Domaille & Ors v Guernsey Financial Services Commission [2023]GRC017

Summary

This is a Royal Court of Guernsey judgment on appeals brought by three former directors/officers of a Guernsey fiduciary services company (Artemis Trustees Limited) against enforcement sanctions imposed on them personally by the Guernsey Financial Services Commission (GFSC). The sanctions under challenge included Prohibition Orders, Disapplication Orders, discretionary financial penalties, and a Public Statement, all issued under the Financial Services Business (Enforcement Powers) (Bailiwick of Guernsey) Law 2020 following findings that the individuals lacked probity and failed to meet the Minimum Criteria for Licensing under the Fiduciaries Law.

• Grounds of appeal: Error of law/fact in findings of want of probity, unreasonable assessment of seriousness of misconduct, retrospective application of increased fining powers, failure to have regard to sanctions in similar prior cases, and human rights (proportionality) concerns.
• Court's disposal: Prohibition Orders and Disapplication Orders against all three appellants were quashed; the financial penalty against Mr Domaille was reduced from £280,000 (to be substituted at or capped at £175,000) and against Mr Clarke from £90,000 (capped at £60,000); the Public Statement was remitted to GFSC for reconsideration in light of the judgment.
• Costs: GFSC ordered to pay the Appellants' costs on the recoverable basis, subject to a 14 day window for any party to seek a different costs order.

The judgment is significant as guidance on how GFSC must approach findings of want of probity, the standard and burden of proof required, the need to distinguish corporate failings from individual culpability, and the requirement to have regard to penalties imposed in comparable prior enforcement cases and to the timing of conduct relative to changes in fining powers. It does not itself create new ongoing regulatory obligations for the wider industry but constrains how GFSC exercises its enforcement powers against individuals.

Key obligations

• GFSC must reconsider and issue revised terms for the Public Statement concerning the three appellants in light of the judgment
• Any party wishing to contest the default costs order must file and serve notice within 14 days of the judgment being handed down
• GFSC is directed to impose a financial penalty on Mr Domaille no higher than £175,000 (or substitute that sum) and on Mr Clarke no higher than £60,000 (or substitute that sum)

Applies to

fiduciary services licensees, individuals holding controlled functions (Controller, Director, Partner, Manager, Money Laundering Reporting Officer, Money Laundering Compliance Officer), Guernsey Financial Services Commission (as respondent regulator)

Deadlines

• 14 days of the formal handing down of this judgment: Deadline for any party wishing to contend for a different costs order to file and serve notice to that effect