Volaw Trust and Corporate Services Ltd and its Directors and others v The Office of the Comptroller of Taxes and another

The privilege against self-incrimination under article 6 is not a general bar on compelling the production of pre-existing documents during an investigation. Compatibility ordinarily depends on the fairness of any eventual trial and the use made of the material. For real evidence, the court considers the nature and degree of compulsion, the public interest, procedural safeguards and the use of the material. Compelled production of objective client records by a regulated service provider did not itself breach article 6. Under Jersey customary law, the privilege does not apply where the risk of prosecution arises under foreign law. A tax information exchange agreement is not directly enforceable in Jersey under its dualist constitutional approach; the domestic implementing Regulations govern the validity of notices.

Two appeals concerned notices requiring Volaw, a Jersey trust company business, to produce documents relating to clients suspected of tax offences and fraud. The TIEA Notices were issued under the Taxation (Exchange of Information with Third Countries) (Jersey) Regulations 2008 following requests from Norway. The 1991 Law Notice was issued under the Investigation of Fraud (Jersey) Law 1991.

The Royal Court dismissed the TIEA judicial review application in Larsen v Comptroller of Taxes [2015] JRC 244. The Jersey Court of Appeal dismissed the substantive challenge to the 1991 Law Notice in Volaw Trust & Corporate Services Ltd v HM Attorney General for Jersey [2016] JCA 138. Before the Board, the central questions were whether compulsory production of pre-existing documents engaged article 6 or Jersey customary law, and whether article 6(4) of the Jersey/Norway TIEA constrained the Comptroller’s powers.

1. Article 6. Lord Reed, delivering the judgment of the Board, rejected the categorical submission that compulsory production of pre-existing documents necessarily infringed the privilege against self-incrimination. The privilege principally protects against coercion or oppression and is ordinarily assessed by reference to the fairness of the proceedings as a whole. Pre-trial conduct engages article 6 where an initial failure is likely seriously to prejudice a later trial. The Board adopted the four-factor approach identified in Jalloh v Germany (2006) 44 EHRR 32 and developed in Ibrahim v United Kingdom: the nature and degree of compulsion, the public interest, relevant safeguards, and the use made of the material.

2. Application. The notices imposed only a statutory financial sanction on Volaw. They involved no physical or psychological pressure comparable with the Strasbourg cases concerning oppressive extraction of evidence. The public interest in investigating international tax evasion, serious or complex fraud, and the conduct of licensed financial-service providers was substantial. The notices sought objective factual records, not admissions of guilt, and the prosecution would still bear the burden of proving any offence. If documents were later relied on at trial, the trial court could determine their admissibility. The notices therefore did not themselves deprive the appellants of a fair trial or violate article 6.

3. The Board declined to decide categorically whether article 6 can apply to a pre-trial investigation in one jurisdiction where any trial will occur in another. It was enough that any contemplated proceedings would be in Norway or Jersey, both Convention jurisdictions, and that serious prejudice to the fairness of a future trial had not been shown. The Board also explained that the dictum in R v Hertfordshire County Council, Ex p Green Environmental Industries Ltd [2000] 2 AC 412 concerning extrajudicial inquiries should not be read without its qualifications.

4. Jersey customary law. Assuming that the customary privilege extends to pre-existing documents, it does not apply where the risk of criminal or penal sanctions arises under foreign law. The Board applied the reasoning in Brannigan v Davison [1997] AC 238. It was therefore unnecessary to decide whether the 2008 Regulations had abrogated the privilege or whether any such abrogation was ultra vires. The arguments concerning prior representations, use immunity, and the position of directors and officers likewise did not arise.

5. Article 6(4) of the TIEA. Jersey’s dualist approach meant that the TIEA did not form part of domestic law and could not itself invalidate the notices. The challenge had to arise under the implementing Regulations, which were not said to impose the suggested obligation. In any event, the Norwegian requests expressly stated that the information was obtainable under Norwegian law and normal administrative practice.

The Board advised that both appeals be dismissed. The parties were given 21 days to make submissions on costs, failing which costs would be borne by the appellants.

1. Privy Council: in [2019] UKPC 29, both appeals were dismissed. The Board heard the withdrawn TIEA appeal because the issues were of general public importance.
2. Court of Appeal of Jersey: in [2016] JCA 138, the court granted leave to apply for judicial review but dismissed the substantive challenge to the 1991 Law Notice. The notice was stayed pending the appeal process: [2016] JCA 176A.
3. Royal Court of Jersey: in [2015] JRC 244, the Commissioner dismissed the TIEA judicial review application. The challenge to the 1991 Law Notice was dismissed on the basis of that decision.