Jersey Unreported Judgments

Judicial Review

[2024]JRC016

Royal Court

(Samedi)

19 January 2024

Advocate J. Harvey-Hills for the Applicants.

Advocate G. G. P. White for the Respondent.

judgment

the commissioner:

1.        This judgment contains my reasons for granting leave to the Applicants to bring judicial review proceedings.  This judgment follows on from my previous judgment in this matter reported at JTC (Jersey) Limited and Anor v Jersey Competent Authority [2023] JRC 119 dated 17 July 2023 ("the July Judgment").  I adopt both the definitions contained in the July Judgment and the background as set out at paragraphs 3 to 25.  I also refer to the relevant regulations as set out at paragraphs 26 to 30. 

2.        Unless the application for judicial review breaches one of the limitations contained in Regulation 14 of the 2008 Regulations, the Royal Court is required to apply the principles applicable on any application for judicial review (see Regulation 14(4) of the 2008 Regulation).  These rules are found in Part 16 of the Royal Court Rules 2004 as Amended.  Rule 16/2(2) requires the applicant seeking judicial review to set out the grounds upon which leave to do so is sought.

3.        In the present case, the Applicants relied on four substantive grounds as follows:

(i)        The information demanded is not foreseeably relevant to the tax affairs of the taxpayer;

(ii)       The information demanded covers periods for which the Convention on Mutual Administrative Assistance in Tax Matters done in Strasbourg on 25 January 1988 as amended by the Protocol done in Paris on 27 May 2010, signed on behalf of the United Kingdom and as extended to Jersey, as it applies between Country A and Jersey (the "Convention") did not have effect in relation to Country A;

(iii)      The Notice is a disproportionate breach of the rights of the beneficiaries to the Trust under Article 8 of the European Convention of Human Rights; and

(iv)     The prohibition is unlawful.

4.        A Skeleton Argument was filed by the Applicants on 24 October 2023 containing the detailed submissions of the Applicants in respect of each of the above grounds.  This Skeleton Argument was filed for a hearing due to take place on 31 October 2023.  However, that hearing was adjourned for reasons it is not necessary to set out in this judgment, with a hearing date being refixed for 16 January 2024. 

5.        On 11 January 2024, the Respondent filed its skeleton.  In its skeleton, the Respondent did not oppose leave being given on Grounds 1, 3 and 4, but did oppose the granting of leave in relation to Ground 2, namely the contention that the information demanded covers periods for which the Convention did not have effect in relation to Country A. 

6.        The Respondent's contentions were that the effect of Article 28(6) of the Convention was that information could be requested which was foreseeably relevant to the application of the tax laws of Country A in respect of a tax covered by the Convention for periods after the entry into force of the Convention in that country.  The Respondent's position was that as long as the information was foreseeably relevant to the application of the tax laws of the requesting country in respect of  (a) a tax covered by the Convention for that country and (b) for a taxable period falling within Article 28(6), it did not matter whether the information requested had been created before or after the date the Convention came into force or whether the information was in respect of transactions or other occurrences that took place before or after the date the Convention came into force.

7.        The submissions also noted that there was a caveat to Article 28(6) in relation to criminal tax matters allowing for information to be requested for taxable periods prior to the Convention coming into force in relation to Country A (see Article 28(7) of the Convention).

8.        In relation to this argument, I firstly reminded myself of the test for granting leave to an applicant to bring judicial review proceedings.  I explored this in Buckley v Minister for Treasury and Resources [2023] JRC 209 at paragraphs 106 to 110.  In particular, I refer to paragraphs 109 and 110 which state as follows:

"109.   What I therefore draw from the previous authorities is that when considering a leave application, a judge has to be satisfied that there is an issue that requires a full hearing with the costs that that necessarily involves.  In particular, where what is alleged is irrationality or procedural impropriety, the question for the judge is whether the issue raised is one that requires determination by the Jurats.  In other words, does the issue raised based on all the material before the judge give rise to competing arguments, either of which might persuade the Jurats (or a judge on a pure point of law) with the benefit of all the evidence and full argument. If so, then leave should be granted. If, on the other hand, the arguments raised are fanciful or improbable then leave should be refused.

110.   Although not cited by either party, in Imperium Trustees (Jersey) Limited [2023] JCA 057, in granting leave to appeal, the Court of Appeal observed at paragraph 105: "The Appellant must satisfy the court that it has an arguable ground of judicial review, with realistic prospects of success, which merits investigation at a full hearing" (emphasis added).  This observation, while made without full argument, appears to support the conclusions I have reached."

9.        This is the test I have applied. 

10.     Articles 28(6) and 28(7) of the Convention state as follows:

"6. The provisions of this Convention, as amended by the 2010 Protocol, shall have effect for administrative assistance related to taxable periods beginning on or after 1 January of the year following the one in which the Convention, as amended by the 2010 Protocol, entered into force in respect of a Party, or where there is no taxable period, for administrative assistance related to charges to tax arising on or after 1 January of the year following the one in which the Convention, as amended by the 2010 Protocol, entered into force in respect of a Party. Any two or more Parties may mutually agree that the Convention, as amended by the 2010 Protocol, shall have effect for administrative assistance related to earlier taxable periods or charges to tax.

7. Notwithstanding paragraph 6, for tax matters involving intentional conduct which is liable to prosecution under the criminal laws of the applicant Party, the provisions of this Convention, as amended by the 2010 Protocol, shall have effect from the date of entry into force in respect of a Party in relation to earlier taxable periods or charges to tax."

11.     The difficulty with Advocate White's argument for the Respondent is that this is not the criticism being advanced. The Applicants are not contending that information created prior to the date of the Convention coming into force in relation to Country A might not be disclosed as long as it is foreseeably relevant for a tax year arising after the Convention came into force under Article 28(6). Advocate Harvey-Hills for the Applicants expressly accepted that such information was disclosable if foreseeably relevant as long as it related to a period covered by Article 28(6).  He was right to make that concession and to agree to modify Ground 2 to make this clear.  There is no limitation in Article 28(6) on the administrative assistance that can be granted as long as it is foreseeably relevant.  Any standalone argument that no information created prior to the Convention coming into force could be provided is not in my opinion arguable.  It does not matter when the information has been created.  Rather it must be foreseeably relevant and relate to a taxable period covered by the Convention as it applies to Jersey and Country A.  To hold otherwise could lead to information that is both foreseeably relevant and relating to a tax year covered by the Convention not being disclosed solely because of the precise date upon which it was created.  Such a scenario could lead to only part of what is foreseeably relevant being disclosed which runs contrary to the intention of the Convention.

12.     The Applicants' objection was not about the date information was created.  Rather the objection was as set out in the affidavit of a lawyer (M) sworn on 4 October 2023.  The assertion made in that affidavit at paragraph 24 is that Country A had issued an amended assessment order requiring B and C and their siblings to file an amended tax return for the tax year 2012.  The Applicants' argument is therefore that the request for assistance under the Convention relates to a tax year prior to the Convention coming into force as between Jersey and Country A.

13.     In relation to this argument, the Respondent has not filed any evidence to dispute the evidence filed to date by the Applicants from M.  Accordingly, the contention advanced for by the Applicants is at least arguable because at this stage it is based on undisputed evidence that the request relates to a tax year prior to the Convention coming into force between Jersey and Country A.  To be fair to Advocate White he did not oppose this ground as being arguable as long as it was clear that information created prior to the Convention coming into force could be disclosed as discussed at paragraph 11 above. Accordingly, I am satisfied that the relevant threshold is met and leave is accordingly granted. 

14.     That is not to say that when the matter comes for a judicial review hearing the position might not turn out to be different or that it may be that the Respondent is entitled to give information in respect of an amended assessment made after the date the Convention came into force between Jersey and Country A, even if the amended assessment relates to a tax year commencing prior to the Convention having effect between Jersey and Country A.  That position is however arguable and is therefore a matter for another day. 

15.     In relation to Advocate White's reference to Article 28(7) and the request for information in relation to criminal matters, the Applicants' position is that the present case is one involving a civil claim for taxes and was therefore not in the arena of a criminal investigation.  This was noted at paragraph 42 of the July Judgment.  The Respondent, in the evidence filed for that hearing, and  at this hearing, has not challenged that position. Absent any evidence to show that these are criminal proceedings, the contentions of the Applicants that this is a civil case is therefore also arguable.

16.     For all the above reasons, the Applicants are given leave in respect of Ground 2 on the basis set out in this judgment, in addition to the other grounds where leave is not opposed.

Authorities

JTC (Jersey) Limited and Anor v Jersey Competent Authority [2023] JRC 119. 

Royal Court Rules 2004 as Amended. 

Buckley v Minister for Treasury and Resources [2023] JRC 209.