Jersey Law.

The relevant Irish provision is Section 142(1) of the Bankruptcy Act 1988 which provides that:-

142 (1)  ‘The Court and its officers may act in aid of any court in the Isle of Man or the Channel Islands, and its officers respectively, at the request of such court, in any bankruptcy matter before such court , and the Court and its officers so acting shall have the like jurisdiction and authority as in the case of a  bankruptcy originating under an order of the Court.’

It is clear, therefore, that the Irish court may act in aid of the Royal Court of Jersey in any bankruptcy matter before the Royal Court, on a request for such assistance being made by the Royal Court.

It is noted that the Royal Court has in any event a discretion to grant assistance to a foreign court in a country or territory not named under Article 49 of the Law, in accordance with the principles of comity and will usually exercise that discretion where there is evidence of reciprocity from the courts of the foreign state.

However, given the formal statutory basis for the provision of assistance in the Republic of Ireland, it is only right and proper that similar provisions are enacted in Jersey to reflect principles of mutual co-operation, recognition and reciprocity and to assist in this modern world of global trade and cross-border transactions.

 

2.  Increase in the prescribed limits for certain priority claims

Article 32 of the Law sets out how any proceeds realised as a result of the désastre process are to be distributed.  In particular, once the Viscount’s fees have been paid, priority is given, amongst certain other items, to claims by an employee of a bankrupt, for (a) arrears of wages and salary in the six month period immediately preceding the declaration; and (b) holiday pay and bonuses.  This means that these claims will be paid first and in full (if sufficient funds are available) before any other debts are considered. 

The sum to which priority is given may not exceed the prescribed amount as set out under Article 5(a) and (b) of the Order.  The current prescribed limits are:

(a)    £4,350 under Article 5(a) (wages and salary); and

(b)    £1,250 under Article 5(b) (holiday pay and bonuses).

The limits were last increased in December 2012.  Between then and December 2017, the Jersey Cost of Living Index (as provided by Statistics Jersey, formerly the States of Jersey Statistics Unit) shows an increase of 10%.  When applied to the above figures this results in figures of £4,783.58 and £1,374.59.

The recommendation from the Viscount is therefore to increase the amounts to:

 Article 5(a)  £4,800      Article 5(b)  £1,375

 

Financial and Manpower implications

There are no financial or manpower implications that would arise for the States from the adoption of the Draft Law.

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