Before : |
John Martin, QC, President; James William McNeill, QC; Nigel Pleming, QC. |
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Between |
Volaw Trust & Corporate Services Ltd and its directors and other officers Independent Oilfield Rentals IOR Limited Larsen Oil and Gas Drilling Limited Network Drilling Limited North East Oil Limited OPS Personnel Services Limited |
Applicants |
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And |
Her Majesty's Attorney General for Jersey |
Respondent |
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Advocate A. D. Hoy for the Applicants.
Advocate H. Sharp, QC, for the Respondent.
judgment
pleming ja:
1. On 19th August 2015, Her Majesty's Attorney General for Jersey authorised the issue by a Crown Advocate of a Supplementary Notice to the first Applicant ("Volaw") under the Investigation of Fraud (Jersey) Law 1991 ("the 1991 Law"). The notice was served on Volaw on 25 August 2015 and required (amongst other matters) Volaw to produce within 21 days true copies of a list of documents "which appear to the Attorney General to relate to matters relevant to the investigation". The documents, for the company Applicants listed above (and two others), included corporate and financial documents, and also "information as to the existence of any accounts or assets held in relation to [Berge Gerdt Larsen]". Mr Larsen was identified as a "person under investigation". The notice was prefaced by this paragraph:-
"It appears to the Attorney General that there exists a suspected offence involving serious or complex fraud and that there is good reason for him to exercise the powers conferred upon him by the Investigation of Fraud (Jersey) Law 1991".
2. The 2015 Notice appears to have arisen from a request by Mr Larsen to the Norwegian prosecuting authorities to issue letters of request for assistance to the Attorney -General of Jersey to obtain a number of documents from Volaw. This Supplementary Notice followed similar notices issued in 2006 and 2012.
3. Volaw is licensed to conduct trust and company business under the Financial Services (Jersey) Law 1998. The second to sixth Applicants are companies managed and administered by Volaw.
4. The Applicants challenged the notice by an application for judicial review dated 17th September 2015. The central complaint was that no such investigation notice could be issued in so far as it infringed the Applicants' right to rely on the privilege against self-incrimination ("PSI").
5. In October 2015, in response to a request by the Attorney-General seeking an undertaking from the Norwegian tax authorities limiting the use to which documents and information might be put, the Norwegian Director General of Public Prosecutions declined to issue a statement to the effect that it would be acceptable for documents to be disclosed in return for a guarantee that the documents would not be used in criminal proceedings against the company or any of its employees, owners or board members. The letter included the following statement:-
"The proper legal authority in Jersey - the Attorney General - has issued a binding writ to Volaw Trust to disclose specific documents. Without knowing the contents of these documents, the prosecuting authority cannot, under such circumstances, endorse a statement specifying that the information collected and confiscated cannot be used to prosecute those responsible for unlawful acts".
6. The application was heard by Commissioner the Hon. Michael Beloff QC at the same time as considering challenges to notices issued to the same parties, and to Mr Bergen, under the Taxation (Exchange of Information with Third Countries) (Jersey) Regulations 2008, as amended in 2013. Those proceedings also included a PSI ground of challenge. Commissioner Beloff addressed the PSI arguments at paragraphs 98 to 146 of his judgment, but dealing only specifically with the notices issued under the 2008 Regulations as amended. In paragraph 119 there is a reference to the notice under the 1991 Law:-
"Most significantly it is not surprising that the Regulations require the production of documents, even incriminating ones. It would defeat the entire purpose of the TIEAs agreements if it were otherwise. Advocate Sharp says with force that, if Volaw's argument is correct then a coach and horses would be driven through them (as well as through the analogous powers of the Attorney General pursuant to the Investigation of Fraud (Jersey) Law 1991 ("the 1991 Act") which, it if were correct, can never be used effectively to investigate serious fraud and money laundering. (Volaw, did indeed in a fresh case challenge the exercise of the Attorney General's powers under the 1991 Act on the same basis of infringement of PSI though I have not been called upon to adjudicate on the substantive merits of the point). In my view the present is a case where to paraphrase the words of Lord Walker in Phillips v News Group Newspapers Ltd [2013] 1 AC 1 para 14 the States "have left no doubt that they intend the privilege to be withdrawn".
7. The learned Commissioner dismissed the applications for judicial review in relation to the notices issued under the 2008 Regulations as amended and, when handing down judgment, also refused permission to apply for a judicial review of the decision to issue the notice under the 1991 Law - although there is no formal Act of Court to that effect.
8. The Applicants now challenge that refusal to grant permission by a Notice of Appeal referring to Rule 4(3) of the Court of Appeal (Civil) (Judicial Review) Rules 2000. It appears to be the case (although, again, there is no Act of Court) that Commissioner Beloff refused permission to appeal his decision. In those circumstances, we have considered this Notice of Appeal as an application for leave to appeal under Rule 4(5).
9. The Applicants' grounds contend that the learned Commissioner erred in law in holding as follows:-
(i) The privilege against self-incrimination does not apply in relation to pre-existing documents or material, either at common law or under Article 6, ECHR (referring to paragraphs 104-108, 131(i)-(iii), 132-133 of the judgment);
(ii) The privilege against self-incrimination does not apply where the risk of prosecution would arise in another jurisdiction, either at common law and/or under Article 6, ECHR (referring to paragraphs 135-140 of the judgment).
10. The focus of the argument in this court has been on the first point, whether or not PSI applies to pre-existing documents.
11. The 1991 Law, relevant to this application, provides:-
"2 Attorney General's powers of investigation
(1) The powers of the Attorney General under this Article shall be exercisable in any case in which it appears to the Attorney General that -
(a) there is a suspected offence involving serious or complex fraud, wherever committed; and
(b) there is good reason to do so for the purpose of investigating the affairs, or any aspect of the affairs, of any person.
(2) The Attorney General may -
(a) by notice in writing require the person whose affairs are to be investigated ("the person under investigation") or any other person whom he or she has reason to believe has relevant information to answer questions or otherwise furnish information with respect to any matter relevant to the investigation at a specified place and either at a specified time or forthwith; and
(b) administer questions or otherwise obtain information accordingly.
(3) The Attorney General may by notice in writing require the person under investigation or any other person to produce at such place as may be specified in the notice and either forthwith or at such time as may be so specified any specified documents which appear to the Attorney General to relate to any matter relevant to the investigation or any documents of a specified description which appear to the Attorney General so to relate; and
(a) if any such documents are produced, the Attorney General may -
(i) take copies or extracts from them,
(ii) require the person producing them to provide an explanation of any of them;
(b) if any such documents are not produced, the Attorney General may require the person who was required to produce them to state, to the best of the person's knowledge and belief, where they are.
(4) If, on an application by the Attorney General, the Bailiff is satisfied, in relation to any documents, that there are reasonable grounds for believing -
(a) that -
(i) a person has failed to comply with an obligation under this Article to produce them,
(ii) it is not practicable to serve a notice under paragraph (3) in relation to them, or
(iii) the service of such a notice in relation to them might seriously prejudice the investigation; and
(b) that they are on premises specified in the application,
the Bailiff may issue such a warrant as is mentioned in paragraph (5).
(5) The warrant referred to in paragraph (4) is a warrant authorizing any police officer -
(a) to enter (using such force as is reasonably necessary for the purpose) and search the premises; and
(b) to take possession of any documents appearing to be documents of the description specified in the application or to take in relation to any documents so appearing any other steps which may appear to be necessary for preserving them and preventing interference with them.
(6) A police officer executing a warrant issued under paragraph (4) may be accompanied by any person or persons expressly authorized for that purpose by the Attorney General.
(7) A statement by a person in response to a requirement imposed by virtue of this Article may only be used in evidence against the person -
(a) on a prosecution for an offence under paragraph (14); or
(b) on a prosecution for some other offence where in giving evidence the person makes a statement inconsistent with it.
......................
(13) Any person who without reasonable excuse fails to comply with a requirement imposed on the person under this Article shall be guilty of an offence and liable on conviction to imprisonment for a term not exceeding 6 months or to a fine or to both.
(14) A person who, in purported compliance with a requirement under this
Article -
(a) makes a statement which the person knows to be false or misleading in a material particular; or
(b) recklessly makes a statement which is false or misleading in a material particular,
shall be guilty of an offence and liable on conviction to imprisonment for a term not exceeding 2 years or to a fine or to both."
12. Article 2 is based on and in almost identical terms to section 2 of the Criminal Justice Act 1987. It is to be noted that Article 2(7) limits the circumstances in which a statement made by a person in response to a requirement imposed by virtue of the Article may be used. No such use restriction or immunity arises in relation to existing documents. The absence of such a provision is a clear indicator that the legislative intention was that existing documents could, if necessary, be used in subsequent criminal prosecutions.
13. We start from the position that "a provision depriving a person of such a fundamental right as the right to claim the privilege against self-incrimination is to be strictly construed", but such a right is not absolute and can be qualified - Phillips v News Group Newspapers Ltd [2013] 1 AC 1, at paragraph 56, and Beghal v DPP [2015] UKSC 49, [2016] AC 88, Lord Hughes at paragraph 61.
14. Advocate Hoy, for the Applicants, accepted that the 1991 Law was in sufficiently clear terms to have removed from a person the right or privilege against self-incrimination which might otherwise be held: R v SFO ex p. Smith [1993] AC 1, 40-44 (Lord Mustill) rejecting an argument that the power of investigation ended on charge, concluding:-
"Now these and similar comments would require careful scrutiny if the thrust of the argument were to the effect that Parliament could not have intended to establish an inquisitorial régime of this kind in relation to serious or complex fraud alone. But in fact no such argument is or could be made, for it is indisputable and undisputed that this is just what Parliament set out to do, and has effectively done."
15. The argument which he sought leave to present is based upon the protection which, he submitted, should be engaged essentially through Article 6 of the European Convention on Human Rights ("ECHR") as regards pre-existing documents. His submission was that as Volaw was the subject of investigation by the Norwegian Tax Authority it, and its directors and other officers, were to be treated as "charged" according to the autonomous meaning within Article 6 jurisprudence - Ambrose v Harris [2011] UKSC 43, [2011] 1 WLR 2435, Lord Hope at paragraphs 62 and 63, and Beghal, Lord Hughes at paragraph 68:-
"68. Article 6 of the Convention does not contain an explicit privilege against self-incrimination, but it is well established that such is implicit in it. The trigger for the privilege is, however, that a person is "charged" with a criminal offence, in the special sense in which that word is used in the jurisprudence of the Strasbourg court, that is to say that his position has been substantially affected by an allegation against him and he has become, in effect, a suspect: see Lord Hope of Craighead DPSC's summary of the rule in Ambrose v Harris [2011] 1 WLR 2435, paras 62-63. If a person is charged in this sense, then the effect of article 6 will be to confer the privilege against self-incrimination and any abrogation by statute of the common law privilege will accordingly be ineffective; moreover the use in a subsequent criminal trial of answers obtained under compulsion before the defendant was charged will be an infringement of the right to a fair trial. See for example Saunders v United Kingdom 23 EHRR 313 where section 434(5) of the Companies Act 1985 had abrogated the privilege. In that case the answers given under compulsion to DTI inspectors were adduced in a criminal prosecution of the subject and it was that which constituted the breach of article 6. The court made it clear at para 67 that the asking of the questions, at a stage when the defendant (as he later became) had not been charged and the purpose of the questioning was an administrative investigation quite different from a criminal one, did not amount to a breach of article 6."
16. The argument was then developed that Article 6 of the Convention protects a person (particularly a person charged within the Article 6 meaning) from any obligation to yield up even pre-existing documents unless there is a suitable binding guarantee that any information so obtained will not be used in any subsequent prosecution - whether in Jersey or elsewhere.
17. Advocate Hoy accepted that the position under Article 6 is the subject of conflicting judgments, the Strasbourg Court having held that the right against self-incrimination applies to evidence obtained "in defiance of the suspect's will" but does not apply to information with an "existence independent of the will of the suspect". This terminology is found in Saunders v United Kingdom 23 EHRR 313 (with emphasis added):-
"68. The Court recalls that, although not specifically mentioned in Article 6 of the Convention, the right to silence and the right not to incriminate oneself, are generally recognised international standards which lie at the heart of the notion of a fair procedure under Article 6. Their rationale lies, inter alia, in the protection of the accused against improper compulsion by the authorities thereby contributing to the avoidance of miscarriages of justice and to the fulfilment of the aims of Article 6. The right not to incriminate oneself, in particular, presupposes that the prosecution in a criminal case seek to prove their case against the accused without resort to evidence obtained through methods of coercion or oppression in defiance of the will of the accused. In this sense the right is closely linked to the presumption of innocence contained in Article 6(2) of the Convention.
69. The right not to incriminate oneself is primarily concerned, however, with respecting the will of an accused person to remain silent. As commonly understood in the legal systems of the Contracting Parties to the Convention and elsewhere, it does not extend to the use in criminal proceedings of material which may be obtained from the accused through the use of compulsory powers but which has an existence independent of the will of the suspect such as, inter alia, documents acquired pursuant to a warrant, breath, blood and urine samples and bodily tissue for the purpose of DNA testing. In the present case the Court is only called upon to decide whether the use made by the prosecution of the statements obtained from the applicant by the Inspectors amounted to an unjustifiable infringement of the right. This question must be examined by the Court in the light of all the circumstances of the case. In particular, it must be determined whether the applicant has been subject to compulsion to give evidence and whether the use made of the resulting testimony at his trial offended the basic principles of a fair procedure inherent in Article 6(1) of which the right not to incriminate oneself is a constituent element."
18. Advocate Hoy submitted that these paragraphs have caused considerable difficulty in practice, and have been misunderstood and misapplied by the Court of Appeal of England and Wales in a series of cases - Attorney General's Reference (No 7 of 2000) [2001] 1 WLR 1879, C Plc v C [2008] Ch 1, and R v S(F) [2009] 1 WLR 1489. The argument can perhaps be encapsulated in this paragraph from the Applicants' written contentions:-
"The Appellants submit that in each case the Court of Appeal has mistakenly understood the distinction that is drawn in paragraphs 68 and 69 of Saunders. The crucial word in those paragraphs is 'will', which the Appellants submit is to be understood in the sense of 'free will', the right against self-incrimination attaches to information where the state seeks to overbear the individual's free will ('in defiance of his will') and coerce him into the 'cruel trilemma of perjury, self-incrimination or punishment for non-compliance'. This may arise whether what is sought is documentary evidence, real evidence or testimonial evidence. In contradistinction, material with 'an existence independent of the will of the suspect' is material that may be obtained without coercing the individual into that 'cruel trilemma'. This would include evidence obtained (for example) by a search warrant: although coercive powers are used the individual is not forced to choose between perjuring himself, being prosecuted for non-compliance or providing the very evidence that incriminate him 'in defiance of his will'".
19. This argument had been presented to the learned Commissioner, but rejected by him. In doing so he stated (with detailed case citations added):-
"131. If the jurisprudence of the ECHR is not- as I find - compulsive in favour of Volaw's submission, I decline to rule that Volaw can rely upon PSI as a reason for not complying with the Comptroller's notices for three main reasons:
(1) it seems to me that it is not possible as a matter of principle to equate the extraction of fresh evidence by way of compulsion and the requirement to disclose existing documents whose contents are unaffected by the compulsion (see in C plc -v- P Lawrence Collins LJ para 47 [C plc -v- P [2008] Ch 1]). The surrender, even under compulsion, of such documents will not run the risk of a miscarriage of justice in the same way as a coerced oral statement; au contraire its non-surrender may lead to a wrong result;
(2) it seems to me clear as a matter of policy that Volaw's submissions must be rejected; otherwise the whole purpose of a TIEA would be frustrated;
(3) the preponderant and quintessentially pragmatic English case law digests, distinguishes and (ultimately) discards Funke [Funke v France 1993 16 EHRR 297] in favour of Saunders."
20. Advocate Hoy's argument was that the learned Commissioner had also misunderstood a critical passage in the decision in Saunders. He contended, (as summarised in the passage set out above) that Saunders has made it clear that it was not the nature of the information obtained from the suspect which was the critical element, rather it was how the information had been obtained that is critical to the analysis. The use of a warrant, for example, did not offend the right to avoid self-incrimination; but the use of coercion to overbear the individual's 'will', or the use of a degree of force materially greater than that normally required to obtain the type of material in question.
21. In our judgment there is no indication that the learned Commissioner misunderstood this aspect of Saunders. He had referred in paragraph 123 to the passage from paragraph 69 in the decision in Saunders which we have highlighted. Further it is clear that the learned Commissioner had in mind the issue of the overcoming of 'will'. In paragraph 129 he quoted from Allen v United Kingdom (2002) 35 EHRR CD 289 where the determination of the European Court of Human Rights includes the following passage:-
"The right not to incriminate oneself is primarily concerned, however, with respecting the will of an accused person to remain silent in the context of criminal proceedings and the use made of compulsorily obtained information in criminal prosecutions. It does not per se prohibit the use of compulsory powers to require persons to provide information about their financial or company affairs (see the abovementioned Saunders judgment, where the procedure whereby the applicant was required to answer the questions of the Department of Trade Inspectors was not an issue). In the present case, therefore, the Court finds that the requirement on the applicant to make a declaration of his assets to the Inland Revenue does not disclose any issue under Article 6(1), even though a penalty was attached to a failure to do so. The obligation to make disclosure of income and capital for the purposes of the calculation and assessment of tax is indeed a common feature of the taxation systems of Contracting States and it would be difficult to envisage them functioning effectively without it."
22. Returning to Saunders, the crucial passage is "it [PSI] does not extend to the use in criminal proceedings of material which may be obtained from the accused through the use of compulsory powers but which has an existence independent of the will of the suspect such as, inter alia, documents acquired pursuant to a warrant". In a detailed Note, submitted after the conclusion of the hearing, Advocate Hoy seeks to persuade us that, on the facts of this case, it would be unlikely that the issue of a warrant would be lawful. We have considered the Note, and consider there is no need to address this argument, a decision whether or not to issue a warrant not yet having arisen. However, the content of the Note reinforces rather than undermines our overall conclusion that there is no difference of substance, in PSI terms, between "documents acquired pursuant to a warrant" (referred to in paragraph 69 of Saunders) and "pre-existing documents acquired pursuant to a notice served under section 2 of the 1991 Law". Both processes involve the use of compulsory powers, and the material obtained has an "existence independent of the will of the suspect". If the warrant procedure under Article 2(4) is not a denial of the right to avoid self-incrimination, it would take very powerful reasoning to demonstrate that an overcoming of 'will' by a less public, but still regulated process did so merely because of the existence of the possibility of fine or imprisonment.
23. Insofar as a logic can be discerned in the Applicants' line of argument on Saunders it would appear to be that the combination of the content of the material and the existence of the possible punishment engaged the will of the individual and thereby altered the nature of the material so that it no longer had an existence separate from that of the suspect. We consider that the learned Commissioner was correct to reject this argument.
24. Perhaps the high point of the Applicants' submissions, as it was before the learned Commissioner, is the reference by Lord Hughes at paragraph 60 of Beghal to "yield up documents" in the sentence: "It [PSI] entitles any person to refuse to answer questions or to yield up documents or objects if to do so would carry an appreciable risk of its use in the prosecution of that person". We agree with the learned Commissioner's observations on this passage, in paragraph 133 of his judgment, emphasising that the reference to "yield up documents" was obiter. We are wholly unpersuaded that his Lordship was there intending to address the ability of a prosecuting authority to demand pre-existing documents under, for example, section 2 of the Criminal Justice Act 1987, or decide that a person in receipt of a notice under that section may lawfully refuse to furnish existing documentation on the basis of PSI.
25. In our view, if it were not for the observation of Lord Hughes in Beghal referred to above, we would unhesitatingly conclude that the Applicants' contentions do not have any real prospect of success, which is the test this court has recently indicated should be used when considering the possibility of granting leave to appeal from the Royal Court: Crociani v Crociani [2014] JCA 089 at paragraph 51.
26. However, and bearing in mind that the Privy Council may be invited to consider the question of PSI in relation to the challenge to the notices issued under the 2008 Regulations as amended, we propose to treat this application for leave to appeal as a renewed application for leave to apply for judicial review. We grant permission, but for the reasons set out above and in the judgment of the learned Commissioner, we dismiss the application. And, in so far as this is an appeal, we dismiss the appeal.
27. We will consider any written submissions (if so advised) addressing consequential relief, including costs, to be lodged within 14 days of the date of the handing down of this judgment.
Authorities
Investigation of Fraud (Jersey) Law 1991.
Financial Services (Jersey) Law 1998.
Taxation (Exchange of Information with Third Countries) (Jersey) Regulations 2008, as amended.
Court of Appeal (Civil) (Judicial Review) Rules 2000.
Criminal Justice Act 1987.
Phillips v News Group Newspapers Ltd [2013] 1 AC 1.
Beghal v DPP [2015] UKSC 49, [2016] AC 88.
R v SFO ex p. Smith [1993] AC 1, 40-44.
European Convention on Human Rights.
Ambrose v Harris [2011] UKSC 43, [2011] 1 WLR 2435.
Saunders v United Kingdom 23 EHRR 313.
Attorney General's Reference (No 7 of 2000) [2001] 1 WLR 1879.
Allen v United Kingdom (2002) 35 EHRR CD 289.