G v S

• Jurisdiction: Cayman Islands
• Judge: (Zacca, P., Georges and Henry, JJ.A.)
• Judgment Date: 02 December 1992
• Court: Court of Appeal (Cayman Islands)
• Date: 02 December 1992

Court of Appeal

(Zacca, P., Georges and Henry, JJ.A.)

G

and

S

R.D. Alberga, Q.C. and Ms. J. O”Connor Connolly for the appellant;

M. Marsden, Ag. Solicitor General for the respondent.

Cases cited:

(1) Cedeno v. O”BrienUNK(1964), 7 W.I.R. 192, dicta of Wooding, C.J. applied.

(2) Minister of Foreign Affairs, Trade & Industry v. Vehicles & Supplies Ltd.UNK(1989), 39 W.I.R. 270, dictum of Lord Oliver of Aylmerton applied.

(3) W.E.A. Records Ltd. v. Visions Channel 4 Ltd., [1983] 1 W.L.R. 721; [1983] 2 All E.R. 589, dicta of Donaldson, M.R. applied.

Legislation construed:

Misuse of Drugs Law (Second Revision) (Law 13 of 1973, revised 1985), s.2(b) as added by Misuse of Drugs (Amendment) Law, 1988 (Law 8 of 1988), s.2: The relevant terms of this sub-section are set out at page 212, line 32 – page 213, line 2.

s.16L(1) and (2) as added by Misuse of Drugs (Amendment) Law, 1988 (Law 8 of 1988), s.6:

‘(1) A constable may, for the purpose of an investigation into drug trafficking, apply to the Grand Court for an order under subsection (2) in relation to particular material or to material of a particular description.

(2) If on such an application the court is satisfied that the conditions in subsection (4) are fulfilled, it may make an order that the person who appears to it to be in possession of the material to which the application relates shall-

(a) produce it to a constable for him to take away; or

(b) give a constable access to it, within such period as the order may specify.’

s.16L(4) as added by the Misuse of Drugs (Amendment) Law, 1988 (Law 8 of 1988), s.6: The relevant terms of this sub-section are set out at page 207, lines 13–31.

s.16L(6) as added by the Misuse of Drugs (Amendment) Law, 1988 (Law 8 of 1988), s.6: The relevant terms of this sub-section are set out at page 210, lines 33–35.

Criminal Law-drugs-investigation into drug trafficking-production of documents-at inter partes hearing for discharge of ex parte order for production made under Misuse of Drugs Law (Second Revision), s.16L(1) and (2) court may allow prosecution to adduce fresh evidence and may vary order in consequence-not improper to take such evidence at end of hearing if defence given opportunity to rebut

Criminal Law-drugs-investigation into drug trafficking-production of documents-money laundering not included in definition of drug trafficking in Misuse of Drugs Law (Second Revision), s.2(b) but in course of wider investigation to trace proceeds of drug trafficking, police may obtain production order under s.16L against money launderer who is ‘specified person’ believed to have ‘benefited from drug trafficking’

Criminal Law-drugs-investigation into drug trafficking-production of documents-‘reasonable grounds for suspicion’ as condition for granting production order under Misuse of Drugs Law (Second Revision), s.16L(4) to be more substantial than tentative identification by interested party of person against whom order sought-suspicion to be plainly shown to be reasonable

Criminal Law-drugs-investigation into drug trafficking-production of documents-application for production order under Misuse of Drugs Law (Second Revision), s.16L(1) to specify documents to clarify whether application in respect of ‘particular material’ or ‘material of a particular description’

The respondent applied to the Grand Court for a production order against the appellant.

The appellant was an attorney-at-law whose client was being investigated for money laundering as part of a wider investigation into the activities of a drug trafficking organization operating through the Cayman Islands. A member of this organization had already been convicted of drug trafficking in the United States. During his trial he revealed the names of certain companies in the Cayman Islands which had been ostensibly set up as land development enterprises but which in fact were intended to provide a front for laundering funds acquired from

drug trafficking. The appellant”s client had purchased two lots of land from one of these companies which the company subsequently ‘resold’ to other parties whilst still supposedly in his possession. The agreement of sale was undated and had not been signed at the same time and place by both parties.

The police officer conducting the investigations was told by a lawyer in Panama that another Panamanian was working for the organization in the Cayman Islands. When asked if the applicant”s client was that person, the lawyer remarked that he might be. On the basis of this interview, the officer treated the circumstances of the sale to the applicant”s client as suspicious and wished to verify the existence of an original agreement because he concluded that if there was not, the applicant”s client was likely to be involved in moving drug trafficking money to the Cayman Islands. He then successfully applied ex parte under the Misuse of Drugs Law (Second Revision), s.16L for an order requiring the appellant to produce all materials (which he specified by type) concerning ‘transactions in relation to the dealings’ of his client.

The appellant applied to the Grand Court (Malone, C.J.) for the discharge of the order, submitting in the main that it was not intended that s.16L should apply to money laundering but only to drug trafficking as defined by the Law. After his submissions the prosecution was allowed to introduce supplemental affidavits to establish the direct connection between money laundering and drug trafficking and explain how the activities of the former fitted into the scope of the Law. The application for discharge was dismissed but the court allowed a variation of the order to make the production request more specific. These proceedings are reported at 1990–91 CILR 341.

On appeal, the appellant submitted that (a) the Grand Court had no jurisdiction to review an ex parte order made under s.16L; (b) the prosecution should not have been allowed, at the end of the hearing for the discharge of the order, to adduce evidence intended to neutralize the effect of one of the principal arguments advanced in his favour;(c) the first prerequisite for the grant of a production order unders.16L, namely that there should be an investigation into drug trafficking, had not been met; (d) there was not sufficient evidence to raise reasonable grounds for suspecting that his client had carried on or had benefited from drug trafficking; and (e) the application for the order was not specific enough and was merely a fishing expedition for information.

Held, allowing the appeal:

(1) Although s.16L(1) and (2) of the Misuse of Drugs Law (Second Revision) did not expressly state that an application for the production of documents should be made ex parte, it was clearly appropriate that this should be so to reduce the risk of documents being disposed of. Moreover, those provisions gave the court a general power to make appropriate orders and the power to discharge or vary them was implicit in sub-s. (6). The statutory prescription apart, it was well established that the court was empowered to review orders made ex parte. Since an

ex parte order was provisional and based only on the evidence and submissions of one side, it was part of the understanding in granting it that a judge would expect to review it on the basis of all the evidence placed before him at a subsequent inter partes hearing and to vary it if necessary. In particular, since the clear objective of the legislation was to suppress the drug trade, it was desirable that the court should hear everything the prosecution would wish to say, affording, if need be, an opportunity for the applicant seeking a discharge to rebut any fresh evidence. The court had, therefore, not improperly exercised its discretion to allow the prosecution to adduce at the end of the hearing fresh evidence in support of maintaining the order and to vary it as a result (page 210, line 28 – page 212, line 5).

(2) By using the word ‘means’ instead of ‘includes,’ the legislature had intended the definition of drug trafficking in s.2(b) of the Misuse of Drugs Law (Second Revision) to be comprehensive. That definition could not be extended by the court to take in money laundering. However, although s.16L was generally concerned with an investigation into drug trafficking for the purpose of which a police officer might apply for an order, s.16L(4) permitted a production order to be obtained against a ‘specified person’ who might not have been engaged in drug trafficking as defined by the Law but who, nevertheless, was the subject of an enquiry aimed at establishing his having obtained a benefit from drug trafficking. Such a person might be a money launderer and provided that it was established that an enquiry into his activities was part of the wider investigation to trace individuals who might have benefited from drug trafficking, he could properly be the subject of a production order (page 213, lines 3–8;page 214, line 9 – page 215, line 1).

(3) The evidence in the present case, however, was insufficient to say that the respondent could have ‘reasonable grounds for suspecting’ (within the meaning of s.16L(4) of the Misuse of Drugs Law (Second Revision)) that the appellant”s client was involved in the money laundering scheme set up by the drug traffickers. The only basis for suspicion was the tentative suggestion by an interested party that the appellant”s client might have been involved. Since there was no independent evidence to support the identification, the police officer”s suspicion could not be said to have been reasonable. In principle, since the powers granted under s.16L were necessarily intrusive into the affairs of persons who might be innocent of any wrongdoing, it should be ensured that the suspicions on which the exercise of those powers were based were plainly shown to be reasonable. The prosecution having failed to satisfy this condition, the appeal would be...