Golden Accumulator Ltd v Cayman Islands Monetary Auth

• Jurisdiction: Cayman Islands
• Judge: (Levers, J.)
• Judgment Date: 15 November 2005
• Date: 15 November 2005
• Court: Grand Court (Cayman Islands)

Grand Court

(Levers, J.)

GOLDEN ACCUMULATOR LIMITED AND CORAL HOUSE LIMITED

and

CAYMAN ISLANDS MONETARY AUTHORITY

Ms. M. Crinis for the applicants;

H. Robinson, L.R.M. Sibblies and Ms. S. Edun-Watler for the defendant;

Ms. V. Ellis and R. Barton for the intervenor, the Attorney General.

Cases cited:

(1) Bertoli v. Malone, 1990–91 CILR 58, referred to.

(2) Chief Constable (N. Wales Police) v. Evans, [1982] 1 W.L.R. 1155; [1982] 3 All E.R. 141, referred to.

(3) Coney v. Choyce, [1975] 1 W.L.R. 422; [1975] 1 All E.R. 979, referred to.

(4) Gillick v. W. Norfolk & Wisbech Area Health Auth., [1986] A.C. 112; [1985] 3 All E.R. 402, referred to.

(5) Inland Rev. Commrs. v. National Fedn. of Self-Employed & Small Businesses Ltd., [1982] A.C. 617; [1981] 2 All E.R. 93, considered.

(6) R. v. Dairy Produce Quota Tribunal, ex p. Caswell, [1989] 1 W.L.R. 1089; [1989] 3 All E.R. 205, applied.

(7) R. v. Stratford-on-Avon D.C., ex p. Jackson, [1985] 1 W.L.R. 1319; [1985] 3 All E.R. 769, dicta of Lord Ackner applied.

Legislation construed:

Grand Court Law (1995 Revision), s.11(1): The relevant terms of this sub-section are set out at para. 11.

Grand Court Rules, O.53, r.3(7): The relevant terms of this sub-rule are set out at para. 21.

O.53, r.4: The relevant terms of this rule are set out at para. 8.

Monetary Authority Law (2003 Revision) (Law 16 of 1996, revised 2003), s.6(1): The relevant terms of this section are set out at para. 13.

s.34(19): The relevant terms of this sub-section are set out at para. 29.

Monetary Authority Law (2004 Revision) (Law 16 of 1996, revised 2004), s.50: The relevant terms of this section are set out at para. 32.

Supreme Court Act 1981 (c.54), s.31: The relevant terms of this section are set out at para. 11.

Administrative Law-judicial review-locus standi-applicant to have‘sufficient interest’ to have locus standi under Grand Court Rules, O.53, r.3-no sufficient interest by individual account-owner in international investigation of activities of companies holding and controlling accounts-public interest in Cayman Islands Monetary Authority carrying out statutory functions, including speedy international collaboration in regulation of securities, not to be delayed or frustrated

Civil Procedure-dismissal for want of prosecution-delay-‘undue delay’ in pursuing judicial review justifies refusal under Supreme Court Act 1981, s.36(1) to grant relief sought if substantial prejudice or detrimental to good administration-court to consider context and public policy implications of delay

Financial Services-Monetary Authority-judicial review-proceedings which delay cross-border co-operation by Cayman Islands Monetary Authority to be prosecuted expeditiously-application for judicial review struck out if no good reason shown for delay

The applicants sought judicial review of a decision of the Cayman Islands Monetary Authority to direct a company to disclose otherwise confidential information.

Two Cayman companies applied for judicial review of a decision of the Cayman Islands Monetary Authority in June 2004 to direct that LOM Securities Ltd. provide certain otherwise confidential information about the applicants, who held accounts with it, to CIMA. The information was to be passed to the Bermuda Monetary Authority, which was conducting an investigation into LOM Securities Ltd. in Bermuda and which had given the necessary undertakings not to disclose the information requested except in statutorily permitted circumstances. Once the request had been served on LOM Securities Ltd., the applicants filed for leave to apply for judicial review, claiming to be affected by the decision of CIMA to issue the direction; leave was granted in June 2004 with an injunction restraining CIMA from enforcing the direction pending further order of the court. The application for judicial review was made within

the three-month period after leave was granted. An order for directions was made in January 2005, following a delay due to Hurricane Ivan. The applicants took no further steps until CIMA, in June 2005, sought to have the application struck out for want of prosecution.

CIMA submitted that (a) the leave to apply for judicial review and the notice of the objections should be set aside on the ground that the applicants had failed to prosecute their objections within a reasonable period of time and there had been consequential undue delay; (b) in any case the applicants had no locus standi to apply for judicial review, since they were third parties to the original order and their intervention would frustrate CIMA”s speedy collaboration with the Bermuda Authority; and (c) any breach of confidentiality that would arise from the disclosure of the information was overridden by their statutory duty to produce documents to CIMA.

The applicants submitted in reply that (a) the decision to direct that the information be provided was ultra vires and should be quashed; (b) the Bermuda Authority was attempting to elicit detailed information regarding the ownership and operation of accounts held by the applicants with LOM, and its request did not fall within the scope of the powers available to CIMA; (c) they had locus standi by virtue of the fact that their names were on the accounts concerned; (d) the evidence requested by the Authority was neither necessary nor required for its investigation; and (e) the disclosure of the information requested would be a breach of confidentiality and they were individually affected by the decision of CIMA to issue the direction.

Held, striking out the application for judicial review:

(1) The applicants were guilty of undue delay in prosecuting their objections to the directions given by CIMA. The onus was on them to show good cause for their delay, especially as injunctive relief was sought, but, as they had failed to do so and CIMA had suffered detriment as a result, the matter would be struck out for want of prosecution. This was possible by the application of s.36(1) of the English Supreme Court Act 1981, incorporated as part of the jurisdiction of the Grand Court by the Grand Court Law, s.11(1), which allowed the court to refuse to grant any relief sought on an application for judicial review if undue delay would be likely to cause substantial hardship to, or substantially prejudice the rights of, any person or would be detrimental to good administration. As there was no statutory definition of ‘undue delay,’ the court had to consider the context in which the decision was made and the public policy implications of delay in dealing with the matter. The powers of CIMA were significantly enhanced by the Monetary Authority (International Co-operation) (Amendment) Law 2000, to ensure that the Cayman Islands were fully compliant with the international standards relating to cross-border co-operation. In that context, public policy dictated that any proceeding taken to delay such co-operation should be prosecuted expeditiously (paras. 11–12; para. 15; paras. 19–20).

(2) Nor, under the Grand Court Rules, O.53, r.3, did the applicants have locus standi. They had not shown that they had a ‘sufficient interest’ in the matter to which the application related since, although they were the named owners of the accounts in question, the Bermuda investigation was into the activities of the company holding and controlling the accounts. The applicants were therefore effectively third parties and whatever interest they had was minor compared with the broader public interest involved. The public interest demanded that CIMA promote and enhance market confidence, consumer protection and the reputation of the Cayman Islands as a financial centre. Co-operation between international bodies in the regulation of securities was of the utmost importance and the applicants” intervention would have the effect of delaying or frustrating that collaboration (para. 21; para. 24; para. 30; para. 33).

(3) The applicants would not suffer any prejudice by the information requested being passed to the Bermuda Monetary Authority, which had put in place safeguards and given the relevant undertakings to protect confidentiality. Any duty of...