Robert Tchenguiz and Others v Director of the Serious Fraud Office Rawlinson and Hunter Trustees S.A. (a company incorporated in Switzerland, in its capacities as trustee of the Tchenguiz Discretionary A Trust and the NS One Trust (Intervening Party)

Hearing dates: 8 December 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.

This is an application originally made on behalf of Mr Robert Tchenguiz ("RT") for permission under CPR 31.22(1)(b) to make collateral use of some 57 documents disclosed to him by the Serious Fraud Office ("SFO") in these proceedings, by seeking to adduce those documents in a pending appeal by Rawlinson & Hunter Trustees S.A. ("R&H") in certain other proceedings in Guernsey (the "Guernsey proceedings"). That appeal is, I am told, now due to be heard in mid-February 2015. RT had originally made this application alone, but he was refused permission by the Guernsey Court of Appeal to intervene in such pending appeal by a Judgment of that Court dated 10 September 2014. As a result, R&H made an application to be joined to this application so as to stand in RT's place which the SFO did not oppose and which I accordingly granted.

This application under CPR 31.22(1)(b) has some similarity to a previous application which I determined earlier this year in respect of 22 other documents. My Judgment is reported at [2014] EWHC 2597 (Comm); and was recently upheld by the Court of Appeal: see [2014] EWCA Civ 1409. The background to the present application (which I do not propose to repeat) is set out in those Judgments. For present purposes, I would refer, in particular, to the law as stated in the Judgment of Jackson LJ at [55]–[66] and the summary of the general principles with regard to the balancing exercise at [66].

However, although the present application has some similarity to the previous application, Miss Newman QC on behalf of R&H emphasised (rightly) that there are certain important differences between them; and that the balancing exercise to be performed must, of course, be carried out by reference to the particular documents which are the subject of the present application. In particular, it is important to note that, unlike the previous application, the vast majority of the 57 documents have not been generated as a result of the interaction between the SFO and any foreign authority concerning a criminal investigation. That is, I accept, an important difference. Notwithstanding, as appears from the authorities cited by Jackson LJ (in particular, the passage from the speech of Lord Hope in Taylor v Director of the Serious Fraud Office [1999] 2 AC 177 cited by Jackson LJ at [58]) and as summarised by Jackson LJ at [66(iv)], there is a strong public interest in preserving the integrity of criminal investigations and protecting those who provide information to prosecuting authorities from any wider dissemination of that information other than in the resultant prosecution.

At the outset, I should say that, in my view, the balancing exercise which I am required to perform under CPR Part 31.22 has been somewhat hampered in the present case. In particular, it is important to note that the 57 "documents" extend in total to over 500 pages. These include some (but very few) documents provided to the SFO; some emails/correspondence between the SFO and third parties; and, more importantly, a large number of detailed internal notes prepared by the SFO recording discussions with third parties (in particular, representatives of Grant Thornton) over an extended period in the course of the criminal investigation as well as the SFO's internal assessments, from time to time, of such investigation and its recommendations about future action. (I should mention that at the request of the SFO and with the agreement of R&H, I ordered that the detailed content of such material should remain "confidential" and certain parts of the hearing were therefore held "in private". For this reason, I do not propose to refer in detail to the contents of such material in this public Judgment.)

In considering this material and the necessary balancing exercise, it seems to me absolutely essential to understand what are said to be (i) the specific propositions of fact which are allegedly to be derived from the documents in question; and (ii) the relevance – or at least the potential relevance – of such alleged propositions of fact to the proposed pending appeal in Guernsey. Until recently, it seems to me that R&H (and previously RT) had failed to grapple properly with these two aspects which are, in my view, fundamental to a proper determination of the application. As appears from the correspondence between the parties in the lead up to the hearing of the present application, it would seem that those acting for RT/R&H sought to criticise the SFO for "lack of engagement" on its part and, in particular, for failing to agree to a meeting and to come forward with concrete proposals (e.g. some form of "gisting exercise") by way of possible compromise as to the potential use of these documents – criticism which was repeated with some vigour in Miss Newman's skeleton argument on this hearing and in her oral submissions.

Whilst I should emphasise that this Court is always at pains to encourage parties to litigation to co-operate fully, in my view, such criticism was and remains unfounded. Under CPR Part 31.22, the burden lies firmly on the applicant ultimately to demonstrate "cogent reasons" to permit the collateral use of documents. It is fair to say that the first witness statement of Ms Martin dated 11 August 2014 served in support of the application contains quotes and snippets from the 57 documents. However, as it seems to me, until very shortly before this hearing, RT/R&H had simply failed to distil and to explain properly to the SFO the specific information and factual propositions which they were seeking to derive from the many hundreds of pages of which the 57 documents comprised.

It is true that, after some months of correspondence and following the service of the second witness statement of Mr Emson on behalf of the SFO on 20 November 2014 which sought to highlight the shortcomings of the application as referred to above, this "gap" was filled (at least in part) by a letter from RT's/R&H's' solicitors dated 3 December 2014 (i.e. very shortly before this hearing) which set out some 19 propositions of fact said to be derived from the 57 documents which the SFO were, in effect, requested to agree. (Such propositions were repeated in Ms Martin's third witness statement dated the following day i.e. 4 December 2014.) However, as stated in a letter dated 4 December 2014 from the Treasury Solicitor on behalf of the SFO and putting on one side whether such proposal was sensible, the timing was, in my view, unreasonable. The SFO had very little time properly to consider these new "propositions" prior to this hearing and, unsurprisingly, did not agree to such proposal.

At the very least, the stated propositions of fact allegedly to be derived from the 57 documents were now – albeit very belatedly – clear although I do not propose to set them out in detail in this public Judgment.

However, there remained (and remains) the important question of relevance – or at least potential relevance – of such alleged propositions of fact to the proposed pending appeal in Guernsey. This remained somewhat obscure because RT/R&H had not prepared draft grounds of appeal in the Guernsey proceedings to explain the (potential) relevance of such documents as, in my view, ought to have been done.

This "gap" was also filled belatedly to some extent at least by Ms Martin in paragraph 11 of her third witness statement when she sought to explain the intended appeal in Guernsey by reference to the 57 documents as follows:

" 11. The essence of the case which R&H seeks to advance on the Guernsey appeal is as set out at paragraphs 11 and 16 – 18 of my first witness statement and at paragraphs 10 and 60 of the Guernsey Intervention Skeleton. It is that:

11.1 The result of the Guernsey trial and the evidence that was given at that trial were tainted by the continuation of the SFO investigation of which RT was a suspect, in circumstances where the Joint Liquidators acting with Grant Thornton (UK) LLP (together "Grant Thornton", and represented principally by Mr Stephen Akers and Mr Hossein Hamedani) appear to have known that the basis of the SFO investigation was unsustainable yet continued to give support and misleading evidence to the investigation, and not to communicate to the SFO the reasons why the matters it was investigating could not sensibly amount to criminal offences by RT.

11.2 Grant Thornton and Investec Trust Guernsey Limited, the former TDT trustees ("ITGL") both allowed or encouraged the SFO to continue to believe that ITGL, which as trustee of the TDT had carried out the transactions which were under investigation by the SFO, either had no direct involvement in the transactions, or had been deceived or coerced by RT and R20 Limited...