Re Ansbacher (Cayman) Ltd

• Jurisdiction: Ireland
• Judgment Date: 25 May 2004
• Date: 25 May 2004
• Docket Number: [1999 No. 163 Cos],HC 222/04
• Court: High Court

THE HIGH COURT

HC 222/04

1999 163 COS

IN THE MATTER OF THE COMPANIES ACTS 1963 - 1990 AND IN THE MATTER OF PART 2 OF THE COMPANIES ACT 1990 AND IN THE MATTER OF THE MINISTER FOR ENTERPRISE, TRADE AND EMPLOYMENT

AND

ANSBACHER (CAYMAN) LIMITED (FOMERLY GUINNESS MAHON CAYMAN TRUST LIMITED,ANSBACHER LIMITED AND CAYMAN INTERNATIONAL BANK AND TRUST LIMITED) AND IN THE MATTER OF AN APPLICATION BY THE REVENUE COMMISSIONERS PURSUANT TO SECTION 12 OF THE COMPANIES ACTS 1990

Abstract:

Company law - Companies Acts 1990, section 12 - Whether the Revenue Commissioners were entitled to receive access to documents not contained within the Report of the Inspectors.

Facts: On 6 June 2002, Inspectors appointed by the High Court completed a report on the affairs of Ansbacher (Cayman) Limited. Subsequently the Revenue Commissioners sought an order pursuant to section 12 of the Companies Act 1990 for the purpose of remedying financial and information disabilities of the Revenue Commissioners and the Collector General by virtue of the manner in which the affairs of the respondent companies were conducted. The relief also included access to documents obtained by the Inspectors in the course of their investigation not included in the Appendices to the Report.

Held by Finnegan P in refusing to make the order in the terms sought:

1. That section 12 of the 1990 Act gave the Court a wide discretion. However in determining whether to make an order the Court was required to take into account all relevant circumstances. The documents and information obtained by the Inspectors from or in relation to persons and companies not mentioned in the Report were not matters arising out of the Report The jurisdiction of the Court to make an Order was a statutory one and the Court was not permitted to venture outside the terms of the Statute. Accordingly the Court was not permitted to make an order regarding matters not arising out of the Report.

2. That in relation to persons and companies mentioned in the Report the Revenue Commissioners did come within the provisions of section 12(1)(b). They had the necessary interest and they suffered a disability. Furthermore, the public interest in the assessment and collection of taxes outweighed the contractual right to confidentiality and the constitutional right to privacy of the individuals and companies mentioned in the Report. Any undertaking or understanding as to confidentiality given by the Inspectors was not sufficient in the circumstances to prevent the making of an Order.

Reporter: L.O'S.

1 Judgment of Finnegan P. delivered on the 25th day of May 2004

2 This matter comes before me on foot of a motion taken pursuant to the Companies Act 1990 section 12 by the Revenue Commissioners.

3 Section 12 of the Companies Act 1990 provides as follows:

4 12.-(1) Having considered a report made under section 11, the court may make such order as it deems fit in relation to matters arising from that report including-

• (a) an order of its own motion for the winding up of a body corporate, or

• (b) an order for the purpose of remedying any disability suffered by any person whose interests were adversely affected by the conduct of the affairs of the company, provided that, in making any such order, the court shall have regard to the interests of any other person who may be adversely affected by the order.

  (2) If, in the case of any body corporate liable to be wound up under the Companies Acts, it appears to the Minister from-

• (a) any report made under section 11 as a result of an application by the Minister under section 8, or

• (b) any report made by inspectors appointed by the Minister under this Act, or (c) any information or document obtained by the Minister under this Part,

  that a petition should be presented for the winding up of the body, the Minister may, unless the body is already being wound up by the court, present a petition for it to be so wound up if the court thinks it just and equitable for it to be so wound up.

5 The relief sought by the Revenue Commissioners in their Notice of Motion is as follows -

6 "An Order pursuant to section 12 of the Companies Act 1990 for the purpose of remedying financial and information disabilities of the Revenue Commissioners and of the Collector General by virtue of the manner in which the affairs of the companies named in the title hereof were conducted including inter alia directions for the furnishing to the Revenue Commissioners of access to and copies of all documents related to the Inspector's Report which are not contained in the Report or the Appendices to the Report on such terms and conditions as the Court shall deem fit."

7 The following were represented at the hearing of the motions in addition to the Applicant that is to say the Inspectors Appointed to Enquire into the Affairs of Ansbacher (Cayman) Limited, Ansbacher (Cayman) Limited and the Attorney General.

8 By Order dated 22nd September 1999 the High Court appointed Inspectors pursuant to section 8 of the Companies Act 1990 and ordered that the Inspectors investigate and report to the Court on the affairs of Ansbacher (Cayman) Limited and in particular -

9 a. To examine and define the nature and extent of the company's Irish business from 1971 to date i.e. the business carried out in the State or any other business carried out on behalf of Irish residents whether in the State or elsewhere.

10 b. To identify as far as possible all of the parties who are either officers (including shadow directors) and agents of the company, clients of the company or who otherwise assisted in the carrying out of the business at the relevant time.

11 c. To examine whether the Companies Act 1963 - 1990 were breached by the company, its officers (including shadow directors), agents or third parties at the relevant time and if so to identify the statutory provisions involved in the persons in default in each case

12 d. To report on any related matters.

13 The Directors duly completed a Report dated the 6th June 2002 and presented the same to the High Court. The Report runs to some 18 volumes the first volume consisting of the Report and the remaining 17 volumes consisting of Appendices which contain documents. Access to those documents by the Revenue Commissioners has already been permitted by order of this Court. The Applicant now seeks access to documents obtained by the Inspectors in the course of their investigation not included in the Appendices to the Inspector's Report.

14 The Application of the Revenue Commissioners

15 The Application is grounded on an Affidavit of Donnchadh A. Mac Carthaigh a Principal Inspector of Taxes in the Special Projects Team Investigation Branch of the

16 Office of the Chief Inspector of Taxes. In the Affidavit he refers to a number of passages from the Report of the Inspectors Chapter 29 as follows:

17 1. The finding of the Inspectors that:

18 1. The 'memorandum account' system was operated by Guinness and Mahon and GMCT in a deliberately complex and secretive manner which concealed the names of the c1ients invo1ved while allowing them to lodge and withdraw funds to and from accounts held nominally for GMCT.

19 2. Loans were obtained from Guinness and Mahon for GMCT clients on the security of their GMCT deposit, while the existence of this deposit was deliberately omitted from the loan agreement documentation and therefore the general regulatory system of Guinness and Mahon where it would have been seen by bank and Revenue auditors.

20 2. The finding of the Inspectors that there was evidence tending to show -

21 1. The discretionary trust structure as operated by GMCT in conjunction with Guinness and Mahon - through its policy of concealing the true object of the trust, the retention of control by the prime mover over the assets of the trust and the access to the funds provided to the prime mover who could withdraw funds in Dublin - amounted to a sham trust structure. There is also evidence to show that the discretionary trust scheme facilitated widespread tax evasion.

22 2. That the affairs of Ansbacher were conducted with intent to defraud a creditor of some of its clients, that is the Revenue authorities.

23 3. That Ansbacher may have committed a number of criminal offences namely:

• (a) the common law offence of conspiracy (with, inter alia, some of its clients) to defraud, and

• (b) the offence of knowingly aiding, abetting, assisting, inciting or inducing another person to make or deliver knowingly or wilfully any incorrect return, statements or accounts in connection with their tax contrary to the provisions of the appropriate tax legislation, now consolidated in sections 1056 and 1078(2) of the Taxes Consolidation Act, 1997.

24 3. The conclusion of the Inspectors that there is evidence to show that

25 1. Guinness and Mahon conspired with Ansbacher to defraud a creditor of Ansbacher' s clients, namely the Irish Revenue Commissioners, and that there is therefore evidence tending to show that Guinness and Mahon may have committed the offence of conspiracy to defraud contrary to common law.

26 2. Guinness and Mahon may have committed the offence of knowingly aiding, abetting, assisting, inciting or inducing another person to make or deliver knowingly or wilfully any incorrect return, statements or accounts in connection with their tax contrary to the provisions of the appropriate tax legislation, now consolidated in sections 1056 and 1078(2) of the Taxes Consolidation Act, 1997.

27 The Special Projects Team was set up to investigate Ansbacher and related accounts and to recover taxes evaded through the operation of such accounts. It is his view that many of the Ansbacher account holders are tax payers who failed to comply with the provisions of the Taxes Acts and that such failures are likely to have led to a serious

28 prejudice in the assessment or collection of taxes. He believes it would be of...