I OVERVIEW

Gibraltar is a British overseas territory and the United Kingdom is responsible for its external relations. By virtue of this status and Article 355(3) of the Treaty on the Functioning of the European Union, EU law currently applies to Gibraltar.

The Gibraltar courts provide a wide range of remedies for local and foreign claimants who are victims of dishonesty and fraud.

The availability of these remedies depends on the facts and strength of the evidence that give rise to any such claim. In general terms, the courts will act to assist victims of fraud in the tracing and recovery of assets.

Normally, such claims will be brought in the context of a civil suit commenced in Gibraltar or alternatively, in aid of substantive proceedings commenced elsewhere. The most common types of civil fraud claims are claims brought in the tort of deceit, fraudulent misrepresentation, claims for breach of trust or breach of fiduciary duty, equitable proprietary claims or other restitutionary type claims.

In civil claims, the court has a wide discretion to grant interim and final orders to assist in the tracing and preservation of assets as well as to enable a victim to obtain information and help to recover property that has been misappropriated or simply to freeze and preserve assets in support of any such claim.

In the context of criminal proceedings, the principal investigatory body is the Royal Gibraltar Police and any prosecution is brought by the Attorney General's Chambers locally. In cases having a criminal context, the Royal Gibraltar Police also have extensive powers to obtain information as well as to preserve assets.

In addition, financial services business is governed by the Financial Services Act and the local regulator is the Financial Services Commission (FSC). In appropriate circumstances, the FSC can commence proceedings for restitution subject to the terms of the Financial Services Act and other relevant financial services legislation locally.

II LEGAL RIGHTS AND REMEDIES

The Supreme Court of Gibraltar has equivalent jurisdiction to the High Court of England and Wales in respect of civil claims and therefore has jurisdiction to grant equivalent remedies both in an interim and final context.

In the civil context, the victim (in the absence of having commenced substantive proceedings elsewhere) will need to commence a civil claim against the perpetrators of the fraud in Gibraltar.

Whether there is any advantage in bringing claims based on the tort of deceit or in fraudulent misrepresentation as against other claims that may exist for breach of contract or negligent misstatement or misrepresentation will need to be considered and assessed at the outset. As indeed consideration will need to be given to the necessity of seeking interim relief (e.g., a freezing injunction or a search order).

If the identity of the perpetrator is unknown, it will be necessary for the victim to seek a non-party disclosure order or Norwich Pharmacal relief against an innocent party such as an individual or corporation who has become mixed up in the fraud through no fault of their own but who is able to provide information as to the identity of the fraudster or alternatively information to assist in the tracing of assets. In the context of a pre-action disclosure order or a Norwich Pharmacal order, the applicant will normally be required to meet the costs of the disclosing party both incidental to the application and also in respect of the costs of complying with any disclosure order made.

In the event that a civil claim is issued against the fraudster the compensatory remedies that can be sought are as follows:

  1. damages;
  2. an injunction;
  3. an account (including an account of profits) or inquiry as to damage;
  4. equitable compensation; and
  5. interim remedies (e.g., freezing injunction).

To bring a civil claim locally, the court must have jurisdiction and the onus is on the claimant to establish jurisdiction in the absence of a submission by the opposing party.

EU law applies to Gibraltar by virtue of Gibraltar's status as a territory in respect of which the United Kingdom is responsible for its external relations. Jurisdiction is often therefore founded under the Revised Brussels Regulation or alternatively the Brussels or Lugano Conventions, which also apply locally by virtue of the Civil Jurisdiction and Judgments Act.

If neither the Revised Brussels Regulation nor the Brussels or Lugano Conventions apply then appropriate consideration will need to be given to the question of jurisdiction, for example, on the basis that jurisdiction is founded on the basis that the wrongdoing was committed in Gibraltar or alternatively that the damage or harm was suffered by the victim in Gibraltar.

Insofar as there are persons who may have assisted the fraudster in perpetrating the fraud, then it is open to the victim to consider the issue of a claim against the third party on the grounds of dishonest assistance or knowing receipt, or alternatively to commence other restitutionary proceedings.

In a claim for breach of trust or fiduciary duty, the claimant will need to establish the existence of the duty concerned either in a trustee or fiduciary context and to prove the breach of the duty by the trustee or fiduciary.

A fiduciary will be in breach of his or her duty if the fiduciary makes a profit by virtue of his or her office and as a remedy will be required to account to the victim in respect of any benefit gained as a result. Significantly the fiduciary is required to account regardless of a need to prove bad faith on the part of the fiduciary concerned, although there may be circumstances where a conflict between a fiduciary and an individual interest may have been waived by the principal. Clearly whether this is the case will depend on the nature of the evidence and the relevant facts.

Insofar as claims for dishonest assistance are concerned, the following must be proved:

  1. the existence of a trustee or fiduciary relationship;
  2. that there has been a breach of trust or fiduciary obligation owed to the claimant in which the defendant has assisted;
  3. that the defendant has acted dishonestly; and
  4. that the defendant's conduct has resulted in loss to the claimant.

There can also be dishonest assistance by an accessory third party after the initial breach of trust or fiduciary duty. For example, where the breach involves the misappropriation of trust assets then liability can extend to third parties who assist the fraudster in hiding the assets following any initial breach of trust or fiduciary duty beyond the original misappropriation of the funds from the trust fund concerned. However, in cases of dishonest assistance, any statement of case must identify and particularise what the defendant did to assist in the breaches of fiduciary duty or trust, how the assistance caused, contributed or resulted in the claimant's loss and how the defendant is alleged to have acted dishonestly in assisting the main perpetrator.

A review of the law on what constitutes dishonesty for the purpose of dishonest assistance was set out by Mr Justice Jack, Puisne Judge in the recent local decision of Lavarello & Hyde v. Jyske Bank (Gibraltar) Limited Claim No. 2014 L 81 Supreme Court of Gibraltar 17 May 2017, where reference is made to Mr Justice Rose's decision in the English case of Singularis Holdings Limited v. Daiwa Capital Markets Europe Limited [2017] EWHC 257 (Ch). There are two sorts of relevant dishonesty:

  1. actual dishonesty, where the third party assists with actual knowledge of the fraud or breach of fiduciary duty; and
  2. blind-eye (or Nelsonian) dishonesty, where the third party has suspicions of the fraud or breach of fiduciary duty but makes a conscious decision not to make enquiries (i.e., wilful blindness). An honest person does not 'deliberately close his eyes and ears, or deliberately not ask questions, lest he learn something he would rather not know, and then proceed regardless', in accordance with Lord Nicholls in Royal Brunei Airlines Snd Bhd v. Tan 2 AC 378 at page 389F-G.

In cases of dishonest assistance against a corporate entity, a particular individual (or particular individuals) must be identified as having acted dishonestly given the fact that, although a company has legal personality and capacity, it functions through human agents. In turn, the accessory is liable in equity to make good any loss that the beneficiary has suffered as a result of the breach that the accessory has participated in, and such a claim can include a claim for an account of profits.

Subject to the nature of the evidence, the conduct of the individual or corporation concerned may be sufficient to enable a claim to be brought against the party on the basis that it is a party and fellow conspirator in the alleged fraud or act of dishonesty.

To succeed in a civil claim, the claimant will need to prove the claim on the balance of probabilities as distinct from the criminal burden of proof. However, while the civil burden of proof applies, the more serious the allegation the more cogent the evidence in support needs to be. The law in this regard was neatly summarised by Mr Justice Jack in his judgment in Re Wardour Trading Ltd (unreported, Supreme Court of Gibraltar 15 February 2015) where reference was made to the House of Lords decision in Re: B (Children) [2008] UKHL 35, Mr Justice Lewison's (as he then was) decision in Ultraframe v. Fielding [2005] EWHC 1638 (Ch) and also, Lord Nicholls in Re H [1996] AC 563, where he said: 'The more improbable the event, the stronger must be the evidence that it did occur before, on the balance of probability, its occurrence will be established.'

The court also has extensive jurisdiction to grant interim relief in support of a claim. In that regard, the court can grant freezing injunctions or search orders provided the necessary procedural and evidential hurdles are overcome by the applicant concerned.

The English Civil Procedure Rules (CPR) apply to Gibraltar by virtue of the Supreme Court Act locally and also, the local Supreme Court Rules largely apply the CPR.

As stated above, the Supreme Court has equivalent jurisdiction to the High Court, which means the court can in appropriate circumstances make an order for a freezing injunction or alternatively it can also grant a proprietary injunction or alternatively appropriate injunctive relief ordering the detention, custody or preservation or any property or asset to which a claim is made.

The court also has jurisdiction to grant orders against a third party or a fraudster ordering the provision of information or disclosure in relation to matters that are the subject of a claim.

The jurisdiction to grant injunctive relief and to grant other interim remedies is also stand-alone and available even when the substantive proceedings have been commenced outside Gibraltar by virtue of Section 17 of the Civil Jurisdiction and Judgments Act. The latter is equivalent to Section 25 of the English Civil Jurisdiction and Judgments Act. The Court of Appeal has granted a Norwich Pharmacal order under this Section in aid of foreign proceedings in Portugal – see the decision of Secilpar SL v. Fiduciary Trust Ltd (Gibraltar Court of Appeal 24 September 2004). The Section itself on its face prevents it being used to obtain evidence. However, a distinction has been made between the provision of information to assist foreign proceedings and the provision of evidence.

Possible defences to 'fraud' claims will obviously depend on the nature of the allegations made in any claim or in any prosecution brought and the type of claim or offence in respect of which the defendant is charged.

In a non-fraud civil context and generally speaking, the limitation period in respect of contractual claims is six years from the accrual of the cause of action (e.g., the breach of contract) and in tort claims six years from the date the cause of action accrues (i.e., normally from the date damage is caused by the tort) and in cases of breach of trust, six years after the breach.

However, in fraud claims these time limits can be extended in cases of fraud or concealment of the cause of action and time limits start to run from the date when the cause of action could, with reasonable diligence, have been discovered. It is therefore conceivable that a defendant may therefore run a limitation defence in a fraud claim.

Other likely defences will focus on the allegations of dishonesty or fraud to the effect that the evidence is not sufficiently cogent to support any such claims or that the defendant's state of mind was not dishonest. In certain circumstances, it may be appropriate for a defendant to seek or to defend such claims on a summary basis if the evidence or pleaded case does not provide a sufficient basis to support the allegations made and therefore has no prospect of success.

Where allegations of fraud or dishonesty are to be made in evidence or in pleadings counsel have a duty to ensure that any such allegations are supported by material that attests to such serious allegations. To make or persist in making such allegations without material to support the allegations may amount to professional misconduct and can also in appropriate circumstances result in a wasted costs order or disciplinary action against the lawyer concerned.

Malpractice claims under Part 10 of the Insolvency Act 2011

Section 258 of the Insolvency Act 2011 establishes a summary remedy against delinquent officers of a company and any person who has acted as liquidator, administrator or receiver of a company or any person who has been concerned in the promotion, formation, management, liquidation or dissolution of a company. Proceedings may be taken against such a person under Section 258 if it appears that any such person has misapplied or retained or become accountable for any money or other property of the company or has been guilty of any misfeasance or breach of any fiduciary or other duty in relation to the company. The Section does not establish any new cause of action but provides a convenient procedure in liquidation to facilitate the recovery of property or money from a person such as a director who has committed a misfeasance, for example, the sale of the company's assets at an undervalue or the making or improper payment or secret profits. The relevant limitation period for bringing such a claim will be determined by the nature of the cause of action on which the claim is based. No limitation period is applicable if the nature of a director's alleged breach of fiduciary duty is such as to render him or her liable and accountable as a trustee of the company's monies or assets. See Section 26(1)(b) of the Limitation Act 1960 or in respect of any fraudulent breach of trust or fraud to which the trustee was a party under Section 26(1)(a).

Section 259 of the Insolvency Act 2011 contains a statutory provision and civil remedy in respect of fraudulent trading on the application of an appointed liquidator of a relevant company. The effect of the Section if established is to declare that any persons who were knowingly parties to fraudulent trading are liable to make such contributions to the company's assets as the court thinks proper. Fraudulent trading in this context includes any business carried on by the company concerned with intent to defraud creditors of the company or any other person or any business carried on for any fraudulent purpose. Liability under this Section can be imposed on a wide circle of individuals who have participated in the fraudulent activity and therefore extends beyond directors, officers and promoters of the company. The liquidator's right of action under this Section is subject to a period of six years from the date on which the powers under this Section are exercisable given Section 4(1)(d) of the local Limitation Act 1960. In that regard, the liquidator's powers are exercisable following the date of his or her appointment as liquidator.

Section 260 of the Insolvency Act 2011 also contains a statutory provision in respect of insolvent trading. This Section enables a liquidator of a relevant company to apply for an order against a person who is or has been a director of the company for an order that the director makes a contribution, if any, to the company's assets as the court considers it proper if it is satisfied that:

  1. at any time, before the commencement of the liquidation of the company, that person knew or ought to have concluded that there was no reasonable prospect that the company would avoid going into insolvent liquidation; and
  2. he or she was a director of the company at that time.

In principle, liability under Section 260 arises from the moment when the director concerned has either actual or constructive knowledge that there is no reasonable prospect that the company would avoid insolvent liquidation and yet permits the company to continue to trade and incur liabilities after it was known or ought to have been known. Section 260(3) provides a defence to a director if he or she can show that, at the time when he or she knew or ought to have known that there was no reasonable prospect that the company would avoid going into liquidation, he or she took every reasonable and possible step to minimise the loss to the company's creditors. The limitation period for a liquidator to bring an application against a director under this Section is six years from the date of the liquidator's appointment.

Under Section 263 of the Insolvency Act, any monies paid to or recoveries made either under Section 259 or 260 are deemed to be assets of the company that are available to pay unsecured creditors.

Section 263 and Sections 263A–263E also contain criminal offences, including those in respect of fraudulent conduct, malpractice in anticipation and, after the commencement of a liquidation, misconduct in the course of a liquidation and in respect of false representations to creditors.

Part 11 of the Insolvency Act 2011 also makes provision for disqualification orders against directors and others (e.g., a shadow director, a voluntary liquidator or a receiver of a company). An application for a disqualification order can be made under Section 268 within six years of the date on which the company concerned became insolvent. The court can make such an order against a person:

  1. who has been convicted on indictment of an offence in connection with the promotion, formation, management or dissolution of a company that is or becomes insolvent or of an offence under the Insolvency Act that relates to a company that at any time becomes insolvent;
  2. has had an order made against him or her under Section 259 or Section 260 of the Insolvency Act; and
  3. who is a director, shadow director, voluntary liquidator or receiver who has been guilty of fraud in relation to the company or of any misfeasance or breach of duty as a director, voluntary liquidator or receiver of the company or where the court is of the opinion that the person's conduct is such to make him or her unfit to be concerned in the promotion, formation or management of companies or in their liquidation or dissolution.

Under Section 271(4), the period of disqualification shall not exceed 10 years.

Compensation Order under Criminal Procedure and Evidence Act 2011

A compensation order can be sought against a person who has committed an offence pursuant to Section 595(1) of the Criminal Procedure and Evidence Act 2011. Such orders are available in respect of injury, loss or damage as a result of the offence, although where the offence is in relation to Part 16 of the Crimes Act 2011 (fraud), if the assets are recovered, any damage done to any such assets is treated as having arisen from the offence. In the Supreme Court, the amount of compensation is within the discretion of the Court, although in the magistrates' court it is limited to £20,000.

The court also has the power to make a restitution order under Section 600(2) of the Criminal Procedure and Evidence Act when a person is convicted of an offence.

III SEIZURE AND EVIDENCE

In the civil context, it is open to a party in appropriate circumstances to make an application for an interim remedy pursuant to CPR Part 25.1. The types of interim remedies that can be ordered include the following:

  1. an interim injunction;
  2. an interim declaration;
  3. an order for the detention, custody or preservation of relevant property or the inspection of relevant property;
  4. a freezing injunction restraining a party from removing from the jurisdiction assets located in Gibraltar or from dealing with assets whether located in Gibraltar or elsewhere;
  5. an order directing a party to provide information about the location of relevant property or assets that are or may be the subject of an application for a freezing injunction;
  6. a search order; and
  7. an order for a specified fund to be paid into court or otherwise secured where there is a dispute over a party's right to the fund in question.

Any application for such an interim order must be made in compliance with the requirements of CPR Part 23 and the court has jurisdiction to grant an interim remedy regardless of whether there has been a claim for a final remedy of that kind in the substantive claim. The onus is on the applicant to make out and satisfy the court that it should grant the interim remedy sought. Normally applications for freezing injunctions or search orders are made initially on an ex parte basis as putting the opposing party on notice of any such an application would serve to defeat the object of the applications.

To obtain a freezing injunction, the claimant must demonstrate that:

  1. he or she has a cause of action or good arguable case;
  2. there is a serious risk that if the defendant is not restrained by an injunction that the assets will be removed from the jurisdiction or otherwise dissipated or disposed of so as to frustrate any judgment that might be obtained later; and
  3. it is just and convenient for the court to make the order sought.

When making a freezing injunction, the court usually makes an ancillary order requiring the defendant to give disclosure or provide information concerning his or her assets or disclose information to assist in the tracing of alleged misappropriated assets. As part of any such application, the applicant will be required to provide an undertaking as to damages in the usual form.

Under the Insolvency Act, it is also possible to apply for the appointment of a provisional liquidator of a company pursuant to Section 161 of the Insolvency Act 2011. The court may appoint a provisional liquidator under this Section if the company consents to the appointment or the court is satisfied that the appointment is necessary for the purpose of maintaining the value of assets owned or managed by the company, or is otherwise in the interests of creditors or in the public interest.

It is also possible to apply to appoint an interim receiver to secure and protect relevant property.

i Obtaining evidence

Letters of request from foreign courts in respect of evidence required for foreign court proceedings (whether criminal or civil) are dealt with under the provisions of the local Evidence Act. The latter, inter alia, incorporates the provisions of the English Evidence (Proceedings in Other Jurisdictions) Act 1974, which enacted relevant provisions to effect the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters.

In short, the court has power to require evidence to be taken in appropriate circumstances and as directed by the court. The court will consider the formal letter of request and will generally accede to such requests provided they are not considered irrelevant, tantamount to a fishing expedition (e.g., pretrial disclosure of documents requests) or frivolous or vexatious.

Any application made to give effect to a letter of request must be focused and in that regard, the court will be loath to make a general disclosure order. Instead, the court normally makes orders for the disclosure of specified documents or specified categories of documents as opposed to orders in very general terms that the court is likely to consider are too widely drafted.

One further issue to consider in the context of applications to give effect to letters of request from foreign courts is the issue of privilege. In that regard, a witness cannot be compelled to provide evidence if the witness is entitled to claim privilege from giving such evidence either as a matter of Gibraltar law or under the law of the requesting court. Normally, it is for the recipient of any order to assert the privilege concerned and in the absence of such an assertion being accepted by the applicant, the court will need to determine the issue in the context of the application or any return date.

Any claim for privilege under the foreign law concerned will need to be supported by expert evidence from the foreign jurisdiction concerned.

IV FRAUD IN SPECIFIC CONTEXTS

i Banking and money laundering

Under Part IV of the Crime (Money Laundering and Proceeds) Act 2007, the court has power to make restraint orders and confiscation orders.

The court has power to make a restraint order under Section 30 of the Act and the application is made by application by the prosecutor.

Under Section 23(1) of the Act, the power to make confiscation orders is discretionary and gives the court power in addition to dealing with the offender in any other way 'to make an order requiring him to pay such sum as the court thinks fit'.

Part II of this Act creates money laundering and other associated offences, for example, assisting another to retain the benefit of criminal conduct or failure to notify the Gibraltar Financial Intelligence Unit if a person undertakes relevant financial business and knows or suspects or has reasonable grounds to suspect that another person is engaged in money laundering or is attempting to launder money.

Under the Act, the court also has power to make charging orders in respect of realisable property as well as the appointment of a receiver in respect of realisable property.

In the recent case of Lavarello & Another v. Jyske Bank (unreported) Supreme Court of Gibraltar 17 May 2017, Mr Justice Jack considered and found Jyske Bank liable for dishonest assistance in respect of a claim made that the bank dishonestly assisted the former law firm Marrache & Co to misappropriate client monies and also, on the ground of knowing receipt. The Court considered the application in Gibraltar of the case of Rowlandson v. National Westiminster Bank Limited 1978 1 WLR 798 and also, Section 85 of the Solicitors Act 1974 and a banker's duty in relation to the operation of client accounts. Both sides in the action accepted that Section 85 did not release a bank from liability for dishonest assistance, whether as a matter of actual knowledge or Nelsonian blind-eye knowledge. Mr Justice Jack in turn held that Section 85 does not release a bank from its liability for dishonest assistance, whether as a result of actual knowledge or Nelsonian blind-eye knowledge, but also held that the Section creates a strong presumption, on which bankers can rely, that solicitors' client accounts are being conducted in a proper manner and that therefore a banker's duty to investigate transactions must be considered against the background of the statutory presumption. The judgment is currently the subject of appeal. The author is respectfully of the view that the application of Section 85 of the English Solicitors Act 1974 to Gibraltar is questionable given the provisions of Section 33 of the Supreme Court Act 1960, which only extends the law in England relating to barristers and solicitors to the latter, and not to banks, in Gibraltar.

ii Insolvency

Liquidators and administrators of companies (as well as trustees in bankruptcy) have extensive powers under the Insolvency Act 2011 to obtain court orders requiring persons in possession of information or documents relating to a company or a bankrupt to disclose the material. Section 240(1) expressly gives a liquidator or other office holder of a company power by notice in writing to require the provision of information concerning a company, including its promotion, formation, business, dealings, accounts, assets, liabilities or affairs as reasonably required by the officer holder concerned. The notice may be sent to a wide range of individuals, including officers and former officers of a company, any member or former member of a company, any employee or former employee and any person who is or has been a receiver, accountant or auditor of the company. Provision is also made under Section 241 for the examination of a person under Section 240(1)(c) by an officer holder. In addition, an application can be made for an examination before the court under Section 242 of the Insolvency Act. Section 402 of the Insolvency Act permits an application to be made (where a bankruptcy order has been made and before the discharge of the bankrupt) by the trustee in bankruptcy or the official receiver for an order for a person as defined in Section 402(2) to appear to be examined concerning the affairs of the bankrupt. A person under this Section includes the bankrupt, his or her spouse or former spouse, any person known or believed to be indebted to the bankrupt and any person appearing to the court able to give information concerning the bankrupt or the bankrupt's dealings, affairs, assets or liabilities. There are also various bankruptcy offences set out in Part 14 of the Act, including those relating to the concealment of assets, false statements and the fraudulent disposal of assets.

As referred to above, Part 10 of the Insolvency Act contains relevant statutory provisions in relation to malpractice and enables a liquidator of a company to commence proceedings against directors of companies on the basis of alleged insolvent or fraudulent trading as well as other courses of action.

iii Arbitration

Under Section 32 of the Arbitration Act, the court has power to make interim remedies in aid of arbitration proceedings, including security for costs, discovery of documents or interrogatories, interim injunctive relief, the appointment of a receiver as well as the preservation of any goods that are the subject of an arbitration reference.

iv Fraud's effect on evidentiary rules and legal privilege

Neither legal advice privilege nor litigation privilege attaches to communications between a legal adviser and a client produced for the purpose of committing or furthering a fraudulent act or crime. The obvious reason is because it is not part of a lawyer's duty to further (whether knowingly or not) a fraudulent act and consequently no privilege attaches to any such communications with that purpose, as any such privilege would be contrary to public policy.

V INTERNATIONAL ASPECTS

The Revised Brussels Regulation applies in Gibraltar for the time being, pending the outcome of Brexit. It provides general rules with respect to jurisdiction in respect of civil or commercial matters and applies in respect of disputes between EU nationals or corporations.

In matters relating to tort, quasi-delict or delict, the courts of the Member State where the harmful event occurred or may occur will have jurisdiction. In relation to contractual claims, the courts of the Member State that is the place of performance of the obligation in question will have special jurisdiction. Generally speaking in fraud cases, the court will have jurisdiction if the fraud occurred in Gibraltar.

If the parties have agreed a choice of law clause attributing jurisdiction to a particular Member State then that court will usually have jurisdiction (in the absence of the courts of another Member State having special jurisdiction) subject to compliance with certain formalities, including the fact that the agreement should be in writing or conforming to general trade practice.

In the event that an opposing party seeks to commence proceedings in another jurisdiction then the courts of that jurisdiction should proceed to stay the claim pending the determination of the issue of jurisdiction by the courts of the Member State that the parties have agreed in the jurisdiction clause.

As stated above, the Evidence Act contains statutory provision to enable the taking of evidence in aid of foreign proceedings whether civil or criminal in nature upon receipt of a request from the foreign court concerned. In respect of criminal matters, the European Convention on Mutual Assistance in Criminal Matters applies and Gibraltar has enacted relevant local legislation in the guise of the Mutual Legal Assistance (European Union) Act. In addition, there is also the Mutual Legal Assistance (international) Act, which deals with the provision of assistance to foreign states or territories.

Insofar as the freezing or seizure of assets is concerned, in civil proceedings the appropriate course is to seek an appropriate interim remedy, usually an injunction in appropriate terms.

The methods available to enforce foreign judgments in Gibraltar will depend on the location of the identity of the country where the judgment originates. In the majority of cases enforcement is by way of registration of the judgment.

Judgments emanating from Member States of the European Union are generally enforceable under the Revised Brussels Regulation or alternatively in limited circumstances under the Brussels and Lugano Conventions, which also apply in Gibraltar by virtue of its EU status.

The main exceptions when a judgment will not be recognised under the Revised Brussels Regulation are when:

  1. recognition of the judgment would be contrary to public policy;
  2. it was given in default of appearance and the defendant was not served with the document that instituted the proceedings in sufficient time and in such a way as to enable the defendant to arrange his or her defence;
  3. the judgment is irreconcilable with another judgment between the same parties; or
  4. the court that made the judgment lacked jurisdiction.

In addition, the Administration of Justice Act 1920 also applies to Gibraltar by virtue of the English Law Application Act. Gibraltar also has an equivalent act to the English Foreign Judgments (Reciprocal Enforcement) Act 1933 in the guise of the Judgments (Reciprocal Enforcement) Act 1935. The relevant countries within the application of the 1933 Act include Australia and the Australian States, the Isle of Man, Guernsey, Jersey, India and Pakistan. Under this Act, the judgment must be for a sum of money (not from fines or unpaid taxes) and it must be final or conclusive. The Act has effect subject to the provisions of the local Civil Jurisdiction and Judgments Act 1993.

It is also possible to seek to enforce a judgment for a fixed sum of money at common law. Judgments will not be recognised at common law if:

  1. the proceedings were contrary to natural justice;
  2. the judgment was obtained by fraud;
  3. recognition of the judgment would be contrary to public policy; or
  4. the foreign court lacked jurisdiction.

If the judgment is not for a fixed sum of money and provided the claimant has the same cause of action in Gibraltar, proceedings could be instituted in Gibraltar on the basis of the foreign judgment and seek summary judgment on issues determined by the foreign court.

Generally speaking, the courts will not look behind the substantive merits of a judgment that a claimant seeks to enforce. However, if the judgment was obtained by fraud then this can act as a defence to a judgment that is sought to be enforced either at common law or under the provisions of the 1933 or 1920 Acts.

VI CURRENT DEVELOPMENTS

The most recent decision on the issue of dishonest assistance is the decision of Lavarello & Another v. Jyske Bank (Gibraltar) Limited (unreported) Supreme Court 17 May 2017. That decision contains an interesting review and analysis of the law relating to dishonest assistance and knowing receipt, with specific reference to a banker's duty of enquiry. That judgment is currently the subject of an appeal to the local court of appeal.

Relatively recent legislation in Gibraltar has focused on an extensive update of local companies and insolvency legislation as well as criminal legislation. The Crimes Act 2011 created the statutory offence of fraud under Section 415 as well as other fraud-related offences under Part 16 of the Act. At present, it is not envisaged that there will be any further fraud-specific legislation enacted.


Footnotes

1 Charles Simpson is a partner at Triay & Triay. The information in this chapter was current as of September 2017.