At the risk of stating the obvious, Jersey is a small jurisdiction, with a limited judiciary, and relatively few cases coming to trial. One might have hoped and expected that the opportunity and inclination for judicial disagreements was rather limited. However, the recent Court of Appeal decision in Booth v Viscount and others rather gives the lie to that.
The judgment is 45 pages long; it only takes 15 pages for Martin JA (the Court of Appeal Judge who delivered the leading judgment) to dispense with the actual appeal; yet he spends another 27 pages exploring the controversy surrounding the subjective and the objective approach to contractual consent. To those of us for whom this issue is not an ordinary topic of conversation, the question concerns whether a professed unilateral mistake can set aside a contract (the subjective view) or whether certainty requires a certain degree of objectivity in determining whether parties have reached an agreement (the objective view).
This is not merely an academic debate; it has consequences for all of us. We enter into contracts every day for all sorts of things, ranging from the mundane to the life affirming, and we need certainty. Yet the Jersey law of contract is opaque; there is no readily available textbook in English (or indeed, in any other language) setting out the law. Instead lawyers rely upon ancient principles, French texts, judgments from Jersey and elsewhere and instinct to determine what the law is.
It is hardly a satisfactory position. It is one which the Jersey Law Commission recommended changing as long ago as 2002 by “the incorporation of English law by statute on the basis of the relative speed by which it could be carried out, its lack of a negative effect in terms of the Island’s suitability for doing business and the fact that it probably reflects the impression, albeit mistaken, that the majority of islanders have of the basis of the Jersey law of contract.”
That recommendation was not actioned and instead, more fuel was added to the fire. As Martin JA concluded in Booth:
“The current state of the authorities in Jersey is, in my view, wholly unsatisfactory. It should not be the case in a modern, developed jurisdiction such as Jersey that something as fundamental to its commercial law as the correct approach to the determination of contractual consent should be uncertain. The uncertainty is made worse by the fact that the matter is controversial at the highest level in the local judiciary. On one side of the debate, espousing the subjective approach, are the current and a former Bailiff; on the other, favouring the objective approach, are a former Bailiff and the current Deputy Bailiff, soon to be the Bailiff. It is clear…that some of the current personnel of the Court of Appeal also consider the matter to be at best uncertain. It is time the debate came to an end.”
Strong criticism indeed by a well-respected English QC who has sat as a Judge of our Court of Appeal for a number of years and favoured the certainty of the objective approach.
Yet the Learned Bailiff was also a member of the Booth Court of Appeal. Whilst he accepted that a resolution needed to be reached whether “by way of Restatement [i.e. the States making a Law setting out the Jersey Law of Contract or aspects of it] or a subsequent court of appeal decision”, he did not agree with Martin JA’s assessment of what the correct approach might be.
So as a jurisdiction do we now simply wait for a suitable case to reach the Court of Appeal and hope that someone else has the misfortune to be a party to it?
It cannot be right that two litigants should have to go to the time and expense of arguing before the Royal Court whether subjective or objective consent is correct. As Martin JA noted in Booth, the issue is uncertain at the highest levels of the judiciary and in the Court of Appeal. So whatever happens in the Royal Court, there will be an appeal to the Court of Appeal. But as the Bailiff pointed out in Booth, we must be “faithful to our own law”, we cannot conclude that “convenience or legal certainty in commercial contracts”permits us to choose a different law. With Bailiffs past, present and future overtly ranged on different sides of the issue, determining what “our own law”is might be rather tricky for a Court of Appeal whose members are otherwise all from outside of Jersey. That rather suggests that whoever the unlucky parties might be, they should steel themselves for the inevitable appeal to the Privy Council. All this will be at significant expense, both in terms of financial costs to the parties and the island and in lost opportunities for the parties, the Judges and the Courts (what other cases could and should those Courts have been dealing with?).
Nor can it be right that for something as fundamental as the approach to contractual consent, we have to wait for the right case to come along between equally energetic and wealthy parties. Our whole financial services industry depends on certainty with contracts and this is a critical issue.
The then-Chief Minister started an Access to Justice Review in 2013, and although it seems to have focussed on Legal Aid, this current issue is something that should be looked at, and looked at quickly. Forcing a litigant (of whatever means) to run a gauntlet of uncertain decisions to clarify a fundamental aspect of Jersey law is not Access to Justice; having significant uncertainty on a matter of law which impacts across our community and our financial services industry is unacceptable; perhaps it is time for the States to intervene.
David Cadin, Partner, Bedell Cristin, Jersey
Editorial opinions expressed in Business Eye CI are not necessarily those of the publishers. Views expressed by our contributors are their own.
