Anchor Trust v Jersey Financial SC

• Jurisdiction: Jersey
• Court: Court of Appeal
• Judge: Vos JA
• Judgment Date: 17 March 2006
• Neutral Citation: [2006] JCA 40
• Date: 17 March 2006

[2006] JCA 40

COURT OF APPEAL

Before:

J. P. C. Sumption Q.C. (President)

Dame Heather Steel

G. C. Vos Q.C.

Between

Anchor Trust Company Limited

Appellant

and

Jersey Financial Services Commission

Respondent

Mr Barry Shelton appeared for the Appellant Company.

Advocate J. D. Kelleher for the Respondent.

Authorities

Financial Services (Jersey) Law 1998.

Interface Management Limited v Jersey Financial Services Commission [2003] JLR 524 .

Porter v Magill [2002] 2 AC 357 p 494 .

R v Home Secretary ex parte Doody [1994] AC 531 p 560 .

Shane M Milford v. Seaward Marine Limited 1 ^st December 2000.

Stoop v Royal Borough of Kensington & Chelsea [1992] 1 PLR 58 .

Costain Limited v. Strathclyde Builders Limited [2004] SCLR 707 .

Vos JA

Introduction

1 On 1 ^st February 2001, Anchor Trust Company Limited (“Anchor”) applied for registration under Article 9 of the Financial Services (Jersey) Law 1998 (the “1998 Law”) to conduct trust business.

2 On 4 ^th March 2005, the Chairman of the Jersey Financial Services Commission (the “Commission”) wrote to Anchor informing it, that pursuant to its powers under Article 8 of the 1998 Law, the Board of the Commission had decided to refuse Anchor's application for registration.

3 On 9 ^th March 2005, Anchor filed notice of appeal to the Royal Court against the Board's decision.

4 On 23 ^rd March 2005, the Chairman of the Commission, Colin Powell, wrote to Anchor's advocate giving reasons pursuant to Article 11(2) of the 1998 Law for its decision to refuse Anchor's application for registration to conduct trust business.

5 The Royal Court heard oral evidence from Mr Colin Powell, Chairman of the Commission, on the 19 ^th July 2005.

6 On 27 ^th October 2005, the Royal Court (M.C. St. J. Birt, Deputy Bailiff, with Jurats Le Cornu and Morgan) delivered a 71-page Judgment (the “Judgment”) dismissing Anchor's appeal against the Commission's refusal to register Anchor.

7 On 25 ^th November 2005, Anchor filed its Notice of Appeal to this Court on the following three grounds:-

• (i) That the Royal Court failed to follow the procedural approach set out in its previous judgment in Interface Management Limited v. Jersey Financial Services Commission [2003] JLR 254.

• (ii) That the Royal Court failed to take relevant matters into account or took irrelevant matters into account in reaching its decision.

• (iii) Having regard to the all the circumstances of the case, the Royal Court's decision was one which no reasonable tribunal properly directing itself, could reach.

8 From the time it filed its Notice of Appeal, Anchor has been represented by Mr Barry Shelton, one of Anchor's directors, in person.

9 On 25 ^th January 2006, Anchor filed amended further and better particulars of its grounds of appeal (the “Amended Grounds”), explaining and elaborating the first two of the three grounds set out above.

10 On 21 ^st February 2006, Anchor filed a supplemental Notice of Appeal complaining that there was a presumption that the Deputy Bailiff was affected by bias. The complaint was that Mr Colin Powell and Mr Richard Pirouet, respectively the Chairman and Deputy Chairman of the Commission, who dealt with Anchor's application, comprised 2 of the 3 members of the Pay Review Board, which recommended that the Deputy Bailiff should receive a 15% salary increase in June 2002.

The 1998 Law

11 It is important to keep the core legislative provisions closely in mind before one comes to consider the history of Anchor's application.

12 Article 7 of the 1998 Law prohibits the carrying on unauthorised financial service business. Article 7(4) makes it a criminal offence to carry on financial service business in Jersey, without being a ‘registered person’.

13 Article 8 of the 1998 Law makes provision for the way in which applicants may apply to be registered under Article 9 of the 1998 Law.

14 In particular, Article 8(3) provides that an application under Article 8(1)(b) shall:

“contain or be accompanied by such information and documents as the Commission may require, relating to the applicant and the applicant's business, to persons who are principal persons in relation to the applicant and verified in such manner as the Commission may require”.

15 Article 8(4) provides that:

“At any time after receiving an application and before determining it the Commission may, at its discretion, by written notice order the applicant or any person who is or is to be a principal person in relation to the applicant to provide such additional information or documents as the Commission reasonably requires for the determination of the application, verified in such manner as the Commission may require, and such requirements may differ as between different applications”.

16 Article 8(5) also provides that:

“the Commission may by written notice require the applicant or any person who is to be a principal person in relation to the applicant to provide a report by an auditor or accountant, or other qualified person approved by the Commission, on such aspects of any information and documents required by or under paragraph ( 3) or (4) as the Commission may specify”.

17 Article 8(6) provides a further positive disclosure obligation on the applicant by providing that while an application is pending, an applicant who either

“(a) determines to bring about any alteration in, or (b) becomes aware of any event which may affect in any material respect, any information or documents supplied by the applicant to the Commission in connection with the application shall forthwith give written notice of that matter to the Commission”.

18 Article 9(1) provides that the Commission

“may either register a person with or without attaching conditions under Article 10(2) or may refuse to register a person”.

19 Article 9(3) provides the following grounds on which the Commission may refuse to register a person:-

“(a) having regard to the information before the Commission as to the –

(i) integrity, competence, financial standing, structure and organization of the applicant ,

(ii) persons employed by or associated with the applicant for the purposes of the applicant's business or who are principal persons in relation to the applicant ,

(iii) description of business which the applicant proposes to carry on ,

the Commission is not satisfied that the applicant is a fit and proper person to be registered;

(b) the applicant has at any time and whether or not in relation to the application, in any case where information was required under this Law in any connection –

(i) failed to provide any such information, or

(ii) provided to the Commission information which was untrue or misleading in any material particular; …

(d) the applicant or any person employed by or associated with the applicant for the purposes of the applicant's business has been convicted – …

(ii) of any offence involving dishonesty;

(e) it appears to the Commission, as a result of information provided in pursuance of requirements of or under Article 8, or information otherwise obtained, that – …

(ii) in order to protect the reputation and integrity of Jersey in financial and commercial matters, …

the applicant should not be registered; or

(f) the Commission has reason to believe that at any time there has been a failure on the part of the applicant to follow a Code of Practice issued under Article 19”.

20 Article 9(5) provides that

“where, under this Article, the Commission refuses to register a person or revokes a registration it shall give notice in writing to the applicant or registered person concerned”.

21 Article 10 provides that Economic Development Committee may, on the recommendation of the Commission, prescribe conditions applicable to registered persons, and that the Commission may attach conditions to any particular grant of registration under Article 9.

22 Article 11(2) provides that

“where the Commission … acting under Article 9, refuses to register a person or revokes a registration … the applicant … may require the Commission to furnish him or her within 14 days with a statement in writing of its reasons for that decision”.

23 Article 11(3) then gives the basis of the appeal of the Royal Court. It provides as follows:-

“Any person aggrieved by such refusal … may appeal to the Court … within one month from the date on which notice in writing has been given to the person under Article 9(5) or, as the case may be, under Article 10(3) on the ground that the decision of the Commission was unreasonable having regard to all the circumstances of the case” (emphasis added).

24 Article 32(4) gives the Commission power to require registered persons to provide the Commission with an accountant's report, and Article 33(1) gives the Commission power to appoint a competent person to investigate and report. Both Articles list the matters into which such reports can be required as including a registered person's financial services business and the integrity, competence, financial standing and organisation of that person. These Articles were applied to Anchor as an applicant for registration.

What is not appealed

25 The Royal Court dealt at paragraph 3–15 of its Judgment with the dispute between the parties as to the proper test that it should have applied on an appeal to the Court under Article 11(3). In brief, the Royal Court reviewed the relevant authorities and held (leaving the question of vires aside) that:-

• (i) The Court should look at the correctness and fairness of the procedure in order to decide whether the proceedings of the decision-maker were in general sufficient and satisfactory; and

• (ii) The Court should look at the merits of the decision, on the basis that an appeal should be allowed if the decision of the Commission was...