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.