Benjamine Company Services Ltd v Anguilla Financial Services Commission

• Jurisdiction: Caribbean States
• Judge: Mathurin J
• Judgment Date: 22 February 2018
• Neutral Citation: AI 2018 HC 1
• Docket Number: Claim Number: AXAHCV2017/0066
• Court: Eastern Caribbean Supreme Court
• Date: 22 February 2018

THE EASTERN CARIBBEAN SUPREME COURT

IN THE HIGH COURT OF JUSTICE

(CIVIL)

Mathurin, J.

Claim Number: AXAHCV2017/0066

Between

Benjamine Company Services Ltd

Applicant

and

Anguilla Financial Services Commission

Respondent

Appearances;

Ms. Jacinth Jeffers for the Applicant

Ms. Yanique Stewart and Ms. Eustella Fontaine for the Respondent

Judicial Review - Application for leave to apply for judicial review — Delay — Prospect of success — Whether court satisfied that there was an arguable ground for judicial review having real prospect of success — Whether alternative remedy available — Application denied — Financial Services Commission Act, ss. 35(1), 60 — Administrative Penalty Regulations — CPR R. 56.3.

Mathurin J

1 The Applicant filed a Notice of Application for Leave to Apply for Judicial review pursuant to Part 56.3 of the CPR2000. The Court set down the matter in open court and at that hearing permitted the Applicant to amend the application to include certain factors referred to in Part 56.3. The application was amended and filed on the 13 ^th February 2018 and set down for further hearing on the 16 ^th February 2018. At the hearing Counsel for the Applicant Ms. Jeffers advised the Court that the application was in respect only of the penalty of EC$50,000.

Background

2 The Applicant is a company licensed by the Anguilla Financial Services Commission (the FSC) to carry on company management business in Anguilla. Ms Cora Benjamin, representative of the Applicant states in her affidavit in support of the Application that in September 2016 it received an application from GM Marketing Group Limited (GM) requesting its services to be employed as GM's Registered Agent. GM had previously been struck off the company register in February 2016. On the 4 ^th January 2017, GM was restored to the company register with the Applicant as its registered agent/registered office.

3 The Applicant states that in April 2017, it became aware of a complaint against GM and shortly thereafter lodged a Suspicious Activity Report with the FSC against GM. Ms Benjamin further states that the Applicant made enquiries of GM but that GM failed to respond and as such the Applicant resigned as Registered Agent for GM as evidenced by letter dated May 12 ^th 2017 ( BCS2).

4 The Applicant states that a meeting was scheduled to discuss GM by the FSC and that at that meeting on May 15 ^th 2017, it was explained to FSC that the Applicant had resigned as Registered Agent for GM as GM failed to respond to emails requesting information.

5 On June 14 ^th 2017 the Applicant states that it received from FSC a Notice of Intention to impose a penalty on the Applicant in the sum of EC$50,000.00 for failure to comply with various sections of the Anti-Money Laundering and Terrorist Financing Regulations in relation to GM. The breaches, the Applicant states, comprised of failure to conduct customer due diligence, failure to enquire of the former Registered Agent as to why it resigned from GM, failing to be aware of the Investor Alert issued against GM and failing to categorize GM as high risk. (BCS4)

6 The Applicant states that it responded to the FSC by letter dated July 6 ^th 2017 (BCS5) objecting to the contents of Notice of Intention as it states that it was not aware of the Investor Alert issued against GM as they were not the Registered Agent for GM at the time the alert was issued and it was only after a complaint was received against GM that they became aware of it. The letter states that the Applicant received the documents from the former Registered Agent and whilst it did not enquire as to the reason for resigning as GM's Registered Agent, the former agent had a duty to transfer that information to the Applicant.

7 The Applicant denied that the due diligence applied by it was rudimentary and remarked on the documents, including police records that it had obtained through due diligence. The Applicant also explained in response that the enhanced due diligence requirements were not pursued because although GM was not present for identification purposes, GM was not a new customer to this jurisdiction and as such was rated as medium risk.

8 The Applicant concluded stating “Alternatively, if the Commission proceeds to impose a penalty we are requesting that the Commission also consider the aforementioned circumstances and significantly reduce the penalty as Benjamine is not in any financial position to pay EC$50,000. Attached is a copy of the annual audited financial statements for ease of reference.”

9 By letter of 4 ^th August 2017 the FSC stated that the written representations were considered and it was of the view that the representations did not provide sufficient reason for a variation of its original position in the Notice of Intention on June 14 ^th 2017 and that it was minded to recommend to the Board of the Commission that the Applicant be fined EC$50,000.

10 On August 29 ^th 2017 the Applicant responded asking for a hearing with the Board to present its case. The FSC replied by letter on 1 ^st September as follows:

“The Commission is of the view that there is no legislative authority for the Commission to consider your request for an oral hearing with the Board as sections 46 and 47(3) of the FSC Act only provided for the opportunity to make written representations to the Board as Benjamine has done in its response of 6 ^th July 2017. However, if Benjamine would like to provide further written representations to the Commission on or before 15 ^th September 2017, the executive will forward these to the Board along with Benjamine's representations of 6 ^th July 2017.”

11 On the 29 ^th September 2017, the Applicant responded reiterating the points raised in its representations of the 6 ^th July 2017. Further, the Applicant reminded the FSC of the passing of Hurricane Irma stating that it caused the Applicant significant damages. The Applicant requested that the Board waive or reduce the penalty.

12 On the 16 ^th October 2017, the FSC agreed to consider the ability of the Applicant to pay the penalty in accordance with Section 3 of the Administrative Penalty Regulations 2013. FSC stated that it had considered the financial statements as of December 2016 and was providing the Applicant with the opportunity to make a submission detailing any material change to the financial circumstances of the Applicant since 31 ^st December 2016. The Applicant was required to provide all relevant details, “ including if applicable any estimates by a third party and any other supporting documentation that detail the quantum of any damages from the hurricane and any portion of the damages that is uninsured.”

13 On the 20 ^th October 2017, the Applicant wrote to the FSC thanking them for the opportunity to provide a report on the cost of damage suffered by the Applicant. Attached to this letterwas a document called a property valuation which stated as a finding that the Applicant's property had depreciated by 8% (US$87,571.20)

14 On the 15 ^th November 2017 the FSC responded detailing the violations of the Applicant, and further stated that based on the review of the Applicant's most recently filed audited financial statements, the Applicant had the ability to pay the penalty imposed. The Commission was of the view that the written representations provided no reason to find that “ Benjamine had not committed the alleged disciplinary violations or to justify the imposition of a lower penalty.”

15 The Commission stated as follows;

“In determining the appropriate amount of the administrative penalty to impose, the Commission has been mindful of the range outlined in Schedule 1, item 6 of the Administrative Penalties Regulations, RRA F28-2 (Administrative Penalties Regulations) which authorizes the Commission to impose a penalty in a range of EC$15,000.00 to EC$100,000.00 for the contravention of any AML/CFT obligation.

The Commission also considered the factors listed in section 3 of the Administrative Penalties Regulations. In particular,...