Court dismisses appeal of Montpelier (Trust and Corporate) Services Limited (“Montpelier”)
Background
On 7 October 2019, following an application by the Isle of Man Financial Services Authority (the “Authority”), the Isle of Man High Court (His Honour Deemster Khamisa QC) made an order that a manager, receiver and inspectors be appointed in respect of Montpelier. Details of those appointments are set out below.
Montpelier made an application in early October 2019 for a stay of “any order appointing a manager, receiver or inspectors pending an appeal to the Appeal Division” (the “Stay Application”). On 10 October 2019, His Honour Deemster Khamisa QC delivered his judgment dismissing the Stay Application. A copy of that judgment is available here.
On 11 October 2019, Montpelier filed an appeal against (a) the Order of His Honour Deemster Khamisa QC appointing a manager, receiver and inspectors in respect of Montpelier (the “Appointment Order”) and (b) the Order of His Honour Deemster Khamisa QC refusing to grant a stay in respect of the Appointment Order (the “Stay Appeal”). On 23 October 2019, the Island’s Appeal Court (the Staff of Government Division) dismissed Montpelier’s Stay Appeal and listed the hearing of the principal appeal (against the Appointment Order) for a hearing on 10 January 2020 (subsequently re-listed for 10 February 2020).
Pending the appeal, the manager, receiver and inspectors remained in place and Montpelier remained licensed to carry out regulated activities in accordance with its financial services licence.
On 10 February 2020, the Authority appeared in the Appeal Court represented by Her Majesty’s Solicitor General Walter Wannenburgh. Montpelier was represented by Advocate Laurence Vaughan-Williams. On that date, the Appeal Court dismissed Montpelier’s appeal and ordered Montpelier to pay the costs of the Authority of and incidental to the appeal.
The dismissal of the appeal followed Montpelier’s purported notice of discontinuance of the appeal on 4 February 2020, a procedure which is entirely inappropriate in appeal proceedings. Montpelier sought to abandon its appeal and argued that there should be no order as to costs against it. The Appeal Court rejected that argument and ordered indemnity costs against Montpelier. In so doing, the Appeal Court stated:-
“26. No order as to costs would be wholly inappropriate here. In our judgment it is appropriate to order indemnity costs against Montpelier. The management of the appeal has been conducted in an unreasonable manner and, in our view, had an improper purpose, namely to buy Montpelier time and to allow it to represent to its creditors and investors that the Order was in some way not final because it was subject to appeal. This takes the appeal out of the norm…”
In dismissing Montpelier’s appeal, the Appeal Court stated:-
“We therefore reject Mr Vaughan-Williams’ suggestion that the withdrawal of the appeal was commercial and pragmatic if this was based upon the reasons he put forward. We are bound to conclude, on the material before us, that Montpelier, represented by a highly experienced Isle of Man advocate, has decided not to pursue its appeal simply because it would fail, a view we share on the basis of our careful reading of the written submissions filed and the other documents on the parties’ reading lists. There can be no other credible reason for Montpelier’s eleventh hour volte-face.”
A copy of the Appeal Court’s judgment dated 10 February 2020 is available here.
Montpelier continues to be licensed to conduct business under Class 4 (corporate services) and Class 5 (trust services) and the manager, receiver and inspectors remain in place. Details of Montpelier‘s licence can be found on the Authority’s register here.
The Authority makes this public statement under section 13(4) of the Financial Services Act 2008 on the ground that it is desirable in the public interest to do so. A copy of this public statement has been sent to Montpelier.
If you have any questions regarding the Court’s decision, please contact infofids@iomfsa.im or your usual contact at Montpelier. If you wish to contact Gordon Wilson (the manager and receiver), please do so on gwilson@cwconsulting.im.
Details of appointments made by Order of His Honour Deemster Khamisa QC dated 7 October 2019 (which appointments remain in force)
Mr Gordon Wilson of CW Consulting Limited, Third Floor, 15-19 Athol Street, Douglas, Isle of Man, IM1 1LB is appointed as receiver in respect of Montpelier pursuant to section 21 of the Financial Services Act 2008;
Mr Gordon Wilson of CW Consulting Limited, Third Floor, 15-19 Athol Street, Douglas, Isle of Man, IM1 1LB is appointed as manager in respect of Montpelier pursuant to section 22 of the Financial Services Act 2008;
Mr Adrian Hyde and Mr Robert Starkins of CVR Global LLP, 20 Furnival Street, London EC4A 1JQ are appointed as inspectors to investigate certain matters relating to Montpelier pursuant to section 5 of the Companies Act 1974.
A copy of the Authority’s previous update published on 5 November 2019 in relation to Montpelier is available here.