Istel (AT & T) Ltd v Tully

JurisdictionEngland & Wales
CourtHouse of Lords
JudgeLord Templeman,Lord Griffiths,Lord Ackner,Lord Goff of Chieveley,Lord Lowry
Judgment Date20 Jul 1992
Judgment citation (vLex)[1992] UKHL J0720-2

[1992] UKHL J0720-2

House of Lords

Lord Templeman

Lord Griffiths

Lord Ackner

Lord Goff of Chieveley

Lord Lowry

AT & T Istel Limited and Others
(Appellants)
and
Tully (A.P.) and Another (A.P.)
(Respondents)
Lord Templeman

My Lords,

1

This appeal concerns the ambit of that right to silence which is known as the privilege against self incrimination and entitles any person to refuse to answer questions or to disclose documents if to do so would tend to expose him to proceedings for a criminal offence. The plaintiffs' claim in these proceedings is based on allegations of a complicated fraud said to have been perpetrated by the first defendant Mr. Tully in conspiracy with his wife the second defendant Mrs. Tully and with all or some of the other first 16 defendants.

2

By a contract made as from 1 April 1988 Wessex Regional Health Authority ("Wessex") engaged the second plaintiff company ("Abbey") to provide computer services. At that time Abbey was controlled by Mr. and Mrs. Tully and their family settlement trustees. By a written agreement dated 26 May 1988 the first plaintiff company ("Istel") agreed to buy the entire share capital of Abbey and its subsidiary companies for the sum of £2,550,000.00. Mr. Tully remained a director of Abbey and continued to play a prominent part in its management.

3

In 1991 Wessex entertained the suspicion that they had been and were being swindled by Abbey and in particular by Mr. Tully and certain employees of Wessex and Abbey and others. The alleged swindle took the form of charging Wessex for computer services which had not been rendered and double charging for services which had been rendered by a multiplication of invoices and false entries. The sums involved were suspected to run into millions of pounds. A police investigation followed and a number of people including Mr. Tully were arrested and questioned but so far no charges have been laid.

4

The plaintiffs, alerted by claims put forward against Abbey by Wessex for damages and repayment of monies wrongly extracted from Wessex carried out their own investigations and now by these present proceedings allege a large commercial fraud. It is said that invoices were raised against Wessex on behalf of Abbey and that when payment was received by Abbey the monies were diverted by Mr. Tully and others and were partly dissipated in bribes and partly disguised and concealed in various bank accounts and other havens. The first 16 defendants are said to have been involved in the fraud or in receiving and laundering the money involved. The 17th-24th defendants are banks and other institutions innocent of the fraud but in possession of correspondence, bank accounts and other documents which would enable the plaintiffs to trace monies derived from Abbey. The 25th defendant Wessex is sued more prosaically for breach of the contract dated 1 April 1988 which has been repudiated by Wessex on the grounds of fraud.

5

As a general rule a plaintiff is entitled to disclosure and discovery of all dealings and documents relevant to the plaintiff's claim and the defendant is entitled to the like relief from the plaintiff relevant to the defence. In the present case disclosure by Mr. and Mrs. Tully of their dealings and documents with the affairs and money of Abbey and its subsidiaries will enable the plaintiffs to complete their investigation and to trace the fate of monies paid by Wessex and monies which were received or ought to have been received by Abbey and to recover such monies and to recover damages for any wrongful dealings with those monies. All the allegations made by the plaintiffs are denied by Mr. and Mrs. Tully but, of course, if there has been no fraud, the disclosure by Mr. and Mrs. Tully of their dealings and correspondence will not cause any harm but will on the contrary demonstrate that the suspicions of the plaintiffs are ill-founded. Accordingly on 5 June 1991 Buckley J. made against various defendants orders for disclosure and discovery including an order in paragraph 18 that Mr. Tully should make and serve on the plaintiffs' solicitors an affidavit:

"(a) setting out with full particulars all dealings by the first defendant or anyone on his behalf with:-

  • (i) the monies referred to in schedule 1 to this order; and

  • (ii) all and any sums or assets representing or derived from those monies; and …

(c) exhibiting copies of all documents which relate to the receipt or transfer of, or dealing with all such assets, and in particular all such documents as are set out in schedule 3 hereto and are in the possession custody or power of the first defendant."

6

Schedule 1 includes references to certain specified sums paid out or received by Abbey or Wessex, some of the monies said to be "in respect of charges which were not due and/or were inflated". Schedule 3 specifies all documents, correspondence and memoranda relating to any accounts or assets, owned or controlled by the first sixteen defendants, and to their dealings with the assets of the defendants or the sums described in the 1st Schedule. In paragraph 19 of the order Mrs. Tully was ordered to make an affidavit corresponding to that required from Mr. Tully. Wright J. set aside paragraphs 18(a) and (c) and 19(a) and (c) of the order dated 5 June 1991 on the grounds that they infringe the defendants' privilege against self incrimination. The Court of Appeal agreed with Wright J. Mr. Tully is in effect saying that if he discloses his dealings with his assets or the monies of Wessex and Abbey and if he furnishes copies of the documents relating to those dealings he will be providing evidence which may assist the police to prosecute him for the crime of embezzlement. As is always the case with the privilege against self incrimination, the greater the fraud or other wrongdoing of the person claiming the privilege, the greater, it is said, is his need for protection. The plaintiffs, not finding this submission very attractive, now appeal.

7

In his speech in Reg. v. Director of Serious Fraud Office, Ex parte Smith [1992] 3 W.L.R. 66, 74 my noble and learned friend Lord Mustill identified six "rights of silence" namely:

  • "(1). A general immunity, possessed by all persons and bodies, from being compelled on pain of punishment to answer questions posed by other persons or bodies.

  • (2). A general immunity, possessed by all persons and bodies, from being compelled on pain of punishment to answer questions the answers to which may incriminate them.

  • (3). A specific immunity, possessed by all persons under suspicion of criminal responsibility whilst being interviewed by police officers or others in similar positions of authority, from being compelled on pain of punishment to answer questions of any kind.

  • (4). A specific immunity, possessed by accused persons undergoing trial, from being compelled to give evidence, and from being compelled to answer questions put to them in the dock.

  • (5). A specific immunity, possessed by persons who have been charged with a criminal offence, from having questions material to the offence addressed to them by police officers or persons in a similar position of authority.

  • (6). A special immunity …, possessed by accused persons undergoing trial, from having adverse comment made on any failure (a) to answer questions before the trial, or (b) to give evidence at the trial."

8

Lord Mustill considered, at pp. 74-75 that:

"Each of these immunities is of great importance, but the fact that they are all important and that they are all concerned with the protection of citizens against the abuse of powers by those investigating crimes makes it easy to assume that they are all different ways of expressing the same principle, whereas in fact they are not."

9

This appeal is concerned with the second right to silence, an immunity from being compelled on pain of punishment to answer questions which may incriminate. In the present case if Mr. Tully refused to disclose his dealings with the monies of Abbey or Wessex or refused to produce copies of the documents relevant to those dealings, he would be in breach of the order of Buckley J. and liable to be fined or imprisoned by the judge for contempt of court.

10

The speech of Lord Mustill to which I have referred discussed the motives for the evolution and retention of the privilege against self incrimination, at p. 75C:

"The first is a simple reflection of the common view that one person should so far as possible be entitled to tell another person to mind his own business."

11

This reasoning cannot apply to the present case. If Mr. Tully had not dealt with the monies of Abbey or Wessex he would be able to tell the plaintiffs to mind their own business. But if he has had dealings with such monies then those monies were the business of the plaintiffs as well as the business of Mr. Tully and he cannot fairly tell the plaintiffs to cease to bother him about those monies. If Mr. Tully has good grounds for exercising the privilege against self incrimination, then his refusal to comply with the orders for disclosure and discovery made by Buckley J. may have the effect of assisting Mr. Tully to escape prosecution and punishment for a crime and also the effect of assisting Mr. Tully and others to keep money which belongs to Abbey.

"Secondly, there is a long history of reaction against abuses of judicial interrogation. The Star Chamber and the Council had the power to administer the oath and to punish recusants; and literally to press confessions out of those under interrogation. Even after the abuses of the Star Chamber had been curbed the magistrates, who in the absence of a police force had some of the functions of the modern juge d'intruction, had power to interrogate the accused before trial." (p. 75)

12

This reasoning also does not apply to the present case. It is true that if Mr. Tully fails to comply with the order of Buckley J. he...

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