Whiting v Torus Insurance (Bermuda) Ltd (Costs)
| Jurisdiction | Bermuda |
| Judge | Kay, JA,Baker, P,Bernard, JA |
| Judgment Date | 12 June 2015 |
| Neutral Citation | [2015] CA Bda 18 Civ ,BM 2015 CA 19 |
| Docket Number | Commercial Jurisdiction 2014 No 194,CIVIL APPEAL No Ad of 2015 |
| Court | Court of Appeal (Bermuda) |
| Date | 12 June 2015 |
[2015] CA (Bda) 18 Civ
The Court of Appeal for Bermuda
Baker, President
Kay, JA
Bernard, JA
CIVIL APPEAL No Ad of 2015
Mr. David Kessaram, Cox Hallet Wilkinson, for the Appellant
Mr. Jeffrey Elkinson, Conyers Dill & Pearman, Amicus
International agreements to which Bermuda is a party provide for the rendering of assistance by Bermuda to the tax authorities of other countries which seek information about persons present in Bermuda. The assistance is now in the form of a production order whereby the Minister of Finance (the Minister) serves upon a person an order requiring the production of information. The system is governed by the International Cooperation (Tax Information Exchange Agreements) Act 2005 (the 2005 Act), as amended by the International Cooperation (Tax Information Exchange Agreements) Amendment Act 2014 (the 2014 Act), which came into force on 8 December 2014. In the present case, the Minister received a request for assistance from the French tax authorities. On 30 December 2014, he applied to, and obtained from, the Supreme Court a production order in relation to AD. This appeal is concerned with what transpired following the making of the production order.
The procedure for obtaining a production order is set out in sections 5 and 6 of the 2005 Act in the following terms :
‘5(5) 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) 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 within21 days of the date of service of the order.’
The amendments introduced by the 2014 Act now add the following into section 5 of the 2005 Act :
‘(6A) A person served with a production order under subsection (1) who seeks information from the Minister pertaining to the production order, must first file an application with the court to review the production order.
(6B) Upon the application under subsection (6A) having been filed with the court, the court shall decide whether to grant the person a right of review.’
The question at the heart of this appeal is whether a person upon whom a production order is served is entitled to disclosure of the documents which were placed before the judge by the Minister in support of his ex parte application for the production order. In accordance with general common law principles, the subject of the production order was entitled to such disclosure: Ministry of Finance v E, F, H and O [2014] Bda LR 54. We are told that, following that judgment, the Minister informed all those against whom production orders were made of their right to receive disclosure of the documents which had been before the court on the ex parte application.
The present dispute results from a change in the stance of the Minister since 8 December 2014. His stance now is that, by reason of the amendments, he is no longer required to disclose the material which had supported his ex parte application. If the subject of the production order wishes to apply for a review under section 5(6A), he must do so without sight of that material. He is not even entitled to know the source of the originating request for assistance. The Supreme Court will then proceed to decide ‘whether to grant the person a right of review’. If a right of review is refused at that stage, the subject must comply with the order, which is supported by criminal sanctions, without ever having had the opportunity to see the material upon which the order was based.
AD did not accept the lawfulness of the Minister's stance. He sought disclosure of the relevant material so as to satisfy himself that the production order had been properly made and to decide whether or not to make an informed application for a review pursuant to section 5(6A). His case is that, at common law, there is a fundamental right to disclosure of the material upon which an ex parte order was based and a right of that importance can only be abrogated by a clear and unambiguous statutory provision. He disputes that the amendments deriving from the 2014 Act amount to such a clear and unambiguous abrogation.
On 26 January 2015 in the Supreme Court, Hellman J accepted the submission of Mr Jeffrey Elkinson, then appearing for AD, and ordered the Minister ‘to provide copies of all the documents placed before the court on the making of the production order on 30 December 2014’. The Minister now appeals against that decision.
The appeal was first listed in this Court in March. By then it had become a matter of indifference to AD because the Minister had chosen to make the disclosure voluntarily. As AD had obtained the material, he had no further interest in resisting the appeal and, on that occasion, only Mr David Kessaram, representing the Minister, appeared. He indicated that the Minister wished to pursue the appeal because of its importance for other pending and anticipated cases. The Court agreed to hear the appeal if, but only if, it could have the benefit of submissions from an amicus curiae because it considered that the issue is too important to be resolved upon submissions from only one party. Thereafter, Mr Elkinson, who had triumphed before Hellman J, agreed to appear before us, this time as amicus. We are most grateful to him.
Hellman J began his judgment by observing :
‘It is a fundamental principle of fairness at common law that a party should have access to the evidence on which the case against him is based and thus an opportunity to comment on it and, if appropriate, challenge it.’
He then recorded the submission on behalf of the Minister to the effect that, by reason of the amendments, in particular section 5(6A), the common law right to disclosure has been modified so that it only arises once the court has granted a right of review. The submission was predicated on the assertion that the purpose of the amendments was ‘to avoid fishing expeditions’. Hellman J continued :
‘The grounds of review, [the Minister] submits, must be confined to grounds which are apparent from the face of the order. Thus an applicant would be unable to seek a review on the grounds that the statutory conditions for the making of a production order had not been satisfied because he would not have access to the material which would enable him to assess whether there were grounds to make such an application. However, [the Minister] submits, applicants can draw comfort from the fact that the request for a production order will have been subject to independent scrutiny by both the Minister when deciding whether to provide assistance to the requesting party and the Court when making the order.’
Ultimately the case for the Minister was that, unless subsection (6A) bore the meaning for which he contended, ‘why bother to enact [it]?’
Hellman J rejected these submissions. He characterised the right to disclosure of the material deployed by the Minister in support of the ex parte application as a ‘fundamental right’ of the kind referred to by Lord Hoffmann in R v Secretary of State, ex parte Simms [2000] 2 AC 115, 131. As such, it could only be removed by express language or necessary implication (which is not the same as reasonable implication: Morgan Grenfell & Co Ltd v Special Commissioners for Income Tax [2003] 1 AC 563, per Lord Hobhouse at paragraph 44). He added :
‘Subsection (6A) does not expressly remove the right of a person served with a production order to see the evidence which was before the Court when the production order was made. Neither does the removal of that right necessarily follow from the express provisions of the...
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