Jersey Unreported Judgments

Business dispute - applications submitted by the respondent to withhold documents.

[2015]JRC044

Royal Court

(Samedi)

24 February 2015

Before     :		Advocate Matthew John Thompson, Master of the Royal Court
Between	U, V and W		Appellants
And	Jersey Financial Services Commission		Respondent

Advocate S. A. Hurry for U.

Advocate W. A. F. Redgrave for V.

Advocate P.C. Sinel for W.

Advocate B. H. Lacey for the Respondent.

 

CONTENTS OF THE JUDGMENT

		Paras
1.	Introduction	1
2.	The Law	2-5
3.	Process	6-14
4.	Decision	15-19

judgment

the master:

Introduction

1.        This judgment sets out my approach in relation to applications to withhold documents on the grounds of public interest immunity ("PII") in relation to regulatory appeals and to record the practice I adopted in relation to the application to withhold disclosure on the basis of PII by the respondent. 

The Law

2.        The general approach to be adopted when PII is claimed in civil cases was considered by the Royal Court in Re X Children v Minister for Health and Social Services [2011] JLR 772 at paragraphs 21 to 24 as follows:-

"21.    There are no rules in Jersey governing the procedure for claiming public interest immunity ("PII") in civil cases and no authority was produced to me. I was referred to Disclosure by Matthews & Malek, 3rd ed. (2007), which explains that in England an official view will be put forward usually by certificate or affidavit or witness statement by the Minister or other appropriate official, such as the head of the organization concerned, as to why the document concerned will not be disclosed or produced. In accordance with a three-stage test, the official must consider whether disclosure would cause real damage or substantial harm. If he is satisfied that the damage test is met, he should consider (so far as he can judge it) the strength of the public interest in disclosing the document and carry out the balancing exercise.

22       The three-stage test is derived from a Government Paper on Public Interest Immunity dated December 18th, 1996, and set out in Matthews & Malek, Disclosure, 2nd ed. (2001), para. 9.076, at 249:

"First: A decision must be taken on whether there is a duty to disclose the document at all.  Broadly speaking, the question in civil and criminal cases will be whether the document is relevant or potentially relevant to an issue in the case.  If there is no duty to disclose the document, questions of PII do not arise.

Sir Richard Scott recommended that if a disclosure point involving documents which are the subject of a PII claim is referred to the judge, the judge should be invited to decide first whether the documents are disclosable.  In the Government's view, this is a correct and useful approach.

Second: If there is a duty to disclose, a decision must be taken on whether the document attracts PII. Existing practice has been to determine this question by asking whether the document attracts PII because of its 'contents' or because it falls into a 'class' of documents which attracts PII.  The Government regards this distinction as no longer helpful.  It proposes to abandon it and adopt a new approach which applies the fundamental test of whether the maker of the certificate believes that disclosure would cause real damage. 

Third: This step applies to some claims, including those made by Ministers.  If the document attracts PII, the decision maker will consider (so far as he can judge it) the strength of the public interest in disclosing the document.  This will require an assessment of the issues in the case.  The decision maker performs what is described in this report as the Wiley balancing exercise, usually after taking advice from counsel in the case or Treasury Counsel.  If the balance appears to him to favour disclosure, he is entitled to disclose the document.  If the balance appears to go the other way, or if the decision maker is uncertain, he will put a certificate to the court explaining clearly his reasons for asserting PII; and the court will then be invited to determine whether disclosure should be made."

23       Where the document is of questionable relevance or it is arguable that production is in any event not necessary, the court will usually consider relevance first, and only once it has decided that prima facie the document should be disclosed will the judge then go on to consider public interest immunity, carrying out a three-stage process as follows (para. 9.082, at 252-253):

"(a) satisfying himself from the certificate/affidavit/witness that:

(i) the class of documents concerned is capable of attracting the immunity;

(ii) there is no reason to believe that the actual documents do not fall within the class aimed; and

(iii) both the documents and the claim have been properly considered by an appropriate person;

(b) determining whether there is a public interest in production of the documents, by reason of both:

(i) relevance to matters in question, and

(ii) necessity for disposing fairly of the case;

(c) balancing the public interest in withholding the documents against the public interest in producing them."

24       Once PII has been properly raised, the burden is on the applicant for production to show that the documents should be produced (Air Canada v. Trade Secy. (No. 2) (1) ([1983] 1 All E.R. at 165-166))."

3.        In the Matthews and Malek Disclosure 4th Edition issued subsequent to the decision of the Royal Court in X Children, Matthews & Malek address the threshold as to when PII may be asserted. Paragraph 12.7 states as follows:-

"The threshold test as to when public interest immunity may be asserted has been expressed in various ways in the authorities and has changed over time.  There has been a tightening of circumstances in which public interest immunity may be asserted.  The House of Lords has adopted the test of whether disclosure will cause "substantial harm" to the public interest.  The Government's approach in the December 1996 report uses the criterion of whether disclosure would cause "real damage" to the public interest.  When the December 1996 report was announced the Government confirmed that "real damage" meant the same as "substantial harm"."

4.        Once the court has reviewed whether the applicant for PII has followed the three stage approach, the court then has to perform a balancing exercise.  That balance exercise was described in Matthews & Malek at paragraph 12.08 as follows:-

"The balancing exercise consists of the court balancing competing public interest.  There is the public interest that substantial harm or real damage should not be done to the state or public service by the disclosure of certain documents, and there is the public interest that the administration of justice should not be frustrated by the withholding of documents necessary for the fair determination of proceedings.  Although the December 1996 report applies equally to civil and criminal proceedings there are crucial distinctions in practice, both as to how public immunity claims are asserted, but also in the application of the balancing exercise as between the public interest in withholding a particular document and the administration of justice in the individual case.  This distinction arises as a result of the different nature of proceedings.  As stated by Sir Richard Scott V.C. in his report in the context of class claims:

"It is of the essence of the 'balancing exercise' to be carried out in a civil case in which a PII claim has been made, that the public interest factors prayed in aid as justifying the withholding of documents must be weighed against the public interest in the administration of justice and the extent to which the withholding of the documents might prevent a just result being reached in the case.  In this 'balancing exercise' the greater the weight of the public interest reasons for withholding the documents, the more likely will be that the scale will come down against disclosure.  But, in criminal cases, the only question is (or at least should be) whether the documents sought to be withheld might be of assistance to the defendant in defending himself.  If they are, they must be disclosed ... There is, I believe, no reported criminal case in which the judge has concluded that the documents would be of assistance to the defendant but has nonetheless declined, on, PII grounds, to order them to be disclosed.  The firm conclusion is, in my opinion, justified that in criminal cases the only question should be whether the documents might be of assistance to the defendant.  This is not a 'balancing exercise'.  The issue does not depend on the weight of the PII factors that are being invoked."

5.        Like Commissioner Clyde-Smith in X Children, I concluded that the substance of the extracts from Matthews & Malek that I have referred to should also be followed in Jersey in order to assert proper judicial control over the process and to secure a fair trial under Article 6 of the European Convention of Human Rights. 

Process

6.        The application for PII followed on from my decision reported at U V and W-v-JFSC [2014] JRC 202.  W appealed against that decision which appeal was dismissed as reported at W-v-JFSC [2015] JRC 017.  The overall effect of the disclosure I ordered was to provide each of the appellants with significant quantities of material (see paragraph 36 of the decision reported at [2014] JRC 202). 

7.        At the time of the appellants' applications for disclosure, the respondent indicated it might wish to apply to argue that disclosure should not take place in whole or in part on the grounds of public interest immunity.  Accordingly, I gave the respondent 14 days to make such an application.  Within the 14 day period, the respondent wrote to me on an ex parte basis enclosing a draft representation inviting comments as to how I wished the respondent to progress its application. 

8.        I indicated that the appropriate procedural route for the respondent to follow was to issue a summons rather than proceed by way of representation, such summons to be supported by an affidavit following the approach set out in X Children.  I further invited submissions from the respondent on whether the procedure to be adopted should be on an ex parte basis or an inter partes basis.  I also asked for any submissions on the general legal principles to be adopted, including any process to be kept separate from any submissions on the merits of the application itself. 

9.        The respondent then applied to me to hear an application by way of summons.  The summons was supported by an affidavit sworn on behalf of the respondent by an individual duly authorised to do so. 

10.      I directed that part one of the respondent's application, which addressed the general principles applicable when the Royal Court was considering applications raising PII, was to be determined in the presence of the appellants, if they wished to attend.  I further directed that part two of the application, which was to consider those documents over which PII was asserted, was to be determined in the absence of the appellants and their advisers. 

11.      However I made it clear that once I had determined the general principles applicable on a PII application, it was open to me to vary the order I made in respect of part two of the respondent's summons to allow the appellants to attend, if I thought it appropriate to do so.  In the event no such order was made and the appellants did not dispute the general principles set out by the respondent and which I have accepted by this judgment. 

12.      I have set out the above process because I consider this is the practice that should be followed in respect of future PII applications.  It is right to observe however there may be applications where it is not appropriate to notify the appellants of the application.  It should be for the party seeking to assert PII to persuade the court on an ex parte basis should an applicant desire that no other parties are to be notified of the application not to make disclosure on the basis of PII.  Absent such an application or other special circumstances, where one party is applying to withhold documents on the basis of PII, the other parties to the proceedings should be aware of the fact of such an application and should be permitted to make any observations they wish to make insofar as they can do so.  Those observations may be matters of general principle or may be matters relevant to the particular circumstances of the case. 

13.      Finally, any applications raising PII should generally be made promptly when disclosure is ordered and as soon as reasonably practical. 

14.      On the present application none of the appellants challenged the general principles advanced by the respondent and other than inviting the court to review the application thoroughly and carry out a proper balancing exercise, no other observations were made by the appellants. 

Decision

15.      In relation to the application by the respondent:-

(i)        I was satisfied that the documents were capable of attracting PII;

(ii)       there was a duty to disclose the document.  That duty arose from the orders I made recorded in my earlier judgment to which I have made reference above;

(iii)      an affidavit was filed on behalf of the respondent as a result of which I was satisfied that the respondent had assessed the relevant public interest in relation to whether or not parts of certain documents should be disclosed. 

16.      I was also satisfied that real damage would occur if disclosure took place of the material the respondent wished to redact. 

17.      In reaching this view I balanced the public interest in ordering disclosure against the public interest of withholding documentation for the reasons advanced by the respondent.  I was satisfied that the general principle of parties complying with disclosure orders was outweighed by the prejudice described by the respondent.  In particular, in this case there has been extensive disclosure, as referred to above, which will enable the appellants to pursue their appeal.  I was satisfied that withholding of small amounts of parts of documents would not affect the ability of the appellants to pursue their appeals.  By contrast if disclosure were made I was satisfied and agreed with the respondent that there would be real damage to other areas of public interest.  I do not set out what those other areas are because to do so would run the risk of revealing what I have ordered does not need to be disclosed.  I therefore granted the respondent's application. 

Authorities

Re X Children v Minister for Health and Social Services [2011] JLR 772.

Matthews & Malek Disclosure 4th Edition.

European Convention of Human Rights.

U V and W-v-JFSC [2014] JRC 202.

W-v-JFSC [2015] JRC 017.