Z Ltd v Offshore Incorporations (Samoa) Ltd [2013] WSCA 1 (28 June 2013)

COURT OF APPEAL OF SAMOA

Z Ltd v Offshore Incorporations (Samoa) Ltd and Samoa International Authority [2013] WSCA 1

Case name:
Z Ltd v Offshore Incorporations (Samoa) Ltd and Samoa International Authority

Citation: [2013] WSCA 1

Decision date: 28 June 2013
Parties:
Z LTD a company incorporated in the People’s Republic of China. (Appellant) v OFFSHORE INCORPORATIONS (SAMOA) LTD in its capacity as the Resident Agent of Y Ltd a company incorporated in Samoa and having its registered office at Ground Floor, SNPF Building, Beach Road, Apia, Samoa (First Respondent) and SAMOA INTERNATIONAL FINANCE AUTHORITY a body corporate established pursuant to the Samoa International Finance Authority Act 2005. (Second Respondent)

Hearing date(s): 24 June 2013

File number(s): CA 02/13

Jurisdiction: CIVIL

Place of delivery: Mulinuu
Judges:
Fisher J
Hammond J
Hansen J

On appeal from: Supreme Court

Order: Appeal dismissed
Representation:
T Harry and B Heather-Latu for Appellant
G Stowers for First Respondent
M T Lui and A Ah Leong-Oldehaver for Second Respondent

Catchwords:
Norwich Pharmacal order
Definition of law in Article 11 of Constitution

Words and phrases:

Constitutional Provisions cited:
Articles 2(2), 43 and 111(1)

Legislations cited:
Acts Interpretation Act 1974
International Companies Act 1988
International Partnership and Limited Partnership Act 1988
International Trusts Act 1988
Fines (Review and Amendment) Act 1998
Samoa International Finance Authority Act 2005

Cases cited:
Broadcasting Corporation v AG [1982] 1 NZLR 120
Commissioner of Inland Revenue v West Walker [1954] NZLR 191, 197
Mohamed v Secretary of State for Foreign and Commonwealth Affairs [2008] EWHC 2048, [2009] 1 WLR 2579
Norwich Pharmacal Co v Customs and Excise Commissioners [1973] UKHL 6; [1974] AC 133 (HL).
R v Secretary of State for Housing Department ex part Pierson [1997] UKHL 37; [1998] AC 539
Secilpar SL v Fiduciary Trust Ltd and Fiduciary Management Ltd [2003-04 Gib LR 463] (CA)
Taylor v Attorney General [1975] 2 NZLR 675
The Queen (oao) Omar & Ors v The secretary of State for Foreign and Commonwealth Affairs [2013] EWCA Civ 118

Summary of decision:

IN THE COURT OF APPEAL OF SAMOA

HELD AT MULINUU

CA 02/13

BETWEEN

Z LTD a company incorporated in the People’s Republic of China.

Appellant

AND

OFFSHORE INCORPORATIONS (SAMOA) LTD (in its capacity as the Resident Agent of Y Limited a company incorporated in Samoa having its registered office at Ground Floor, NPF Building, Beach Road, Apia, Samoa.

First Respondent

AND

SAMOA INTERNATIONALFINANCE AUTHORITY, a body corporate established under the Samoa International Finance Authority Act 2005.

Second Respondent

Coram:

Honourable Justice Fisher

Honourable Justice Hammond

Honourable Justice Hansen

Counsel:

T Harry (of the English Bar) and B P Heather-Latu for Appellant

G Stowers for First Respondent

M T Lui and A Ah Leong-Oldehaver for Second Respondent

Hearing: 24 June 2013

Judgment: 28 June 2013

JUDGMENT OF THE COURT

A. Introduction

1. “Norwich Pharmacal order” is an order made by a court requiring a third party to disclose relevant documents or information in that party’s possession where that party has been an innocent participant in the wrongdoing of another. Although the provenance of the jurisdiction is much older, it was brought to modern focus in Norwich Pharmacal Co v Customs and Excise Commissioners [1973] UKHL 6; [1974] AC 133 (HL).
2. This appeal is concerned with the relationship between Norwich Pharmacal orders, on the one hand, and certain legislation in Samoa, on the other. Subject to specified exceptions, s 227(2) of the International Companies Act 1988 (“the IC Act”) makes it an offence to divulge information or communications of an international or foreign company registered under that Act. The question is whether that statutory provision excludes the jurisdiction a court might otherwise have to make a Norwich Pharmacal order requiring disclosure of the same material.

B. Background

3. The question arises in the context of an attempt by the appellant (“Z Ltd”) to obtain information from the first respondent (“OIL”) regarding a certain judgment debtor of the appellant, referred to here as “Company B”. Z Ltd alleges that:

(a) Z Ltd obtained an arbitration award against Company B for hundreds of millions of USD.

(b) The award has been registered in the High Court of Hong Kong and is therefore available for enforcement against Company B as a judgment debt.

(c) Company B forms part of a corporate group which is loosely associated with another company called Y Ltd through the common beneficial ownership of an individual named Mr X.

(d) Y Ltd is registered in Samoa under the IC Act and for some time OIL has acted as its Resident Agent here.

(e) In breach of an arbitral interim order registered in the High Court of Hong Kong, Company B arranged for the transfer of some shares from one its own subsidiaries to a subsidiary of Y Ltd.

(f) The share transfer was a deliberate and fraudulent attempt by Company B to dissipate its own assets, and those of its subsidiaries, in order to evade enforcement of the judgment debt.

(g) Y Ltd was a party to that fraud.

(h) OIL has been an innocent party to the transaction involved.

(i) It is inherently likely that the first respondent has information which would be of assistance to the appellant in its efforts to enforce its judgment debt against Company B.

4. It is unnecessary for us to reach any final conclusions on those allegations. For present purposes it will be sufficient to assume that they are well-founded.

Procedural background

5. On 20 November 2012 Z Ltd made an ex parte application for Norwich Pharmacal orders against OIL in the Supreme Court of Samoa. Z Ltd provided affidavit evidence in support of the allegations alleged above. The Chief Justice granted the application and made three ex parte orders on 6 December 2012:
   • (a) an order to stop OIL from disclosing to anyone the fact, contents and associated materials of Z Ltd’s motion;
   • (b) An order preventing inspection of the court record; and
   • (c) An order requiring disclosure of “(a) copies of all books, records, and other materials in [OIL’s] possession, custody, power, or control relating to Y Ltd, and (b) copies of all “documentation” related to or connected with any companies for which OIL acts as resident agent that are owned or controlled by Y Ltd or its principals”.
6. When the orders were served on OIL it filed an application to stay the orders. On 13 December 2012 the second respondent, Samoa International Finance Authority (SIFA) successfully sought its own joinder as a third party to assist the Court. It sought variation or discharge of the ex parte orders.
7. At a defended hearing on 24 December 2012 the Chief Justice discharged the three ex parte orders he had previously made. When notified later that an appeal had been lodged, he reduced his reasons to writing on 24 May 2013. In substance it is that judgment that is appealed against.
8. Following the oral decision to discharge the three orders, Z Ltd filed notices of appeal and leave to appeal on 23 January 2013. That was followed by amended notices on 5 June 2013 after the written reasons for decision. The application for leave was refused by the Chief Justice the next day. A written judgment in respect of this refusal was delivered in chambers on 14 June 2013.

C. The Supreme Court judgment

9. The respondents’ applications to stay or discharge the orders were based primarily on the International Companies Act 1988.
10. In his reasons for decision the Chief Justice reviewed the development of Norwich Pharmacal orders. This included Mohamed v Secretary of State for Foreign and Commonwealth Affairs [2008] EWHC 2048, [2009] 1 WLR 2579 in which Thomas LJ found that on such applications five issues required answer:

(a) Was there wrongdoing?

(b) Was [the respondent], however innocently, involved in the arguable wrongdoing?

(c) Was the information necessary?

(d) Was the information sought within the scope of the available relief?

(e) Should the Court exercise its discretion in favour of granting relief?

11. The Chief Justice assumed, without deciding, that in the present case the first four requirements were satisfied. As to the fifth, he considered s 227 of the IC Act and the effect which a Norwich Pharmacal order would have on Samoa’s reputation as an offshore financial centre. In the exercise of his discretion he concluded that such an order “would undermine the privacy laws which is one of the main selling points used by SIFA to promote Samoa as an offshore financial centre”. This impact outweighed the reasons Z Ltd advanced in support of disclosure. Consequently he concluded that the existing ex parte orders should be discharged.

D. Issues on Appeal

12. In an ably presented argument to this Court, Mr Harry traversed the evidence at some length. He set out to show the likelihood of fraud, the probability that OIL would have records that would assist Z Ltd in exposing the fraud, and the justice of directing disclosure of those records. He submitted that a desire to promote Samoa as an offshore financial centre was not a proper reason for cooperating in the concealment of fraud, citing in support Secilpar SL v Fiduciary Trust Ltd and Fiduciary Management Ltd [2003-04 Gib LR 463] (CA) at para 33. In that case the Court of Appeal had endorsed the remarks of the Chief Justice of Gibraltar at first instance when he said:

“It is not in the interests of Gibraltar to become known as a safe haven for wrongdoers and it is in the interests of the jurisdiction to apply internationally accepted standards to uncover wrongdoing. The duty of the court is to strike the proper balance and apply accepted principles to applications such as has been made in this case. The fact that Gibraltar is an offshore finance centre will not be permitted to dilute the standards which we apply to such applications.”

13. Mr Harry appropriately conceded, however, that before reaching discretionary matters of that kind one must decide whether the IC Act excludes Norwich Pharmacal relief in relation to confidential material falling within the scope of that Act. If the appellant’s case fails to surmount that hurdle it must fail. We turn to that issue.

E. The International Companies Act 1988

14. In 1988 Samoa enacted legislation designed to make Samoa an attractive place in which to register foreign investment vehicles. As well as the IC Act itself the legislation included the International Trusts Act 1988, the International Partnership and Limited Partnership Act 1988 and certain other banking statutes.
15. The IC Act in particular is stated in the long title to be “An Act to provide for the incorporation, registration and administration of International and Foreign Companies; and for purposes connected therewith.” It makes provision for overseas interests to either register a new international company in Samoa or to register an existing foreign company in Samoa.
16. As in the other foreign investment statutes just referred to, the IC Act offers an overseas investor the opportunity to preserve its own anonymity and to maintain the confidentiality of its records and transactions. Ms Stowers cited the following provisions in the IC Act as examples:

(a) An international company may be registered in Samoa by a trustee company which will be the one to appear on the memorandum of association as the subscriber to the memorandum (s 13).

(b) Only those closely associated with the international company may inspect the documents it files with the Registrar of International and Foreign Companies; they are not open to the general public (s 12(2) and (2A)).

(c) One of the officers of a trustee company can act as the sole director of the international company (s 83(1)-(4)).

(d) With specifically defined exceptions, the director of an international company commits an offence if he or she discloses information obtained by reason of his or her office (s 83(8) and (9)).

(e) With specifically defined exceptions, disclosure of information regarding the international company and its transactions is an offence (ss 227, 227A and 227B).

17. It is the last of these protections that is the focus for this appeal. Section 227(1) defines a bracket of protected information and communications which include the international company’s shareholding and beneficial ownership of those shares, the identity of its members, management and officers, its transactions and its assets and liabilities. It is common ground that the information sought in the present case falls within that definition.
18. The key provision is s 227(2) which materially provides:

(2) Any person or entity who:

(a) divulges information or communications to which this section relates ...

commits an offence against this Act.

19. Section 227(2) is supplemented by 219(3) which renders a person who commits an offence against s 227 liable on conviction to a fine not exceeding 100 penalty units (effectively SAT$10,000 pursuant to s 4 of the Fines (Review and Amendment) Act 1998), or imprisonment for a term not exceeding five years, or both. The maximum penalty for a breach is therefore severe.
20. The IC Act carves out a series of specific exceptions to the general prohibition against disclosure. First, s 227(3) creates a series of exceptions which remain subject to an overriding discretion vested in SIFA to prohibit disclosure under s 227(4). Broadly speaking this bracket of exceptions permits disclosure:

(a) For the purposes of the Registrar or SIFA or to carry on the business of the company itself (s 227(3)(a) to (c));

(b) Where the Supreme Court orders the supply of information to a foreign government, court or tribunal for use in an investigation or prosecution in relation to the sale or laundering of narcotics and their proceeds (s 227(3)(d));

(c) For what are effectively internal purposes to enable communication among liquidators, officers and members of international, foreign, or trustee, companies or for release by consent (s 227(3)(e) to (g);

(d) Release by the Registrar of the company’s constitutional documents, name and registered office (s 227(h) and (j));

(e) Release to authorities to prevent or control terrorism or money laundering (s 227(3)(k), (l) and (n)); and

(f) Release by the Registrar or the Minister if they believe this to be in the best interests of Samoa or to uphold the integrity of the jurisdiction as an offshore financial centre or to ensure compliance with the IC Act (s 227(3)(m)).

21. Secondly the IC Act permits the Supreme Court to order disclosure in three exceptional circumstances which can be broadly summarised as:

(a) To require a person to produce relevant documents or give relevant evidence in any proceedings in Samoa if these are criminal proceedings or civil proceedings alleging fraud or other dishonesty (s 227(7);

(b) In winding up proceedings where the Court is satisfied that the company or one of its officers has failed to comply with the IC Act (s 227B(1)(a)); and

(c) Where the company or one of its officers is convicted of an offence under the IC Act (s 227B(1)(b)).

22. Mr Harry did not suggest that Z Ltd’s application could be brought within any of the statutory exceptions to the general prohibition in s 227(2). It was common ground that if the application was caught by the general prohibition it would not be saved by those exceptions. The thrust of the appeal was that the statutory prohibition in s 227(2) itself was not intended to oust the Court’s jurisdiction to make Norwich Pharmacal orders under the wider powers it derived from the common law.

Does s 227(2) oust jurisdiction derived from the common law?

23. It cannot be seriously disputed that ss 227 to 227B of the IC Act together create a statutory regime which governs confidentiality and disclosure in relation to international and foreign countries registered in Samoa. The sole question is whether, as Ms Stowers and Ms Lui contend, that regime was intended to be exhaustive. Does it leave room for a common law jurisdiction to operate alongside the statutory one?
24. Mr Harry submitted that in interpreting s 227 we should invoke a presumption against implicit alteration of the common law by statute. In support he cited the three New Zealand Court of Appeal decisions in Commissioner of Inland Revenue v West Walker [1954] NZLR 191, 197; Taylor v Attorney General [1975] 2 NZLR 675, 680 and Broadcasting Corporation v AG [1982] 1 NZLR 120 together with the House of Lords decision in R v Secretary of State for Housing Department ex part Pierson [1997] UKHL 37; [1998] AC 539, 573.
25. In deciding whether that presumption could be relevant to this case three considerations must be taken into account.
26. First, in Samoa such a principle, which is itself a common law one, must be subject to the Constitution. Of relevance in that respect are Art 2(2), Art 43, the definition of “law” in Art 111(1), and the form of judicial oath prescribed in the Third Schedule. Judges must swear to serve Samoa in accordance with the Constitution and “the law”. The definition of “law” in Art 111 relevantly includes “the English common law and equity for the time being in so far as they are not excluded by any other law in force in ... Samoa” (emphasis added).
27. Secondly in Samoa s 5(i) of the Acts Interpretation Act 1974 materially provides that “an Act ... is deemed remedial ... and shall accordingly receive such fair, large, and liberal construction and interpretation as will best ensure the attainment of the object of the Act ... according to its true intent, meaning, and spirit”.
28. Thirdly even in the absence of those limitations in the Constitution and the Acts Interpretation Act, it is well accepted that the extent to which such a presumption has force is strongly influenced by the nature of the common law principle at stake. We heard no submission to the effect that the common law rights involved in this case were so fundamental that the Courts would necessarily be reluctant to find them subjugated to statute.
29. For those reasons it cannot be assumed, without argument, that in Samoa there is a presumption against implicit alteration of the common law by statute or that it would apply in a case such as this one. However it is unnecessary for us to decide that question because on any approach to the matter it must be open to Parliament to exclude the common law if that intention be adequately conveyed in the statute. With or without a presumption as the starting point, it is ultimately be a matter of statutory interpretation. The question is whether in the IC Act Parliament has impliedly excluded scope for the continued operation of a parallel disclosure regime at common law.
30. In their helpful submissions Ms Stowers and Ms Lui pointed to a number of features of the Act which suggest an intention to exclude the common law.
31. First, the prohibition in s 227(2) is expressed in overarching terms. There is no mention of a common law exception. It follows that only by reading an implied exception into s 227(2) could one continue to recognise a parallel common law jurisdiction.
32. Secondly, the Act creates an elaborate series of closely defined exceptions. On the face of the statute, these exceptions were intended to be exhaustive.
33. Thirdly, the Act expressly authorises the Court to direct disclosure in four circumstances that are closely defined The Court is permitted to direct disclosure to a foreign government, court or tribunal for use in an investigation or prosecution in relation to the sale or laundering of narcotics and their proceeds (s 227(3)(d)); to require the production of documents or the giving of evidence in any criminal proceedings or civil proceedings alleging fraud or other dishonesty (s 227(7); to direct disclosure in winding up proceedings where the company or one of its officers has failed to comply with the IC Act (s 227B(1)(a)); or to direct disclosure where the company or one of its officers is convicted of an offence under the IC Act (s 227B(1)(b)). The fact that Parliament saw it as necessary to authorise the Court to direct disclosure in only those four circumstances implies the converse. The converse is that the Court may not direct disclosure in any others.
34. In our view this case is on all fours with the English Court of Appeal decision in The Queen (oao) Omar & Ors v The Secretary of State for Foreign and Commonwealth Affairs [2013] EWCA Civ 118. In that case the appellants sought Norwich Pharmacal orders in England which would permit them to obtain information from the Secretary of State in England to assist them in their defence to a prosecution for terrorist acts in Uganda. There existed in England a procedure for obtaining such evidence under the Evidence (Proceedings in Other Jurisdictions) Act 1975 and the Crime (International Cooperation) Act 2003. In the principal judgment Lord Justice Maurice Kay noted it to be common ground that “whether or not a statutory regime is comprehensive so that it precludes of the application of a common law alternative remedy is ultimately a question of statutory interpretation” (para 10). He went on to hold (para 25):

“This leads me to the conclusion that Parliament did not and would not create a parallel procedure. It created an exclusive one in the area which it addressed. To relegate national security to the status of a material consideration to be weighed on a case-by-case basis at the stage of necessity or discretion in a Norwich Pharmacal application would be to subvert the carefully calibrated statutory scheme. I am in no doubt that, where the scheme of the 2003 Act is in play, Norwich Pharmacal does not run.”

35. The same conclusion must be reached in the present case. There is no question of national security here but in its place is a clear intention to protect confidentiality as an incentive for offshore interests to use Samoa as a financial centre. To that end Parliament has created an exhaustive regime to govern all questions of confidentiality and disclosure in relation to international and foreign companies registered in Samoa.
36. There is no room for any residual jurisdiction to make Norwich Pharmacal orders in relation to the same material. It is not disputed that the information sought falls within the definition of information or communications of a registered international or foreign company to which s 227 otherwise applies. Nor is it argued that the application fell within one of the statutory exceptions to the general prohibition against disclosure in s 227(2). It follows that there was no jurisdiction to grant the application.

Conclusion

37. Our conclusion as to jurisdiction makes it unnecessary to consider other issues raised on the appeal including the question whether there is any evidence indicating that OIL was, however innocently, a party to wrongdoing against Z Ltd, whether the other discretionary considerations raised on such an application have been satisfied, whether it was appropriate for the appellant to file fresh evidence without leave to do so and whether the appellant should be given leave to proceed with the appeal out of time.
38. The appeal is dismissed.
39. In accordance with s 227A of the Act we direct that there be no publication in relation to these proceedings.
40. Pursuant to s 227A(2)(b) this judgment may be published for law reporting purposes after removal of all details that might directly or indirectly identify the international company referred to in the judgment and any individuals or companies actually or allegedly associated with that company.
41. The appellant must pay the respondents costs in this Court in the sum of $3000 to each respondent, a total of SAT$6000.
    

___________________________

Honourable Justice Fisher

___________________________

Honourable Justice Hammond

___________________________

Honourable Justice Hansen