Smellie J
IN CHAMBERS
IN THE GRAND COURT OF THE CAYMAN ISLANDS
CAUSE NO. 751/97
IN THE MATTER OF THE CONFIDENTIAL RELATIONSHIPS (PRESERVATION) LAW (1995 REVISION)
AND IN THE MATTER OF AN APPLICATION BY
(1) RAYMOND KALLEY, AS TRUSTEE OF THE EB TRUST AND PB TRUST
(2) EGIL BRAATHEN
(3) PAULINE BRAATHEN
Appearances:
Jacqueline Wilson for the Attorney-General.
Diarmad Murray for the applicants.
RULING
It is as thoroughly settled as any proposition of law can be that no court will allow itself to be made the instrument of enforcing obligations alleged to arise out of a transaction which is illegal: Scott v Brown [1892] 2 Q.B. 724.
The principle behind the rule of law is clear: ex turpi causa non oritur actio.
The present application is admitted to be one by which the applicants seek the leave of this Court to use in evidence, information which they have obtained in the Cayman Islands by means of a breach (albeit unwittingly) on the part of a respondent bank ("FCB") of the Confidential Relationships (Preservation) Law ("the CR(P)L"). The breach was committed by FCB by the handing over of the information to the applicants’ lawyers without the defendants’ ("the principals’) consent and without an order of the Court. The applicants in those circumstances nonetheless seek the leave of this Court to be able to use the information in evidence in proceedings in Florida.
The applicability to such a situation of the settled principles cited above could hardly be more plain. And, to my mind, it is irrelevant that the applicants came by the information perhaps without being themselves participes criminis to the offence of unlawful disclosure. They have the information, in the hands of their attorneys, without the consent of the principals and without authorisation by the court. It therefore remains illegally possessed while in their hands whether or not they were party to the original breach by FCB which resulted in its disclosure.
And, in that regard, it seems to me the applicant must - while they hold and seek to use that information - come perilously close to a breach of the law themselves.
Section 5(3) of the CR(P)L reads:
“Whoever, being in possession of confidential information, clandestinely or without the consent of the principal, makes use thereof for benefit of himself or another, is guilty of an offence and liable on summary conviction to the penalty prescribed in subsection (2) ....” (emphasis supplied).
It is at least arguable therefore that by using the information in the present manner of supporting this, their application for leave, the applicants act in breach of that provision.
If so, that only compounds the abuse of seeking to obtain the sanction of the court of the breach and its authorisation of the further trammelling of the principal’s rights proposed by the further disclosure in the Florida proceedings.
To my mind there can be only one direction given in these proceedings: the documentation containing the information must be immediately returned to First Cayman Bank as the fiduciaries on behalf of the principals who do not consent. No copies of that information are to be retained by anyone, including the legal advisers of the applicants. Unwitting though it was, I am satisfied that the last paragraph of the letter (ie: that of 10th September 1997 from W.S. Walker & Co. to FCB) conveying the order of this court to FCB may well have induced the breach as that order directs disclosure to the plaintiffs by others who are not named as parties to the order. The order was to have been brought to FCB’s attention for no other purpose but to notify them of its other injunctive provisions. If the breach was induced by FCB’s
misinterpretation of the order one must be moved to observe that the matter would have been better handled by bringing to FCB's attention the aspect of the order relevant to it.. That does not, of course, excuse FCB who should have closely read and strictly complied with the terms of the order. Those terms do not authorise disclosure of any confidential information by FCB, let alone the provision by FCB of the many pages of confidential documentation which it did provide to the applicant's attorneys.
As copies of the documentation have been provided to parties and to the court, I direct that the court file be kept closed until further order or direction of the court, and that all copies of the documents in the possession of counsel or of the parties be submitted to the Clerk of the Court for safe-keeping on the court file in the same manner. Any other copies made from the documents disclosed are to be destroyed.
I give these directions instead of one for the immediate distruption of all copies as I regard the copies on the court file as a matter now of the record of the court and in respect of which disposal must occur in accordance with the rules of process.
Anthony Smellie
JUDGE OF THE GRAND COURT
Dated this 24th day of November 1997