Mucky Mutz Limited v Hightide Investments Limited: [2024] JRC268

Mucky Mutz Limited (the Appellant) appealed the Magistrate’s decision in the Petty Debts Court, which allowed Skyfall Collections Limited (Skyfall) to pursue a claim on behalf of Hightide Investments Limited (the Landlord) for unpaid rent.

Skyfall had issued a summons (on behalf of the Landlord) against the Appellant, demanding payment to its own account rather than the Landlord’s. The key issue for the Royal Court was whether Skyfall could legally represent the Landlord in this claim.

Skyfall asserted that it was acting in its capacity as mandataire for the Landlord and noted that the Petty Debts Court had accepted the operation of mandataires for some 37 years.

Whilst the Royal Court noted that the Petty Debts Court Rules 2018 do not provide for corporate representation in the same way the Royal Court Rules 2004 do it noted that the rights of audience in the Petty Debts Court are governed by the Loi (1891) sur la Cour pour le Recouvrement de Menues Dettes (the 1891 Loi), which only permits Advocates or Ecrivans to appear on behalf of others.

The Court held that Skyfall’s appointment as mandataire was an attempt to circumvent the 1891 Loi. The Court emphasised that if a natural person had appointed Skyfall, it would not have been recognised. Instead, the Court pointed out that businesses can assign debts to collection agencies, but the agency must have a valid assignment to act.  The Royal Court concluded that the Magistrate’s decision to allow Skyfall to act was incorrect and struck out the summons.

This ruling is crucial for businesses using debt collectors. It recommends:

• Reviewing agreements with debt collection agencies.
• If pursuing a debt directly, either represent the business or appoint an Advocate.
• If outsourcing debt collection, ensure a valid debt assignment.

Full Judgement Here