2000/218
7 pages
COURT OF APPEAL.
Decision: 25th October, 2000.
Reasoned Judgment: 7th November, 2000.
Before: |
Sir David Calcutt, Q.C., President; |
|
R.C. Southwell, Esq., Q.C., and; P.D. Smith, Esq., Q.C. |
In the matter of Dermot Jeremy Dimsey (APPELLANT)
and Article 78 of the
Companies (Jersey) Law, 1991, as amended;
And in the matter of
the Representation of Her Majesty's Attorney General (RESPONDENT).
Appeal by the APPELLANT against the Order of the Royal Court of 18th October, 1999, made on the application of the RESPONDENT, under Article 78 of the Companies (Jersey) Law, 1991, as amended, that the APPELLANT should not be a Director or in any way be concerned in the management of a company for a period of three years.
The APPELLANT on his own behalf;
P. Matthews, Esq., Crown Advocate.
JUDGMENT.
SMITH JA, delivering the judgment of the Court:
1. On 16 July 1999 HM Attorney General presented a Representation to the Royal Court applying for a disqualification order against the Appellant under Article 78 of the Companies (Jersey) Law 1991 ("the Companies Law").
2. The material parts of Article 78 as amended (under the heading "Disqualification orders") read as follows:
"(1) Where it appears to the [Finance and Economics] Committee, the [Financial Services] 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 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."
3. The Representation was based on the Appellant's conviction in England in 1980 for conspiracy to defraud in respect of which he was sentenced to fifteen months' imprisonment and on the Appellant's conviction on 30 April 1997 at Guildford Crown Court for conspiring to cheat the Public Revenue in respect of which he was sentenced to eighteen months' imprisonment.
4. The Representation was heard by the then Deputy Bailiff and two jurats on 18 October 1999. Mr P Matthews, Crown Advocate, appeared for the Attorney General and the Appellant appeared on his own behalf. The Royal Court made an order under Article 78(2) and disqualified the Appellant for three years from its date. The Appellant was granted leave to appeal.
5. In his Notice of Appeal the Appellant listed three grounds:
"1. no consideration was given to the fact that the conviction of 1997 was listed to be heard in the house (sic) of Lords and could result in the conviction being quashed;
2. the precedents put forward by the Attorney General were not applicable to my case as they referred to Jersey Judgments and not United Kingdom Judgments under which Law I was convicted;
3. the Attorney General seemed to rely heavily on a 1980 conviction in the United Kingdom, which in the United Kingdom is time-barred under the Rehabilitation of Offenders Act 1974. It should also be noted that no order to disqualify me as a director of United Kingdom companies was ordered by the Court in England."
6. In his written Case and his submissions before us the Appellant expanded on his grounds and complained of the following:
1. The precedents quoted by the Respondent were all cases under Article 43 of the Bankruptcy (Désastre) Jersey Law 1990. The Appellant was not convicted under any insolvency provision nor involved in any company en désastre.
2. Although the Respondent has asserted that the Appellant being successful in the House of Lords would be merely a technical victory it would still mean that the Appellant would have broken no law.
3. The prosecution opening statement at the 1997 trial on which the Respondent relied before the Royal Court gives a misleading view and interpretation of the Appellant's conduct. A trial transcript ought to have been utilised instead.
4. The question of enacting rehabilitation of offenders legislation in Jersey is being actively considered and, if introduced, will be retrospective so that it is quite possible that in the near future the Appellant's 1980 conviction would be deemed to be spent.
5. Article 7 para. 1 of the European Convention on Human Rights prohibits the imposition of a heavier penalty than the one that was applicable at the time the criminal offence was committed. In disqualifying the Appellant as a director the Royal Court is seeking to impose a heavier penalty. A draft Human Rights Law has been lodged au greffe by the Legislation Committee of the States but has not yet become law.
6. The Appellant can be a director of any company in any other jurisdiction except Jersey and was not disqualified by the English court in 1997 or 1980.
7. The Appellant has not been charged or convicted of any offence in Jersey.
8. The judgment of the then Deputy Bailiff does not demonstrate how it was "expedient in the public interest" that the Appellant be disqualified and the Appellant did not harm the public interest in Jersey.
9. The Respondent ought to have acted earlier under Article 78 and ought not to have allowed the Appellant to start a new life and then be punished again.
7. For all the above reasons the Appellant asks this court to set the disqualification aside or reduce the length of the period.
8. A number of the Appellant's complaints may be disposed of if two points are clarified. Firstly, a person may only be disqualified under Article 78 if "his conduct in relation to a company [our emphasis] makes him unfit." Secondly, a conviction, as such, does not necessarily provide and is not necessary to provide, the basis for a disqualification.
9. As far as the first point is concerned the Appellant is to be forgiven for failing to grasp it as it seems to have been overlooked in the Royal Court. "A company" is defined in Article 1 of the Companies Law as "a company registered under this Law, or an existing company". According to Article 1 an "existing company" means "a company registered under the Laws repealed by Article 223": Article 223 repeals the Companies (Jersey) Laws 1861 to 1968. Put shortly "a company" within the meaning of Article 78 is a Jersey company and it is only conduct in relation to a Jersey company that may render a person liable to disqualification.
10. The available material dealing with the 1980 conviction is the judgment of Watkins LJ in the Criminal Division of the Court of Appeal (unreported 29 January 1981). Although the conspiracy in question did relate to a company there is no indication in the judgment that it was registered under the Companies (Jersey) Laws 1861 to 1968. Moreover, no evidence was placed before the Royal Court to this effect. The Attorney General's Representation does not assert that this was the case and the Royal Court did not so find. It follows that had the Representation been limited in its basis to the 1980 conviction or the circumstances out of which it arose it could not have resulted in the disqualification of the Appellant. Furthermore, we do not consider that events which occurred some twenty years before the Royal Court hearing could have had any real bearing on the question of whether the Appellant was unfit to be concerned in the management of a company in 1999.
11. Turning to the second point - that a conviction, as such, does not necessarily provide and is not necessary to provide the basis for disqualification - we again draw attention to the requirement that the conduct complained of must be in relation to a company within the meaning of the Companies Law. Thus, although in the present case the count on which the Appellant was convicted in 1997 does refer to companies within the meaning of the Companies Law, Article 78(2) requires the Royal Court to satisfy itself before making the order sought that, on the evidence, the Appellant was guilty of conduct in relation to one or more of those companies making him unfit to be concerned in the management of a company.
12. In the instant case a document entitled "Prosecution Opening" pertaining to the trial of the Appellant and his co-conspirators in 1997 and a judgment of the Court of Appeal (Criminal Division), delivered 7 July 1999 (since reported sub nomine Regina v. Dimsey; Regina v. Allen [2000] 3 WLR 273) were put before the Royal Court on the Attorney General's behalf. That judgment dealt with the Appellant's appeal against his 1997 conviction together with an appeal by another accused person who had been convicted by a different court on counts arising from other circumstances. The only common issue was the effect of Section 739 of the Income and Corporation Taxes Act 1988 ("ICTA") on the convictions of each Appellant - an issue to which we shall return.
13. In our judgment the Appellant's complaint in respect of the prosecution opening is well taken. This proved nothing at his trial in 1997 and it cannot be said that merely because the Appellant was convicted this necessarily meant that the jury accepted every allegation made against the Appellant in that opening. We consider that this document ought not to have been placed before the Royal Court.
14. However, the material comprised in the Court of Appeal judgment stands on an entirely different footing. It includes a detailed description of the evidence upon which the Appellant's conviction was based and, therefore, the allegations which must have been found to have been proven, the Appellant having been convicted on the count on which he was indicted.
15. The Court of Appeal judgment reveals ample material on which the Royal Court was entitled to be satisfied that the Appellant had been guilty of conduct in relation to a company within the meaning of the Companies Law justifying an order being made under Article 78(2). In essence the judgment describes the manner in which the Appellant pretended that one of his co-conspirators did not have the central management and control of the business of three Jersey companies in which the Appellant was involved in order to give the false impression to the revenue authorities that the companies were not resident in the United Kingdom.
16. These observations dispose of a number of the Appellant's complaints. The Rehabilitation of Offenders Act 1974 issue no longer arises because, as we have indicated, the 1980 conviction and the known facts relating to it cannot and do not support the order of the Royal Court. However, we would add that the Rehabilitation of Offenders Act has no application in this jurisdiction and the Appellant could not have relied on equivalent legislation which may or may not be enacted in this Island in the future.
17. The fact that the Appellant has not been charged or convicted of any offence in Jersey is irrelevant. The power to disqualify under the Companies Law does not depend on a conviction in Jersey or anywhere else. Its exercise involves an analysis of conduct in relation to a Jersey company which may not have resulted in a conviction or even a charge. Furthermore, it matters not whether the English authorities sought the Appellant's disqualification by the court there after his convictions in that jurisdiction. The function of the Royal Court under Article 78 of the Companies Law is to administer the law of and in this Island.
18. It follows from what we have said that the possibility of the Appellant's appeal to the House of Lords succeeding (resulting in the quashing of his 1997 conviction) cannot be relied on to impeach the order made by the Royal Court. The quashing of the conviction would be on the ground that under Section 739 of ICTA the companies to which we have referred were not liable to corporation tax in the United Kingdom and that no loss to the Inland Revenue did flow or could have flowed from the conspirators' conduct; accordingly, there could have been no cheat and, therefore, no conspiracy to cheat.
19. But whether or not this argument succeeds the Appellant's conduct remains the same. It may not amount to a complete offence in English law but it was still dishonest. Whether or not a criminal offence is provable against a person his conduct may still make him unfit to be concerned in the management of a company. Win or lose in the House of Lords the Appellant's conduct was rightly perceived by the Royal Court to fall into this category.
20. The European Convention for the Protection of Human Rights and Political Freedoms does not form part of the domestic law of Jersey. Therefore it has no direct effect and we adopt the reasoning of the House of Lords on this point set out in R. -v- DPP, ex parte Kebeline [1999] 4 All ER 801. However, we think it appropriate to point out that in our judgment the Appellant's disqualification would not, in any event, come within the scope of Article 7 para. 1 of the Convention. It is clear that the objective of Article 78 of the Companies law is not the punishment of the person allegedly guilty of the relevant conduct but the protection of the public. Although not dealing with article 7 as such the European Court of Human Rights has ruled that disqualification proceedings of the type instituted in the present case are not criminal (see DC, HS and AD v. UK [2000] BCC 710). Thus disqualification of the Appellant does not constitute "a penalty" within the meaning of Article 7 but a protective step taken not as a consequence of the Appellant's conviction in 1997 but of the facts that came to light as a result of the investigation that led to it.
21. The requirement in Article 78(1) that it should appear " . . . that it is expedient in the public interest" that a person be disqualified is imposed on the authorities empowered to apply when contemplating an application to the court. It does not apply to the court whose function is separately described in Article 78(2). In this context we refer to and adopt the remarks of Dillon LJ in Re Sevenoaks Stationers (Retail) Limited [1991] Ch. 164 at p. 176 on the similarly worded portion of Section 6 of the Company Directors Disqualification Act 1986:
"The test laid down ... is whether the person's conduct ... "makes him unfit to be concerned in the management of a company". These are ordinary words of the English language and they should be simple to apply in most cases. It is important to hold to the words in each case."
22. It is true that the three precedents put before the Royal Court on the Attorney General's behalf related to applications under Article 43 of the Bankruptcy (Désastre) (Jersey) 1990 Law. It is understandable that this was done given that the application relating to the Appellant was the first under the Companies Law. There are similarities and differences in the two pieces of legislation (discussed by Advocate Andrew Winchester in "The Disqualification of Company Directors in Jersey" in (1998) Jersey Law Review 288) but it is quite clear from the judgment of the then Deputy Bailiff in the instant case that the significance of those precedents was not misunderstood and that the Appellant was properly dealt with under the Companies Law. Furthermore, the complaint in the Appellant's Notice of Appeal that the precedents were Jersey and not United Kingdom judgments "under which Law I was convicted" is totally misconceived. The Attorney General's application was on foot of Jersey Law. It was based on facts found in England but, as we have demonstrated, the law of the place of conviction could have had no bearing on the determination of that application in this Island.
23. The Appellant asserts that the Respondent ought to have acted sooner and not allowed the Appellant to start a new life and then be punished again. We have already dealt with the Appellant's misconception as to the punitive nature of Article 78. However, the regulatory objective of the statute seems to us to require prompt action. Long delay will tend to dissipate unfitness where there is no evidence that between the time of the conduct complained of and the application a respondent has committed further relevant misconduct. Again, long delay may be viewed as an abuse of process.
24. Having said all this we are satisfied that as far as the 1997 criminal proceedings are concerned there was no material delay. Bearing in mind that Mr Dimsey's appeal to the Court of Appeal against his conviction was only disposed of in July 1999 and that it would have been imprudent of the Attorney General to have applied to the Royal Court when that appeal was pending we consider that in this instance the Attorney General moved with commendable expedition.
25. The result of our deliberations is that we reject the Appellant's appeal against his disqualification as such. This leaves his appeal against the period of disqualification of three years, the maximum being five. It may be argued on his behalf that by not confining the application to "conduct in relation to a company" the Royal Court may have disqualified him for a longer period than would otherwise have been the case in that it took into account and ought not to have taken into account the 1980 conviction.
26. We are satisfied from the Deputy Bailiff's judgment that the 1980 conviction had little impact on the period of disqualification. Beyond this we have considered afresh the question of the appropriate period of disqualification in the light of all that has been said and our own conclusions. This is not just a case of incompetence. This is a case involving dishonesty. Bearing that potent factor in mind we are satisfied that three years disqualification is appropriate and we confirm the order of the Royal Court in this respect.
Authorities.
Companies (Jersey) Law 1991: Article 78.
Bankruptcy (Désastre)(Jersey) Law 1990.
Regina v. Dimsey; Regina v. Allen [2000] 3 WLR 273).
Income and Corporation Taxes Act 1988: Section 739.
Rehabilitation of Offenders Act 1974.
R. -v- DPP, ex parte Kebeline [1999] 4 All ER 801.
DC, HS and AD v. UK [2000] BCC 710.
Re Sevenoaks Stationers (Retail) Limited [1991] Ch. 164.
Company Directors Disqualification Act 1986: s.6.
European Convention on Human Rights: Article 7(1).