Revisiting the Remise de Biens – Part 2

I've been looking at the judgement given in the rejected Remise de Biens application by the Pitmans,
 
While I think the Court provided sound reasons for rejecting a Remise (see part 1 of my article), there remain unanswered questions relating to the whole proceedings, which I find most unsatisfactory, and these are explained here.
 
Jurat's Calculation of Assets
 
With regard to the Jurats assessment of the situation:
 
"The Jurats concluded that on the basis that the property was sold before 13th June 2014 and the secured lending discharged in full, together with additional interest amounting to approximately £10,670.40, there would be a surplus available to pay a dividend to the unsecured creditors providing sufficient margin to justify a remise."
 
Unsettled Questions
 
While the Court rejected the application for a remise on the grounds of past judgments, what is more curious is that upon the original application for a Remise, the jurats were instructed to make a valuation of the Pitman's assets.
 
Since that played no part whatsoever in the legal judgment, apart from determining that they had sufficient assets to pay the secured creditor (as required for a Remise),  one wonders why the Jurats were instructed to do so. Clearly, at that point in the proceedings, the case for rejecting a Remise was still open, otherwise why involve work in obtaining valuations?
 
The Jurats were appointed on 29th November, 2013 to examine the property of the applicants. They reported back that there would be a surplus available to pay a dividend to the unsecured creditors providing sufficient margin to justify a remise. On the basis of the Jurats' report, it seemed clear that the Court had jurisdiction to grant a remise."
 
But then the Court decided, on other matters entirely, to reject the Remise – "the Court's decision was not based upon the amount of the surplus that would be available for the unsecured creditors."
 
I've explained the reasoning behind the Court's judgement above, and it seems they certainly had grounds for rejecting the Remise:
 
"The Court was faced with applicants who were applying for a remise not to avoid the potential injustices of a dégrèvement but to gain the advantages of a remise and avoid the disadvantages of a désastre. There was no authority, as Mr Clarke conceded, to support the notion that a remise should be granted in order to avoid a désastre.."
 
I'm not saying that is not sound, and the reasons given in the rejection were comprehensible.
 
But what the Court failed to explain was why they wasted all the Jurats' time, and expenses in obtaining valuations in the first place, if they were going to be set aside on other grounds altogether. That I find quite incomprehensible. Is it the Court's business to waste what is probably tax payers money sending Jurats off on what is in fact a wild goose chase of no relevance? I would welcome an explanation.
 
Frederick Benest and Michael Wilkins's article on the Remise states that
 
"In summary, in making an application for a remise the debtor presents to the Court a sworn schedule of all his movable and immovable property. If the Court accepts the application in principle a double-phased process is then triggered.  First, two Jurats are appointed.  The Jurats examine the schedule and verify the value of the property of the debtor.  Following such consultation with creditors[8] as they deem appropriate the examining Jurats then report back to the Court (within fifteen days) as to the efficacy of a remise. Assuming that the Jurats are satisfied that a remise would have utility (namely that the value of the debtor's property indeed exceeds the secured claims) and any objections from creditors are not found by the Court to be overriding, the second phase of the process will in all probability be engaged." 
 
According to Benest and Wilkins, then, for the Jurats to present their case to Court, as they did in the case of the Pitmans, the Court must have accepted the application in principle. It remains unanswered, without satisfactory explanation, why the Court changed its mind and rejected the application in principle, even though there were good grounds for doing so.
 
I offer two possible explanations which would make sense of this, and of the two, I prefer the latter.
 
The first is that the Court had made up its mind to reject the application for a Remise on whatever grounds, and when those of valuation failed, sought other grounds to reject the Remise. The weakness of this is that the evidence of cases shows that the Remise had never been applied to a Désastre, only a Dégrèvement, and it was obvious beforehand that the Jurats valuation would almost certainly support a Remise. If an outsider like myself could see that, it must have been obvious to the trained legal minds.
 
The second is that in facing an attempt to use a Remise against a Désastre, the Court had no precedents to guide it, and needed time to examine the principles of law involved, and study the existing cases and commentary on the use of the Remise. The strength of this is that it explains why the Jurats investigated the property. At that time, the Court was faced with something unprecedented, and was not in a position to decide whether a Remise was viable.
 
What is unsatisfactory, if that is taken to be the case, is that the Court did not elucidate its own ignorance in the matter, and the fact that it had been "caught on the hop". It is quite probable that such an admission would be seen as a weakness, and hence was concealed simply to save face. No one likes to admit ignorance, especially lawyers.
 
That also explains the somewhat harsh tones in which the Court describes the Remise – "The 1839 Law as a stand alone statutory insolvency regime is barely fit for purpose in this modern age."
 
In fact, it is perfectly adequate in its proper case, as Benest and Wilkins point out, in mitigating the effects of a Dégrèvement, which itself is surely barely fit for purpose, and as archaic as the Remise. To remove one without tackling the other would, in my view, create a dangerous imbalance.  As a remedy against a Dégrèvement and not Désastre, it works very well.

List of Remise Cases Available Online

The following are links to cases available regarding the Remise, which show that it has, as far I can see, only ever been applied to a dégrèvement and never to a désastre. I've included a "snippet" of text to illustrate that is the case.
 
http://www.jerseylaw.je/Judgments/UnreportedJudgments/Documents/Display.aspx?url=04-03-18_Barker-v-Myles_and_Ors_053A.htm
 
The files that Mr Barker required related to the en désastre proceedings on 10th August, 1984, to 13th December, 1984, the files in the dégrèvement proceedings from 11th January, 1985 to 21st March, 1986 and the files of the remise de biens from the 21st March 1986 to the same date in 1987.
 
http://www.jerseylaw.je/Judgments/UnreportedJudgments/Documents/Display.aspx?url=2012/12-01-03_Gibbins-v-AG_001.htm
 
In relation to the present application the Crown accepts that the threshold is passed, that is to say that there has been a change of circumstances; that change has arisen because the property, which I have referred to, has subsequently been taken by Jersey Home Loans Limited on a dégrèvement, an application in February last year by Mr and Mrs Gibbins for a remise de bien having failed
 
http://www.jerseylaw.je/Judgments/UnreportedJudgments/Documents/Display.aspx?url=2010/10-09-14_Representation_of_Mickhael_166A.htm
 
On Friday 26th February 2010, Dr Mickhael made an application to the Royal Court for the granting of a remise de biens pursuant to the Loi (1839) sur les remises de biens ("the 1839 Law").  The application was accompanied by a sworn schedule of all his property pursuant to Article 1 of the 1839 Law, and, in accordance with Article 2 of that law, the Court appointed Jurats De Veulle and Nicolle to examine the schedule and the application, and report back to the Royal Court as to whether or not a remise was viable.  In the interval, the dégrèvement was stayed in accordance with usual practice. 
 
http://www.jerseylaw.je/Judgments/UnreportedJudgments/Documents/Display.aspx?url=2012/12-12-21_Representation_of_Franco_238.htm
 
The representor applied to the Court by way of representation on 12th October, 2012, seeking a Remise de Biens on the basis that the value of the property significantly exceeded the liabilities of the representor secured against the property and that an orderly sale of the property would result in a surplus after settlement of such liabilities.  The Court stayed the dégrèvement and appointed two Jurats to examine the application and report back to the Court.
 
The Court therefore granted the Remise de Biens.
 
http://www.jerseylaw.je/Judgments/UnreportedJudgments/Documents/Display.aspx?url=2013/13-10-25_In_the_matter_of_Reva_Holdings_Ltd_208.htm
 
On 7th June, 2013, JHL obtained an Acte Vicomte Chargé d'Ecrire.  On 23rd August, 2013, on the application of JHL, the Court pronounced 'L'Adjudication de la Renunciation' of Reva's immovable property and ordered that a dégrèvement should take place.  It appointed Mr Pollano and Advocate Temple as attournés.
 
As already stated, Reva applied on 20th September for a Remise.  The supporting affidavit suggested that Reva's assets exceeded its secured liabilities.
 
Having considered carefully the points put forward by Miss Grant on behalf of Reva, we are not satisfied on the evidence that, if a Remise were to be granted, the sum realised would exceed the secured liabilities and accordingly we decline to order a Remise.  The stay on the dégrèvement is therefore lifted and it may now proceed.
 
http://www.jerseylaw.je/Judgments/UnreportedJudgments/Documents/Display.aspx?url=2008/08-08-14_Burby-v-Thompson_and_Bertram_133.htm

On 29th March the applicants applied for a stay of the dégrèvement proceedings on the grounds that they were considering applying for a Remise de Biens.  The Court stayed the dégrèvement proceedings until 7th May or such longer period as might be agreed by consent between the parties.  The Act specifically stated that, for the avoidance of doubt, the Attournés were relieved of their responsibility to progress the dégrèvement during the course of the stay.
 
http://www.jerseylaw.je/Judgments/UnreportedJudgments/Documents/Display.aspx?url=2008/08-11-27_Burby-v-Thompson_and__Bertram_JCA204.htm
 
The parties in this Appeal both agree that, when an application to make remise de biens is made, this will  stay the dégrèvement proceedings as a matter of  customary law despite the fact that no statutory power to stay is spelled out in the 1839 or the 1880 Law. This is confirmed in Le Gros; Traité du droit coutumier de L'ile de Jersey, page 371.
 
http://www.jerseylaw.je/Judgments/UnreportedJudgments/Documents/Display.aspx?url=1998_103.htm
 
The property in question, "Les Buttes," was owned by the Bower family, and unfortunately at some date prior to 1974, the Appellant's father ran into financial difficulties, and a remise de biens was accorded to him.
 
http://www.jerseylaw.je/Judgments/UnreportedJudgments/Documents/Display.aspx?url=04-03-18_Barker-v-Myles_and_Ors_053A.htm
 
The files that Mr Barker required related to the en désastre proceedings on 10th August, 1984, to 13th December, 1984, the files in the dégrèvement proceedings from 11th January, 1985 to 21st March, 1986 and the files of the remise de biens from the 21st March 1986 to the same date in 1987.
 
http://www.jerseylaw.je/Judgments/UnreportedJudgments/Documents/Display.aspx?url=2006/06-03-23_Snell-v-Beadle_046.htm
 
On 22nd July 1994, Mrs Bell took judgment against Mr Snell in respect of her loan.  The sum involved was £76,800 plus interest.  Faced with two judgments and the risk of one or other of them being enforced by dégrèvement (in which event he could have lost the equity in the relevant property(ies)) Mr Snell applied for a Remise de Biens on 5th August 1994, which application was granted on 26th August.
 
http://www.jerseylaw.je/Judgments/UnreportedJudgments/Documents/Display.aspx?url=2006/06-11-16_Snell-v-Beadle_JCA164.htm
 
On 22nd July 1994, Mrs Bell took judgment against Mr Snell in respect of her loan. The sum involved was £76,800 plus interest. Faced with two judgments and the risk of one or other of them being enforced by dégrèvement (in which event he could have lost the equity in the relevant property) Mr Snell applied for a Remise de Biens on 5th August 1994.
 
http://www.jerseylaw.je/Judgments/UnreportedJudgments/Documents/Display.aspx?url=2007/07-12-04_Ansbacher-v-HSBC_Bank_PLC_JCA228.htm
 
Advocate Thompson's speculations as to whether and when a dégrèvement would be appropriate, and as to the choice between a désastre, a remise de biens and a dégrèvement do not seem to me to overcome these hurdles.
 
This was unnecessary and inappropriate, and not required to enable Ansbacher to proceed to a Vicomte chargé d'écrire, and thence to a dégrèvement
 
http://www.jerseylaw.je/Publications/JerseyLawReview/Oct97/case_summaries.aspx
 
Sparta Investments Ltd. and others v Superseconds Ltd. CA: (Collins, Nutting, and Sumption JJA) April 11th 1997 unreported.
 
The first and second appellants in October 1995 had sought and obtained a remise de biens which was for a term of six months. On 7th June 1996, having concluded that the combined estate of the debtor and guarantors could not be sold for a sum sufficient to satisfy the secured charges on the real property of the appellants, the Autorisés sought and were granted a discharge of the remise de biens, The Royal Court held that the discharge of the remise de biens gave rise to a general cession of the appellants the cession having been conditional until the failure of the remise de biens.

Revisiting the Remise de Biens – Part 1

I've been looking at the judgement given in the rejected Remise de Biens application by the Pitmans, and annoyingly it cited a case I had been unable to access because it was behind the Jersey Legal Information Board restricted access login. This was "Super Seconds Limited and Others v Sparta Investments Limited [1997] JLR 112." It was annoying, because some aspects of that judgement were significant in the Pitman's case.
 
Jurat's Calculation of Assets
 
With regard to the Jurats assessment of the situation:
 
"The Jurats concluded that on the basis that the property was sold before 13th June 2014 and the secured lending discharged in full, together with additional interest amounting to approximately £10,670.40, there would be a surplus available to pay a dividend to the unsecured creditors providing sufficient margin to justify a remise."
 
Reasons for Rejection: Remise applies to Dégrèvement not Désastre
 
The Pitman's assets covered the secured creditor, so why did the remise fail, and the Court reject it?
 
The Court looked back at the major case law with regard to the Remise, that of "Re Mickhael" and it noted that it
 
"sets out the principles which the Royal Court will be likely to consider in determining when conditions warrant the granting of a remise but this was against the background of dégrèvement proceedings. In the case before us there were no dégrèvement proceedings either instituted or threatened."
 
It should be remembered that like, the Remise, a dégrèvement is an archaic legacy of Jersey law, which is a debt recovery process for secured lenders seeking to recover an unpaid debt. It is a debt recovery procedure which results in the debtor's property becoming freed from all security and thereby "disencumbered". It is therefore very different from a désastre. The aim of désastre is to settle debts amongst the creditors equitably.
 
The ruling of case law was that a remise was preferable to a dégrèvement, but the case of the Pitmans involved a désastre instead. But there is no case law providing authority for this:
 
"the Court was faced with applicants who were applying for a remise not to avoid the potential injustices of a dégrèvement but to gain the advantages of a remise and avoid the disadvantages of a désastre. There was no authority, as Mr Clarke conceded, to support the notion that a remise should be granted in order to avoid a désastre."
 
Here the case of Super Seconds Limited and Others v Sparta Investments Limited [1997] was cited, and the critical sentence in assessing the Pitman's case was this judgement:
 
"In the ordinary course of events, where a court has a discretion to make a declaration treating a debtor's property as being en désastre, that course will be preferable to authorizing one of the older procedures, unless it is shown to be in the interests of justice that the latter should be used.  "
 
With the case of Sparta, the Court rules that:
 
"The substance (although not of course the legal analysis) of the transaction would be that Sparta would have succeeded in artificially re-arranging the order in which the company's assets are applied against its liabilities"
 
It is clear that the Court's thinking with regard to the Pitmans was that this was also an artificial arrangement to circumvent a désastre which would have settled debts amongst the creditors equitably.
 
In summing up, the differences in approach were noted between a dégrèvement, where a secured creditor pursued a claim, and a désastre, which covered the rights of the unsecured creditors to be paid.
 
The critical factor in the judgement was not that the unsecured creditors would be paid a proportion of what remained in the estate, because that is the case with a remise, but the fact that a remise was a legal means to mitigate the harshness of a dégrèvement.
 
As Natasha Clark of Appleby noted:
 
"The advantage of the dégrèvement procedure for a creditor bank, as opposed to the désastre (bankruptcy) option, is clear: whilst désastre ensures the equitable treatment of all the creditors, a dégrèvement is concerned with clearing charges off the property and disposing of it. Unlike a désastre it allows any value in the property, over and above that which is owed, to vest in the creditor who takes the property, and not in the debtor."
 
It can be seen that any monies left from the sale of property with a dégrèvement would remain with the creditor bank, a "windfall" effect!:
 
This is why the Court in judging the Pitman's case ruled that:
 
"What should be added however is that both the previous cases concerned an application for a remise de biens where the alternative was that of dégrèvement.  In those cases, a remise de biens could mitigate the rigours of the process of dégrèvement and provide either a return for unsecured creditors, or indeed a return of some equity to the debtor.  "
 
And Natasha Clark (in her article) actually does not consider best means of  mitigation to be an application for a Remise but rather to apply for a désastre:
 
"Whilst at a first glance the procedure does appear unfair on debtors, there is in fact a safety net in place for them, as they may apply for a désastre after the dégrèvement procedure has started, up until the dégrèvement is actually granted by the court (a time period of at least 3 months). "
 
In rejecting the claim for a Remise, the Court looked back at the two cases in question. The Super Seconds / Sparta one was an example of a Remise being rejected because it was "artificially re-arranging the order" in which creditors were paid, and the Jersey Home Loans Limited case was one where it was rejected "there was some good or sound reason to do so" in favour of a désastre:
 
"It must be right, therefore, that as the Court of Appeal said in Super Seconds Limited, the Court should endeavour to order a désastre, even if it is more costly as a procedure, unless it can be shown to be in the interests of justice that the older remise procedure should be used, or as the Deputy Bailiff put it in Jersey Home Loans Limited, there was some good or sound reason to do so."
 
And they also notice how the désastre proceedings are a better way of balancing interests of debtors and creditors:
 
"That balance has been struck by allowing a period of time to elapse (ordinarily four years) after a declaration and before the debtor can be discharged of his debts, during which time the creditors can benefit from the comprehensive powers vested in the Viscount (and the Court) and from the possibility of sharing in any property acquired after the declaration and before the discharge. This modern and balanced regime governs the great majority of bankruptcies and we could see no reason why those insolvent debtors who happen to own real property in Jersey and might therefore qualify for a remise should be treated any differently, unless it was to avoid the real injustices that can flow from a dégrèvement, which is, after all, the rationale for the 1839 Law."
 
I've looked through every Remise case available, and they all involve a dégrèvement and not a désastre. Remise as a mitigation against a désastre has never been considered in those cases, and this case sets an important precedent in rejecting that avenue, and setting out the broad principles for doing so.
 
Clean Hands Argument Failed
 
As an aside, it is pertinent to note that the Court gave no credence to the submission of the lawyers for the JEP and Broadlands, Mr Santos-Costa and Mr Steenson who
 
"submitted that the application should be refused because the applicants did not come to the Court with clean hands, in part because of their criticisms of the Jersey judicial system and in part for their having caused their clients to incur legal fees which they could not pay."
 
"Mr Santos-Costa handed us a copy of Mr Pitman's blog in which he is indeed very critical of the Jersey judicial system, but the Court declined to take it into account.  Whatever opinions the members of the Court might personally hold on the contents of the blog, we robustly defend the right of every person whatever views he or she may hold to have access to impartial justice."
 
The Court instead noted that "No bad faith could be shown on the part of the applicants in their application for a remise".
 
Unanswered Questions
 
While I think the Court provided sound reasons for rejecting a Remise, there remain unanswered questions relating to the whole proceedings, which I find most unsatisfactory, and I will attempt to explain those in part 2 (tomorrow).

 

The Remise de Biens: How it works

"St Helier deputies Trevor and Shona Pitman have asked the legal system to allow their home to be sold to pay off their debts. Under Jersey law, no States members are allowed to be considered bankrupt while sitting in the assembly. The couple were unavailable for comment. In Jersey law a "remise de biens" allows people struggling with debt to ask the court to step in. It is a form of bankruptcy that lets a court sell property to pay off debt."(1)

The BBC report is not strictly speaking accurate. The "remise de biens" is not bankruptcy as such. That is a "désastre (bankruptcy)". The purpose of a désastre is to gather in and sell an insolvent debtor's assets, to find out why insolvency occurred and whether any bankruptcy offences were committed, and to distribute the net proceeds of the assets to those who are entitled to them. After 1990, the Bankruptcy Law on désastres applied to both movable and immovable property.

There is also a "dégrèvement" which is a procedure mostly used by banks where property is concerned. As Natasha Clark of Appleby explains:

"The advantage of the dégrèvement procedure for a creditor bank, as opposed to the désastre (bankruptcy) option, is clear: whilst désastre ensures the equitable treatment of all the creditors, a dégrèvement is concerned with clearing charges off the property and disposing of it. Unlike a désastre it allows any value in the property, over and above that which is owed, to vest in the creditor who takes the property, and not in the debtor. " (2)

And there is another option, which is at the discretion of the court, a "Remise de Biens". One of the critical case laws cited in this respect is termed "Re Barker [1985]", where  Charles Frossard, Commissioner, said this:

"We have come to the conclusion that a remise de biens is always preferable to a dégrèvement when conditions warrant it."

Deputies Trevor and Shona Pitman have applied for a "remise de biens" which is not totally bankruptcy, as can be seen from this explanation from Voisin Law:

"It is in fact a means by which a debtor, who might not be insolvent, but is experiencing difficulty satisfying his creditors can realise those of his assets as are necessary to satisfy his creditors in an orderly fashion. The procedure is governed by the Loi (1839) sur les Remise de Biens, albeit it is derived from ancient customary law. The process is commenced by the debtor applying to the Royal Court. The debtor must own immovable property i.e. land/house. The debtor is required to present a schedule of all his moveable and immoveable property to the Court. The debtor must swear to the fact that the schedule is true and accurate. If accepted, the Royal Court will appoint 2 Jurats to examine the schedule, investigate the property and report back to the Court within 15 days." (3)

What is important to note is this:

"If satisfied, the Royal Court may grant the relief sought. If it does, then the debtor's property will be placed entre les mains de la justice. The Jurats will then supervise the orderly disposal of the debtor's property. A successful Remise will release the debtor from liability for his debts by selling all or part of his assets. If sufficient funds are raised to pay off the creditors and there is a balance on the debtor's estate, the balance and any unsold assets will be returned to the debtor." (3)

In other words, if the assets can cover the debts, then the debtor will no longer have liability for debts, and therefore would not be considered bankrupt. So the BBC report is misleading.

The important factor is whether it is judged that there is sufficient equity in a debtor's property. If that is not the case, if there is only marginal equity, or the sale or realisation of other assets would be considered complicated, then - as happened recently - a Remise may be turned down. Key principles, as noted by Voisin Law are:

a)      The Court will have no jurisdiction unless it reasonably considers that there may be a surplus available for distribution amongst ordinary creditors following the sale of assets;
b)      If the Court is satisfied that there may be a credit balance available for distribution amongst ordinary creditors then it is right to investigate the matter and give consideration to the application for a Remise;
c)      The Court will have regard to the impact of any extended delay in the recovery of the debt upon the creditors;
d)      There must be clear and significant equity in the debtor's property;
e)      The Court will consider any factors which would go to show hardship on the part of the creditor or the debtor;

It should also be noted that demonstration of bad faith or uncertainty as to the outcome of the Remise will make it less likely that the Court will grant the application.

On the background of the law, there's an interesting article by Frederick Benest and Michael Wilkins in the Jersey Law review which notes that:

"This is an ancient procedure which developed out of the customary law of Normandy and was last substantively modified by a statute passed as long ago, in its original form, as 1839: the Loi (1839) sur les remises de biens." (4)

The article also deals with the fact that while there is no appeal against the decision of the court, there could be brought a writ of complaint against the decision, and an appeal could be made on the grounds of the Human Rights Law (which at the time of their writing, was still being implemented):

"Article 2 of the 1839 Law provides that there is no appeal from the decision of the Court as to whether to grant or refuse a remise.  However, a petition of doléance (i.e. a writ of complaint or grievance somewhat similar to the ancient English remedy of mandamus) could nonetheless be brought to remedy any breach of natural justice (or manifest error of law).. Furthermore  a failure (e.g.) to provide a fair hearing would engage the Human Rights (Jersey) Law, 2000 (once fully implemented) for a breach of the article 6 Convention right." (4)

As Benest and Wilkins note, the autorisés responsible for realising the debtor's property and the payment of his debts will, in the normal course of events, engage experts and agents to assist them in this process. The Viscount (who administers every désastre) may also provide back-up and certain administrative support.The Jurats have nonetheless to take any decisions presented to them before action can be taken:

"According to the evidence of JW Dupré, Attorney General, given to the Royal Commissioners in 1859, 'nothing is done of any importance without its having been laid before the Jurats and their assent obtained" (4)

It is notable that while the time is not set within stone, there are certain customary time scales:

"A remise must be concluded within a fixed period prescribed by the Court, traditionally of six months, during which time the autorisés attempt to regularise the debtor's affairs.  The proceedings may be - and generally are - extended to twelve months by the Court  but thereafter a further extension can only be granted with the agreement of the creditors because, in the words of Tomes DB in Re Barker- '........a remise which has not been successfully concluded within a year operates, as a matter of law, as the personal cession and renunciation by the debtor of all his property to his creditors and a dégrèvement ensues'. (4)

A Remise that is successful is not a bankruptcy, so it does not need a discharge:

"If a remise is successful to the extent that all the debtor's debts are paid in full, the question of discharge does not arise - there simply are no debts remaining.  But where a remise is successful so  that the secured charges are paid off and a dividend, however small, is paid to the unsecured creditors, the debtor obtains a discharge from his outstanding debts in the sense that the debtor cannot be sued subsequently by a creditor who received a dividend."

The case of Dr Mickhael in 2010 set forth some important case law considerations:

"Where there is a clear and significant equity in the debtor's property, which would accrue to one or more of the creditors on a dégrèvement and be lost to the debtor if the dégrèvement were to proceed, the Court had a solid basis upon which to exercise a discretion to grant a remise. "

" Conversely, where there is only a marginal equity, and a potentially complex process for the sale or other realisation of the assets, it is highly doubtful as to whether a remise would be appropriate."

"Between the two extremes set out in the preceding two paragraphs, other factors will inevitably have some relevance - the weighting of them will depend upon the Court's assessment of the margin of equity in the property which appears to exist, the length of time the realisation of the assets is likely to take place if a remise were to be granted and any other factors which would particularly go to show hardship on the part of the creditors or the debtor." (5)

And Paul Omar, in an article on the Remise, has some interesting historical notes:

"The procedure, which developed in Jersey customary law, is said to be based on the lettres de répit issued by Royal fiat first introduced in a French ordinance promulgated in 1673 during the reign of Louis XIV. The Loi (1839) sur les remises de biens, which codified and amended the customary law procedure, does not define a duration for the procedure. "

"An element of good faith and probity has always been evident in the law relating to remise de biens. Le Geyt stated that the procedure was not available to persons who had wantonly dissipated their assets by spending their money "in taverns, on games of chance or with shameless women". The 1839 law itself was passed in order to control the availability of the procedure by subjecting the application to a hearing  before the court and to require debtors to follow the advice and counsel of the Jurats."

"Le Gros also states that despite the requirement to swear an oath, some debtors have in the past misstated or omitted debts from the statement, often acting in concert with creditors to do so: C. Le Gros, Traité du Droit Coutumier de l'Ile de Jersey (1943) (reprinted 2007, Jersey and Guernsey Law Review Ltd, St Helier), at 371-372." (7)

And he notes that:

"In fact, the law now states that the detailed statement of property presented by the debtor must, unless rejected on the spot, be verified on oath before the court that it is true and faithful. In Re Mickhael, the court states that good faith on the part of the debtor is required, particularly where the debtor is asking the court to exercise its discretion in granting a remise, applying the maxim: "he who comes to equity must do so with clean hands"." (7)

References:

(1)   http://www.bbc.co.uk/news/world-europe-jersey-25218963
(2)   http://www.applebyglobal.com/publication-pdf-versions/articles/articles-2010/the-degrevement-dilemma-by-natasha-clark.pdf
(3)   http://www.voisinlaw.com/voisin-law-review-for-business-brief-july-2011/
(4)   http://www.jerseylaw.je/Publications/JerseyLawReview/Feb04/JLR0402_Benest.aspx
(5)   http://www.jerseylaw.je/Judgments/UnreportedJudgments/Documents/Display.aspx?url=2010/10-09-14_Representation_of_Mickhael_166A.htm
(6)   http://www.jerseylaw.je/Judgments/UnreportedJudgments/Documents/Display.aspx?url=2011/11-02-08_Representation_of_Mr_and_Mrs_Gibbins_033.htm
(7)   https://www.jerseylaw.je/Publications/jerseylawreview/feb11/JLR1102_Omar.aspx