Judicial review - application for a stay of proceedings
Before : |
Sir Michael Birt, Commissioner |
File No. 2022/034
Between |
Imperium Trustees (Jersey) Limited |
Applicant |
And |
Jersey Competent Authority |
Respondent |
File No. 2023/056
Between |
JTC (Jersey) Limited |
First Applicant |
|
JTC Trustees Limited (in its capacity as trustee of the Zanzibar Trust) |
Second Applicant |
And |
Jersey Competent Authority |
Respondent |
File No. 2023/204
Between |
Triton Administration (Jersey) Limited |
Applicant |
And |
The Office of the Comptroller of Revenue |
Respondent |
Advocate J. Harvey-Hills for the Applicants in 2022/034 and 2023/056.
Advocate M. W. Cook for Triton Administration (Jersey) Limited.
Advocate J. P. Rondel and Advocate G. G. P. White for the Jersey Competent Authority.
judgment
the COMMISSIONER:
1. On 23 September I sat to give directions in the above three sets of proceedings. All three proceedings concern applications for judicial review (leave having been granted in each case) in respect of a decision of the Jersey Competent Authority ("the Respondent" or "the JCA") to issue notices pursuant to the provisions of the Taxation (Exchange of Information with Third Countries) (Jersey) Regulations 2008 ("the 2008 Regulations"), as applied by the Taxation (Implementation) (Convention on Mutual Administrative Assistance in Tax Matters) (Jersey) Regulations 2014.
2. I shall for convenience refer to the three applications as 'the Imperium application', 'the JTC application' and 'the Triton application' respectively and to the Applicants as 'Imperium', 'JTC' and 'Triton' respectively. The three cases are being heard together in order to consider an issue which is common to all three, namely whether the proceedings should be stayed pending the outcome of an application by the Respondent (and the Attorney General) for leave to appeal to the Judicial Committee of the Privy Council ("JCPC") against the decision of the Court of Appeal on 18 January 2024 in the case of Imperium Trustees (Jersey) Limited v Jersey Competent Authority [2024] JCA 014 ("the CA costs judgment") and, if leave to appeal is granted, for a stay until a decision of the JCPC on the substantive appeal.
3. Before turning to the issue, I should summarise briefly the background to the issue.
4. The notice in the Imperium application was issued by the Respondent on 22 February 2022 following a request by the Belgian tax authority. On 24 May 2022, the Deputy Bailiff refused Imperium's application for leave to apply for judicial review of the Respondent's decision to issue the notice. On 1 June 2023, the Court of Appeal allowed Imperium's appeal and granted leave to apply for judicial review on certain of the grounds relied upon.
5. An issue then arose as to the costs of the appeal to the Court of Appeal. The Respondent argued that costs could not be awarded against it, even though the appeal had been successful, because of the terms of Article 2 of the International Cooperation (Protection from Liability) (Jersey) Law 2018 ("the 2018 Law"), which effectively provides that the Respondent cannot be ordered to pay costs concerning legal proceedings in respect of a notice (absent a finding of bad faith). In the CA costs judgment, the Court of Appeal held that this costs provision in the 2018 Law was incompatible with Article 6 ECHR and made a declaration of incompatibility.
6. Although the Court of Appeal refused leave to appeal to the JCPC, the Respondent (and the Attorney General) applied to the JCPC on 3 June 2024 for leave to appeal and requested an expedited hearing of that application. The decision of the JCPC on whether to grant leave to appeal is awaited.
7. Following the CA costs judgment, Imperium applied to amend its grounds for judicial review by adding a further ground ("the Article 6 ground"). In essence, the Article 6 ground is to the effect that the costs rule in the 2018 Law is a restriction on the right of access to the court and that accordingly the whole mechanism for challenging a notice by way of judicial review is not consistent with Article 6 of the ECHR, with the consequence that the issue of a notice by the Respondent is unlawful and amounts to a breach of Article 7(1) of the Human Rights (Jersey) Law 2000.
8. In a judgment dated 28 February 2024, Imperium Trustees (Jersey) Limited v Jersey Competent Authority [2024] JRC 048, Commissioner Thompson granted Imperium leave to amend its grounds of appeal so as to include the Article 6 ground.
9. The notice in the JTC application was issued by the Respondent on 9 March 2023 following a request from the Pakistani Tax Authority. There were initial proceedings concerning a prohibition on disclosure by JTC but this prohibition was lifted on 14 June 2023. Leave to apply for judicial review was granted by Commissioner Thompson on 16 January 2024. Following the CA costs judgment on 18 January 2024, Commissioner Thompson granted JTC leave to amend its grounds of judicial review by adding the Article 6 ground on 24 April 2024.
10. The notices in the Triton application were issued on 5 October 2023 following a request from the Swedish tax authorities. On 14 March 2024, Commissioner Birt granted Triton leave to amend its grounds for judicial review by adding the Article 6 ground and then granted leave to apply for judicial review.
11. It follows that the present position is that each of the Applicants has been granted leave to apply for judicial review of the relevant notice(s). The grounds of each application contain what I would describe as conventional grounds (e.g. that the information sought is not 'foreseeably relevant') ("the non-Article 6 grounds"), but also raise the Article 6 ground. The non-Article 6 grounds differ of course in relation to each Applicant and will need to be determined at separate hearings; but the Article 6 ground in each application raises the same issue of law. Accordingly there will need to be a single hearing at which the same court will determine the Article 6 ground in relation to all three sets of proceedings.
12. As already noted, the Respondent, together with the Attorney General, is seeking leave from the JCPC to appeal against the CA costs judgment. A request has been made for an expedited decision and, if leave to appeal is granted, a request will be made for an expedited hearing of the appeal. However, no decision on whether leave to appeal will be granted has yet been reached.
13. In the meantime, on 3 June 2024, the Chief Minister, in reliance upon Article 2(4) of the 2018 Law, made the International Co-operation (Protection from Liability) (Jersey) Order 2024 ("the Order") excluding from the 2018 Law (i) costs below £75,000, (ii) costs of £75,000 or more to the extent that the person claiming costs would suffer financial hardship if costs were not recovered, and (iii) costs of £75,000 or more if the relevant public authority (the JCA in this case) has acted unreasonably in the conduct of the proceedings. The Order was no doubt made with the aim of meeting the concerns in relation to Article 6 ECHR expressed in the CA costs judgment. The Applicants dispute that it has achieved this objective. Whether it has been successful in achieving this objective will fall for decision as part of the Article 6 ground.
14. It is against this background that the Applicants now apply for a stay of all three proceedings. Helpfully, they prepared a single joint skeleton argument and Advocate Harvey-Hills presented the oral arguments at the hearing on behalf of all three Applicants. Although at an earlier stage the Respondent agreed to a stay, that is no longer the case and the application for a stay was opposed.
15. The application is for a general stay of all three proceedings until the outcome of the application for leave to appeal to the JCPC is known and, if leave to appeal is granted, until determination of the appeal. The stay would include both the Article 6 ground and the non-Article 6 grounds.
16. Advocate Harvey-Hills submitted that it would not be in the interests of fairness and the efficient administration of justice to proceed to a hearing on either the Article 6 ground or the non-Article 6 grounds until it was known whether the JCPC was going to grant leave to appeal and, if granted, the outcome of that appeal. If, on any appeal, the decision of the Court of Appeal was overturned (on the basis that the costs provisions of the 2018 Law were not incompatible with Article 6 ECHR), then the Article 6 ground would fall away. In those circumstances any hearing of the Article 6 ground in the meantime before the Royal Court would be a wasted hearing in circumstances where the Applicants could not recover their costs because of the 2018 Law.
17. Furthermore, he submitted, there might well be difficulty in either the Applicants or the Respondent appealing against a decision of the Royal Court on the Article 6 ground reached before the outcome of any appeal to the JCPC was known. At that stage, the JCPC would be seized of the legal issue as to the costs regime of the 2018 Law by way of the appeal from the CA costs judgment and might well not give leave for an appeal from a decision of the Royal Court on the Article 6 ground which raised similar issues. Thus, if the Royal Court decided that the Article 6 ground was valid (thereby leading to the quashing of all the various notices) but the JCPC subsequently allowed an appeal from the CA costs judgment (thereby completely undermining the reasoning which would have supported any decision of the Royal Court to uphold the Article 6 ground), the parties would be left with a decision of the Royal Court which, in retrospect, was made on an erroneous view of the law but which would remain in force in the absence of an appeal to the JCPC.
18. Even if the JCPC were to dismiss any appeal, it might do so on somewhat different grounds from those set out by the Court of Appeal, which might in turn mean that the Royal Court, in reaching its decision in the meantime on the Article 6 ground, had proceeded on a basis of law which turned out to be inconsistent with the law as subsequently established by the JCPC.
19. In short, Advocate Harvey-Hills submitted that proceeding to a hearing on the Article 6 ground at this stage was fraught with possible difficulty and ran a real risk of the parties incurring entirely wasted costs which could not be recovered by the Applicants even if successful. On this latter aspect, I was informed by Advocate Harvey-Hills that the Applicants had made clear to the Respondent that they would not seek a stay if the Respondent was willing to waive its rights under the 2018 Law, but that this suggestion had not been taken up by the Respondent.
20. If the Court was not in favour of granting a general stay, Advocate Harvey-Hills submitted that the preferable course would be to proceed to hearings on the non-Article 6 grounds first. This was because these were not directly affected by the outcome of any appeal to the JCPC. However, proceeding in this manner would run the risk of the hearings (of which there would be three separate ones) turning out to have been unnecessary if the Court were subsequently to uphold the Article 6 ground, which was a knockout blow to the notices and would render the non-Article 6 grounds unnecessary.
21. Advocate Harvey-Hills emphasised that the Applicants were not seeking to delay the proceedings unnecessarily as some kind of "stalling" tactic. However, he submitted that to proceed with either the Article 6 ground or the non-Article 6 grounds before a decision of the JCPC was known would be fraught with difficulty and would risk giving rise to inconsistency and confusion. At the very least, the Court should stay the determination of the Article 6 ground until the JCPC had decided whether to grant leave to appeal against the CA costs judgment. At that point, the Court would be able to reach an informed decision and, if leave to appeal had been granted, would have the benefit of the likely timetable of any expedited appeal.
22. I start by reminding myself of the Overriding Objective of dealing with cases justly and at proportionate cost. This includes saving expense and ensuring that cases are dealt with expeditiously and fairly.
23. In my judgment, it would not be consistent with the Overriding Objective to grant a general stay pending the outcome of any appeal to the JCPC as requested by the Applicants and I reject the application for such a stay. I would summarise my reasons for reaching this conclusion as follows:
(i) I appreciate that the Respondent has requested an expedited decision from the JCPC on the application for leave to appeal and will also be applying for an expedited hearing of any appeal for which leave is granted. However, the outcome of such applications is at this stage unknown. If there is no expedited hearing of any appeal, experience suggests that it may well be two years or so before the outcome of any appeal is known. Even if an expedited hearing of an appeal is ordered, there may well still to be a considerable delay before the appeal is determined. Although the length of any delay is unknown at this stage, I consider that the granting of a general stay pending the outcome of any appeal as requested by the Applicants is likely to lead to significant delay in resolving the various judicial review proceedings.
(ii) If, at the end of this period of delay, the JCPC were to dismiss the appeal against the CA costs judgment, the Royal Court would then have to proceed to determine both the Article 6 ground and the non-Article 6 grounds at a point which might well be some years after the notices were issued. Even then, there could be further delay after the decision of this Court if either party sought leave to appeal from the JCPC against this Court's decision. In my view this would not be an efficient management of the Court's business and would lead to the Court not dealing with the various cases expeditiously.
(iii) Conversely, if the JCPC were to allow an appeal against the CA costs judgment and hold that the costs provisions of the 2018 Law were not incompatible with the ECHR, I accept that the Article 6 ground would fall away and would not need to be dealt with. However, the non-Article 6 grounds would still need to be determined and thus a not dissimilar period of delay would be likely to elapse after the JCPC's decision.
(iv) Delay in determining proceedings is always to be avoided so far as possible but there is an additional public interest factor in these cases. Jersey is a party to various bilateral agreements on the exchange of tax information as well as the Convention on Mutual Administrative Assistance in Tax Matters. It is plainly in the public interest that the Island should, so far as possible, comply with its obligations under the Convention and the bilateral agreements and do so reasonably promptly. The effect of granting a stay until the outcome of any appeal against the CA costs judgment would be effectively to prevent the Island from fulfilling its obligations under the Convention and the bilateral agreements until the outcome of the appeal to the JCPC and, if the appeal is dismissed, the decision thereafter by the Royal Court on the Article 6 ground and any possible appeal therefrom. That is because, in the event of any person who is the subject of a notice issued by the JCA in the meantime wishing to challenge such notice on the Article 6 ground, such person would have to be granted leave to apply for judicial review and any such proceedings would then have to be stayed until the outcome of any appeal to the JCPC for the same reasons as are submitted in the present case. There would in effect be a total pause on the ability of the Island to comply with its obligations under the Convention and the bilateral agreements, which would not be in the public interest.
(v) I accept that, if a hearing on the Article 6 ground proceeds before any decision of the JCPC, such hearing will turn out to have been unnecessary if the JCPC overturns the CA costs judgment and this is in circumstances where the Applicants would not be able to recover their costs in full from the Respondent even if successful on the Article 6 ground. However, this factor has to be balanced against the delays likely to follow from the stay requested by the Applicants. In my judgment, the balance comes down firmly in favour of avoiding delay so far as possible.
(vi) I do not consider that the problems of proceeding to an Article 6 hearing prior to the decision of the JCPC as summarised at paras 16-19 above are as serious as Advocate Harvey-Hills submits. If the JCPC upholds the CA costs judgment, then the Royal Court decision on the Article 6 ground will have been made upon a correct basis of law, whichever way it decides. Any losing party (whether the Applicants or the Respondent) will have the normal right to apply to the JCPC for leave to appeal against the Royal Court's decision.
(vii) If, on the other hand, the JCPC allows the appeal against the CA costs judgment and holds that the costs regime in the 2018 Law is not incompatible with the ECHR, there will be no difficulty if, in the meantime, the Royal Court has determined the Article 6 ground in favour of the Respondent. Its decision would, in its result, be consistent with the JCPC decision because the notices would not have been quashed by reason of any inconsistency with the ECHR. There would be a potential issue if the Royal Court decided the Article 6 ground in favour of the Applicants and quashed the notices on that ground. In the event of the JCPC overturning the CA costs judgment, the Respondent would need to seek leave to appeal against the Royal Court's decision on the basis that, following the JCPC's decision to overturn the costs judgment, the Royal Court had reached its decision on an erroneous understanding of the law. I do not see why there should be any difficulty in the Respondent seeking and obtaining leave to appeal from the JCPC at that stage if it was clear that the Royal Court's decision was wrong in law and should be reversed. I appreciate that Regulation 14A(4) of the 2008 Regulations provides for a period of only 14 days in which to apply to the JCPC for leave to appeal against a decision of the Royal Court, but I do not see why a precautionary application for leave to appeal could not be lodged within that period.
(viii) Advocate Harvey-Hills also envisaged the possibility of the JCPC upholding the CA costs decision but on somewhat different grounds, which might result in inconsistency between the JCPC decision and any decision of the Royal Court on the Article 6 ground taken in the meantime. I have to say that I do not regard this as very likely and Advocate Harvey-Hills did not point to any specific area of concern. However, if it were to occur, it seems to me that the position would be similar to that discussed in the previous sub-paragraph. If the Royal Court's decision on the Article 6 ground was seen to have been taken on an erroneous basis in law because of the subsequent decision of the JCPC and if this would have affected the outcome, I do not see why there should be any difficulty in obtaining leave from the JCPC to appeal against that erroneous decision of the Royal Court. Again, a precautionary application could be filed within the 14 day time limit if necessary.
24. The Applicants' alternative submission is that there should be a stay until the outcome of the Respondent's application for leave to appeal against the CA costs judgment is known. However, although an expedited decision has been requested, it is not known at this stage whether this will be granted and when any decision is likely to be reached. Accordingly, the length of any such stay would be unknown.
25. In my judgment, any delay is to be avoided as far as possible. Furthermore, it is hard to see what a stay until the leave application is determined would achieve. If leave to appeal is refused, the Article 6 ground and the non-Article 6 grounds will need to go ahead and there will have been no reason to delay those hearings. The time until the leave decision is given by the JCPC will simply have been wasted by reason of the stay. If, on the other hand, leave to appeal is granted, we would then be in the position described in para 23(i) above, namely, on the Applicants' submission, a delay until determination of the appeal itself. For the reasons given earlier, on the information presently available, I would not be willing to grant a stay until the outcome of the appeal. It is, I suppose, conceivable that, on granting leave to appeal, the JCPC would order an expedited hearing which could take place within a very short delay. If that were to occur, I would be willing to consider a fresh application to stay the hearing on the Article 6 ground, although much would depend on how quickly an expedited hearing could be heard. I propose to grant liberty to apply to cover such a situation.
26. Nevertheless, for the reasons given, I decline to order a stay until the application for leave to appeal is determined by the JCPC.
27. That leaves the question of whether I should at this time give directions as to the order in which the various hearings should take place.
28. At a separate hearing on 23 September, I directed that, for reasons connected with possible time bars in relation to tax assessment in Sweden, the non-Article 6 grounds of the Triton application should be heard before the end of 2024. Those directions remain in place.
29. As to the other applications, although I did not hear from the Respondent as to whether it agreed these dates, I was informed by Advocate Harvey-Hills that the Imperium application would be ready for hearing in the first quarter of 2025 and the JTC application would be ready for hearing in the second quarter of 2025.
30. Assuming that these targets are agreed by the Respondent, I consider that the non-Article 6 grounds should be heard during these periods. As to the Article 6 ground, I see no reason for delay. I therefore direct that it should also be heard during the first quarter of 2025 and I make no direction as to whether it is heard before or after the non-Article 6 grounds in the Imperium application.
31. In summary, I reject the application for a stay and direct that the parties should attend before the Bailiff's Judicial Secretary within seven days of this judgment being formally issued in order to fix the following dates:
(i) A hearing of the Article 6 ground in relation to all three applications during the first quarter of 2025;
(ii) A hearing of the non-Article 6 grounds in the Imperium application as soon as practicable, but in any event no later than the first quarter of 2025; and
(iii) A hearing of the non-Article 6 grounds in the JTC application as soon as practicable, but in any event not later than the second quarter of 2025.
If the parties cannot agree dates, I will sit to resolve any dispute.
Authorities
Taxation (Exchange of Information with Third Countries) (Jersey) Regulations 2008.
Taxation (Implementation) (Convention on Mutual Administrative Assistance in Tax Matters) (Jersey) Regulations 2014.
Imperium Trustees (Jersey) Limited v Jersey Competent Authority [2024] JCA 014.
International Cooperation (Protection from Liability) (Jersey) Law 2018.
Human Rights (Jersey) Law 2000.
Imperium Trustees (Jersey) Limited v Jersey Competent Authority [2024] JRC 048.
International Co-operation (Protection from Liability) (Jersey) Order 2024