Jersey Unreported Judgments

Business - appeal against decision of the Master dated 15th December, 2014, to stay administrative appeal of W.

[2015]JRC094

Royal Court

(Samedi)

8 May 2015

Before     :		J. A. Clyde-Smith, Esq., Commissioner, sitting alone.
Between	The jersey Financial Services Commission		Appellant
And	W		Respondent
And	Her Majesty's Attorney General		Party Convened

Advocate B. H. Lacey for the Appellant.

Advocate P. C. Sinel for the Respondent.

Advocate D. J. Hopwood for the Party Convened.

judgment

the commissioner:

1.        The appellant ("the Commission") appeals against the decision of the Master of 15^th December, 2014, to stay the administrative appeal of W for a period of six months and this pursuant to the maxim "le criminel tient le civil en état".  The reasons for that decision are contained in the Master's judgment of that date (W-v-JFSC [2014] JRC 250). 

2.        The general background is that following the issuing of production notices to the trust company concerned ("the Trust Company") and its affiliates and the interviewing of some fifteen individuals including W, the Commission, having completed its investigation and its published Decision Making Process, informed W by letter dated 19^th June, 2014, that it had concluded, for the reasons given, that he had acted with a most serious lack of integrity and had displayed a level of incompetence of the most serious kind.  It had therefore decided firstly, to bar W from any involvement in the finance industry in the Island and secondly, to issue a public statement. 

3.        W has appealed those decisions and it was not in dispute that the appeal operates to suspend those decisions from coming into force until the appeal is determined by the Court or is withdrawn by W.  

4.        In August 2014, Advocate Sinel, who acts for W, was informed that there was a police investigation into the trust company but neither the police nor the Attorney General would give any details of the investigation or comment on its progress.  W therefore applied to the Master for a stay of his appeal under the maxim "le criminel tient le civil en état".  Advocate Hopwood, for the Attorney General, made the point that investigations of financial wrongdoing often take a protracted period and sometimes a number of years to complete.  

5.        The maxim was authoritatively considered by the Jersey Court of Appeal in Glazebrook v The Housing Committee [2000] JLR 301.  In that case, the Housing Committee applied unsuccessfully to stay Glazebrook's appeal against its decision to refuse her housing consent, whilst the police investigated her complaint that two officers of the Housing Committee had committed perjury, whose evidence she had given notice she intended to challenge at the appeal hearing.  The Housing Committee argued that there was a real danger of prejudice to those officers who might be defendants in criminal proceedings as there was a close link between some of the issues arising out of the challenge to the officers in the appeal hearing and those which would arise in any criminal proceedings for perjury.   The application was refused because the Housing Committee had failed to discharge the burden upon the appeal of showing cause why it should be stayed.  Quoting from the judgment of Southwell JA at page 305:-

"In the light of these Jersey and English authorities, I can summarise what is in my view the true application of the Jersey law principle that le criminel tient le civil en état in this way:

(a)       Where there are, or may be, concurrent civil and criminal proceedings, the Jersey courts have a discretionary power to control the conduct of the civil proceedings so as to ensure that there is no real danger of prejudice to the fair trial of existing or potential criminal proceedings.

(b)       The burden of persuading the court to exercise this power is on the person seeking such exercise.

(c)       If the same or similar questions of fact will have to be decided in both sets of proceedings, it will generally be wrong to allow a decision to be made in the civil action before it is made in the criminal proceedings, because that would create a real danger of prejudice to the fair trial of the criminal proceedings.

(d)       But it may be appropriate even in such a case to allow the interlocutory stages of the civil action to proceed so that there is not undue delay.

(e)       If and in so far as the civil action can be decided without impinging on the question of fact to be decided in the criminal proceedings, then the civil action can be allowed to go to trial."

6.        A stay pursuant to the maxim was refused by the Court in Haworth, Taylor and Tucker v Policy & Resources Cttee [2005] JLR 1, a case in which police officers had been arrested on suspicion of committing offences in relation to the misappropriation of police computer equipment in respect of which a criminal investigation had been instituted.  They were subsequently suspended from work pending a concurrent disciplinary inquiry into related allegations of misconduct.  They sought to restrain the defendant committee from holding their disciplinary hearings as the related criminal investigation had not yet been determined and it was not therefore known whether they would face any charges.  The application was refused in the light of undertakings given by the Deputy Chief Officer that there was no danger that the contents of the disciplinary hearings (held in private) would be leaked (paras 15-19).  Birt, Deputy Bailiff, expanded on the summary given in Glazebrook in this way:-

"15     Although the maxim is not quoted as such in English cases, the underlying principles in both jurisdictions are the same.  Helpful passages are to be found in two English cases.  The first is Jefferson Ltd v Bhetcha (2).  In that case the claimant was seeking summary judgment in respect of matters which were to be the subject of pending criminal proceedings.  At first instance, the judge either adjourned the application for summary judgment or stayed the whole action (it was not clear which.)  The Court of Appeal held that the judge had been in error, that the "right to silence" which was available in criminal proceedings did not apply in civil proceedings, that the burden of showing that a stay or adjournment of the civil proceedings in whole or in part was necessary lay on the defendant, and that in that case this burden had not been discharged.  We would refer in particular to two passages from the judgment of Megaw, LJ.  First [1979] 2 All ER at 1113:

'I should be prepared to accept that the court which is competent to control the proceedings in the civil action ... would have a discretion ... to stay the proceedings, if it appeared to the court that justice (the balance of justice between the parties) so required, having regard to the concurrent criminal proceedings, and taking into account the principle, which applies in the criminal proceeding itself, of what is sometimes referred to as the 'right of silence' and the reasons why that right, under the law as it stands, is a right of a defendant in criminal proceedings.  But in the civil court it would be a matter of discretion, and not of right.  There is, I say again, in my judgment, no principle of law that a plaintiff in a civil action is to be debarred from pursuing that action in accordance with the normal rules for the conduct of civil actions merely because so to do would, or might, result in the defendant, if he wished to defend the action, having to disclose, by an affidavit under Ord. 14, or in the pleading of his defence, or by way of discovery or otherwise, what his defence is or may be, in whole or in part, with the result that he might be giving an indication of what his defence was likely to be in the contemporaneous criminal proceedings.  The protection which is at present given to one facing a criminal charge (the so-called 'right of silence') does not extend to give the defendant as a matter of right the same protection in contemporaneous civil proceedings.'

16       Later, on the same page (ibid):

'In my judgment, while each case must be judged on its own facts, the burden is on the defendant in the civil action to show that it is just and convenient that the plaintiff's ordinary rights of having his claim processed and heard and decided should be interfered with.

Of course, one factor to be taken into account, and it may well be a very important factor, is whether there is a real danger of the causing of injustice in the criminal proceedings.  There may be cases (no doubt there are) where that discretion should be exercised.  In my view it would be wrong and undesirable to attempt to define in the abstract what are the relevant factors.  By way of example, a relevant factor telling in favour of a defendant might well be the fact that the civil action, or some step in it, would be likely to obtain such publicity as might sensibly be expected to reach, and to influence, persons who would or might be jurors in criminal proceedings.  It may be that, if the criminal proceedings were likely to be heard in a very short time ... it would be fair and sensible to postpone the hearing of the civil action.  It might be that it could be shown, or inferred, that there was some real, not merely notional, danger that the disclosure of the defence in the civil action would, or might, lead to a potential miscarriage of justice in the criminal proceedings, by, for example, enabling prosecution witnesses to prepare a fabrication of evidence or by leading to interference with witnesses or in some other way.'

17       Both Glazebrook (1) and Jefferson involved civil proceedings.  The case of R v BBC, ex p. Lavelle (3) concerned disciplinary proceedings against an employee of the BBC in circumstances where the employee had been charged with theft of some tapes belonging to the BBC which had been found at her home.  The BBC took the view that the removal of the tapes was misconduct which justified her dismissal regardless of whether she was guilty of theft.  It therefore wished to hold a formal disciplinary hearing with a view to her dismissal.  The employee sought the intervention of the High Court.  Woolf, J refused to intervene and had this to say ([1983] 1 All ER at 255):

'....[I]t seems to me that whilst the court must have jurisdiction to intervene to prevent a serious injustice occurring, it will only do so in very clear cases in which the applicant can show that there is a real danger and not merely a notional danger that there would be a miscarriage of justice in the criminal proceedings if the court did not intervene.'

18       Some of the matters which he took into account in reaching his decision to refuse relief to the employee can be found in his conclusion (ibid. at 256):

'Furthermore, approaching the matter in the way indicated by Megaw LJ and Phillips J, I have considerable reservations whether or not there was any risk of a real injustice to the applicant in this case.  The proceedings before Mr Singer were to be in private.  The applicant had already on 2 February given a version of events which was presumably substantially true.  Although a witness from the BBC was to be an important witness at the criminal trial, it is fanciful to suggest that he would fabricate his evidence to incriminate the applicant in some dishonest manner.  Finally, the matters which are going to have to be proved in the criminal proceedings are much more extensive than those in the disciplinary proceedings.  In disciplinary proceedings the removal of the tapes to where they were found would be sufficient to establish a disciplinary offence in the contention of the BBC.'

19       In our judgment, it is clear from the cases that, in the ordinary course, the fact that a defendant has been charged with a criminal offence should not prevent a third party from seeking to enforce a civil claim which he may have against the defendant or, in the case of an employer, from seeking to dismiss the defendant if he has grounds upon which to do so.  The burden lies upon the defendant to show that there is a real danger of injustice to him in the criminal proceedings so that the third party should be prevented from enforcing his ordinary rights, whether as a plaintiff in civil proceedings or as an employer.  Clearly, as Southwell JA indicated, this may arise where the very same issue has to be resolved in civil proceedings which will be publicly known."

7.        The Court went on to say obiter that had the disciplinary proceedings not been in private and without the undertakings, it would have granted a stay because although no criminal proceedings had been instituted, and the Court had very little evidence as to what if any criminal charges might be brought, the allegations in relation to the desk top computers were so closely related that there was a real danger that they raised the same issues. 

8.        Having explored the application of these principles to the facts in a number of first instance English decisions in all of which stays were refused (R v BBC Broadcasting Corporation ex parte Lavelle [1983] 1 WLR 23; Secretary of State for Trade and Industry V Crane & Anor [2004] BCC 825; Secretary of State for Trade and Industry v Carr [2006] BCC and Financial Services Authority v Anderson & Ors [2010] EWHC 308), the Master reached the following conclusions at paragraphs 16 and 17:-

"16     Ultimately, it was not disputed by any of the parties that there is a discretion vested in me to stay proceedings where the continuation of one part of the proceedings may prejudice the fairness of the trial of the other proceedings.  It also was not really in dispute that the power to be exercised is one that can only be exercised with great care and where there is a real risk of serious prejudice which may lead to injustice.  It should also be remembered that the judge in criminal proceedings has extensive powers to control those proceedings and ensure fairness.

17       I also accept that what the Court should be concerned about, as referred to in Crane, is a manifest risk of injustice rather than the existence of a mere possibility of injustice.  I also must have regard to the strong public interest in the respondent being able to exercise its functions just as there is a strong public interest in disqualification proceedings being exercised for the protection of the public.  It is clearly important that the respondent is not unduly restricted in the exercise of its powers because of the possibility of a criminal investigation.  The issue for me to decide is whether, and if so how, I should exercise the discretion vested in me to say W's appeal, having regard to the above principles."

9.        No point was taken by either counsel as to the accuracy of this summary, which I endorse.  The complaint of the Commission is as to the way the Master applied those principles to the facts of this case, a case which involved the Island's financial regulator.  The Master's decision can be summarised in this way:-

(i)       The mere fact that the matter is only at the stage of a criminal investigation does not prevent the maxim from applying. 

(ii)      The public statement that W had acted with a most serious lack of integrity was capable of overlapping with the finding of dishonesty in a criminal trial. 

(iii)     If there is to be a prosecution, then, bearing in mind W's position in the trust company (as a principal person and significant shareholder) there is a material risk that it would involve W and allegations of dishonesty against him. 

(iv)     That it was right to assume that for the same reasons W was under investigation. 

(v)      The Commission had been able to exercise its powers because issues between the regulator and the regulated are private.  It was only when the exercise of its powers led to public statements that the maxim would come into play. 

(vi)     As W was challenging not just the conclusions of the Commission but the underlying findings of fact which gave rise to those conclusions, there was a significant risk of the Royal Court reaching conclusions in respect of the same matters that he was assuming were under investigation and which may lead to a criminal prosecution.  Quoting from paragraph 47:-

"47 It is the fact of the criticism of W in the public statement coupled with different divisions of the Royal Court considering what appear to be the same essential facts and documents that in my judgment gives rise to a real risk of serious prejudice."

(vii)    Quoting from paragraphs 48 and 49:-

"48     The dilemma this case raises is that the more serious the (mis)conduct of a financial services business or an individual within that business that is under investigation, the more likely it is that the maxim may come to play.  As I have already found, however, such a possibility does not prevent the respondent from investigating matters and acting; what it might prevent is an ultimate public appeal against its decisions, should those decisions be challenged.  In my judgment that is outweighed by ensuring that the safeguards of a criminal prosecution are preserved.  If that were not the case, then the maxim would in practice never apply.  Yet, to quote Southwell JA, as he stated in Glazebrook:-

'If the same or similar questions of fact will have to be decided in both sets of proceedings it will generally be wrong to allow a decision to be made in the civil action before it is made in the criminal proceedings, because that would create a real danger of prejudice to the fair trial of the criminal proceedings.'

49       I am of the view that in this case there is a significant overlap between the Royal Court considering W's appeal and any later criminal trial which has led me to conclude that a stay should be granted because there is a serious risk of real prejudice.  In my judgment, the Royal Court, in hearing W's appeal, will have to consider and pronounce upon the same or similar facts as any criminal prosecution against W, if one is brought.  It will have to consider and form a view as to whether the respondent's Board was right to conclude that W demonstrated a most serious lack of integrity.  The issue is not just a risk of adverse publicity because I consider that publicity alone can be usually dealt with by appropriate directions from a trial judge in any criminal prosecution.  Rather the issue is the fact that the Royal Court, by the time of any prosecution, if I were to accept the respondent's and the Attorney General's arguments, would already have determined in a civil court the same or similar question of fact, that could arise in a criminal trial, thus endorsing any public statement that was then issued.  It is also not speculation at this stage, given W's roles, to assume that W would be at least part of, if not at the centre of, any prosecution, should one be brought."

10.      The Master then went on to limit the duration of the stay in this way:-

"52     In the exercise of the discretion vested in me, the view I have reached therefore is that a hearing of the appeal should at present be stayed until 31st May, 2015.  The purpose of granting a stay for this period is to allow further time to the Attorney General to proceed with his investigations.  If by May the position has altered then whether or not the stay is maintained can be considered at that time.  If on the other hand the position remains the same, then an application to extend the stay for a further period can be made.  I consider an initial stay for this length of time, as matters stand, strikes the appropriate balance between the concerns expressed by the appellant, which have led me to conclude that a serious risk of prejudice does exist, and the fact that the involvement of the Attorney General appears only to be at the investigation stage."

11.      Finally, it is right to note that the Master required that the preparation for the appeal should continue in the meantime as follows:-

"54     In light of my decision I will hear further argument on what steps should be taken by reference to the principles set out above.  However, subject to hearing further argument, the general approach from the cases I have referred to, is that evidence should be filed so that the appeal is ready to proceed, once any further stay expires.  This is subject to consideration of appropriate safeguards for any evidence filed in respect of the appeal so that such evidence is not disclosed to the Attorney General pursuant to Article 38 gateway while the stay is in place."

Attorney General's contentions

12.      The Attorney General could not identify any circumstances that should prevent the Commission from discharging its duty to the public.  Quoting from paragraph 26 of Advocate Hopwood's skeleton argument before the Master:-

"26      As the English authorities say, to grant the application would be to effectively extend the right to silence from criminal into civil proceedings.  In civil proceedings of a public-law nature, the effect may be even more chilling: an errant company director could effectively nullify the regulator's statutory power and duty - and the perverse result could be that the worst offenders, over whom the regulator's control was most needed, would be the hardest to regulate because they faced the highest likelihood of prosecution."

13.      Advocate Hopwood had submitted to the Master that W had raised only a notional or theoretical danger of injustice, failing to displace the burden upon him.  No charge against him had as yet been laid and accordingly no criminal proceedings are pending. 

W's contentions

14.      It is not necessary to set out all of the submissions made by Advocate Sinel to the Master, because he supported the Master's decision in what he described as, and I agree was, a careful judgment.  It was, he said, a case management decision and bearing in mind that we are now five months into the stay, the appeal was a waste of everyone's time.  The Commission think they are right about everything and no one else has any rights.  It was out of control and there were no checks or balances to the exercise of its powers. 

15.      It was obvious, Advocate Sinel submitted, that the investigation was about the trust company and as W was a driving force behind the trust company, he would be at the centre of the investigation.  The problem was the extremely damaging nature of the proposed public statement, which would receive substantial publicity in this small jurisdiction, whose finance industry had an even smaller community of some 12,500.  The statement would be available on the Commission's website for all to see.  It would be impossible, he said, for W to have a fair trial if that statement was published. 

16.      Advocate Sinel dismissed my suggestion that for a prosecution to succeed, the Attorney General had an interest in ensuring a fair trial.  He regarded the Attorney General as hostile and someone who worked very closely with the Commission - "that was how these things were done".

17.      In any event, W (who now lives and works outside the Island) was not engaged in the financial services industry in the Island and had given undertakings not to do so.  There was therefore no risk to the public and no prejudice to the Commission. 

Decision

18.      It is well established that when considering an appeal against a decision of the Master, the Court should exercise its own discretion, but may give such weight, as it thinks fit, to the manner in which the Master exercised his discretion (Murphy v Collins [2000] JLR 276). 

19.      Substantially for the reasons put forward by Advocate Lacey for the Commission, I agree that the Master has erred in the exercise of his discretion, in a decision which has serious implications for the Commission in its ability to fulfil its regulatory functions. 

20.      It is implicit in the Master's decision that absent any change in the factual matrix, the stay will be extended on 31^st May, 2015, and from time to time thereafter, so that in effect, there will be an indefinite delay in W's appeal pending the outcome of the criminal investigation whose nature and breadth is unknown, during which time the decisions reached by the Commission will be held in abeyance.  W has not even been interviewed by the police and the investigation may take years to complete; it is well known that such investigations can be very lengthy. 

21.      The Master focused exclusively on the public statement that the Commission decided to issue, but it is both the directions barring W from involvement in the finance industry in the Island and the public statement that will remain in abeyance for this indefinite period.  At paragraph 41 of his judgment, the Master said that the Commission had been far from powerless in terms of protecting the financial position of the Island.  It is true that the Commission has undertaken an investigation and taken some regulatory action, but it has been prevented from acting on that investigation in relation to W by issuing the directions and the public statement.  These are the powers available to the Commission in respect of W but it has been rendered powerless pro tem to implement them. 

22.      It is not satisfactory for the Commission to be told that it should rely on undertakings from W not to involve himself in financial services within the Island or to be told by W that through such undertakings, there are currently no regulatory risks.  The issue of undertakings was considered in Secretary of State for Trade and Industry v Carr [2005] EWHC 1723 (Ch), a case concerning the filing of written evidence in disqualification proceedings before the commencement of criminal proceedings and where a stay was refused.  Richards J said this at paragraph 49:-

"49     While taken together these factors have some force, I accept Mr Davis-White's submission that it would not be right to order a stay of the disqualification proceedings on case management grounds.  Such proceedings are brought in the public interest and they serve an important purpose.  The public interest is best served by such proceedings being brought to a conclusion as soon as reasonably practicable.  While Mr Carr's proposed undertaking is designed to achieve as much as possible of the effect of a disqualification order, Mr Jones accepts that it achieves less than an order.  For example, breach of the undertaking would be a civil contempt of court with a maximum penalty of two years' imprisonment, while breach of a disqualification order is an offence punishable by a maximum of five years' imprisonment.  There is no public register on which the undertaking could appear.  While Mr Carr is willing to give an undertaking to be personally liable for debts as provided by s.15 of the 1986 Act as if a disqualification order had been made, there can be no similar liability imposed on his associates (cf. s.15(1)(b).  Moreover, if a respondent is to be prohibited from acting as a director, the public is entitled to know as early as reasonably practicable the grounds on which he has been found unfit."

23.      In the same way, the public in Jersey is entitled to know that the Commission has decided to bar W from involvement in the financial services industry as early as reasonably practicable and the grounds upon which he has been so barred.  The same applies to regulators in the jurisdictions outside Jersey, where W appears to be conducting financial services businesses, with whom the Commission is permitted, under Article 8(3) of the Financial Services Commission (Jersey) Law 1998 to exchange information.  

24.      There is some force in Advocate Lacey's submission that any delay in bringing into effect its regulatory decisions, save as envisaged by statute or by established case law, by a stay of the appeal proceedings, let alone an indefinite stay, could operate to:-

(i)       Place at risk for an extended period investors and the public as a whole;

(ii)      Damage and undermine the Commission's ability to discharge its statutory functions and duties; and so

(iii)     Damage the confidence placed in the Commission by members of the Island's finance industry, investors, the public and sister regulators around the world; and so

(iv)     Undermine Jersey's reputation as a leading offshore jurisdiction in financial and commercial matters. 

There is therefore a strong public interest in W's appeal being determined as expeditiously as possible. 

25.      Leaving aside the fact that under Royal Court Rule 15/2(5), appeals against decisions of public bodies are intended to be resolved expeditiously (within four months), the Master has, in my view, failed to give proper weight to the public interest in W's appeal being determined without delay.  As Ferris J said in Secretary of State for Trade and Industry v Crane at paragraph 9:-

"...

(viii)    The cases in which concurrent disqualification proceedings and civil proceedings arising from the same conduct are most likely to exist are cases where serious misconduct is alleged.  In such cases the public interest in disqualification proceedings being brought to a substantive hearing is particularly strong.  As Jacob J observed in Jibrail v Secretary of State for Trade and Industry (unreported, November 20, 1997):

'Disqualification proceedings exist for the protection of the public.  It can hardly be the case that the more deserving an individual is of disqualification, the more he is in a position to say he is entitled to a stay or that a stay should be granted merely because he worries about his right to silence.'"

26.      The Privy Council in Financial Institutions Services Ltd v Panton [2003] UKPC 86 was concerned with civil proceedings brought by a body set up by government in the public interest to manage certain financial institutions.  It confirmed the general principle at paragraph 11:-

"11     Both courts began with the need to balance justice between the parties.  The plaintiff had the right to have its civil claim decided.  It was for the defendants to show why that right should be delayed.  They had to point to a real and not merely a notional risk of injustice.  A stay would not be granted simply to serve the tactical advantages that the defendants might want to retain in the criminal proceedings.  The accused's right to silence in criminal proceedings was a factor to be considered, but that right did not extend to give a defendant as a matter of right the same protection in contemporaneous civil proceedings.  What had to be shown was the causing of unjust prejudice by the continuance of the civil proceedings."

It went on to say at paragraph 14:-

"14     The plaintiff in its affidavit in response said that by its very nature it was a temporary institution.  Its purpose is to divest itself of all the assets acquired so as to reduce the substantial public debt that has been incurred as a result of the payments to the depositors in those financial institutions.  The plaintiff's mandate and the public interest required that its claims be pursued expeditiously and that the operations of the plaintiff be wound down as soon as possible.  Any delay in this matter being tried would therefore severely prejudice the plaintiff and would not be in the public interest."

The appellants in that case failed to make out their case for a stay.

27.      The Financial Services Authority v Anderson & Others [2010] EWHC 308 (Ch) was also concerned with a financial regulator where a stay was refused.  Having cited Panton, Briggs J said this at paragraph 19:-

"19     Although there is not a fresh statement of the principles, the Privy Council's approval of the principle which I have just described (which had been applied by the courts below) demonstrates its continuing vitality.  It is not enough, for example, that both the civil and criminal proceedings arise from the same facts, or that the defence of the civil proceedings may involve the defendants in taking procedural steps such as exchanging witness statements and providing disclosure of documents which might not be imposed upon them in the criminal proceedings."

And then, at paragraph 26:-

"There is only a criminal investigation at present, not criminal charges.  A trial must therefore, if criminal charges are brought, be many months away.  In my judgment there is no sufficient reason to suppose that potential jurors will include anyone with a present interest in the publicity about these proceedings which sticks in his or her mind when criminal proceedings come on for trial."

A stay was again refused. 

28.      The Master accepted at paragraph 49 of his judgment that the issue of publicity can be dealt with by appropriate directions from a trial judge in any criminal prosecution but his concern related to different divisions of the Royal Court considering what appeared to him to be the same facts.  However, a trial judge is well equipped to ensure a fair trial by controlling the evidence that is before that trial.  No judgment of the Court on the appeal could be used by the prosecution in any criminal trial as proof of W's guilt. 

29.      I agree with Advocate Lacey that on the facts of this case, W has failed to discharge the burden upon him.  There is no evidential basis that the risk of prejudice is real - only submissions.  His case is based upon speculation as to what criminal proceedings may ensue, if any.  As the Master observed at paragraph 51:-

"Equally it is right to observe that any investigation is just that at present.  No decision to prosecute has been made and it is not for the Royal Court or the Master to trespass on the Attorney General's jurisdiction.  There may therefore never be a prosecution.  Even if there is, it is possible that any prosecution that occurs might not involve W.  Any prosecution might also not overlap with the public statement, contrary to the assumptions I have made."

30.      In essence, the Master in my view failed to give sufficient weight to the fact that this is a criminal investigation about which little is known (in contrast for example to the facts in Haworth where the officers concerned had been arrested and it was clear what allegations were being investigated) and to the strong public interest in the Commission being able to fulfil its regulatory functions. 

31.      If real prejudice were established, then under the maxim, a stay would be granted (assuming safeguards could not be imposed to obviate the same) pending the outcome of the criminal investigation/proceedings, but in this case, the Master has granted a six months' stay "to allow further time to the Attorney General to proceed with his investigations".  I do not think that by so ordering the Master was seeking to control or exert influence over the parallel criminal investigation, but there is some merit in Advocate Lacey's submission that the maxim should apply to stay the appeal until the criminal investigation/proceedings are concluded or not at all. 

32.      There are wider implications of the decision of the Master upon the Commission's ability to discharge its regulatory functions.  Indeed, I am informed that there is an appeal by another individual involved in this matter, which is now in abeyance as a consequence of the Master's ruling.  The effect of stays being granted in these circumstances may be that the Commission will routinely find itself prevented from acting in scenarios involving the worst offenders whose conduct not only attracts the regulator's attention, but also that of the police and the Attorney General.  The point was made by Advocate Hopwood namely that the result could be that the worst offenders over whom the regulator's control was most needed would be the hardest to regulate because they faced the highest likelihood of prosecution.  

33.      It is clear from the English authorities that the test is strictly applied in that jurisdiction with stays being most reluctantly granted (see "The Timing of Tortious and Criminal Actions for the same wrong" by Matthew Dyson, 2012 Cambridge Law Journal).  In his submissions before the Master, Advocate Sinel placed some reliance on the decision in DPR Futures Limited [1989] 2 WLR 778 where Millett J was satisfied that there was a real risk to a fair criminal trial if the civil proceedings (brought by the joint liquidators of a company placed in a compulsory winding-up) were heard before that criminal trial.  Despite that finding, he still declined to grant a stay because a large number of clients who had invested through the company would suffer serious injustice if the civil proceedings were delayed and because the interests of the respondents could be safeguarded in other ways. 

34.      The possible application of the maxim in this case will no doubt be kept under review, in particular at the hearing of the appeal or if criminal proceedings are actually instituted.  It is clear that the test should be applied strictly and even if at some future stage real prejudice can be established by W, it may be possible to avoid a stay of the appeal in the light of the strong public interest in it proceeding without delay, by imposing other safeguards to protect W's interests.  

35.      In the premises, I allow the appeal and set aside the Master's decision.  The application for a stay is dismissed. 

Authorities

W-v-JFSC [2014] JRC 250.

Glazebrook v The Housing Committee [2000] JLR 301.

Haworth, Taylor and Tucker v Policy & Resources Committee [2005] JLR N 1.

R v BBC Broadcasting Corporation ex parte Lavelle [1983] 1 WLR 23.

Secretary of State for Trade and Industry V Crane & Anor [2004] BCC 825.

Secretary of State for Trade and Industry v Carr [2006] BCC.

Financial Services Authority v Anderson & Ors [2010] EWHC 308.

Murphy v Collins [2000] JLR 276.

Secretary of State for Trade and Industry v Carr [2005] EWHC 1723 (Ch).

Financial Services Commission (Jersey) Law 1998.

Financial Institutions Services Ltd v Panton [2003] UKPC 86.

The Timing of Tortious and Criminal Actions for the same wrong by Matthew Dyson, 2012 Cambridge Law Journal.

DPR Futures Limited [1989] 2 WLR 778.