Jersey: A Charge Too Far

Last Updated: 6 June 2008
Article by Louise Richardson

The taking and enforcement of security over property in Jersey, whether commercial or residential, is a very different procedure from that in England. It is a particularly arcane area of law, which is still being clarified by the courts, as lenders may learn to their cost.

Jersey law recognises three principal types of charge over immoveable property all governed by a statute over 125 years old, namely the Loi (1880) sur la propriété foncière ("the 1880 Law"). They are:-

  1. hypothèques légales (legal hypothecs, arising automatically by operation of law, such as a widow's rights over property in relation to her dower);

  2. hypothèques conventionnelles (contractual hypothecs created by an agreement between the parties);

  3. hypothèques judiciaires (judicial hypothecs created by the registration in the Public Registry of an act of the court, whether in respect of a reconnaissance (acknowledgement of a debt) or a judgment on a debt – it is these which are used most frequently to secure lending on conveyancing transactions).

A hypothec is a right in rem attaching to a debt or obligation. It is dependent upon the existence of the debt or obligation and whilst a debt or obligation can exist without a hypothec, the converse situation can not. A hypothec confers certain advantages on a holder – he obtains priority payment in a désastre. He can also enforce the security by way of dégrèvement proceedings – an older insolvency procedure set out in the 1880 Law focused on freeing the land of charges rather than achieving fairness for the creditors. The hypothec registered first in time takes priority over later hypothecs.


In dégrèvement proceedings, the creditors are called upon to take over the particular property subject to paying off all prior charges on it. The creditors are approached in order of their charges – the most recently registered first. If the creditor declines to take on the property and pay off the others he gets nothing (although the debt can be pursued separately as it is not discharged). The creditor who takes the property will then, however, be entitled to take the full value of the property even if it is in excess of the debt owed, provided he pays off the holders of any earlier hypothecs.

The law relating to the priority of judicial hypothecs came to the fore in a recent judgment of the Court of Appeal in December 2007: Ansbacher (Channel Islands) Limited v. HSBC Bank PLC [2007] JCA 228.

Ansbacher had given a loan to two borrowers. Security was a first charge over their house in the form of a judicial hypothec. There was a subsequent borrowing from HSBC for which a second charge was given. A judgment creditor obtained and registered a third hypothec. The borrowers defaulted on the loan. Ansbacher obtained a judgment in the Royal Court which it registered as a further judicial hypothec. The Public Registry showed the following hypothecs against the names of the property owners:-


In favour of Ansbacher – acknowledgement of debt re loan agreement




In favour of HSBC – promissory note




In favour of a judgment creditor - judgment arising out of a breach of contract claim against the property owners




In favour of Ansbacher - judgment after default on loan agreement (including additional sums for interest)



When the borrowers failed to pay off the judgment debt, Ansbacher commenced dégrèvement proceedings against them so as to enforce its security. It assumed that its original 2002 charge would be valid, and so it would be repaid in full by the later charge holders, or if they declined to do so, would take on the property and at least receive all the moneys raised by a sale of the property. HSBC contended that only one registration was permitted in respect of any one debt and that the registration of the 2006 judicial hypothec by Ansbacher had destroyed the 2002 judicial hypothec. Thus if Ansbacher did not want to take the property (under the 2006 charge) and repay the pre-dating charge-holders, HSBC itself would have the opportunity to take the property, free of the Ansbacher charge.

The Royal Court had held that a lender who obtained a judicial hypothec by registering his acknowledgment of debt at the Public Registry, would lose the benefit of any priority by that registration if he later obtained judgment for the same debt and registered that judgment, as a second judicial hypothec.

Public Registry

The Court of Appeal considered the interpretation of the 1880 Law and when a hypothec must be removed from the Public Registry. It stated that: "Two circumstances are set out: first, the extinction of the debt; secondly, the registration of a subsequent act of judgment & but only if it is in the same procedure". What did the "same procedure" mean? The Court of Appeal decided "procedure" meant "the whole judicial process affecting the debt or obligation in question".

The court concluded that "if there is a single underlying obligation or debt, the law provides that there can be only one judicial hypothec securing such a debt or obligation, because the earlier hypothec loses its effectiveness upon the registration of the later act or judgment given within the judicial process". Ansbacher, by registering the second hypothec had lost the priority of the first hypothec. Thus the court of Appeal upheld the first instance decision. Ansbacher could only rely on the 2006 hypothec and if it wanted the property, would first have to pay off HSBC and the judgment creditor even though the sale proceeds of the property would not necessarily also cover the entirety of its own indebtedness.

Significantly, the Court of Appeal stated "neither the rules nor the principles applicable to mortgages in English law can be transplanted into the regime established for hypothecs under the 1880 Law ... whilst it might seem unjust to an English lawyer that the holder of the first registered charge should have his charge displaced by the subsequent registration of a judgment for the self-same debt, there is in fact no such injustice in Jersey law, because a hypothec is quite different in juridical principle from a mortgage, and is enforced by quite different procedures".

Thus those who have the benefit of a judicial hypothec, and then judgment in respect of the same debt, must not register that second judgment as a judicial hypothec but instead proceed onto enforcement either by désastre or dégrèvement or other means; lenders beware.

This article first appeared in the spring issue of Appleby Jersey's Resolution newsletter.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Louise Richardson
In association with
Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.