Jersey Unreported Judgments

Business - reasons for granting further stay of appellant's appeal.

[2015]JRC241

Royal Court

(Samedi)

25 November 2015

Before     :		Advocate Matthew John Thompson, Master of the Royal Court
Between	W		Appellant
And	Jersey Financial Services Commission		Respondent

W did not appear and was not represented.

Advocate B. H. Lacey for the Respondent.

judgment

the master:

1.        This judgment represents my detailed written reasons for granting a further stay of the appellant's appeal against a decision of the respondent to issue directions under Article 23(1) of the Financial Services (Jersey) Law 1998 ("the Law") and to make a public statement pursuant to Article 25 of the Law. 

2.        This matter has already been subject to a number of judgments before me, the Royal Court and the Court of Appeal.  Without setting out the procedural history in detail the respondent has filed its affidavit in response to the notice of appeal served by the appellant as is required by Rule 15/3(1) of the Royal Court Rules 2004, as amended.  To date the appellant has not filed an affidavit. 

3.        Part of the reason for this not happening related to arguments about the scope of discovery to be provided by the respondent which were reported at UV and W-v-Jersey Financial Services Commission [2014] JRC 202, W-v-Jersey Financial Services Commission [2015] JRC 017 and W-v-Jersey Financial Services Commission [2015] JCA 060. 

4.        There were also issues about whether or not the appeal should be stayed pending a criminal investigation.  I granted a stay for the reasons set out in my judgment at W-v-Jersey Financial Services Commission [2014] JRC 250.  Commissioner Clyde-Smith allowed an appeal by the respondent against that decision reported at Jersey Financial Services Commission-v-W [2015] JRC 094.  An extension of time for leave to appeal was refused by W. J. Bailhache, Bailiff sitting as a single judge of the Court of Appeal reported at W-v-Jersey Financial Services Commission [2015] JCA 135.  This judgment is material to the matters before me because they refer to the appellant having been seriously ill since mid-March 2015. 

5.        Paragraph 2-4 of the Bailiff's judgment state as follows:-

"2.      On 5th June, 2015, Messrs Sinels, on behalf of the applicant, sought an extension of time within which to appeal.  The application for an extension was filed on the same day upon which the time for an application for leave to appeal had to be filed.  The reasons for seeking an extension of time are that the applicant has been suffering ill health.  He has been seriously ill since mid-March 2015 and undergoing a number of medical tests.  A medical report dated 25th March, 2015, from a hospital in England and Wales accompanied the application by Messrs Sinels, and was itself supported by a further hospital report dated 27th April, 2015, and by a letter from the Applicant's general practitioner dated 8th May, 2015.  The basis of the application from Messrs Sinels is that that firm had been unable to obtain instructions from the Applicant who was said to be on medication including strong pain relief medication. 

3.        The application was not accompanied by any sworn affidavit, although I have accepted for the purposes of this decision the medical information as presented in the hospital and general practitioner reports as being accurate. 

4.        I note that in the general practitioner's letter of 8th May, he indicates that the applicant has medical conditions which "have had a severe impact on his everyday function.  He will certainly be unable to sit for any prolonged periods that allow him to conduct any meaningful review of any documentation.  His mental ability I am sure is also affected by the ongoing background of pain as well as the concerns regarding the possible causes of his seizure.  I am quite sure that the physical discomfort and stress caused by having to prepare reports and review documentation at this stage would be very detrimental to his psychological and physical well-being.  I trust that the above information will be taken into due consideration, in considering the request from the patient to defer court proceedings until he is enjoying a better state of health."

6.        In relation to whether or not the appellant was able to give instructions to his lawyer to pursue an appeal, Bailhache, Bailiff concluded as follows:-

"Having reviewed the medical reports and information put before me by Messrs Sinels, I am not satisfied that there is anything sufficient to justify an extension of time being granted.  There is clearly no doubt that the applicant has some medical problems which require attention.  One can have every sympathy with the applicant in that connection, but I do not think they are sufficient for me to reach the conclusion that he was unable to give instructions to his lawyers as to whether or not to enter an appeal."

7.        On 24^th July, 2015, Commissioner Clyde-Smith determined the costs of the appeal before him as to whether not the appellant's appeal should be stayed pending a criminal investigation.  Paragraphs 3 to 9 of that judgment are also material to the appellant's health and stated as follows:-

"3. The Court has now received an affidavit from Mrs W, the wife of W ("Mrs W") in which she sets out the recent history of the medical problems that have beset W and she concludes at paragraph 8:-

"The appellant remains in serious poor health such that he has been and is unable to liaise with his lawyers and provide proper instructions in respect of this litigation.  As a result Sinels are unable to continue to act for the appellant."

And at paragraph 10:-

"Upon the evidence produced it can clearly be seen that the appellant is unable through ill-health to give instructions on this matter to Sinels and unable to attend or be represented at the Hearing."

It would seem from the Meta data extracted from the affidavit that Sinels had involvement in producing the document that became Mrs W's affidavit, although the extent of that involvement is unknown. 

4. Attached to the affidavit is a short letter from W's General Practitioner, in which he confirms only that "he is currently not well enough to attend future Court hearings until his symptoms are more stable."  In a lengthier letter of 6th July, 2015, he says this:-

"We understand that this patient is involved with complex legal matters in Jersey.  Currently his medical condition is not stable, not adequately treated and not adequately investigated.

We would be very grateful if we could be given extra time to allow this to happen."

In neither letter does the General Practitioner advice upon the ability of W to give instructions.  It would seem from the Meta data extracted from the affidavit that Sinels had involvement in producing the document that became Mrs W's affidavit, although the extent of that involvement is unknown. 

5. Since then, the Court has also received a report from Professor M C Walker, a consultant neurologist, dated 9th July, 2015, following a consultation in London to which W was clearly able to travel.  It goes into detail about his medical condition and gives advice as to his treatment but nowhere does it opine upon the ability of W to give instructions to his lawyer. 

6. The issue of costs arising out of the application for a stay and the appeal before the Royal Court is not complex.  There is no requirement for W to attend in Jersey physically, but simply to give instructions.  The order sought by the Commission is manifestly reasonable, namely that the costs of the hearing before the Master and of the appeal before the Royal Court should be costs in the cause, and this in recognition that it was not unreasonable for W to have brought his application for a stay which was successful before the Master. 

7. Advocate Lacey, for the Commission, wrote to Sinels on 19th May, 2015, proposing orders to this effect in order to save further costs and that proposal was rejected. 

8. I was not satisfied on the medical evidence before me that W was unable to give instructions on what is a very discrete and straightforward issue and concluded that the original order sought by the Commission should therefore be made.  Yet another adjournment and the incurring of yet more costs were not justified. 

9. In view of W's rejection of the proposal put forward by the Commission in relation to costs, I also granted the Commission its costs of and incidental to the application for costs and the hearings before me on 2nd July and 16th July, 2015."

8.        On 27^th August, 2015, Professor Walker a consultant neurologist at the National Hospital for Neurology and Neurosurgery, London reported as follows about the appellant:-

"The medication is being adjusted at the moment, as he continues to have seizures.  Both the medication and the seizures are having a considerable impact on his cognition and his concentration.  Because of this [W] would not be in a position to prepare an affidavit. 

Moreover, the lack of sleep and stress associated with dealing with legal documents is undoubtedly having an effect upon his health, worsening his seizures control. 

It is likely that the seizures will be controlled within the next 12 months with medication, and he will then be in a much better position to comply with the court."

9.        In light of this evidence, at a hearing on 12^th October, 2015, where the appellant was seeking a stay, I ordered the provision of further medical evidence as follows:-

"1.      by 5.00 p.m. Monday, 9th November, 2015 the Appellant or someone duly to authorised on his behalf do swear and file with the Judicial Greffier and the Respondent an affidavit exhibiting an independent medical report advising whether the Appellant is by reason of serious ill health unable to take all or any of the following steps namely:-

(a)       to instruct a lawyer to represent him in respect of his administrative appeal against a decision of the Respondent to issue public statements about the Appellant and certain conclusions the Respondent had reached about the Appellants conduct;

(b)       to instruct a lawyer to prepare a substantive affidavit in response to the affidavits filed by the Respondent in the administrative appeal;

(c)       to prepare himself without legal representation, an affidavit to respond to the affidavits filed by the Respondent;

(d)       whether legally represented or not, to take part in a final hearing to determine his appeal;

(e)       whether the Appellant would be able to conduct such proceedings himself;

(f)        to give instructions to a legal adviser or other appropriately qualified individual to assess and respond to claims for costs by the Respondent which the Appellant has been ordered to pay."

2. if the advice received indicates that the Appellant is not presently able to carry out any of the tasks referred to in paragraph 1 of this order by reason of serious ill health, the independent report shall set out by what period it is estimated that the Appellant will be able to carry out such tasks as far as is possible."

10.      In response to this order I received an affidavit from Mrs W and a letter from Dr Robert Powell a consultant neurologist at Morriston Hospital, Swansea who is treating the appellant. 

11.      His letter included the following:-

"Our impression is that he has a new and explosive onset of focal epilepsy with a seizure onset in the left parietal lobe.  As yet investigations have not revealed a cause for this.  His seizures are currently well controlled on a combination of two antiepileptic drugs leveltriacetam 750mgs bd and sodium valproate 500mgs bd.  Unfortunately however he is experiencing significant side effects including a tremor and difficulties with concentration, memory and following conversations.  We are therefore in the process of making gradual reductions to the dose of sodium valproate.

This has been a very significant medical event for [W] from which he is slowly recovering.  Having reviewed his my feeling is that he is not currently capable of participating in the ongoing legal case and is not in a position to prepare an affidavit himself or to take part in any hearings in person.  I am afraid there is no way of making an exact prediction of his prognosis over the next months and years.  I am hopeful that his antiepileptic medication will continue to control his seizures and if we are successful in reducing the doses of medication his cognitive function including concentration and memory will improve.  It is possible however that reducing the medication will lead to a return of his seizures and alternative treatments may need to be considered.

Finally I think the stress of the legal process is undoubtedly impeding [W's] recovery from a serious illness and it is my feeling that this should be put on hold until he is capable of complying with the process.  Again I am afraid that I am unable to give a timeframe for this however I would have thought 3-6 months would be a reasonable estimation."

12.      Advocate Lacey for the respondent did not challenge the finding of epilepsy.  However, she pointed out that the report was not clear about the ability of the appellant to give instructions to a lawyer generally, to instruct a lawyer to prepare an affidavit or to instruct a lawyer in respect of costs orders made in the respondent's favour.  She contended it was not therefore clear whether or not the appellant could give instructions even if he could not prepare an affidavit himself or represent himself. 

13.      Sinels Advocates, who remain on the record for the appellant, have taken the stance that the appellant is unable to give instructions and therefore they cannot act for as long as this state of affairs continues. 

14.      The reason why the respondent is concerned about the lack of clarity in the response from Dr Powell is because the appellant or Mrs W on his behalf may be taking steps which amount to financial services activity.  It is important for the respondent to be able to publicise its decision so that other regulators, investors and members of the public are aware of the conclusions it has reached in relation to the appellant. 

15.      Advocate Lacey referred me to two matters in support of these concerns. 

16.      Firstly, in a detailed without prejudice letter written to the respondent in respect of which Mrs W waived privileged by referring it to the court in an earlier affidavit, it is clear that either the appellant or Mrs W is involved in a commercial transaction to repay certain investors who lost money in their previous dealings with the appellant and the financial services business he operated in Jersey.  It is not clear whether Mrs W is taking these steps to help her husband sort out these losses or whether she is doing so as front on his behalf.  What is clear that a firm of English solicitors have been instructed by the appellant or by Mrs W. 

17.      More recently the respondent has just become aware that Mrs W is the beneficial owner of a company looking to reach a commercial deal with those investors who have lost money.  She is said to be the beneficial owner at least of one of the companies involved in the proposed transaction and therefore is giving instructions to English solicitors.  Again it is not clear whether Mrs W is doing this to sort out the difficulties the appellant faces because he cannot act for himself or whether she is acting effectively as a representative for the appellant. 

18.      These matters do not sit easily with the medical evidence received.  On the one hand two experienced consultants have stated that the appellant is not capable of preparing an affidavit, is not capable of participating ongoing legal process and the process causes him stress.  Dr Powell also gives evidence that the appellant is also suffering significant side effects from medication which need to be addressed.  Against that Mrs W appears to be involved in some of commercial transaction in some way for the appellant in circumstances whether the respondent has reached a conclusion that the appellant should not work in the financial services industry in Jersey without their permission and a detailed public statement should be made to that effect.  The respondent is understandably concerned.   

19.      Weighing these factors in the balance is not easy.  Nevertheless I have reached the view based on the medical evidence although it does not answer fully the matters listed in my Act of 12^th October, 2015, that at present it would be unfair to require the appellant to proceed with his appeal.  This unfairness overrides the concerns the respondent has raised.  This appeal is also no longer holding up determination of any other appeal and the former business has now been wound up.  Accordingly, I ordered that the appeal process be stayed for a further three months to allow the appellant to undergo further treatment.  I have allowed three months as this is the minimum period identified by Dr Powell where the appellant's condition might improve sufficiently for the appeal to then proceed. 

20.      Prior to the expiry of this three month period, I require an update from Dr Powell by reference to the same questions set out in my Act of 12^th October, 2015.  I also require Dr Powell to answer specifically whether or not the appellant is able to give instructions either generally or relation to the preparation of an affidavit.  Mrs W should therefore provide Dr Powell with a copy of this judgment. 

21.      I require this update specifically because Sinels Advocates took part extensively in the process leading to the decision of the respondent.  They are extremely familiar with the arguments and the material that was before the respondent.  They also possess the material that the appellant sought from the liquidators.  I will therefore wish to know whether the appellant, by the time the stay expires, is able to give instructions to Sinels or other lawyers to enable any such lawyer to carry out the tasks of preparing the appellant's affidavit in response and analysing the material they have obtained.  At present the letter from Dr Powell, helpful though it is, in part only hints at the appellant's inability to give instructions as a matter of inference.  Whilst, in granting a stay, I have accepted that Dr Powell's letter allows me to draw such an inference, when the matter next comes back before me, I wish to be addressed expressly by Dr Powell on the ability of the appellant to give instructions on the preparation of his affidavit and the conduct of his appeal. 

22.      In the Act of 12^th October, 2015, I also required evidence on the ability of the appellant to give instructions on the assessment of costs orders made against the appellant.  This issue has not been specifically addressed.  In this case Sinels Advocates had conduct of the matters before the Royal Court and the Court of Appeal which focused on the scope of discovery required and whether or not a stay based on a pending from an investigation should be granted.  These were both technical legal arguments. 

23.      Accordingly, it is Sinels Advocates who are best placed to assess the reasonableness of the costs claimed by the respondent pursuant to orders made in its favour if instructed to do so.  The involvement required of the appellant is much more limited.  All the appellant is required to do is to give instructions to his lawyers to review the costs claimed which is not complex and is in the appellant's interest and then to consider whether or not any offer of settlement is made in respect of the costs claimed based on an analysis of those costs by Sinels Advocates and their advice.  I have also taken into account the fact that it is normal practice for lawyers involved in disputes of this kind to review costs bills of their opponent and to provide guidance to their client as to what part of the costs ordered should be accepted and what part should be challenged.  If the appellant does not wish to pay Sinels to carry out such a task, or Sinels refuse to do so, such matters are not a basis to stay assessment of costs claimed which can still be carried out by the Assistant Greffier based on his considerable experience of taxing bills of costs and on the assumption that every item of costs clamed is disputed.  It is also not fair on the respondent to delay assessment any further.  Accordingly, the stay I have granted does not apply to any taxation of outstanding costs orders in favour of the respondent. 

24.      In reaching this view I have also taken into account the communications by Mrs W to the respondent in July and her more recent involvement in dealing with investors who lost money.  It seems to me that Mrs W has some form of authority to either represent her husband or alternatively is able to communicate with him when appropriate to obtain either information or instructions from him.  She is also able to prepare affidavits and obtain evidence on whether or not her husband's appeal should be stayed for medical reasons.  In light of these matters, I consider that, if Sinels Advocates send any recommendation on costs to Mrs W, that she will be able to either reach a view herself on behalf of her husband as to what costs she should agree or to discuss any advice received with him in order for instructions to be given to Sinels Advocates. 

25.      Finally, the respondent is still investigating what steps have been taken in London by the appellant and/or Mrs W in relation to investors who have lost money.  I therefore gave permission to the respondent to come back to me at any time to apply to lift the stay granted by me before three months has expired based on new material information which is indicative either of the appellant being involved in financial services or is indicative of the appellant's ability to give instructions to lawyers.  Involvement in a commercial solution to repay investors may be indicative of such an ability. 

26.      For all these reasons I therefore ordered a stay of the appeal for three months but refused to grant any stay of determination of the costs orders in favour of the respondent. 

Authorities

Financial Services (Jersey) Law 1998.

Royal Court Rules 2004, as amended.

UV and W-v-Jersey Financial Services Commission [2014] JRC 202.

W-v-Jersey Financial Services Commission [2015] JRC 017.

W-v-Jersey Financial Services Commission [2015] JCA 060.

W-v-Jersey Financial Services Commission [2014] JRC 250.

Jersey Financial Services Commission-v-W [2015] JRC 094.

W-v-Jersey Financial Services Commission [2015] JCA 135.

W-v-Jersey Financial Services Commission [2015] JRC 156A.