Jersey Unreported Judgments

[2005]JRC001

royal court

(Samedi Division)

 

6^th January, 2005

 

 

 

 

 

In the matter of an application for judicial review.

 

And in the matter of Part XII A of the Royal Court Rules, 1992, as amended.

 

 

 

The Applicant in person

Advocate B. H. Lacey for the Proposed Respondent

 

 

 

judgment

bailiff:

Introduction

1.        The applicant applies for leave to bring proceedings for judicial review against the Jersey Financial Services Commission ("the Commission").  When the application was first considered the Court decided to exercise its power under Rule 12A/2(3) to direct that the Commission be given notice of the application.  Miss Lacey appeared on the Commission's behalf and also provided me with a bundle of papers, including an affidavit from Mr Colin Powell CBE, Chairman of the Commission.

2.        The applicant has also sworn an affidavit.  He is acting in person because he states that he is unable to afford a lawyer.  From all these documents the facts emerge with reasonable clarity.

Facts

3.        The applicant is employed by Anchor Trust Company Limited ("Anchor") as its IT manager.  Anchor is a trust company which has applied for registration under the relevant legislation.  It has not yet been approved but is operating under the transitional provisions.  In early November 2004 it came to the attention of the Commission that the applicant was publishing material on three websites or possibly one website with three domain names, viz www.jerseyfsc.com, www.jerseyfsc.net and www.jerseyfsc.co.uk.  I shall refer to these collectively as "the website".  The website of the Commission is at www.jerseyfsc.org.  The website belonging to the applicant was regarded by the Commission as having been clearly designed so that people around the world looking for the Commission's website might accidentally log on to it.  This was of concern to the Commission because the material on the website was very critical both of the Commission and of its Director General, Mr David Carse.  The website was entitled 'The Jersey Financial Scandals' Collection'.

4.        The applicant denied that the website had been created with the deliberate intention of luring away potential visitors to the Commission's website.  He pointed out that the design of the website was quite different from that of the Commission's website.  It is unnecessary for these purposes to describe the content of the applicant's website in any detail.  It is sufficient to state that it is highly critical of the Commission's performance of its functions and contains unflattering innuendos about its Director General, Mr Carse.  The website also portrays Jersey as a place where human rights are not respected and where regulated entities are involved in financial scandals.  The Commission took the view that this criticism was unfounded and malicious. 

5.        Miss Lacey for the Commission helpfully supplied me with a chronology of significant events, none of which was disputed by the applicant.  From this chronology it appears that on 4th November Mr Carse sent an email to Anchor enquiring whether the applicant, who was known to the Commission, was still employed by the company.  On 5th November Anchor confirmed to Mr Carse that the applicant was employed as the IT manager.  During the morning of 5th November a letter addressed to the applicant by the legal advisers of the Commission was hand-delivered to the applicant at his place of employment; the legal adviser had been unable to find the applicant's name in the local telephone directory, and other inquiries to trace a private telephone number were unsuccessful.  The letter alleged that the applicant was infringing the Commission's rights and required him to close down the website immediately.  The applicant replied on the same day denying any wrongdoing and pointing out that the information had been gleaned from other websites.  The letter from the legal advisers was then posted on the applicant's website demonstrating indirectly his connection with Anchor.

6.        On 8th November at 1209 Mr Bryant, a director of Anchor, sent an email to Mr Carse in the following terms:-

"Please be advised that a meeting of our board was convened this morning. 

At this meeting it was unanimously agreed that; despite correspondence being received at these offices from Mourants for Adrian Walsh, Anchor disassociates itself from the website that Adrian Walsh has set up.

It was further unanimously agreed that, until such time as the issues between Adrian Walsh, yourself and Mourants have been resolved, Anchor would suspend Adrian Walsh from his employment.

Clearly, it is hoped that this matter will, in no way, effect [sic] Anchor's ongoing license [sic] application."

Mr Carse replied as follows at 1217:-

"I think that these issues should be addressed in a formal letter.  I am about to have faxed over to you a letter dealing with Mr Walsh's behaviour and I would be grateful if you would reply to it."

7.        At about 1230 on 8th November Mr Carse wrote to Mr Bryant by fax in the following terms:-

"We spoke last week regarding the behaviour of one of your employees, Mr Adrian Walsh, in publishing insulting and defamatory material about the Commission and myself on the above website and on two other websites with similar names.  These appear to be designed to replicate the Commission's own website address.

Mourants, the lawyers acting for the Commission, have written to Mr Walsh to demand the removal of the website.  Judging by the comments published on the website, he has refused to do this. 

In the light of this, I would be grateful for your reply to the following questions:

(i)        What is Mr Walsh's current role and position within Anchor and how has this evolved since he joined the company?

(ii)       What knowledge and involvement does Anchor have in the activities of Mr Walsh in publishing the above website? 

(iii)      Does Anchor consider that behaviour of this kind is appropriate for an employee of a regulated entry?  Does it condone such behaviour?

(iv)      What action, if any, does Anchor propose to take in relation to Mr Walsh's activities?

I note from your email of today's date that Anchor wishes to distance itself from Mr Walsh and believes that this is a matter for Mr Walsh personally.  However, I wish to make it clear that I do not consider that this is a sustainable or an acceptable position.  Anchor is a regulated entity (albeit with transitional status) and Mr Walsh is an employee of Anchor.  Moreover, his website contains a thinly disguised reference to Anchor and what he considers to be the Commission's unfair treatment of it.  Therefore, it is he who has involved Anchor.

I would also draw to your attention the fact that on 21 April 2004, the same day as the offending websites were registered, Mr Walsh emailed the Commission to complain that the Commission was "using bad practice on our company" by allegedly taking action against its IT systems.  I wrote to Mr Shelton on 22 April 2004 to seek a further explanation of this complaint.  So far I have not received a reply."

8.        Later that day Mr Bryant replied to that fax as follows -

"Thank you for your fax of 8th November 2004.

Please be advised of the following:

(i)        Mr Walsh, for the past three years has been the IT Manager at Anchor.  Prior to that he was a trust administrator with the company.  As advised in my e-mail issued prior to receipt of your fax, Mr Walsh has now been suspended from Anchor pending the outcome of any action either you or the Commission may bring against him.

(ii)       Anchor had no knowledge or involvement in the activities of Mr Walsh in publishing the above website.  Clearly, the board of Anchor is now aware that this website exists. 

Checks carried out on Mr Walsh's Anchor PC confirm that the web-site in question was not published or updated from Anchor's premises.

(iii)      Anchor does not condone the publication of insulting and defamatory material about any institution, entity, or individual and does not consider this kind of behaviour to be appropriate.  Anchor regrets that it has been, indirectly, associated with this web-site but, as we are sure the Commission will appreciate, we cannot be held responsible for the actions of our employees outside of their normal hours of employment.

(iv)      Until such time as this matter has been resolved between Mr Walsh, the Commission and yourself, Anchor considers that it has taken appropriate action in suspending Mr Walsh from his employment at this time.

Finally, I can confirm that Anchor does not wish to pursue the matter relating to the Commission's IT systems raised by Mr Walsh in April this year."

9.        On 9th November at 0735 Mr Carse wrote to Mr Bryant by email -

"Thank you for this.  It is helpful to a certain extent, but does not I feel go far enough.  While you have suspended Mr Walsh, he remains your employee. He is continuing to publish malicious comments about the Commission on his website.  You say that you cannot be held responsible for the actions of employees outside their normal hours of employment.  But it cannot be acceptable for an employee of a regulated entity to publish offensive material about the regulator, and for the employer to disclaim responsibility for this.  Apart from anything else, there is the question of what constitutes Mr Walsh's "normal hours of employment".  He spoke to Mrs Lacey at Mourants on Friday at about 1.30 pm about the letter that had been sent to him.  Between then and 3.40 pm, he has posted Mourants letter on his website along with his comments on the letter.  My point is that this is not, as you claim, simply a matter between Mr Walsh and the Commission.  Anchor is also involved whether it likes it or not.  Mr Walsh is your employee and I assume that this is widely known in the industry.  By publishing the letter from Mourants, he has also published Anchor's name and publicly associated it with this dispute.  The correct approach therefore would be for Anchor to require Mr Walsh to desist from his activities and to cease to use the websites whose domain names replicate those of the Commission.  I look forward to your cooperation in this matter."

10.      At 1039 that morning Mr Bryant emailed Mr Carse to state that closure of the websites had been requested.  Later he emailed again to inform Mr Carse that the websites had been disabled.  It appears that the applicant was given an ultimatum by Anchor; if the websites were not closed down, his employment would be terminated.  Faced with that ultimatum the applicant had complied.

The claim

11.      In his notice of application the applicant, under the heading "Judgment, order, decision or other proceeding in respect of which relief is sought", has inserted "Article 8, The Financial Services Commission (Jersey) Law 1998:  Article 10 of the European Convention on Human Rights".  Article 8 of the 1998 Law contains the statutory powers of the Commission.  Article 10 of the European Convention on Human Rights provides protection for freedom of expression.  This right includes "freedom to hold opinions and to receive and impart information and ideas without interference by public authority ...".  In his oral submission the applicant told me that what was complained of was the decision to put pressure on Anchor to persuade the applicant to close down his website.  He contended that this was unlawful.  In the box headed 'relief sought' the applicant inserted:-

"Permanent injunction restraining the Commission from coercing my employer to take action against me and from itself taking any further action against me in relation to the matters posted on the Jersey Financial Scandals Collection website."

Statutory background

12.      Counsel for the Commission drew my attention to Article 7 of the 1998 Law which provides -

"Guiding principles

In exercising any of its functions the Commission may take into account any matter which it considers appropriate, but shall in particular have regard to -

(a)       the reduction of the risk to the public of financial loss due to dishonesty, incompetence or malpractice by or the financial unsoundness of persons carrying on the business of financial services in or from within the Island;

(b)       the protection and enhancement of the reputation and integrity of the Island in commercial and financial matters; and

(c)       the best economic interests of the Island."

13.      Counsel also referred to Article 8 which provides, so far as is material -

"Powers of the Commission

(1)       The Commission shall have such powers as are reasonably necessary for the carrying out of its functions or incidental to their proper discharge."

14.      Counsel further referred to Codes of Practice for Trust Company Business published by the Commission in October 2001.  Principle 1 is "A registered person must conduct its business with integrity".  Paragraph 1.1 provides that - "Failure to comply with the above principle will be considered amongst the most serious of breaches of the Codes".  Principle 3 is "A registered person must organise and control its officers effectively for the proper performance of its business activities and be able to demonstrate the existence of adequate risk management systems."  Paragraph 3.1 provides that "A registered person must:- 3.1.1 ensure their partners, directors, senior managers and all other employees are fit and proper for their roles".

Conclusion

15.      The applicant contended that a fundamental principle was at stake, namely his right to freedom of expression.  He asserted that his website contained a legitimate expression of his political views and that it was not material that he was an employee of a trust company which was liable to supervision by the Commission.  Counsel for the Commission accepted that the applicant, like everyone else, was entitled to be critical of the Commission, provided of course that such criticism did not amount to a breach of the law.

16.      The issue for me however is whether there is an arguable case that the Commission has abused or exceeded its statutory powers.  If there were evidence that the Commission had threatened Anchor with some penalty if the website operated by the applicant were not closed down there might be such an arguable case.  The legislature has vested wide powers in the Commission for the purposes set out in the Law.  It is axiomatic that those powers should be exercised with prudence and with discretion.  There is indeed a balance to be struck between the exercise of the Commission's statutory powers to protect the public interest and the freedoms of the individual protected by law.  I must not be taken as giving any indication as to where the balance might lie in circumstances of this kind if the Commission had required Anchor to procure the closing down of the website.   In my judgment however no such issue arises in this case.

17.      What has the Commission actually done?  It was faced with the publication of allegations about its competence and integrity which were likely, given the similarity of the website addresses on which the allegations were published and the website address of the Commission, to come to the attention of those wishing to contact or to glean information about the Commission.  Having regard to the duty of the Commission to protect and enhance the reputation and integrity of the Island in commercial and financial matters, it is hardly surprising that the Commission should have been concerned.  Whether or not any of the allegations was defamatory, many of them were certainly scurrilous.  The fact that the allegations were published by an employee of a regulated entity was, in my judgment, another legitimate cause of concern.  What the Commission did was to request the applicant, admittedly in strong terms, to cease publishing these allegations.  That request was then posted on the applicant's website with the result that his allegations became publicly associated with Anchor.  In short the applicant refused the request.  Mr Carse then made it clear to Anchor that he considered the conduct of the applicant to be inappropriate for an employee of a regulated entity, and sought to ascertain whether it was condoned by Anchor.  If it was not condoned, Mr Carse sought to ascertain what Anchor proposed to do about it.  Later Mr Carse expressed the view that it would be appropriate for Anchor to require the applicant, its employee, to desist.

18.      Is it reasonably arguable that this conduct was in breach of any duty of the Commission or otherwise unlawful?  I have no hesitation in answering that question in the negative.  In my judgment Mr Carse acted with moderation and with complete propriety.  There is no evidence that Anchor was coerced into requiring the applicant to close down his website.  The facts were drawn to the attention of Anchor which made its own judgment as to the appropriate course of action to be taken.  The suggestion made by the applicant that the only option available to the Commission was to approach him about their concerns seems to me to ignore both the statutory duties of the Commission and the obligations of a registered entity under the Law and Codes of Practice.  Furthermore the applicant's response to the Commission's approach was hardly encouraging.  I accordingly refuse leave to proceed by way of judicial review.

19.      I would add by way of postscript that nothing in this ruling affects, of course, any rights which the applicant may have as a matter of private law.  I have seen no evidence of any interference by the Commission in the contractual relationship between the applicant and Anchor.  That is not to say however that no such evidence exists.  It will be a matter for the applicant to decide, it is to be hoped with the benefit of legal advice, whether or not he has a cause of action against the Commission in private law.

Authorities

Financial Services Commission (Jersey) Law 1998.

Financial Services (Jersey) Law 1998.

Royal Court Rules 1992: Part 12A.