Jersey: Disclosure In Jersey: What, When And From Whom? (Part 1)

Introduction

  1. This is the first of two short articles on four aspects of disclosure in civil proceedings in Jersey. The first focuses on the differences between pre-action and post-judgment disclosure and the measure of uncertainty which has developed around these separate jurisdictions. The second will address trustee disclosure and the position of foreign insolvency office-holders following the decision of the Royal Court in Smith v Nedbank Private Wealth Limited 1.
  2. The terms disclosure and discovery are often used interchangeably. In Jersey discovery refers to the process by which parties to substantive proceedings are required to disclose all relevant documents in their possession, custody or control to their opponent(s). Accordingly discovery falls outside the scope of these articles.

Pre-action disclosure

  1. Except for a provision under the Law Reform (Disclosure and Conduct before Action) (Jersey) Law 1999 which only applies to personal injury cases, a Norwich Pharmacal Order ("NPO") is the primary way to obtain pre-action disclosure in Jersey. A NPO enables material to be obtained from a third party in accordance with the test set out in Riba Consultaria Empresarial Ltda v Pinnacle Trustees Limited 2:
  1. Are we satisfied there is a good arguable case that the plaintiff is the victim of wrongdoing?
  2. Are we satisfied that there is a reasonable suspicion that the third party has been mixed up in the wrongdoing?
  3. As a matter of discretion, do we consider it to be in the interests of justice to order the third party to make disclosure?
  1. The situation is slightly different for foreign insolvency office-holders and beneficiaries of a Jersey trust as will be addressed in the second article. It is also possible to obtain disclosure ancillary to a freezing order (formerly known as a Mareva injunction). In exceptional cases a search order can be granted to enable an applicant to collect and preserve material in advance of civil proceedings. This draconian power will only be used where the applicant can show (i) an extremely strong prima facie case, (ii) that the damage (potential or actual) would be very serious for the applicant and (iii) clear evidence that the respondent possesses incriminating material and a real possibility that such material may be destroyed before an inter partes application can be made.
  2. Jersey has developed a broad NPO jurisdiction based on English common law. There is no bright-line distinction between NPO and Bankers Trust principles 3. It does not share the same legal framework which applies to third party disclosure as a matter of English law 4 and places a greater reliance upon the inherent jurisdiction of the Court. The law is also shaped by policy considerations which militate in favour of assisting victims where the Island's financial services have been used as instruments of wrongdoing 5. In Macdoel Investments Ltd and Others v Federal Republic of Brazil and Others 6 the Court of Appeal reflected on the classic statement of principle from the speech of Lord Reid in Norwich Pharmacal Company & Ors v Customs and Excise 7.

"In any event, whilst the cases in which the Norwich Pharmacal jurisdiction has been developed in England and Wales provide useful guidance on how Lord Reid's statement of principle may be applied, the courts of Jersey are in no sense bound by the scope of the jurisdiction that may have been delineated de facto by the circumstances of these cases. Nor are these courts constrained by the limits which may be placed on the application of the principle in the different social and economic conditions that may prevail from time to time in England and Wales (see, generally, State of Qatar v. Al Thani . . .). They will have regard to, amongst other things, the policy considerations which shape the law of Jersey and the social and economic context in which it operates.

We are conscious that, as the Court of Appeal of Jersey remarked in Durant Intl. Corp. v. Att. Gen. . . . (2006 JLR 112, at para. 1, per Sumption, J.A.):

'Over the last half-century, Jersey has become a major financial centre, providing trust and banking facilities for an extensive international clientele . . . It has for some time been the policy of the legislature and of the executive agencies exercising statutory powers that the commercial facilities available in Jersey should not be used to launder money or mask criminal activities here or anywhere else.'

Although these remarks were made in the context of an action that concerned the provision of assistance by the authorities in Jersey to foreign prosecutors, they have relevance in the sphere of civil litigation, where the courts are conscious that Jersey's reputation as a major financial centre might suffer if it were not willing to assist victims of wrongdoing to obtain redress."

  1. The NPO jurisdiction is arguably not as 'exceptional' as it once was 8 and applicants can expect the court to take a permissive view of the disclosure available. The expansion in its scope as matter of English law (notwithstanding pockets of judicial resistance) 9 has been mirrored in Jersey and reinforced by domestic considerations (see above). In Riba 10 Sir Michael Birt QC (sitting as a Commissioner) acknowledged developments since Norwich Pharmacal 11:

"Although that case was concerned with information about the identity of the wrongdoer, the principle has regularly been applied to include information about the whereabouts of assets or other information to support the existence of a cause of action."

  1. This is not to say that the jurisdiction is set to become a back door to pre-action discovery or even to reflect the generous regime in the United States under 28 U.S.C §1782. It is difficult to define the position (and thus assess the extent to which it may have departed from English law) due to the limited number of authorities and the fact that the majority of respondents are financial institutions which often adopt a neutral stance. In the absence of adversarial argument written judgments are rarely handed down.
  2. There are some notable points of caution. The court has refused to hear ex parte applications brought as a matter of convenience and directed counsel to serve the proceedings on the respondent(s) and return for an inter partes hearing 12. An NPO will be refused where its predominant purpose is to supplement the disclosure process in an overseas court 13. Parties seeking disclosure in support of foreign proceedings should therefore apply before commencing their substantive claim. This also meets the obvious concern that disclosure cannot be said to be necessary to formulate a claim which has already been commenced.
  3. The most significant pitfall concerns the locus of office-holders appointed by a foreign court, which will be addressed separately.

Post-judgment disclosure

  1. A judgment creditor can bring an application against either the judgment debtor or a third party (or both) for information required to aid enforcement or execution of a judgment or arbitral award anywhere in the world and need only establish that it is in the interests of justice for such disclosure to be ordered.
  2. This is a separate jurisdiction which can usefully be referred to as a Goldtron Order (where disclosure is sought from the judgment debtor) or a Jomair Order (where disclosure is sought from a third party). As the authorities discussed below illustrate, a freestanding disclosure order can be obtained in either circumstance.
  3. The power to order post-judgment disclosure has been affirmed in a number of cases, the earliest of which is Goldtron Limited v Most Investment Limited 14. These decisions approve and develop the dicta of Coleman J in Gridrxsime Shipping Co Ltd v Tantomar-Transportes Maritimos LDA 15 at 310:

"It is to be observed, however, that both in Ashtiani -v- Kashi and in Derby & Co Limited-v-Weldon (Nos 3 and 4) the courts were concerned with pre-judgment orders which included Mareva injunctions. The orders for disclosure were therefore orders ancillary to those injunctions. There was no question of there being any other order in support of which a disclosure order could be justified. Where, by contrast, one has the position that a judgment has been already obtained or an award made and where a Mareva injunction in aid of execution is justified, the jurisdiction to make a disclosure order arises both as a power ancillary to and in support of the injunction and independently of the injunction as a power in support of the execution of the judgment or award. ..." Emphasis added

And at 312:

"That case was concerned with a pre-trial worldwide Mareva injunction coupled with a worldwide disclosure order. In my judgment, quite different considerations apply in the case of a post-judgment or post-award disclosure order. In such cases it is just and convenient that the judgment or award creditor should normally have all the information he needs to execute the judgment or award anywhere in the world. It does not need the supervision of these courts to ensure that double execution is not achieved or that the information is not otherwise abused." Emphasis added

  1. As per the first emphasised passage above, the power to order disclosure exists independently of the power to order disclosure in support of an injunction 16. In Jomair Leasing v Hourigan 17 it was confirmed (by reference to Goldtron at para 26) that the evidential threshold for obtaining disclosure is substantially lower post-judgment 18 and that the jurisdiction extends to third parties:

"We are quite satisfied that the interests of justice require disclosure of his assets in Jersey. We note that disclosure is sought from the party cited rather than the defendant but this does not affect the position. The essential principle remains that the Court can make disclosure orders whether against a defendant or third parties in order to aid in the execution of a judgment or award and the interests of justice would usually point in favour of ordering such disclosure."

  1. This leaves the concept of a post-judgment NPO, which is known to both English and Jersey law, 19 on the verge of irrelevance. A post-judgment applicant is not subject to the traditional restrictions on the scope of NPO relief and need only establish that disclosure is the interests of justice which, as the court in Jomair observed, it usually will be.

A Separation of Powers

  1. The basic distinction between applications brought pre and post judgment is a useful one. The potential for confusion is illustrated in Riba which was brought as a NPO application despite the applicants being judgment creditors. It made no material difference to the outcome (because the respondent was ordered to disclose any documents in its possession relating to the six entities in question) however the identical relief would have been available as a Jomair Order – an approach which would have reduced the legal and evidential burden on the applicant. In different factual circumstances overlooking the post-judgment jurisdiction might well prejudice an applicant's prospects.
  2. An aspect of the confusion is due to the absence of distinct terminology. This is not a new issue. As the court in Goldtron observed (in respect of freezing orders) 20:

"As Donaldson M.R. stated in Deutsche Schachtbau GmbH-v-Ras Al Khaimah National Oil Co (1987) 2 All ER 769 at 780, it is at least doubtful whether a post-judgment injunction is correctly described as a Mareva injunction. The Mareva injunction introduced into English Law the concept of freezing assets of a defendant in advance of judgment. The Court had always assumed a jurisdiction to grant an injunction in aid of enforcement of a judgment. Nowadays the expression 'Mareva' has come to include post-judgment as well as pre-trial relief."

  1. In an article published in 2012 Advocate Nicholas Journeaux 21 examined the jurisprudential basis for third party disclosure and, following a careful review of authorities from England, Jersey and Guernsey, posited a set of principles common to the various circumstances in which a financial institution may be required to disclose confidential client information to a third party. This effort to reconcile Jomair and the line of authorities preceding it with conventional NPO principles leads to a closely reasoned conclusion focussed on the relationship between the disclosing party and the wrongdoing. Notwithstanding the rigour of this analysis I would respectfully argue that it overlooks the importance of the pre/post judgment distinction and, in doing so, seeks to elide concepts which sit more comfortably when separated.
  2. The central commonality between the two jurisdictions is the imperative to do justice. Even here the landscape is not the same. In Rugby Football Union v Consolidated Information Services Ltd 22 Lord Kerr, having emphasised that the essential purpose of the remedy (NPO) is to do justice, distilled a series of factors from the relevant case law which should be considered as part of the court's discretion 23. It is immediately evident that these factors (which I shall not list here) would not apply in the same way (or in some cases at all) to an application brought by a judgment creditor. While the success or failure of an application can be determined by factors outside the pre/post judgment rubric, the differences between the two are a consideration of fundamental importance to parties seeking disclosure in Jersey.

Footnote

1 2018JRC156

2 2018 JRC033A. This formulation reflects the alteration proposed by the Court at para 21.

3 The key authorities are Macdoel Invs. Ltd and others v. Federal Republic of Brazil and others 2007 JLR 201 and New Media Holding Company Llc v Capita Fiduciary Group Limited 2010 JLR 272 see also Templeton Insurance Limited and another v Minerva Trust Company Limited (as former trustee of The Avalon Trust) and another 2011 JRC205

4 See Stephen Gee QC, Commercial Injunctions (6th Ed) at 23-041 et seq

5 New Media Holding Company LLC v Capita Fiduciary Group Limited 2010 JLR 272 at para 15 citing Macdoel Invs. Ltd and others v. Federal Republic of Brazil and others 2007 JLR 201 at paras 38-39 (which includes citation of passage from the judgment of Sumption JA in Durant International Corporation and Others v Attorney General and Federal Republic of Brazil 2006 JLR 112 at para 1)

6 2007 JLR 201 at 38-39

7 1974 ACC 133 at 175

8 New Media Holding Company LLC v Capita Fiduciary Group Limited 2010 JLR 272 at para 23

9 See general discussion in Paul McGrath QC, Commercial Fraud in Civil Practice at 15.126 to15.129

10 2018 JRC033A at para 14

11 1974 ACC 133

12 See Riba Consultaria Empresarial Ltda v Pinnacle Trustees Limited 2018 JRC033A and Templeton Insurance Limited and another v Minerva Trust Company Limited (as former trustee of The Avalon Trust) and another 2011 JRC205

13 New Media Holding Company LLC v Capita Fiduciary Group Limited 2010 JLR 272 at para 31(iv)

142002 JLR 424 at paras 25–28, see also Apricus Investments-v-CIS Emerging Growth Limited 2003 JLR N40 2003 JRC 151 at paras 16–20, Africa Edge SARL-v-Incat Equipment Rental Limited 2008 JLR N41 2008 JRC 175 at paras 8–10, ENRC v Zamin Ferrous Limited 2015 JRC217 at para 26 et seq

15 1994 1 WLR 299 at 310

16 See Offshore Civil Procedure at p501 JA6.35.43 citing Dalemont v Senatorov 2012 JRC 014 at para 16, Apricus Investments-v-CIS Emerging Growth Limited 2003 JLR N 40 and Africa Edge SARL-v-Incat Equipment Rental Limited 2008 JLR N 41

17 2011 JRC 042

18 Ibid at para 10

19 See Mercantile Group (Europe) AG v Aiyela 1994 QB 336 and Riba Consultaria Empresarial Ltda v Pinnacle Trustees Limited 2018 JRC033A

20 2002 JLR 424 at para 25

21 Advocate Nicolas Journeaux, Third Party Disclosure Of A Debtor's Assets: What Are The Limits? Jersey & Guernsey Law Review – February 2012

22 2012 UKSC 55

23 Ibid at para 17

www.bakerandpartners.com

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Sign Up
Gain free access to lawyers expertise from more than 250 countries.
 
Email Address
Company Name
Password
Confirm Password
Position
Industry
Mondaq Newsalert
Select Topics
Select Regions
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions