Jersey Unreported Judgments

Probate - Intermeddling.

[2019]JRC156

Royal Court

(Samedi)

9 August 2019

Before     :

A. J Olsen, Esq., Lieutenant Bailiff, and Jurats Thomas and Averty

The Attorney General

-v-

Standard Bank Jersey Limited

Sentencing by the Inferior Number of the Royal Court, following a guilty plea to the following charge:

1 count of:

Intermeddling, contrary to Article 23(1) of the Probate (Jersey) Law 1998 (Count 1).

Plea: Guilty

Details of Offence:

The Bank authorised the partner of a deceased customer to use the deceased's account without the requisite grant of probate and in contravention of the Bank's policy for dealing with deceased customers' accounts.  The partner was entitled to the contents of the account under the terms of the will. 

 

In total, £9,552.49 was spent by the partner before the error was identified and the account locked.  The deceased's partner reimbursed the Bank and a grant was obtained.  The Bank notified the JFSC and the Attorney General of the offence and carried out a review of and improvements to its internal procedures. 

Details of Mitigation:

Guilty plea and cooperation throughout; no loss to the estate or the heirs; rectification of policies and procedures. 

Previous Convictions:

No previous convictions. 

Conclusions:

The Crown submitted that the conduct in this case was more serious than that of the offender in AG v Abu Dhabi Commercial Bank PJSC Jersey Branch [2018] JRC192, which had merely overlooked the need for a grant - in this case the correspondence showed that the offender was aware of the requirement for a grant and elected to ignore it. 

Count 1:

£35,000 fine.

Total:  £35,000 fine.

No Compensation Order sought.

No Costs order sought. 

Sentence and Observations of Court:

Count 1:

£20,000 fine.

Total:  £20,000 to be paid within 2 weeks. 

D. J. Hopwood, Esq., Crown Advocate.

Advocate M. W. Cook for the Defendant Company.

JUDGMENT

THE lieutenant BAILIFF:

1.        Standard Bank Jersey Limited, which we shall call "the Bank", held three accounts for a customer called Graham Anthony Dangerfield, to whom we shall refer as "the deceased".  Only one of those accounts is relevant to this prosecution namely, account numbered 10405062 and we shall call that "the account". 

2.        The deceased died on 13 July, 2018 and at that date the account contained a balance of £49,953.41.  The deceased had resided in Kenya with his long term partner Ms Lyn Shiell.  She held a power of attorney over all his affairs. 

3.        Ms Shiell was the residuary beneficiary of the will of the deceased in relation to his estate in England, Wales and Jersey, which we understand to be the entirety of his estate, and she was a joint executor of that will.  She was also the sole beneficiary of the GD Trust, which the deceased had established in 2014. 

4.        It is also relevant to note that Ms Shiell had a third-party mandate to operate the account, and that in the three-month period prior to the death of the deceased £1.25m had been transferred to the account to the GD Trust and £20,000 to Ms Shiell's account.  The effect of this was to reduce the account, as we have said, to a little under £50,000.  There can be no doubt that the deceased intended everything to pass to Ms Shiell on his death via either the GD Trust or his will.  

5.        The Bank had a formalised "deceased accounts" procedure in force at this time.  The Crown has helpfully summarised it for us and no purpose will be served by setting it out in extenso here.  Suffice it to say that, upon the death of its account holder the Bank should have placed a block on the account and marked it 'deceased', cancelled all standing orders and revoked all Third Party Authorities.  The Bank was made aware of the death of the deceased on the day of its occurrence, but did none of these things.

6.        The Crown in its summary points to an email sent by an unnamed member of staff to Ms Shiell and her co-executor on 1^st August, 2018.  The relevant part of the message reads:

"Having read the Will it seems that any residue cash (sic) outside of the trust is to be settled into the DG (sic) Trust [that is an error for GD Trust] upon probate being granted. This said, there is only a small amount of just under £50,000 in the one account with Standard Bank Jersey Limited, which is still paying the rent on the Kenyan property. It is my understanding in that there are no other assets that would require the grant of probate outside or indeed Kenya. Therefore, if you are both in agreement, I propose that this account continues to meet Lyn's expenses as she is the sole beneficiary of the DG trust (sic). If there is any cash still unused at some point in the future this can then be settled into the trust."

7.        Between the 16^th August and 7^th November the Bank permitted Ms Shiell to continue to operate the account as if the deceased were still alive.  She made a total of 107 payments away, totalling £9,552.49.  It was this course of conduct that comprised the offence of intermeddling contrary to Article 23(1) of the Probate (Jersey) Law 1998.

8.        On 7^th November last year routine internal checks at the Bank identified that transactions had been recorded on the account of the deceased customer.  The account was locked down in short order and within a fortnight Ms Shiell had refunded the sum of £9,552.49 to the account. 

9.        The Bank referred itself to the Jersey Financial Services Commission on 21^st November and then to the Attorney General, providing as is put in its letter of apology dated 6^th August, a "full and transparent schedule of the events and remedial actions."  The letter also says this:

"Standard Bank Jersey has a deceased accounts procedure and this incident would not have occurred had that procedure been followed.  Our investigations confirm that the reason why the procedure was not followed in this instance was to avoid hardship to the bereaved partner of the deceased.  However, the actions of the individuals were clearly misplaced and the consequences of their well intentioned actions were not appreciated by them at that time." 

10.      We accept that the sole motivation of the Bank was to provide short-term assistance to the bereaved partner of the deceased, who is in any event due to inherit the entirety of his estate.  (We pause to note, though, that she was not impecunious, having received £20,000 out of the account shortly prior to the death of the deceased.) 

11.      The Crown asserts at paragraph 13 of its conclusions that is:

"...mere good fortune that the value of the funds dispatched, was not greater.  The deceased's partner might easily have spent or transferred away the entirety of the £50,000 or so in the account before the Bank realised its error on 7^th November."

12.      This assertion fails in our judgment to take adequately into account the important fact that this ultimately was Ms Shiell's own money. 

13.      In AG v Abu Dhabi Commercial Bank [2018] JRC 192 the Bailiff said this at the end of paragraph 18 of the Court's judgment:  

"It is very hard to see how anyone could reasonably treat this as seriously damaging the Island's reputation in financial matters.  There is clearly no damage to the Island's integrity in commercial and financial matters, because there was no intention to damage anyone, and no intention to benefit fraudulently or otherwise from the action that was taken.  It is clear there is no evidence of any loss or prejudice to the estate".

14.      It is our judgment that that is precisely the case here.  In addition we accept that there is no intention to evade the payment of stamp duty attendant upon the grounds of probate.  Indeed, we understand that a grant has now been obtained and the requisite stamp duty paid, and we accept that there was no intention to dissipate the estate or any part of it to those not entitled to it. 

15.      In mitigation the Crown recognises five separate factors. 

(i)        The Bank referred itself to the JFSC, and later the Attorney General after encouragement from the JFSC to do so.  This was a very prompt referral of itself;  

(ii)       The Bank cooperated fully with investigators;

(iii)      The Bank pleaded guilty at the earliest opportunity;

(iv)      The intermeddling has not caused any loss to the estate or the heirs and

(v)       The Bank has given assurances that it has put further policies in place to prevent offences of this type from recurring. 

16.      We would add, of course, that the Bank has no previous convictions, which is also acknowledged by the Crown. 

17.      Advocate Cook, offered a handsome apology on behalf of his client, adding that the Bank had enhanced its procedures and has given training to its staff to ensure that this sort of thing does not happen again. 

18.      We took heart from the fact that the Bank has reviewed its other deceased accounts and that no irregularities have been identified. 

19.      Advocate Cook submitted that this case was not more serious than the Abu Dhabi case.  Indeed, he submitted that it was less serious in terms of the amount, which was greatly less than the Abu Dhabi amount in question of £330,000.  He also submitted that it was by no means a deliberate flouting of the law; it was done with the best of intentions.  Effectively it was a negligent overlooking of the Bank's policy.  We accept that submission. 

20.      We also wish to emphasise that not only was the reference of the Bank by itself to the authorities very timely, but also that the Bank has acted impeccably since the error was discovered. 

21.      In all the circumstances the judgment of the Court is that the appropriate fine in this case is one of £20,000, and we grant the Bank two weeks to pay.  

Authorities

Probate (Jersey) Law 1998

AG v Abu Dhabi Commercial Bank PJSC Jersey Branch [2018] JRC192.