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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> V v C [2001] EWCA Civ 1509 (16 October 2001) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2001/1509.html Cite as: [2001] EWCA Civ 1509, [2002] CP Rep 8 |
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Mr Justice McCombe
Strand, London, WC2A 2LL Tuesday 16 October 2001 |
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B e f o r e :
LORD JUSTICE WALLER
and
LORD JUSTICE LONGMORE
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V |
Claimant/ Respondent |
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- and - |
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C |
Appellant/ Defendant |
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Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
David Railton QC and Rory McAlpine (instructed by Denton Wilde Sapte for the Respondent)
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Crown Copyright ©
LORD JUSTICE WALLER:
Introduction
"Mr Colledge states that in order to provide a detailed defence to the claim it is inevitable that Mr Clough would be required to provide information that will or may assist a prosecution. The nature of such information is not identified. Among certain submissions in his statement, it is contended by Mr Colledge that to proceed with a summary judgment now is to require Mr Clough either (a) to "buy" his right not to incriminate himself at the price of having judgment entered against him or (b) to forego that right with the attendant risks to the criminal process under way against him. Mr Colledge states his belief that open discussion in the civil context, and especially any judgment, is bound to be widely reported not only in the financial papers but generally, and that he is very concerned that if judgment were to be entered, as a result of the claim to privilege, the resulting publicity would seriously compromise Mr Clough's right to a fair trial of both the civil and the criminal proceedings."
(1) that VTFL had proved its case for summary judgment on breach of fiduciary duty (entitling it to both (i) an enquiry for damages to be assessed and (ii) judgment for £11.3m.) but he held that VTFL had not proved its case for summary judgment in respect of the money had and received claim of £11.3m;(2) that whilst Mr Clough might be entitled to claim the privilege against self-incrimination in principle, that of itself was not an answer to VTFL's application;
(3) that Mr Clough was effectively seeking a stay or was inviting the court to decline to proceed with a summary determination because of fear of prejudice to a fair trial in the criminal proceedings; and
(4) that the circumstances did not warrant that course.
Self-incrimination: the true nature of the privilege
"92. Privilege against incrimination of self or spouse. There is a general rule of evidence that a person should not be compelled to say anything which might tend to bring him into the peril and possibility of being convicted as a criminal. Hence in any civil proceedings, any person, whether a party or not, cannot be compelled to produce any document or thing or to answer any question, if to do so would tend to expose that person, or his or her spouse, to proceedings for an offence of for the recovery of a penalty, but this rule applies only as regards criminal offences under the law of any part of the United Kingdom and penalties provided for by such law, and does not extend to criminal offences under a foreign law."
"In no stage of the proceedings in this court can a party be compelled to answer any question, accusing himself, or any one in a series of questions, that has a tendency to (incriminate . . .) . . . "
"The extent of the privilege is I think this: the man may say, "If you are going to bring a criminal charge, or if I have reason to think a criminal charge is going to be brought against me, I will hold my tongue. Prove what you can, but I am protected from furnishing evidence against myself out of my own mouth.""
"14. Privilege against incrimination of self or spouse
(1) The right of a person in any legal proceedings other than criminal proceedings to refuse to answer any question or produce any document or thing if to do so would tend to expose that person to proceedings for an offence or for the recovery of a penalty –
(a) shall apply only as regards criminal offences under the law of any part of the United Kingdom and penalties provided for by such law; and
(b) shall include a like right to refuse to answer any question or produce any document or thing if to do so would tend to expose the husband or wife of that person to proceedings for any such criminal offence or for the recovery of any such penalty."
"A person shall not be excused, by reason that to do so may incriminate that person or the wife or husband of that person of an offence under this Act – (a) from answering any question put to that person in proceedings for the recovery or administration of any property, for the execution of any trust or for an account of any property or dealings with property; or (b) from complying with any order made in any such proceedings; but no statement or admission made by a person in answering a question put or complying with an order made as aforesaid shall, in proceedings for an offence under this Act, be admissible in evidence against that person or (unless they married after the making of the statement or admission) against the wife or husband of that person."
"(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."
"For the purposes of the rule it seems to me that there is a very material distinction between the following:
(1) A case where a party to litigation says "I will not provide a defence, or answer requests for further information, or answer questions in the witness box, or provide documents because the answers (etc) may expose me to criminal proceedings." In such a case the party will not be made the subject of any court order to do the act to which he objects nor will he be punished for refusing to take step. He has thereby successfully invoked the privilege and has avoided the objectionable step of incriminating himself out of his own mouth or by his own act.
(2) A case where a party says "I will not do any of the above acts for the same reasons. What is more my opponent may not take any step to establish his civil right, even by material already available to him and for which he does not depend upon the material provided by me or any further step being required of me.""
Is the defendant entitled to a stay or postponement of the summary judgment application?
"As I understand it, the judge based his decision on the view that there is an established principle of law that, if criminal proceedings are pending against a defendant in respect of the same subject matter, he, the defendant, is entitled to be excused from taking in the civil action any procedural step, which step would, in the ordinary way, be necessary or desirable for him to take in furtherance of his defence in the civil action, if that step would, or might, have the result of disclosing, in whole or in part, what his defence is, or is likely to be, in the criminal proceedings. Mr Owen in this court submitted that that is the general rule which ought to be followed. He did not, as I understand it, submit that it was an invariable or inflexible rule which would deprive the court of any discretion if the matters which I have mentioned were established. With the view, if it were put forward, that this is an established principle of law, I would respectfully but firmly disagree. There is no such principle of law. There is no authority which begins to support it, other than, to a limited extent, Wonder Heat Pty. Ltd. v Bishop [1960] V.R. 489 which, with great respect, I should not be prepared to follow, if indeed it does purport to lay down such a principle. I do not think that it does.
I should be prepared to accept that the court which is competent to control the proceedings in a civil action, whether it be a master, a judge, or this court, would have a discretion, under section 41 of the Supreme Court of Judicature (Consolidation) Act 1925, to stay the proceedings, if it appeared to the court that justice – the balancing of justice between the parties – so required, having regard to the concurrent criminal proceedings, and taking into account the principle, which applies in the criminal proceeding itself, of what is sometimes referred to as the "right of silence" and the reason why that right, under the law as it stands, is a right of a defendant in criminal proceedings. But in the civil court it would be a matter of discretion, and not of right. There is, I say again, in my judgment, no principle of law that a plaintiff in a civil action is to be debarred from pursuing that action in accordance with the normal rules for the conduct of civil actions merely because so to do would, or might, result in the defendant, if he wished to defend the action, having to disclose, by an affidavit under Order 14, or in the pleading of his defence, or by way of discovery or otherwise, what his defence is or may be, in whole or in part, with the result that he might be giving an indication of what his defence was likely to be in the contemporaneous criminal proceedings. The protection which is at present given to one facing a criminal charge – the so-called "right of silence" – does not extend to give the defendant as a matter of right the same protection in contemporaneous civil proceedings."
"Of course, one factor to be taken into account and it may well be a very important factor, is whether there is a real danger of the causing of injustice in the criminal proceedings. There may be cases – no doubt there are – where that discretion should be exercised. In my view it would be wrong and undesirable to attempt to define in the abstract what are the relevant factors. By way of example, a relevant factor telling in favour of a defendant might well be the fact that the civil action, or some step in it, would be likely to obtain such publicity as might sensibly be expected to reach, and to influence, persons who would or might be jurors in criminal proceedings. It may be that, if the criminal proceedings were likely to be heard in a very short time (such as was the fact in the Wonder Heat case in the Victoria Supreme Court) it would be fair and sensible to postpone the hearing of the civil action. It might be that it could be shown, or inferred, that there was some real – not merely notional – danger that the disclosure of the defence in the civil action would, or might, lead to a potential miscarriage of justice in the criminal proceedings, by, for example, enabling prosecution witnesses to prepare a fabrication of evidence or by leading to interference with witnesses or in some other way.
Accepting the existence of a discretion, I have come to the conclusion that there is nothing which has been put forward in this case – presented, as it has been, with great thoroughness and diligence by counsel for the defendant – which leads to the conclusion that it is either just or convenient, bearing in mind fully the defendant's "right to silence" in the criminal proceedings, and the reasons for that right, that the civil action should be stayed or that the Order 14 proceedings should be adjourned, for what that might be worth, without the action being stayed."
"Although the issues in the civil and the criminal proceedings are not identical, there is plainly a substantial overlap between them. Both require a detailed consideration of the manner in which the company's business was conducted and of the responsibility of each of the respondents for its activities. These investigations are bound to attract widespread publicity in the media. I am satisfied that there will be a real risk of prejudice to the respondents' right to a fair trial if the present proceedings were heard before the criminal proceedings, particularly if they were heard shortly beforehand. I am not, however, persuaded that there is any sufficient reason to stay the proceedings. Until they are concluded many hundreds and possibly thousands of small investors have no chance of recovering the money which they have lost."
"A serious injustice to large numbers of people will be caused if all this had to wait until after the criminal trial had been concluded. If it were necessary in order to safeguard the respondents' right to a fair trial I would not hesitate to stay these proceedings. But, in my judgment, their interests can be properly safeguarded in other ways.
A further reason not to stay the proceedings is that the joint liquidators are considering whether to seek summary judgment for the repayment of the directors' loan accounts either under R.S.C. Ord. 14 or on admissions. I see no reason why such applications, if made, should have to await the outcome of the criminal proceedings."
"In my view there is a clear distinction between cases such as Saunders and Funke, where applicants were required to answer questions and were subject to criminal penalties if they failed or refused to do so, even though their answers might incriminate them, and the present proceedings for summary judgment where it is open to the first defendant to put forward material to show that he has, using the words of Rule 24.2(a) a "real prospect of successfully defending the claim" or, more accurately, evidence to rebut the claimant's contention that there is no such real prospect.
He is not compelled to advance such material as the defendant was compelled to answer questions as to his wealth in the Angola case."
"Moreover, even where a defendant is compelled to answer questions, the test is: are there reasonable, not fanciful, grounds for apprehending a danger to the witness from being compelled to answer? (see the judgment of Staughton L.J. at p.324 of the Angola case).
Adopting that approach, by way of analogy, it is very difficult to see how, in putting forward material to rebut the claimant's contention that there is no real prospect of him being able to successfully defend the claim, the first defendant would be in any danger of incriminating himself."
"Thus, it is not simply the risk of prosecution. A witness is entitled to claim the privilege in relation to any piece of information or evidence on which the prosecution might wish to rely in establishing guilt. And, as it seems to me, it also applies to any piece of information or evidence on which the prosecution would wish to rely in making its decision whether to prosecute or not."
Points on quantum
Was £11,317,521.15 the correct figure pursuant to paragraph 7.2 of the particulars of claim? Mr Geering suggests bases on which the figure should be either £6,954,603 or £9,794,058. The £9.7m figure is put forward on the basis that in their particulars of claim the claimants plead in paragraph 6 that the total misappropriated was £319,973,283, and in the same paragraph assert that the amount paid back was £310,179,225; thus, the argument runs, judgment should not be for more than the difference between those two global figures. The £6.9m figure is put forward on the basis that by the individual items pleaded as having been paid back the word "approximately" appears, and on the basis that of the figures pleaded as making up the £11.3m, the figures pleaded in paragraph 5.1.3 which total £4,362,917, the sums seem to have been already diverted before being transferred to three entities pleaded. This latter point overlooks the fact that these sums already formed part of sums alleged to have been directly misappropriated before transfer to other entities, as asserted in paragraphs 5.1.2(a), (b) and (c). Reliance on the word "approximately" cannot help the defendant, referring as it does to repayments; if the defendant wished to say that more had been repaid he was free to do so. I reject any argument that the figure should be £6.7m.
Conclusion
LORD JUSTICE LONGMORE:
LORD JUSTICE BROOKE: