Sunday, October 28, 2018

Debtor's Jail


Debtor’s Prison in St Kitts, Nevis and Anguilla
The Background
Imprisonment for debt in the islands of St Kitts, Nevis and Anguilla has been abolished for over 100 years.  Prior to the year 1889 the most common method of enforcing a judgment for money was by way of imprisonment.  Besides the writ of fieri facias (by which the debtor’s personal possessions could be seized and sold) the most usual way to collect a judgment debt was to seize the person of the debtor and imprison him in the hope of coercing him to sell his real and other property to settle his debt.  Unlike today there was at that time no need to allege that the debtor had behaved dishonestly in order to obtain a writ of arrest to enforce a judgment debt.
The dispatches of the Governors back to the Secretary of State in London remark that common debtors on occasion filled the prisons of Basseterre and St John's, Antigua.[1]  Reform eventually came to the Leeward Islands by way of introducing the UK reforms of some 20 years earlier.
The Debtor’s Act of the Leeward Islands,[2] which came into effect in St Kitts on 31 December 1888, instituted a major reform in the law applicable to civil debts.  This Act was based on the Debtor’s Acts of 1869 and 1878 of the United Kingdom.  The purpose of the Act was to clear the prisons of persons imprisoned for debt.  From the date of the Leeward Islands Act no debtor may be imprisoned in St Kitts and Nevis save under the limited procedure authorised by the Act.  The rule now is that no person may be arrested or imprisoned for making default in the payment of money, save in certain specific cases such as failure to pay a fine, as explained below.
The principle which the law seeks to enforce is that if any merchant gives credit to a customer who does not have the means to pay for the goods bought, then that is a risk that the merchant chose to take.  If any money lender hands over to a borrower a sum of money without taking adequate security for the loan, then that is a risk that the money lender chose to take.  The careless creditor is not to be permitted to come to law and expect to find a summary procedure that allows him to enforce his reckless transaction by the imprisonment of the impecunious debtor.
The Oral Examination Procedure
The rules of the High Court include a procedure for conducting an Oral Examination of a judgment debtor who is not paying his debt.  The Oral Examination is not a method of enforcement of a judgment.  It is merely a tool to assist a legal practitioner to determine which method of enforcement to use.  It is a particularly valuable tool where the judgment creditor does not know the nature and location of the assets or income of his judgment debtor.  Oral Examinations are governed by Part 44 of the Civil Procedure Rules, 2000.  The mechanism is explained in the English Supreme Court Practice.  It is essentially as follows.  The legal practitioner for the judgment creditor, by an application without notice, obtains from a judge an order for the Oral Examination of the judgment debtor.  That order in Form 14 is served personally on the judgment debtor at least 7 days before the date fixed for the examination.  At the same time, a draft financial position notice in Form 16 requiring the judgment debtor to complete a statement of his financial position is served.  An affidavit of service must be filed not less than 3 days before the date fixed for the examination.
The examination is conducted normally by the Registrar or Master.  The judgment debtor is examined as to his means to pay by his lawyer and cross-examined by the lawyer for the judgment creditor.  The Registrar or his clerk writes out the evidence of the judgment debtor on loose sheets of paper.  At its conclusion the statement is read back to the judgment debtor, who then signs it.  The record of the evidence of the judgment debtor is placed on the court file.  Parties may receive a copy of it from the Registrar on payment of any necessary photocopying fee.  A copy of it may be exhibited in due course with any affidavit supporting a method of enforcement that may subsequently be applied for.  After the completion of the Oral Examination procedure, the legal practitioner for the judgment creditor is expected to decide which of the various enforcement options provided by the rules he will use.
No order of imprisonment can be made under or subsequent to the Oral Examination procedure.  Even if an offer of payment is made by the judgment debtor and accepted at the Oral Examination, and an order is made, that order is not enforceable by imprisonment.  The creditor’s lawyer must follow up the Oral Examination proceedings by an application for one of the enforcement proceedings provided for in the rules.  These procedures include a writ for the sale of personal property, a charging order on shares in companies, or an order for the sale of any land discovered in the Oral Examination.  A consent order for payment of a judgment debt made under one of these procedures must be given effect by obtaining a further order under a Judgment Summons.  A breach of such a consent order cannot be followed by a Motion for Contempt and the imprisonment of the defaulting judgment debtor.  This is a consequence of the provisions of the Debtor’s Act.
The Judgment Summons Procedure
Part 52 of CPR 2000 is the rule governing the issue of a Judgment Summons in the jurisdiction of the Eastern Caribbean Supreme Court.  Part 52.1 applies to applications to commit to prison a judgment debtor for non-payment of a debt “where this is not prohibited by any relevant statute”.
The most relevant statute is of course the Debtor’s Act.  This Act abolished imprisonment for debt except in six specific cases.  They are set out in section 3.  They are:
(1) default in the payment of a fine or penalty;
(2) default in the payment of a sum recoverable summarily before a Magistrate;
(3) default by a trustee ordered by the Court to pay any sum;
(4) default by a solicitor in payment of costs for misconduct;
(5) default in payment for the benefit of creditors of any portion of a salary in respect of which a court having jurisdiction in bankruptcy is authorised to make an order; and
(6) defaults in payment of sums in respect of payment of which orders are in this Act authorised to be made.
We are interested in the exception found at paragraph (6) which covers judgment debtors.  Section 4(1) of the Act governs committal to prison for non-payment of a judgment debt.  It provides that the court may commit a judgment debtor to prison for a term not exceeding 6 weeks.  There are conditions that must be satisfied.  The order (a) must be made by a judge (b) in open court (c) by an order showing on its face the ground on which it is issued.  Further, (d) the court can only make such an order where it is proved to the satisfaction of the court that the person making default has or has had since the judgment the means to pay the debt and has refused or neglected to do so.
Section 4(3) authorises the judge to exercise his jurisdiction under this section in Chambers or otherwise in the prescribed manner.  However, section 4(1), as we have seen, requires the order committing the judgment debtor to be made in open court.  In my day as a legal practitioner, that order for imprisonment was obtained by a contempt motion heard in open court on what was called “Motions Day”.  Now, under Part 52.4 on hearing the Judgment Summons the judge may make a suitable order for payment of the judgment debt by a particular date or by specified instalments under penalty as provided by the Debtor’s Act.  The subsequent application for the committal to prison of a defaulting debtor is explained below.
Imprisonment in the High Court under the Judgment Summons Procedure
CPR 2000 is a form of subordinate legislation made by the Chief Justice, and is subject to the substantive law of the Debtor’s Act.  So, Part 52 must be read in conjunction with the Debtor's Act and the rules made under it.  In particular, the Debtors (Committal) Rules govern the procedure for enforcement of an order for payment and committal made by a judge under a Judgment Summons.[3]  CPR 2000 does not amend or replace the Debtor’s Act and the Rules made under it.  Where Part 52 appears to conflict with the u, then Part 52 must give way.  However, I do not believe there is any conflict between the two.
Part 52.2 provides for all applications to commit a judgment debtor to be made by way of a Judgment Summons in Form 21.  The summons must state certain particulars.  Sub-rules 3, 4 and 5 provide for the service and hearing of the summons and the enforcing of any instalment order.  This is in accordance with the Debtor’s Act.
In following the procedure under Part 52.2, a careful legal practitioner will bear the Debtors (Committal) Rules in mind when applying for the imprisonment of a judgment debtor.  Sub-rule 2 requires that the application to commit the judgment debtor to prison must be made by summons and shall specify certain particulars.  By sub-rule 3 the service of the summons must be personal unless the judge is satisfied that the judgment debtor is evading service.  Sub-rule 4 provides that proof of the means of the debtor shall, whenever practicable, be given by affidavit.  In High Court proceedings, the affidavit must be sworn by the client or someone else knowledgeable about the debtor’s affairs, not by the legal practitioner or his clerk, as is sometimes done in the Magistrate’s Court.  Where it appears to the judge that the debtor or other person should attend court but is absent, the judge may order the person's attendance for the purpose of being examined on oath.  Sub-rule 5 provides that the judge may then make an order of committal in Form A in the Schedule to the rules.  These Debtor’s Act provisions are all essentially the same as those in Part 52.
The hearing of a Judgment Summons cannot be carried out by a Master or the Registrar.[4]  While a Registrar or Master frequently handles Oral Examinations, only the judge is permitted to hear a Judgment Summons.  This is a consequence of the penal implications of an order made in this proceeding.
The judge may not make a suspended committal order on the first or other early hearing of a Judgment Summons.  This would conflict with Sub-rule 2 of the Debtor’s (Committal) Rules. 
Where there has been default in any order for payment under the Judgment Summons, the judgment creditor must follow the provisions of Part 53 to obtain a committal order.  Part 53 provides the requirements that the judgment creditor must meet before the judgment debtor may be committed.  These are essentially the same as the provisions of the Debtor’s (Committal) Rules.  So, at Part 53.3, (a) the original order made by the Judge on hearing the Judgment Summons must have been served personally on the judgment debtor.  (b) The order must have been endorsed with a penal notice.  If the penal notice is missing, the order is ineffective.  (c) There must have been sufficient time after service of the order afforded to the judgment debtor to comply.  (d) The Summons applying for the committal order must specify the exact nature of the alleged breach, (e) be verified by affidavit, and (f) be served, and (g) there must be an affidavit of service.
To recap, the Oral Examination procedure is not a mechanism for obtaining an order for periodic payments by a judgment debtor although such an order is sometimes obtained by consent.  Any such order made by a Master or Registrar is unenforceable.  Any attempt to enforce it by imprisonment is an illegal avoidance of the protections introduced by the Debtor’s Act.
It is not open to a court to imprison a debtor for contempt (in a case where the debtor failed to pay an instalment on a judgment) otherwise than as permitted by the Debtor’s Act.  Even when the court is satisfied that the judgment debtor has the means to pay the debt but he has failed to pay it, in the absence of a final order under a Judgment Summons, he may not be imprisoned.  The flouting of an order to pay a judgment debt can only be properly adduced under the Judgment Summons procedure.  That is the correct proceeding, not because it is right or just, but because the Debtor’s Act says so.  Until the Debtor’s Act is overturned by parliament it remains binding law.  An illegal imprisoning of a judgment debtor by a Judge may have the consequence of making the State liable to the debtor in a claim for damages.
Once the detailed provisions of the Debtors (Committal) Rules and Part 53 of CPR 2000 are followed by the legal practitioner for the judgment creditor, and credible evidence of wilful default (in paying the amounts ordered by the judge to be paid at the earlier hearing of the Judgment Summons) is produced to the judge, a committal order can be requested.
Where the debtor’s Oral Examination produced evidence of his ownership of land or valuable personal possessions, the court will expect alternative enforcement proceedings to be preferred instead of pursuing an order for imprisonment.  If the debtor has failed to comply with an order for payment by instalments, and additionally owns property, the court will expect the property to be proceeded against before an application for a Judgment Summons is made.  Committal for contempt of court as a method of collecting a judgment debt is the last recourse available to a judgment creditor, and will be sparsely awarded.
Don Mitchell
17 September 2018
A revised version of an October 2010 paper delivered to the Antigua and Barbuda Bar Association:
30 October 2018
Revised again for use in a panel discussion on Radio ZIZ of St Kitts on the topic of “Debtors’ Jail”


[1]      Additionally, the Quaker missionary John Candler who visited the West Indies in 1841 reported that 6 of the 56 prisoners in the Basseterre jail at the time of his visit were debtors.
[2]      An Act of the Federal Assembly of the Colony of the Leeward Islands [No 2/1888].
[3]      Made on 24 November 1890 under section 8.
[4]      Practice Direction 2 of 2007 made by the Chief Justice under Part 4.2(2) of CPR 2000.