Bertoli v Malone

• Jurisdiction: Cayman Islands
• Judge: (Zacca, P.; Georges and Kerr, JJ.A.)
• Judgment Date: 28 November 1990
• Court: Court of Appeal (Cayman Islands)
• Date: 28 November 1990

Court of Appeal

(Zacca, P.; Georges and Kerr, JJ.A.)

BERTOLI, EISENBERG and CANNISTRARO

and

MALONE (as CAYMAN MUTUAL LEGAL ASSISTANCE AUTHORITY)

R. Potts, Q.C. and C. Quin for the appellants;

C. Clarke, Q.C., and R. Finlay, Crown Counsel for the respondent.

Cases cited:

(1) Barclay”s Bank PLC v. Taylor, [1989] 1 W.L.R. 1066; [1989] 3 All E.R. 563, dictum of Lord Donaldson of Lymington, M.R. applied.

(2) Lloyd v. McMahon, [1987] A.C. 625; [1987] 1 All E.R. 1118, dicta of Lord Bridge of Harwich applied.

(3) Public Disclosure Commn. v. Isaacs, [1988] 1 W.L.R. 1043; [1989] 1 All E.R. 137, considered.

(4) R. v. Leicester Crown Ct., ex p. D.P.P., [1987] 1 W.L.R. 1371, dicta of Watkins, L.J. applied.

(5) R. v. Manchester Crown Ct., ex p. Taylor, [1988] 1 W.L.R. 705.

(6) R. v. Race Relations Bd., [1975] 1 W.L.R. 1686; [1976] 1 All E.R. 12, dicta of Lord Denning applied.

(7) Tournier v. National Provncl. & Union Bank of England, [1924] 1 K.B. 461; [1923] All E.R. Rep. 550, dicta of Bankes, L.J. applied.

(8) Wiseman v, Borneman, [1971] A.C. 297; [1969] 3 All E.R. 275, dicta of Lord Reid applied.

(9) Yew Bon Tew v. Kenderaan Bos Mara, [1983] 1 A.C. 553; [1982] 3 All E.R. 833, dicta of Lord Brightman considered.

Legislation construed:

Confidential Relationships (Preservation) Law (Law 16 of 1976), s.3, as amended by the Confidential Relationships (Preservation) (Amendment) Law, 1979 (Law 26 of 1979), s.3: The relevant terms of this section are set out at page 78, line 23 – page 79, line 14.

s.3A(6), as added by the Confidential Relationships (Preservation) (Amendment) Law, 1979 (Law 26 of 1979), s.4: The relevant terms of this section are set out at page 70, lines 14–18.

s.5: The relevant terms of this section are set out at page 78, lines 4–9.

Mutual Legal Assistance (United States of America) Law, .1986 (Law 16 of 1986), Schedule, art.l: The relevant terms of this article are set out at page 67, line 31 – page 68, line 2.

art. 3: The relevant terms of this article are set out at page 68, lines 15–40.

art. 19: The relevant terms of this article are set out at page 75, lines 24–34.

Administrative Law-Cayman Mutual Legal Assistance Authority-procedure-no requirement to give hearing to person subject of US request arising out of US criminal proceedings-hearing only required if fair and necessary

Administrative Law-Cayman Mutual Legal Assistance Authority-procedure-no unfairness in Cayman Mutual Legal Assistance Authority not granting hearing to applicant challenging request for confidential information in criminal case-prosecution entitled to adduce relevant evidence and no duty of confidentiality if disclosure compelled by statute

Criminal Law-retrospective effect-criminal acts penalized under new name-statute creating general offence of racketeering not deemed retrospective if constituent elements already criminal offences and legislation merely intended to facilitate investigation

Administrative Law-Cayman Mutual Legal Assistance Authority-confidential information-confidential information even if existing before

enactment of Cayman Mutual Legal Assistance (United States of America) Law, 1986 not protected when required in criminal proceedings and subject of US request to Authority

The appellants sought declarations that they were entitled to be heard by the defendant on a request by US authorities for legal assistance with respect to criminal proceedings instituted against them in the United States.

The appellants were defendants in criminal proceedings started in 1985 in the United States in which it was being alleged that they had been guilty of racketeering and related offences. After the beginning of those proceedings the Cayman Mutual Legal Assistance Treaty was implemented by the Mutual Legal Assistance (United States of America) Law, 1986 with legal effect from March 1990. Section 3 of the Law in combination with art. 19.3 of the Treaty identified ‘racketeering’ as a criminal offence for the investigation of which assistance could be provided. Although this term had not existed before in the law of the Cayman Islands, the constituent elements specified in the Treaty by way of definition were recognizably offences under other names. Section 4 provided that the Chief Justice of the Cayman Islands ‘acting alone and in an administrative capacity’ was to be the Authority to which special requests for assistance should be directed. Accordingly, the US Authority requested the Cayman Authority to require banks and trust companies in the Cayman Islands to disclose information concerning the appellants in response to which the Authority issued notices on persons who were to produce the relevant documents.

The appellants then sought orders in the Grand Court (Schofield, J.) against the Authority with a view to controlling or declaring upon the exercise of its official functions and, in particular, with a view to recognizing that they were entitled to be heard on the question of the US request. At the beginning of the proceedings they had not yet formally requested a hearing from the Authority. The Authority”s position was that it was not obliged to nor would it permit a hearing to any person who was the subject of a Treaty request but it would give consideration to any material fact which came to its notice, including a written representation, although this would not involve notifying its decision to the person making such representations. The proceedings were adjourned to allow the appellants to submit full written representations to the Authority, to which they received no reply. The court dismissed the appellants” application on the ground that a hearing was not justified ih the particular circumstances.

On appeal, the appellants submitted that (a) under the provisions of the Law and the Treaty the Authority was under an obligation to consider whether they should be granted a hearing-either oral or written; (b) since it also had a duty to act fairly, that obligation in the particular circumstances was to grant an oral hearing; and (c) the Authority could not validly grant the request by compelling the disclosure of information obtained before the operative date of the Mutual Legal Assistance (United States of America) Law, 1986 since (i) until that Law and the Treaty came into force, there was no conduct

classified as ‘racketeering’ to which the Treaty”s provisions could be applied, and (ii) they had acquired a right to have the confidentiality of information given and received prior to March 1990 preserved and the Law coming into force then should not be allowed to affect that vested right.

The Authority submitted that (a) on a proper construction of the Law and Treaty the appellants had no right to be heard and the Authority was not obliged to consider whether to grant them a hearing; and (b) acting fairly involved considering any relevant information brought to its attention (which it had done by receiving the appellants” written representation) but did not extend to a duty to grant the appellants a formal hearing.

Held, dismissing the appeal:

(1) The Authority was under an obligation to act fairly and, in terms of the particular procedural requirements for any matter before it, should act within the statutory framework of the Mutual Legal Assistance (United States of America) Law, 1986 and the Mutual Legal Assistance Treaty since the principles of natural justice were not meant to be applied as rigid rules, to frustrate the intent of the legislature. Accordingly, the court would only introduce such supplemental procedures as would ensure the attainment of fairness in so far as they were necessary and where the. relevant legislation was silent. The purpose of the Law and Treaty was to speed up the processes involved in the investigation, prosecution and suppression of crime between the two countries. In scope, they controlled the functions of the Authority and granted it powers which could be exercised at any stage of an investigation, even before a charge had been laid. In particular, there were specific provisions outlining the only circumstances in which the Authority could deny assistance from which it followed that a person in respect of whom information was sought could not be a party to the. determination whether assistance should be granted. It followed therefore that as a matter of statutory construction, the Authority was under no obligation to consider whether to hear such a person (page 66, line 22 – page 67, line 21; page 70, lines 19–34; page 71, lines 16–22; page 72, lines 18–29; page 73, lines 5–9).

(2) Moreover, there was no necessity based on the demands of fairness that the court should supplement the legislative requirements by specifying that the Authority should exercise a discretion to hear a person who was the subject of a request. As part of the criminal proceedings against the appellants, the prosecution was entitled to adduce relevant evidence and as far as this operation encroached upon a duty of confidentiality owed to the appellants, the Authority could do no more than ensure that the statutory conditions prescribed for lifting the sanctions imposed to prohibit breaches of confidence had been fulfilled: it had always been the case that confidentiality could be breached if disclosure were authorized by legislation. The fact that the appellants submitted written representations which were not rejected by the Authority was irrelevant and did not in any way impinge on what

was involved in acting fairly. Accordingly, the Authority had correctly decided that the procedural requirements as set out in the Law and the Treaty adequately met the requirements of justice in terms of its own purpose and functions (page 71, lines 24–27; page 73, line 9 – page 74, line 8).

(3) Although the Treaty had in effect recognized in respect of the Cayman Islands a new category of criminal offence under the general term...