An Application for Judicial Review and GCR O.53 Between: (1) Maples Corporate Services Ltd (2) Maplesfs Ltd Plaintiffs v Cayman Islands Monetary Authority Defendant

• Jurisdiction: Cayman Islands
• Judge: Justice Kawaley
• Judgment Date: 22 November 2022
• Docket Number: CAUSE NO. GC 20 OF 2021
• Court: Grand Court (Cayman Islands)

In the Matter of an Application for Judicial Review

And in the Matter of GCR O.53

Between:

(1) Maples Corporate Services Limited

(2) Maplesfs Limited

Plaintiffs

and

Cayman Islands Monetary Authority

Defendant

Before:

The Hon. Justice Kawaley

CAUSE NO. GC 20 OF 2021

IN THE GRAND COURT OF THE CAYMAN ISLANDS

HEADNOTE

Judicial review-public interest immunity privilege application by Defendant in respect of documents admitted to be relevant- Order 24 rule 19

Appearances:

Mr Hector Robinson QC ( Mourant Ozannes (Cayman) LLP) and Ms Jodie Woodward (Cayman Islands Monetary Authority) for the Defendant (the “Authority”/ “CIMA”)

IN CHAMBERS

REASONS FOR RULING ON DEFENDANT'S PUBLIC INTEREST IMMUNITY PRIVILEGE APPLICATION

Introductory

1 Under paragraph 1 of this Court's Order herein dated August 30, 2022, the Defendant was ordered to produce certain documents referred to in its List of Documents in the event that it failed to make a “Public Interest Immunity Application”. By an Ex Parte Summons dated 30 September 2022, the Defendant sought the following Order:

“ 1. That Exhibits 8, 9, 10, 30, 36, 37, 38 and 48 referred to at paragraph 1 of the Order dated 30 August 2022 shall not be disclosed in these proceedings on public interest immunity grounds.”

2 That Summons was heard on 28 October 2022 and at the conclusion of the ex parte hearing I reserved costs but made an Order in the following substantive terms:

“1. The Defendant shall not be required to produce to the Plaintiffs or otherwise disclose in these proceedings Exhibits 8, 9, 10, 30, 36, 37, 38 and 48 referred to at paragraph 1 of the Order dated 30 August 2022.

2. That the First Affidavit of Angelina Partridge (unfiled) shall not be disclosed in these proceedings on public interest immunity grounds.”

3 These are the reasons for that decision.

The factual basis for the privilege claim

4 The application was supported in broad, disclosable terms by the First Affidavit of Cindy Scotland dated 3 October 2022, the deponent being the Authority's Managing Director. The deponent firstly explained that of the 11 documents referred to in the 30 August 2022 Order, three had been disclosed but public interest immunity (“PII”) privilege was maintained in respect of the eight documents referred to in paragraph 1 of the Ex Parte Summons. She then deposed:

“ 7. In relation to the PII Exhibits, I can confirm that these documents contain sensitive information relating to the business of the Authority and their disclosure would seriously damage the effectiveness of the Authority to regulate the financial services industry if these documents were made available to the Plaintiffs, their legal representatives or otherwise publicly disclosed…

8. The internal workings of the Authority are sensitive information relating to the Authority covered by s.50 (1) of the MAA. It is important that that information does not enter the public domain that could affect the efficiency of the Authority's onsite inspections …Should such documents be disclosed into the public domain, it is possible that this will enable licensed entities to evade compliance with the laws and regulations of the Cayman Islands and prevent discovery by the Authority. Further, it may also jeopardise other regulators or law enforcement agencies both domestically and in the international sphere. The sensitive nature of the material is confidential and if disclosed the public interest would be injured as it would prevent the Authority from properly being able to carry out its statutory functions…”

5 These broad averments were supported with greater particularity by reference to the specific documents in the First Affidavit of Angelina Partridge which I reviewed in camera with the assistance of Leading Counsel for the Authority. I ultimately directed that this Affidavit need not be filed.

Legal findings

The Court's jurisdiction

6 It was essentially common ground at the directions hearing that this Court's jurisdiction to determine whether public interest immunity privilege corresponded to that enjoyed by the High Court of England and Wales 1. GCR Order 24 rule 19 provides:

“ Disclosure which would be injurious to public interest: saving (O.24, r.19) 19. The foregoing provisions of this Order shall be without prejudice to any rule of law which authorises or requires the withholding of any document or information on the ground that the disclosure of it would be injurious to the public interest.

7 I assumed that the Authority was not an emanation of the Crown entitled to formally rely upon section 19 of the Crown Proceedings Act (1997 Revision), but that to the extent that the Grand Court Rules were silent as to the procedure for public interest immunity in particular, the English practice (under, inter alia, CPR 31.19 and/or Supreme Court Practice 1999 paragraph 24/5.35) in relation to public interest immunity privilege would apply by virtue of section 11 as read with section 18 (2) of the Grand Court Act (2015 Revision) and GCR Order 24 rule 19.

8 Further and in any event, in a case involving public interest immunity asserted by the Crown, the general provisions relating to privilege found in GCR Order 24 rule 14 were regarded as applying to public interest immunity claims: Douglas v The Governor of the Cayman Islands and The Director of Prisons,

Cause No. 155 of 2017, Judgment dated October 19, 2020 (unreported, Marlene Carter J (Actg.)) at paragraph 6

The application of public interest immunity privilege to the Authority

9 Various English law texts were cited in the Authority's written submissions which made it clear that the proposition that public interest immunity privilege applied to financial services regulatory bodies is no longer controversial. Helpful concise explanations of the reasons why this is so may be found in ‘ Disclosure’, 5 ^th edition at 12-29-12-30, ‘ Documentary Evidence’, 14 ^th edition, at 22.19 and ‘ Phipson on Evidence’ Twentieth edition at 25.19. It was impossible to conceive any valid basis for contending that the same principles should not apply as a matter of Cayman Islands law. On the contrary, the fact that the financial services industry is a major pillar of the local economy in my judgment materially elevated the public policy imperative for the law to support (as far as possible) the integrity of the operations of a national financial regulatory body such as the Authority. It was in any event, common ground in this case that the Authority could assert public interest immunity privilege, just as it was 27 years ago in Kaufman v Credit Lyonnais Bank [1995] CLC 300 at 313 E-F where Arden J (as she then was) held:

“ Normally public interest immunity is conferred only on a government department but exceptionally the immunity may be conferred on others: see, for example, D v NSPCCELR [1978] AC 171 where the House of Lords held that public interest immunity extended to the names of those who gave information to the NSPCC, a body authorised under Act of Parliament to bring proceedings for the protection of children.

In this instance the SFA is also enabled under the 1986 Act to license and to monitor persons carrying on the business of giving investment advice on securities. It has therefore a statutory supervisory role, and the fact that it is not an arm of the government does not prevent it from making a claim to public interest immunity. Both parties have proceeded on the basis that the SFA is operating in the public interest when it receives information from member firms rather than simply operating contractual rights against them. As the later point has not been argued I propose to proceed on the basis that public interest immunity can be asserted by the SFA. In ( MGN Pension Trustees Ltd v Invesco Asset Management Ltd unreported, 14 October 1993) Evans-Lombe J held that IMRO could claim public interest immunity.”

10 I accordingly had little difficulty in accepting the conceded proposition that the Authority possessed legal standing to assert its public interest immunity claim on the basis that this category of privilege may be invoked by financial regulatory bodies as indicated above. It is clear from, in particular, section 50 of the Monetary Authority Act (2020 Revision) that information received by the Authority from, inter alia, regulated entities or foreign authorities is prima facie confidential. The same applies to information received in relation to the enforcement of the Proceeds of Crime Act (2020 Revision) (“ POCA”) and the Anti- Money Laundering Regulations (2020 Revision). For instance, section 139 of the POCA creates the offence of “ tipping-off” which is committed by, inter alia, disclosing information which would prejudice an investigation. Under section 6(1) of the Monetary Authority Act (2020 Revision), functions conferred on the Authority include the following:

“ (b) regulatory functions, namely —

(i) to regulate and supervise financial services business carried on in or from within the Islands in accordance with this Law and the regulatory laws;

(ii) to monitor compliance with the anti- money laundering regulations; and

(iii) to perform any other regulatory or supervisory duties that may be imposed on the Authority by any other law;

(c) co-operative functions, namely, to provide assistance to overseas regulatory authorities in accordance with this Law…”

Substantive and procedural governing principles

11 In oral argument, Mr Robinson KC referred to a selection of instructive judicial pronouncements on the substantive and procedural approach to public interest immunity privilege applications. Firstly, in terms of vintage,...