ROBERT TCHENGUIZ and Others v THE SERIOUS FRAUD OFFICE HM PROCUREUR for GUERNSEY (Intervenor)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Eder |
| Judgment Date | 28 July 2014 |
| Neutral Citation | [2014] EWHC 2597 (Comm) |
| Docket Number | Case No: 2013 Folios 1450 and 1451 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 28 July 2014 |
[2014] EWHC 2597 (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 No: 2013 Folios 1450 and 1451
(in its capacities as trustee of the TDAT and NS One Trust)
and
MISS CATHERINE NEWMAN QC (instructed by Stephenson Harwood) for the Claimants
MR PUSHPINDER SAINI QC and MR JAMES SEGAN (instructed by Slaughter & May) for the Defendant
MR KHAWAR QURESHI QC (instructed by Laytons LLP) for the Intervener
Hearing date: 21 July 2014
On 21 July 2014 I heard an application on behalf of the first claimant ("RT") for the following orders:
i) Permission be granted under CPR r.31.22(1)(b) for Stephenson Harwood LLP to give the 22 documents listed in Schedule 1 to this Order (the "Guernsey Documents") to lawyers ("Guernsey Counsel") instructed on behalf of (a) the First Claimant, (b) Rawlinson & Hunter S.A. in its capacity as Trustee of the Tchenguiz Discretionary Trust ("TDT") and/or (c) the minor beneficiaries of the TDT.
ii) Permission be granted under CPR r.31.22(1)(b) for Guernsey Counsel (if so advised) to seek to have the Guernsey Documents admitted in evidence in the case of Investec and another v Glenalla Properties Ltdand others, Court file no. 1462/2010 (the "Guernsey 1 proceedings") and in any appeal(s) in those proceedings.
iii) Permission be granted under CPR r.31.22(1)(b) for Stephenson Harwood LLP to give the Guernsey Documents to counsel ("Criminal Counsel") instructed to advise the First Claimant on whether the documents seen by Criminal Counsel show or tend to show that criminal offences have been committed by Grant Thornton UK LLP and/or any servants or agents of Grant Thornton UK LLP and/or any officers/agents of the SFO.
At the outset of the hearing, an application was made on behalf of the HM Procureur for Guernsey ("HMP") to intervene in this application. That application to intervene was not opposed by RT or the SFO. In the circumstances, I granted the application to intervene.
At the end of the hearing, I informed the parties of my decision viz I would grant the permission sought under paragraphs (i) and (iii) above; but I would decline to grant the permission sought as set out in paragraph (ii) above. This Judgment sets out my reasons for those decisions.
The Guernsey 1 proceedings as referred to in paragraph 1(ii) above are proceedings in the Royal Court of Guernsey. They are described in paragraphs 25 and 26 of the second witness statement of RT and paragraph 97 of the claimants' Further Particulars of Fact. In summary they relate to certain arrangements described as " intercompany loans". The trial of the Guernsey 1 proceedings took place during June 2012. Judgment was delivered by Lieutenant Bailiff Sir John Chadwick on 6 December 2013. In particular, he held that the intercompany loans which Investec Trust (Guernsey) Ltd as trustee of the TDAT ("ITGL") had carried out gave rise to valid loans between ITGL and two other entities referred to as Glenalla and Thorson in the sums of approximate £62.7m and £80.6m respectively; that there was no loan agreed between ITGL and another entity referred to as Oscatello, but instead Oscatello had a valid claim in restitution against ITGL in the sum of approximate £39.4m; that ITGL was personally liable to these companies, rejecting ITGL's case that it was entitled to limit its liability; and that ITGL was nevertheless entitled to be indemnified from the TDT trust assets for these liabilities. He also rejected the case advanced by Rawlinson & Hunter S.A. ("R&H") that ITGL should not be entitled to any indemnity because he held that ITGL had not acted unreasonably or grossly negligently.
Appeals have been brought by ITGL and by R&H. The grounds of appeal are lengthy. The Guernsey Court of Appeal hearing was due to take place between 23–28 June 2014. In the event, RT and the minor beneficiaries of the TDT intervened and successfully applied for part of the appeal affecting them to be adjourned until October 2014. This adjournment was sought and granted on the basis that there were a number of documents disclosed by the SFO in these proceedings which, according to the proposed interveners, would satisfy the Ladd v Marshall [1954] 1 WLR 1489 test for the admission of fresh evidence.
The documents in question consist of 22 documents (and possibly others). The nature and content of these Guernsey Documents are described in paragraphs 27–35 of RT's second witness statement. The Guernsey lawyers representing RT, R&H and the minor beneficiaries have not yet been permitted to see these Guernsey Documents.
Nevertheless, as appears from the second witness statement of RT and as submitted by Miss Catherine Newman QC on behalf of RT, it is said that the Guernsey Documents and the information they contain are relevant to the Guernsey appeal. By agreement of the parties, the Guernsey Documents were provided at this hearing in a "confidential" file. It was agreed that they should be treated as confidential and, by consent, I made an order to that effect. Although most of the present hearing was held in public, in order to preserve confidentiality and by agreement of the parties, certain parts of the hearing took place (with my approval) in private whenever it was necessary to refer in any detail to the contents of the Guernsey Documents. Accordingly, in this Judgment, I will not refer in any detail to the contents of the Guernsey Documents. For present purposes, it is sufficient to say that, as set out in her skeleton argument, Miss Newman submitted that the Guernsey Documents and information that they contain are relevant to the Guernsey appeal in (at least) the following respects:
i) The documents are relevant to a specific and potentially crucial factual point namely the question of whether ITGL senior staff knew of and authorised certain bookkeeping entries carried out by an employee named Louw Rabie in July and October 2008.
ii) The documents are relevant to the respective credibility of ITGL's and R&H's witnesses. In particular, Miss Newman submitted that LB Sir John Chadwick had failed in his judgment to deal in an even handed or adequate manner with the witness evidence. This was one of R&H's Grounds of Appeal.
iii) The documents reveal and/or suggest a wider narrative of interaction between the SFO and ITGL prior to the Guernsey 1 proceedings.
iv) The Guernsey Documents suggest the likely existence of documents which would have been in the possession and control of ITGL and which ought in the ordinary course of events to have been disclosed in the Guernsey 1 proceedings.
Miss Newman accepts that the proposed use of these Guernsey Documents is subject to the restriction contained in CPR 31.22 which provides in material part 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."
Whether or not the Guernsey Documents (and any other documents for which permission may subsequently be granted by this Court) can be admitted in the Guernsey appeal will – subject to the outcome of this present application – depend on the outcome of a further hearing in Guernsey during the week of 8 September 2014 when the Guernsey Court of Appeal will decide whether the Ladd v Marshall criteria for the admission of fresh evidence on appeal are satisfied.
I have already considered the applicable legal principles in relation to CPR 31.22 in my previous two Judgments in these proceedings, which I shall refer to as the "Criminal Advice Judgment" and the "Review Team Judgment", which I delivered on 29 April 2014 and 16 July 2014 respectively. I do not propose to repeat what I said in those two Judgments. For present purposes, it is sufficient to set out what Miss Newman submitted were the relevant applicable legal principles in the context of the present applications which were summarised in her skeleton argument as follows:
i) The relevant test is "the interest of justice which involves considering the interest of the party seeking to use the documents and that of the party protected by the CPR r 31.22 order": SmithKline Beecham Plc v. Generics (UK) Ltd [2004] 1 WLR 1479, §37.
ii) The public interest principle of discovering the truth and making full disclosure "operates in favour of releasing relevant documents from hub into satellite proceedings as long as no significant injustice is done to the disclosing party": Cobra Golf Inc v. RATA [1996] FSR 819, 831.
iii) The court will not modify the undertaking unless there are "special circumstances" and where to do so will not do "injustice to the party giving discovery": SmithKline Beecham Plc v. Generics (UK) Ltd [2004] 1 WLR 1479, §36.
iv) For "special circumstances" to exist it is enough that there is a special feature of the case which affords a reason for modifying or releasing the undertaking and is not usually present. The matter then becomes one of the proper exercise of the Court's discretion, many factors being relevant. It is neither possible nor desirable to propound an exhaustive list of those factors, but they include the following, Re Springfield Nominees Pty Ltd v Bridgelands Securities Ltd [1992] FCA 472, (1992) 110 ALR 685 (Australian Federal Court of Appeal) at [22], [26]:
(a) the nature of the document;
(b) the circumstances under which it came into...
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