Ministry of Finance v DEF Ltd

• Jurisdiction: Bermuda
• Judgment Date: 31 July 2019
• Date: 31 July 2019
• Docket Number: Civil Jurisdiction 2019 No AA193
• Court: Supreme Court (Bermuda)

[2019] Bda LR 59

In The Supreme Court of Bermuda

Civil Jurisdiction 2019 No AA193

In the matter of the request for exchange of information under the International Cooperation (Tax Information Exchange Agreements) Act 2005 (section 2) and the Convention on Mutual Administrative Assistance in Tax Matters in respect of the Agreement between Bermuda; United Kingdom and requesting country, Kingdom of Sweden

Between:

Ministry of Finance

Plaintiff

and

DEF Ltd

Respondents

Mr J Elkinson for the Ministry of Finance

Mr J Knight for the Respondents

The following cases were referred to in the judgment:

Ministry of Finance v E, F, H, O [2014] Bda LR 54

Minister of Finance v Bunge Ltd [2013] Bda LR 83

Minister of Finance v AD [2015] Bda LR 52

R v Secretary of State for the Home Department ex parte Simms [2000] 2 AC 115

Governey v Financial Services Ombudsman [2015] 2 IR 616

TIEA production order — Right of review — Disclosure of material

RULING of Hargun CJ

Introduction

1. By an ex parte Production Order dated 15 April 2019 the Court, pursuant to section 5(2) of the International Cooperation (Tax Information Exchange Agreements) Act 2005 (“the 2005 Act”), ordered that DEF Ltd (“the Respondents”) produce the following information to the Minister of Finance (“the Minister”):

• i. In relation to the affairs of the Respondents for the years 2015 – 2018:

  • (a) Annual Financial Statements;

  • (b) Trial Balances and/or balance sheets and income statements from the accounts;

  • (c) Complete general ledgers from the accounts;

  • (d) Copies of 6 numbered accounts of the Respondents for the calendar years 2015, 2016, 2017 and 2018;

  • (e) Any other bank accounts not mentioned above that are associated with the Respondents; and

  • (f) Bank account information for a numbered account relating to Northern Trust International Banking Corporation.

• ii. In relation to the affairs of Active High Yield Fund Ltd:

  • (a) The Annual Financial Statements for the period 2014 – 2016;

  • (b) Trial Balances and/or balance sheets and income statements from the accounts for the period 2014 – 2016;

  • (c) Complete general ledgers from the accounts for the period 2015 – 2016; and

  • (d) Copies of statements for bank accounts for the period 2015 – 2016.

Relevant provisions of the 2005 Act

2. The Preamble to the 2005 Act states that it is expedient to make general provision for the implementation of a tax information exchange agreements entered into by the Government of Bermuda with other jurisdictions and to enable the Minister to provide assistance to the competent authorities of such jurisdictions under such agreements.

3. Section 5 of the 2005 Act deals with issuing of Production Orders by the Supreme Court. Section 5(1) provides that where the Minister has received a request in respect of which information from the person in Bermuda is required, the Minister may apply to the Supreme Court for the Production Order to be served upon the person referred to in the request, directing and to deliver to the Minister the information referred to in the request.

4. Section 5(2) provides that the Supreme Court may, if on such an application it is satisfied that conditions of the applicable agreement relating to a request are fulfilled or where the Court is satisfied with the Minister's decision to honour a request is in the interest of Bermuda, make a Production Order requiring the person referred to in the request (a) to deliver to the Minister the information referred to in the request; or (b) to give the Minister access to such information, within 21 days of making request of the Production Order.

5. Section 5(5) provides that an application for a Production Order under this section may be made ex parte to a judge in Chambers and shall be in camera.

6. Section 5(6) deals with challenge to the Production Order and the issue of disclosure of the material relied upon by the Supreme Court when it made the ex parte Production Order. Section 5(6) provides that a person served with a Production Order under subsection (1) who is aggrieved by the service of the order may seek review of the order within 21 days of the date of the service of the order.

7. Section 5(6A) provides that a person served with the Production Order under subsection (1) who wishes to view the documents filed with the court on the application for the Production Order (a) shall not be entitled as against the Minister to disclosure of such documents until the person has been granted a right of review under subsection (6B) and that the Court has directed disclosure of such documents as it considers appropriate for the purposes of the review; and (b) shall not (notwithstanding anything to the contrary contained in the Supreme Court Records Act 1955) be permitted to view such documents on the court file until such a right of review has been granted and the Court has directed disclosure of the documents.

8. Section 5(6B) deals with the determination of the right of review. It provides that upon the application under subsection (6) having been filed with the court, the Court shall decide whether to grant the person a right of review.

9. Section 4 deals with the grounds for declining a request for assistance. Section 4(2) provides that the Minister may decline a request for assistance if:

• (a) the information relates to a period that is more than six years prior to the tax in respect of which the request is made;

• (b) the request pertains to information in the possession or control of the person other than the taxpayer that does not relate specifically to the tax affairs of the taxpayer;

• (c) the information is protected from disclosure under the laws of Bermuda on the grounds of legal professional privilege;

• (d) the requesting party would not be able to obtain the information (i) under its own laws for the purposes of the administration or enforcement of its tax laws; or (ii) in response to a valid request from the Minister under the agreement;

• (e) the disclosure of the information would be contrary to public policy; or

• (f) the Minister is not satisfied that the...