W v Jersey Financial Services Commission

JurisdictionJersey
CourtRoyal Court
JudgeMatthew John Thompson
Judgment Date14 December 2017
Neutral Citation[2016] JRC 231A
Date14 December 2017

[2016] JRC 231A

ROYAL COURT

(Samedi)

Before:

Advocate Matthew John Thompson, Master of the Royal Court

Between
W
Appellant
and
Jersey Financial Services Commission
Respondent

Advocate P. C. Sinel for the Appellant.

Advocate B. H. Lacey for the Respondent.

Authorities

W v JFSC [2016] JRC 199 .

W v JFSC [2015] JRC 017 .

Financial Services Law 1998.

W v JFSC [2014] JLR 202 .

Royal Court Rules 2004, as amended.

W v JFSC [2015] JRC 241 .

W v JFSC [2014] JRC 250 .

W v JFSC [2015] JCA 060 .

R v Lancashire County Council ex p. Huddleston [1986] 2 All ER 941 .

Finance and Economics Committee v Bastion Offshore Trust Company [1994] JLR 370 .

De Smith's Judicial Review 7th Edition.

Interface Management Limited & Ors v JFSC [2003] JLR 524 .

Anchor Trust v JFSC [2005] JLR 428 .

Anchor Trust v JFSC [2006] JCA 040 .

Volaw Trust and Corporate Services Ltd & Anor v Comptroller of Taxes [2013] (2) JLR 499 .

Taxation (Exchange of Information With Third Countries) (Jersey) Regulations 2008.

MacFirbhisigh & Ching & Ors v CI Trustees & Executors Ltd & Ors [2014] (1) JLR 244 .

Business — decision in relation to applications by the Appellant.

CONTENTS OF THE JUDGMENT

Paras

1.

Introduction

1–2

2.

Background

3–24

3.

Application for reasons

25

4.

The parties' contentions

26–39

5.

The obligation to give reasons

40–53

6.

A power to order reasons

54–69

7.

The adequacy of the respondent's reasons

70–120

8.

Conclusion on reasons

121–122

9.

The application to amend

123–129

10.

The applications for discovery

130–147

11.

Conclusions

148

THE MASTER:
Introduction
1

This judgment represents my decision in relation to the applications by the appellant:-

  • (i) seeking a detailed statement of findings of fact made by the respondent to justify the proposed public statement and specific requests for further and better particulars or for details of certain paragraphs of the proposed public statement;

  • (ii) to amend its grounds of appeal; and

  • (iii) for discovery/specific discovery.

2

The present application follows on from my decision in this matter dated 1 st November, 2016, reported at W v JFSC [2016] JRC 199 where, at paragraph 34, I required any applications for specific discovery or for better reasons, or to file any further affidavit evidence to be issued, in the sense of arranging a date fix appointment before my secretary, before close of business Friday, 28 th October, 2016.

Background
3

The relevant background to this matter is set out in the judgment of Commissioner Clyde-Smith in the present proceedings at W v JFSC [2015] JRC 017 at paragraphs 4 to 8 which I adopt including the definitions and which state as follows:-

“4. I describe the background, as I understand it to be, taken from the information supplied by the Commission but I make no findings in that respect. As a consequence of the need for anonymisation, the description will be brief. Consistent with the judgment of the Master and the parties, I will refer to the board of commissioners as “the Board” and to those full-time directors and employees of the Commission who are not members of the Board as “the Executive” .

5. Production notices were issued by the Commission to the trust company concerned (“the Trust Company”) and its affiliates, pursuant to Article 32(1)(a) of the Financial Services (Jersey) Law 1998 (“the Financial Services Law”) covering a very wide range of matters, as a consequence of which the Commission received over ten thousand documents for review. It also conducted interviews with some fifteen individuals, exercising its powers under Article 32(1)(b) of the Financial Services Law. There were two interviews of W conducted by the Executive lasting some two days each in advance of which he was provided with an interview bundle of documents extracted by the Executive from the documents received pursuant to the production notices .

6. A draft of the final report into the Trust Company (in so far as it related to W) was provided to him before being finalised. Thereafter the decision making process in respect of W (as with the Trust Company) followed that set out in the Commission's guidance note of 27th May, 2009, (and as revised on 5th August, 2011,) which comprised, following a Preliminary Review, four stages:-

Stage 1 – disclosure and verification of information .

Stage 2 – Review Committee .

Stage 3 – Board – first meeting .

Stage 4 – Board – second meeting .

7. Pursuant to that process, a draft Individual Criticism Paper was prepared by the Executive and disclosed to W for his review and verification of the factual information contained within it. The process culminated in the decision of the Board taken at its Stage 4 second meeting to give directions to W and issue a public statement, against which decision he is now appealing .

8. It is fair to say that throughout this process W and from the time they were instructed, his advocates, Sinel's, were requesting not only extensions of time to respond to the Executive but also sight of all the documentation held by the Commission pursuant to the production notices and transcripts of the interviews of all of the other individuals involved, which the Commission regarded as restricted information and therefore was unable to provide. That remained the position of the Commission in the application made by W to the Master for discovery of documentation over and above that provided by the Commission in the two affidavits sworn by Mr John Clark Averty, Deputy Chairman of the Commission, pursuant to Rule 15/3(1) of the Royal Court Rules 2004; the first of which set out generic matters in respect of the Commission's powers and procedures and the second of which concerned the particular case of W.”

4

It is also right to add that W, albeit under protest, has participated fully in each stage of the decision making process referred to at paragraphs 6 of Commissioner Clyde-Smith's judgment. A summary of W's submissions at each stage of the respondent's process is set out in the affidavit of Lord Eatwell filed on behalf of the respondent on 5 th October, 2016, (filed in accordance with directions previously given by me) at paragraph 7.

5

In particular, W provided two responses to the Individual Criticism Paper (“the ICP”) produced by the executive about W, provided written submissions for the Stage 3 meeting, and in advance of the Stage 4 meeting and orally addressed the Stage 4 meeting.

6

The Royal Court at the determination of this appeal will have access to all written submissions and the full transcript of the oral submissions made by W. It is not in dispute that W addressed the board of the respondent for a number of hours at the stage 4 hearing.

7

The decision of the board was communicated to W by a letter dated 19 th June, 2014. W was informed that the respondent through the board had resolved to give certain directions under various regulatory laws and to issue a public statement under the Financial Services Law.

8

The letter of 19 th June, 2014, on page 2 stated “The reasons for giving directions are contained in the public statement issued under the Financial Services (Jersey) Law 1998.” Enclosed with the letter of 19 th June, 2014, was the public statement the board had resolved to issue. It is this public statement which is the subject matter of W's application for a statement of findings of fact or for particulars because the board has stated that the reasons for giving directions are contained in the public statement.

9

The letter of 19 th June, 2014, referred to the public statement as containing the reasons for the decision to issue directions because Article 23(5) of the Financial Services Law 1998 at sub-paragraph (a) requires a notice of a direction to specify the reasons for giving directions. Each of the directions issued under the relevant regulatory law also refers to the reasons for the directions being the findings set out in the public statement.

10

It is also appropriate at this point to refer to Article 25A of the Financial Services Law which provides in summary that where the respondent intends to issue a public statement identifying any registered or formerly registered person (which would include W), notice of this intention is to be given under paragraph 3 of Article 25A to the person concerned. The notice to be given is required to set out the reasons for issuing a public statement.

11

However, neither the board minutes recording the decision to issue a public statement in respect of W, nor the letter of 19 th June, 2014, nor the public statement itself nor any of the affidavits filed on behalf of the respondent contain any reasons for the decision to issue a public statement. This is a breach of Article 25A. I address the significance of this failing later in this judgment.

12

It is also necessary to refer to some aspects of the procedural history of this matter.

13

The primary appeal challenging the decision of the board to issue directions and make a public statement in respect of W was served on the respondent on 17 th July, 2014. A second appeal was issued on 21 st August, 2014, concerning the decision to make public statements in respect of others associated with the Trust Company before W's appeal had been determined; nothing turns on the second appeal for the purposes of the present application.

14

On 13 th October, 2016, for the reasons set out in the judgment given in this matter reported at W v JFSC [2014] JLR 202, I ordered certain further discovery as recorded at paragraph 36 of the judgment as follows:-

I therefore have reached the view that there should be disclosure to each of the appellants of minutes of each stage of the respondent's decision making process, minutes and notes of...

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