Doorstop Ltd -v- Gillman and Lepervier [2012] JRC 199 (01 November 2012)

Doorstop Ltd -v- Gillman and Lepervier [2012] JRC 199 (01 November 2012)

The Royal Court has jurisdiction to refuse enforcement of contractually agreed interest rates that are not moderate or reasonable, based on Jersey customary law. The Court will assess reasonableness according to the circumstances of each loan, including risk, market practice, and party sophistication. Compound interest is not recoverable under the Interest on Debts and Damages (Jersey) Law 1996, but may be awarded as damages if justified. The Court is not bound to enforce unconscionable or usurious contractual terms.

Citation
[2012] JRC 199
Parties
Plaintiff: Doorstop Limited; First Defendant: Anthony Henry Gillman; Second Defendant: Second Defendant (unnamed); Amicus Curiae: Advocate Heywood
Jurisdiction
Jersey
Judgment Date
01 November 2012
Procedural Posture
Civil / Post Default Judgment, Determination of Contractual Interest
Outcome
Judgment for plaintiff with interest at 8% per annum; contractual interest claims above this rate disallowed as immoderate/usurious.
Legal Topics
Usury, Contractual Interest, Compound Interest, Guarantee and Indemnity, Public Policy, Penalty Clauses
Contract Law Banking and Finance Law Customary Law Usury Contractual Interest Compound Interest Guarantee and Indemnity Public Policy +1 more

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Parties

Doorstop Limited

Plaintiff

Anthony Henry Gillman

First Defendant

Second Defendant (unnamed)

Second Defendant

Advocate Heywood

Amicus Curiae

Procedural Posture

Civil / Post Default Judgment, Determination of Contractual Interest

Legal Issues

  1. 1 Court's jurisdiction to interfere with contractually agreed interest rates
  2. 2 Distinction between pre- and post-judgment interest
  3. 3 Court's approach to compound interest

Ratio Decidendi

The Royal Court has jurisdiction to refuse enforcement of contractually agreed interest rates that are not moderate or reasonable, based on Jersey customary law. The Court will assess reasonableness according to the circumstances of each loan, including risk, market practice, and party sophistication. Compound interest is not recoverable under the Interest on Debts and Damages (Jersey) Law 1996, but may be awarded as damages if justified. The Court is not bound to enforce unconscionable or usurious contractual terms.

Court Disposition

Judgment for plaintiff with interest at 8% per annum; contractual interest claims above this rate disallowed as immoderate/usurious.

Orders

  • Plaintiff awarded judgment against both defendants for £590,950 (first loan) and against first defendant for £41,000 (second loan), with interest at 8% per annum from loan dates until repayment.
  • Contractual interest above 8% and compound interest not allowed.