Rawlinson and Hunter Trustees S.A (as trustee of the Tchenguiz Family Trust) v Director of the Serious Fraud Office
| Jurisdiction | England & Wales |
| Judge | Lord Justice Moore-Bick,Lady Justice Gloster,Lord Justice Longmore |
| Judgment Date | 31 July 2014 |
| Neutral Citation | [2014] EWCA Civ 1129 |
| Docket Number | Case No: A3/2014/1352 |
| Court | Court of Appeal (Civil Division) |
| Date | 31 July 2014 |
[2014] EWCA Civ 1129
Lord Justice Longmore
Lord Justice Moore-Bick
and
Lady Justice Gloster
Case No: A3/2014/1352
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION (COMMERCIAL COURT)
Mr. Justice Eder
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr. Charles Hollander Q.C., Miss Rosalind PhelpsandMr. James Duffy (instructed by Stephenson Harwood LLP) for the appellants
Mr. Pushpinder Saini Q.C. and Mr. James Segan (instructed by Slaughter and May) for the respondent
Hearing date: 14 th July 2014
This is an appeal by Vincent Tchenguiz and others ("the VT parties") against the decision of Eder J. on an application under CPR 31.20 for permission to make use of certain documents said to have been disclosed by the respondent in error in litigation currently before the Commercial Court. Parallel proceedings have been brought against the same defendant by Robert Tchenguiz and others ("the RT parties") in which similar issues arise in relation to disclosure and in those circumstances they have sensibly agreed to be bound by the outcome of this appeal. For convenience I shall refer to the parties to this appeal as "the VT parties" and "the SFO" respectively.
The proceedings in the Commercial Court have their origin in the collapse of the Icelandic bank Kaupthing Bank hf. As a result of its investigations into the circumstances in which that occurred the SFO obtained warrants for the arrest of Robert and Vincent Tchenguiz and to search both their residences and certain premises of the various companies and trusts through which they pursue their business interests. Some of the warrants were eventually quashed following successful proceedings for judicial review, but the VT parties and the RT parties both say that the execution of those warrants, together with the attendant publicity, caused significant financial loss and reputational damage. The claims for damages which formed part of the claims for judicial review were transferred to the Commercial Court. The trial is due to start early in October 2014.
Disclosure has been a very onerous exercise, in particular because of the number and nature of the documents held by the SFO which have to be reviewed for relevance, public interest immunity ("PII"), statutory prohibitions on disclosure, legal professional privilege and the rights of third parties. At its peak the team of reviewers employed by the SFO numbered well over one hundred and included junior barristers, trainee solicitors, contract lawyers and paralegals assigned to different aspects of the work. In March 2013 Slaughter and May wrote to the appellants' solicitors on behalf of the SFO describing in broad terms how they intended to approach the task. In a letter dated 14 th March 2013 they explained that the documents in the SFO's possession fell into two categories: those relating to the investigation and those relating to the judicial review proceedings. The letter continued:
"The Judicial Review Work sat within the broader Investigation Work, in the sense that the judicial review proceedings were started at a point in time when the SFO's investigation into Kaupthing had already started and in circumstances where the SFO's investigation continued, albeit in a much reduced way, alongside the proceedings. A number of SFO employees found themselves engaged in both the Investigation Work and the Judicial Review Work.
The SFO is entitled to, and does, assert privilege claims in respect of both limbs of LPP, namely legal advice privilege and litigation privilege. However, in order to avoid debate as to the true scope of the privilege in the relevant context, and to avoid the burdensome task of identifying any documents, or parts of documents, which may fall within that privilege, the SFO does not, and will not, generally assert litigation privilege over internal communications within the SFO as regards its Investigation Work, save to the extent that such communications may also fall within the scope of legal advice privilege.
For the avoidance of doubt, our client does intend to assert its right to claim LPP over:
(a) communications with external legal counsel, and communications with internal SFO lawyers, in respect of issues where those lawyers were providing discrete legal advice to the investigation team in relation to the Investigation Work; and
(b) both the legal advice limb and the litigation privilege limb of LPP as regards the Judicial Review Work."
Similar explanations were expressed in letters written on 21 st May 2013 and in witness statements made in the proceedings by Mr. Cotton, a partner in Slaughter and May.
Documents were disclosed in the form of electronic copies together with covering lists also in electronic form, so that disclosure and production for inspection occurred simultaneously. When I use the word "disclosure" (or some cognate expression), therefore, it should be understood with that in mind. During December 2013 and January 2014 a large number of documents were disclosed to the VT parties by the SFO, including the following documents that are the subject of the present appeal:
(i) Document SFO-042290, a briefing note for the Intelligence Unit written by Katie Badger ("the Katie Badger document");
(ii) Document SFO-038047, a statement made by a former employee of the SFO, Wayil Eisa ("the Wayil Eisa statement");
(iii) Documents SFO-019016 and SFO-032717, comprising a short string of emails passing between the Treasury Solicitor and the SFO relating to a draft order that was to be placed before the court; and
(iv) Document SFO-016237, a PowerPoint presentation in respect of which PII was claimed.
Following correspondence between Slaughter and May and the appellants' solicitors, Stephenson Harwood, in which it was asserted that the documents had been disclosed inadvertently, the VT parties made an application to the court under CPR 31.20 for permission to make use of the documents in the proceedings. The application was resisted by the SFO on the grounds that the first three documents were subject to LPP and that disclosing them had been an obvious mistake. Eder J. held that each of those documents was indeed privileged and the fact that it had been disclosed by mistake obvious. Accordingly, he declined to give permission for their use.
In the case of the document in respect of which PII was claimed the SFO relied on a certificate issued by the Director (after disclosure had taken place) that the public interest in the administration of justice which would be served by disclosing it was outweighed by the public interest in withholding it from production. That certificate was not challenged and the judge exercised his discretion against allowing use to be made of the document.
Since different considerations apply to each of the documents, or group of documents, that are the subject of the appeal, it is convenient to deal with them separately. Before I do so, however, it is necessary to refer briefly to some of the authorities.
CPR 31.20 provides as follows:
"Where a party inadvertently allows a privileged document to be inspected, the party who has inspected the document may use it or its contents only with the permission of the court."
It is trite law that a party who is entitled to claim legal professional privilege in respect of a document is not bound to do so. He can, if he so chooses, waive privilege and allow the other party to the litigation to inspect it. It follows that it cannot be assumed that the production for inspection of a document to which privilege attaches must have inevitably have been inadvertent. Before the introduction of the CPR a party who inadvertently produced a privileged document for inspection could apply for an injunction to restrain its use. Although the jurisdiction to grant relief was discretionary, it was the established practice of the court to grant an injunction only in cases where it was satisfied that production had been obtained by fraud or where it was obvious that the document had been disclosed by mistake. (No question of fraud arises in this case and there is no need to refer to it again.) The starting point in such cases has always been that a party who is allowed to inspect documents is entitled to assume that they were produced for that purpose voluntarily. In Pizzey v Ford Motor Co. Ltd [1994] P.I.Q.R. 15 Mann L.J., (with whom the other members of the court agreed) having referred to a number of earlier authorities, including Goddard v Nationwide Building Society [1987] Q.B. 670, Guinness Peat Properties Ltd v Fitzroy Robinson Partnership [1987] 1 W.L.R. 1027 and Derby & Co. Ltd v Weldon (No. 8) [1991] 1 W.L.R. 73 said at page 21:
"Slade L.J.'s use of the phrase "obvious mistake" does not seem to me founded on any authority, but the use was repeated by Dillon L.J. in Derby & Co. Ltd in the passage which I have quoted. I respectfully agree with the usage. It is of the utmost importance in the context of litigation that a party should be able to rely on the discovery of his adversary. Exceptions to that ability must not extend beyond fraud and mistake. Cases of mistake are stringently confined to those which are obvious, that is to say those which are evident. This excites the question: Evident to whom? The answer must...
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