Bishopsgate Investment Management Ltd v Maxwell; Cooper v Maxwell; Mirror Group Newspapers Plc v Maxwell
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE DILLON,LORD JUSTICE STUART-SMITH,LORD JUSTICE MANN |
| Judgment Date | 11 February 1993 |
| Judgment citation (vLex) | [1992] EWCA Civ J0129-1 |
| Docket Number | 92/0017 |
| Court | Court of Appeal (Civil Division) |
| Date | 11 February 1993 |
[1992] EWCA Civ J0129-1
Lord Justice Dillon
Lord Justice Stuart-Smith
Lord Justice Mann
92/0017
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(MR JUSTICE HOFFMANN)
Royal Courts of Justice
MR GAVIN LIGHTMAN Q.C., MR ANTHONY JONES Q.C., MR PHILIP MARSHALL and MR MICHAEL BRIGGS, instructed by Messrs Peters & Peters, appeared for Kevin Francis Herbert Maxwell (Appellant in the Bishopsgate appeals and the Cooper appeal, Respondent in the Mirror Group appeal).
MR CHARLES FALCONER Q.C., MISS LEXA HILLIARD and MR MARTIN MOORE, instructed by Messrs Lovell White Durrant, appeared for Mirror Group Newspapers Plc and Mirror Group Newspapers Limited (Appellants in the Mirror Group Appeal).
MR PHILIP HESLOP Q.C., MR JOHN BRISBY and MR MALCOLM DAVIS-WHITE, instructed by Messrs Stephenson Harwood, appeared for the Respondents in the Bishopsgate and Cooper appeals.
The court has before it expedited appeals against orders made by Hoffmann J. in the Chancery Division on 23rd December 1991. Mr Kevin Maxwell ("Mr Maxwell") is a party to each of the appeals either as appellant or as respondent. The appeals raise questions of law of considerable general importance, irrespective of the particular facts concerning Mr Maxwell, as to whether Mr Maxwell is or is not entitled to rely on the well-known privilege against self-incrimination and consequently to refuse to answer questions which he has been required to answer by the court, or which it is sought to put to him.
In each of the cases Hoffmann J., in making his orders, followed the rulings of law of another judge sitting at first instance in a case between other parties. This, sitting at first instance, he was plainly right to do, leaving it to this court to consider whether the earlier rulings of other judges were correct.
Three of the appeals concern a company called Bishopsgate Investment Management Limited ("Bishopsgate"). On these appeals ("the Bishopsgate appeals") Mr Maxwell is the appellant, and the issue is between Mr Maxwell and the provisional liquidators of Bishopsgate. The main question on the appeals is whether Mr Maxwell is entitled to reply on the privilege against self-incrimination to refuse to answer questions put to him by the provisional liquidators under sections 235 and 236 of the Insolvency Act 1986.
This question of law is one on which there has been disagreement recently between judges of the Chancery Division sitting at first instance. In a case of Re Barlow Clowes Gilt Managers Limited, decided on 31st July 1990, Ferris J. held that a person being examined under section 236 was entitled to rely on the privilege. An appeal to this court is pending against that decision. In Re Jeffrey S. Levitt Limited, however, decided on 29th October 1991, Vinelott J., having considered the judgment of Ferris J., reached the opposite conclusion, viz. that the privilege was not available. An application by Mr Levitt, the individual involved in Jeffrey S. Levitt, for leave to appeal against the order of Vinelott J. is pending before this court. Then in Re Farr Plc decided on 29th November 1991 the same question of the availability of the privilege came before Ferris J. for the second time; he decided - rightly in the circumstances - that he ought to follow the considered judgment of Vinelott J. rather than his own earlier judgment, and he gave leave to appeal. In Mr Maxwell's case Hoffmann J. likewise followed the decision of Vinelott J. and gave leave to appeal.
In Re Barlow Clowes Gilt Managers and Re Jeffrey S. Levitt criminal charges had already been brought against the individuals concerned before the judges' orders in relation to the privilege against self-incrimination were made. Accordingly the appeals in those cases will raise the further issue whether, even if the privilege against self-incrimination is not available, it would nonetheless be unfair, or oppressive, to allow questioning under section 236 while the criminal proceedings are pending. That is a matter discussed in a recent decision of this court in Re London United Investments Plc (" LUI") in which judgments were handed down on 19th December 1991. It does not, however, arise in Mr Maxwell's case since no charges have yet been brought against Mr Maxwell; the conclusion of Hoffmann J. that it would not be oppressive for Mr Maxwell to be questioned if the privilege is not available, is not challenged on the Bishopsgate appeals.
That there happen to be three Bishopsgate appeals, rather than just one, is a result of the procedural course followed through the endeavours of both parties to get the issues resolved, and in the case of the provisional liquidators to get information if they can, as speedily as possible. Nothing turns on it, and it is not necessary for me to go into details of the proceedings.
The remaining appeal before us is an appeal by Mirror Group Newspapers Plc and Mirror Group Newspapers Limited, to which Mr Maxwell is respondent. Mirror Group Newspapers Plc ("Mirror Group") is the parent of the group of companies which publishes the Daily Mirror newspaper, among other newspapers. Mirror Group Newspapers Limited is the actual company in the Group which publishes the Daily Mirror. Both companies have started an action against Mr Maxwell and others in which they have claimed an account of all monies or other assets of the plaintiffs removed or transferred away from the plaintiffs by or at the direction of or on behalf of the defendants, an order that the defendants do provide all information and documents relevant to all dealings which they or Robert Maxwell deceased had with the plaintiffs' money and assets, declarations as to the tracing of assets, damages for breach of trust or breach of duty, damages for conversion or wrongful interference with the plaintiffs' property and damages for fraud, with other relief.
In that action, an order has been made against Mr Maxwell requiring him to supply information to the plaintiffs about various drawings of large sums of money from Mirror Group's bank accounts, and he has relied on the privilege against self-incrimination to relieve him from the obligations under that order.
Neither Mirror Group nor Mirror Group Newspapers Limited is in liquidation, in administration, or in administrative receivership. Accordingly, they cannot invoke any of the provisions of the Insolvency Act 1986, and have to reply on the general law. They submit, however, with particular reliance on a trio of cases decided in the last century to which I shall in due course come, that under the general law the privilege against self-incrimination is not available to a defendant if, immediately before the material time, the defendant was a fiduciary, servant or agent of the plaintiffs in the action and the plaintiffs are by the action seeking to recover from the defendant monies or property of the plaintiffs, or an account of or information about such monies or property, for which the defendant, as such fiduciary, servant or agent, is accountable to the plaintiffs in equity. A similar submission was rejected by Sir Nicolas Browne-Wilkinson V.-C., sitting at first instance, in Tate Access Floors Inc. v. Boswell [1991] Ch. 512 at 528, which is for present purposes indistinguishable from the present case. Hoffmann J., again correctly in the circumstances, followed the decision of the Vice-chancellor, leaving its correctness to be determined by this court.
By a respondent's notice in the Bishopsgate appeals, the provisional liquidators of Bishopsgate claim to rely in the Bishopsgate appeals on the arguments advanced for Mirror Group on its appeal - i.e. if the primary contention that the privilege against self-incrimination is not available to a person being questioned under sections 235 or 236 of the Insolvency Act 1986 fails, they contend that, because of his position as a person accountable in equity, Mr Maxwell is not entitled to rely on the privilege as against Bishopsgate, and they rely on the three authorities relied on by Mirror Group.
It is unnecessary to go into the facts in any detail.
The various proceedings arise as a result of investigation of the affairs of Mirror Group and associated companies since the sudden death of Mr Maxwell's father, Robert Maxwell, on or about 5th November 1991.
Bishopsgate has since March 1988 been the investment trustee of a common investment fund then established for the Mirror Group Pension Scheme and certain other pension schemes for companies connected with Robert Maxwell. Mr Maxwell was himself a director of Bishopsgate from February 1988 until he resigned on 4th December 1991. As a result of inquiries since Robert Maxwell's death, it appears that very large amounts of money and assets which ought to be comprised in the common investment fund are not, apparently, there and have not as yet been traced, while other investments and monies which were part of the common investment fund have been traced into the hands of banks or other third parties which claim rights of security. As Robert Maxwell is dead, Mr Maxwell is one of the most obvious persons for the provisional liquidators to want to question to find out as a matter of the highest urgency what has happened, and to make good the apparent deficiencies...
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