Bank of Nordkavn v Secretary for Interior

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Norsk Financial Services CA v Secretary for Interior
Register number: CAC1/1/2018/E

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Court of Appeal for the First Circuit
Proceedings initiated May 21, 2018
Decided May 30, 2018
Full case nameNorsk Financial Services CA (Appellant/Cross-respondent) v Secretary for Interior (Respondent/Cross-appellant)
Citations[2018] CAC1 1
Prior historyDistrict Court for Eskhavn, [2018] DCEK 1
Court membership
The Chancellor of Nordkavn
Holding
The Secretary for Interior cannot act under 10 N.F.C. §19(a) unless the relevant party is exercising functions of a public authority. District Court for Eskhavn reversed.
Laws applied
10 N.F.C. §19

Bank of Nordkavn v Secretary for Interior was a case before the Court of Appeal for the First Circuit of the Nordkavn Federation. The case originated from the Bank of Nordkavn (Freedom of Information) Directive 2018, issued by the Secretary for Interior, that declared that the commercial Bank of Nordkavn was exercising functions of a public nature, and was thus bound to comply with freedom of information requests.

The First Circuit held that the Secretary for Interior cannot issue such a directive unless the relevant party is exercising the specific functions of a public authority.

The case was the first to be heard by the Norsk judiciary.

Background

Norsk Financial Services CA, an Aarborg corporation, was a registered bank trading as the Bank of Nordkavn. At the time the Bank of Nordkavn (Freedom of Information) Directive 2018 was issued, the bank held every consumer bank account on the Secure Payment System.

The directive was issued on the 19th May 2018 in exercise of the power vested by 10 N.F.C. §19, which allows the Secretary for Interior to require that a party (other than a public authority) comply with freedom of information requests if it appears to the Secretary that the party is exercising functions of a public nature.

District Court for Eskhavn

The bank began proceedings on the 21st May 2018 in the District Court for Eskhavn, alleging that the Secretary had committed an error of law in their application of section 19. Furthermore, the bank also sought relief on the grounds that the Secretary did not take submissions from the bank before issuing the directive and did not provide their reasons for issuing the directive. The bank sought a declaration that the directive was unlawful and thus invalid.

Artemis Langford of Jurisfocal represented the bank; James Frisch represented the government.

Augustus J found for the Secretary, holding that the de facto monopoly over consumer spending held by the bank was sufficient to allow the Secretary to issue the directive. In response to the secondary questions, the court held that the Secretary was under no obligation to take submissions from the bank before issuing the directive, but that the Secretary could be compelled to give their reasons for issuing the directive under the provisions of the Freedom of Information Act 2018.

Court of Appeal for the First Circuit

The bank appealed to the First Circuit. In its application, the bank alleged that the District Court erred by failing to consider the commercial nature of the bank’s business activities. The Secretary cross-appealed, alleging that the District Court erred by holding that the Secretary could be compelled to give reasons for a decision under the provisions of the Freedom of Information Act.

Opinion of the Court

Chancellor Clark disagreed with the findings of the District Court. He ruled that the Secretary for Interior had overstepped the boundaries of the Act, which was intended only to regulate public authorities or other parties that were carrying out the functions of those public authorities.

It is clear from a reading of the Act that it is specifically concerned with the regulation of public authorities. I do not consider that it was intended to have broader effect, and it is certainly not primarily concerned with furthering corporate accountability. Hence, I conclude that a narrow reading of section 19 should be adopted.

I do not consider that the commercial nature of the bank’s activities is sufficient to support this appeal. A party may be carrying out activities of a commercial nature and still also be carrying out functions of a public authority. However, while the bank may be exercising a degree of control over a public service, it is not carrying out the specific functions of any public authority. Accordingly, for the purposes of section 19, it is not exercising functions of a public nature. The directive is unlawful.[1]

The judgement was the Chancellor's first judgement in Nordkavn.


References