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Jersey Unreported Judgments
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Cite as: [1999] UR 180
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ROYAL COURT
(Samedi Division)
18th October, 1999
Before: F.C. Hamon, Esq., Deputy Bailiff, and
Jurats Rumfitt and Allo
In the matter of Dermot Jeremy Dimsey
and Article 78 of the
Companies (Jersey) Law, 1991, as amended
Representation of Her Majesty’s Attorney General
Application by the Attorney General for an Order under Article 78 of the Companies (Jersey) Law, 1991, as amended, that Dermot Jeremy Dimsey should not be a director or in any way be concerned in the management of a company for such period as the Court shall think fit
P Matthews, Crown Advocate
Dermot Jeremy Dimsey on his own behalf
JUDGMENT
THE DEPUTY BAILIFF: We have a representation brought by Her Majesty’s Attorney General pursuant to the provisions of Article 78 of the Companies (Jersey) Law, 1991, as amended. That Article reads as follows:
"(1)Where it appears to the Committee, the Commission, or the Attorney General that it is expedient in the public interest that any person should not, without the leave of the court, be a director of, or in any way whether directly or indirectly be concerned or take part in the management of, a company, the Committee, the Commission, or the Attorney General, as the case may be, may apply to the court for an order to that effect to be made against that person.
(2)The court may make an order against a person where, on an application under this Article, the court is satisfied that his conduct in relation to a company makes him unfit to be concerned in the management of a company.
(3)An order under paragraph (2) shall be for such period not exceeding five years as the court thinks fit."
This five year period of disqualification was highlighted by the Edwards report and a recommendation has been made that it should be extended now to fifteen years in line with the Bankruptcy (Désastre) (Amendment No. 2) (Jersey) Law, 1996, which came into force on 1 April 1997. The recommendation has been made but the law has not yet been passed to extend that period.
This is the very first application under the Companies (Jersey) Law, 1991, as amended, on a matter of this kind, although we have and were shown this morning three cases under the Bankruptcy (Désastre) (Jersey) Law, 1990.
The meaning of ‘unfit’ has been considered in the schedule to the Company Directors Disqualification Act 1986 of the United Kingdom. What is says is this:
"The criteria set out in Schedule 1 may be summarised as follows:-
Part 1 - Matters applicable to all cases:-
(1)any misfeasance or breach of a fiduciary or other duty owed by the director to the company;
(2)any misapplication of assets or conduct making him accountable to the company;
(3)his part in any improper transfer of assets intended to defraud creditors;
(4)his part in any failure by the company to keep proper records and registers and to file annual returns, etc;
(5)his part in any failure to prepare annual accounts and directors’ and auditors’ reports."
However, those are particular matters to which the Court can have regard but which do not really apply here because we have, as yet, no clear definition of what ‘unfit’ may mean.
All we need to say is that we must be satisfied that a person’s conduct renders him unfit and, of course, that it is expedient in the public interest for him to be disqualified as a director.
As a result of convictions, Mr. Dimsey has been struck off by his professional accountancy body but he still remains a director in Jersey. The Crown, in support of its application, has cited two convictions against him. In 1981 Mr. Dimsey had his sentence of three years for conspiracy to defraud reduced eventually by the Court of Appeal to fifteen months because of the disparity of sentence with his co-conspirator, a man called Arnold, who was clearly more involved. However, at all material times Mr. Dimsey was a director of companies that became enmeshed in a conspiracy to defraud.
It is helpful to look at some of the remarks made by the Court of Appeal in that first case on 29 January 1981. These were highlighted for us by Crown Advocate Matthews this morning. Their Lordships said, amongst other things, this:
"Arnold was introduced to the appellant by a mutual acquaintance. From then onwards the appellant fell among thieves, and to his disgrace he lent a hand on more than one occasion to the furtherance of Arnold’s criminality. There were three others engaged in the further movement of assets from Linsey Knitting Mills to a company in Jersey and the further removal of those assets from that company into the client account of Richard Martin, and the use of that money for reinvestment in the United Kingdom .
The appellant’s rôle (the appellant of course is Mr. Dimsey) involved the production by him of a number of false documents, assistance in transferring money from and to the United Kingdom and more general assistance in connection with it. Compared with that of Martin his part can truly be said to be the lesser, and compared with that of Arnold it pales into such insignificance as causes this Court to look very seriously and carefully at the difference between their respective sentences.
The only material benefit which had accrued to the appellant by the time of the trial was a sum of about £1,000 for dishonest services rendered up to then. What he would have gained by a continued association with Arnold it is impossible to tell and would be unfair to speculate upon.
Until he met Arnold the appellant had been a reputable accountant."
The Attorney also relies on the 1997 conviction on a conspiracy to defraud the Inland Revenue. That trial was quite different to the earlier trial because Mr Dimsey did not appear but was represented by counsel.
The question that is going to appeal is a question of whether tax was or was not due under s.739 subsection (2). That is not the point that we have to face, though it may very well succeed in the House of Lords. The question we have to face is whether the way that Mr Dimsey in particular covered up, to a certain extent, a Jersey company’s financial affairs represents the sort of conduct which this Court feels renders him fit or unfit to be a director. We need to look at some of the matters which the Court raises in that judgment and what they say is this:
"Dimsey continued to be consulted by Chipping and Da Costa on the content of correspondence with the Inland Revenue in respect of Chipping’s financial affairs. It was the prosecution case that this enabled him to monitor and vet replies with a view to covering up the extent of Chipping’s financial affairs and the extent of Chipping’s tax liabilities arising from his involvement with Thomlyn and Glenville."
Those are the words which, perhaps, are most important. It is the monitoring and vetting of replies which the Crown asks us to notice, whether or not the appeal is successful, as those facts are irrefutable.
Mr. Dimsey asks us today for a delay while the House of Lords decide what is undoubtedly a technical point.
We are not truly concerned whether the first case is spent for the purposes of this application because we know that between January 1977 and December 1978 the dishonest scheme which was promulgated brought to the man called Arnold a profit of £150,000, which in today’s value would be something in the region of £525,000. There was, of course, a corresponding loss to the shareholders.
The Crown Advocate did not say it in so many words but it may well be that one conviction so many years ago by a professional man is enough. However, the second conviction sounds the death knell. If this matter had been brought on the 1980 conviction alone we might have hesitated but because of the second conviction and because of what is implied in that second conviction the Court is of the opinion that the learned Attorney’s application must succeed. We therefore order that Mr Dimsey be disqualified in the terms of the Order for three years from being a director of, or in any way whether directly or indirectly being concerned or taking part in the management of a company, from the date of this Order.
Authorities
R -v- Dimsey & Arnold (29th January, 1981) Unreported Judgment of the Criminal Division of the Court of Appeal of England.
R -v- Dimsey & Allen (7th July, 1999) Unreported Judgment of the Criminal Division of the Court of Appeal of England.
The Companies (Jersey) Law 1991, as amended: Article 78.
The Disqualification of Company Directors in Jersey: Article by Advocate Andrew Winchester: Jersey Law Review: October, 1998, pp.228-297.
The Bankruptcy (Désastre) (Jersey) Law, 1990: Article 43.
The Bankruptcy (Désastre) (Amendment No. 2) (Jersey) Law, 1996.
In re Delaney & Dell Trust (CI) Limited (9th November, 1995) Jersey Unreported.
In re Hay (10th June, 1996) Jersey Unreported.
In re Munson (2 October 1997) Jersey Unreported.