Weighbridge Trust Limited v Guernsey Financial Services Commission [2024] GRC080

Summary

This is a Royal Court of Guernsey judgment on an appeal by Weighbridge Trust Limited (WTL) against the GFSC's decision to issue a public statement naming WTL under section 38 of the Financial Services Business (Enforcement Powers) (Bailiwick of Guernsey) Law 2020. The underlying misconduct, admitted by WTL, involved historic dishonest record-keeping and fiduciary failings by former directors, but WTL is now under entirely different, innocent ownership and management following a 2020 buy-out. The Court allowed the appeal and set aside the Commission's decision to publish the statement against WTL, while leaving in place separate public statement decisions against two former individuals (Mr Conway and Mrs Dowding) which were not under appeal.

Key legal points addressed

• Public statement power: Section 38 of the EP Law allows the GFSC to publish a statement about a licensee, former licensee, relevant officer or other person for material contravention of laws/rules or failure to meet minimum licensing criteria, considering factors such as seriousness, inadvertence, remediation efforts and financial consequences to third parties.
• Right of appeal: Section 106(1)(l) of the EP Law gives a person aggrieved by a decision to publish a section 38 statement relating to them a right of appeal to the Royal Court, covering both the decision to publish at all and the terms of the statement.
• Grounds of appeal: Statutory grounds under section 106(3) are: ultra vires or other error of law, unreasonableness, bad faith, lack of proportionality, or material error of fact or procedure.
• Court's powers: Under section 106(6), the Royal Court may set aside the Commission's decision (with or without remitting it with directions) or confirm the decision in whole or in part.
• Outcome: The Court found the SDM's decision to issue a public statement against WTL itself (as opposed to only against the culpable former directors) was unreasonable and disproportionate given WTL's change of ownership and control, and set the decision aside rather than remitting it for reconsideration.
• Costs: The Commission was ordered to pay WTL's costs of the appeal on the recoverable basis, subject to either party notifying the court within 7 days if they contend for a different costs order.

This decision is primarily of interest to fiduciary licensees and their advisers as an illustration of how the Royal Court applies the unreasonableness and proportionality grounds of appeal to GFSC public statement sanctions, particularly where a licensee has undergone a genuine change of control since the misconduct occurred.

Key obligations

• The Commission must pay WTL's costs of and incidental to the appeal on the recoverable basis unless either party notifies the court within 7 days of the judgment's final handing down that it contends for a different costs order.

Applies to

fiduciary licensees, trust and company service providers, licensees, former licensees and relevant officers subject to GFSC enforcement action

Deadlines

• within 7 days of the date of this judgment when finally handed down: Either party must notify the court if it wishes to contend for a different costs order than the default order that the Commission pay WTL's costs on the recoverable basis.