Robert Tchenguiz and Another v Director of the Serious Fraud Office
| Jurisdiction | England & Wales |
| Judge | Mr Justice Eder |
| Judgment Date | 29 April 2014 |
| Neutral Citation | [2014] EWHC 1315 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case Nos. 2013 Folios 1450, 1451 |
[2014] EWHC 1315 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Mr Justice Eder
Case Nos. 2013 Folios 1450, 1451
Mr Alex Bailin QC, Mr Anton Dudnikov and Mr John Robb (instructed by Shearman & Sterling (London) LLP) appeared on behalf of the Claimants in 2013 Folios 1450 and 1451
Mr James Eadie QC, Mr James Segan and Ms Katherine Hardcastle (instructed by Slaughter and May) appeared on behalf of the Defendant
Hearing date: 11 April 2014
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
CPR 31.22
Introduction
This Judgment concerns an application by the claimants (the "RT claimants") with regard to their proposed use of certain documents disclosed by the defendant (the "SFO") in the course of the current proceedings.
In its original form, the application was in respect of two different categories of documents. The first category related to certain documents in respect of which the RT claimants wished to obtain legal advice from certain Guernsey lawyers. In the event, the SFO were "neutral" with regard to such application; and I made an order in effect permitting use of such documents for that purpose. It is unnecessary to say anything more with regard to such documents.
The second category related to some 198 documents which the RT claimants wish to provide to independent counsel not currently instructed in these proceedings for the purpose of obtaining such counsel's advice ("criminal advice") as to whether a certain third party, Grant Thornton UK LLP ("Grant Thornton") and/or any of its servants/agents and/or any officers/agents of the SFO have committed any criminal offences by reason of Grant Thornton having provided to the SFO false or misleading allegations of criminal conduct by the first claimant, Robert Tchenguiz ("RT"); or by Grant Thornton having made false statements in court proceedings; and by reason of the 'co-operative relationship' which was formed between Grant Thornton and the SFO during its investigation into RT. The RT claimants also wish to obtain advice as to the prospects of and procedures for the initiation of a criminal prosecution if the view is taken that any criminal offence was committed. I shall refer to all the foregoing as the "proposed course of action".
I should mention that for their part Grant Thornton (who were given notice of the RT claimants' application) have confirmed through their solicitors that they have no objection to the proposed course of action.
As set out in his skeleton argument, Mr Bailin QC on behalf of the RT claimants summarised the specific reasons for the proposed course of action as being that these documents appear to raise serious issues about whether individuals employed:
i) by Grant Thornton made false or misleading statements to the SFO when providing information under s2 Criminal Justice 1987 (" CJA 1987") which conduct may amount to a criminal offence under s2(14) CJA 1987;
ii) by Grant Thornton made false allegations of criminal fraud to the SFO in the course of a criminal investigation with intent that those allegations be taken seriously which conduct may amount to the criminal offence of perverting the course of justice;
iii) by the SFO agreed to perform their functions improperly ( e.g., by not acting independently; or by agreeing to provide Grant Thornton with information about RT or other aspects of the investigation) in exchange for an advantage from Grant Thornton ( e.g., obtaining information from Grant Thornton and/or its co-operation in the investigation) which conduct may amount to the criminal offence(s) of receiving or paying a bribe: ss1 and 2 Bribery Act 2010.
iv) by the SFO committed perjury in relation to the evidence placed before the Divisional Court.
The application
The application is made against the background of CPR 31.22 which provides as follows:
" (1) A party to whom a document has been disclosed may use the document only for the purpose of the proceedings in which it is disclosed except where —
(a) the document has been read to or by the court, or referred to, at a hearing which has been held in public;
(b) the court gives permission; or
(c) the party who disclosed the document and the person to whom the document belongs agree."
In passing, it may be noted that (as appears from Hollander, Documentary Evidence (11 th Ed) para 27–37) although this rule is relatively new, it was intended to re-state the law in relation to what had previously been an "implied undertaking" save as relates to documents read out in open court: see Marlwood Commercial Inc v. Kozeny [2005] 1 WLR 104 (CA) at para 10.
There are two separate limbs to the application. First, the RT claimants seek a declaration that they do not require the permission of the Court under CPR 31.22(1)(b) for the proposed course of action; alternatively, if they do require such permission, the RT claimants seek an order granting such permission.
I heard the application in relation to the proposed course of action on Friday 11 April 2014. At the end of the hearing, I indicated my conclusions in relation to both limbs viz (i) that permission was required for the proposed course of action; and (ii) that I would grant such permission. This Judgment sets out my reasons for these conclusions.
I deal with each limb in turn.
Is permission required?
Mr Bailin's primary submission was that permission was not required for the proposed course of action. In that context, Mr Bailin submitted in summary as follows:
i) A party who has been given disclosure is entitled to legal advice as to the meaning and implications. Such advice does not amount to collateral use of the disclosure and is within the " use … for the purpose of the proceedings in which it is disclosed": CPR 31.22(1). Advice on the implications of a disclosed document does not amount to use of that document for a collateral purpose.
ii) The contention that passing a disclosed document to a legal adviser for advice is an improper collateral use of that document is surprising as well as novel. The effect of the SFO's position would be that the RT claimants do not have an unfettered right to legal advice as to the legality of acts which affected them and courses of conduct which might be open to them.
iii) It is inherent within CPR 31.22 that a party's legal advisers must, without making any application under CPR 31.22, be able to read disclosed documents and advise on potential collateral proceedings (criminal or civil) which might arise from those documents. That advice does not constitute collateral use. It would only constitute collateral use (for which permission/consent would be required) if steps were taken to commence such proceedings e.g., by passing the documents to a relevant prosecutor. Were it otherwise, a party which wished to make an application under CPR 31.22 to deploy disclosed documents in collateral proceedings would already be in breach of CPR 31.22 by virtue of having advised on such use prior to the making of the application. Such a construction of CPR 31.22 would be perverse: c.f. the commentary in Hollander, §27–09.
iv) If the RT claimants' present legal advisers can read disclosed documents and advise on potential collateral proceedings (criminal or civil) which might arise from those documents, there can be no difference in principle if the RT claimants wish to use specialist, independent counsel for the criminal aspect. A litigant has an unfettered right to instruct a different lawyer for distinct aspects of his case. In general, a litigant who uses (or seeks to use) different lawyers for different proceedings or different aspects of related proceedings should be in no different position to a litigant who uses a single lawyer (or set of lawyers) for all his proceedings. CPR r 31.22 does not alter this: see e.g., Virgin Media Communications Ltd v. BskyB Group [2008] 1 WLR 2854, particularly at §§20, 25, 31.
As appears from those passages in Virgin Media v BskyB, I readily accept that there is a very strong desirability of any litigant being able to instruct the lawyer of his choice; that there is no reason why external lawyers should not be in the same position as in-house lawyers who receive disclosure subject to separate undertakings; and that it is hard to conceive of circumstances where disclosure in one set of proceedings would preclude lawyers from acting in other proceedings between the same parties. I am also prepared to assume (without deciding the point) that the RT claimants' existing team might well be entitled to advise on whether disclosed documents revealed any criminality; and I fully recognise that it may be difficult to draw the line between such a situation and the proposed course of action. In particular, I readily accept that it is difficult to suppose that the RT claimants' existing team would be in breach of CPR31.22 if, when reading these documents for the purpose of the present proceedings, they permitted their minds to wander to consider any possible criminality and gave advice to the RT claimants in relation thereto; that the suggestion of any breach in such circumstances might be said to be absurd; that a strict logician might say that there is no difference between such a situation and the RT claimants' proposed course of action; and that, on such basis, a construction of CPR31.22 which would, in effect, prevent the RT claimants from obtaining criminal advice from "external" lawyers is not only illogical but would...
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