THE
CONSULTATION
PAPER
THE
including the
use of English in conveyancing
CONSULTATION PAPER No
The Jersey Law Commission was set up by a Proposition laid before the
States of Jersey and approved by the States Assembly on
The Commissioners are:
Mr David Moon,
Solicitor, Chairman
Mr David Lyons, English
Solicitor
Advocate Alan Binnington
Mr Clive Chaplin,
Solicitor
Advocate John Wheeler
The Jersey Law Commission invites comments on this consultation paper
before
The
Whiteley Chambers
JE4 9WG
Fax no: 01534 504444
THE
CONSULTATION PAPER
THE
including the use of English in conveyancing
CONTENTS
Introduction
A. A mandatory requirement for conveyancing documents to be in
the English language
B. Removal of requirement for contracts to be passed in open
court and provision for them to be executed before a prescribed witness and
registered in the public registry.
C. Registration to occur on
any day
D. Formalities and enforcement
of transactions in immovable property
E. Prescription and estoppel
F. Hypothecation
G. Succession to Immovables
H. Rentes
I. Trusts of Immovable
Property in
J. Summary of
Recommendations
Schedule 1: Glossary of words
Schedule 2A: Draft conveyance
Schedule 2B: Explanatory Note of
Draft Conveyance
Schedule 3: Legislative
Amendments
Schedule 4: Article from the
"The Effect of the Fourniture et
Garantie clause in a hereditary contract" by Dr John D. Kelleher.
Consultation Paper
Review
of the
including the use of English in conveyancing
INTRODUCTION
In July 1999 a working group
comprising D O Moon, J Le C Bisson and C R De J Renouf was established,
together with I Le Marquand to conduct preliminary research into the
conveyancing systems in operation in
(a) A mandatory requirement for all conveyancing documents to be in the English language;
(b) The removal of the requirement for contracts to be passed in open court and provision for them to be executed before a prescribed witness and registered in the Public Registry;
(c) Registration to occur on one specific day each week;
(d) Only one form of hypothecation by consent to be available secured on specific property/ies. This also to be executed before a prescribed witness and registered in the Judicial Greffe in the Public Registry and cancelled by a similar process. Judgments obtained in contested actions or by default could still continue to be registered as the present judicial hypothec, but “reconnaissance” would no longer be permissible. Transfers of the benefit of the hypothecs to be effected by registration of the transfer with the Judicial Greffe in the Public Registry;
(e) Title to property, devolved by intestate succession to be registered by the heir claiming title filing an Affidavit within a year and a day of the death of the deceased owner;
(f) Prescription periods both as to actions in respect of title to property and enforcement of adverse covenants/servitudes to be reduced. Remedies for such actions to be discretionary to the court and after a specified period the award of damages to be the only available remedy for such actions;
(g) The introduction of the remedy of specific performance in transactions relating to real property where the terms of the transaction are recorded in a written memorandum executed by or on behalf of each party;
(h) The creation of equitable interest in real property to be permissible where there is evidence in writing in a prescribed form, registered in the Public Registry.
This consultation paper is the result of further research carried out by
Advocates H.M. Boléat and W.A.M. Bridgeford into the desirability and
practicality of implementing each of the above recommendations in addition to
the consideration also put forward at (H) as a recommendation for the abolition
of rentes.
A.
A MANDATORY REQUIREMENT FOR CONVEYANCING
DOCUMENTS TO BE IN THE ENGLISH LANGUAGE
Background
Many years ago, as far back as medieval times, the passing of contracts of real property in Jersey was a parochial event. Each Sunday, following the service at the parish church, a parochial assembly was held (often in the church graveyard) and was attended by all the residents of the parish. All property transactions took place by means of an “ouïe de paroisse”. Effectively parties to the transaction made a solemn declaration in front of the parish assembly and it was this declaration which bound the parties.
Although initially committed to memory, the transactions were, at times, recorded in manuscript which served as an aide memoire. In the 14th century however, the practice evolved of drafting a formal contract, the contents of which the parties swore on oath before the Bailiff and certain of the Jurats of the Royal Court. At times this contract merely witnessed what had already taken place at an “ouïe de paroisse”. On other occasions, the contract was first sworn before the Bailiff and Jurats and later read publicly in the parish cemetery. By the 16th century, formal contracts had become commonplace for all types of transactions, and the “ouïe de paroisse” subsequently fell into disuse. In 1562 and 1591, attempts were made to introduce a central system of registration for land contracts. However, it was only in 1602, when Sir Walter Raleigh was Governor of Jersey, that the Public Registry was finally established. The passing of the Act of States creating the Registry on 24th July 1602 coincided with one of Sir Walter Raleigh’s official visits to the Island: the reason for which he is often (albeit erroneously) credited with founding the Registry.
The provisions of the Act of States were reinacted, with modifications, in the Code of 1771, under the heading of Regîstres, and it is this version in the Code, as amended, which now has force of law.
The following summarises (in translation) those provisions of the Code of Laws 1771 which remain in force:-
(1) all land contracts passed before Court shall be registered according to the Orders of the Commissioners;
(2) the office of Registrar shall be filled by a competent person who shall take oath before Court and who, if required, shall provide a guarantee;
(3) all contracts passed before the Bailiff (or his Lieutenant) and two or three Jurats, will be transcribed formally (not in shorthand). Having been signed by the above named, they shall be delivered (within two or three days) to the Registrar, who will record legibly the date in words: the name of the judge and the Jurats, before whom the contract was passed; the name and surname of the contracting parties; the nature and extent of the land sold, leased or exchanged; the situs of the land and the sum of money or rente involved; the formal clauses and conditions if relevant, and the guarantee of the parties. Once registration is completed, an officer shall take the letters/contracts back to court to be approved. The registrar shall deliver the contracts to the parties within two weeks of having received them;
(4) charges and hypotheques must also be registered if they are to take priority over subsequent charges and/or hypotheques;
(5) Powers of Attorney and Acts of Court appointing tuteurs must be entered into the Register;
(6) the Registry shall remain open to the Public;
In relation to (1) above, such rights are now registered in accordance with the Rules of the Royal Court. In relation to (2) the office of Registrar is ipso facto filled by a person of competence and no guarantee is ever required. The office holder for the time being does and should continue to take the customary oath. If the recommendations of this consultation paper are adopted, much if not all of (3) would fall away whilst (4) - (6) would be retained.
In accordance with the Code, all contracts relating to land (including leases for more than nine years) were and continue to be, recorded in the Public Registry, as well as all charges and hypothecs on immovables.
Over the centuries, and even in recent years, the essential form of land contracts has undergone very little change. In essence the contract is a record evidencing the appearance of the parties, or their attorneys, before the Bailiff and Jurats to agree and be bound by the terms of the contract. Registration in itself is not a guarantee of title, but purely a public record of the transaction. (A Purchaser is reliant on his lawyers carrying out a title check on the Pride II system, to satisfy themselves that the Vendor has good title).
The warranty of title to the property conveyed is dependent on the terms of the conveyance. If it is silent then a warranty is implied but the introduction of various provisions and currently the clause known as the “vices cachées” clause is intended to negate any such warranty. The question is sufficiently discussed in the article by Dr John D. Kelleher entitled “The effect of the Fourniture et Garantie clause in a hereditary contract” (see Schedule 4). The conclusion is that the position is confused.
Jersey Legal French
Since the 16th Century when formal contracts first became commonplace, Jersey legal French evolved as the language in which contracts were drafted. The language is essentially French with several words or turns of phrases which modern French speakers would regard as somewhat archaic, for example, the use of the word “nonante” instead of “quatre-vingt-dix”. Although it is true that land contracts have become increasingly complex in recent years, particularly in relation to the larger scale commercial transactions, the language, as indeed the form of contract, has varied little over the centuries.
Registered Contracts are habitually passed in the French language, leases being the only exception. Interestingly, there is no legal requirement compelling the use of the French language. In an article contained in “Parlers et Traditions Populaires de Normandie” (now Le Viquet) written by Peter Bisson (Easter 1984 Vol. 16 Issue 63), Mr Bisson commented that there had recently been an attempt by the Royal Court to allow contracts to be drafted in the English language, and this at the option of the parties. There had also been an attempt to change the method of passing contract. The Jersey Law Society, however, was vehemently against any such change, but as Mr Bisson points out, those in support of changing to the English language were using the argument that there was already a need to translate into English in brackets, after the French equivalents, any unfamiliar French words. Although this practice continues to this day, it is nothing new. During the reign of Queen Victoria, when a number of new houses were being constructed on the outskirts of St Helier, contracts spoke of:-
Salons (anglicé “drawing rooms”)
Bosquets d’Arbustes (anglicé
“shrubberies”)
Couronnement de Murs (anglicé
“copings”)
Those in support of a change today cite the ever decreasing number of the population who speak or read French and the increasing demand from purchasers for translations of their Deed of Purchase. Not all law firms are able to offer translations to their clients and when they do so translations are invariably handed out post completion. Purchasers are entitled to know with clarity the obligations they are entering into well before completion, and they should have at hand a copy of the contract they are about to enter into in a language they understand. Modern contracts, particularly estate contracts, invariably contain numerous and complex clauses where the rights of neighbours of necessity are very precisely defined. Hardly surprising, therefore, that modern day Declarations relating to Flying Freeholds are drafted (save for the preamble) entirely in the English language as indeed are the majority of contract leases.
It is clear that Jersey legal French has evolved as, and remains to a large degree, the dominant language for the drafting of land contracts in Jersey. This is the result of custom and usage, not of any legal requirement. In a society where French, especially legal French, is now the preserve of the few the situation is far from satisfactory. There should be a mandatory requirement for all conveyancing documents to be in the English language. This would require the adoption of a standard form of deed of conveyance and an addition to the Royal Court Rules of a glossary of terms in English equivalent to the technical French terms in current use (see Schedules 1 and 2). Words not included in the glossary would have their usual meaning appropriate to the context. In the case of dispute, the Court would adjudicate.
B. REMOVAL OF REQUIREMENT FOR CONTRACTS TO BE PASSED IN OPEN
COURT AND PROVISION FOR THEM TO BE EXECUTED BEFORE A PRESCRIBED WITNESS AND
REGISTERED IN THE PUBLIC REGISTRY
In a recent report dated the 15 February 2001, the Royal Court Consultation Group presented their conclusions as to the workings of the Friday afternoon Court. The question as to whether the passing of contracts before the Court could be carried out in an alternative manner was considered and two proposals put forward:-
(a) The formation of a separate Court, probably sitting elsewhere in the Royal Court buildings on a Friday afternoon, to be presided over by, for example, a Lieutenant Bailiff and two Jurats. Contracts would be passed before this Court. This would release the Bailiff and the Deputy Bailiff to deal with other matters/cases on a Friday afternoon in the main Court. Consideration could also be given as to whether the Judicial Greffier could be given the power to pass contracts in the presence of one or two Jurats, so that the Lieutenant Bailiffs would not have to be present. A change in substantive law would have to be made in order to effect such a change.
(b) Passing of contracts could be carried out throughout the Friday afternoon by members of the public attending at Morier House to appear before the Judicial Greffier and one or two Jurats. Contracts could then be passed by some form of exchange or registration system, which would be completed on the Friday afternoon. Such a change would not involve the passing of contracts before open court and would therefore represent a fairly fundamental change.
A
third and alternative proposal to that put forward by the Royal Court
Consultation Group would be a simple amendment to the Code of Laws for the
Island of Jersey 1771 to provide for the prescribed witness to be either a
locally qualified Advocate or Solicitor who should administer the oath in the
same way as does the Bailiff or Deputy Bailiff.
The Advocate or Solicitor acting for the one party would administer the
oath and then witness the contract on behalf of his client and forward the
partially executed document to the lawyer acting on the other side for counter
execution. Finally, the contract
would be forwarded to the Greffier for
registration.
A fourth proposal, and that recommended by the Commission is the enactment of legislation to provide for all parties to the contract to execute the contract before a prescribed witness either a locally qualified Advocate or Solicitor, who would attest the signatures/the affixing of a company seal, as the case may be, of the parties and once executed by all parties, the prescribed witness would be responsible for filing the contract with the Judicial Greffier for registration.
C. REGISTRATION TO OCCUR ON ANY DAY
There would appear to be no good reason for restricting registration of contract to Fridays. Provided the contract was delivered to the Greffier for registration before, say, 2.30 p.m. (as per the current practice) on any given day, such contract would be deemed to have been registered on that day and the transaction effective on that day. The consideration would exchange hands on that day.
Recommendation
The introduction of a mandatory requirement for all conveyancing to be conducted in the English language, adopting a glossary of terms and a standard form of deed of conveyance to be executed under hand by the parties before a prescribed witness and filed with the Judicial Greffier on any weekday before 2.30pm for registration the same day. The legislative changes required to achieve this are set out in Schedule 3. These changes should be regarded as an interim measure leading to the substantive change from a system of a registry of deeds to a registry of title and electronic conveyancing on which the Commission intend to issue a report and recommendations once current recommendations have been implemented.
D.
FORMALITIES AND ENFORCEMENT OF TRANSACTIONS IN
IMMOVABLE PROPERTY
1.1 Promesse à héritage ne vaut
The present law regarding the formalities required for contracts to transact in immovables is marked by an unfortunate degree of uncertainty. From the old case of Guiton v. Gruchy (1870) it appeared that the agreement between the parties had to be in writing and, moreover, that such agreement needed to specify the “penalité” (that is, a sum of agreed liquidated damages) to be incurred by the refusing party before the court could award damages (though of course it would never order specific performance). This second requirement always sat oddly with the court’s general jurisdiction to award damages for breach of contract. In Basden Hotels Limited v. Dormy Hotels Limited (1968) the court confirmed that what was required was an agreement in writing; damages could be claimed even though no penalty was stipulated. Nevertheless the practice continues of stipulating agreed liquidated damages in preliminary contracts of sale of immoveable property, even though such damages are often excessive and the court will reduce them in appropriate cases.
In Romeril v. Davis (1977) the court refused to treat the plaintiff’s published advertisement for sale combined with the defendant’s written tender as an enforceable “accord hérédital”. There was, in the court’s view, no intention on the part of the defendant to create legal relations; but the case also appears to be authority that the agreement between the parties must be a single written agreement signed by both of them. By way of contrast, in Symes v. Couch and JJ Couch Engineers Limited (1978) the court took the view that the requirement for writing was no more than a rule of evidence, and that the harshness of the customary law, as it had developed in Jersey, could be mitigated by introducing the English equitable doctrine of part performance. In that case an oral agreement which was evidenced in writing and supported by part performance was held to be enforceable and damages were awarded. At the time of the decision in Symes, the English doctrine of part performance (though since abolished) could rescue a purely oral agreement which failed to satisfy the then existing requirement of evidence in writing as set out in s. 40 of the Law of Property Act 1925 (which reprised the similar requirements of s. 4 of the Statute of Frauds 1677).
1.2 Defects in the
present law
The present law in Jersey suffers from the following defects:
·
The case law has left the position uncertain as to
whether what is required is a single written agreement, signed by both parties,
or written evidence of an agreement; what that agreement should state or
include; and whether a purely oral agreement could be rescued by the doctrine
of “part performance”.
·
Although heralded as “one of the great judicial
creations of English law”, and often valuable in preventing fraud and
mitigating the harshness of formal requirements, the doctrine of “part
performance” was regarded by the 1987 English Law Commission as suffering from
too many vagaries and uncertainties. It
was abolished in England by the Law of Property (Miscellaneous Provisions) Act
1989. This doctrine is still considered
part of Jersey law.
·
There are, again, anomalies, or at least differences
that require justification in terms of public policy. A contract to sell immovables owned by a
property holding company, to sell a “flying freehold” flat, to create a simple
conventional hypothec or to grant a “contract” lease would in principle need to
be in writing or at least to be evidenced in writing. But a contract to sell a property holding
company, a “share transfer flat”, to create a judicial hypothec or to grant a
“paper” lease is not required to comply with any applicable formalities of
writing.
1.3 The
several options and the reformed scheme in England
In 1987 the English Law Commission published its report on Formalities for Contracts for Sale etc. of Land. As a result of the report fundamental changes were made to this area of law in England. The position had been governed by s. 40(1) of the Law of Property Act 1925, which was itself was based on the Statute of Frauds Act 1677. Under the law as it then existed, a contract for the disposition of an interest in land which was not (a) evidenced in writing and (b) signed by the party sought to be made liable was unenforceable (though not void). The English Law Commission subjected the wording of s. 40(1) of the 1925 Act to detailed criticism and found it to be illogical and uncertain in its application. Since it is not proposed that the old s. 40(1) should provide any basis for the new law in Jersey such criticism is irrelevant in the present context. Having surveyed several alternative options, each comprising a differing level of formality, the Commission proposed that a high level of formality should continue to apply for contracts for the disposition of interests in land. It is appropriate to set out the various options reviewed by the English Law Commission both in their working paper and in their subsequent report, and to place those options in a Jersey context.
1.3.1 To make only minor amendments to existing law
This option was described as tenable but was ultimately rejected. The defects identified by the Commission in the existing English law suggested that a root and branch reform was needed;
1.3.2 To remove any special formality for contracts to transact in immovables
If this approach were adopted, a purely oral contract to carry out a disposition in land would be valid and enforceable, though in practice such contracts would in the vast majority of cases no doubt continue to be made in writing. If anything, such formal requirements only aided the dishonest to escape the terms of bargains which had in truth been concluded. In 1983 in the Canadian province of Manitoba, legislature, acting more boldly than its 1980 Law Commission had recommended, abolished any requirement for writing for contracts to transact in land. The “onslaught of litigation” which the Manitoban Commission had feared might result from such a reform does not appear to have occurred. The abolition of any formality for contracts to transact in land is therefore an option that should be given full consideration in Jersey.
The 1987 English Law Commission, in considering this option, surveyed the law in seventeen other jurisdictions. It was found that that there was “an overwhelming trend towards formalities for such contracts”. Though there are of course many items of movable property that might be of greater value than a small piece of land, in practice the single most valuable legal transaction that most people make in their lives will be the purchase or sale of land. There is thus a widespread tendency to treat land with greater formality than other types of property. In common law jurisdictions, the requirement for written evidence generally derives from the Statute of Frauds Act 1677; in most of these jurisdictions the formal requirements have been tempered by the doctrine of part performance. In the USA, where the Statute of Frauds provided the basis of the law, written formality likewise applies. The Restatement of the Law of Contract, however, contains a doctrine of equitable relief having similar effect to part performance. In the hybrid jurisdictions of Scotland and South Africa, non-compliance with the relevant requirement of writing makes the contract void, as in Jersey, and not merely unenforceable, as under the Statute of Frauds. Jersey has received the doctrine of part performance, but the strict requirements of form applying in these other hybrid jurisdictions have been tempered by doctrines of rei interventus, homologation and unjust enrichment. In civil law jurisdictions, preliminary contracts for the sale of land generally have to comply with specific formalities, on pain of nullity. In theory, the modern French legal system stands out as an exception from the rest of the civil law countries on account of its lack of formality. Contracts pertaining to land are not governed by any special rules, but under the general principles of contract law set out in Part 6 of the Civil Code, and may thus be entered into purely orally. In practice, written evidence has important probative value and some form of writing is necessary if the contract is to be registered so as to be enforceable against third parties.
The conclusion adopted by the English Law Commission was that
contracts to transact in land should continue to be treated with greater
formality than generally applies to other types of contract. In Jersey, where
land transactions have to date been dealt with under a regime of rather extreme
formality, there is an additional argument which tends to the same conclusion.
1.3.3 Prescribed forms
Another option considered in the English Law Commission’s consultative paper was the introduction of prescribed forms for contracts to transact in land. This option had the advantage that it would be completely clear whether a contract had been entered into; a warning advising that legal advice be taken and certain standard conditions of sale could also be incorporated. In the subsequent feedback, there was some support for this proposal, at least as regards domestic conveyancing. But difficulties were envisaged in devising a form suitable for all types of transaction. It was also considered that, despite warnings, an “official” form may in fact lull the unwary into a false sense of security and so discourage the seeking of legal advice. In view of these difficulties, and the general lack of consensus, the introduction of prescribed forms was not in the event recommended by the English Law Commission.
1.3.4 Cooling off periods
By analogy with UK consumer protection legislation, the English Law Commission also canvassed the idea that there should be a statutory cooling off period after a contract for a transaction in land had been entered into, during which parties would be free to withdraw. In the final report the view was taken that “cooling off” periods would only add delay and complication to the conveyancing process. It had also not been established that there was truly a need for “consumer protection” in this area. The proposal for “cooling off” periods was therefore rejected.
1.3.5 Written contract signed by both parties, on pain of nullity
This was the preferred option of the English Law Commission and its proposals were duly enacted as s. 2 of the Law of Property Act (Miscellaneous Provisions) Law 1989. The main features of the new law are summarised in the following paragraph.
The agreement itself now had to be in writing, not merely evidenced in writing, as was the case under s. 40 of the Law of Property Act 1925. Under the 1989 Act the absence of a written agreement makes the agreement void, not merely unenforceable as it had been; the effect of this was that the doctrine of part performance was by necessary implication abolished. In accordance with the Commission’s views, but subject to the exceptions mentioned below, the new formalities applied to all contracts for the disposition of interests in land, including contracts for leases, mortgages and options to purchase. Whilst in the working paper the Commission had expressed a preference for restricting the requirement of writing to the “main” terms of the agreement, it was decided in the final report that simplicity and certainty required that all the terms of the contract should be in writing. Thus the resulting legislation required that all the express terms of the contract to be in writing. If Jersey were to adopt the former approach, the “main” terms required to be in writing would need to be defined (compare Article 3 of the Security Interests (Jersey) Law 1983).
Pursuant to the
recommendations of the English Law Commission, certain exceptions were made to
the requirement for a written agreement which would be appropriate to Jersey,
namely:
Short Term Leases. Such leases could be granted orally and the Commission had considered that it would be illogical to require a contract to grant such a lease to be in writing. A parallel line of reasoning would exclude contracts for the grant of “paper” leases in Jersey (leases for nine years or less) since such leases may also be granted purely orally.
Sales of land made in public auctions. It was convenient for such contracts to be
concluded orally under the fall of the hammer.
This will presumably also be the case in Jersey, in those rare instances
where immovable property is sold at auction.
1.4 The present position in England if formalities are not observed
The English Law Commission recognised that, despite the advantage of certainty that written formality brings, there will be cases where justice will be denied if the strict requirements of the law are applied without exception. The doctrine of part performance had fulfilled this function, but the Commission recommended its abolition. Instead there are various alternative techniques that can be used by the courts in England.
· Constructive trusts. Section 2(5) of the 1989 Act contains an express reservation concerning the creation and operation of resulting, implied and constructive trusts. Constructive trusts are recognised in Jersey law by Article 29 of the trusts (Jersey) Law 1984 and judgments of the Royal Court ( see section J where these are discussed).
· Estoppel. The Law Commission considered proprietary estoppel to be a particularly useful technique for avoiding injustice in difficult cases. For a brief description of proprietary estoppel, see p. 27 below. As traditionally understood, it appears that proprietary estoppel would be of assistance to a disappointed purchaser, not a vendor. What was considered particularly advantageous by the Commission was the fact that proprietary estoppel allows the court to apply a flexible remedy, depending on the circumstances. Although the Commission clearly thought proprietary estoppel a useful technique for avoiding injustice, the 1989 Act contained no express saving provision for proprietary estoppel. In Yaxley v. Gotts (2000) the opportunity came for the English Court of Appeal to consider whether proprietary estoppel could indeed still be used to provide a remedy notwithstanding non-compliance with the statutory formalities laid down in the 1989 Act. It was held that the doctrine of proprietary estoppel had indeed survived the 1989 Act, and that in many cases the same set of facts could equally give rise to claim of proprietary estoppel as for a constructive trust. It has, however, been pointed out that there are nevertheless important differences between proprietary estoppel and constructive trusts, which will potentially affect the nature of the remedy given and the intervening rights of any third party. In Jersey, recent judgments of the Royal Court indicate that a claim for proprietary estoppel will be available: Maçon v Quérée (2001) as also will a constructive trust be recognised ( Murphey v Thomas (2001) and In the matter of the Esteem Settlement and the Number 52 Trust (2002). Even so, the availability of proprietary estoppel alone will be of considerable importance to the Jersey courts in seeking to achieve an equitable result (assuming written formality will continue in principle to be required); and its usefulness will certainly be increased if the further express powers outlined on p.25 below are also made available.
· Rectification. The English Law Commission, having proposed that all the terms of the agreement should be in writing, noted that, in appropriate circumstances, the equitable doctrine of rectification could also operate to save a contract where not all of the pertinent terms had been rendered in writing or where one or more of them had been wrongly recorded. In order for the doctrine of rectification to apply there does not need to be a prior enforceable contract; it is sufficient that there is a prior agreement or a continuing common intention to contract, together with convincing proof that the written document does not adequately represent the terms of the agreement. In Jersey the courts have most often applied the doctrine of rectification in relation to trusts, but it is no doubt available in other contexts. An order of rectification is of retrospective effect.
· Collateral Contracts. The English Law Commission also took the view that where some term had not been incorporated into the written contract the contract could be saved by construing the omitted term as part of a collateral contract which, not itself being a contract for the disposal of an interest in land, would be enforceable separately. Unfortunately there are two conflicting decisions of the Court of Appeal on this concept which leads us to believe that it should be avoided.
1.5 Conclusion.
It is proposed that two very different options stand
out above the rest and in particular option 1.3.5 which the Law Commission
would recommend.
· Option 1.3.5: written agreement. The first would be to adopt a similar approach to that adopted in s. 2 of the Law of Property (Miscellaneous Provisions) Act 1989, that is, to require an agreement in writing between the parties, except in certain specified exceptional circumstances. This would not be radically different from existing Jersey law since the law at present also requires some written formality in order for an agreement to transact in immovables to be valid. In view of the abolition of the uncertain doctrine of part performance in England, and the availability of alternative equitable remedies it seems right also to abolish part performance in Jersey. It is recommended that to avoid the uncertainties of litigation which have arisen in England pursuant to the 1989 legislation that the Jersey legislation should prescribe that an agreement relating to a transaction in immovable property to be enforceable should contain prescribed essential terms in writing such as those required by the Security Interests (Jersey) Law, 1983 and be signed by both parties in the presence of independent witnesses. The term “transaction in immovable property” could be extended to include shares in companies owning immovable property putting share transfer flats on the same footing.
· Option 1.3.2: no formality. The option has the considerable advantage of avoiding the technical drafting difficulties and also the vagaries of equitable doctrines which undermine the supposed certainty of statutory formality. It also has the advantage of automatically bringing immovable property into line with the quasi-immovables such as share transfer flats: none would require written formality. The question would simply be whether the evidence established, on the balance of probability, that a valid contract had been concluded under the laws of Jersey, whether written or oral. In practice, agreements would no doubt continue to be put in writing. The doctrine of part performance would fall away.
1.6 On a practical level it is also for consideration as to whether the Island should adopt a suggestion made from a recent study in the United Kingdom, whereby a Vendor would be required to provide a pack of copy documents of title, local authority searches, planning /housing/agricultural consents, draft contracts and other relevant documents when the property is put up for sale to potential buyers.
Recommendation
The Commission recommends that legislation be enacted to require a written agreement for transactions in immovables as discussed in paragraph 1.5 ie. option 1.3.5, a written contract signed by both parties, on pain of nullity.
THE FORMALITIES AND ENFORCEMENT OF TRANSACTIONS OF IMMOVABLE PROPERTY
2. The
non-availability of specific performance – “promesse à héritage ne vaut”
2.1 The present law
It is well established that the remedy of specific
performance is not available in cases of breach of an agreement to sell Jersey
immovable property or indeed to carry out any other transaction in immovable
property which requires for its completion the passing of a contract before
court. This is a consequence of the application of the maxim “promesse à héritage ne vaut” discussed
above. An agreement for a transaction in immovable property is regarded as
enforceable if it is in writing and includes a promise for the payment of a
specified sum by way of liquidated damages for non-performance by a defaulting
party. In such a case, the court is able
to award damages in favour of the innocent party. But it cannot order specific performance
other than as an alternative to the payment of liquidated damages. In
other types of case involving movables as opposed to immovables, the court has
an undoubted discretionary jurisdiction to grant specific performance wherever
damages would be an inadequate remedy.
The reason most often stated for non-availability of specific
performance in relation to immovables is that the court will not order an
unwilling party to take the oath in court which is, at present, a necessary
part of the process of conveyancing.
The “oath explanation” was, notably, relied upon by the Court
of Appeal in Taylor v. Fitzpatrick
(1979) and it appears to be generally accepted as the explanation of the
maxim. However, alternative explanations
have from time to time been proposed.
Thus it has been suggested that the maxim is a consequence of the
principle of “la conservation du bien
foncier dans la famille” or that a person cannot be compelled to pass
contract because the obligation is one “quae
non est dando sed in faciendo”.
The principle already has a number of established exceptions. By statute, pursuant to Article 35 of the Matrimonial Causes (Jersey) Law, 1949 the court may authorise any person (such as the Viscount) to inter alia pass contract on behalf of a recalcitrant party, in cases where the court has made an order for the transfer of property under that Law. But it is not the only statute that has made inroads. In Ritson v. Slous (1973) it was held that the right of a co-owner of Jersey immovable property to enforce the sale of the property by auction to terminate the co-ownership was incontestable. In default of a contract being passed, the court ordered that the Deputy Viscount could carry out the oath-containing conveyance on