AG v Pearce [2025] JRC 261 – director disqualification - Key Learning Points and lessons to learn

Jersey - AG v Pearce [2025] JRC 261  involves

• An application by the Attorney General (AG) under Article 78(2) of the Companies (Jersey) Law 1991 to disqualify Darius James Pearce from being a director or involved in the management of any company, foundation, or similar body corporate (in Jersey or elsewhere) without court leave.
• The application was heard on 4 September 2025 in the Royal Court of Jersey, with judgment delivered on 15 October 2025 by Commissioner A.R. Binnington and Jurats Le Cornu and Entwistle.

Background and Facts

• Pearce was convicted on 17 December 2020 of three counts of money laundering related to a major drug-trafficking enterprise, described as Jersey's most complex such investigation. He was sentenced on 5 July 2021 to 7.5 years' imprisonment.
• Through his company, Jersey Online Traders Limited (a jewellery and gold bullion business), Pearce laundered substantial sums by:
• (i) receiving cash in his shop;
• (ii) depositing it into personal or business accounts;
• (iii) buying gold bullion in London; and
• (iv) making the gold or proceeds available to criminals in the UK.
• The method was deemed "sophisticated" and directly involved the company.
• Pearce ignored the company's separate legal personality, mixing funds between personal and business accounts.
• He appealed his conviction and sentence unsuccessfully to the Jersey Court of Appeal (dismissed 26 January 2022) and the Privy Council (permission refused 20 May 2023).
• At the disqualification hearing, Pearce (appearing via video from prison) sought a third adjournment to have his mother represent him, which was refused as she was not a qualified advocate. He initially declined to participate but later made submissions, denying wrongdoing and showing no remorse.

Court's Decision

• The court granted the disqualification order, finding Pearce's conduct in relation to the company made him unfit to manage any corporation.
• The purpose of Article 78 is public protection (not punishment), as affirmed in precedents like In re Dimsey [2000] JLR 401.
• Disqualification period: 10 years, starting from the sentencing date (5 July 2021) rather than the order date, to account for appeal delays.
• This was below the AG's request for the maximum 15 years but in the "middle bracket" (6-10 years) for severe cases, per English guidance in Re Sevenoaks Stationers (Retail) Ltd [1991] Ch 164.

Reasons for the period:

• The criminality was serious and company-linked, with no remorse or acknowledgement of wrongdoing, necessitating strong public protection and deterrence.
• However, Pearce was not professionally qualified, there was no direct public financial loss, and the company was not essential to the crime (unlike cases of systemic corporate fraud in finance).
• The existing prison sentence already provided some deterrence.

The order bars Pearce from direct or indirect involvement in the management of companies, foundations under the Foundations (Jersey) Law 2009, or foreign-incorporated bodies in Jersey, without court permission.

Key Learning Points and LESSONS

This case underscores the Jersey courts' commitment to safeguarding the island's reputation as a well-regulated international finance centre by addressing director misconduct through disqualification.

Below are the primary learning points and LESSONS, drawn from the judgment and referenced authorities:

1. Purpose of Disqualification is Protection, Not Punishment:
• Orders under Article 78 are designed to protect the public, investors, creditors, and Jersey's financial reputation from unfit individuals, rather than to penalise them (as per In re Dimsey).
•  LESSON: Directors should view compliance not just as avoiding personal penalties but as upholding public trust; failure can lead to long-term exclusion from corporate roles even after criminal sanctions.
2. Unfitness Linked to Corporate Conduct:
• Criminal acts (e.g., money laundering) involving a company demonstrate unfitness if they exploit corporate structures, ignore separate legal personality, or involve sophistication (e.g., mixing personal/business funds).
•  LESSON: Directors must respect corporate governance principles; using a company as a "veil" for illegal activities risks disqualification, even if the company is incidental to the crime.
3. Lack of Remorse Aggravates the Outcome:
• Pearce's denial of wrongdoing and absence of regret extended the disqualification period, as it heightened public protection needs.
•  LESSON: Acknowledging errors, showing remorse, and cooperating (e.g., in investigations or hearings) can mitigate severity; persistent denial signals ongoing risk, leading to stricter measures.
4. Deterrence and Jersey's Reputation as a Finance Centre:
• The court emphasised deterring money laundering and similar abuses to protect Jersey's international standing (citing In the Matter of SPARC Group Limited [2022] (2) JLR 65). Aggravating factors include wider public interest, repeated offending, or professional expertise (though not present here).
•  LESSON: In jurisdictions like Jersey, directors face heightened scrutiny; actions that could tarnish the island's finance reputation (e.g., facilitating "ill-got gains") warrant deterrent disqualifications to signal zero tolerance.
5. Guiding Brackets for Disqualification Periods:
• Adopting English precedents (Re Sevenoaks Stationers), periods are bracketed: 2-5 years (minor cases), 6-10 years (serious), 11-15 years (severe, e.g., repeat offenders or major fraud). The AG's 2023 guidance highlights aggravating factors like losses, repetition, or public interest.
•  LESSON: Courts balance severity—here, middle bracket due to seriousness but absence of professional abuse or direct losses; directors should note that criminal sentences (e.g., imprisonment) complement but do not replace disqualifications.
6. Timing and Procedural Fairness:
• The period ran from sentencing (not the order date) to avoid rewarding delays from appeals. Multiple adjournments were refused to ensure efficiency.
•  LESSON: Exhausting appeals does not indefinitely delay consequences; self-represented parties must comply with rules (e.g., no non-advocate representation), and courts prioritise public interest over personal convenience.
7. Broader Public and Indirect Risks:
• Beyond direct harm, disqualification addresses indirect threats like reputational damage from money laundering (per R v Seager [2010] 1 WLR 815).
•  LESSON: Directors in any business (even local ones like retail) must ensure entities are not used for crime; this protects shareholders, employees, trading partners, and the public from fraud, incompetence, or regulatory failures.
8. AG's Role and Public Interest Threshold:
• The AG applies if disqualification is "expedient in the public interest" (Article 78(1)), but courts focus on unfitness (Article 78(2)).
•  LESSON: Regulators and prosecutors actively pursue disqualification post-conviction; companies and directors should prioritise ethical conduct to avoid triggering such interventions, especially in financial hubs.

CONCLUSION

• Overall, this case serves as a cautionary tale for directors: ethical lapses, particularly involving criminality, can lead to extended exclusion from corporate life, reinforcing Jersey's stance against using companies for illicit purposes.
• It highlights the need for robust internal controls, compliance training, and early legal advice in the event of potential misconduct.

SOURCE

https://www.jerseylaw.je/judgments/unreported/Pages/[2025]JRC261.aspx

REFERENCED AUTHORITIES

• Companies (Jersey) Law 1991.
• AG v Pearce [2021] JRC 203.
• In the Matter of Dimsey [2000] JLR 401.
• In the Matter of SPARC Group Limited (en désastre) 2022 (2) JLR 65.
• Re Sevenoaks Stationers (Retail) Ltd [1991] Ch 164.
• R v Seager [2010] 1 WLR 815.

AG v Pearce 15-Oct-2025

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Companies - reasons for granting the Attorney General's application

[2025]JRC261

ROYAL COURT

(Samedi)

15 October 2025

Before     :            A. R. Binnington, Esq., Commissioner, and Jurats Le Cornu and Entwistle

Between             The Attorney General   Representative

And        Darius James Pearce

               Respondent

IN THE MATTER OF THE APPLICATION OF THE ATTORNEY GENERAL IN THE MATTER OF DARIUS JAMES PEARCE

AND IN THE MATTER OF ARTICLE 78 OF THE COMPANIES (JERSEY) LAW 1991

Advocate J. P. Rondel for the Representor.

The Respondent appeared in person for part of the hearing.

JUDGMENT

THE COMMISSIONER:

1. On 4 September 2025, the Court sat to hear an application pursuant to Article 78(2) of the Companies (Jersey) Law 1991 (the "Companies Law"), that the Respondent should not, without the leave of the Court:

(i)        be a director of or in any way, whether directly or indirectly, be concerned or take part in the management of a company;

(ii)       be a member of the council of a foundation incorporated under the Foundations (Jersey) Law 2009 or, in any other way, directly or indirectly, be concerned or take part in the management of such a foundation; or

(iii)      in Jersey, in any way, whether directly or indirectly, be concerned or take part in the management of a body incorporated outside Jersey.

2. At the commencement of the hearing, the Respondent, who appeared by video link from H.M.P. La Moye, asked for the hearing to be adjourned to another day as he wished to be represented by his mother, who was unable to attend the date fixed for the hearing. When I was told that his mother, not being a Jersey Advocate, could not appear on his behalf, and that the Court wanted to proceed despite previous adjournments, the Respondent said he declined to participate further.  He, however, remained on the video link and made submissions later in the hearing.  This was the Respondent’s application for a third such adjournment.  The Representor’s application had been adjourned previously on 18 April 2024 at the Court’s own volition and 29 May 2024 upon the application of the Respondent.
3. At the conclusion of the hearing, the Court granted the application and ordered a disqualification for a period of 10 years.  The following are our reasons for that decision.

https://www.jerseylaw.je/judgments/unreported/Pages/[2025]JRC261.aspx