July 21 2009
Given the accepted need for disclosure in certain legitimate circumstances and the duty to define those circumstances rationally to the authorities, several grounding principles must be considered when disclosure of information deemed to be confidential under Bahamian law is sought.
In response to a 2000 report by the Financial Action Task Force, a US governmental organization, the Organization for Economic Cooperation and Development blacklisted the Bahamas as an offshore investment jurisdiction due to, among other things, a lack of transparency in the international arena and the existence of various obstacles to mutual legal assistance. The Bahamian legislature therefore set about the implementation of various acts under the general heading of financial services measures. One such act was the Evidence (Proceedings in Other Jurisdictions) Act. The act was passed to give foreign courts the right to apply to Bahamian courts for assistance in obtaining evidence that was considered pertinent to a trial in that jurisdiction, as an overall part of the initiative to try and to reduce such obstacles while maintaining banking confidentiality.
The Bahamian government has always been aware of the fact that any move away from offshore confidentiality may well set in motion potentially negative trends in future investment in its financial vehicles, allowing other, more secretive jurisdictions to benefit. On October 10 2001, at the Caribbean Community and Common Market conference held in Nassau, the minister for finance stated that although the Bahamas has cooperated extensively in the fight against crime – especially money laundering – the Bahamian government must be careful to preserve confidentiality for non-criminal and civil matters.
The introduction of the act repealed the Foreign Tribunal Evidence Act 1856. Since this legislative update, the Bahamian courts have had to consider a substantial number of requests from foreign courts or tribunals under the new regime. As the act is derived almost entirely from the equivalent UK act, passed in 1975, over the last 30 years Bahamian courts have predominantly applied UK case law to Bahamian cases, subject to further interpretation of the Bahamian act.
These legislative initiatives brought with them considerable ambiguity. The question was raised as to the standards the courts should apply in order to maintain a balance between offshore confidentiality and a direct request from a foreign court for evidence to be used in that court for trial purposes. This update addresses how the Bahamian courts initially chose to apply the various decisions of the UK courts post-implementation of the act in 2000. A second update on this subject will address how Bahamian public policy and recent developments, both domestic and international, have subsequently affected the courts' various determinations in this regard.
The jurisdiction of any court in the Bahamas to order a person within the jurisdiction to provide oral or documentary evidence in aid of proceedings in foreign courts is exclusively statutory. The court has no inherent jurisdiction to act in the aid of foreign courts. In respect of civil proceedings, such jurisdiction is conferred solely by the act and the procedure for dealing with such requests is set out in Order 65 of the Rules of the Supreme Court of the Bahamas.
Under Section 3 of the act, an application may be made to the Supreme Court by or on behalf of a court or tribunal exercising jurisdiction in a country or territory outside the Bahamas for an order for evidence to be obtained in the Bahamas. The procedure for this process is set out in Section 3(2). The requesting court must send the request to the registrar of the Supreme Court, whereupon the registrar must forward the request to the attorney general, who then presents the application to the court. Should the court accede to the request, the attorney general is responsible for receiving the evidence and forwarding it to the requesting court.
The section which has come under most scrutiny is Section 4, which stipulates that:
"Where an application is made to the Supreme Court for an order for evidence to be obtained in the Bahamas and the court is satisfied that:
- the application is made in pursuance of a request issued by or on behalf of a court or tribunal (the requesting court) exercising jurisdiction in a country or territory outside the Bahamas;
- that the evidence to which the application relates is obtained for the purposes of civil proceedings which either have been instituted before the requesting court or whose institution before the court is contemplated and for which investigations have commenced."(1)
The courts have attempted to define certain words or phrases in this section in order to reduce the ambiguities raised by the implementation of the act. Further, they have had to do so while at the same time considering the greater concept of public policy and the desire to exclude fishing expeditions when adjudicating thereupon.
Section 2(1) of the act defines 'civil proceeding', in relation to a requesting court, as proceedings in "any civil or commercial matter". What constitutes a civil proceeding depends on both the classification of the proceeding by the requesting court and the classification of the proceeding under Bahamian law. It is instructive that the Cayman Grand Court has held, obiter dictum, that a wide interpretation of the term 'civil proceeding' should be used, while no such determination has been made by the Bahamian courts.(2) However, the Cayman decision is consistent with the landmark earlier UK case Re State of Norway's Applications concerning the definition of civil proceedings, where Lord Goff concluded that the true construction of the term:
"could not be made by reference to any internationally acceptable classification and rather it must be answered according to how such proceedings were classified under the laws of both the requesting and requested states."(3)
Evidence to be used at trial
Should the courts be satisfied that the request comes from the appropriate authority under the act (as defined by the act), and that the proceedings are civil in nature on the balance of the definitions of the requesting state and Bahamian common law, the next step for the courts is to ascertain whether what is being requested is to be considered "evidence to be used at trial" as per Section 4(2). In further attempting to ascertain the Bahamian legislature's true intention when considering whether to order the disclosure of evidence in accordance with the act, there is considerable case law asserting that the court's jurisdiction is limited only to evidence admissible at trial and not pre-trial disclosure.
'Pre-trial disclosure' means "information which may lead to the discovery of evidence", as opposed to "direct evidence to be used in trial in the requesting court".(4) The emphasis, therefore, is placed not on what the requesting court may consider to be necessary at trial, but on whether the evidence being sought is in fact direct evidence to be used in that trial, such a decision being within the sole jurisdiction of the Bahamian courts. If the disclosure of the requested evidence would lead only to a train of enquiry whereby the requesting party may then stumble upon direct evidence, this has come to be referred to as a 'fishing expedition'. Such expeditions will not be entertained by the Bahamian courts since they are inconsistent with the intentions of the act.
In the UK Court of Appeal case(5) Lord Justice Kerr discussed the definition of the term 'fishing expedition':
"Although 'fishing' has become a term of art for the purposes of many of our procedural rules dealing with applications for particulars of pleadings, interrogatories and discovery, illustrations of the concept are more easily recognized than defined. It arises in cases where what is sought is not evidence as such, but information which may lead to a line of inquiry which would disclose evidence. It is the search for material in the hope of being able to raise allegations of fact, as opposed to the elicitation of evidence to support allegations of fact, which have been raised bona fide with adequate particularization."
Kerr's statement attempts to set the parameters as to what is needed to satisfy the court that the requesting court is not embarking on a fishing expedition. The courts must consider several criteria when reaching a decision:
The act is concerned with oral as well as documentary evidence. Lord Gibson has stated that:
"The court should, in my judgment, exercise its discretion by applying the principle that a witness, whose evidence is sought by a foreign court, should be directed to answer no more or no less than would be required of him in proceedings of the court of that country."
This point has yet to be ruled upon in the Bahamas, but should this dictum stand, it could be argued that under existing legislation it is impossible to obtain evidence from a non-party to an action other than by subpoena. Such procedures are permitted only for the production of evidence at trial rather than pre-trial disclosure, and hence there is no procedure in Bahamian law that is applicable under these circumstances.
For further information on this topic please contact Matthew Paton at Lennox Paton by telephone (44 20 7743 6490), fax (44 20 7743 6491) or email (email@example.com).
(1) The original Section 4(b) was amended by Section 2, Act 33/2000.
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CR Matthew Paton