Jamaica Stock Exchange v Fair Trading Commission

• Jurisdiction: Jamaica
• Judge: FORTE, P. , WALKER. J.A: , PANTON, J.A. , FORTE, P:
• Judgment Date: 29 January 2001
• Neutral Citation: JM 2001 CA 1
• Judgment citation (vLex): [2001] 1 JJC 2901
• Court: Court of Appeal (Jamaica)
• Date: 29 January 2001

IN THE COURT OF APPEAL

BEFORE:

THE HON. MR. JUSTICE FORTE,P THE HON. MR. JUSTICE WALKER, J.A THE HON. MR. JUSTICE PANTON, J.A

BETWEEN

JAMAICA STOCK EXCHANGE

PLAINTIFF/APPELLANT

AND

FAIR TRADING COMMISSION

DEFENDANT/RESPONDENT

R.N.A. Henriques, Q.C., Allan Wood, R. Braham instructed by Livingston, Alexander & Levy for Appellant

Hilary Phillips, Q.C., Denise Kitson, Wendy Duncan instructed by Grant, Stewart, Phillips & Company for Respondent

STATUTORY INTERPRETATION - Whether provisions of Fair Competition Act apply to appellant - Whether proceedings being pursued by defendant in breach of natural justice - Injunction restraining respondent from continuation of proceedings - Fair Competition Act - Securities Act

FORTE, P.

1 The appellant brought an action in the Supreme Court in which it claimed the following orders:

• (1) A declaration that upon its proper construction, the Fair Competition Act is not applicable to the Plaintiff as the Plaintiff is expressly governed by the provisions of the Securities Act.

• (2) Further or alternatively, a declaration that the action and proceedings being taken and pursued by the Defendant against the Plaintiff whereby the Defendant is performing the functions of complainant and adjudicator is in breach of the rules of natural justice and void.

• (3) Further or alternatively, a declaration that the action of the Defendant purporting to act under the provision of the Fair Competition Act in interrogating and examining Directors and Council members of the Plaintiff after having instituted proceedings against the Plaintiff is ultra vires.

• (4) Further or alternatively, a declaration that the Defendant has acted in abuse of its statutory powers and/or has sought to exercise its powers for an improper purpose and consequently the actions of the Defendant are ultra vires and void.

• (5) Further or alternatively, a declaration that the Fair Competition Act and or the action and proceedings instituted by the Defendant against the Plaintiff whereby the Defendant performs the function of investigator, interrogator, complainant and adjudicator is in breach of, and an abrogation of the Plaintiff's constitutional right pursuant to Section 20(2) of the Jamaica Constitution and also infringes the principle of separation of powers enshrined by the Constitution of Jamaica.

• (6) Further or alternatively, a declaration that the action and proceedings taken by the Defendant against the Plaintiff concerning the conduct of the Plaintiff's business is in breach of and an abrogation of the Plaintiff's constitutional right of the freedom of association provided for by Section 23 of the Jamaica Constitution.

• (7) An Injunction restraining the Defendant, its officers and/or agents from continuing the proceedings and action taken against the Plaintiff and interrogating any of the Directors or Council members of the Plaintiff until the trial of the action herein or further Order.

  Further or other relief.

  Costs."

2 The action, having been heard before Theobalds, J the learned judge refused all the declarations and the order for injunction sought, and in what appears to be an oral judgment summarily disposed of the arguments presented to him.

3 The appellant the Jamaica Stock Exchange now appeals to this Court.

4 In coming to a determination on the contentions advanced, I do not intend to deal with the grounds seriatim but rather will deal with the important issues as I see them. Further any reference to the facts and history of the case can be derived from (i) the judgment of Panton, J.A. which I have had the opportunity to read in draft and (ii) the necessary references in this judgment to the complaint of the Fair Trading Commission (FTC) which resulted in this action. The appeal can be determined on a resolution of the following issues:

• (1) Do the provisions of the Fair Competition Act apply to the Jamaica Stock Exchange?

• (2) Is the doctrine of the Separation of Powers which it is contended is a creature of the Constitution likely to be breached if the Fair Trading Commission is permitted to hear its complaint against the Jamaica Stock Exchange?

• (3) Is there likely to be a breach of the rules of natural justice, if the hearing by the Fair Trading Commission is pursued?

5 The question posed in (1) (supra) can if answered in the negative dispose of the appeal, but having regard to the arguments advanced on the issues stated in (2) and (3), no matter the determination in question (1), it is felt that some opinion ought to be expressed. Some other interesting arguments have been advanced in respect, inter alia, to abuse of power, and the right to freedom of association. I will however confine myself to the above issues.

6 (1) Does the Fair Competition Act Apply to the Jamaica Stock Exchange?

7 The first issue that arises for consideration is whether the plaintiff/appellant i.e The Jamaica Stock Exchange (the "JSE") comes within the purview of the Fair Competition Act (the "FCA") and consequently can be the subject of investigation and be directed by the Fair Trading Commission (the "FTC") performing its function under that Act.

8 The appellant contends that the Jamaica Stock Exchange concerned as it is, with securities, is governed and regulated by the Securities Act to the exclusion of the provisions of the FCA. In response, counsel for the FTC contends that the FCA has special application to competition issues in "all industries and entities save those which are specifically excluded by Section 3 of the FCA".

9 It may be a good starting point, in the determination of this issue, to set down the exceptions dealt with in Section 3:

"3. Nothing in this Act shall apply to -

• (a) combinations or activities of employees for their own reasonable protection as employees;

• (b) arrangements for collective bargaining on behalf of employers and employees for the purpose of fixing terms and conditions of employment;

• (c) the entering into of an agreement in so far as it contains a provision relating to the use, licence or assignment of rights under or existing by virtue of any copyright, patent or trade mark;

• (d) the entering into or carrying out of such an agreement or the engagement in such business practice, as is authorized by the Commissioner under Part V;

• (e) any act done to give effect to a provision of an arrangement referred to in paragraph (c);

• (f) activities expressly approved or required under any treaty or agreement to which Jamaica is a party;

• (g) activities of professional associations designed to develop or enforce professional standards of competence reasonably necessary for the protection of the public;

• (h) Such other business or activity declared by the Minister by order subject to affirmative resolution."

10 It is seen then that there are in fact no provisions contained in Section 3 excluding the Stock Exchange from the provisions of the Fair Competition Act.

11 However, it was contended by the appellant that a closer examination of the provisions of the FCA demonstrates that the Legislature did not intend that the Act should apply to securities. The contention is supported by the fact that both Acts were passed in the House on the same day, indicating, that each was intended to deal with separate issues, to the exclusion of the other, the one with competition, the other with securities. Reliance is placed on the definitions of the words "business" and "goods" which are to be found in Section 2 of the FCA. "Business" is defined as meaning "any activity that is carried on for gain or reward or in the course of which goods or services are manufactured produced or supplied, including the export of goods from Jamaica."

12 It is agreed on both sides that the JSE undertakes no activities in the course of which goods are manufactured, produced or supplied. It is however clear from the definition that the JSE would in carrying out its functions be supplying services, and therefore would be engaged in "business" as defined, given the fact that it is also admitted that it does so for "reward" though none of the monies made are paid out either by way of dividend or otherwise to its members: (see clause 4(a) of its Memorandum of Association)

13 The appellant however contends that the definition given to "goods" clearly indicates that the FCA was not intended to apply to securities. This definition reads as follows:

"Goods" means all kinds of property other than real property, money, securities or choses in action."

14 Where therefore any provision of the FCA speaks to "goods" this must be interpreted to exclude the matters set out in the definition and in particular for the purposes of this case - securities and choses in action. So, for instance, a broker dealing in the purchasing and selling of securities could not be controlled by the provisions of the FCA for the reason that the broker would be supplying and purchasing securities for its clients. The question therefore is whether the Stock Exchange providing, as it does the services which facilitate the trading in securities which as will be seen hereunder comes within the regime of the Securities Act, would a fortiori be exempt from the provisions of the FCA by virtue of the definition of "goods".

15 The application of these definitions must of course be done in the context of the complaint which the FTC seeks to investigate and determine, to see whether the particular provisions of the FCA upon which it relies can be applicable to the JSE. The second amended complaint which speaks to the final allegations against the JSE reads as follows:

"Take notice that in the exercise of its general functions as set out at Section 5(1)(d) of the Fair Competition Act as well as its powers to make findings and issue directions in relation to abuse of dominant position under Section 21(1)...