C [2001] EWCA Civ 1509

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

Mr Justice McCombe

[2001] EWCA Civ 1509

Case No Case No: A2/2001/0837

Venue Royal Courts of Justice, Strand,, London, WC2A 2LL, Tuesday 16 October 2001

Between

CAppellant/ Defendant

Before

Lord Justice Brooke

Lord Justice Waller

Lord Justice Longmore

Ian Geering QC and Jonathan Davies-Jones (instructed by Orchard for the Appellant)

David Railton QC and Rory McAlpine (instructed by Denton Wilde Sapte for the Respondent)

Date 16 October 2001

LORD JUSTICE WALLER:

Introduction

[1]This is an appeal from the decision of McCombe J dated 8 March 2001. By that decision he allowed an appeal from Master Miller dated 27 September 2000 by which the Master had dismissed the claimant's application for summary judgment against the first defendant. McCombe J in allowing the appeal gave judgment against the defendant for £11.3m and on a further aspect judgment on liability with damages to be assessed (the amount claimed being some £70.5m).

[2]The appeal raises points of principle and practice relating to the privilege against self-incrimination. The particulars of claim were served on 13 March 2000. By those particulars of claim VTFL sought various forms of relief against Mr Clough, including(1) a claim in paragraph 7.2 that Mr Clough was liable to account to VTFL for sums totalling £11,317,521.15 ("£11.3m.") and

(2) a claim in paragraphs 7.1 and 7.7 for damages for breach of fiduciary and other duties. The particulars of claim went into considerable detail as to the ways and means by which it was alleged by VTFL that Mr Clough had misappropriated, or was liable for the misappropriation of, monies of VTFL, by the use of accounts and/or companies over which it was asserted that Mr Clough had ownership or control.

[3]A defence was due on 10 April 2000 and extensions of time were requested. Ultimately on 9 May 2000 Mr Clough served his defence. For the most part the defence confined itself to the observation that Mr Clough could not plead to an allegation because that might incriminate him and asserted that the claimant was put to proof of the matters so asserted. Thus, for example, where the points of claim contained an assertion that a company or account was within the ownership or control of Mr Clough, the response in the defence was in the above terms.

[4]It is not in issue that the prosecuting authorities were concerned to investigate Mr Clough and concerned to consider the possibility of criminal proceedings against him. Indeed we now know since the hearing before McCombe J that Mr Clough was, on 31 July 2001, charged with fraudulent trading contrary to section 458 of the Companies Act 1985.

[5]No application was made on behalf of Mr Clough to stay the proceedings. In the result an application was made by the claimant for summary judgment, that application being supported by a witness statement dated 24 May 2000. No application was made on behalf of Mr Clough to adjourn the summary judgment application. A witness statement was put in by Mr Colledge on behalf of Mr Clough which

the judge accurately summarises in this way:

"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."

[6]Nothing is said in the witness statement of Mr Colledge even in the most general terms about the nature of Mr Clough's defence. All that is said is 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." On the basis of that evidence it was simply submitted on his behalf that the privilege against self-incrimination had been invoked and had been invoked bona fide. In the result it was submitted it was not open to the court to grant summary judgment. The submission, as I understand it, was that this invocation was temporary in the sense that the privilege could only be invoked pending conclusion of the criminal proceedings. But, until that conclusion (so it was submitted) the court had no latitude as to whether to proceed or not with the summary judgment application.

[7]The summary judgment application came on before Master Miller on 27 September 2000. He held that VTFL had proved its case for summary judgment for breach of fiduciary duty (the damages to be assessed) but not in respect of the money had and received claims of £11.3m. He also held that Mr Clough was entitled to claim the privilege against self-incrimination in answer to VTFL's application. The Master found that contrary to VTFL's submission Mr Clough was not seeking simply a stay of the action. In those circumstances he refused the application to strike out the defence, and the application for summary judgment was dismissed on the basis that Mr Clough had "a compelling reason why the case should be disposed of at trial" within the meaning of CPR 24.2(b).

[8]On 8 March 2001 McCombe J allowed the appeal of VTFL. In essence he held:-(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.

[9]Thus it was that the judge gave judgment for £11.3m and a further judgment on liability for damages to be assessed. Self-incrimination: the true nature of the privilege

[10]Halsbury's Laws of England (4 th Ed) (1975) Vol 13 at paragraph 92 puts the matter this way:

"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."

[11]Various points would seem to me to flow from the above if it correctly describes the nature of the privilege. First, the privilege is against being "compelled" and this must mean being compelled by lawful authority or "compelled on pain of punishment" (a phrase as we shall see used by Lord Mustill in Reg. v Director of Serious Fraud Office, Ex parte Smith

[1993] AC 1

at 30-31). Second, the privilege "in any civil proceedings" is against being "compelled" to answer questions or produce documents. If the privilege had been against being required to put in a defence, one would expect that to have been established heretofore. Certainly there is no suggestion that "a defence" is a document to which it is contemplated the privilege against producing documents would apply. Third, (and this really arises from what I have just said) the privilege seems to be against being compelled to provide evidence or information. So far as pleading a defence is concerned there is no "compulsion" to put in a defence at all. Judgment can be allowed to go in default. Furthermore even if a defence is pleaded there is no compulsion to plead anything which provides information to the claimant. A claimant can be put to proof (see CPR 16.5). Of course if the defendant intends to put forward a different version of events from that given by the claimant, he is required by CPR 16.5(2)(b) to put forward that version. But, I stress there is no compulsion on him so to do because there is no compulsion on him to put forward a different version of events as opposed simply to putting the claimant to proof of the allegations that the claimant makes. So far as pre-trial proceedings are concerned, it is only if the claimant seeks to "compel" discovery and the production of a document, or "compel" an answer to an interrogatory in order to assist his case that the privilege would appear to arise.

[12]If the above is a correct understanding of the nature of the privilege, the stance of Mr Geering QC on behalf of Mr Clough simply has no basis. The plea made in the defence and supported by the affidavit can only be relevant in the context of the court being required to rule (a) whether the civil proceedings generally or the summary judgment application should be adjourned either because they cannot be tried fairly or because trying them might affect the fairness of a criminal trial; or possibly (b) whether, even if the summary proceedings should not be adjourned, it is right to give judgment without a full trial having regard to any handicap a defendant may be under in being required to put in some evidence if he is to obtain what under the old rules used to be called leave to defend.

[13]Is the above statement quoted from Halsbury's Laws and my understanding of what it means supported by authority? In my view it is supported by many authorities both ancient and modern. Indeed it is hardly possible to open an authority dealing with privilege against self-incrimination without confirmation that both the general statement is accurate and my understanding of it is correct. I will accordingly select only a few quotations from a few authorities over the centuries. Lord Eldon LC in Paxton v Douglas (1812) 19 Ves. Jun. 225 at 227-228, as cited recently in Den Norske Bank A.S.A. v Antonatos and Another

[1999] QB 271

at 285H, said:

"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 . . .) . . . "

[14]In Lamb v Munster

(1882) 10 QB 110

at 113 Mr

Justice Stephen said:

"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.""

[15]In more modern times Triplex Safety Glass Company Limited v Lancegaye Safety Glass (1934) Limited

[1939] 2 KB 395

(in particular the judgment of Du Parcq LJ at 403); and in even more modern times A.T. & T. Istel Ltd v Tully

[1992] AC 45

(in particular the speech of Lord Templeman from pages 49 to 52) support the view that privilege is against "compulsion" in the course of proceedings to produce evidence or information, and that by compulsion is meant compelled "on pain of punishment" (the very phrase used by Lord Templeman at p 52).

[16]Section 14 of the Civil Evidence Act 1968 also in my view confirms the position, providing as follows:

"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."

[17]Section 31(1) of the Theft Act 1968 further describes the privilege in a way which suggests that it is compulsion against answering and not against putting in a defence in civil proceedings which is covered by the same. Section 31(1) provides:

"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."

[18]In parenthesis I should add that the above section does not apply to the criminal proceedings which have been taken against Mr Clough in the present case. That is again an indictment of the failure of Parliament to widen the ambit of the above section. Much of the difficulties caused to the courts in this area are caused by the fact that section 31 does not apply to offences outside the Theft Act. In my judgment in Den Norske Bank (supra) at 284E-G I set out some of the calls over the past years for Parliament to correct the injustice caused by maintaining section 31 in its present form. This court can only continue to call for Parliament to act.

[19]I return to my main theme. Lord Mustill described the "six rights of silence" in this way in Reg. v Director of Serious Fraud Office, Ex parte Smith

[1993] AC 1

at 30-31:- "(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."

[20]It will be seen so far as immunity against being compelled to answer questions which may incriminate the defendant is concerned, the compulsion is described as "on pain of punishment" which words do not appear in relation to certain other of the immunities. It is also material to comment that of course in the modern era and by virtue of the provisions of the Criminal Justice and Public Order Act 1994, and the Criminal Procedure and Investigations Act 1996, in certain circumstances the special immunity against adverse comment has now been removed. That may have some relevance in the conduct of the exercise of discretion to which I shall be turning hereafter.

[21]Thus, as it seems to me, there is ample support for the broad statement quoted from Halsbury's Laws and ample support for my views expressed as to the proper understanding of that paragraph. The privilege is against being "compelled" "on pain of punishment" to provide evidence or information. The privilege does not give rise to a defence in civil proceedings, nor give rise to a right not to plead a defence in civil proceedings. I would agree with

the judge when he said this at paragraph 38 of his judgment:

"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.""

[22]As the judge said, in the second case the party is not claiming the privilege against self-incrimination save in name. The party is simply asking the court to delay or postpone its process or in procedural language is asking the court to grant a stay of the proceedings. Alternatively, I would add that it may be seeking to persuade the court that the case is not one for summary judgment because at the stage when the defendant is being asked to answer the application for summary judgment, his hands are in some way tied by virtue of the possibility that what happens at the civil trial may have an impact on the fairness of a criminal trial.

[23]Further confirmation that there is no absolute right for a defendant not to have judgment entered against him in civil proceedings simply because the privilege against self-incrimination is raised, is, as the judge held, provided by the cases dealing with the question whether proceedings should be stayed to which I shall refer and to which the judge referred. Apart from the decision of Sullivan J in Surrey Oaklands v Hurley (unreported 20.5.99.) neither experienced counsel for the defendants nor the court ever suggested that the privilege against self-incrimination could in some way provide either a defence to an action or a basis for resisting a summary judgment application. That privilege, if relevant, simply went to the exercise of the court's discretion in considering the question of stay or adjournment. Is the defendant entitled to a stay or postponement of the summary judgment application?

[24]It is clearly a discretionary matter in any given case whether there should be a stay, adjournment or postponement.

[25]The judge approached this aspect of the case by reference to certain authorities to which I will refer. First Jefferson Ltd v Bhetcha

[1979] 1 WLR 898

where the Court of Appeal was concerned with a claim against a former employee in respect of the value of cheques allegedly misappropriated by her. She asserted that if she were required to swear an affidavit in response to a summary judgment application she would necessarily disclose her defence to criminal charges. Forbes J "adjourned the proceedings" which the Court of Appeal thought was the equivalent to granting a stay. Megaw LJ, with whom Brandon LJ agreed, said this at 904:

"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."

[26]A little further down the same page Megaw LJ said this:

"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."

[27]The judge then referred to Guinness plc v Saunders (unreported 17.10.88.). In that case a stay of the proceedings was refused and an appeal against that decision rejected. It is clear that the Vice-Chancellor thought that a full-blown trial on oral evidence should not come on until after the criminal trial but there was no reason otherwise to interrupt the usual proceedings. No comment was called for in relation to any application for summary judgment which did not arise in that case.

[28]D.P.R. Futures Ltd

[1989] 1 WLR 778

was a decision of Millett J (as he then was). Liquidators of a company had brought proceedings against former directors claiming inter alia repayment of certain loans made to them in breach of section 330 of the Companies Act 1985. A trial of criminal charges was pending. The charges were in respect of conspiracy to defraud and, as the judge noted, breaches of section 330 of the 1985 Act which prohibited the making of loans to directors (see page 783C-D). The directors' application for a stay was founded on the overlap between the two sets of proceedings, and as quoted by the judge, Millett J said this at page 790D-E:

"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."

The judge further quoted the passage at 790F-G in the following terms:

"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."

[30]McCombe J in the present case, at paragraph 49, placed reliance on Millett J's reference to the fact that the Order 14 application should be allowed to proceed in D.P.R. Futures. Criticism is made of McCombe J by Mr Geering He suggested that the position in D.P.R. Futures was very different from that in the instant case in that the directors had made admissions on the accounts. That criticism by Mr Geering is in my view misplaced. The fact that the directors had made admissions on documents could not alter the fact that if they chose to put in affidavits they might well make further admissions which would tend to incriminate them. As we made clear in Den Norske Bank A.S.A. v Antonatos (supra) at 289B-F, the fact that someone may have made an admission at some previous stage in the process will not prevent that person being entitled to take the privilege against self-incrimination if he were to be compelled to answer a question on oath in court.

[31]Finally there is the decision of Sullivan J in Surrey Oaklands NHS Trust v Hurley & Ors (unreported 20.5.99.). In that case the claimant had issued a summons for summary judgment and applied for an order for interrogatories and disclosure of documents. Counsel for the first defendant argued that although charges had in that case had been made under the Theft Act, conspiracy charges might be added to which section 31 of the Theft Act would not have applied. Oaklands was a case arising after the introduction of the CPR and Sullivan J made much reference to the principles relevant to application of the new procedure. He also made reference to European Convention law. He added (at page 16 of the transcript):

"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."

[32]As he made clear the references to the cases in that passage are to Saunders v U.K.

[1998] 1 BCLC 362

, Funke v France

(1993) 16 EHRR 297

and to Sociedade Nacional Angola v Lundqvist

[1991] 2 QB 310

. Sullivan J continued his judgment as follows, in a further passage cited by

the judge in the instant 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."

[33]What is suggested by Mr Geering on behalf of the appellants in the instant appeal is that there may be some inconsistency between the above and a passage in my judgment in the Court of Appeal in Den Norske Bank where I concluded as follows at page 289A-B:

"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."

[34]In reliance on the above passage of my judgment, Mr Geering was disposed at one stage to argue that the obtaining of a judgment in a civil action under a summary process might be relied on by the prosecuting authorities as "information" in considering what charges to bring in the criminal process. First, this is to give too wide a meaning to "piece of information" and further it seems to me to be somewhat fanciful. In the passage above quoted, one must remember that what I had in mind was information compelled "on pain of punishment" out of the mouth of the defendant. If a defendant allows a judgment to be entered against him, or has judgment entered against him, even if resisted, that does not seem to be to provide information "compelled" from the defendant. In any event, it is far fetched to suggest that a prosecuting authority would place any reliance on a judgment as such. Obviously if a defendant in civil proceedings were compelled to answer questions about the ownership of companies or the nature of control over bank accounts, that would provide information on which the prosecuting authorities might rely in making their investigations. But simply the entry of judgment would not seem to me to be such information.

[35]Can the judge's ruling that the application for summary judgment should go forward, and his finding that on the evidence before him it was appropriate to give summary judgment, be attacked? In my view it cannot, and indeed Mr Geering realistically appreciated that if he failed on his main point (that his client was entitled to invoke the privilege against self incrimination), he was hard pressed to suggest that the judge's judgment could be impugned.

[36]The judge was concerned primarily with how the civil proceedings before him were to be resolved. He was concerned with the fairness of those proceedings from both the defendant's and the claimants' point of view. He had to be concerned with whether the defendant might have a defence in those proceedings which he was being constrained from putting forward because of the impact on possible criminal proceedings. If there was no answer to the claimants' claim, then there would be no need for a full trial with all its attendant publicity, and it would be fair to both sides in the civil proceedings to give judgment. He would of course have to assess the affect of continuing civil proceedings and of entering judgment, including any publicity that that might engender on any criminal trial in considering the appropriate steps to take.

[37]In considering whether the defendant was being constrained from putting forward a defence in the civil proceedings, the following would be material considerations. First, as Megaw LJ put it, there is no right to silence in the context of civil proceedings. Of the six rights to silence analyzed by Lord Mustill, what I would understand Megaw LJ to be referring to are the following. First that in a civil trial there is no immunity against adverse comment or adverse inference from a failure to provide answers before the trial or to give evidence at the trial. I say that because in a civil trial a defendant does not have to put in a defence or give evidence, but, if he does not, the court can draw an inference because in a civil trial it is not his "right" not to do so. Megaw LJ also supports the distinction which in my view exists between putting in a defence in relation to which there is no right to invoke the privilege against self-incrimination and a defendant being interrogated or being compelled to produce documents in relation to which the privilege against self-incrimination can be invoked. This is important in the summary judgment context because if the claimant can establish his claim without interrogatories or disclosure then a privilege against self-incrimination is not in fact relevant.

[38]Second, even in the context of criminal proceedings, if a defendant has a positive defence i.e. he wants to establish a different explanation for events from those asserted against him, the criminal law now expects that defence to be adumbrated at an early stage if there is to be no danger of adverse inferences being drawn or adverse comment made. Thus it is clearer in the modern era even than it was in 1979 when Jefferson was decided that the disclosure of a defence in civil proceedings is unlikely to disadvantage a defendant in criminal proceedings.

[39]Third, it is legitimate to start from the position that a positive defence is likely to exculpate rather than incriminate. It is legitimate to expect an explanation on oath as to the nature of the defence that a defendant has so that a court can see(a) whether there is a reason for a trial on the merits; and

(b) whether the way in which having to fight the summary judgment application or the trial may impinge on the fair trial of the defendant in a criminal court. In this context, if it is obvious that a full trial must proceed and that an order for production of documents, for example, is going to be met be a claim of privilege against self-incrimination, postponement of the civil trial may be appropriate. But if a claimant can establish his case without compelling information or evidence from a defendant, the only relevant impact on the criminal trial to be considered is what the effect of entering a summary judgment will be. The onus is on the defendant at all stages to demonstrate that the civil process should not proceed, and the stronger the case against the defendant in the civil context the higher the onus on the defendant should be.

[40]In the instant case in considering whether to allow the summary judgment application to proceed and/or to give judgment, the judge was entitled to take into account that the defendant had chosen not to provide any answer to the claimants' allegations. This was not the same as drawing adverse inferences against the defendant because he had claimed privilege against self-incrimination. In his defence he had no right to invoke such privilege and the defence simply contained no answer to the claimants' case. I should add however that some debate took place during the hearing of the appeal as to the circumstances when it might be legitimate to draw an adverse inference against a person who claimed the privilege against self-incrimination. In Den Norske I expressed the view, with which Millett and Chadwick LJJ agreed at page 296, that particularly in the light of the way matters had developed in the criminal context, I preferred the view of Templeman LJ in the Court of Appeal in Rank Film Distributors Ltd v Video Information Centre

[1982] AC 390

at 423 that an adverse inference could be drawn, to that of Staughton LJ in the Court of Appeal and Leggatt J (as he then was) at first instance in Sociedade Nacional Angola . What it is perhaps right to emphasise is that I was not seeking to suggest that an adverse inference or an "adverse comment" (the language of Leggatt J approved by Staughton LJ in Sociedade National Angola at 319) would be justified simply because a person claimed the privilege. Each case turns on its own circumstances. The Den Norske case concerned a refusal to answer on cross-examination in relation to assets in the Mareva context. If as seemed possible in that case, either an explanation was sought to be given at trial which was not incriminating, or, if there was simply no answer to the claimant's evidence because there was still a refusal to answer, I see no reason why an inference should not be drawn in favour of the claimant.

[41]But, in any event in this case, in a defence there is no right to invoke the privilege against self-incrimination, and I see no reason why the judge should not take into account that no answer has been provided by the defendant. The judge did have a concern as to whether some answer might be available if the defendant appreciated that the privilege against self-incrimination was not available to him by way of defence. This the judge has guarded against by providing a further opportunity for the defendant if he so wishes to swear an affidavit showing that he does, after all, have a total or partial defence.

[42]Thus it seems to me prima facie that the judge was right in considering what was fair as between the parties in the civil proceedings, taking the view that the summary judgment application should proceed and that summary judgment should be given. What then about the effect of allowing the summary judgment application to go ahead, and the possible entering of a judgment on future criminal proceedings? Again it seems to me that the judge was right in considering that such impact as proceeding and giving judgment might have on those criminal proceedings should not preclude him from acting as he did. The assertions made by the claimants in their points of claim have always been available to the prosecuting authorities. The reasoned judgment of the judge will be available to the prosecuting authorities unless some order is made that the written reasons should not be entered on the court file (such order being made by McCombe J pending appeal – see paragraph 4 of the Order page 40 of the appeal bundle). The fact that judgment has been entered will be available to the prosecuting authorities. The Order at page 40 included a direction that McCombe J's Order entering judgment should not be entered on the court file, but, again that was intended, so we were informed, to be effective pending appeal. There is no point in the claimants obtaining judgment unless they can now enforce it publicly. Thus the fact that judgment has been entered will have to be publicly known and it may receive publicity and indeed this was assumed by the judge. I would have thought furthermore that following the conclusion of this appeal, the reasoned judgment of the judge and indeed of this court, should be available publicly, although whether finally that is right can be decided at the conclusion of this appeal, but for present purposes I am prepared to assume that it will be available.

[43]What then are the risks? It is suggested that the prosecuting authorities might use the judgment obtained and the recent judgments. That seems to me fanciful. No reliance could be placed on the civil judgment in the criminal trial so as to prove the guilt of the defendant, and the fact of judgment does not take the authorities any further than the assertions in the points of claim. What about a potential juror being affected by publicity that judgment has been obtained? The criminal trial will not come on for some time, and it is unlikely that any juror will carry in his or her head the particular publicity relating to Mr Clough. In any event the judge will warn the jury that they try cases on the evidence which is before them; he will further direct them that they should disregard anything they have read in newspapers or seen on the television. If for any reason the fact that a civil judgment has been obtained becomes known to the jury at the trial, the judge will further warn the jury that it helps them not one iota in considering whether the defendant had acted with intent to defraud creditors or in considering any other criminal offence with which the defendant may be charged because the burden of proof is different.

[44]In my view the judge was not only entitled in his discretion not to adjourn the summary proceedings but was right not to do so. He was further right on the material before him to give summary judgment, allowing the defendant to reopen that aspect if on reflection he wished to defend the summary judgment application on the merits. Points on quantum

[45]Mr Geering has certain points which can be described as pleading points, and I will deal with them in turn. 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.

[46]As regards the £9.7m figure (the difference between the two global figures), at first sight there seems to be something in this point. I am unclear whether it was raised before the judge. It does not appear from his judgment that he dealt with it. Mr Railton QC's suggested answer is as follows. He pointed out that when one examines the pleading it can be seen that the payments amounting to £11.3m were paid to entities who are not entities responsible for any of the repayments. Thus he submits that no credit for repayments should be given as regards these sums. In any event, submits Mr Railton, the amounts repaid related to monies misappropriated over a substantial period of time, and must therefore or should therefore have included interest on the monies. Thus he submits, it is not appropriate simply to compare the two global figures.

[47]Once again the defendant has not assisted with any explanation. It seems to me that Mr Railton is right that it is not correct simply to take one global figure from the other. Since thus also prima facie monies paid to the entities have not been repaid, absent some explanation from the defendant pointing in a contrary direction, the claimants are entitled to the sum the judge awarded.

[48]Mr Geering next submitted that the claimants do not adequately plead causation of loss resulting in damage, and he submits that Appendix 6, referred to in paragraph 7.7 under which judgment on liability was given, pleads no particulars of loss at all. He submits thus that judgment on liability with damages to be assessed should not have been given.

[49]A rather different pleading point appears to have been taken before the judge (see paragraphs 22 and 23 of his judgment).

[50]I do not think that the point demonstrates a disentitlement to judgment on liability. The pleading read as a whole clearly pleads circumstances in which loss and damage would appear to have resulted. It will be at the assessment stage that pleading points on the damages can be taken. Conclusion

[51]It seems to me that the judge was right in his conclusion in this case and my reasons are in almost all areas the same as his.

[52]It is not a correct invocation of the privilege against self-incrimination to plead the same in a defence. The circumstances of this case were such that there was no basis on which an application for summary judgment should not go ahead. On the evidence before the judge the defendant did not demonstrate a real prospect of successfully defending the claim in the respects covered by the judge's judgment. The impact on any criminal trial of entering judgment would be minimal and not such as to preclude the giving of judgment.

[53]Accordingly I would dismiss the appeal but give the appellant 14 days to swear and serve an affidavit on the merits if he wishes to do so.

LORD JUSTICE LONGMORE:

[54]I agree.

LORD JUSTICE BROOKE:

[55]I also agree.

Order

1 st Defendant's Appeal dismissed; costs of appeal to be paid by 1 st Defendant to Claimant; such costs to be subject to detailed assessment on standard basis; permission to appeal to House of Lords refused.