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Appleby celebrates after GFSC ruling overturned

Appleby celebrates after GFSC ruling overturned

Wednesday 26 April 2023

Appleby celebrates after GFSC ruling overturned

Wednesday 26 April 2023

Appleby is celebrating after the appellants it acted for won a landmark appeal against the Guernsey Financial Services Commission (GFSC) in the Royal Court.

A judgement was handed down on 25 April in the case of Domaille, Clarke and Hannis, which Appleby say will be of interest across the financial services sector.

The initial GFSC ruling had imposed prohibition orders on the Appellants of eight, four and three years respectively, along with fines of £280,000, £90,000 and £30,000. For failing to meet aspects of the Minimum Criteria for Licensing

Now, the Royal Court has removed the prohibition orders and asked the GFSC to reconsider the fines – with suggested maximums of £175,000 and £60,000.

The GFSC has since said: "We are preparing to ask the Guernsey Court of Appeal to review legal aspects of the judgment handed down in this matter on 18 April 2023 because some of the reasoning and interpretation of the law contained in the judgment does not align with our understanding of our statutory duties and powers - as endorsed by the Royal Court and Guernsey Court of Appeal in prior judgments concerning appeals against our enforcement actions."

The Judgment is a hallmark for a regulatory environment that is “firm but fair”, covering several key legal issues, including the test for probity, retrospective fining powers under the enforcement powers law, the grounds for appeal under that law, removal of notices detailing prohibition orders from the GFSC website, and whether the GFSC’s approach was fair, reasonable and proportional.

The Judgment notes, variously, that the findings in relation to an alleged want of probity for Mr Domaille were “quite unsatisfactory”, “flawed for being made upon an error of law” and “unreasonably made”; in relation to Mrs Hannis they were “unreasonable and unjustified”; and in relation to Mr Clarke they were “quite excessive” and “not properly sustainable”. 

In upholding the appeal the Judgment also went on to make a number of observations regarding the Commission’s approach in this case including its “attitude to changing goal posts”, and the “flawed and unfair introduction of charges of want of probity at the Final Notice stage, based on no relevant further evidence”. 

Ultimately, the Judgment concluded that in relation to all three Appellants there was no evidence that any of the matters of which they were accused had caused any harm to clients, beneficiaries, investors, creditors or member of public, nor to the reputation of the Bailiwick.

The Appleby team included of Advocate Anthony Williams (pictured above)Partner and Head of Dispute Resolution, Richard SheldonGroup Partner, Alex Thornton de MauroySenior Associate, Ndaedzo KhwidzhiliAssociateand Nafiza Rahman, Paralegal.

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