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You are here: BAILII >> Databases >> Jersey Unreported Judgments >> Larsen and Volaw -v- Comptroller of Taxes and States of Jersey [2015] JRC 244 (27 November 2015) URL: http://www.bailii.org/je/cases/UR/2015/2015_244.html Cite as: [2015] JRC 244, [2015] (2) JLR 209 |
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Judicial review- dismissal of all applications for judicial review.
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Before : |
Michael Jacob Beloff, QC, Commissioner, sitting alone. |
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Between |
Berge Gerdt Larsen |
Applicant |
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And |
(1) The Comptroller of Taxes (2) The States of Jersey |
Respondents |
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Between |
Volaw Trust & Corporate Services Limited and its directors and other officers |
Applicants |
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North East Oil Limited and its directors and other officers Larsen Oil and Gas Drilling Limited and its directors and other officers Network Drilling Limited and its directors and other officers Independent Oilfield Rentals IOR Limited and its directors and other officers Petrolia Drilling Limited and its directors and other officers OPS Personnel Services Limited and its directors and other officers |
Applicants |
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And |
(1) The Comptroller of Taxes (2) The States of Jersey |
Respondents |
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Between |
Fiduciana Trust Cyprus Limited (as Trustee of the Merit Trust) |
Applicant |
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And |
(1) The Comptroller of Taxes (2) The States of Jersey |
Respondents |
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Advocate Howard Sharp QC for the Comptroller of Taxes and States of Jersey.
Advocate J. Harvey-Hills for Berge Gerdt Larsen.
Advocate A. D. Hoy for Volaw Trust & Corporate Service Limited; North East Oil Limited, Larsen Oil and Gas Drilling Limited, Network Drilling Limited, Independent Oilfields Rentals IOR Limited, Petrolia Drilling Limited and OPS Personnel Services Limited, and the directors and other officers of each.
Advocate D. Evans for Fiduciana Trust (Cyprus) Limited.
judgment
the commissioner:
1. The main cases, which I shall call respectively the Volaw and Larsen proceedings and the Fiduciana proceedings, all concern notices from the Comptroller of Taxes("the Comptroller'') requiring the provision of certain documentation to foreign tax authorities pursuant to the provisions of the Taxation (Exchange of Information with Third Countries) Regulations 2008 as amended in 2013 ("the 2008 Regulations as amended'') made under the Taxation (Implementation)(Jersey) Law 2004 ("the 2004 Law'') Article 2. In all there has been a challenge made by way of judicial review not only to the notices, but to the validity of the 2013 amendments to the Regulations themselves. In all leave to apply for judicial review has been granted.
2. The Volaw and Larsen proceedings are a sequel to Volaw Trust and Corporate Services Limited and Larsen v Comptroller of Taxes, a case ("Larsen No. 1") decided by the Court of Appeal under the 2008 Regulations in their then incarnation in which the Applicants made challenges to Notices served on Volaw on 28th May, 2012, in response to a request made by the Norwegian Tax Authority ("NTA") pursuant to an agreement made between Jersey and the Kingdom of Norway for the exchange of information relating to tax matters which came into force on 7th October, 2009, ("J/NTIEA"). These were dismissed by the Royal Court and Court of Appeal (Volaw Trust and Corporate Services Limited and Larsen-v-Office of the Comptroller of Taxes [2013] JCA 239 and Volaw Trust and Corporate Services Limited-v-Comptroller of Taxes [2013] 2 JLR 499), the Privy Council refusing leave to appeal further. As a result the information sought was provided to the NTA on 30th July, 2014, on the basis that it would be used in respect of the affairs of Mr Larsen only.
3. As the Court of Appeal said in Larsen 1 "Underlying the dispute is the tension between the private interest in commercial confidentiality and the public interest in international co-operation in the investigation of potential tax evasion" (para 2). In R (on application of ABN International SA) v FSA [2010] EWCA Civ 123 Stanley Burnton LJ said of the latter at para 38:-
The dispute also reflects a tension between the effective exercise of that co-operation and fairness to the individual taxpayer.
4. In relation to the several challenges made in the Volaw and Larsen proceedings it must also be borne in mind that the Notices are simply machinery to assist in a process of investigation by a foreign state, which, if Mr Larsen or anyone else investigated is guilty of neither non-payment of taxes properly due nor of evasion of such payment, will have no adverse consequences other than those intrinsic to the investigation process itself, the disruption and expense involved in compliance with the Notices, and, if the material provided is transmitted, the exposure to scrutiny of otherwise private documents for specific and limited purposes and subject itself to obligations of confidentiality (1998 Regulations as amended, Regulation 16B, and J/NTIEA Article 7). Norway is itself a friendly democratic sovereign state which has ratified the European Convention on Human Rights ("the ECHR") and which must be presumed, absent compelling contrary evidence, to act in accordance with its obligations under the J/NTIEA and the ECHR. This is not a case in which Mr Larsen, a fortiori Volaw and other recipients of the Notices are threatened with loss of liberty or deprivation of property or the imposition of some sanction or burden. The sending of Notices is a stage in a process which may - but also may not - ultimately lead to such outcome; see the distinction drawn in analogous circumstances in R -v- Inland Revenue ex p. Morgan Grenfell [2003] 1 AC 563 at p577-578 (DC), para 48 p595 (CA).
Mr Larsen was, at the time coincident with Larsen No 1, being prosecuted in Norway for tax evasion. On 4th October, 2013, the District Court in Bergen in an elaborate judgment of 281 pages found him guilty of criminal tax fraud, whose gravity, in its view, was indicated in his sentence of 5 years' imprisonment and a substantial fine ("the Bergen judgment"). Mr Larsen is appealing that judgment. Nonetheless and not wholly surprisingly the NTA has now by nine letters of request summarised in an Appendix to this judgment sought the assistance of the Comptroller for the purpose of a criminal investigation into whether Mr Larsen, Volaw or the other companies and their Directors have committed tax offences.
5. In the Volaw and Larsen proceedings the salient dates are these:-
(i) On 27th August, 2014, the Comptroller received the request from the NTA for information about the affairs of Volaw and eight other companies (for convenience to be referred to hereafter simply as 'Volaw' - Volaw itself being the Companies financial services provider in Jersey) pursuant, as before, to the J/NTIEA. (The Comptroller was at that date David Le Cuirot who had been appointed on 1st August, 2013. His deputy, Andrew Cousins dealt with the matter on Mr Le Cuirot's behalf until his own departure from office on 13th February, 2015). (Again for convenience I shall refer hereafter indifferently to the Comptroller unless I state otherwise).
(ii) On 21st October 2014 the Comptroller, after seeking and obtaining clarification and further information from the NTA, issued 9 Notices to Volaw requiring disclosure of documents and records relating to the affairs of Mr Larsen and what were said to be associated corporate entities.
(iii) On 7th November, 2014, Volaw applied for leave to apply for judicial review supported by an affidavit of Mr Mark Healey, a Director of Volaw.
(iv) On 18th November, 2014, Mr Larsen applied for judicial review supported by his own affidavit dated 17th November, 2014.
(v) On 25th November, 2014, Sir Michael Birt, the then Bailiff, granted Volaw and Mr Larsen leave to apply for judicial review against the Comptroller and the States.
(vi) On 9th February, 2015, Mr Larsen and Volaw each issued a summons seeking the setting aside of the Notices on the grounds that neither the States or the Comptroller had responded to the application for judicial review, or alternatively that they each file affidavits responding to the grounds in full.
(vii) On 13th February, 2015, Mr Michael de la Haye filed an affidavit on behalf of the States.
(viii) On 13th February, 2015, Mr Andrew Cousins filed an affidavit on behalf of the Comptroller ("Mr Cousins' first affidavit").
(ix) On 9th April, 2015, Mr David Le Cuirot filed an affidavit on his own behalf "to provide the substance of the reasons for the decisions to serve the Notices'' (para 3).
(x) On 13th April, 2015, the hearing of the summons of Mr Larsen and Volaw took place.
(xi) On 20th April, 2015, Mr Cousins filed another affidavit ("Mr Cousins' second affidavit") exhibiting the Letters of Request without conceding any obligation to do so but in an effort to avoid delay to the substantive hearing.
(xii) On 14th May, 2015, I dismissed an application made by Mr Larsen and Volaw, based on the duty of candour owed by the Respondents to an application for judicial review, for further elaboration of the cases of the Comptroller and States and disclosure of additional documents thereby ("the Disclosure ruling"). In that ruling I also determined that a Letter of Request is not ordinarily a disclosable document either before or after the making of an application for judicial review.
(xiii) On 26th June, 2015, Dexter Flynn filed a first affidavit.
(xiv) On 14th July, 2015, Dexter Flynn filed a second affidavit.
(xv) On 23rd July, 2015, Dexter Flynn filed a third affidavit.
(xvi) On 28th September, 2015, Kenneth Hodcroft, who had an interest in certain of the companies, filed an affidavit.
6. Mr Larsen and Volaw rely upon a variety of grounds in seeking to quash the Notices and to obtain a declaration that the Comptroller has no power to transfer to the NTA any documents received pursuant to the Notices. The main contentions are that:-
(i) The 2008 Regulations as amended are ultra vires the enabling legislation, i.e. the 2004 Law and/or infringe various human rights enforceable in Jersey under the Human Rights (Jersey) Law 2000 ("the Human Rights Law") and/or the rule of law itself (there is a pithy summary of this contention in Sir Michael Birt's judgment of 25th November, 2014, para 9) ("the Larsen/Volaw Regulations issue").
(ii) The Notices themselves are ultra vires those Regulations as imposing, unjustified and disproportionate requirements on Volaw ("the Larsen/Volaw Notices issue").
(iii) Mr Larsen and/or Volaw should have been given, but were not, an opportunity in advance of the services of the Notices to make informed representations as to why the Notices should not be served ("the Larsen/Volaw Natural Justice issue").
7. Sir Michael Birt, in giving leave, did not elaborate on his conclusion that "there is sufficient in the grounds to justify the granting of leave to apply for judicial review on all the grounds set out in the application" (para 5 see also para 10) though I note that he was not prepared to describe the challenge to the Regulations as amounting to a "strong prima facie case" (para 15). I interpret his decision on sufficiency "in the grounds" to refer to the grounds themselves rather than to every point made in support of those grounds.
8. There are ancillary grounds, postdating the grant of leave, and which themselves accordingly require leave if they are to be advanced. Volaw took on itself by Advocate Hoy the main carriage of these ancillary grounds:-
(i) The requirements of the Notices breach the privilege against self-incrimination ("the PSI issue");
(ii) The requirements of the Notices breach the principles of the Data Protection (Jersey) Law 2005 ("the DPA issue").
9. The backcloth to the 2004 Law and Regulations made thereunder is to be found in The Convention on Mutual Administrative Assistance in Tax Matters ("the Tax Convention") which, in its form at the time material to these proceedings provided as follows:-
10. The 2004 Law in force from 5th November, 2004, provides, so far as material, as follows:-
The 2004 Law did not incorporate the Convention or any TIEA into Jersey law but enabled regulations to be made to give effect to the latter.
11. The J/NTIEA, one of the TIEAs to which the regulations would attach, in force from 7th October, 2009, provides, so far as material, as follows:-
12. The 2008 Regulations as amended in force from 6th November 2013.... provide so far as material:-
13. The Human Rights (Jersey) Law 2000 (in force from 10th December 2006), which informs the construction of the 2004 Act and the 2008 Regulations as amended, and with which both must comply provides, so far as material, as follows:-
14. Three of the companies, Larsen Oil and Gas Drilling Ltd, Independent Oil Fields Ltd, North East Oil Fields Ltd ("the three companies") also originally challenged the provision of the documents to the NTA on the primary basis that there is no "positive power" to do so and sought an order compelling the Comptroller to take all reasonable steps to procure their return. (Their other arguments based on Human Rights Law and the DPA are considered in relation to the main proceedings and what I say in that context can be applied mutatis mutandis to this challenge).
15. On 1st July, 2014, the then Bailiff dismissed an application for leave to apply for judicial review by the three companies which essentially mirrored the applications in Larsen 1.
16. On 24th October, 2014, the present application for judicial review was made supported by an affidavit of Mr Healey of even date.
17. On 16th January, 2015, the Bailiff gave leave on the basis of the similarity of the issues raised in the subsidiary proceedings (including Human Rights and data protection issues) with those in the main proceedings.
18. On 26th March, 2015, Mr Le Cuirot filed an affidavit in response.
19. This ingenious submission, if well founded, would make the grounds of challenge in the main proceedings redundant. It was in the event withdrawn shortly before the hearing on the basis that the absence of such a power was an inadvertent omission curable by reference to the principles in Inco Europe Ltd v First Choice Distribution Ltd [2000] 1 WLR 586 ("Inco") which I discuss later. l therefore consider it only briefly as a prologue to the main production and in order to scotch any chance of its resurrection hereafter because in my view the withdrawal was correct if somewhat too narrowly based.
20. I would have had no hesitation in rejecting the submission for these reasons:-
(i) Article 4 of the 2004 Law expressly envisages that Regulations will enable such provision to be made and Regulation 3(1) reflects this in terms.
(ii) The power of provision is in any event to be implied as necessarily ancillary to the power to obtain: see by analogy e.g. Ward v MPC [2005] 2 AC 114 para 23.
(iii) The power of provision is expressly restricted in the 2008 Regulations as amended in Regulation 14 (3)(b) on the necessary premise that such power otherwise existed.
(iv) It would destroy the very purpose of a TIEA.
(v) More generally the Comptroller only obtains information by means of a Notice in order to provide it to the appropriate authority of the requesting state. Article 1 of the N/TIEA. He has no other interest in them.
In short the fact that the drafting of those regulations could have been improved does not entitle a Court to make a nonsense of them.
21. In my view it is clear from the documents disclosed by the Respondents (Proposition P.132/2013 - a Report on the draft 2013 Amendments ("the Report") and the Hansard material) that the reason for the 2013 amendment to the 2008 regulations was to reduce the delay in responding to a request under a TIEA; and to achieve this by abbreviating time limits and so reducing the routes of challenge, exploited indeed by Mr Larsen in Larsen 1 and others ("the first reason"), as well as to bring Jersey legislation into broader alignment with that of other States involved in the same exercise ("the second reason"). Avoidance of delay in the effective exchange of information by use of rights and safeguards provided by the States which are parties to the J/NTIEA is one of the J/NTIEA's objectives (Article 1). There had already been in pursuit of the same objective an amendment to the 2008 Regulations in 2012 to respond to the Peer review report of the Global Forum on transparency of Information for Tax Purposes which recommended that "Jersey should amend its domestic legislation to remove the identified impediments to the effective access to relevant information''.
22. The first reason is indeed apparent from a simple comparison of the amended Regulations with the Regulations in their form before those amendments (as well as from the Explanatory Note to the former); and is confirmed by the documents I have referred to, which also and expressly evidences the second reason). The French complaint may have been responsible for the reconsideration of the Regulations in their previous form and the speed with which the amendments were introduced (see the Report "this is why there is a need for an urgent response" and Hansard Speech of the Chief Minister) but the 2008 Regulations as amended stand or fall in point of law on their own merits (I so found in the Disclosure ruling para [38]).
23. It is not therefore in issue that the 2008 Regulations as amended reduce the procedural rights accorded to taxpayers when compared with the 2008 Regulations in their original form in that:0
(i) No reasons are required for the sending of Notices;
(ii) R14(1) introduces a 14 day time limit in which to bring proceedings;
(iii) R14(2) excludes certain grounds for judicial review;
(iv) R14(3) makes compliance with a Notice mandatory notwithstanding inception of judicial review proceedings;
(v) R14A purports to restrict further rights of appeal.
Neither is it in issue that in other jurisdictions e.g. the United Kingdom, greater rights are accorded where requests are made under a TIEA (see discussion in R on the Application of Derrin Brother Properties v HMRC [2014] EWHC 1152 (Admin); [2014] STC 2238 ("Derrins")), or that in principle greater rights could be so accorded ("shortfall").
24. But that reduction or shortfall is not per se objectionable nor does it involve the necessary conclusion that those regulations are out with the enabling provisions of the 2004 Law or non-compliant with the Human Rights Law.
There is no mandatory standard template for procedures under a TIEA "The question is whether a less intrusive measure could have been used without unacceptably compromising the objective". Bank Mellat v HM Treasury [2013] UKSC 39; [2014] AC 700" ("Bank Mellat") per Lord Sumption at paras 20 and 75). Margins of appreciation must be accorded to legislatures sensitive to and sensible of local circumstances. In my view the proper question is whether in their current form those Regulations are: first within the enabling power; second are compatible with the Human Rights Law and third are proportionate.
25. As to the first the language of the 2004 Law enables the States to pass Regulations that appear to them to be "necessary or expedient" for the purposes of implementing a TIEA as well as "dealing with matters arising out of or related to such an agreement or obligation". The criteria of necessity or expediency are alternative; and the latter creates a lower hurdle than the former see e.g. Ahmed v HM Treasury [2010] 2 AC 534 ("Ahmed") at para 47. Unusually, but not uniquely, the 2004 Law enabled the States by such regulations to amend enactments (which, pursuant to the Interpretation (Jersey) Law 1954 - Article 1(1) included both primary and secondary legislation) or to make such provision in lieu thereof as would ordinarily be made by primary legislation. Nor in the Jersey context did this involve an abdication of powers which ought to remain vested in the legislation to the executive. The States would themselves have to vote on and hence vouch for any regulations made by reason of this unusual power-and in this instance did so.
26. It is, I accept, insufficient for the Respondents to rely on the literal interpretation of the 2004 Law to validate the 2008 Regulations as amended. The primary power relied on to make such regulations has to be tested against the principle of legality. In consequence of this legal principle, not only ambiguous words but general words are insufficient to override human rights. Lord Hoffmann in R v Secretary of State ex p Simms [2000] 2 AC 115 at p.131 explained:-
27. In this context Mr Larsen and Volaw naturally placed emphasis on the decision of the Supreme Court in Ahmed where the scope of powers under the United Nations Charter Act Section 1 empowered the making of Orders in Council are to make such provision as appeared "necessary and expedient" to enable measures required by decisions of the Security Council to be "effectively applied". Such words were held insufficient to enable the fundamental rights of the individual to be overridden in two orders, the Terrorism Order and the Al Quaeda Order.
28. I draw attention to the following features of that influential decision.
29. First, as Lord Hope observed, such Orders in Council:-
There is therefore no read across to the present case where, as I have already noted, the Regulations themselves required a positive endorsement by the States before coming into effect. Although that is a vital point of distinction I note additionally that Lord Phillips P was not prepared to espouse the proposition:-
30. Second, the two orders made were extremely oppressive. As Lord Hope observed:-
Again there is no read across to the present case where any infringement of human rights was of a significantly lesser scale.
31. Third those designated as the objects of the oppressive orders:-
See too Lord Rodger at para 186 and Lord Mance at para 249.
Yet again there is no read across to the present case where the remedy of judicial review coupled with the possibility of an appeal is available.
32. The crucial question, as it seems to me, is whether the States were conscious or unconscious of what they were doing in enacting the 2004 Law.
33. As Lord Browne Wilkinson said in R v Secretary of State for the Home Department ex p Pierson [1998] AC 539, at p.575:-
34. In application of that principle in Ahmed Lord Rodger said:-
35. I respectfully accept that he posed himself the right question as to the scope of Parliamentary intention but note that to answer it he had to evaluate a number of factors as listed in his judgment, at paras 179-184. All were specific to the case before the Supreme Court. None is replicated even by analogy in the present case.
36. I see no reason on the facts specific to the present case to conclude that the States did not know exactly what they were doing in 2004 or that the 2008 Regulations as amended were not within the scope of those envisaged when the 2004 Law was enacted. The generality and flexibility of the provisions of the law were designed, in my view, to enable certain rights to be overborne in the interests of obtaining otherwise confidential information for use in an investigation by another state. In the context of the reach of enabling powers framed by concepts such as necessity or expediency, one is in the realm not of absolutes, but of questions of degree (see Ahmed Lord Hope para 76). The Report of the draft law lodged with the Greffe by the Policy and Resources Committee on 22nd January, 2004, ("the Report") stated that its provisions were "compatible with Convention rights". The Report further noted at para 4 the need for the States both to authorise any TIEA and to approve any Regulations required to implement it.
37. In my view, on the basis of the facts as I have already found them, the States clearly (and rationally) considered the 2008 Regulations as amended to be expedient for the purposes of dealing with matters relating to J/TIEAs. I note that the OECD's Supplemental Peer Review Report stated at paragraph 104:-
Larsen, I may provide the paradigm example of such a case, and insofar as the restrictive amendments complained of are valid, Mr Larsen may be said to be the author of his own misfortune.
38. This agitates the question whether judicial review, coupled with the possibility of an appeal to the Privy Council, is a sufficient guarantor of the fairness to which Mr Larsen or Volaw are entitled either at common law or pursuant to the Human Rights Law or whether:-
(i) the absence of an opportunity to make representations as to why the Notices should not be sent - aliter the natural justice issue.
(ii) an absence of a right of appeal to the Court of Appeal
(iii) the abbreviated time limits
are inconsistent with the principles which they embody.
39. As to (1) the issue does not strictly go to the vires of the Regulations. If fairness requires such an opportunity, it can be implied into the regulatory scheme; if it does not, cadit quaestio. Nor does it go uniquely to compatibility with the Human Rights Law which is as much concerned with the means of challenge to a decision within the scope of Articles 6 or 8, as with the means of preventing an adverse decision in the first place. Nonetheless it is convenient to consider whether in law Mr Larsen and Volaw must have an opportunity to make such advance representations which in point of fact they did not.
40. The lynch pin of the Applicants' argument on the natural justice issue was the observations of the Court of Appeal in Larsen No. 1 where that Court said:-
41. It is axiomatic that the Royal Court is bound by decisions of the Court of Appeal.
42. It should, however, be noted:-
(i) The observations as to the existence of the right reflected a concession made by Counsel then appearing for the Comptroller (The observations and its extent-or limits-are in any event no less important);
(ii) The concession does not appear to reflect the Comptroller's thinking at the time material to these proceedings as appears from:-
(a) The fact that though cognizant of the decision in Larsen 1, he did not on legal advice (Mr Cousins' first affidavit paras 16-17) accord to the Applicants any such opportunity; and
(b) The statement made on his behalf by Counsel now representing him that "it was frankly rather curious that the Comptroller was previously obliged to engage in informal discussions with a person suspected of complex tax fraud or their close associates before any documents could be formally secured for the purposes of a criminal investigation. This in circumstances when in most cases, there was little or no prospect of voluntary disclosure". As the Bailiff pertinently (if provisionally) posed in a num question at the leave application "Does this really mean that, if there is a criminal tax investigation, the Controller has got to give notice that he is investigating, perhaps to the criminal, in order to give the criminal an opportunity to make representations as to why the notice should not be issued, but also to give the criminal the opportunity of destroying the documents which might incriminate him?" It is not without interest that the analogous regime in the Cayman Islands obliges notification of the subject of a request prior to service of a notice only where the matter is not criminal or allegedly criminal. Cayman Island Tax Authority v MH Investments C-A no.3.of 2013 ("MH") para 5.
(iii) The regulatory context in which such observation was made was different from the present context. In the 2008 Regulations a person served with a notice was entitled to a reasonable opportunity to provide the documents without notice, a factor which influenced the analysis of the Court of Appeal. That entitlement has disappeared. There is no longer any statutory stipulation that there be such opportunity prior to the issuing of a Notice; a possible two stages have been reduced to one. The removal of that stipulation aligns the Regulations more closely with other mutual legal assistance regimes including the Investigation of Fraud (Jersey) Law 1991. The 2008 Regulations as amended reflect the policy of the last sentence of Article 1 of the J/NTIEA. Protection of individual rights must not prevent or postpone unduly the transmission of tax information.
(iv) While it is trite law that "although there are no positive words in a statute, requiring that a party shall be heard, yet the justice of the common law will supply the omission of the legislature" Cooper v Wandsworth 134 ER 414; (1863) 14 CB NS 180 per Byles J at p.194.....the implication is not automatic. As Lord Sumption said in Bank Mellat at para 36 in a passage following his exposition of the Cooper v Wandsworth line of authority'.
It does not of course follow that a duty of prior consultation will arise in every case. The basic principle was stated by Lord Reid 40 years ago in Wiseman v Borneman [1971] AC 297, 308, in terms which are consistent with the ordinary rules for the construction of statutes and remain good law:-
(v) A factor determining whether the implication is triggered is the existence of a procedure which enables a challenge to be made after it is taken - in this instance judicial review with the possibility of an appeal to the Privy Council if judicial review is refused. True it is that, as Lord Neuberger P said in Bank Mellat, (para 187) that "in some cases the right of subsequent challenge can be enough to dispense with any prior obligation to consult, while adding and explaining that "it is by no means a sufficient answer in many cases". (ditto). That is, however, to my mind a proposition of fact as much as of law. Lord Neuberger cannot sensibly be taken to have considered it to be dispositive since, if it were, it would always be decisive in favour of the implication and at odds with Lord Reid's dictum in Wiseman.
(vi) The dicta in Bank Mellat were inevitably conditioned by what was at stake. In that case the Bank was prevented from carrying on its business at all. In the present case Volaw is merely being obliged to provide documents pursuant to a notice. There is a palpable difference of scale. Lord Sumption laid stress on "particular circumstances" when dealing with procedure (para 31) reflecting what he had already said dealing with substantive justification: "Every case turns on its own facts and analogies with other decided cases can be misleading'' (para 26).
(vii) Once an application for judicial review is made, the Comptroller is prevented from transmitting material received in response to his Notice to the requesting state (R 14.3(b)). I accept that the need to aggregate the material and provide it to the Comptroller will be irksome, but it is not in itself calculated significantly to invade privacy. The Comptroller has no interest in examining the material other than to check, in so far as he can, that it is fully responsive to the Notice; the material is not required for the purposes of Jersey revenue law. Judicial review, as I find later, is in the circumstances an effective remedy to protect an Applicant's legitimate interests).
(viii) To add to the specified statutory procedure to challenge a decision already taken another - and prior - procedure would necessarily be to elongate the process and would frustrate the perceptible purpose of the Regulations rather to abbreviate it. see too the OECD commentary at para 6, which does not regard prior notification as compulsory and advises exceptions where it is provided for in the interests of effective investigation.
43. I am alert to the fact that in one case where representations of the recipient of the Notice were taken into account its evidence "removed in its entirety the foundation upon which the French tax authorities had, on the face of their request based their suspicion and given as the reason for their request": APEF Management v The Controller [2014] (1) JLR 90 ("APEF") para 101. But that does not establish that a system which restricts the right to make representations to those made after rather than before the decision is ipso facto flawed: see. R (Detention) Action v Secretary of State for the Home Department [2015] EWCA civ 840 ("Detention Action''). "A successful challenge to a system on grounds of unfairness must show more than the possibility of aberrant decisions and unfairness in a particular case" (para 27). Knock out blows e.g. one which showed dispositive that the overseas authority were investigating the wrong taxpayer would always be exceptional. A tax convention compatible system should not encourage mere jabs subtly seeking to provoke the Comptroller to pursue a line of enquiry which he would not otherwise be obliged to pursue.
44. I therefore conclude that in the context of the current regulatory regime the dictum of the Court of Appeal can be modified as set out in the next sentence. The Comptroller can, if he reasonably thinks fit, offer an opportunity to a person to whom he plans to send a notice an opportunity to persuade him to abandon that plan but he is not obliged to do so.
45. However, even were that conclusion to be incorrect, in my view, judicial review should not go since the offer of such an opportunity could in this case have made no difference. I do not ignore the much quoted dictum of Megarry VC in John v Rees [1970] Ch.435 at 402 "As everyone who has had anything to do with the law well knows, the path of the law is strewn with examples of open and shut cases which, somehow were not; of unanswerable charges which in the event were completely answered; of inexplicable conduct which was fully explained; of fixed and unalterable determinations that, by discussion, suffered a change" and see in Jersey. JT Jersey Limited v Jersey CRA [2014] 1 JLR 15 paras 131-133. But in this instance I am not required to speculate upon what might have happened but to analyse what did. The Applicants' case made before me cannot be less powerful and may well be more powerful than the case that they could hypothetically have advanced before the Comptroller as to why notices should not be issued. If, their case is inadequate now, it would necessarily have been inadequate then; and, putting myself in his shoes, as I must, I cannot conceive that the Comptroller would have rationally come to a different conclusion.
46. Article 6 of the ECHR provides, so far as material:-
47. Advocate Harvey-Hills submitted in his skeleton argument that judicial review is not sufficient, in order to "verify and scrutinise the underlying grounds pursuant to which the Notice issued" and conduct "an examination of the underlying factual basis of the decision". As the Court of Appeal held in an analogous context in Larsen 1 Article 6 does not, however, inevitably require an unrestricted appeal from the decisions of an administrative body based on findings of fact and the exercise of judgment. "Judicial review can in certain circumstances suffice" para 49) For Article 6 purposes "The condition to be satisfied is that judicial review provides full jurisdiction to deal with the case as the nature of the decision requires''. (R Alconbury Developments Ltd v Secretary of State for the Environment [2001] UKHL 23 per Lord Hoffmann para 87 approved in R (Runa Begum) v Tower Hamlets LBC [2003] UKHL 5; [2003] 2 AC 430 per Lord Bingham para 5. "The principle that access to the judicial review court may cure a defect provided that the procedure as a whole complies with Article 6(1) is well recognised"; see also Wade and Forsyth Administrative Law 11th ed ("Wade") p.381. "The more administrative and the less judicial the decision making process set up by parliament may be, the less intense will be the judicial scrutiny of the decision to secure compliance" (p379).
48. How then is the nature of the decision under challenge to be characterised? The decision required of a Comptroller is whether to respond to a request concerning a taxpayer, and in consequence to require the taxpayer or the third party to provide information to him. He can only refuse the request under Article 6 of the J/NTIEA on the three grounds there set out. As to this, there may be arguments as to whether, for example, the information requested is tax information at all but the thrust of most challenges by a person seeking to impugn a Notice would be to the judgment made by the Comptroller that the information is foreseeably relevant to the administration and enforcement of the domestic laws of the requesting state (ditto Article 4e). Is then judicial review sufficient for a challenge of that kind?
49. In answering this question I bear in mind the following matters:-
(i) as I have already determined, there is no obligation on the Comptroller to disclose the letter of request;
(ii) as has been frequently stated that it is not for the relevant Jersey authority to address issues of foreign law (Larsen 1 para 197);
(iii) it is not for a decision maker to question the correctness of the material provided to it from outside the jurisdiction as long as it is properly evaluated after, it may be, some probing for the purposes of clarification:-Larsen 1 paras 28 and-171 In short the Comptroller does not have to resolve disputed issues of fact. As was said by Clyde-Smith, Commissioner in APEF (para 66):-
(See too Taylor Fladgate v Comptroller of Taxes [2014] 1 JLR 342 paras 44-46 Temple v Comptroller of Taxes [2014] 214 JLR 44 ("Temple") at para 37, the Royal Court consistently following the guidance of the Court of Appeal in Larsen No. 1 on this issue notwithstanding any intervening change to the 2008 Regulations).
This approach reflects that conventionally taken in the context of mutual assistance in criminal matters Bertloli v Malone [1991] UKPC 17, Arturus Properties v Attorney-General [2001] JLR 43, 51-52.
(iv) The Comptroller is engaged in an evidence gathering process as part of an investigation, not conducting a trial.
(See Larsen No. 1 para 218). See to like effect Sir Michael Birt in Larsen Oil and Gas Drilling Ltd v Comptroller of Taxes [2014] JRC 143 para 44
(v) In those circumstances, which further define and circumscribe the decision to be made by the Comptroller, it seems to me that judicial review is an appropriate remedy compatible with Article 6. It is open to an applicant, if it can, to impugn the Comptroller's judgment as unreasonable in the public law sense (I accept that even though the epithet reasonable has disappeared from the vocabulary of the 2008 Regulations as amended it remains implicit in them). (See the Deputy Bailiff in Temple para 37.) If the Comptroller is not obliged to verify the facts underlying the Request the person on whom the Notice is served cannot complain, other than in exceptional circumstances, of his omission to do so. If he is not obliged to form a view on matters of foreign law, such person cannot compel him to do so by advancing an argument of foreign law itself said to undermine the validity of the Request.
50. The fact that the scope for challenge at the suit of an applicant may be limited cannot mean per se that he is entitled to a more intrusive or wide reaching legal remedy than judicial review; if anything the reverse must be the position. Judicial Review has in any event been held to be an appropriate mechanism to resolve issues relating to the production of evidence obtained by a Notice issued pursuant to the Investigation of Fraud (Jersey) Law 1991: see Durant v Attorney General [2006] JLR 112 and in cases brought by reference to an NTIEA such as Larsen 1 and the later Jersey cases (see also Derrins at paras 77-78).
51. I do not accept that cases in the ECHR such as Capital Bank AD v Bulgaria Application no.49429/99 ("Capital Bank") at para 109-115 disclose any contradictory principle given that the circumstances were entirely different from those of a TIEA. Capital Bank concerned removal of a Bank's licence on grounds of insolvency where the key and disputed issue - i.e. whether the bank was indeed insolvent - was not reviewed at all by the domestic courts. Those cited to me involved the placing of a Credit Union into receivership or the dismissal from office where the procedure was similarly defective. I note that the States were fully aware that the 2008 Regulations as amended would provide for a judicial review process when the amendments were debated on 5th November, 2013; see the relevant part of Hansard pp98-100 and the explanatory note to Proposition 132/2103.
52. As Advocate Sharp observed - and not entirely frivolously - the volume of papers produced by the Applicants suggests that they have had ample opportunity in this judicial review to ventilate their concerns over the Notices. Si monumentum requiris circumspice. I add that there have been seven days of hearing (not taking into account the Disclosure hearing which provided a dress rehearsal for some of the main performance).
53. Article 8 as well as Article 6 is relevant, I accept, to this argument Article 8.1 provides for the right to respect for, inter alia, private life. The Notices indisputably interfere with privacy and confidentiality rights although unless the material is personal, privileged or commercially sensitive "at a relatively low level" (Derrins para 71). Whether the interference can be justified depends upon whether the triple test in Article 8(2) is satisfied: "There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of ... the economic well-being of the country, for the prevention of ... crime ...". The Notices indisputably have a foundation in transparent and accessible Jersey law and consequently with law in the enhanced Strasbourg sense as well as a legitimate aim, the protection of the taxation system and revenue (Derrins para 72). But necessity (embracing proportionality) does engage considerations of the quality of the process attendant upon the sending of the notices.
54. In B Larsen Holdings v Norway [2013] ECHR 24117/08 ("BL Holdings") a challenge to the acquisition by Norwegian tax authorities by seizure of a "back up" tape of information and documents pertaining to the tax payer was based on Article 8. The challenge failed. Materially for present purposes the ECHR said the relevant provisions of domestic law were subject to "important limitations" and contained "adequate and effective safeguards" [para 172] including the ability to challenge the seizure itself.
55. I note (as did the Court of Appeal in Larsen 1) the distinction drawn by the ECHR in B.L. Holdings Ltd between a "search and seizure" case and a demand by a public authority for information [para 173], and its appreciation of "the public interest ensuring efficiency in the inspection of information provided by the Applicant company for tax assessment purposes" [para 175].
56. Moreover if Article 6 does not directly require that an appeal should be by way of unrestricted oral hearing, Article 8 cannot be construed indirectly to do so.
57. In summary the statutory provision of a right of judicial review cannot sensibly be described as unjustifiable restriction on the rights of access to the court or to a fair hearing. It is rather the grant of access and a guarantee of fairness. Judicial review is, I am aptly reminded, the ordinary mechanism by which a person can seek to challenge a decision taken by a public official. By that mechanism fundamental fair trial rights are respected, not removed.
58. The time limits for instituting judicial review under the new regulatory regime are undoubtedly tight, especially so, as Advocate Evans noted, for Trustees who are interested parties but may not have been themselves the recipients of the Notices. However ordinarily judicial review applications must be made "promptly" and, as Lord Diplock said in O'Reilly v Mackman [1983] 2 AC... at p 284 ].
59. The need for speed in engaging the court process is one of the major features of distinction between public and private law. Moreover I note that in ordinary judicial review a notice of appeal against a decision of the Royal Court must be served within 14 days (Court of Appeal (Civil) (Judicial Review) Rules 2000, Rule 6(3) itself capable of abridgment, Rule 7).
60. The question whether or not those time limits are excessively stringent must be assessed by reference to the scope for challenge as discussed above. In Detention Action the Fast Track Rules governing asylum appeals were held to be unlawful. It should, however be noted:-
(i) that the system required asylum seekers to present their appeals within 2 days of the decisions under challenge with similar successive time limits (paras 7-11) far less than the time allowed for judicial review challenges under the 2008 Regulations as amended (R14(1)) or an application to appeal to the Privy Council (R14A(4)).
(ii) In issue was the right to claim asylum - a safeguard against proscribed persecution - not a less important - albeit not unimportant - right to protect the privacy of personal financial information.
(iii) The restrictions were on appeal, not judicial review applications and, as the Master of the Rolls said, "asylum appeals were often factually complex and difficult, sometimes raising difficult issues of law" (para 37) which is not the case here.
In my view these applicants - and others in similar circumstances - ought to be able, if sound case for challenge they have, to institute proceedings within 14 days and the abbreviation of time limits is not out with the powers of the States under the 2004 Law.as being an impermissible infringement of substantive or procedural human rights guaranteed under the Human Rights law or the Convention or by the Royal Court law 1948 or otherwise.
61. The common law does not require that the Applicants be given an appeal from the decision of an independent and impartial decision of the Royal Court. "This is the inevitable corollary of the fact that there is no right of appeal against a statutory authority unless statute so provides" (Wade op cit 446). Nor does Article 6 of the ECHR do so. It requires a single determination by an independent tribunal of civil rights, not more than one.
62. On its face R14A no longer provides for the right to appeal to the Court of Appeal which subsisted under the earlier regime but only to the Privy Council but this would not, as explained, offend against Article 6 which requires no provision for an appeal at all. Rather it is in excess of such requirement (I decline to construe R14A as rendering any appeal to the Privy Council nugatory by requiring an appeal thereto to be "brought" within 14 days to be concluded rather than commenced in such period. Such an impractical interpretation is required neither literally still less purposively).
63. It was suggested that in any event by an exercise of 'remedial construction' the appellate jurisdiction of the Court of Appeal could also be held to subsist since neither R 14A nor any other Regulation expressly removed it; rather it conferred appellate jurisdiction on the Privy Council. The elegance of the phrase is unable to disguise the extravagance of the submission. First it ignores the word "only". Second, Article 12(2) of the 1961 Law provides:-
64. The 2008 Regulations as amended are by reason of Article 2(2) of the 2004 Law 'such other enactment'. The principle generalia specialibus non derogant cannot sensibly apply where the special law itself envisages its susceptibility to be overridden. Third, given the limits, as explained, of Article 6, such construction is not required to achieve compatibility therewith.
65. It is common ground that the 2008 Regulations as amended did not cater for the case of a person such as Fiduciana, which was neither the taxpayer nor the recipient of a notice ("the two categories") nor indeed of any person outside those two categories who had sufficient interest to apply for judicial review ("other persons with standing"). That being so, it was argued that such a person first retained the ability to apply for judicial review on any of the conventional grounds (i.e. the principles referred to in R 14(4)) irrespective of the exceptions set out in R14(2), second was not subject to the special restrictive time limits applicable to the taxpayer or recipient of a notice (R14(1)) and third, enjoyed the right of appeal to the Court of Appeal and Privy Council in accordance with the ordinary rules for judicial review by reason of R 14(4).
66. It was further argued that, based on the third point, even if no right of appeal to the Court of Appeal arose under Article 6 where procedural rights, including an appeal, are conferred on anyone they should be conferred on a non-discriminatory basis (Podbielski v Poland [2005] ECHR 543 para 62) so that to deny such rights to the two categories while maintaining it for other persons with standing was itself offensive to the formers' Convention rights.
67. I do not for my part accept that the other persons with standing did enjoy all the advantages (other than the second) contended for over the two categories. As to the first the exceptions to the grounds for judicial review provided for in R 14(2) are applicable to anyone who made such an application, and not only to the two categories, the subject of R 14(1). As to the third the 'principles of judicial review' are a proxy for the substantive grounds upon which such an application can be made, and not for the forum where they may be relied upon.
68. In my view it is in any event clear that the omission to make specific reference to other persons of standing in the scheme of the 2008 Regulations as amended was an inadvertent oversight rather than a deliberate decision. There was no dissent from the Bar as to this analysis, discussed during the hearing, nor could anyone suggest any reason why the States should have chosen to confer procedural benefits not on persons in the two categories but rather on other persons with standing.
69. Article 4 of the Human Rights Law requires the Court to read legislation in a human rights compatible way where it is possible to do so. The limits of this power have been exhaustively and authoritatively discussed by reference to the analogous provision in the Human Rights Act 1998 (See e.g. Ghaidan v Mendoza [2004] 2 AC 557). Reading words in is one of the recognized routes to the desired destination. Inserting the phrase "other persons with standing" into R 14(1)(b), and 14A 2(b) would eliminate the alleged discrimination as to time limits, if nothing else, in favour of other persons with standing but I would, absent compelling precedent or persuasive authority, be uneasy about using Article 4 to subtract rights from persons currently enjoying them rather than to confer rights upon persons who do not.
70. The same destination can, however, be reached by application of principles, free standing of the human rights context, as explained in Inco where it was held:-
(See also Ghany v Attorney General of Trinidad and Tobago [2015] UKPC 12 paras 14-15). This reasoning is applicable to secondary as well as primary legislation, see Bojan Bogdanic v Secretary of State for the Home Department [2014] EWHC 2572 (QB), para 40.
71. In my view all three conditions are manifestly fulfilled. It was argued that there was no clear indication of parliamentary intent but it seems obvious to me that the States envisaged that in order to fulfil their perceptible purpose the time limits must be applied to whoever enjoyed standing.
72. Mr Larsen and Volaw submitted that it was not open to the States by regulation to limit the right of appeal to the Privy Council in the manner set out in R14A because of the provisions of The Judicial Committee Act 1833 ("JCA 1833").
73. Section 3 of the JCA 1833 provides as follows:-
74. If there were an absolute bar by reason of this provision on local attempts to curtail the amplitude of appeal rights to the Privy Council, it is notable that there have been as a matter of record at least two breaches of the bar. Article 14(2) of the 1961 Law precludes any appeal to the Privy Council where the Jersey Court of Appeal has refused leave in respect of a civil matter. (While I accept of course that the Privy Council can itself grant special leave, Article 14(2) is nonetheless a restriction). Article 52 of the Extradition (Jersey) Law also limits the circumstances in which an appeal can be made to the Privy Council in a context of collaboration with another friendly foreign state and in language which is echoed in the 2008 Regulations as amended. Advocate Harvey-Hills accepted that the logic of his argument (which I reject) was that this limit too was ultra vires. Those restrictions were both the creatures of primary legislation but that seems to me to be without significance given the width of section 2(2) of the 2004 Law to which I have already referred.
75. The JCA 1833 itself was an act of the Westminster Parliament as well as a local law "registered in Jersey by the consent of the Insular Authorities'' (Michel v Attorney-General [2010] JCA 018 para 26, see too para 22). (The registration is the procedure vouched for in the Jersey Code of 1771). I cannot accept Advocates Sharp's submission that its reach therefore depends upon the continued consent of those authorities. However R 14A does not remove the right of appeal to the Privy Council; it confirms it and indeed allows the Privy Council itself, not the Jersey Courts, to determine what should be in its docket. There is nothing in this at odds with JCA 1833.or of the Appels a sa Majeste en conseil Order in Council 1893 or the Judicial Committee(Appellate Jurisdiction)Rules 2009 being essentially derivative from or at any rate not enlarging the scope of that initial legislation nor does the principle already alluded to general ia specialibus non derogant prevent the State from exercising its powers under the 2004 Law so to diminish the scope for delay antithetical in itself to the policy underpinning the J/NITEA.
76. I rely mutatis mutandis on the analysis advanced above in relation, in particular, to the applicants' arguments based on Human Rights in dismissing this ground of challenge in so far as discrete. Applying the Bank Mellat principles I consider that the States reaction to the perceived problems of the status quo ante was proportionate and within the scope of their margin of appreciation of Jersey needs. The fact that the Jersey regime was different to, and more stringent than, analogous regimes in other jurisdictions does not make them disproportionate.
77. It is part of the catechism of modern judicial review that a public authority must in exercise of its powers have regard to relevant considerations and only to those. So much stems from Wednesbury itself 1948 1 KB 322 (see Wade op.cit pp321-323). I do not detect that there was any consideration which the States were obligated expressly or impliedly to take into account that they failed to have regard to at all or that they took into account any consideration which they were not entitle so to do. In essence this submission was for the most part-as is often the case in judicial review applications, a reformulation of contentions advanced under other heads already discussed. In particular and without prejudice to that, I do not see that the States misunderstood in any material way the character of other TIEA regimes, which were themselves not standardized nor, as I have already found, wrongly succumbed to any French blacklisting.
78. There is a presumption of regularity in respect of the Comptroller's decision (Derrins paras 1 and 57). For the reasons set out in the Disclosure Ruling the onus lay and lies upon Mr Larsen and Volaw to raise some legally material concerns about the Comptroller's decision.
79. Mr Larsen's first affidavit used in the application for leave confirms that he was convicted of tax related crimes in Norway (paragraph 7) He nonetheless goes on to say that "It is not clear to me why these Notices [served on the Jersey companies] have been issued". The statement seems in the circumstances somewhat disingenuous.
80. There are, as was argued on behalf of the Comptroller, two themes in the Bergen judgment. First, that Mr Larsen was guilty of aggravated tax evasion and breach of trust. Secondly, that companies in the Larsen group in form managed and controlled in Jersey were in fact his creatures and that the Trusts he created were a mere façade. Hence the natural desire of the NTA to see whether those companies - the subject of the nine notices - were resident in Norway for tax purposes and so liable to declare their income - which they have not done - in breach of Norwegian fiscal and criminal law as well as whether Mr Larsen himself has provided full information to the NTA about any income he has personally received from those companies. Mr Larsen disputes the conclusions of the Bergen Court but he cannot be unaware of them. He no longer enjoys any presumption of innocence. On the contrary he is presently fixed with a finding of guilt. Even if, as Advocate Harvey-Hills argued, that of which he was found guilty and that which is the subject of the current investigation are not exactly in pari materia. The affinity between the two is sufficient.
81. It was not for the Comptroller to re-examine the conclusions of the Bergen Court as if he were the domestic appellate court: see OECD Guidance arts. 1, 3, 4 and 5. Unless there were some manifest and critical error on its face, he had to treat the Bergen judgment as a given.
82. Advocate Harvey-Hills submitted that the Bergen judgment was unsound because its approach to the issues of corporate residence and sham trusts were both flawed on their face; and further that in relation to sham trusts the Respondent was prevented from any reliance on the Bergen Judgement because of Article 9 of the Jersey Trust Law 2006.
83. I do not accept this submission. It seems to me that the Bergen Court asked itself the right question about who was in truth the decision maker for the companies; and, to the extent that it is relevant, approached the issue in a manner consistent with the test laid down in Wood v Holden [2006] EWCA Civ 26; [2006] 1 WLR 1393, at paras 27 and 40-43 The Bergen Court pp61-62 was - correctly -looking at where 'the actual decision' was made; it did not confuse direction by an outsider with usurpation by the same. Advocate Sharp in his skeleton argument put it this way:-
This submission is vouched for by the material alluded to.
84. I do not accept the submission on the Trust point either. I do not see that the Bergen Court confused the questions of whether the trusts were shams or whether the evidence disclosed at most a breach of fiduciary duty a trustee neglectful, of his obligations in relation to genuine trusts (see the classic analysis of Birt DB in Re Esteem Settlement [2003] JLR 188 pp223ff). It was not, and could not, be submitted that Jersey law does not acknowledge the possibility of a sham trust; see Munby J in A v A & St Georges Trustees Limited [2007] EWHC 99 (Fam) noting that English and Jersey law appeared to approach the issue of sham vel non in the same way. The Bergen Court found that the Blading Trust has "never been a trust other than in name" p142 and that "it was never the intention that the (Jova) Trust should be real" (p.146).
85. Advocate Harvey-Hills submitted that nonetheless the Comptroller was bound by the provisions of Article 9 of the Trusts (Jersey) Law 1984 which in its modern incarnation provides at (4): "No foreign judgment in respect to a trust shall be enforceable or given effect to the extent that it is inconsistent with this Article irrespective of any applicable law relating to the conflict of laws". This is read together with Article 9(1) which provides that a number of matters relating to trusts had to be determined in accordance with the law of Jersey, including its validity and that no rule of foreign law should affect such a position. It was argued that as the Bergen Court was not applying Jersey law to the issue of the trusts' validity, the Comptroller could not give effect to its judgment without contravening Article 9(4) by which, given it was of general application he was bound. The flaw in that argument is that the Comptroller was not giving effect to the Bergen judgment at all, even construing, as I was invited to do, the word judgment as distinct from order, a construction which itself in this context does not attract me. He was giving effect to the Letter of Request which is a different exercise, even acknowledging, as I do, that the Letter of Request itself on its face accorded great weight to the judgment.
86. Mr Larsen's second affidavit dated 26th June, 2015, exhibits a written opinion from Dr Matre, a Norwegian lawyer who acted for Mr Larsen in the Bergen Court and who features in Larsen 1 para 198, to the effect that there is a 10 year limitation period for the offences that the NTA seeks to investigate and that in so far as the Letters of Request seek information which precedes that period, it must be irrelevant and ought not to be the subject of the Notices.
87. I repeat that it is not for the Comptroller (or for the Court on a judicial review of his decision) to adjudicate upon issues of foreign law. But without prejudice to that and assuming as I shall, that Dr Matre is correct about the limitation period this proposition, it is a non sequitur that material which relates to periods before, even decades before, that date may not be "foreseeably relevant" to the putative offences by shedding light, inter alia, on the important issue of the control and management of the companies. I accept that the residence of a company for the purposes of Norwegian fiscal law may change from year to year so that its residence in, for example, 2005 may not be the same as in 2006, but if, as the Bergen Court concluded wherever the board of the companies in which Mr Larsen had an interest in form took their decisions, in fact those decisions were taken by Mr Larsen, it seems to me that it is relevant to investigate whether this was consistently the position.
88. Dr Matre further opined that fiscal law in Norway provides for offences where the mens rea is gross negligence, not intent and that the J/NTIA Article 3(f) defines "criminal tax matters" as tax matters "involving intentional conduct". Therefore it was submitted the Comptroller's Notices might require documentation capable of establishing gross negligence only and not intent against the taxpayer. I repeat my concern about this line of challenge. But in any event I see no reason to assume that the NTA was not cognizant to the terms of the J/NTIEA. It is not for the Comptroller to predict whether intention will be made out; see the OECD guidance para 35. The standard of foreseeable relevance "is intended to provide for the exchange of information in tax matters to the widest possible extent" subject to the proviso that member states are not at liberty "to engage in fishing expeditions or to request information that is unlikely to be relevant to the tax affairs of a given taxpayer'' (a definition found in the OECD Commentary para 3 and in the Council Directive 2011/11/EC preamble (9)).
89. As long as:-
(i) First the "request is genuinely directed to the purpose for which the notice may be given, namely to secure the protection of documents reasonably required for carrying out an investigation or enquiry of any kind into another taxpayer's tax position". (Derrins para 20).
(ii) Second there is some clear and specific evidence that there is a connection between the information requested and the requesting states tax laws (Larsen No1 para155).
the Request will, in my view, be appropriate(and the Requests were so here).
90. Even a request for a conjectural document i.e. one which may not exist is not out with the ambit of the TIEA (Derrins para 20). In my view the pejorative phrase "fishing expedition" is applicable only to a speculative request that has no apparent nexus to an investigation. (See rejection of a similar argument in Larsen 1 para 203). The detailed requests though they enjoy a measure of commonality have sufficient differences to indicate that the NTA has not - to mix the metaphor - adopted a scattergun approach.
91. The problem which continually confronts Mr Larsen and Volaw is that Mr Larsen does not start with a clean slate. It may be one thing for a letter of request to seek documentation relating to a taxpayer against whom no adverse finding has ever been made; quite another where the taxpayer has already been found guilty of offences against fiscal law. Mr Larsen is not in the same position as Derrins. And I emphasise that it will be open to Mr Larsen if first the requested documents are provided to the NTA and secondly charges are brought to argue all the points he wishes about the residence of the companies, the reality of the trusts and his own state of mind. Indeed it may well be that he can effectively rehearse such arguments in the forthcoming appeal against the Bergen judgment (a similar point is made in Derrins para 71).
92. The reasons for the issue of the Notices, against and reflecting this background, are fully and fairly set out in Mr Le Cuirot's affidavit and the exhibits to it, including a detailed analysis of the Bergen judgment and its relevance to the Notices. I reject the ancillary submission that, notwithstanding that he was head of the Department, he was not competent to testify as to those reasons because Mr Cousins was more directly involved; in any event Mr Cousins' second affidavit scotches the point.
93. It was argued that nonetheless I should reject the summary of reasons given in Mr Le Cuirot's affidavit because it should be stigmatized as ex post facto reasoning not reflective of the actual reasons pursuant to the tests expounded by Stanley Burnton J in Nash v Chelsea College of Art [2001] EWHC Admin 538. With reference to those tests:-
(i) First the Comptroller was not under the regime of the 2008 Regulations as amended to give reasons at all. There is therefore ex hypothesi no discrepancy identifiable between contemporary and subsequent reasons;
(ii) Second I see no "real risk that the later reasons have been composed subsequently in order to support the ... decision'', or are a confected retrospective justification of the original decision.
94. It was Mr Larsen who asked for disclosure by the Comptroller of the Letters of Request to which, according to my disclosure ruling he was not in law entitled. The Letters of Request attached the Bergen judgment which obviously inspired the Comptroller's decision to send the Notices. Mr Larsen is to that extent hoist by his own petard.
95. I draw attention to these facts which also seem to me to be germane to this line of argument:-
(i) Mr Cousins sought clarification of two points from the NTA and received it (First affidavit para 10);
(ii) He took particular care with the request given Mr Larsen's history as a doughty litigant. (ditto para 13);
(iii) He confirmed with the NTA that the notices accurately captured what it sought (paras 13-14);
(iv) He appears to have been fully and accurately apprised of the legal framework which governed his decisions and actions (ditto passim).
This was therefore on its very face and in reality no rubber stamping exercise.
96. The evidence adduced by Mr Larsen himself, Mr Healy and Mr Hodcraft raised issues as to whether, for example, Mr Larsen had any interest in particular companies to which the Requests related, but - and this is the critical point - they did not resolve them. They cannot therefore establish that the Comptroller acted other than reasonably. See too the reasoning in Larsen 1 para159, 171(iv) .There is simply no knockout blow.
97. Approaching the issue through the lens of Article 8 of the ECHR I accept that the Notice must be proportionate. In Bank Mellat, in a classic passage repeated in a series of subsequent Supreme Court cases, Lord Sumption JSC said:-
For all the reasons already discussed I am satisfied that the Notices surmounted all four hurdles.
98. Volaw and its Directors contend in their amended grounds that the Notices breach Volaw's and its Directors' PSI at common law and under Article 6 of the ECHR as given effect by the Human Rights Law; or that, the 2008 Regulations as amended must be read and given effect so as to comply with the PSI.
99. They note that the Requests reveal that the NTA is investigating the possibility of criminal offences by Volaw and their Directors as well as by Mr Larsen. Each Request states that a company resident in Norway that fails to report taxable income may commit criminal offences, namely tax evasion or aggravated tax evasion. Accordingly, it is asserted, Volaw and its Directors are both being compelled, on pain of punishment, to provide documents that may incriminate them in relation to such offences.
100. I observe that there was between disclosure of the Letters of Request and the raising of this new point a temporal gap which has not been wholly satisfactorily explained, but, notwithstanding that, and bearing in mind that I have had the benefit of full argument on both sides on a point of considerable importance and interest I shall grant leave.
101. Volaw and the Directors rely upon a quintet of propositions in support of their overall contention, all of which must be satisfied to achieve their objective:-
(i) the privilege applies outside and before criminal proceedings.
(ii) there is a low threshold of the risk of prosecution for the provision to be engaged.
(iii) the privilege applies to pre-existing materials.
(iv) the privilege is engaged where there is a risk of prosecution in another jurisdiction.
(v) the privilege at common law is qualified not absolute.
102. I am prepared to assume the correctness of propositions (i), (ii) and (v) for the purposes of this application while noting that there is superficially an element of paradox in the reliance on PSI as being qualified, not absolute in nature, that is to say on a weaker rather than a stronger version of the privilege. I am also prepared to accept, contrary to Advocate Sharp's submissions, that companies as well as natural persons enjoy PSI (See Phipson on Evidence 18th ed para 24-45. BL Holdings para 104).
103. I also accept Jersey law follows English law in respect of the recognition of PSI:-see Trant v Attorney General [2007] JCA 073 in which the Jersey Court of Appeal endorsed the judgment at first instance given by the then Deputy Bailiff, Michael Birt: "There is no doubt that the law in Jersey recognises a privilege against self-incrimination in the same way as English law....". It is not, however, bound to follow English law in its every application of that principle.
104. In a trilogy of cases the English Court of Appeal has rejected the argument, advanced by Volaw, that compulsory production of pre-existing document violated PSI either at common saw or under the ECHR.
105. First in Attorney General's Reference (No 7 of 2000) [2001] 1 WLR 1874 it held that there is a material distinction between being compelled to answer questions and being compelled to produce documents, given that the privilege has two justifications: (a) it discourages ill treatment of a suspect and (b) it discourages the production of dubious confessions, neither of which applies to the production of documents. It is accepted as "jurisprudentially sound" the distinction drawn in Saunders v UK [1997] 23 EHRR 313 para 69 (set out below)). It was not persuaded by the earlier Strasbourg case of Funke v France ("Funke") insofar as discrepant with Saunders see paras 57-61.
106. Second a majority of the Court of Appeal in C plc v P [2008] Ch 1 reiterated that the privilege does not apply to "documents which were independent evidence", at para [34] per Longmore LJ, Sir Martin Nourse agreeing at para 74 (although both Funke and JB v Switzerland Application no. 31827/96 2001 ("JB"), the foundation of the Volaw argument, were cited to them).
107. Lawrence Collins LJ in the minority on this point considered himself bound by decisions of the House of Lords in Rank Film Distributors Ltd v Video Information Centre [1982] A.C. 380, ("Rank Films") where the privilege was successfully relied upon to justify non-compliance with orders for the disclosure of information and of pre-existing documents and AT&T Istel v Tully [1993] A.C 45. However, he recognised the powerful policy reasons why privilege should not attach to the production of documents (paras 46 - 48 p19) being both its rationale and powerful overseas authority.
108. Third the Court of Appeal held that the privilege does not normally apply to 'things' which comprise evidence with an existence independent of a person's will R v S(F) [2009] 1 WLR 1489 (CA), at [18].
109. In R v Allen [2001] UKHL 46,("Allen'') the House of Lords considered the cognate power of the Inland Revenue to serve a Notice requiring the production of information and documents relevant to their tax affairs pursuant to Section 20 of the Taxes Management Act 1970 where it is a criminal offence not to comply with the Notice (Lord Hutton para 24, p144/145).
110. Lord Hutton, who gave the leading speech, referred to the cases of Funke, Saunders and Brown v Stott [2003] 1 AC 681 (''Brown'') (paras 28-30) and concluded that Article 6 rights are not absolute and that, in the context of the assessment and collection of tax, the power to require a tax payer to provide information about their tax affairs did not constitute a violation of the right against self-incrimination: para 31, p 143.
111. Unfortunately there are cross currents in the English jurisprudence see e.g R (Bright) v Central Criminal Court [2001] 1 WLR 662(DC) and R (Malik) v Manchester Crown Court [2008] 4 All ER 403 ("Malik") at para 72b. As Phipson op cit says Cplc v P "may not be the last word on this topic" (para24-39.). It reflects similar volatility in the jurisprudence of the European Court of Human Rights, to which I will return later. Since neither the Strand nor Strasbourg have spoken with the single voice, it is therefore appropriate to return to first principles.
112. Volaw accepts (necessarily) that statute can abrogate the privilege although only if it does so clearly. R v SF0 ex.p. Smith [1993] AC at p40 "statutory interference with the right is almost as old as the right itself" a fortiori it is not an absolute right: see Attorney General's reference (No 7 of 2000) [2001] 1 WLR 1879 (at para 57). R v Hertfordshire CC ex p Green [2000] 2 AC 412 at p.419.
113. The starting point here must be consideration of the regime of the 2008 Regulations as amended which allow the Comptroller to serve a Notice requiring a taxpayer who is subject of a criminal investigation to provide tax information. To see whether any right to PSI has been abrogated, and, if so to what extent, it is necessary to consider Regulation 10A (which I set out again for convenience) and which provides as follows:-
114. Legal professional privilege ("LPP") is expressly and comprehensively preserved. Significantly there is no equivalent preservation of PSI. I accept that in Malik Dyson LJ stated obiter that inclusion of one form of established privilege did not sufficiently imply the exclusion of the other (para 73) but in my respectful view, if not dispositive, it is at any rate indicative.
115. Furthermore and more significantly R 10A(2) expressly preserves PSI in a qualified and nuanced way only namely in respect of "any answer given" or "statement or deposition made by an individual" distinct from documents.
116. This distinction is again recognised in R 10B.
R 10B(1) provides:
R 10B(3) provides:-
117. The distinct duties quoad statements and documents are distinguished. Here the principle expressio unius exclusio alterius has more purchase because the same kind of privilege (not a discrete one such as PSI) is being delineated.
118. Volaw argues that the use of the phrase "the answers given" at Regulation10A(2) refers to the provision of documents but that is inconsistent with:-
(i) ordinary and natural reading of the words;
(ii) the perceptible purpose of the TIEAs; and
(iii) the fact that Regulation 10B clearly distinguishes between answers given to questions and documents provided in a manner coincident with the trilogy of English Court of Appeal cases referred to above.
119. Most significantly it is not surprising that the Regulations require the production of documents, even incriminating ones. It would defeat the entire purpose of the TIEAs agreements if it were otherwise. Advocate Sharp says with force that, if Volaw's argument is correct then a coach and horses would be driven through them (as well as through the analogous powers of the Attorney General pursuant to the Investigation of Fraud (Jersey) Law 1991 ("the 1991 Act") which, it if were correct, can never be used effectively to investigate serious fraud and money laundering. (Volaw, did indeed in a fresh case challenge the exercise of the Attorney General's powers under the 1991 Act on the same basis of infringement of PSI though I have not been called upon to adjudicate on the substantive merits of the point). In my view the present is a case where to paraphrase the words of Lord Walker in Phillips v V News Group Newspapers Ltd [2013] 1 AC 1 para 14 the States "have left no doubt that they intends the privilege to be withdrawn".
120. The statutory abrogation is not, however, conclusive since it is necessary to take into account the jurisprudence if the European Court of Human Rights, which could be deployed to read in or out words inconsistent with its principles, or, if such interpretation would trespass into the area of legislation, be used to obtain a declaration of incompatibility. The jurisprudence has been euphemistically described in Malik as "somewhat problematic" and the Court of Appeal there ''find it difficult to extract from them a clear statement of principle as to whether the privilege against self-incrimination applies to pre-existing documents (para 77) - although inclined to accept the submission that they did (ditto).
121. I am not minded to rush in where the English Court of Appeal so recently feared to tread, especially when, as will appear, I do not consider that my conclusion on this issue will affect my final order. Nonetheless in deference to the arguments of counsel I shall sketch out the battleground and explain why my own inclination is to contrary effect.
122. In Funke, the applicant's complaint was not as to the use of materials obtained from him in criminal proceedings. No such proceedings were brought against him. Rather, he successfully argued that the proceedings brought against him by the revenue authorities to obtain information were themselves a breach of Article 6:-
123. In Saunders the applicant had been subjected to criminal proceedings. He successfully argued that admitting the evidence of answers, compulsorily obtained from company Inspectors, in those proceedings was a breach of Article 6. The Court, however also said:-
see to like effect Shannon v United Kingdom [2006] 42 EHRR 31 at para 36.
Funke which preceded it was clearly not thought to be an obstacle to that observation.
124. In Weh v Austria Application no 38544/9 [2005] 40 EHRR 37 ("Weh") the ECHR sought to distinguish between two types of cases where the PSI issue could arise. In a manner maybe designed to reconcile these two lines of jurisprudence:-
(i) First, there are cases relating to the use of compulsion for the purpose of obtaining information which might incriminate the person concerned in pending or anticipated criminal proceedings against him, or in other words in respect of an offence with which that person has been "charged" within the autonomous meaning) of Article 6 § 1 ). (para 42).
(ii) Second, there are cases concerning the use of incriminating information compulsorily obtained outside the context of criminal proceedings in a subsequent criminal prosecution. (para 43).
Funke was given as an example of the first; Saunders an example of the second.
125. Much of the latest learning from Strasbourg is less hard edged see e.g. Jalloh v Germany [2007] 44 EHRR 32 ("Jalloh") at p.695 at para 117 "in order to determine whether the Applicants' right not to incriminate himself has been violated the Court will have regard in turn to the following factors; the nature and degree of compulsion used to obtain the evidence; the weight of the public interest in the investigation and punishment of the office at issue; the existence of any relevant safeguards in the procedure; and the use to which any material is put;'' see to like effect Halloran v United Kingdom [2008] 46 EHRR 21 ("Halloran") at p.414.
126. The explanation for this diversity may be found in the observations of Lord Bingham in Brown at p704 D-G:-
127. Many of the cases to which I was taken e.g. Jalloh and Halloran involved specific scenarios far removed from the present case. The case closest in its context is JB, which concerned a penalty imposed upon the applicant for declining to give tax information to the state authorities where this might expose him to prosecution (para 66) and found, following Funke that this violated his PSI. I note, however, that the Court said this: "The Court recalls at the outset that in proceedings originating in an individual application it has to confine itself, as far as possible, to an examination of the concrete case before it. The Court is called upon to examine whether or not the imposition of a fine on the applicant for having failed to provide certain information complied with the requirements of the Convention. It follows that the Court is not deciding in the present case the issue whether a State can oblige a taxpayer to give information for the sole purpose of securing a correct tax assessment." [Para 63]
128. Both Funke and JB have been subjected to criticism on, inter alia, their lack of exposition as to why the compulsion to provide pre-existing documents violates PSI (see Ward v Owen "The privilege against self-incrimination; in search of legal certainty" EHLR 2003 pp 388-399 which I find cogent. As they aptly say "it is not clear that such material should engage the privilege at all. If it did it would come dangerously close to a right to withhold any potentially incriminating material".
129. When Allen came before the ECtHR (2002 35 EHRR CD 289, it said, inter alia "(i) the right not to incriminate oneself does not per se prohibit the use of compulsory powers....to provide information about their financial affairs'; (ii) the obligation to make disclosure of income and capital for the purpose for the purpose of the calculation and assessment of tax as indeed a common feature of the taxation system of contracting states and it would be difficult to envisage them functioning effectively without it." These statements have the ring of common sense.
130. The latest tax case in the series is Chambaz v Switzerland 1165/04 which again allowed a claim for breach of PSI when a fine was levied on the applicant for the refusal to produce tax documents in the context of tax evasion proceedings (paras 53/54). It distinguished Allen on the basis that in Allen the applicant had admitted to acting unlawfully whereas Chambaz had not (para 57). Mr Larsen has not made any such admission; but his denials have been rejected by the Bergen Court. It seems to me well arguable that the ECHR would equate Mr Larsen to Allen rather than Chambaz.
131. If the jurisprudence of the ECHR is not - as I find - compulsive in favour of Volaw's submission, I decline to rule that Volaw can rely upon PSI as a reason for not complying with the Comptroller's notices for three main reasons:-
(1) it seems to me that it is not possible as a matter of principle to equate the extraction of fresh evidence by way of compulsion and the requirement to disclose existing documents whose contents are unaffected by the compulsion (see in C plc v P Lawrence Collins LJ para 47). The surrender, even under compulsion, of such documents will not run the risk of a miscarriage of justice in the same way as a coerced oral statement; au contraire its non-surrender may lead to a wrong result;
(2) it seems to me clear as a matter of policy that Volaw's submissions must be rejected; otherwise the whole purpose of a TIEA would be frustrated;
(3) the preponderant and quintessentially pragmatic English case law digests, distinguishes and (ultimately) discards Funke in favour of Saunders.
132. As to (3) I am aware that the most recent case in which the Supreme Court had to consider the reach of PSI. In Beghal v DPP [2015] UKSC 49, Lord Hughes (for the majority) said "the privilege against self-incrimination is firmly established in judge made law. It entitles any person to refuse to answer questions or to yield up documents or objects if to do so would carry and appreciable risk of its use in the prosecution of that person" (paragraph 60). Naturally and properly Volaw has seized on this case as, if all else fails, coming to their rescue.
133. I make these observations about Beghal:-
(i) The dictum was obiter. Although the statutory provisions under consideration (Section 7 of the Terrorism Act 2000 ("TA 2000")) gives officers, police, customs, immigration the power, inter alia, to require the production of documents (paragraph 8(1)) the core power was to answer questions (para 3); and the Appellant was appealing against a conviction for a refusal to answer questions (para13).
(ii) It was noted that statute can exclude PSI "either expressly or by necessary implication" (para 61).
(iii) Ancillary provisions e.g. to exclude answers given from use at trial may indicate that PSI is otherwise excluded (para63).
(iv) Exclusion can be implied without such ancillary provisions (ditto).
(v) A key indicator is that the powers "would be rendered nugatory if the privilege applied" (para 64).
(vi) PSI is implicit not explicit in Article 6 of the ECHR (para 68).
(vii) The trigger for its application is a "charge" in the special Strasbourg sense (Ambrose v Harris) (para 68). The use thereafter in proceedings of such answers given under compulsion before charge will be an infringement of the right to a fair trial (citing Saunders) (ditto).
(viii) Charged in that context means "his position has been substantially affected by an allegation against him and he has become in effect a suspect" (ditto).
134. In Ambrose v Harris [2011] UKSC 43, where the context was of an interview in a police station Lord Hope said at para 63 "The moment at which article 6 is engaged when the individual is questioned by the police requires very sensitive handling if protection is to be given to the right not to incriminate oneself". This if course is not germane to the present application. However earlier he said para 62 that a person's position will have been "substantially affected as soon as the suspicion against him is being seriously investigated and the prosecution case compiled''. I am prepared to accept that this criterion is satisfied as far as Volaw is concerned; but, as already indicated, decline to agree that it entitles Volaw not to make disclosure of pre-existing documents as distinct from answering questions. Beghal is not in my view, compelling authority to the contrary.
135. There is in any event, a further hurdle for Volaw to surmount if it is to succeed on these issues. It faces a risk of prosecution which arises in Norway and not in Jersey.
136. The Civil Evidence Act 1968 of England and Wales, in s.14(1)(a), explicitly confines the privilege to cases where the risk relates to prosecution in England or Wales. In Brannigan v Davison [1997] AC 238 the Privy Council (hearing an appeal from New Zealand) reached the same conclusion. It expressed concern that because of its 'rigid and absolute' nature the privilege could not be recognized where the risk of prosecution would arise under the law of another jurisdiction:-
137. Volaw nonetheless submits that, in the circumstances of this case, where disclosure is ordered in Jersey solely for the purpose of transmitting the documents to the authorities of another jurisdiction, Norway, there can be no principled reason for excluding the common law privilege against self-incrimination, at least as a relevant factor in the exercise of the Comptroller's discretion in issuing a Notice since the rationale for the Privy Council's approach has disappeared. It being no longer the case that the privilege against self-incrimination, once engaged, operates as an absolute or unqualified right at common law that permits of no exceptions but rather at common law to be a qualified right, as under Article 6, to be taken into account and given due weight in the balancing exercise. See the Divisional Court judgments in Malik (at [78]) and Bright (693A-B, 697A-B72).
138. However, in Warren v Attorney General [2014] JCA 080, where the applicant complained that he felt unable to give evidence freely in confiscation proceedings that took place in Jersey because he feared that what he might say would be used to form the evidential basis of a prosecution in England, the Jersey Court of Appeal declined to grant leave and noted that Warren's remedy was to argue in England that the material should be excluded (para 31).
139. The Jersey Court of Appeal's view in Warren is consistent with the English Court of Appeal reasoning in Rottmann v Brittain [2009] EWCA Civ 12 ("Rottmann") where the appellant sought absolution from answering questions before the English bankruptcy court because it might incriminate him in Germany. Ward LJ said: "It is in my judgment for the English court to control proceedings before the English court. It is for the judge dealing with the bankruptcy matter to exercise his discretion in allowing or not allowing incriminating questions to be put to and to be answered by Mr Rottmann. But such use as may be made of those answers in Germany is a matter for the German court to control. Germany is a signatory to the Human Rights Convention. The German court will, we must assume, consider any objection to the use of the transcript which may be made by Mr Rottmann should he ever stand his trial in Germany. It is for the German court to control its proceedings and not for this court to be further concerned about the hypothetical use that may be made in that jurisdiction."( Para 12).
140. Rottman was dealing with statements being made, not pre-existing documents being produced. I can see no basis upon which the Comptroller, in relation to those documents, could sensibly do other than allow the Norwegian Courts if, (which is still to be decided), Volaw is made subject to criminal charges to decide whether any reliance that the prosecution seek to place on them was or was not consistent with the ECHR or its own domestic law. The Comptroller should render unto the Norwegian Courts the things that are Norway's (see to similar effect Trant para 51).
141. It is also asserted that if any of the Companies refused to assist Volaw in providing materials they may become parties to offences under the 2008 Regulations as amended, either in their own right or as accessories. R 15 establishes an offence of failing to comply with a requirement made under a notice issued under those Regulations, and R 16(1) establishes the criminal liability of others who aid, abet, counsel or procure the commission of offences. The Companies, their Directors and other Officers are therefore compelled to disclose the documents the subject of the Notices on pain of prosecution. In my view this argument conflates and confuses the issue of compulsion with the issue of self-incrimination. The latter is, in my view, concerned with the criminal offences which the documents might disclose, not with the criminal offences for failing to disclose them.
142. Finally in my view the directors' own PSI is not relevant here. Volaw, a separate legal entity, and the companies not the directors have been served with Notices and required to produce documents. The documents are not the personal property of the directors. Volaw and the companies would still be obliged to produce the records even if all the directors resigned en masse. There is no scope for a parasitic claim.
143. A further point was addressed on the last day of the hearing by reference to the decision of the Norwegian Supreme Court in Petrolia AS v Public prosecutor RT [2011] s800 ("Petrolia") which also related to Mr Larsen's affairs and the legality of orders made by the Norwegian Court of Appeal, that 15 companies, in which he was said to have commercial interests , hand over ledger balances and similar documents in relation to investigation of an on-going tax related criminal case against Mr Larsen pursuant to Section 210 of the Criminal Procedure Act (Norway) which provides: "A Court may order the possessor to surrender objects that are deemed to be significant as evidence if he is bound to testify in the case". It was said to show, according to Ms Gaeta, advocate in the firm Steenstrup Storrange DA that Volaw being someone deemed to be a person charged or at risk of being charged in the Norwegian investigation can rely in Norway on PSI to resist the provision of the documents, the subject of the Notices (Gaeta opinions of 16th and 23rd July, 2015). It was also asserted that by virtue of Article 6(4) of the J/N TIEA the Comptroller was entitled to refuse to provide the documents since Norway would not have been able to obtain them under its own laws.
144. I naturally approach this analysis with a measure of diffidence given that I am not qualified to pronounce on Norwegian law and the Comptroller has not provided any expert evidence on the point - although I repeat it is not his duty to do so. With that reservation it is clear that in Petrolia the principal question was whether under the ECHR PSI applied to legal as well as natural persons (para 1). The Supreme Court held that it did, and for that reason, annulled the Court of Appeal order (para 54). The case was remitted to the Court of Appeal to determine whether the fundamental condition in Article 6, i.e. that there was a criminal charge, was satisfied (para 63). Whether the fact that the companies not charged might risk accomplice liability (para 64) would satisfy that condition was not determined. The Supreme Court drew attention somewhat delphically to the decision in Weh as a possible source of guidance for the Court of Appeal (para 65).
145. It is therefore in my view far from clear that Volaw and the companies could rely on Article 6 and PSI as analysed in Petrolia in Norway.
146. According to Ms Gaeta Section 210 can only be deployed against witnesses, not persons charged. This seems on its language (assuming, as I shall, the accuracy of the translation) to be correct. But this does not answer the question whether Volaw would be treated as a witness or a person charged. Furthermore, according to Ms Gaeta, even if Volaw fell into the latter category the Norwegian police could apply for what is termed "a seize warrant" under Section 192 of the Criminal Procedure Act. Therefore it is not again at all clear that Norway would not be able to obtain the documents "under its laws". This reinforces my view that it is more appropriate for the Norwegian Courts to determine such 'quasi-constitutional' issue. As a link in the chain of what remains no more than an investigation, albeit criminal primarily, into Mr Larsen's affairs, in my view Volaw's new argument on PSI are insufficient to justify quashing the Notices.
147. This was not a point which sprang from disclosure of the letters of request. It was a point which could have been taken in Larsen 1 (but was not until the unsuccessful application for leave was made to the Privy Council) and could in theory be taken in any TIEA case.
148. I accept:-
(i) The J/NTIEA acknowledges that it is subject to "the rights and safeguards secured to persons by the laws or administrative practice" of Jersey.
(ii) This is consistent with the OECD Model TIEA and the Guidance thereon which refers expressly to Data Protection at paragraph 26.
(iii) The DPA is such a law.
(iv) The information which is the subject of the request may include personal data within the meaning of DPA Article 1(1).
(v) The Comptroller is a data controller within the meaning of the DPA Article 1(1) and (4).
(vi) Subject to any exception, the Comptroller must accordingly comply with the first, second and third data protection principles which enjoin in broad paraphrase lawfulness, fairness, propriety and precision of purpose and proportionality.
149. The obligations under the DPA are, however, qualified by Article 29 entitled: "Exemption: crime and taxation"
(1) Personal data processed for any of the following purposes -
(a) the prevention, detection, or investigation, anywhere of crime;
....
(c) the assessment, or collection, anywhere of any tax or duty, or of any imposition of a similar nature, wherever due,
are exempt from the first data protection principle (except to the extent to which it requires compliance with the conditions in Schedules 2 and 3) and Article 7 in any case to the extent to which the application of those provisions to the data would be likely to prejudice any of the matters referred to in sub-paragraphs (a)-(c).
(2) Personal data that -
(a) are processed for the purpose of discharging functions under any Law; and
(b) consist of information obtained for such a purpose from a person who had it in the person's possession for any of the purposes referred to in paragraph (1)(a)-(c),
are exempt from the subject information provisions to the same extent as personal data processed for any of the purposes referred to in paragraph (1)(a)-(c).
(3) Personal data are exempt from the non-disclosure provisions in any case in which -
(a)the disclosure is for any of the purposes referred to in paragraph (1)(a)-(c); and
(b) the application of those provisions in relation to the disclosure would be likely to prejudice any of the matters referred to in paragraph (1)(a)-(c).''
(This is in harmony with SECTION V of EC 95.46 the Data Protection Directive Article 13
Exemptions and restrictions
1. Member States may adopt legislative measures to restrict the scope of the obligations and rights provided for in Article 691), 10, 11(1), 12 and 21 when such a restriction constitutes a necessary measures to safeguard:
(e) an important economic or financial interest of a Member States or of the European Union, including .... taxation matters.
150. I shall approach this issue on the basis that (i) The exemption can apply "only in so far as strictly necessary" C-473/12 Institut Professional des Agents Immobilier at para 39 (ii) in R (on the application of Lord) v Secretary of State for the Home Department [2003] EWHC 2073 Munby J said that it would be necessary to consider whether the equivalent exemption under the English legislation was engaged "in any particular case" and that it was for the Data Controller to "show that one of the statutory objectives is likely to be prejudiced in the particular case in which the question arises'' para 94 (iii) that 'likely' equates to, may very well, but less than more probable than not (para 100). I accept too that there is no evidence that the Comptroller considered the DPA, but even applying the rigorous John v Rees test set can see no basis for concluding that he would or might have altered his decision had he done so given the conclusions he in fact reached. If he has decided that the documentation sought was for a lawful purpose was "foreseeably relevant", to the taxpayer's liability and not excessive even if some of it may contain personal data I cannot see how consistently he could contemplate that the exemption would not bite.
Be that as it may, the exercise that it is said he is obliged to carry out is not easy to describe. If, for example, the Letter of Request asked to take a fanciful example for production of electronic love letters sent by a taxpayer to his girlfriend or other documents which could not conceivably bear on his tax liability, no doubt the Comptroller would be oblige to recognize that these contained personal data not "foreseeably relevant" to it. In fact the document sought under the letters of request were business records and unlikely, save incidentally, to contain personal data at all. In my view it cannot be contemplated that he should sift through any documents provided to him to see whether in his view (ignorant as he is of the full picture available to the requesting state) their removal from what is transmitted would not prejudice the investigation which itself should not be unduly delayed. The decision of Foskett J in Trushin v NCA [2014] EWHC 3551 (Admin) dismissing a strike out application of an argument based on the English DPA springs from a wholly dissimilar factual context and therefore is not of any assistance on the issue before me.
151. The fact that the argument is a latecomer does not mean ipso facto that it should be dismissed. Second thoughts can be better thoughts; but not in my judgment in this case. I am gratified that Sir Michael Birt B in a judgment on 15th July, 2014, ([2014] JRC 143) another chapter in this prolonged saga rejected an equivalent argument based on the DPA as "not seriously arguable" para 42.
152. I turn now to Fiduciana. Mr Ventkatchalam is an Indian national and a discretionary beneficiary of the Merit Trust. The taxpayer and the witness who received the Notice (the former trustee) did not challenge the Notice. The new trustee, Fiduciana, has commenced these judicial review proceedings.
153. The salient dates are these:-
(i) On 21st July, 2014, the Indian Tax Authority ("ITA") requested information under the Agreement between Jersey and India for the Exchange of Information and Assistance in Collection of Taxes (the J/ITIEA) dated 3rd November, 2011, in relation to an Indian taxpayer Mr M M Ventkatchalam, a discretionary beneficiary of the Merit Trust.
(ii) On 15th January, 2015, after seeking and receiving clarification on certain matters and the provision of further information, Mr Cousins sent a notice to JTC Trustees (Fiduciana's predecessors as trustee of the Merit Trust) requiring disclosure of various documentation relating to the Merit Trust.
(iii) On 26th February, 2015, Fiduciana applied for leave to apply for judicial review supported by an affidavit from Gaana Khomenko, Managing Director of Fiduciana.
(iv) On the same date leave to apply was granted by the then Deputy Bailiff.
(v) On 20th April, 2015, the affidavit in reply by Mr Cousins was submitted on behalf of the Comptroller.
(vi) On 22nd April, 2015, an affidavit in reply was field by Mr Le Cuirot on his own behalf.
154. The grounds on which leave was sought by Fiduciana were more limited than those in Volaw in terms of specifics but similar to them in terms of generality. They were:-
(1) Illegality/ultra vires inasmuch as the Notice required production of documents predating the coming into force of the J/ITIEA ("ultra vires").
(2) Procedural unfairness because of the respondent's failure to allow Fiduciana to make representations before issuing the Notice or to disclose the letter of request ("the same natural justice issue as in Volaw'') or to disclose the Request ("the Letter of Request issue'') and the failure by the Comptroller to perform his Tameside duty of due enquiry ("the due inquiry issue'').
(3) The Regulations themselves involved a disproportionate interference with rights inasmuch as to the extent they have removed procedural rights they disproportionately interfere with rights protected by common law and by Articles 6, 8 and AIPI ("proportionality").
155. The Deputy Bailiff refused leave on ground (1). (It is only in relation to Ground 1 that the differences between the I/JTEIA and the N/JTIEA relate are germane and it is therefore not necessary for me to set out the full text).
156. The Deputy Bailiff granted leave on grounds (2) and (3) describing as "respectable" the argument that a party out with the two categories had standing and "there is the general principle that there cannot easily be an ouster of the Court's jurisdiction to review judicially at the instance of someone who had locus standi".
157. As to ground (2) the natural justice issue is rejected for the same reasons as those in the Larsen/ Volaw proceedings Advocate Evans succinctly submitted that given an opportunity to make representations prior to the issue of the Notice, production of documents might have been resolved without need for a notice. That may be so but it does not of itself bear on the question of whether such a right exists, and what Fiduciana might have said in this or any other topic is moot.
158. The letter of request issue is disposed of in my disclosure ruling.
159. The due inquiry issue may be rejected since I cannot see what enquiry that Comptroller was obliged to but failed to make. Obviously he needs to consider if a Notice of Request is convention and T/IEA compliant, (as he did) but to impose upon him a duty to make further enquiries is a duty too far above. It is for Fiduciana in any event to show that the Comptroller did not ask himself the right question or take reasonable steps to enable him to answer it correctly; the Comptrollers evidence especially the affidavit of Mr Cousins shows that he did both.
160. As to Ground (3) I repeat that the issue is not what procedural rights were removed, but what procedural rights exist and whether the latter survive the test of fairness. For the same reasons as set out in relation to the Larsen/Volaw proceedings. I conclude that they do.
161. There is no challenge as to the reasonableness of the Comptroller's decision. Information about the Merit trust is reasonably foreseeable to the assessment of Mr Ventkatchalam's tax position in India.
162. I therefore dismiss all the applications for judicial review in these several applications. Counsel will draw up an Act of Court reflecting my decisions. Submissions on consequential matters should be made in writing within 14 days of the handing down of this judgment.