The Jersey Law Review - October 2002
CASE SUMMARIES
ADMINISTRATIVE LAW
JUDICIAL REVIEW
The Yacht Hotel Ltd v The Licensing Assembly CA (Smith, Carey and Rokison JJA) June 7th, 2002 unreported.
D.J. Benest for the appellant; S.C. Nicolle QC, Solicitor General, for the respondent.
The appellant held a 4th category licence for the Yacht Hotel, and the Yacht Bar of the hotel was designated as a public bar requiring it to be closed at 11.00 p.m. In 1999 the appellant applied to the Licensing Assembly for the removal of this designation, stating that the purpose was to cater for the needs of residents. An exchange between counsel for the appellant and the president of the Assembly resulted in a misunderstanding on the part of the Assembly that it was not the intention to cater for the general public. The Assembly accordingly removed the designation but did not attach a condition limiting its use to residents. Subsequently the appellant erected a sign advertising the premises as being open until 1.00 a.m. and public order difficulties ensued.
Those difficulties led the Attorney General to refer the licence to the Assembly under Article 9 of the Law and, in July 2001, the Assembly re-imposed the designation of the Yacht Bar as a public bar. The appellant sought judicial review of this decision and the Royal Court dismissed the application.
On appeal the appellant contended that the Assembly had no jurisdiction to re-impose the designation because the Attorney General’s reference did not raise issues relating to the conduct of the hearing in 1999 but only dealt with issues relating to the public disorder that had ensued following the 1999 decision.
Held, that the Licensing Assembly had no jurisdiction, on a reference made by the Attorney General under Article 9 of the Law, to consider any matters other than those contained in the reference; the misunderstanding between the Assembly and counsel for the appellant was not such a matter and the re-imposition of the designation was therefore made without jurisdiction and would be quashed.
JUDICIAL REVIEW
The Viscount and Price Waterhouse Coopers v Att.Gen. Royal Ct: (Birt, Deputy Bailiff and Jurats Le Ruez and Georgelin) March 28th, 2002 unreported.
B.H. Lacey for the representors; A.J. Belhomme for the Attorney General.
The representors (referred to individually as “the Viscount” or “PWC”) sought judicial review of notices issued by the Attorney General under the Investigation of Fraud (Jersey) Law 1991. The Attorney General’s inquiry concerned M who had been the principal of a trust company C. In July 2001, the Court had appointed PWC as manager of C under the Financial Services (Appointment of a Manager) (Jersey) Order 2000 (“the 2000 Order”). In October 2001 the property of C had been declared en désastre, and the Viscount appointed PWC to assist him in the administration. The Attorney General’s notices sought documents obtained or created by the Viscount and PWC during the course of their administration of C’s affairs. During the hearing the Attorney General conceded that working papers need not be produced, and that documents could be edited to remove references to extraneous matters.
The Viscount and PWC argued that there was a public interest in preserving the confidentiality of information given to them by those concerned in administering C. If such persons thought that information given to the Viscount and/or managers under the 2000 Order pursuant to their statutory duty to assist might later be obtained by the Attorney General, they would be less open and co-operative. Reliance was placed on dicta of Lord Hoffman in Re Arrows (No4).[01] During the hearing the Attorney General further conceded that the notices should operate only against information provided by clients of C.
Held, that although the Attorney General had a duty to give due weight to the confidentiality of information provided as a result of any confidential relationship, the fact that the information was given to the Viscount or to PWC pursuant to a statutory power was not material; applying the criteria laid down in Att. Gen. v Acturus Properties Ltd,[02]there was a presumption of regularity and the representors had not shown any illegality, irrationality or procedural impropriety.
Obiter: (1) the Court inclined to the view that there was a public interest in ensuring the free flow of information from those who had managed the company to the Viscount or a manager under the 2000 Order;
(2) it was possible that the Court could employ a different jurisdiction at the instance of the Viscount or a manager under the 2000 Order in order to balance the competing public interests of preserving secrecy in certain circumstances and of investigating fraud.
ADVOCATES
DISCIPLINARY PROCEEDINGS
In re an advocate Royal Court: (Bailhache, Bailiff and Jurats de Veulle, Rumfitt, Potter, Querée, Le Brocq, Tibbo, Bullen, Le Breton, Georgelin, Allo, and Clapham) August 14th, 2002 unreported.
R.J.Michel, Bâtonnier, in person; A.J.N. Dessain for the advocate; S.C.Nicolle Q.C., Solicitor General, for the Attorney General.
The Bâtonnier brought a representation alleging unbecoming conduct on the part of an advocate. The advocate had accessed the electronic file of a client of his partner in order to obtain information for use in a letter of objection on his own behalf to a proposed development by the client, who was a neighbour. The client had later seen the letter addressed to the planning authorities and had realized that information from his personal file had been used by the advocate. The advocate admitted that the conduct was unbecoming but argued in mitigation that he had offered an apology to the client, had expressed remorse, and had used only information which could have been obtained from the Planning Department; furthermore no damage had in fact been done to the client because the application for planning permission would have been rejected irrespective of the letter of objection.
Held, that the conduct amounted to a gross breach of professional duty, that the Court expected the legal profession to observe the highest standards of integrity in their relations with their clients, and that the advocate would be suspended from practice for two months.
CIVIL PROCEDURE
STAY OF PROCEEDINGS
Jersey Produce Marketing Organisation Ltd. v States of Jersey and Jersey Potato Export Marketing Board Royal Ct: (Birt, Deputy Bailiff and Jurats Allo and Clapham), July 22nd, 2002 unreported.
T.J. Le Cocq for the applicant; S.C. Nicolle Q.C., Solicitor General, for the first respondent and C.J. Scholefield for the second respondent.
On February 26th, 2002, the applicant was given leave to apply for judicial review of the Jersey Potato Marketing Scheme 2001 (Approval) (Jersey) Act 2001 and the Scheme adopted thereunder. The respondents to the application were the States, which had adopted the Scheme pursuant to the Act, and the Jersey Potato Export Marketing Board which had been constituted under the Scheme. The challenge was on the ground inter alia that the Scheme infringed European Community Law.
On March 7th, 2002, by consent, the Royal Court had stayed the application of the Scheme in so far as it affected the applicant and those who wished to market potatoes through the applicant. At the time when the application for a stay was made, the Scheme had been in force but had not yet been operative. Had there been no stay, no potatoes could lawfully have been exported. The respondents made it clear that they were only consenting to the stay because of the need for the 2002 potato season to be able to proceed.
In April, 2002, when the hearing of the application for judicial review came before the Court, the Court decided to refer certain issues of EC Law to the European Court of Justice for a preliminary ruling. It was agreed that such a reference would take approximately eighteen months from the date of the reference to the decision of the European Court of Justice, from which it followed that the argument on EC Law would not be resolved in time for the 2003 season and that the decision might be received shortly before or during the 2004 season. In the circumstances the applicants applied for a lifting of the stay with effect from October 1st, 2002, so that the Scheme might take effect for the 2003 season.
Held,
(A) upon two preliminary points,
(1) that on an application for judicial review it is not for the Court to decide whether the Scheme is good or bad. The Court was concerned only with the legality of the Scheme, and at this stage with assessing the balance of convenience having regard to the fact that there was a challenge to the legality of the Scheme;
(2) that as the original reason for the imposition of a stay by consent had disappeared, the burden of satisfying the Court that a continuation of the stay was necessary lay with the applicant;
(B) refusing the application of the respondents,
(1) that the Court did have jurisdiction to grant an injunction restraining the enforcement of a statute or other legislation where that legislation might infringe EC Law;
(2) that the principles upon which interim relief are granted in cases where legislation is called into question were the following –
(a) whether there is a serious issue to be tried. If there is not, no question of interim relief arises;
(b) whether, if the plaintiff were to succeed at trial, he would be adequately compensated by an award of damages. The availability and adequacy of such a remedy would normally preclude the grant of interim relief;
(c) if the plaintiff would not be adequately compensated by damages, whether there would be an adequate remedy in damages for the defendant under the plaintiff’s undertaking in damages if interim relief were granted. If so, there is no reason on this ground to refuse interim relief;
(d) if there is doubt as to the adequacy of either or both of the respective remedies and damages, the Court should proceed to consider the balance of convenience in the light of all the circumstances of the case;
(3) that there was uncertainty as to whether the applicant would be entitled to damages for an infringement of EC Law, and that, as is usually the case where a public authority is seeking merely to enforce the law, damages would not be an adequate remedy for the States, so that damages would not be an adequate remedy in either direction;
(4) that on the question of a balance of convenience, there was a real risk of damage to the applicant and to the potato industry which outweighed the risk of damage to the States and the Board.
Comment. This case establishes the principles regulating the grant of interim relief in the form of a stay where the substantive action is a challenge to legislation. The judgment is perhaps also noteworthy for the statement by the Court that the “authorities” (unidentified) are “more than capable of arranging matters” by grant of an amnesty, a statement which may come as a surprise to those who have hitherto understood that the grant of an amnesty lies exclusively within the power of the Attorney General. It is to be hoped that this obiter dictum will not find its way into the judisprudence of the Island.
COMPANIES
TRANSFER OF SHARES
Robertson v Slous and Thermal Transfer Services Ltd. Royal Ct: (Birt, Deputy Bailiff, and Jurats de Veulle and Clapham) June 11th, 2002 unreported.
N. Pearmain for the representor, W. Grace for the respondents.
The representor sought an order under article 143 of the Companies (Jersey) Law 1991 that the first respondent (“Mr Slous”) should purchase his 50% shareholding in the second respondent (“TTS”) at a price determined by the Court. In earlier proceedings the Court had found that the respondent was entitled to 50% of TTS which had conducted a plumbing business between 1985 and 1992. The representor organised the plumbing work and Mr Slous dealt with the administrative affairs of TTS. All the profit of TTS during this period had been applied in management charges largely unconnected with TTS in order to mitigate the tax burden of other companies owned by Mr Slous.
Held,
granting the order under Article 143,
(1) that there had been unfair prejudice to the representor;
(2) that an order for the sale of the shares was appropriate in this case; and
(3) that the sale price should be half the net asset value of TTS in 1992 having made allowances for a proper management charge and interest from 1993 to date.
CONFLICT OF LAWS
JURISDICTION
Koonmen v Bender and others Royal Ct: (Bailhache, Bailiff and Jurats Potter and Bullen) July 19th, 2002 unreported.
A.R.Binnington for the plaintiff; D.J.Benest for the first defendant; N.F.Journeaux for the second defendant; M.H.D. Taylor for the third, fourth and seventh defendants.
K and B were U.S. citizens resident in Japan and Costa Rica respectively who had made substantial profits from hedge fund activity. A tax shelter structure was established and part of the profits was placed in an Anguillian trust (“the AEBT”) while the remaining part was held in the seventh defendant, an Anguillian company (“AIA Anguilla”). Both the AEBT and AIA Anguilla were under the control of the Anguillian trustee, the 2nd defendant, (“STAL”) which was a wholly owned subsidiary of the 4th defendant, a Jersey trust company (“STL”) owned and controlled by Jersey residents. The evidence showed that one of the Jersey residents, the 3rd defendant, W, was the architect of the tax shelter structure. About 70% of the assets of the AEBT and AIA Anguilla were situate in Jersey. STAL proposed to distribute the assets of the AEBT in unequal proportions. K brought an action in Jersey claiming that there was an agreement with B that the profits would be shared equally, and that STAL was bound by that agreement.
STAL and AIA Anguilla applied to set aside the leave granted by the Greffier to serve the proceedings out of the jurisdiction, and for a declaration that the Court had no jurisdiction over them in respect of the subject matter of the claim. STL and W also applied for a declaration that Jersey was not the appropriate forum and that Anguilla was the forum conveniens.
Held, dismissing the applications, that K’s action raised serious issues to be tried and that the jurisdiction with which those issues had the most real and substantial connection was Jersey and not Anguilla.
CONTRACTS
REPUDIATION
Hamon v Webster Royal Ct: (Birt, Deputy Bailiff and Jurats Potter and Le Breton). July 19th, 2002 unreported.
A.Clarke for the plaintiff; P.M.Livingstone for the defendant.
H, who was a builder, agreed with W to carry out works on a dilapidated property owned by W. It was agreed that the work would be completed in four months and that W would contribute £12,000 towards the cost of materials. At the conclusion of the work W would grant H a lease of the property rent-free for the next two years. By mutual agreement the period for completion was extended first by eight months and then by a further three months; at that stage H committed himself in writing to completing the work by December 31st, 2000 and stated that, if not completed, W would be entitled to repudiate the contract and call in another contractor. This deadline was again extended until January 15th, 2001, and, the work being still unfinished, W repudiated the contract and employed another builder to complete the job. H asserted that W had not been entitled to repudiate the contract, there being only some three days’ work left to complete by January 15th 2001, and claimed damages for the failure to grant him a lease.
Held, dismissing the claim, that under Jersey law (save in relation to leases where an application to the Court was necessary) an innocent party may terminate a contract where the breach goes to the root of the contract or where the contract specifically provides a right to terminate in respect of the breach in question; in this case the breach did not go to the root of the contract but H had agreed that in default of completion by December 31st, 2000 W would be entitled to repudiate the contract and call in another builder.
CRIMINAL LAW
DRUGS
Durkin v Att.Gen. Royal Ct: (Bailhache, Bailiff and Jurats Rumfitt and Querée) May 13th, 2002 unreported.
S.A. Pearmain for the appellant; C.M.M. Yates for the Crown.
The appellant was found in possession of a small quantity of cannabis and a piece of stained foil and tube which on analysis showed traces of heroin. He pleaded guilty to possession of cannabis and heroin and appealed against his sentence of three months’ imprisonment. During the hearing the appellant sought and obtained leave to appeal against conviction on the charge of possessing heroin on the basis that his guilty plea was entered under a misapprehension as to the law.
Held, allowing the appeal against conviction for possession of heroin but dismissing the appeal relating to the cannabis, applying R v Boyesen,[03] that whether possession of a trace of a drug was sufficient to found a conviction was a matter of fact for the common sense of the tribunal. If the trace was visible, tangible and measurable it was capable of constituting something of which it was possible to have possession.
DRUGS
Valler v Att. Gen. CA (Beloff, Clarke and Vaughan JJA) July 18th, 2002 unreported.
L.J. Kerruish for the appellant; M. St. J. O’Connell, Crown Advocate, for the Crown.
The appellant pleaded guilty to the importation of 500 grams of heroin and 5000 ecstasy tablets. Applying the standard criteria in relation to each drug would have led to a starting point of 14 years for the heroin and 13 years for the ecstasy. The Royal Court decided however to increase the starting point for the heroin to 16 years to take account of the importation of ecstasy and, after making deduction for the relevant mitigation, sentenced the appellant to 11 years’ imprisonment on the heroin count and 10 years concurrent on the ecstasy count. The appellant contended that this approach was wrong.
Held, dismissing the appeal and applying a judgment of the Guernsey Court of Appeal in Richards v Att. Gen. of Guernsey,[04] that the Royal Court had been correct to increase the starting point having regard to the importation of significant quantities of two different drugs.
MONEY LAUNDERING
In re the representation of D P Royal Ct: (Birt, Deputy Bailiff and Jurats Quérée and Clapham) August 6th, 2002 unreported.
D. R. Wilson for the representor; A. J. Olsen for the party convened.
The representor was the beneficial owner of P Ltd the shares of which were held by the party convened, Nearco Administration Services Ltd (“Nearco”). P Ltd had owned a house in London, the proceeds of sale of which were held by a firm of solicitors. The representor wished these funds to be applied for certain purposes but P Ltd refused to give those instructions to the solicitors. It transpired that Nearco was aware that, in relation to a different company H Ltd, in which the representor had a beneficial interest, a suspicious transaction report (“STR”) had been made to the police under the Proceeds of Crime (Jersey) Law 1999 (“POCL”). The representor instructed Nearco to change the board of directors of P Ltd so that her wishes could be implemented. Nearco was unwilling to comply with this instruction without the consent of the police although it conceded that it had no suspicions about the affairs of P Ltd that would justify making an STR. It was concerned however that it might commit a money laundering offence by complying. The representor accordingly issued these proceedings.
Held, that Article 32(3) of POCL had no application given that Nearco entertained no suspicions about the affairs of P Ltd; there had been no justification for failing to comply with the instruction of the representor and Nearco would be ordered to pay the costs of the proceedings.
[Editor’s note: Art 32 of POCL creates the offence of assisting another to retain the benefit of criminal conduct but provides a defence inter alia if the person did not know or suspect that the arrangement related to the proceeds of criminal conduct.]
CRIMINAL PROCEDURE
SENTENCING
Sangster v Att.Gen. Royal Ct: (Birt, Deputy Bailiff and Jurats Le Ruez, Rumfitt, Potter, Bullen, Allo and Clapham), April 29th, 2002, unreported.
A.J.D Winchester for the appellant; S Sharpe, Crown Advocate, for the Crown.
The appellant appealed against her sentence of 18 months’ imprisonment for an offence of demanding money with menaces. One of the grounds of appeal was that the sentencing court had not established a starting point.
Held, dismissing the appeal, that the function of an appellate court was to establish whether the sentence was manifestly excessive and the absence of a starting point in the court’s reasoning was not in itself a ground of appeal.
Obiter: methodologies for determining sentence can vary; until recently all Jersey courts, like English courts, had not applied the starting point methodology except in cases of drug trafficking. It was not easy in many cases, including this one, to establish a starting point when the English cases being used as guidance did not themselves do so.
TRIAL BY JURY
Marriott v Att.Gen. CA (Southwell, Gloster and Carey JJA) April 4th, 2002 unreported.
P.C. Sinel for the appellant; C.E. Whelan, Crown Advocate, for the Crown.
In 1987 the appellant was convicted by a majority verdict on two counts of fraudulent conversion in relation to the property of his mother of whom he was the curator. He was ordered to perform 180 hours of community service. His appeal to the Court of Appeal was dismissed.[05] In relation to the majority verdict the transcript recorded that the Bailiff had announced that “more than sufficient members of the jury” found the appellant guilty. In 1987 the jury was composed of 24 persons of whom a majority of 18 could convict. In 2001, it came to light that two members of the jury had at the time of the trial been convicted of offences that disqualified them for acting as members of a jury. The Secretary of State referred the case to the Court of Appeal under Article 41 of the Court of Appeal (Jersey) Law 1961.
Held, quashing the conviction, that the appellant had been entitled to stand trial before a jury composed only of eligible jurors.
FAMILY LAW
FINANCIAL PROVISION
J v M Royal Ct: (Bailhache, Bailiff and Jurats Le Breton and Clapham) 2002 JLR 330.
M.M.G. Voisin for the petitioner; M.St.J.O’Connell for the respondent; A.D. Robinson for the trustee of the X Trust; K. J. Lawrence for the minor etc. beneficiaries of the X Trust.
The Court was asked to determine the appropriate financial provision for the petitioner in the context of a marriage that had lasted for 14 years and where there were three children. The petitioner claimed a total of £11.6 million. The respondent offered £4.8 million. The bulk of the family assets of approximately £35 million had been built up by the respondent’s father and settled by him in a discretionary settlement known as the X Trust. At the time of the divorce both the respondent’s parents had died. The surviving beneficiaries were the respondent and his children but not the petitioner. The petitioner argued that-
(1) the X Trust was a post-nuptial settlement under article 27 of the Matrimonial Causes (Jersey) Law 1949 and that the Court had jurisdiction to vary the trusts so as to make provision for her;
(2) the Court should in any event take account of the X Trust in making its award, and
(3) on the principles of equal treatment laid down in White v White[06] the petitioner’s lump sum claim was modest.
The trustee contended that the X Trust was not a post-nuptial settlement because -
(a) was not made between the parties to the marriage and
(b) because there was no “nuptial” quality about it.
The trustee also contended that only the assets of the respondent should be taken into account in making an award. The respondent contended that this was not a White v White type of case because the family assets had been built up by the respondent’s father and not by the parties to the marriage.
Held,
(1) that the X Trust was not a post-nuptial settlement for both the reasons advanced by the trustee;
(2) that, applying Bourne v Bourne[07] and Thomas v Thomas,[08] the Court would give judicious encouragement to the trustee to advance monies to the respondent in order to enable him to meet the award;
(3) that this was not a White v White type of case and that the test to be applied was what were the reasonable requirements of the petitioner; that such requirements would be met by an award of £6.6 million.
Obiter: the Court endorsed the White v White principles, agreeing that there was no place for discrimination between husband and wife and that, where family assets have been built up by the efforts of both parties, even if the contributions were different in nature, fairness required that they be given equal weight.
INJUNCTIONS
MAREVA INJUNCTION
Goldtron Ltd. v Most Investment Ltd. Royal Ct: (Birt, Deputy Bailiff and Jurats Bullen and Clapham) August 9th, 2002 unreported.
M.J.Thompson for the plaintiff; M.St.J. O’Connell for the defendant.
The defendant agreed to buy shares in a Russian company from the plaintiff for $13.5 million payable in instalments. The Russian rouble depreciated against the dollar and the defendant sought a variation of the agreement. The dispute was referred, in accordance with the agreement, to arbitration in Moscow where the defendant’s claims were dismissed and it was ordered to pay $9.5 million to the plaintiff. The plaintiff sought and obtained ex parte a Mareva injunction restraining funds in Jersey.
The defendant applied to set aside the injunction on the ground of material non-disclosure of facts at the ex parte hearing. In particular it was alleged that the plaintiff had failed to disclose that the arbitral award was not unanimous and that there were serious procedural flaws in the arbitration process disclosed in the dissenting opinion.
Held, applying a dictum of Bingham J inSiporex Trade SA v Comdel Commodities Ltd.[09],
(1) that the duty of full and frank disclosure had not been discharged by the plaintiff and that the injunction imposed ex parte would be discharged;
(2) that the jurisdiction to re-impose an injunction should be sparingly exercised; the injunction would nonetheless in this case be re-imposed on the ground that, whatever the unsatisfactory state of the evidence, there was in existence an arbitration award in favour of the plaintiff.
PLANNING LAW
APPEALS
Planning and Environment Committee v Le Maistre CA(Smith, Carey and Rokison JJA) July 11th, 2002 unreported.
S.C. Nicolle Q.C., Solicitor General, for the appellant; D.J. Benest for the respondent.
The respondent was refused development permission to construct a bungalow on a small field in St Mary. He appealed to the Royal Court which allowed the appeal, holding that the presumption against non-agricultural development in the Agricultural Priority Zone was not a straitjacket and could be overridden by other compelling considerations; in this case the small size of the field and its un-marketability for agricultural purposes and the minimal adverse impact upon the character of the countryside in the vicinity were such considerations. The appellant committee appealed to the Court of Appeal.
On appeal it was contended that the absence of detriment to the agricultural industry and minimal adverse impact upon the character of the countryside were insufficient to rebut the presumption in Planning Policy C06; it was also argued that the Royal Court had not explained why it considered that development would have a minimal impact, nor why the appellant committee’s decision had been unreasonable.
Held, allowing the appeal by a majority (Carey JA dissenting),
(1) that the factors relied upon by the Royal Court were insufficient to rebut the presumption against non-agricultural development and to underpin a finding of unreasonableness on the part of the appellant committee;
(2) that the Royal Court had fallen into the error of moving from its own conclusion to an assumption that the alternative view adopted by the appellant committee was unreasonable.
Per Carey JA: it was for the Jurats to decide as a matter of fact upon the reasonableness of the appellant committee’s decision; they had visited the site and formed their own subjective view and it was not for the Court of Appeal to trespass upon the function of the Jurats and to substitute its own view.
TRUSTS
DISTRIBUTION OF TRUST ASSETS
In re the X Trust Royal Ct: (Birt, Deputy Bailiff and Jurats Rumfitt and Georgelin) June 13th, 2002 unreported.
A.D. Robinson for the trustee; M.St. J O’Connell for the first party convened; K.J. Lawrence for the second party convened.
In J v M,[10] the Court made an award in matrimonial proceedings which the first party convened (“the husband”) was unable to meet out of his own resources. The husband requested the trustee to advance funds and to make other arrangements to enable the award to be met. The trustee applied for directions pursuant to article 47 of the Trusts (Jersey) Law 1984. It was accepted that the trustee was not surrendering its discretion but was seeking the Court’s approval. The question arose as to whether such distributions, being ultimately for the husband’s former wife, who was not a beneficiary, would constitute a fraud upon a power.
Held, applying the principles set out in Netherton v Netherton,[11] that the distributions were for the benefit of the husband and other beneficiaries and lawful, that the trustee had reached his decision in good faith, and that there was no conflict of interest which might vitiate it.
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[04] April 18th, 2002 Guernsey unreported
[05] Reported at 1987 – 88 JLR 285
[09] (1986) 2 Lloyds LR 428 at 437
[10] 2002 JLR 330; see page 333 supra