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Jersey Unreported Judgments |
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You are here: BAILII >> Databases >> Jersey Unreported Judgments >> Volaw Trust & Corporate Services Limited and Mr B Larsen -v- Income Tax [2013] JRC 095 (16 May 2013) URL: http://www.bailii.org/je/cases/UR/2013/2013_095.html Cite as: [2013] JCR 95, 2013 (2) JLR 40, [2013] JRC 95, [2013] JRC 095 |
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Taxation - appeal against the decision of the Comptroller of Taxes.
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Before : |
H. W. B. Page, Q.C., Commissioner and Jurats Fisher and Liston. |
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Between |
Volaw Trust & Corporate Services Limited |
Appellants |
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Mr Berge Gerdt Larsen |
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And |
The Office of the Comptroller of Taxes |
Respondent |
Advocate A. D. Hoy for Volaw.
Advocate J. Harvey-Hills for Larsen.
Advocate J. D. Kelleher for the Comptroller.
judgment
the commissioner:
1. This is an appeal from the decision of the Jersey Deputy Comptroller of Taxes to serve a notice dated 28th May, 2012, ("the May 2012 Notice") on Volaw Trust & Corporate Services Limited ("Volaw") under the Taxation (Exchange of Information with Third Countries) (Jersey) Regulations 2008 ("the 2008 Regulations") requiring the production by Volaw of certain categories of documents and a small number of individually specified items said to be relevant to the tax affairs, in Norway, of a Norwegian national, Mr Berge Larsen. The appellants are Volaw and, as the 2008 Regulations permit, Mr. Larsen himself.
2. The May 2012 Notice was served in response to a request made by the Norwegian Tax Authority on 26th February, 2010, ("the Request") pursuant to an agreement made between Jersey and The Kingdom of Norway for the exchange of information relating to tax matters ("the TIEA"). The reason for the extended interval of time between the two events will appear later.
3. It is common ground between counsel that the appeal involves a hearing de novo; that it is not therefore for the appellants to show that the Comptroller erred on one or other of the more limited grounds that would be required on a judicial review but, rather, that it is for the Court - standing, in effect, in the shoes of the Comptroller - to consider the matter afresh and to "confirm, vary or set aside the requirement to which the appeal relates" as provided by Regulation 14 paragraph (4). Whether this is indeed the right approach may be for further consideration on another occasion but for present purposes we proceed on the assumption that it is correct.
4. Although other matters also arise, the main issues on the present appeal are whether the fact that the documents sought pre-date the entry into force of the TIEA, as they do, means that they fall outside the terms of the 2008 Regulations; whether the threshold criteria specified by the 2008 Regulations for the lawful exercise of the Comptroller's powers to require the production of information by a person other than the named taxpayer are satisfied; whether the scope of the Notice is excessive; whether the purpose for which the information in question is required by the Norwegian authorities is of relevance and whether that purpose is within the scope of the TIEA and the 2008 Regulations. The answers to these questions turn for the most part on construction of the 2008 Regulations against the background of the TIEA, to some extent on issues of Norwegian tax law (on which we heard evidence) and on the particular facts of the present case.
5. The primary legislation pursuant to which the 2008 Regulations were made is the Taxation (Implementation)(Jersey) Law 2004 ("the 2004 Law"), the preamble to which reads:-
6. The genesis of this enactment lies in the adoption in 1998 by the OECD Committee on Fiscal Affairs and subsequent publication of a report entitled "Harmful Tax Competition - An Emerging Global Issue" and a letter dated 22nd February, 2002, addressed to the Secretary-General of the OECD by Senator Pierre Horsfall, the then President of the States of Jersey Policy and Resources Committee. The latter spoke of Jersey's good record of compliance with international standards for, and international co-operation in, financial regulation and the fight against crime and money laundering; of Jersey's readiness "to reflect the OECD's principles of effective exchange of information and transparency both in a general political commitment and in tax information exchange agreements to be negotiated with individual jurisdictions; and of this political commitment" serving as the basis for bilateral negotiations on tax information exchange agreements and which Jersey will implement on a phased basis by 31 December, 2005, in co-operation with the OECD."
7. The preamble to the 2008 Regulations makes reference to the 2004 law and also to paragraph 1.8.5 of the Strategic Plan 2006-2011 approved by the States on 28th June, 2006. That paragraph, and the preceding one, recorded the States' intention to "Participate in the OECD global forum on taxation from 2006 in order to ensure the Island's interests and a level playing field in the application of international standards" and a resolve to "Negotiate individual Tax Information Exchange Agreements with OECD members in our own right when reciprocal economic benefits are of sufficient value to Jersey from 2006" (the UK but not Jersey being a member of the OECD).
8. Although in international law the United Kingdom government is responsible for Jersey's international relations, by a Letter of Entrustment it has delegated legal power to Jersey to engage directly with international partners and to conclude agreements on its own behalf. Jersey is, therefore, free to make its own arrangements with other countries as regards the exchange of tax information and, following enactment of the 2004 Law, it accordingly entered into a number of bi-lateral agreements of this kind.
9. The relevant agreement in the present case was executed in Helsinki on 28th October, 2008, and came into force on 7th October, 2009. It is a relatively short document of some eight pages and eleven Articles the terms of which will require further examination at a later stage; for the moment it is sufficient to note the following fundamental provisions. Article 1 ("Scope of the Agreement") says:-
And Article 4, "Exchange of Information upon Request", opens with the words:-
Article 10 ("Entry into force") is a little more complex than its heading suggests, in that while it starts by providing that the Agreement is to "enter into force" on the thirtieth day after the latter of the dates on which each of the Parties has notified the other in writing that the procedures required by it its law have been complied with, it then goes on to say that the Agreement shall "have effect"
The expression "criminal tax matters" is defined in Article 3 paragraph 1(f) as:-
As will appear later, this expression is of importance to the present appeal.
10. Turning to the related 2008 Regulations, these do not purport to give direct effect to the Jersey/Norway TIEA but it is obvious and not in dispute that their purpose is to provide, in Jersey domestic law, a procedure for obtaining information of the kind described if a request from Norway falling within the parameters of the TIEA is received, with a view to that information being passed on to the appropriate Norwegian authority.
11. The 2008 Regulations empower the Comptroller to require a taxpayer (under Regulation 2) or a third party (under Regulation 3) to produce "tax information" provided that certain thresholds in relation to those documents or information are satisfied. The term "tax information" is defined in Regulation 1(1) to mean:-
12. Regulation 16A, "Application", states (somewhat clumsily, given the terms in which "tax information" has already been defined):-
The Schedule lists, among others, the Jersey/Norway TIEA; it gives the date when the agreement came into force as 7th October 2009; and it specifies that it applies to seven different taxes, including tax on personal income ("income tax") which is the relevant one for present purposes.
13. The key provisions of the 2008 Regulations where information is to be sought from a party other than the tax payer himself are those specified in paragraphs (1) and (2) of Regulation 3. The first of these provides that Regulation 3 applies:-
If these criteria are not satisfied, that is an end of the matter. If they are, one then moves on to paragraph (2) which defines the nature of the information that can be required as follows:-
14. The Regulation then stipulates that a "requirement" under paragraph (2) must by made by notice in writing (paragraph (3)) and that the Comptroller must give the taxpayer in question (a) a copy of the notice and (b) "a written summary of the Comptroller's reasons for the giving of the notice" (paragraph (5)(b)).
15. There are several features of these provisions that merit comment at this stage. The first is that although the wording that we have italicised in paragraphs (1) and (2) of Regulation 3 is slightly different in each case, the essence is the same. Each requires the Comptroller, as one would expect, to make a judgment that is rational: that is, one that is not arbitrary or capricious; is not one, as the appellants put it, that amounts to little more than the adoption of a "default" position; and is not one that would permit the procedure to be used as a vehicle for a "fishing expedition" by the requesting party. The requirement for a written summary of reasons underlines the point while making clear at the same time that the Comptroller's reasons do not have to be spelt out at length or in great detail.
16. The second feature, as noted earlier with reference to Regulation 16A, is that there is an element of tautology in the drafting of paragraph (2) of Regulation 3 in that the term "tax information", in line four, in the phrase "tax information relevant to" (the matters listed in (a), (b) and (c)) has already been defined in Regulation 1 as information "that is forseeably relevant" to the matters described there. In practice, it may be that there is no difference between "relevant to" and "forseeably relevant to" but it is unfortunate that if the Regulation 1 definition of "tax information" is read in full into the fourth line of Regulation 3 paragraph (2) one ends up with two differently worded sets of criteria of relevance. According to Regulation 1, the criterion is "the administration and enforcement of the domestic laws of a third country, including.....(a) the determination, assessment, enforcement of collection of tax with respect to a person who is subject to that tax; or (b) the investigation or prosecution of a criminal matter in relation to that person"; on the other hand, according to Regulation 3 paragraph (2), the criteria of relevance are said to be "(a) a liability to tax to which the taxpayer is subject or may be subject; or (b) the amount of any such liability; or (c) the taxpayer's residential status for the purpose of these 2008 Regulations."
17. The third observation is that paragraph (1) of Regulation 3 involves the identification of a link between a particular taxpayer, meaning "a person whose liability to pay tax is under examination or investigation" in a country listed in the Schedule to the 2008 Regulations (Regulation 1), potential liability on that person's part to one or more of the taxes listed in the Schedule, and the possibility that that person may have failed or may in the future fail to comply with a domestic law.
18. Before coming to the detail of the Request and the May 2012 Notice it is necessary to go back in time to July 2006 at which point Her Majesty's Attorney General, following an approach by the Norwegian authorities who were already at that stage investigating Mr Larsen's tax affairs, had served two notices on Volaw - one on 7th July, the other on 13th July, 2006 - requiring the production of documents under a different piece of legislation, the Investigation of Fraud (Jersey) Law 1991 ("the 1991 Law"). We shall refer to these as "the 2006 Production Notices". Volaw had duly complied with these notices and the material in question had in due course been made available to the Norwegian Police. The powers of the Attorney General to require the production of documents under that earlier Act (which remains in force) are exercisable in a case where it appears to him that there is a "suspected offence involving serious or complex fraud", wherever committed, and there is good reason to exercise such powers for the purpose of investigating the affairs of any person (Article 2(1)).
19. Shortly after the issue of those notices Mr Larsen's lawyers, Mourant du Feu & Jeune (later Mourant Ozannes, to whom we shall refer as 'Mourant') had written to the then Attorney General (Mr. William Bailhache QC) expressing concern that although the request to which the notices related purported to concern a criminal investigation, the material was in reality sought for the purposes of a civil tax investigation and so fell outside the scope of the Investigation of the 1991 Law. Replying by letter dated 22nd August, 2006, the legal advisor to Attorney General, Mr Howard Sharp, had provided the following assurance: "The Norwegian authorities have given the Attorney General an undertaking that the material transmitted will only be utilised for the purposes of criminal investigations and any subsequent criminal proceedings."
20. Unlike the position in this jurisdiction, in Norway responsibility for tax matters is divided for the most part between, on the one hand, a department described in translation as "the Tax Administration" or "the Tax Authority" consisting of a central Tax Directorate and five regional offices and, on the other hand, the Police and Public Prosecutor. Broadly speaking the Tax Authority (as we shall refer to it) is responsible for the administrative side of things such as assessment and collection of tax whereas criminal investigations and prosecutions are the responsibility of the Police and the Public Prosecutor. The Tax Authority does, however, have power to conduct investigations of its own and, within certain limits, to impose penalties on defaulting tax-payers; as will appear later, in the normal way it also has an important role in relation to prosecutions for criminal offences.
21. Despite the undertaking referred to in Mr. Sharp's letter of 22nd August, 2006, two attempts were made to secure the Attorney General's consent to the Tax Authority being granted access to information concerning Mr Larsen and companies believed to be associated with him. The first, which occurred in the course of 2007, took the form of a request by the Police seeking their release from the original restriction on the use to which the material made available in July 2006 could be put: a request that the Attorney General politely declined. The second, in July 2008, took the form of a written request by the Tax Authority direct to the Attorney General substantially to the same effect. Once again the Attorney General replied that he was unable to assist, explaining:-
"I recognise that the Norwegian Tax Authority may from time to time pass information to the Norwegian Police for the purposes of a criminal investigation. However the focus of the work of the Norwegian Tax Authority appears to be administrative and not criminal. In those circumstances, I do not think I would be acting lawfully under our domestic law to give you assistance in this request and accordingly, with much regret, I respectfully decline to assist."
22. On 26th February, 2010, following the coming into force of the TIEA on 7th October, 2009, the Tax Authority made a further approach, this time in the form of a request under Article 4 of that agreement addressed to the then Comptroller of Taxes, Mr Malcolm Campbell. In the case of Norway, the "Competent Authority" for the purposes of making such a request for information is the Minister of Finance or his authorised representative. The Tax Authority is a subordinate agency of the Ministry of Finance, one of whose five regional tax offices is known as Skatt Vest (Tax West). The covering letter dated 26 February, 2010, came from the Tax Authority and was accompanied by a memorandum headed 'Norwegian Tax Administration' signed by a senior tax adviser on behalf of Skatt Vest. The memorandum was headed "Request for assistance in tax investigation of Mr Berge Gerdt Larsen and his closely related companies", was similar in form to the July 2008 request addressed to the Attorney General, and consisted of some seven pages of text accompanied by one hundred and twenty-one pages of attachments.
23. The opening paragraphs of the memorandum summarised the circumstances that had led to the request for assistance being made, referring among other things to the fact that the Tax Authority had for several years been monitoring the income of Mr Larsen and companies registered in Norway that were wholly or partially owned by him and that a central aspect of this process had been to investigate transactions between the Norwegian companies and transactions between the Norwegian companies and a number of companies registered abroad. Their work so far had given grounds for suspecting incorrect pricing in connection with sales of shares and option agreements, as well as ascribing income to the wrong taxpayer and the antedating of financial contracts, and that their suspicions had also prompted them to investigate whether Mr Larsen had submitted incorrect information concerning his direct or indirect ownership of foreign companies. Reference was made to the fact that in 2005 the Tax Authority had filed a formal complaint with the Police alleging tax evasion on the part of Mr Larsen and to the fact that the Police had subsequently charged Mr Larsen with tax evasion and fraudulent breach of trust, as well as non-reporting of taxable property in foreign companies and that the case was still being investigated. The Tax Authority explained that it was aware that on the authority of the Attorney General documents had been obtained from Volaw and from the Jersey Financial Services Commission and made available to the Norwegian Police and that the Attorney General had declined to allow the Police to share those documents with the Tax Authority. It was for these reasons that the present application for assistance was made.
24. The memorandum asserted that the request "concerns criminal tax matters." The person under investigation was named as Mr Larsen and the period for which information was requested was that covered by the tax years from 1st January, 1996, to 31st December, 2008. The principal request was two-fold. The first, "A)", was in effect for access to the same body of information as that previously supplied to the Norwegian Police in 2006 concerning four particular companies for whom Volaw acted. The second, "B)", was that "investigations be carried out" in respect of another ten companies. In relation to all the companies the Comptroller was asked to "Obtain from Registered Agents all information, documents, correspondence, financial statements, accounts, entity records files held by them, and details of where any other information concerned or connected to the companies can be obtained" and, in respect of Jersey registered companies, to "Obtain from the Jersey Financial Services Commission all information in respect of beneficial owners." The Tax Authority asked that request A) "be considered and processed first" if possible.
25. In the event, request B) has not been pursued. In addition to these specific requests the Tax Authority wrote "we are also seeking to clarify who the real owners are of net company assets in the foreign companies. So far we have noted the following companies:..." and then listed a total of thirty-six companies, thirteen of which were those identified in requests A) and B). But no specific request for information was made in relation to any company other than those previously named.
26. The purpose for which the information requested was said to be required was "for stipulation of tax on general income". But the Request continued "We also wish to use the information to stipulate net wealth tax and we request written permission to also use the information for this purpose", the effect of Articles 1, 2 and 7 of the TIEA being to preclude the use of information obtained in consequence of a request under that agreement for any purpose related to a tax other than income tax (or goods and services tax) without the express written consent of the requested party - that is, in the present case, Jersey. In the event, that consent was not given.
27. Although a period of over two years was to elapse before the May 2012 Notice was served on Volaw by the Comptroller, it is the request of 26th February, 2010, by the Tax Authority that remains the trigger and principal foundation for that notice. Three other notices were issued in the intervening period but, of these, two (dated 22nd April, 2010, and 7th November, 2011, respectively) were subsequently withdrawn and the third (dated 20th January, 2012,) has been stayed pending the outcome of the present proceedings. Although these are now, in a sense, largely a matter of history a brief explanation of the course of events is necessary in order to understand what follows.
28. On 22nd April, 2010, having received the Request from the Tax Authority, Mr Campbell issued a formal notice to Volaw requiring it pursuant to Regulation 3 to furnish "all information, documents, correspondence, financial statements, files and details of any other information concerned with or connected to the named subjects." The subjects in question were named as Mr Larsen himself together with three of the companies listed in the Request and a fourth the name of which plainly should have corresponded with the fourth company named in the Request but which was erroneously described. But the validity of this notice was challenged by Mourant on behalf of Mr Larsen on a number of grounds including in particular that it was incorrect for the Tax Authority to assert, as it did, that the request concerned "criminal tax matters", given that the Authority was only responsible for administrative tax matters, not criminal investigations or prosecutions. This and subsequent exchanges with Mourant led in due course to a protracted correspondence between on the one hand Mr Campbell and on the other the Norwegian Tax Authority, Ministry of Finance and Public Prosecutor and eventually, in September 2011, to withdrawal of the 22nd April, 2010, Notice and, on 7th November, 2011, to the issue of a new notice addressed once again to Volaw ("the November 2011 Notice").
29. The November 2011 Notice required the production by Volaw, for the period 1st January, 1996, to 31st December, 2008, of - broadly speaking - documents relating to the four companies listed in the Request (the name of the of the fourth company now being correctly given).
30. However, various concerns about this new notice were again quickly raised, this time by Voisin on behalf of Volaw, the main point of objection being that the demand was said to be at odds with the views previously expressed by the Attorney General. Voisin called for a moratorium while the Attorney General was consulted, a suggestion that the Comptroller rejected on the basis that following the entry into force of the Jersey/Norwegian TIEA it was for him alone to decide whether to issue a notice in response to a request received under that agreement. Voisin then served a notice of appeal, citing as grounds that the notice was unlawful in that it sought information for a civil tax investigation rather than a criminal tax matter; that the demands of the notice were too wide and amounted to a fishing expedition; and that it was not formulated with sufficient detail. There followed, on 13th January, 2012, a meeting attended by Voisins (for Volaw), Mourant (for Mr Larsen), Carey Olsen (for the Comptroller), the Comptroller himself and Mr Colin Powell of the Chief Minister's Department. Mourant and Voisins expressed concerns that the latest notice was unclear, that the Tax Authority appeared to be attempting to assess the tax liabilities of the companies rather than Mr Larsen's liability to income tax, alternatively that in reality the Tax Authority wanted the information for the purpose of assessing Mr Larsen's liability to wealth tax.
31. Shortly after that meeting, on 20th January, 2012, the Comptroller issued what he described as an "amended notice" in substantially the same form as the previous one but with the addition of a number of significant words designed to clarify the information that was required to be produced ("the January 2012 Notice"). The Comptroller suggested that it would be unnecessary for Volaw to serve a fresh notice of appeal but Voisins and Mourant took a different view, each served new notices of appeal on behalf of their clients, and in March 2012 the Court set a timetable with a view to the consolidated appeals being heard in late July that year.
32. That timetable was, however, overtaken by events. On 28th May, 2012, prompted by concerns expressed by the Tax Authority that the January 2012 "amended" notice had been too narrowly formulated and a complaint by Volaw that the terms of the notice were still unclear, and having had sight for the first time of the 2006 Production Notices (when they were exhibited to an affidavit sworn by Mr Larsen), the Deputy Comptroller, Mr Andrew Cousins, issued a further notice under Regulation 3 (Mr Campbell having died earlier that month). This notice ("the May 2012 Notice") was described as "supplemental to" the January 2012 Notice and was designed in particular to make clear that the documents that Volaw was required to produce included all those that had been disclosed in response to the 2006 Production Notices issued under the 1991 Law. From this point onwards, unless otherwise specifically stated, we use the expression "the Comptroller" to mean the Comptroller or the Deputy Comptroller as the context requires.
33. The May 2012 Notice is addressed to Volaw and relates to information concerning Mr Larsen, who is named as the taxpayer under investigation, and four particular companies with which he is said to have been associated at the material time. It does not appear to be in contention that Volaw acts for the companies as financial services provider in Jersey. The companies in question are:-
(i) Larsen Oil & Gas Drilling Limited ("LOGD"),
(ii) Independent Oilfields Rentals IOR Ltd ("IOR"),
(iii) Mujova Investments Ltd. ("Mujova Investments"),
(iv) North East Oil Ltd ("North East") formerly known as Norden Oil Ltd.
With the exception of North East, which is a BVI company, they are all Jersey companies.
34. The notice requires the production of documents and records held by Volaw falling within the period 1st January, 1997, and 7th July, 2006, as regards one category and between 1st January, 1996, and 31st December, 2008, in the case of two other categories.
35. Accompanying this latest notice was a "Summary of Reasons for Giving Notice" signed by Mr Cousins and dated 28th May, 2012, together with a copy of the corresponding summary delivered by Mr Campbell at the time of his withdrawal of his April 2010 Notice and issue of a new notice in November 2011.
36. The actual description of the documents production of which is required by the May 2012 Notice was as follows:-
"3. (1) All documents and records that were previously provided by Volaw to the Norwegian police and/or public prosecutor pursuant to a Notice issued by the then Attorney General, William Bailhache QC, under Article 2 of the Investigation of Fraud (Jersey) Law 1991 on 7 July 2006, namely:
(i) documents relating to dealings with the named taxpayer; and
(ii) without prejudice to the generality of the forgoing:-
(a) documents (including, but not limited to, statutory records, minute books, details of references taken, file notes and correspondence) concerning the incorporation of Norden Oil Ltd (now known as North East Oil Limited) and Independent Oilfield Rentals Ltd;
(b) documents (including, but not limited to, statutory records, minute
(c) books, details of references taken, file notes and correspondence) concerning the administration and management of Norden Oil Ltd (now known as North East Oil Limited) and Independent Oilfield Rentals Ltd;
(d) documents relating to bank accounts held by Norden Oil Ltd (now known as North East Oil Limited) and Independent Oilfield Rentals Ltd (including, but not limited to, statements of account and any pay instructions); and
(e) documents relating to any trust in respect of which Norden Oil Ltd (now known as North East Oil Limited) and Independent Oilfield Rentals Ltd are underlying companies (including, but not limited to, trust deed, letter of wishes and details of beneficiaries).
The documents listed in paragraphs (ii)(a) and (d) above shall cover the period from incorporation of the companies or settlement of the trust(s) to 7 July 2006 and documents listed in paragraphs (i), (ii)(b) and (c) above shall cover the period from 1 January 1997 to 7 July 2006.
(2) All documents and records that were previously provided by Volaw to the Norwegian police and/or public prosecutor pursuant to a Notice issued by the then Acting Attorney General, Stéphanie Nicolle QC, under Article 2 of the Investigation of Fraud (Jersey) Law 1991 on 13 July 2006, namely:
(i) a facsimile letter dated 12 June, 1998, from Judith Scott at Volaw Trust to the named taxpayer enclosing a 'Company incorporation enquiry form';
(ii) the completed 'Company incorporation enquiry form' sent to the named taxpayer with the facsimile letter mentioned at (i) above;
(iii) a facsimile letter dated the 15th June, 1998, from Judith Scott at Volaw Trust to the named taxpayer; and
(iv) documents relating to the beneficial ownership of Norden Oil Limited (now North East Oil Limited).
4. Further, save in so far as produced under paragraph 3 above, I require Volaw to produce within 35 working days, the following:
(i) all documents and records that Volaw holds (including, but not limited to, financial statements, accounts, files and correspondence) which relate to dealings with the named taxpayer; and
(ii) all documents and records that Volaw holds (including, but not limited to, financial statements, bank accounts, statutory records, minute books, details of references taken, file notes, correspondence and trust documents) concerning the incorporation, administration, activities and operations, management, principals and directors, shareholders and shareholdings, and beneficial ownership of the following companies (including their subsidiaries):
(a) Larsen Oil & Gas Drilling Limited;
(b) Independent Oilfield Rentals IOR Limited;
(c) Mujova Investments Limited; and
(d) North East Oil Limited - formerly Norden Oil Limited
I request that Volaw provide me with the documents and records listed in this paragraph for the period from 1 January 1996 to 31 December 2008."
It will be observed that the time-span of the documents required under paragraphs 4(i) and (ii) is more extensive than that of paragraph 3.
37. Fresh notices of appeal against this new notice were filed by both Volaw and Mr Larsen. At a pre-trial review on 22nd October, 2012, it was ordered that the earlier appeals against the January 2012 Notice be stayed pending the outcome of the appeal against the May 2012 Notice and it is on that basis that the matter comes before this Court.
38. At the price of a degree of repetition, it is worth pausing at this point to emphasise a number of things arising out of the protracted and somewhat tortuous history of this matter. First, that the operative Regulation 3 notice for the purposes of this appeal is that of May 2012 and the foundation for that notice remains the Request made by the Tax Authority in February 2010 albeit over two years previously. Secondly, that the May 2012 Notice is not intended to extend to section B) of the Request or to the section listing thirty-six companies: any vestigial room for doubt about this was laid to rest in the written skeleton argument dated 5th March, 2012, filed on behalf of the Comptroller. Thirdly, that the Comptroller has not consented to any information that may be obtained from Volaw and made available to the Tax Authority being used for the purposes of assessing Mr Larsen to wealth tax. Fourthly, that at the time when the matter came on for hearing before this court the trial of Mr Larsen on a Bill of Indictment, issued on 16th June, 2011, based in part on the transactions described in the Request, was in progress in Norway but had not concluded.
39. So far as evidence is concerned the position is as follows. Prior to the service of the May 2012 Notice Mr Cousins, the Deputy Comptroller, had filed an affidavit on 30th March, 2012, setting out his understanding of Mr Campbell's reasons for having issued the January 2012 notice and addressing the various challenges to that notice set out in Mr Larsen's and Volaw's notices of appeal; Mr Larsen and Mr Mark Healey (a director of Volaw) had sworn affidavits on 11th May, 2012; and an affidavit dealing with Norwegian tax law and criminal procedure had been sworn on 15th May, 2012, by Dr Hugo Matre, a Norwegian lawyer instructed jointly by Mr Larsen and Volaw. Over the course of the six months following service of the May 2012 Notice further affidavit evidence was filed by Mr Cousins, by Mr Healey and by Mr Larsen and also by Mr Sven Anders Drangsholt, a Norwegian lawyer instructed on behalf of the Comptroller, and again by Dr Matre.
40. Although Volaw and Mr Larsen were separately represented, Volaw by Advocate Hoy and Mr Larsen by Advocate Harvey-Hills, and served separate notices of appeal in slightly different terms, the grounds on which they challenged the May 2012 Notice were essentially the same. They also filed a single set of opening written submissions and, when it came to expert evidence of Norwegian law, made common cause in relying on the evidence of a single expert. The Comptroller was represented by Advocate Kelleher.
41. The grounds of challenge were multiple, often overlapping and not always consistent (the appellants' written opening submissions alone running to 92 pages). But the principal complaints were these:-
(i) that there is no power under the 2008 Regulations to require the production of information that pre-dates the entry into force of the Jersey/Norway TIEA on 7th October, 2009, (as the May 2012 Notice does);
(ii) that the threshold condition for the application of Regulation 3 is not satisfied because there are no reasonable grounds, as required by paragraph (1) of that regulation, for believing that Mr Larsen may have failed to comply with the domestic law of Norway concerning income tax and that such failure has led or is likely to lead to serious prejudice to the proper assessment or collection of tax;
(iii) that the conditions of paragraph (2) of Regulation 3 are not satisfied in that there are no grounds on which the Comptroller could reasonably be of the opinion that Volaw has documents and/or records which contain or may contain tax information relevant to (a) a liability to income tax to which Mr Larsen may be subject and/or (b) the amount of any such liability;
(iv) that the way in which the Request and the May 2012 Notice are formulated is illegitimate in that they are insufficiently detailed and no more than a fishing expedition; the documents of which production is required go beyond those actually requested by Norway and, as a class, are too widely delineated;
(v) that, where disclosure is sought in relation to a "criminal tax matter" there is no power to require the production of information other than for the purposes of a criminal investigation or prosecution, whereas the true and only purpose of the Request was and is to enable the Tax Authority to make a civil assessment of Mr Larsen's tax liability.
42. The appellants say no. The Comptroller's answer is yes if the information relates to a criminal tax matter (but not otherwise), and the terms of Article 10 of the TIEA themselves appear to leave little room for doubt that this is right. A distinction is drawn between the date on which the Agreement "enters into force" and the periods of time in respect of which its provisions are to "have effect". As regards the latter (as noted earlier) the Agreement is said to have effect:-
The Comptroller's powers, therefore, became exercisable on 7th October, 2009, but it was and is only in respect of matters other than "criminal tax matters" that there was and is any temporal limitation as to the tax year in respect of which information can be required to be produced. This much appeared to be common ground. But the appellants go on to argue that the scope of Article 10 is cut down by the terms of Regulation 16A; that when the two are read in conjunction and with due regard to the pre-existing powers to require production of documents under the 1991 Law, it is evident that the Comptrollers' powers to require the production of information is confined to post-7th October, 2009, material.
43. The appellants' argument is elaborate but boils down to this. That long before the TIEA came into force Jersey had enacted legislation - the 1991 Law - under which information relating to criminal tax matters could be made available to foreign tax authorities, legislation which remains in force today; that the TIEA did no more than "recognise" that earlier power in the same way that a consolidating act might do, adding nothing new because there was no need for it; that to read the 2008 Regulations as creating a new power extending to pre-TIEA information would involve objectionable retrospective legislation.
44. Key to the appellants' case are the terms in which the political commitment contained in Senator Pierre Horsfall's letter to the Secretary-General of the OECD of 22nd February, 2002, (to which reference was made earlier) was expressed, including in particular the following passages:
"Jersey considers that it already has existing legislation in line with the OECD's proposals for exchange of information on criminal tax matters to be implemented by 31 December, 2003."
And, under the heading "An Effective Exchange of Information", an undertaking to:-
"Maintain in place legal mechanisms that allow information to be provided to tax authorities upon specific request for the investigation and prosecution of criminal tax matters, on a reciprocal basis and in accordance with the legal procedures for handling such requests. Such procedures will be referred to in any tax information exchange, or mutual legal assistance, agreements to be negotiated."
Thus, submitted the appellants, "Article 10 is easily understood when read with these statements. Jersey was agreeing to maintain (not it is to be noted, introduce) mechanisms to allow information to be exchanged for the investigation and prosecution of criminal tax matters. Such procedures were to be referred to in tax information agreements, as was in fact the case with the TIEA." Article 10, and indeed the whole of the TIEA and the 2008 Regulations, must, therefore, be understood as maintaining the status quo as regards matters which predated the entry into force of the TIEA: that status quo being, in the case of "criminal tax matters", the facility for the provision of assistance found in the 1991 Law (opening written submissions paragraphs 200 - 205).
45. There was no dispute between counsel that the proper approach to the construction of international treaties is that described by Mummery J in IRC-v-Commerzbank Attorney General [1990] STC 285 summarising the approach of the House of Lords in Fothergill-v-Monarch Airlines Ltd [1981] AC 351 and the Vienna Convention on the Law of Treaties (notwithstanding that Jersey is not a party); that, in short, that approach entails searching first for what appears to be the clear meaning of the words used but without being overly literal, bearing in mind the purpose of the instrument (or, as is not infrequently said, adopting a "purposive approach") and that its wording will have been the product of negotiation between states; that if the result of this exercise leaves the meaning unclear or ambiguous or produces a manifestly absurd or unreasonable result it may be legitimate to have recourse to supplementary materials.
46. But we find the appellants' argument wholly unconvincing, going, as it does, well beyond anything contemplated by these principles. Whatever may have been contemplated by those responsible at the time of Senator Horsfall's letter in early 2002, it is inescapable that, by the time the TIEA came to be concluded six and a half years later in October 2008, it had been decided to structure things differently. There is nothing that would justify the conclusion that the earlier intention continued to be the basis on which the final terms of the TIEA were negotiated and agreed. On the contrary, as Mr Kelleher put it, "Given the clear purpose of the TIEA, the appellants' interpretation would produce an absurd result, namely that notwithstanding Jersey's inter-state commitment to Norway, Jersey's domestic legislation giving effect to that commitment [had the effect of reducing] its ambit and effect". To this we would add that, other considerations apart, the definition of "criminal tax matters" in Article 3 of the TIEA speaks of "tax matters involving intentional conduct whether before or after the entry into force of the Agreement" (our emphasis) and it would be a curious state of affairs if, notwithstanding that definition, the power to require production of information in such cases were limited to post-Agreement information. There is nothing in the argument that would justify restricting the otherwise clear wording of the TIEA in the manner suggested. All other considerations apart, it is inconceivable that the 2008 Regulations would not have contained some express reference to the 1991 Law were the intention that for which the appellants contend. In any event, the operative words of that Act delineating the circumstances in which the Attorney General's powers under the 1991 Law may be exercised are not "criminal tax matters" but where "there is a suspected offence involving serious or complex fraud" (Article 1 paragraph 2(1)(a)); and, unlike the Attorney General under that Law, who is under no obligation to do anything, the TIEA creates a positive obligation on Jersey to respond to a request for information falling within its terms.
47. As regards the contention that the Comptroller's construction would breach the presumption against retrospective legislation, the point is misconceived. As Mr Kelleher pointed out, a similar argument was unsuccessfully run in HMRC-v-Ben Nevis (Holdings) Limited [2012] EWHC 1807 (Ch), a case in which the defendants argued that an amendment to a statute making provision for a foreign revenue claim to be enforced in the UK, had to be construed as applying in the UK only in respect of tax debts arising after the date when the statutory instruments promulgating the amendment came into force, because for it to apply to tax debts arising before that date would offend the presumption against retrospectivity. Rejecting this argument the learned judge made reference to Bennion on Statutory Interpretation (5th Ed. p.137):-
He then went on to describe the true principle as that enunciated by Willes J in Phillips-v-Eyre (1870) LR 6QB 1 at 23: that legislation "ought not to change the character of past transactions carried on upon the faith of the then existing law....." and concluded:-
48. In the present case there is no question of the legal character of any past transaction, act or omission by the appellants being changed as a result of the 2008 Regulations: the basis of liability for Norwegian tax or prosecution for a Norwegian criminal offence pertaining to tax remains exactly the same as before. All that the TIEA and the 2008 Regulations do is to make provision for the exchange of information that may have a bearing on such matters.
49. For these reasons we are in no doubt that the fact that the 28th May, 2012, Notice requires the production of documents pre-dating the coming into force of the TIEA is, of itself, perfectly legitimate where "criminal tax matters" are concerned. Whether the circumstances of the present case admit of being so classified and, if they do, whether that necessarily implies or requires a restriction on the use to which disclosed information may be put - as the appellants contend - are matters to which we return later.
50. At the heart of the Norwegians' interest in Mr Larsen and the companies the subject of the Request is a series of transactions that took place between October 1997 and January 2000 culminating in the acquisition in December 1999 by North East (a BVI company then known as Norden Oil Limited) of a 34% shareholding in a Norwegian company called Independent Oil Tools AS ("IOT") from Larsen Oil & Gas AS ("LOGAS"), a Norwegian company wholly owned by Mr Larsen, at a price of NOK 8.5m and the onward sale of that shareholding a month later to another Norwegian company, DNO ASA, for a total consideration the value of which is estimated to have been in excess of NOK 36m, making the net proceeds of sale some NOK 27.5m. The acquisition by North East was ostensibly made by the exercise of an option originally granted in October 1997 by LOGAS to IOR (a Jersey company) which was subsequently transferred to North East. But the Norwegian Tax Administration evidently suspect Mr Larsen of having interests in some of the companies concerned, including IOR and North East in particular, which he has failed to declare; that there is a commonality of interest between LOGAS and IOR and between IOR and North East; that the acquisition by North East involved, in effect, a sale by LOGAS at a substantial under value; and that this "constitutes a cost-free transfer of values to the benefit of [Mr Larsen] which the Tax Administration regards as taxable income to him", to quote the Request.
51. Larsen Oil & Gas Drilling Limited ("LOGD"), a Jersey company (not to be confused with LOGAS) comes into the picture because, as there is no dispute, Mr Larsen has at all relevant times had a shareholding interest in that company (25% according to him), because LOGD appears at the material time to have been a shareholder in IOR (35% according to some sources) and because LOGD is the first of the group of four companies named in the May 2012 Notice.
52. The appellants contended there is no basis whatever for the Tax Authority's accusations. This part of their case rested, essentially, on two propositions. First that the factual evidence before the Comptroller, and now before the Court, does not begin to support the Tax Authority's suspicions about the extent of Mr Larsen's interests and the relationships between the several companies. Secondly, in the absence of the receipt by Mr Larsen of any dividend payment related to the transactions in question - and, the appellants say, there has not been any - there is nothing that could give rise to any income tax liability on the part of Mr Larsen himself according to Norwegian law.
53. As to the first, the appellants submitted that the only relevant evidence is that provided by the October 2012 affidavits of Mr Healey, a director of Volaw, and by Mr Larsen himself. The scope of Mr Healey's affidavit is limited for the most part to summarising formal details of the date of incorporation of the four companies named in the May 2012 Notice, the extent, if any, to which Mr Larsen has ever had any shareholding in or been a director of them, the location of their board meetings and effective centres of management (Jersey, or, in the case of IOR, Sark until August 2008 and then Jersey). In each case Mr Healey adds statements (1) to the effect that at no time has the company made dividend or other payments to Mr Larsen or to anyone else, that no other payments have been made to Mr Larsen, and that to the best of Mr Healey's knowledge and belief no member of Mr Larsen's family has ever received a dividend payment or other payment from the company; and (2) to the effect that Norwegian resident shareholders did not at any time own more than a 50% shareholding in the company. In the case of Mujova he adds that it is wholly owned by a purpose trust in which Mr Larsen has no interest ("the Jova Trust"). In the case of IOR he says that while Mr Larsen originally had a 49% shareholding at the time of its incorporation in November 1996 this was subsequently reduced to 25% in 1997; that this was sold in January 1999; and that Mr Larsen no longer has any direct shareholding in IOR. In the case of North East he says that it is owned by a Mr Ken Hodcroft, a UK resident.
54. Mr Larsen, for his part refers in his main affidavit to the criminal charges currently faced by him and strongly refutes the allegations made in the Bill of Indictment dated 16th June, 2011. He goes on to describe at some length his military service in the Royal Norwegian Air Force, how he read chemical engineering at the University of Newcastle graduating in 1975 with a BSc degree, his MBA from the University of Austin, Texas in 1979 and his subsequent career in the field of oil and gas including his time as Chief Operating Executive of DNO between 1995 and 2000 and Executive Chairman between 2002 and 2011. At paragraph 18 he then says:-
"I understand that one of the bases upon which the Norwegian Tax Administration seeks these documents is that it alleges that I have undeclared interests in LOGD limited, IOR Jersey and North East. This is completely untrue. I set out the position in relation to each company below."
55. There then follow details much as summarised by Mr Healey in his affidavit. In the case of North East, Mr Larsen adds in a later, supplementary affidavit dated 26th February, 2012, "I can confirm that I have never received a dividend form North East nor have I received any other kind of benefit form North East, either directly or indirectly." The final section of his main affidavit consists of little more than a recital of the events leading up to the issue of the May 2012 Notice and related correspondence.
56. These affidavits and their exhibits (copy extracts from registers of shareholders and directors in the case of Mr Healey and copy correspondence in the case of Mr Larsen) are, the appellants argued, the only evidence that the Court has to go on; everything else was and is mere speculation on the part of the Tax Authority; the Comptroller had no business acting on it without probing it further; without more it reveals nothing untoward on the part Mr Larsen. The May 2012 Notice must accordingly be revoked. In support of this, Mr Hoy and Mr Harvey-Hills relied heavily on the decision Chan Han Teck, J. in the High Court of Singapore in May 2012 in Comptroller of Income Tax-v-AZP [2012] 22 taxmann.com 36, a case involving a request by the Republic of India for tax related information under an agreement between Singapore and India providing for the exchange of information for the purpose of enforcing tax laws of both states and, in particular, preventing tax evasion or fraud.
57. Having observed that the exchange of information could impinge on interests such as taxpayer privacy and confidentiality of banking information and that "it is important that the right balance is struck and that procedural safeguards are put in place to ensure that only specific and relevant requests are entertained" (paragraph 5), the learned judge in that case turned to consider the requirement stipulated by the inter-state agreement that the information must be "foreseeably relevant" to the administration and enforcement of requesting state's tax laws, commenting as follows:-
58. The Indian authorities sought the production of records and information relating to two particular bank accounts held with the defendant bank in Singapore in the names of Company X and Company Y on the basis that they were believed to be relevant to undeclared incomes of an Indian national and persons associated with him, reliance being placed on two "transfer instructions" said to evidence transfers of money by the Indian national to the two companies. The application was rejected by the judge on the ground that neither document amounted to sufficient evidence of a connection between the national in question and either company; in the case of Company Y there was, moreover, no evidence that the monies in question had in fact ever been transferred to or from the account in question.
59. While there may be similarities of context between that case and the present - and we certainly do not dissent from the learned judge's general observations about the balancing of competing interests and the importance of procedural safeguards - the decision there plainly turned on the minimal extent of the material presented by the Indian authorities and its tenuous nature. One "transfer instruction" was described as unsigned and the court found that it was unclear whether it was ever executed; the other instruction was evidently also unconvincing. Not only is the present case very different when it comes to the information on which the Comptroller was invited to act, but other guidance on the appropriate approach to the sufficiency of such information is to be found closer to home in the form of the decision of the Royal Court in Acturus Properties and 47 Others-v-Attorney General [2001] JLR 43.
60. In Acturus the Attorney General had issued notices under the 1991 Law in response to a letter of request from an agency of the Government of South Africa seeking assistance with a criminal investigation there. On an application for judicial review of the Attorney General's decision by a number of entities named in the letter of request, the representors contended that was not enough for the Attorney General simply to accept what was asserted in the letter of request but was bound to make further enquiries, to check the facts alleged and ask for the affidavit evidence in support of the allegations so as to satisfy himself that there were genuine grounds for believing that a serious or complex fraud had been committed. Rejecting this submission and endorsing what in analogous English authorities has been referred to as "a presumption of regularity" the Court (Birt DB and Jurats) said this (at paragraph 52 and 52):-
61. The considerations that apply in the case of requests for assistance under the 1991 Law may not be entirely on all fours with those applicable in cases such as the present under a tax information exchange agreement and the 2008 Regulations with which we are concerned but the parallels are sufficient to be instructive. The statutory provisions in each case decree that the threshold for intervention includes the belief on the part of the relevant officer that a certain state of affairs exists and entrusts the decision whether to exercise the powers in question to him alone; a rational basis for that belief and decision is necessary; but the context in each case is one in which it is in the nature of things that the full facts are unlikely to be known at the time when the request for assistance is made.
62. On the other hand we accept for present purposes that it may not be appropriate to apply the same notion of "a presumption of regularity" to cases under the tax information exchange regime with which we are concerned, given the different purposes of the legislation and the slightly different way in which the Regulation 3 threshold is expressed by comparison with the equivalent in Article 2(1) of the 1991 Law. In this respect, In re Kaplan [2009] JLR 88 in which Acturus was considered is relevant. In that case the Royal Court was concerned with an application to discharge a saisie judiciaire that had been granted ex parte over the representor's realisable property pursuant to article 16 of the Proceeds of Crime (Jersey) Law 1999. The order had been made on the application of the Attorney General at the request of the United States on the basis of, among other things, an affidavit of an Assistant US Attorney which evidently included a somewhat perfunctory statement of belief on his part that a forfeiture order was be made in proceedings in Missouri. In response to the submission of counsel for the Attorney General that a presumption of regularity was a principle of general application that could be read across to a saisie judiciaire obtained on behalf of foreign jurisdictions under the 1999 Law, Bailhache, Bailiff said (at p.100):-
(By art. 15 of the 1999 Law a saisie judiciaire may be made where "(a) proceedings have been instituted against the defendant in a country outside Jersey and - (i) .............., and (ii) either ..........or it appears to the Court that there are reasonable grounds for believing that such an order may be made in the proceedings."). That said, looking at other aspects of the information before it the Royal Court concluded that enough material had been placed before it to satisfy the statutory "reasonable grounds for belief" condition.
63. Mr Hoy and Mr Harvey-Hills argued eloquently that the Comptroller had failed to approach his task with the requisite degree of rigour; that he had, in effect, abrogated his quasi-judicial, gate-keeper function in favour of adopting uncritically what the Tax Authority asserted; that in doing so he had failed to hold the proper balance between competing interests of which the court spoke in Comptroller of Income Tax-v-AZP and had failed to give sufficient weigh to the protection of Jersey nationals and taxpayers. But this implicitly sets the bar too high and is unjustifiably critical of the Comptroller. Article 3 of the TIEA obliges a requested party to provide the requisite information "to the extent allowable under its domestic laws". In the case of Jersey the "extent allowable" is that provided in the Regulations. The relevant safe-guards have, accordingly, been set by the Jersey legislature and, so far as relevant to present issues, are for the most part given expression in the terms of Regulation 3. And, as is plain from the terms of that Regulation, it is recognised that for the TIEA process to work some margin of appreciation has, inevitably, to be allowed to the Comptroller in deciding whether it is right to accede to a request for assistance: hence the words "believing" and "opinion". While it is certainly right that any request should be carefully considered by the Comptroller with the criteria of Regulation 3 in mind, it is not for him, or for this Court, to devise additional hurdles for a requesting party to jump before any request can be met.
64. For present purposes it appears to us that the principles applicable to the question whether the Regulation 3 paragraph (1) threshold is satisfied, that is whether the Comptroller has reasonable grounds for believing the matters described in (a) and (b) of that paragraph, may be summarised as follows:-
(i) the Comptroller is entitled and bound to have regard to the totality of the information made available to him and its sources or lack of sources;
(ii) there is no requirement that information must be verified by affidavit or otherwise take any particular form;
(iii) for the purposes of deciding whether to act on a request the Comptroller is at liberty to ask the requesting state authorities for clarification or further information but is under no obligation to do so; nor is he under any obligation to require the production of evidence in support of facts of which he is informed in order to verify them for himself;
(iv) where, as here, the Comptroller is faced with conflicting assertions as between the requesting authority (Norway) and those affected by the request (Mr Larsen) it is not for him to reach any final conclusion on where the truth lies: his role is not to act as final adjudicator but simply to decide, having regard to the material before him, whether there are "reasonable grounds for believing" the two matters prescribed by the first paragraph of Regulation 3 and whether he can properly say that in his "reasonable opinion" the documents of which production is sought may contain information relevant to one or more of the matters listed in the second paragraph of that regulation.
65. In the present case the Tax Authority has set out its case at considerable length in the Request. The sources of its account of events and suspicions are said to include monitoring exercises and investigations undertaken over a period of some years, documents evidencing the several elements of the transactions under scrutiny (attached to the Request), circumstantial evidence from Norwegian sources, material seized by the Police in Norway which includes "a significant number of documents regarding the Jersey-managed companies where the companies are more closely linked to Norway than just being ordinary business connections", and various correspondence and records relating to the incorporation of some of the companies concerned. The Tax Authority's concerns are evidently shared by the Norwegian Police and regarded as sufficient to have warranted the issue of a Bill of Indictment against Mr Larsen on 16th June, 2011.
66. On any view the transactions in question, taken at face value, make little commercial sense and have a number of curious features, strongly suggesting that there is more to them than meets the eye. Even so, neither Mr Larsen nor Mr Healey attempts to offer any explanation of - or indeed any comment at all - on the transactions recounted and observations made in the Request (other than indirectly in the form of a single, cursory passage in a letter dated 4th August, 2006, from Mourant to the Attorney General saying "the option was granted at a proper price and Mr Larsen did not benefit from the subsequent sales which simply reflected an increase in price due in part to the rising price of oil"). While Mr Larsen strenuously denies the suggestion that his interests in any of LOGD, IOR and North East is other than that deposed to by him, for the appellants to suggest that, apart from the affidavits of Mr Larsen and Mr Healey, all is speculation and that the material before the Comptroller, and now before this Court, is scarcely better than that in the Singapore case is unrealistic and badly wide of the mark.
67. All in all, we are entirely satisfied that there were available to the Comptroller very good grounds for believing that the Tax Authority's suspicions could be well founded and that Mr Larsen's interests in some at least of the companies and the transactions in question were more extensive or different from what he would have the outside world believe. That, of course, is by no means an end of the matter but it is one of the crucial elements of the case.
68. As to the second of the appellants two main propositions, that there is no conceivable basis on which the transactions in question could give rise to any income tax liability on the part of Mr Larsen, the opinions of the two expert witnesses on Norwegian tax law, Dr Matre (for the appellants) and Mr Drangsholt (for the Comptroller), differed markedly: not so much because of disagreement about substantive law but because of divergent assumptions that they made about the facts to which the law is to be applied. Underlying almost the whole of Dr Matre's evidence was the assumption that the events in question were no more than bona fide transactions between a number of unrelated companies, that the beneficial ownership and directorships of the entities covered by the affidavits of Mr Larsen and Mr Healey were exactly as stated in those affidavits, and that in the absence of any dividend payment to Mr Larsen in connection with the transactions there would be no income accruing to Mr Larsen to which any income tax liability could attach. By contrast, Mr Drangsholt's evidence proceeded on the basis that the full facts were, as yet, unknown, but it was evident to him that the Tax Authority was, as he put it, "interested in investigating the circumstances and determining whether more atypical or indirect transfer of taxable dividends or taxable income to Mr Larsen or close relatives to him, has taken place". He continued:-
"My opinion after reading the documents I have received is that Skatt Vest is not primarily interested in investigating whether the companies LOGD Limited, IOR Jersey, Mujova, North East or any other company have made cash distributions to Mr Larsen directly. The question is whether the transactions that have taken place at company level, directly or indirectly, imply the transfer of value to or for the benefit of Mr Larsen or his relatives and thereby constitutes receipt of taxable dividends or other kind of taxable income" (paragraphs 26 and 27 of Mr. Drangsholt's affidavit).
Each expert was reluctant to depart far from his basic thesis, with the result that cross-examination did little to illuminate things and, like ships passing in the night, the two never engaged fully with one another.
69. Dr Matre was adamant that the only way in which any liability to income tax on the part of Mr Larsen could possibly arise was if there had been a distribution to him by way of dividend by one of the companies concerned; and there was, he contended, no evidence of any such distribution having occurred. Mr Larsen was not, he pointed out, a party to any of the transactions in question. All that had happened was that there had been a series of arm's length transactions between companies. LOGAS might possibly have been susceptible to some tax liability by the application of the Norwegian "transfer pricing rules" (applicable where companies are affiliated or associated) but those rules operate exclusively at the company level and the fact that Mr Larsen was the 100% shareholder in LOGAS would be of no relevance. In support of this he quoted from published works of two distinguished academic lawyers, Professor Frederick Zimmer and Professor Ole Gjems-Onstad. He also cited passages from two decisions of the Supreme Court of Norway, the first from Greta Somme-v-Drammen Municipality (otherwise referred to as "Grecon") reading (in translation):-
The second from The State-v-Henning Astrup (otherwise referred to as "Ragelas"), reading:-
70. Mr Drangsholt, for his part, suggested that there were at least three ways in which Mr Larsen might find himself liable to income tax were the facts to turn out to be not as straightforward as Dr Matre assumed them to be: (1) that the transactions might indeed be regarded as giving rise to a taxable dividend in the hands of Mr Larsen within the terms of Section 10-11 of the Norwegian Tax Act; (2) under anti-avoidance principles developed by the courts; and (3) by reason of the Norwegian Controlled Foreign Corporation Rules (the "NOKUS" Rules).
71. As to the first of these, Mr Drangsholt pointed out, and Dr Matre accepted, that the concept of a taxable dividend is wider than a simple cash payment, being defined by Section 10-11(2) of the Norwegian Tax Act as "any distribution that involves a transfer of assets free of charge from the company to the shareholder" and thus including any economic benefit conferred on a shareholder (or someone identifiable with him under the relevant provisions of the Norwegian Act such as close relative). Mr Drangsholt accepted that the transfer pricing rules mentioned by Dr Matre primarily take place at company level, but insisted that "transactions not carried out at arm's length can, according to Norwegian tax law, also be considered as a taxable distribution of income to the shareholders in these companies without de facto transfer of cash or similar to shareholders, if the transaction in question in some way has benefitted the shareholder or his relatives" (affidavit paragraph 30). This, he suggested, was what Skatt Vest was referring to when it said:-
"The Tax Administration concludes that BGL has transferred the shares in IOT from LOG to the Jersey companies at below market price, and that the transfer was made for BGL's private purposes. The transfer also means that LOG lost capital gains on the shares in the amount of NOK 27,502,944. The share transfer constitutes a cost-free transfer of value to the benefit of BGL, which the Tax Administration regards as taxable income to him."
Mr. Drangsholt continued:-
"My opinion is that Mr Larsen, depending on what facts the investigation may reveal, might be considered as having received taxable dividends according to section 10-11(2) or taxable income according to the basic principle settled in section 5-1 of the Norwegian Tax Act, if the entering into of the option agreement on 20 October, 1997, and the agreement that this option should be assigned by IOR Jersey to North East was not in the interest of LOG AS but in the interest (benefit) of Mr Larsen or his relatives.
There are examples from Norwegian case law where similar circumstances occurred and where the shareholders were considered as having received taxable income, even though the relevant transactions took place at company level."
72. By way of example he referred to a recent decision of the Norwegian Borgarting Appeal Court, Knoop, Utv. 2012,139. On the face of things valuable commercial rights under a contract with a third party had been transferred from one company to another, both being owned by Mr. Knoop. But the Court found that the reality was that Mr. Knoop had "taken the contract out of the first company" and placed it instead with the second one. This, it held, this was for tax purposes to be regarded as a "withdrawal" from the first company for the benefit of the shareholder even though thereafter he transferred the contract to the second company; the withdrawal thus constituted a taxable dividend from the first company to Mr. Knoop. Dr Matre was dismissive of this decision on a number of grounds: that the decision was one of an inferior court, that it failed to take account of the Supreme Court decisions in Grecon and Ragelas, that there was a degree of ambiguity in the terminology used by the Appeal Court, that in any event the facts of the case were different from those of the present one; that, all in all, the decision was thoroughly unsatisfactory and was wrongly decided. But Mr. Drangsholt stuck to his guns and we, for our part, were by no means persuaded that it could be so easily dismissed, being - it seemed to us - perfectly intelligible and logical. And, as regards Dr Matre's point that the case was distinguishable on its facts from the present one, that of course did no more than beg the question of what the true facts in the present case are. Mr Drangsholt, too, cited Professor Gjems-Onstad, this time to the effect that where distributions are made by one company to another which is controlled by the shareholder of the company making the distribution, "the allocation of income may be altered provided there exists special circumstances" and that the controlling shareholder may, for example, be liable to income tax "if the real reason for the transaction is to benefit the shareholder" (paragraph 35).
73. As regards anti-avoidance concepts, Mr Drangsholt explained that in a corpus of over seventy judgments since the first half of the 20th century the Norwegian Supreme Court has developed a general anti-tax-avoidance doctrine which can, in appropriate cases, result in transactions being reclassified for tax purposes. It operates, in effect, where the dominant purpose of a transaction is the avoidance of tax and the transaction involves violation of the purpose behind the provision of the Norwegian Tax Act and serves no other commercial purpose. By way of example Mr Drangsholt cited two Norwegian Supreme Court cases: Hovda, in which the court reclassified the capital value of shares transferred from one company to another as a distribution of dividends to the underlying shareholders, and Ragelas, in which a company (Ragelas) was liquidated by another company (Pegasus) that had previously been the recipient of shares assigned to it by the joint shareholders of the two companies and the court, looking at the sequence of transactions as a whole, took the view that they constituted a predetermined scheme with the sole purpose of reducing the tax liabilities of the Astrup family and classified the proceeds of the liquidation received by Pegasus as distributions of dividends to the shareholders. The result of such cases, said Mr Drangsholt, can be similar in effect to the direct application of Section 10-11 of the Norwegian Tax Act. Dr Matre acknowledged the existence and scope of the doctrine but contended that the two Supreme Court cases were distinguishable from the present case on their facts, a contention that takes one down the blind alley of divergent assumptions as to what the relevant facts in the present case are.
74. The third principal head of potential liability considered by Mr Drangsholt is the NOKUS rules (the Norwegian Controlled Foreign Companies Rules). The effect of these is that where a Norwegian resident shareholder directly or indirectly owns or controls 50% or more of a foreign company, the shareholder is taxed on the company's annual profits (by reference to his percentage holding) irrespective of whether those profits are actually distributed to him by means of a dividend. The rules pose little difficulty in principle, but given the different approaches of the two experts to the question of the facts of the case it was inevitable that there would be little to say on the subject and no consensus as to their application here. Responding to Dr Matre's unqualified assertion in his first affidavit that, on the evidence presented, none of the circumstances that could trigger the NOKUS rules arises, Mr Drangsholt protested that he could not see how Dr Matre could say that at this stage:-
"It is my understanding that this is exactly what Skatt Vest wants to investigate and, even though Mr Larsen in his affidavit has claimed otherwise, the Bill of Indictment from the Norwegian Public Prosecutor implies that the information provided by Mr Larsen is misleading or even incorrect" (paragraph 53).
75. The appellants also suggested that, irrespective of the facts, the NOKUS rules could not apply in the present case because they are discriminatory against Jersey companies. This, it was said, is because while a Norwegian taxpayer will incur a charge to tax on the profits of a foreign company that he controls (irrespective of whether those profits are ever actually paid to him), a similar charge will not arise if he has an identical holding in a company in Norway carrying on identical business; the result is to make it less attractive for a Norwegian resident individual to establish a company in Jersey than in Norway and, correspondingly, more difficult for Jersey companies to raise capital from Norway. In these circumstances, the appellants submitted, the Court ought not to assist in the implementation of taxes which discriminate against Jersey nationals. The right so to refuse is expressly contained in Article 6(5)of the TIEA:-
"The requested Party may decline a request for information if the information is requested by the requesting Party to administer or enforce a provision of the tax law of the requesting Party, or any requirement connected therewith, which discriminates against a national or citizen of the requested Party as compared with a national or citizen of the requesting Party in the same circumstances."
The answer to this on behalf of the Comptroller was that a Jersey company is neither a "national" nor a "citizen" of Jersey; nor is a service provider such as Volaw. And if Mr Larsen were to find himself liable to pay Norwegian income tax on the profits of a Jersey company by reason of the NOKUS rules it would be because he is a resident of Norway for tax purposes: his nationality or citizenship would be irrelevant. This appears to us to be correct.
76. It is no part of the Comptroller's function when deciding whether to issue a Regulation 3 notice in response to a request under the TIEA, or this Court's function on any appeal from such a decision, to resolve contentious issues of Norwegian tax law or to reach definitive conclusions about whether the person the subject of the request is or is not liable to Norwegian tax. Indeed, in the ordinary way it is unlikely that the Comptroller would have expert evidence of Norwegian tax law in front of him at the time when he is called upon to make his decision (as happened here with Dr. Matre's first affidavit, sworn on 11th May, 2012,) and it would be impractical that he should be required to obtain such evidence and undertake a process of detailed evaluation before coming to a conclusion. In the case of the present appeal it would, moreover, be wholly inappropriate for this court to presume to make findings on strongly disputed matters of substantive Norwegian tax law or the facts of the case under investigation, or to express definitive conclusions on questions of income tax liability, at the very time when these issues are the subject of a criminal prosecution in Norway concerning Mr Larsen. Nor do we accept the proposition advanced by Mr Harvey-Hills and Mr Hoy that the Court must be satisfied that it is more likely than not that Mr Larsen has failed to comply with Norwegian tax law. The Comptroller's task was, and ours now is, simply to ask whether the threshold criteria specified in paragraph (1) Regulation 3, carefully formulated as they have been, are satisfied.
77. The answer to that question is that having regard, first, to what we have already said (that we consider that there are very good grounds for believing that the Tax Authority's suspicions are well founded and that Mr Larsen's interests in some at least of the companies involved in the transactions in question were more extensive or different from what he would have the outside world believe) and, secondly, to the evidence of Mr Drangsholt and Dr Matre, we are satisfied that there are indeed reasonable grounds for believing that Mr Larsen may have failed to comply with Norwegian domestic income tax law and that such failure has led, or is likely to lead, to serious prejudice to the proper assessment or collection of tax. The very fact that charges of breaches of such law by Mr Larsen have not only been the subject of a Bill of Indictment but have been pursued to trial is, also, something that can hardly be ignored.
78. It follows from this conclusion that the appellants' repeated charge that the Request is nothing but an illegitimate "fishing expedition" is untenable.
79. Before leaving the subject of potential income tax liability on the part of Mr Larsen we feel obliged to record a measure of unease at the way in which much of Dr Matre's views concerning the facts of the case relevant to such potential liability were expressed. Mr Drangsholt candidly and very properly admitted that he did not know what the facts might, in due course, prove to be (causing him to come in for a good deal of flack in the appellants' opening written submissions where he was charged with postulating "a series of hypothetical situations, none of which bears any relation to the actual facts", indulging in "speculative straw grasping to justify a charge where none can reasonably exist based on the available information" and "unfounded speculation"). But Dr Matre was more assertive and judgemental than we would expect from an independent expert witness working - as such witnesses often must - on the basis of facts that ought to be acknowledged as no more than assumptions. This may have been unintentional; or it may be that Dr Matre was unconsciously handicapped by the fact, as he readily acknowledged, that he not only acts for Mr Larsen in civil cases in Norway from time to time but has been part of the team representing Mr Larsen in the current prosecution of him albeit only in relation to what he referred to as "civil tax matters". Either way, the result was that his written testimony in particular too often read more like advocacy than independent expert evidence; though, to be fair, this tendency was less marked in his cross-examination by Mr Kelleher and he accepted that it would not take many facts to turn out to be different from those deposed to by Mr Larsen and Mr Healey for his views (on the potential for a tax liability on the part of Mr Larsen) to change. To the extent that there were differences of opinion between the two, we preferred the evidence of Mr Drangsholt to that of Dr Matre.
80. We should also mention the appellants' point that in a number of places in his affidavit the Deputy Comptroller, Mr Cousins, appears to have confused "Larsen Oil & Gas Drilling Limited" (or "LOGD") with "Larsen Oil & Gas AS" (or "LOGAS" alternatively "LO&G") and their contention that this is indicative of a significant misunderstanding of the relevant facts and is alone sufficient to warrant the May 2012 Notice being set aside. Mr Kelleher acknowledged the mistake and expressed the Deputy Comptroller's profound regret that it should have occurred. Whether in truth it is evidence of a misunderstanding on the scale that the appellants suggest or may have been little more than a slip of the pen may be debated. But either way, it makes no difference to our own assessment of the position, given that the potential for any misunderstanding has now been eliminated.
81. Something of a medley of arguments was advanced by the appellants under these heads, but the main themes appear to be three: that there is nothing in the Request to establish a connection between Mr Larsen and any potential liability to any tax falling within the scope of the TIEA; that there is nothing to show any connection between the documents the subject of the May 2012 Notice and any such liability; and that the Request fails to comply with the stipulation of Article 4(5) of the TIEA that a request "must be formulated with the greatest detail possible."
82. Underlying all three is the same, unrealistic insistence on the part of the appellants that there is nothing about the circumstances of the transactions described in the Request that could possibly warrant suspicion that there is more to them than meets the eye, a contention that has already been examined and rejected above in the relation to Regulation 3(1). Even in relation to Article 4(5) the main complaint is an assertion, once again, that the basis of the Request is "a series of bald assertions that are unsupported by any evidence" (paragraph 238 of the appellants' opening written submissions), although, more specifically it is also alleged that that the Request does not explain how the matters to which it refers are relevant to a liability on Mr Larsen's part to a tax covered by the TIEA, why the documents requested are relevant to any such liability, on what basis the NOKUS rules are said to apply, and on what basis the Request can be said to concern criminal tax matters (paragraph 243).
83. In our view the requirements of Regulation 3(2) and of Article 4(5) are more than adequately addressed in the Request (and its attachments) under the specific headings "The tax purpose for which the information is sought" and "The grounds for believing that the information requested is relevant to the Norwegian Tax Administration and the factual basis for the investigation", both in bold type and underlined. Moreover, by the time of the May 2012 Notice, the Comptroller had also had sight of the Bill of Indictment against Mr Larsen. As regards the controversy over the expression "criminal tax matters" the Comptroller had by then also had the benefit of correspondence with the Norwegian authorities. The extent of the detail that it is possible to give in any particular case will be conditioned by the circumstances; but it is in the nature of the facility afforded by any TIEA that much will probably still be unknown and subject to investigation at the time that a request is made, and that, accordingly, there is a limit to how much specific detail a requesting party can realistically be expected to give.
84. Nor do we consider there to be anything unreasonable about the nature and extent of the documents the subject of the May 2012 Notice. Once the nature of the Tax Authority's reasonable concerns about the transactions in question is recognised it is not difficult to see that the Comptroller might have been of "the reasonable opinion", as this Court is, that the documents production of which is required "may contain tax information relevant to (a) a liability to tax to which [Mr. Larsen] .........may be subject; or (b) the amount of any such liability."
85. The appellants submitted that the scope of the May 2012 Notice is excessive, in that it extends to documents that are not covered by the Request and cannot therefore legitimately be demanded. First, it was said, the Tax Authority never formally requested disclosure of "all documents provided under the 2006 Notices to HM Attorney General" (paragraph 12 of Mr Larsen's notice of appeal). The point is without merit. The way in which reference was made to these documents in the February 2010 Request may not have described them in quite this way but on any fair reading it is obvious that that was what the Tax Authority was asking for under the request that they categorised as "A)" and equally obvious from the course of events subsequent to the Request that it was this corpus of material that was and is at the heart of the dispute.
86. Secondly, it was said that the Request did not include documents relating to Volaw's dealings with Mr Larsen. But, with one exception the wording of paragraph 4(i) of the May 2012 Notice, "all documents and records that Volaw holds (including, but not limited to, financial statements, accounts, files and correspondence) which relate to dealings with the named taxpayer" is, in substance, the same as the request at paragraph 3(1) for Volaw to produce all documents previously provided pursuant to the first of the 2006 Production Notices, "namely: (i) documents relating to dealings with the named taxpayer; and ..........". The only real difference is that whereas the latter was limited in time to the period 1st January, 1997, to 7th July, 2006, the paragraph 4(i) request was for 1st January, 1996, to 31st December, 2008. Recognising the overlap between the two requests, paragraph 4 opened with the words "Further, save in so far as produced under paragraph 3 above ..........". The belt-and-braces duplication of the request for this particular kind of document could be said to be inelegant but is otherwise unobjectionable. And the widening of the span of time is in keeping with the terms of the Request itself:-
"The person under investigation is Mr Berge Gerdt Larsen, born 16 November, 1952,and the period for which the information is requested comprises the tax years from 1 Jan. 1996, until 31 Dec. 2008."
87. As to the appellants' third point, that paragraph 4(ii) of the May 2012 Notice requiring Volaw to produce documents concerning the four named companies for the period 1st January, 1996, to 31st December, 2008, goes beyond anything in the Request, here again there is an element of overlap with paragraph 3, albeit only in respect of two of the four companies. More importantly, on a fair reading of the section of the Request headed "Assistance requested" it is clear that the Tax Authority was asking the Comptroller, as the Jersey competent authority under the TIEA, to "1. Obtain from the Registered Agents all information, documents, correspondence, financial statements, accounts, entity records files held by them, and ......" in relation to "the companies", that the companies so referred to included the four named under "A)", and that in referring to "Registered Agents" the Tax Authority had in mind Volaw in particular given that, "As far as we know, Volaw is the only services provider used by these companies.....". Here, too, the time-span is in line with that specified in the Request.
88. By way of variant on their contention that the 2008 Regulations do not apply at all to the production of documents pre-dating the coming into force of the TIEA, the appellants argued that, if the request is in relation to a "criminal tax matter" as that term is used in Article 10 category (a) of the TIEA, it is only legitimate for a Regulation 3 notice to be issued if the documents sought are required for the purpose of "a criminal prosecution" or if they are made available on condition that they are only used for such purposes; or, perhaps, if they are required for the purpose of "a criminal investigation or prosecution" (the appellants' submissions as to whether the proposition does or does not include "criminal investigation" as well as "criminal prosecution" vacillated). Either way, say the appellants, the information sought by the Tax Authority is not in truth wanted for the purpose of any criminal investigation or prosecution but in order to carry out a civil tax assessment of Mr Larsen's liability to tax.
89. As noted earlier, "criminal tax matters" is defined by Article3 paragraph 1(f) of the TIEA as:-
"tax matters involving intentional conduct whether before or after the entry into force of this Agreement which is liable to prosecution under the criminal law of the requesting Party".
But, as noted in paragraph 33 of the appellants' closing submissions:-
"The dispute on this issue does not concern what is meant by a criminal tax matter but rather the use to which the information can be put. The appellants consider that it can only be used for criminal tax matters, [whereas] the respondents contend that there is no limitation as long as the request is somehow relevant to criminal tax matters."
Although the general drift of the contention may be said to be clear, the evident difficulty of formulating precisely the purpose for which information may be used in such circumstances suggests, without more, that the basis of the submission is not straightforward.
90. In fact the appellants only arrive at the conclusion for which they contend by a tenuous line of argument based on the inter-relationship between the TIEA, the 2008 Regulations and the 1991 Law and, in the case of the TIEA the relationship between Articles 1 (Scope of the Agreement), 7 (Confidentiality) and 10 (Entry into force).
91. But the argument is unpersuasive, depending, as it does at heart, on the proposition that where pre-TIEA documents are concerned, the regime governing their production is not to be found in the 2008 Regulations at all but exclusively in the terms of the earlier 1991 Law - a proposition that appears to us to be both improbable and without any compelling foundation. Nor does the argument sit easily with the only provisions of the TIEA which touch on the question of the purpose for which information the subject of a request is required, namely Articles 1, 4(1) and (5), and 7.
92. Article 1, while not using the word as such, makes it perfectly clear that the "purpose" of the TIEA is reciprocal assistance with:-
"the administration and enforcement of the domestic laws of the Parties concerning the taxes covered by this Agreement, including information that is foreseeably relevant to the determination, assessment, recovery and enforcement or collection of tax with respect to such persons subject to such taxes, or to the investigation of tax matters or the criminal prosecution of tax matters in relation to such persons."
Article 4(1) obliges the requested party to provide information "for the purposes referred to in Article 1". Article 4(5)(d) requires the requesting party to specify in writing "the tax purpose for which the information is sought." And Article 7 stipulates that information provided and received by the competent authorities of the parties shall be kept confidential; that it may be disclosed "only to persons or authorities (including courts and administrative bodies) concerned with the purposes specified in Article 1, and used by such persons or authorities only for such purposes, including the determination of any appeal"; that it "may not be used for any purpose other than for the purposes stated in Article 1 without the express written consent of the competent authority of the requested Party"; and that it may not be disclosed to any other jurisdiction.
93. There is nothing here or anywhere else in the TIEA to the effect that, if information is obtained in relation to one or more of the purposes set out in Article 1, it cannot be used for any of the other purposes set out in Article 1. As the appellants' own submissions clearly demonstrated, their argument involves editing out of Article 1 those passages that would otherwise cover any purposes apart from a criminal prosecution. In fact, as Mr Kelleher pointed out, Articles 7(1), (2) and (3) contemplate that information obtained can be used for the other purposes stated in Article 1. To this we would add this further observation: that whereas Articles 1, 4(1) and 4(5)(d) are directed to the stage at which a request for information is made, the provisions of Article 7 - and on which the appellants placed considerable reliance - concern the situation following the provision of such information to the receiving party and impose obligations on that receiving party; any question of enforcement of those obligations would in practice therefore have to be pursued in the courts of the receiving party. For the rest, it seems to us that the following submissions of Mr Kelleher correctly summarise the position:-
"The key question in this Ground of Appeal must be whether the temporal distinction in Article 10, which enables the obtaining of information for "criminal tax matters" (as defined) from an earlier date than it does for civil tax matters, somehow serves to operate as a restriction on use by the recipient. In other words, if the Requesting party states that the request concerns their interest in a tax matter involving intentional conduct which is capable of leading to a prosecution, is the Requesting party restricted to using the information obtained for a criminal investigation and/or prosecution. The TIEA, as set out above, does not provide such a restriction.
Further, the Comptroller has no power to reduce the purposes prescribed in the TIEA for which the information obtained may be used. As set out above, the TIEA works in the opposite direction, a state of affairs amplified by the fact that the Comptroller has an express power under Article 7(3) of the TIEA to consent to the use of information provided for a purpose other than a purpose set out in Article 1. The Comptroller has no power to impose a restriction on use. Contrast the position under the Investigation of Fraud (Jersey) Law 1991 where the Attorney General has an express power, in agreeing to provide information to another designated party, to impose "an obligation not to disclose the information concerned otherwise than for a specified purpose" (Article 3(2))."
94. To put the matter another way, the sole function of the reference to "criminal tax matter" in Article 16 and the related definition in Article 3 paragraph 1(f) is to define the criterion which, if satisfied, allows a request to be made for the production of pre-TIEA information. The words say nothing and imply nothing by way of limitation on the use to which such information may thereafter be put. If (1) the purpose for which the information is required falls within the scope described in Article 1 and (2) the matter concerns tax and is one "involving intentional conduct whether before or after the entry into force of this Agreement which is liable to prosecution under the criminal law of the requesting Party", then it is legitimate for a request to be made and to extend to pre-TIEA information. The two considerations are independent of one another.
95. Apart from their argument about use-limitation, the appellants do not seem to contest the fact that the request in the present case falls within the definition of "criminal tax matter": nor, in practice, could they sensibly do so given that what lay behind the Request was, quite plainly, alleged "intentional conduct" on the part of Mr Larsen and that, by the time the May 2012 Notice was issued Mr Larsen had been the subject of a Bill of Indictment charging him with, among other things, criminal offences in relation to tax matters. Nor is it suggested that, without re-writing Article 1, the Tax Authority could be said to want the information for a purpose falling outside the scope of that article.
96. However, given the importance that the appellants attached to the point, it is right that we should address their contention that the true reason that the Tax Authority wanted, and continues to want, the information in question is in order to be able to conduct a civil tax assessment of Mr Larsen and not for the purposes of his prosecution for alleged criminal offences. Their charge - and their counsel did not shrink from saying so - was and is one of bad faith on the part of the Norwegian authorities. It derives in part from correspondence conducted with the Attorney General's department at the time of the 2006 Production Notices and again in 2008/09 and in part from correspondence subsequent to the February 2010 Request between, on the one hand, the Norwegian authorities and the Law Officers' department. There is, said the appellants, a fundamental inconsistency between the Attorney General's refusal to allow the documents supplied to the Police pursuant to the 2006 Production Notices to be passed to the Tax Authority on the ground that the "focus" of the latter's work appeared to be "administrative not criminal" (letter of 24th June, 2009, from the Attorney General to the Regional Director of Skatt Vest) and the Comptroller's acceptance of later assertions by the Norwegian authorities that the very same documents, the subject of the first part of the Request, were wanted in connection with a "criminal prosecution" and for the purposes of prosecuting Mr Larsen.
97. To a large extent the matter revolved around the separate but related functions of the Tax Authority and the Norwegian Police in relation to tax matters and, in particular, the extent to which the Tax Authority has a role to play in relation to criminal prosecutions. This, together with debate about what would constitute a "criminal tax matter" in Norway and about the purpose for which the information was required, was the subject of a significant body of correspondence between, at the Jersey end, the Comptroller, the Attorney General, and the law firms advising the appellants and, at the Norwegian end, the Skatt Vest, the Ministry of Finance and the Public Prosecutor. Looking at the totality of that correspondence and having had the assistance of Dr Matre and Mr Drangsholt in this area, it appears to us that the following is a fair summary of the position:-
(i) Put simply, conducting criminal investigations and prosecutions in Norway is the responsibility of the Police and the public prosecutor while civil assessment of a taxpayer's liability to tax is the domain of the Tax Authority.
(ii) That said, these functions overlap in at least two respects. First, the Tax Authority's role necessarily involves it in conducting its own investigations and, as one might expect, it will often be the Tax Authority which first detects cases of suspected criminal tax evasion: in such cases it may, if it thinks appropriate, refer the matter to the Police who will then decide whether to prosecute. Secondly, again as one would expect, a significant degree of cooperation and exchange of information between the two agencies is necessary and takes place, albeit hedged about with protocols of one kind or another designed to ensure that appropriate levels of confidentiality are preserved and the system is not abused.
(iii) Although the prosecution of a tax payer on a criminal charge would normally be preceded by a civil tax assessment by the Tax Authority, such an assessment is not an absolute necessity for a prosecution to proceed to trial: that much is evident from the fact that the present prosecution has, in the event, gone ahead without any such formal assessment having been made.
(iv) There is, however, no doubt that wherever practicable the prosecutor will much prefer to have the benefit of a formal assessment by the Tax Authority of the taxpayer's alleged liability before the trial both for substantive purposes as evidence of the extent of evasion and the seriousness of the offence and, importantly, for the purpose of deciding questions of confiscation or forfeiture following a conviction. An illustration of information obtained by the Police being transmitted to the Tax Authority for the purpose of making just such an assessment for the purposes of a prosecution is, according to Mr Drangsholt, afforded by the decision of the Norwegian Supreme Court in the case of X AS et al-v-The Public Prosecutor Rt.[2008]. Dr Matre did not disagree.
(v) Where such a formal assessment is not available at the time of trial the court will, if necessary, make its own provisional assessment or "pre-judicial review" as Dr Matre termed it. That is what would probably have to happen in the current prosecution of Mr Larsen.
(vi) Although it was too late for the requested documentation to be of use by the Tax Authority to make a tax assessment in connection with current stage of the trial of Mr Larsen, it could still be important for the purposes of any confiscation order or the like in the event of a conviction or in relation to any appeal. In cross-examination by Mr Kelleher, Dr Matre agreed that this could be so.
98. The appellants accused both the Norwegian Ministry of Finance, in the person of the Deputy Director General, and the Public Prosecutor of deliberately trying "to give the impression that a civil assessment of tax was necessary for the purpose of the prosecution" in letters dated, respectively, 17th September, 2010, and 29th March, 2011. As regards the first, it is true that the Director General, writing to the Comptroller, used the word "necessary". But what he wrote, endeavouring to explain the Norwegian system for determining tax claims and the criminal prosecution, was this:-
"Under the Norwegian tax assessment system what is penalised is providing the Tax Authorities with incorrect or insufficient information, intentionally or with qualified neglect. In tax matter [sic] where this is relevant and the Tax Authorities finds [sic] it appropriate they will bring charges on this part of the matter to the police and the Public Prosecutor. The Public Prosecutor will in turn take the criminal side of the case to court if they see the charges justified. If convicted by the court, the tax payer may be sentenced to a fine or to imprisonment, depending on the severity of the particular matter. However, the underlying tax claim itself is always determined by the Tax Authority. The Court has no authority to decide on the amount of tax to be paid. Therefore, in a criminal tax matter it is also necessary to determine the tax claim administratively. In order to determine the tax claim correctly the Tax Authorities needs sufficient information."
99. Quite apart from the obvious fact that although the author's command of English is impressive he does not always express himself in quite the way that a native user of the language might, to speak of it also being "necessary to determine the tax claim administratively" does not of itself appear to us to represent an attempt to mislead anyone. At the stage at which this letter was written, the distinction between absolute, invariable necessity and standard, desirable practice had not become the subject of sharp focus in the way that it did later. It is equally important to look at exactly what Elisabeth Deinboll, the Hordaland State Public Prosecutor, said in her letter to Mr Campbell of 29th March, 2011, then the Comptroller of Income Tax:-
"In order to effectively and successfully prosecute the tax crimes we believe Mr Larsen has committed [sic]; an important part of this prosecution being the confiscation/forfeiture of evaded tax; I need a formal assessment of the tax that Mr Larsen has evaded by use of companies registered in Jersey or administered by service providers in Jersey. This formal assessment can under our law only be made by the relevant Norwegian authorities, and only if they have full access to the information we have received from you under the judicial process. I therefore request your consent to make this information available to the tax authorities for this purpose."
Much the same observations apply here as regards the use of the word "need". "I wish to have" might have been a more accurately nuanced statement. But, of itself, there is nothing here that could be said to be deliberately misleading having regard to what we have found to be the way in which the system normally works.
100. This letter of 29th March, 2011, although addressed to Mr Campbell, was copied to, among others, H.M. Attorney General (by then Mr Timothy Le Cocq QC) and H.M. Solicitor General (Mr Howard Sharp QC) and it was the Solicitor General who replied. Anticipating continuing resistance from Mr Larsen and his advisers and possible litigation, he replied on 28th April, 2011, asking a number of questions including why the criminal courts could not impose a fine or confiscate assets without a formal tax assessment and why evidence from a tax official and a tax expert, without full disclosure of documentation, would not be sufficient for the purposes of a prosecution.
101. Ms Deinboll's response took the form of a three-page letter dated 11th May, 2011. It opened with an explanation that, in the case of Mr Larsen, a formal tax assessment would be "an integral part of a criminal procedure"; that Mr Larsen was charged with financial fraud as well as tax crimes; that it was likely that the prosecution would be asking for the sentence to include imprisonment, fines representing the value of evaded tax, claims compensating evaded tax, and the confiscation of assets. "A formal tax assessment will enable me to present a fixed claim, proving the actual amount of evaded tax. In case of Mr Larsen, an assessment is indeed complicated." Extracts from relevant Norwegian legislation were enclosed, the relationship between the Police and the Tax Authority explained and the importance of shared information emphasised. The letter continued:-
"I would like to emphasise, that in Norway it is highly unusual to carry out criminal proceedings regarding tax crimes without a formal tax assessment from the relevant tax authorities. [Emphasis added]. Further, the Supreme Court of Norway has accepted the full disclosure of information between the police and the relevant tax authorities, in order to conduct criminal investigations and proceedings properly. I respectfully invite you to explain to me why Mr Larsen may prevent the Jersey Attorney General from assisting the Norwegian Prosecuting authority acting in compliance with our standard proceedings?
Due to the Undertaking dated 5th April, 2006, signed by the Norwegian Prosecution Authority, we have been prevented from sharing the information with the tax authorities in the case of against Mr Larsen; and of course we respect our obligations towards Jersey in this regard. May I also add that we truly appreciate the invaluable assistance provided by your Attorney General.
The Undertaking has however led to a more complicated investigation than would be the case following standard procedures. Subsequently, the legal proceedings against Mr Larsen will be equally complicated. It is in this respect, I refer you to my letter dated 29th March. As I pointed out to you in my letter, a formal tax assessment will enable us to implement the criminal proceedings against Mr Larsen effectively and successfully. At least, that is the purpose of my request to your Attorney General.
In the Public Prosecutors opinion, Mr Larsen has committed serious violations of Norwegian law. Thus, we decided to initiate final legal proceedings even if there are no formal tax assessments in this case. Failing to do so, we accept that Mr Larsen's considerable efforts to prevent us from obtaining relevant information will succeed and his crimes go unpunished."
102. The appellants suggest that this letter constituted yet another attempt by the Public Prosecutor to create a misleading impression that a civil tax assessment was "necessary" for the prosecution of Mr Larsen. But, once again, on a fair reading of the letter there is nothing in the least misleading about it. Ms Deinboll's statement that in Norway it is highly unusual to carry out criminal proceedings regarding tax crimes without a formal tax assessment from the relevant tax authorities and her disclosure of the prosecution's decision to start formal proceedings against Mr Larsen without such an assessment, given the difficulties that were being encountered, made it clear that she was not suggesting that a civil tax assessment was invariably essential in every case or an indispensible necessity in the particular case of Mr Larsen. What she was saying, quite plainly, was that in practice it would be highly desirable that there should be a formal assessment; that, without it, the prosecution would be considerably more complicated and difficult - as, indeed, Ms Deinboll, writing to Mr Cousins on 7th February this year, says has happened:-
"7. I would also like to emphasise; as in fact I already did in my letter dated 11th May, 2011, to the Attorney General; that important parts of the police investigation against Mr Larsen have been put on a hold, as the Prosecution - still at this point in time - is unable to conduct a full investigation without a full disclosure of the Jersey documents to the Norwegian tax authorities. For one thing, this relates to the possible tax liabilities if NOKUS rules apply. Indeed, the lack of a formal tax assessment has made the criminal investigations and proceedings far more complicated than would otherwise be the case."
103. On 18th May, 2011, there was a further letter from the Jersey Law Officers' Department, this time from the Attorney General, in which among other things he said, mistakenly, that he understood Ms Deinboll to be saying that a formal tax assessment was a part of all prosecutions for tax fraud or criminal evasion of tax and asked for confirmation of this. If such an assessment were "an essential element in the evidence that supports a prosecution" he might, he said, be able to agree to the release of the information previously made available in response to the 2006 Production Notices, provided that there was an undertaking that it would not be used for a subsequent civil tax claim. Responding on 30th May, 2011, Ms Deinboll re-affirmed what she had previously already made clear:-
"With reference to your request on page 2 of your letter dated 18th May, please be aware that I cannot state that a formal tax assessment is part of all prosecutions for tax fraud or criminal evasion of tax. [Original emphasis.] What I can confirm is that it is highly unusual that such formal tax assessment from the relevant tax authorities is not a part of the prosecutions. I refer you to my letter dated 11th May, in this regard as I point out that a formal tax assessment is an important and integrated part of the criminal proceedings."
The same point was reiterated in the penultimate paragraph of her letter.
104. It is necessary to follow this chain of correspondence through to its conclusion. The Attorney General replied the following day, 1st June, 2011, saying that the contents of Ms Deinboll's letters had been of considerable assistance and that, subject to receiving three undertakings, he would be able to consent to the release to the Tax Authority of information previously supplied to the Police in order that a tax assessment could be made for the purposes of the prosecution of Mr Larsen. The first undertaking was to the effect that any such information would be disclosed by the Public Prosecutor and used by the Tax Authority exclusively for the purpose of the prosecution for tax offences. Ms Deinboll immediately confirmed that as far as she was concerned such an undertaking could given but warned that the Tax Authority might consider it to be inconsistent with the TIEA.
105. At more or less exactly the same time, the Comptroller wrote to the Acting Director General of the Norwegian Ministry of Finance (which had by then assumed the role of competent authority for the purposes of the TIEA) asking two questions: first whether the case concerning Mr Larsen involved alleged intentional conduct on his part, and secondly whether the intention was to use the evidence requested under the TIEA solely for the purpose of assisting the criminal prosecution or whether the Tax Authority intended "to conduct a civil tax assessment in respect of Mr. Larsen that is independent of the criminal case and which will still continue and or be completed in the event of an acquittal?" Mr. Gjesti replied on 15th June, 2011, confirming that the case against Mr Larsen involved alleged intentional conduct but saying, as regards the Comptroller's second question, "We cannot see that this question is relevant when deciding whether a request for information is valid under the TIEA between Jersey and Norway" and maintaining that the requesting party is allowed to use such information for the purposes of "the tax assessment [and] collection of tax claims, even if criminal charges are not eventually brought to court." In the light of this response, Ms Deinboll brought her correspondence with the Attorney General to a close in a letter dated 16th June, 2011, writing:-
"It seems that the different views on the issue of criminal tax matters vs civil tax matters, will prevent us from moving any further with regard to my previous request, unless of course the Jersey view on this issue will be reconsidered. From the Norwegian authorities' point of view, signing an Undertaking is considered inconsistent with their position according to the Tax Information Agreement. As the Norwegian Tax Authorities are handling criminal tax matters with regard to Mr Larsen, they will argue that Jersey is obliged to share the requested documents with no other restrictions than that according to the TIEA.
I do fear that this problem is a result of the fact that the Norwegian proceedings with regard to the handling of various tax crimes are different compared to other countries. I refer you to my letter dated 11th May."
The same day, Ms Deinboll proceeded to issue the Bill of Indictment against Mr Larsen. A copy was subsequently received by the Comptroller.
106. There is nothing in any of this that would justify a finding of bad faith on the part of the Norwegian authorities. The correspondence took place in the protracted interval between the first TIEA notice issued by the Comptroller in April 2010 and its replacement in November 2011. It followed the Comptroller's agreement to put the matter on hold while he gave consideration to objections to the April 2010 notice raised by Mourant on behalf of Mr Larsen and was prompted by the Comptroller's and the Jersey Law Officers' endeavours to gain a better understanding of the respective roles of the Police and the Tax Authority in Norway with particular reference to Mourant's contention that the case was not one involving a "criminal tax matter". Ms Deinboll's letters of 29th March and 11th May, 2011, are substantially in keeping with what we heard from the two experts on Norwegian procedure. Dr Matre's first affidavit suggested that Mr Gjesti's letter of 17th September, 2010, was "potentially misleading" (with which Mr Drangsholt disagreed) but made no corresponding criticism of any of Ms Deinboll's letters. In any event "potentially misleading" falls a long way short of the appellants' charge of deliberately seeking to create a false impression.
107. What is plain is that there was genuine difficulty and confusion on both sides: on the Jersey side, in trying to understand exactly how the unfamiliar Norwegian system worked, and, on the Norwegian side, in endeavouring to explain things. And, with the Jersey Law Officers doing their best to find a solution to the impasse in May/June 2011, the position became more complicated still as Ms Deinboll's initial intervention in the form of a letter addressed to the Comptroller was answered instead by the Solicitor General and the ensuing dialogue ended up conflating the two very different regimes of the 1991 Law and the TIEA. As a result, while the Attorney General's suggestion that the problem might be overcome by an undertaking from the Norwegian Tax Authority (as well as the Public Prosecutor) in the terms proposed in his letter of 1st June, 2011, was a legitimate proposal in the context of the exercise of his powers under the 1991 Law, it invited the Tax Authority to accept a use-limitation which, as we have found, they were entitled to regard as incompatible with the TIEA and, no doubt, as setting an unwelcome precedent were it to be accepted.
108. Another and possibly fairer point canvassed by the appellants - and one that was taken up with the Public Prosecutor by the Jersey Law Officers in anticipation of continuing objection on the part of Mr Larsen to the release of information to the Tax Authority - was why it was that there appeared to have been no suggestion on the part of the Norwegian authorities back in 2008 that a formal tax assessment was a part of the prosecution process or that without it the prosecution would be hindered. Answering this point (it would seem) in her letter of 11th May, 2011, to the Solicitor General, Ms Deinboll wrote:-
"Until 2010, we were under the impression that Jersey would comply with the request from the Norwegian tax authorities. My request of 29th March, [2011,] is based on the fact that this is clearly not the situation. Further, and prior to my request, I came under the impression that there was a change in the Jersey-approach to these issues, and subsequently, that a request from the Public Prosecutor was in consistence with such a change."
109. Exactly what Ms Deinboll had in mind here is not altogether clear but it is as well to recall the pre-2010 history following the issue of the 2006 Production Notices. Although the request itself and the Attorney General's response were not in evidence it seems that at some point in or prior to September 2007 the Norwegian Police approached the Attorney General with a request that they should be allowed to give the Norwegian Tax Authority access to the documents obtained from Jersey pursuant to the 2006 Production Notices. A letter from the Police addressed to the Tax Authority dated 25th September, 2007, makes reference to the fact that they were still waiting for a response to this request and that the reason for wanting the Tax Authority to have the documents was to enable or assist it in making tax assessment(s). A letter from Mourant to the Attorney General dated 5th May, 2010, makes specific reference to a letter of request from the Norwegian Police to the Attorney General containing such a request and describes the request as being "for the purposes of tax assessment", though the police's letter itself was not among the trial bundles. The Attorney General having subsequently declined this request, the Tax Authority, at the suggestion of the Police, made its own application to Jersey in the person of the Attorney General asking for access to these same documents. The reasons for the request were set out in a memorandum dated 4th July, 2008. In it the Tax Authority referred to its own (continuing) investigations into the affairs of Mr Larsen, to the fact that these were being conducted in parallel with the police investigation, and that under the "two-pronged" system operated in Norway for the sanctioning of tax irregularities the Tax Authority had power to impose penalties. Towards the end, confirmation was given that "the documents provided would be used only for the purpose of the tax investigation and any prosecution that may arise out of the investigation."
110. In the event, it was some nine months before the Tax Authority received a reply from the Attorney General, dated 24th June, 2009, explaining that after giving the matter very careful consideration he had concluded, with much regret, that he could not assist: it appeared to him, he said, that the purpose of the request was to collect information for a civil tax investigation and assessment, that the focus of the Tax Authority's work was administrative rather than criminal and that the statutory powers conferred on him (by the 1991 Law) were limited to cases involving the investigation or prosecution of criminal offences. He did, however, suggest that the Tax Authority might take comfort from the fact that Jersey and Norway had entered into a Tax Information Exchange Agreement although it might not be of assistance in the present case.
111. After that, the next development of which there is any evidence was on 26th February, 2010, when the Tax Authority submitted its formal request under the TIEA, which had come into force some four months previously, a request that resulted in the Comptroller issuing his April 2010 notice as discussed above.
112. Quite why the Norwegian authorities did not emphasise from the start the practical importance to the prosecution process of having an assessment by the Tax Authority is unclear. Perhaps back in 2007/2008 the priority for the Police was still investigation and the prospect of a trial was not yet a matter of urgency. Perhaps, as the passage from Ms Deinboll's letter of 11th May, 2011, cited above suggests, until 2010 the Norwegians remained optimistic that one way or another the Jersey authorities would find a way of giving them what they wanted, and that it was only when the Comptroller's April 2010 notice under the new regime of the TIEA failed to secure immediate compliance and further protracted correspondence ensued that the full implications of not being able to obtain a formal assessment of Mr Larsen liability to income tax in advance of a trial began to trouble the Public Prosecutor to the point where she felt it necessary to intervene as she did in her letter to the Comptroller on 29th March, 2011.
113. Whatever the explanation, the matter is again nowhere near sufficient to justify a conclusion that there was bad faith at work on the part of the Norwegian authorities. All other considerations apart, there would have to be compelling evidence available to this Court before it would be justified in making such a finding in a context such as the present, particularly where no allegation to that effect was made in either appellant's notice of appeal. The proper place for this charge to be pursued, if at all, is in the Norwegian courts where, if necessary, the matter could be more effectively explored.
114. In addition to matters already addressed, a miscellany of other points were taken by the Appellants:-
(i) that the May 2012 Notice includes documents that have already been provided to the Norwegian Police;
(ii) that the Request, and thus the May 2012 Notice, was defective in that it omitted to include the statement required by Article 4(5)(h) of the TIEA that -
"if the requested information was within the jurisdiction of the requesting Party then the competent authority of the requesting Party would be able to obtain the information under the laws of the requesting Party or in the normal course of administrative practice and that it is in conformity with this Agreement";
(iii) that an assessment of Mr Larsen's liability to tax in relation to the transactions in question has, in fact, already been made;
(iv) that the Comptroller's reliance on the Model TIEA and related Commentary and a paper produced by Working Party No.10 of the OECD Centre of Tax Policy and Administration was impermissible;
(v) that Volaw was not given an adequate opportunity to provide the documents voluntarily prior to the issues of a formal notice, as required by paragraph (4) of Regulation 3;
(vi) that the May 2012 Notice is procedurally unfair and an abuse of process.
115. The contention here is not simply that what is required is duplicative and unnecessary, as the heading might suggest. Rather it is said, first, that Article 4(1) of the TIEA provides "The competent authority of the requesting Party shall only make a request for information pursuant to this Article when it is unable to obtain the requested information by other means..." ; secondly, that the TIEA specifies that "the competent authority" in the case of Norway is the Minister of Finance or the Minister's authorised representative; thirdly, and importantly, "It is absurd to suggest that, in the context of the TIEA being limited to criminal tax matters, the "competent" Norwegian authority (which is not in fact competent to deal with criminal tax matters) [meaning the Tax Authority] does not have the information because the body which is in fact competent for such matters [meaning the Police] falls outside the definition" (appellants' opening written submissions paragraph 257). Thus, it is said, the relevant Norwegian competent authority is already in possession of the documents the subject of the May 2012 Notice and Article 4(1) operates to bar any request by the Tax Authority. But at heart this is no more than a variant of the appellants' case that the Request and May 2012 Notice do not concern a "criminal tax matter" and, as such, must be rejected.
116. In the event, this (admitted) lacuna was supplied earlier this year in a letter from the Assistant Director General of the Tax Authority dated 22nd February, 2013, containing the requisite confirmation.
117. It was confirmed, in the same letter, that no such assessment had yet taken place.
118. In fact, both parties relied on the Model TIEA for different purposes. But, for our part, we did not find it necessary to have recourse to these materials; nor, in any event, did we find the parties' related submissions of sufficient cogency to be of much assistance. We have, accordingly, arrived at our stated conclusions independently of such matters.
119. Paragraph (4) of Regulation 3 provides "before giving a notice under this Regulation, the Comptroller shall allow the person of whom the requirement is to be made a reasonable opportunity to provide to the Comptroller the documents concerned." It is true that the Comptroller did not give Volaw such an opportunity before serving the May 2012 Notice but by then the matter of the Request had been the subject of considerable correspondence for over two years and, although the terms of the Notice differed from those of the January one, there was nothing of substance in the later notice that would have taken anyone by surprise. It is also all too evident that affording Volaw an opportunity to produce the documents requested without the need for a formal notice would have not made the least difference to the outcome. A procedural flaw there may have been, but it is not one that begins to be of sufficient seriousness to warrant setting the May 2012 Notice aside.
120. The complaint here is that it is unfair and prejudicial to the appellants that the May 2012 Notice was issued as supplement to the January 2012 one, which in turn was said to be supplemental to the November 2011 Notice. It would, of course, have been preferable for there not to have been a succession of such notices subsequent to the original one in April 2010. But the November 2011 and January 2012 ones were designed to try to meet some of the earlier objections raised by the appellants and the May 2012 Notice was designed to take account of the terms of the 2006 Production Notices which the Comptroller had not seen until they were exhibited to Mr Larsen's first affidavit. It may be that these matters will have a bearing on any costs orders made in due course. But neither the TIEA nor the 2008 Regulations prohibit the issue of more than one notice in a relation to a request under the TIEA. And in any event, the appeal against the January Notice has effectively suspended the operation of that notice and the parties have agreed that that appeal is stayed pending the outcome of the appeal against the May 2012 Notice. Currently, therefore, the appellants are not required to take any steps in relation to the January Notice and it is hard to see how they are currently prejudiced by it or how the situation could properly be called an abuse of process.
121. For these reasons we decline to set aside or vary the May 2012 Notice. The appeals will be dismissed and the requirements made of Volaw in that Notice confirmed.
122. We emphasise that in reaching this conclusion we proceed on the basis that the information is made available solely in order to afford assistance in connection with the potential tax liability of Mr Larsen, not any of the companies named in the May 2012 Notice.
