W v The Jersey Financial Services Commission

• Jurisdiction: Jersey
• Court: Royal Court
• Judge: J. A. Clyde-Smith
• Judgment Date: 23 January 2015
• Neutral Citation: [2015] JRC 17
• Date: 23 January 2015

[2015] JRC 17

ROYAL COURT

(Samedi)

Before:

J. A. Clyde-Smith, Esq., Commissioner, sitting alone

IN THE MATTER OF THE NOTICES OF APPEAL DATED 17 JULY 2014 AND 21 AUGUST 2014

Between

W

Appellant

and

The Jersey Financial Services Commission

Respondent

Advocate P. C. Sinel for the Appellant.

Advocate B. H. Lacey for the Respondent.

Authorities

U V and W -v- JFSC [2014] JRC 202.

Royal Court (Jersey) Law 1948.

Financial Services (Jersey) Law 1998.

Royal Court Rules 2004.

Science Research Council v Nasse [1980] AC 1028.

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

Interface Management Limited, Interface Trustees, Interface Secretaries Limited & Rosenthal v Jersey Financial Services Commission [2003] JLR 524.

Anchor Trust v Jersey Financial Services Commission [2005] JLR N 28.

Anchor Trust v Jersey Financial Services Commission [2006] JCA 040.

Volaw & Corporate Services & Anor v Comptroller of Taxes [2013] 2 JLR 499.

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

Victor Hanby Associates v Oliver [1990] JLR 337.

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

Business — appeal against decision of the Master dated 13 Oct 2014.

THE COMMISSIONER:

1 This is an appeal by the appellant (“W”) against the decision of the Master, given on 13 ^th October, 2014, to decline to make certain orders for disclosure against the respondent (“the Commission”). The reasons for declining those orders were set out in the Master's judgment of 23 ^rd October, 2014, ( U V and W -v- JFSC [2014] JRC 202).

2 The case was listed to be tried with Jurats. Counsel were unsure as to whether Jurats were required and rested on the wisdom of the Court. It seemed to me that an application for discovery of documentation is a matter of law and procedure which pursuant to Article 15(1) and 1(A) of the Royal Court (Jersey) Law 1948 falls to be dealt with by a single judge. Certainly if the application for discovery had been made before the Royal Court as opposed to the Master, it would, in my view, have been dealt with by a single judge, and it would have been incongruous for an appeal to the Royal Court from a decision of the Master under delegated authority from the Royal Court to be required to be heard by a Court comprising Jurats. No findings of fact are made in such an application and in reality the Jurats had no role to play. I therefore released them from the hearing.

3 The application for discovery was made in the context of an appeal brought by W (and two others) against decisions by the Commission to give certain directions to the appellants and to make public statements relating thereto. Consistent with the judgment of the Master, this judgment is being issued in the same anonymised form so that the identities of the appellants remain confidential until the appeal is determined.

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 27 ^th May, 2009, (and as revised on 5 ^th August, 2011,) which comprised, following a Preliminary Review, four stages:–

• (i) Stage 1 — disclosure and verification of information.

• (ii) Stage 2 — Review Committee.

• (iii) Stage 3 — Board — first meeting.

• (iv) 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.

9 It is intended that the appeal of W and the appeals of the other two individuals should be heard by the same Court consecutively immediately after each other in order to ensure consistency, but as the Master observed at paragraph 36 of his judgment, this would result in the Court being in possession of more material than the individual appellants. In his judgment, that was potentially unfair, given that these are appeals alleging unreasonableness on the part of the Board's decision, including unfairness and inconsistency, for the appellants not to be placed in the same position as the Board and the Royal Court as far as can be achieved. The Master therefore ordered, subject to a number of safeguards, that there should be disclosure to each of the appellants of the minutes of each stage of the Commission's decision-making process, minutes and notes of deliberations of the Board of any relevant Board decision relating to any of the appellants or other persons, the Individual Criticism Papers for each appellant and other persons where public statements have already been made and the final statement to be issued.

10 The Master was not prepared, however, to order discovery beyond that. Quoting from paragraph 40 of his judgment:–

“40 However, that was as far as I was and am prepared to go. I do not consider that notices of appeal, affidavits filed by the Commission, interview transcripts, objections filed by any of the appellants to draft of the ICPs or drafts of the public statements or submissions made to the Board should be disclosed. This includes notes of meetings between any of the appellants, or the other persons where public statements have been made and the Board. All those documents are confidential to those parties and the respondent. The information contained in them goes far beyond how the Board exercised its powers against an appellant, what it took into account , understanding the factual matrix known to the Board, or the Board's deliberations. In my judgment, the orders I have made provide an appellant with sufficient information to evaluate the findings made against other individuals involved, in the financial service business the Board is concerned about, and to assess whether the findings made against a particular appellant are unreasonable. I also accept that some of the material I have ordered to be produced will contain information supplied in confidence. This is inevitable, if an appellant is to know what the Board had in mind when deliberating its conditions. However this does not mean that disclosure as sought by Advocate Sinel should be produced. Advocate Sinel's approach in that regard again appeals to me to be looking for something to support his case. In reaching this view I accept that there may be some material not disclosed that is possibly relevant which might assist an appellant. However in my judgment the possibility of something being found that might assist an appellant is outweighed by preserving confidentiality.”

He went on to conclude at paragraph 49 that he considered this was:–

“sufficient to enable each appellant to evaluate the full factual matrix known to the Board at the time as well as the Board's thinking contained in its deliberations and therefore to advance arguments as to why the Board's decisions were unreasonable.”

11 The Master made it clear that his decision did not mean that W could not make a further application for specific categories of documentation on a much more limited and precise basis once he had had a chance to consider the material that he had ordered to be produced, but any such application should be justified on the basis of the approach set out in Science Research Council v Nasse [1980] AC 1028 which Advocate Lacey, for the Commission, had referred to him and should be supported by an affidavit explaining what is required and why it is relevant, necessary and...