Court in the Cayman Islands rejects argument over Ansbacher deposits

A court in the Cayman Islands has rejected an argument from lawyers representing the Tanaiste, Ms Harney, that a Cayman bank brought a court action so as to thwart her inquiry into the Ansbacher deposits.

The Chief Justice of the Grand Court of the Cayman Islands, Mr Justice Anthony Smellie, said he believed the bank, Ansbacher (Cayman) Ltd, initiated the court action in recognition of its responsibilities under Cayman law and public policy.

Mr Justice Smellie made his remarks when rejecting an application for costs from lawyers representing Ms Harney. The costs relate to an unsuccessful application to the courts by Ansbacher (Cayman) in May, seeking a direction under the Cayman Islands' confidential relationships law. Lawyers representing Ms Harney made submissions during the case and senior officials from the Department of Enterprise, Trade and Employment attended the hearing.

Under Cayman law, banks and other businesses must get the permission of the courts before disclosing confidential business information. An authorised officer appointed by Ms Harney and investigating the Ansbacher deposits, Mr Gerard Ryan, has sought documentation from Ansbacher (Cayman) concerning business it conducted in Ireland. The bank has said it will not hand over the documentation unless forced to do so.

In May the Grand Court decided it did not have jurisdiction to hear the application from the bank, because the bank was claiming the order from Mr Ryan, which had been delivered to a firm of Dublin solicitors, had not been properly served. The court ruled that the bank should first test this claim in the Irish courts. No such case has yet been initiated by the bank.

The application for costs, made earlier this month, was heard in camera. However, in his judgement, Mr Justice Smellie said Mr Ryan's lawyers "seek to ascribe to Ansbacher the tendentious motive of having brought the application hoping to get directions from the court to not divulge the information and to use those directions to thwart the enforcement of the Minister's mandate in Ireland".

Mr Justice Smellie said "there is no basis upon which I can arrive at such a conclusion. The fact is that the Minister's mandate purports to require Ansbacher to surrender information defined as confidential by the Confidential Relationships (Preservation) Law and contained in what is now known as the `Ansbacher files' - described as dozens of files believed to be held by Ansbacher in the Cayman Islands relating to business alleged to have been illegally carried on by Ansbacher with residents of Ireland in Ireland".

He said that even though Ansbacher doubted the efficacy of the order served on them, it could not be said that the bank had abused the courts by seeking a direction. Although the application from Ansbacher was misconceived, because the court found that it did not have jurisdiction to hear it, "it was, I can only properly conclude, one which was brought in recognition of or out of concern to comply with" the bank's duty.

Mr Justice Smellie said that, in relation to applications such as the one made by Ansbacher, "public policy considerations will dictate disclosure in the event, for example, of a crime, or non-disclosure in the event, for example, of the absence of evidence of misconduct".

The documentation being sought by Mr Ryan was generated in Dublin and was taken to the Cayman Islands following the death of Mr Des Traynor in 1994. Ms Harney has said Mr Ryan will use all legal means available to secure the retrieval of the documentation. She has appealed to the bank to reconsider its attitude towards Mr Ryan's request.

However, even if the bank was to change its mind, it is thought likely it would have to get the permission of the Cayman courts before it could hand over the documents. If, as seems likely, it does not decide to voluntarily hand over the documents, then the only avenue open to Mr Ryan is to seek to have the Cayman courts order the bank to do so.