THREE RIVERS DISTRICT COUNCIL, BANK OF CREDIT AND COMMERCE INTERNATIONAL SA in liquidation v THE GOVERNOR AND COMPANY OF THE BANK OF ENGLAND [2002] EWHC 2309 (Comm)

IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
COMMERCIAL COURT
Neutral Citation No. [2002] EWHC 2309 (Comm)
[2002] EWHC 2309 (Comm)Case No Case No: 1993 Folio No. 1309Venue Royal Courts of Justice, Strand, London, WC2A 2LL
Between
THREE RIVERS DISTRICT COUNCIL, BANK OF CREDIT AND COMMERCE INTERNATIONAL SA in liquidationClaimantTHE GOVERNOR AND COMPANY OF THE BANK OF ENGLANDDefendant
Before
Mr Justice TomlinsonLord Neill QC, David Mildon QC and Barry Iaacs (instructed by Lovells) for the ClaimantsNicholas Stadlen QC and Bankim Thanki (instructed by Freshfields Bruckhaus Deringer) for the DefendantCharles Hollander QC and Sarah Lee (instructed by the Treasury Solicitor), for HM TreasuryJonathan Crow (instructed by the Treasury Solicitor for the Secretary of State for Foreign Affairs)Hearing dates : 4 and 11 October 2002Date 8 November 2002
[1]Mr Justice Tomlinson : In my judgment handed down on 31 May 2002 I did not consider necessity under CPR 31.17 (3)(b) although I noted in paragraph 83 that it is a jurisdictional threshold. I did however express the view that I hoped that it would be recognised that there can be no sensible objection to disclosure of substantial parts of the archive. In that latter regard I had already indicated that, subject to any particular points that might arise in relation to particular classes or sub-classes of documents, I regarded it as appropriate to exercise my discretion in favour of disclosure.[2]In the event no one has addressed argument to me to the effect that, in relation to the bulk of the material identified in the order which I then made, disclosure is not necessary in order fairly to dispose of the claim. By the same token, it has not been suggested that I should not exercise my discretion in favour of disclosure. HM Treasury have not regarded it as appropriate for them to consent to an order. They point out that it is for the court to be satisfied that the prerequisites have been fulfilled and that disclosure is necessary. Very helpfully however they have limited their submissions to certain discrete matters and have addressed no arguments on necessity. Very largely for the reasons set out in my earlier judgment I have no doubt that disclosure of documents which I have already held satisfy the test of potential relevance contained in CPR 31.17 (3)(a) is in principle necessary in order fairly to dispose of the claim.[3]I have not found it necessary to inspect any of the underlying documents in order to ascertain what the parties have for shorthand called actual as opposed to potential relevance. I note that this is permissible where there is an application under CPR 31.19 (1). However no such application has been made in relation to the material which I am presently considering. Whilst I need not express any final view on the matter, I do not see any scope within the context of the enquiry required by CPR 31.17 for an inspection to ascertain actual relevance when it is potential relevance which is the jurisdictional threshold which must be overcome. In the particular context of this case where the canvas of the claim is vast and changing, it would be most inappropriate that the court should be the arbiter of relevance unaided by the parties, and in particular by the claimants who are the artists working on that canvas.[4]So far as concerns those few instances where confidentiality issues are raised, I have directed myself by reference to the decisions in Science Research Council v Nasse [980] AC 1028 and Wallace Smith Trust v Deloitte Haskins Sells [1997] 1 WLR 267. Those authorities establish:- i) Where confidentiality is raised, it is not a ground for PII in itself, although it may be an ingredient of or relevant to a claim for PII; ii) If the disclosure of the documents in question is shown to be necessary in the interests of the litigation, then that need overrides confidentiality; iii) However, in such a case, the court will be concerned to see whether the needs of the litigation can otherwise be satisfied, eg, by considering redactions, disclosure from other sources or other appropriate means.[5]I do not consider that Article 8 of the European Convention on Human Rights calls for separate treatment. Subject to specific instances where it is agreed that, for example, the identity of informants is irrelevant to the issues in the trial and that their anonymity should be preserved, my conclusions thus far on relevance and necessity demonstrate that any incursion into privacy which may here be involved is necessary for the protection of the rights and freedoms of the parties to the litigation.[6]I am however persuaded, indeed all parties were agreed, that in relation to the entirety of the archive it is important to ensure that the material is not unnecessarily or unwittingly brought into the public domain. Such is necessary not least to protect the integrity of further similar inquiries. For that reason my order at this stage is that inspection, subject to further order, will be by provision of copy documents. I have endeavoured to make express that which would otherwise in any event be implied, viz that no use is to be made of the copy documents thus disclosed other than for the purposes of the litigation and then only in a controlled manner which will safeguard the contents of the documents from inadvertent further disclosure to third parties. Thus, paragraphs 3 and 4 of my Order provide:
" 3. The documents provided to the Claimants and Defendant pursuant to this order are to be used by the parties solely for the purposes of inspection and drafting the Statement of Case and/or the Defence and/or the witness statements in this action until further order. Further, any person who is provided with documents pursuant to this order or is shown any document must not divulge their contents to any person save insofar as it is necessary to do so in connection with the conduct of one of the above purposes in the litigation until further order. 4. No copies of the documents disclosed pursuant to this order are to be provided to third parties other than to the parties' witnesses without the leave of the court. Where a copy of a document is provided to a proposed witness, he must also be provided with a copy of this order and must not show the copy of the document or reveal its contents to any other person or make further copies and must return the copy provided to him to the Claimants' or Defendants' legal representatives (whichever is appropriate) on completion of the task for the purposes of which the document was provided."
[7]Because the priority is to ensure that the Claimants have access to this material whilst finalising their Particulars of Claim, and because it may be that ultimately no use will be sought to be made at trial of much of the material thus disclosed, I have included in my Order a further paragraph:
" 5. The documents provided under this order shall not be treated as coming into the public domain by virtue of (a) the provision of them to the Claimants or Defendant (b) inclusion of them in court bundles or (c) providing them to the court to read. No use is to be made of the documents which would result in them coming into the public domain without the consent of the Treasury Solicitor the leave of the court or until further order."
It is important that it be appreciated that this is intended to be an interim measure so as to ensure that there is no delay in the material being made available to the parties – that is why it sets out to preserve confidentiality merely until further order. In fact I anticipate that it is wholly non-controversial to declare that documents do not come into the public domain merely by virtue of being provided by a non-party to the parties to the litigation, or by inclusion of them without more in bundles prepared for use at trial. However, I can see that the position may be said to be different if the stage is reached at which the documents are provided to the court with a view to their being read by the trial Judge as part of his reading in preparation for the trial. I also appreciate that there may be third party interests who might wish to be heard on this issue. I should stress that I have not been addressed upon and I have reached no conclusion concerning the appropriate treatment in relation to documents from the archive which any party wishes to deploy at trial. That problem can be considered as and when it arises, and if necessary, on a document-specific basis. Similarly, I have not heard argument concerning and I have not finally ruled upon the position which will obtain in consequence of the documents being (a) provided in copy to the Claimants or the Defendant or (b) included in court bundles. If anyone wishes to make representations to the effect that either or both of these steps brings the documents into the public domain, they will have the opportunity to do so.[8]Various of the materials in the archive were provided to the inquiry by regulatory, governmental or quasi-governmental bodies whose right to disclose is regulated by statute. I have already discussed at paragraph 24 of my earlier judgment how it was that concerns arising out of Section 82 of the Banking Act 1987 led to the appointment of Bingham LJ on behalf of not just HM Treasury but also the Governor of the Bank. This was thought to open up to the Bank the gateway to disclosure afforded by Section 83 of the Act. For its part the Bank on this application has taken the view that there is no statutory impediment to there being disclosed to the Claimants such materials as the Bank furnished to Bingham LJ. Mr Hollander QC for the Treasury Solicitor submitted that to the extent that other materials are covered by a statutory restriction, in the absence of a relevant gateway similar in effect to Section 83 of the Banking Act 1987 disclosure would constitute a criminal offence. Fortunately I do not need to consider whether this is indeed so and, if it is, by whom such an offence would be committed. In that regard some observations of Lord Woolf MR in Barings plc v Coopers & Lybrand [2000] 3 AER 910 @ 919 might be relevant. I do not need to consider this point because the submission of HM Treasury, through Mr Hollander, was that in relation to each of the statutes the provisions of which are engaged there is a gateway which permits the disclosure sought. Mr Hollander and Miss Lee provided me with a very helpful document which charted an appropriate course through an array of statutes, made the more bewildering by the need to consider the statutory position both as it was in 1991/1992 and as it now is. Since 1 December 2001 many of the rules relating to disclosure of statutorily protected information have changed in consequence of the introduction of the Financial Services and Markets Act 2000. I do not think that it is necessary for me to reproduce here the content of Mr Hollander and Miss Lee's document. Having read that document and having been addressed on it by Mr Hollander and taken through a sample of the statutory material I am entirely satisfied that the approach adopted by HM Treasury is correct and that there are, where necessary, appropriate statutory gateways permitting the disclosure sought.[9]There are some documents which contain manuscript notes by Bingham LJ The parties do not seek to see these notes. In some cases, where words are written over the page, it is not possible to make a redaction and it will be necessary for the document to be retyped. Where manuscript amendments have been made to transcripts, normally by Mr Jackson at the behest of witnesses, this will be made clear on any re-typed version.[10]I turn to deal briefly with particular concerns which have been raised by respondents to the Treasury Solicitor's letter inviting any observations on confidentiality. In view of the form of order which it has been agreed is appropriate at this stage I need not address concerns which were limited to the possibility of the documents coming into the public domain.(i) The Bank of Spain . Mr de la Cruz of the Bank of Spain apparently sent two letters to Bingham LJ in February/March 1992. No details are given in recent correspondence received from Mr Priego, Head of the Legal Department of the Bank of Spain, from which one could conclude that those letters include information which English law would recognise as confidential. Furthermore the Bank of Spain does not suggest that disclosure of these letters will cause any prejudice either to itself or to anybody else. The objection taken by the Bank of Spain is a formal one, namely that the material referred to in the letters is subject to a Spanish law confidentiality regime contained in Article 6 of Real Decreto Legislativo 1298/1986 which prevents the Bank of Spain consenting to its release, and in particular that Section 3 of this Article establishes that employees or former employees of the Bank of Spain are not allowed to give evidence unless expressly authorised so to do by the Bank. On the present application the court is concerned with disclosure of documents physically situate in England and effectively under the control of persons who are subject to English jurisdiction. So long as those documents remain in England the legality of what is done with them is governed by English law. In fact I am unpersuaded that there would be a violation by anyone in England of the provisions of Section 3 of the Article if disclosure were made.(ii) Price Waterhouse . Messrs Herbert Smith on behalf of Price Waterhouse have furnished a letter dated 13 September 2002 addressed to the Treasury Solicitor in which they maintain on their clients' behalf an objection to disclosure of documents concerning the evidence provided to the inquiry by their clients or submissions and correspondence made on their behalf specifically for the purpose of the inquiry. Price Waterhouse were not present or represented at the hearing before me although Messrs Herbert Smith knew that it would be considered at that hearing whether disclosure should be ordered notwithstanding their objection. Much of Messrs Herbert Smith's letter amounts to a revisitation of issues arising out of the decisions of the House of Lords in Lonrho Ltd v Shell Petroleum and R v Chief Constable of West Midlands Police ex parte Wiley [1995] 1 AC 274 . I discussed those issues at paragraphs 70 – 76 of my earlier judgment and I do not propose to repeat what I there said. The Treasury Solicitor makes no claim to PII in respect of any of the Price Waterhouse material, although it is agreed that appropriate redactions will be made to protect the identity of an informant or informants which is of no relevance in the proceedings. As to the more general objections raised by Messrs Herbert Smith the following observations by Lord Neill QC in his skeleton argument for the Claimants are in my judgment particularly pertinent:- "The only client to whom Price Waterhouse owed duties of confidentiality and with which the Bingham inquiry was concerned was the Second Claimant, BCCI. BCCI has not invited Price Waterhouse to invoke their auditors' obligation of confidentiality in response to the present application and it must be obvious to Price Waterhouse that to do so would be contrary to BCCI's wishes. Price Waterhouse have compromised proceedings brought against them by BCCI on terms that Price Waterhouse would assist rather than hinder BCCI in the pursuit of these and other proceedings. In their letter Herbert Smith cite extensively from the judgment of Millett, J. when ruling upon the application of Price Waterhouse in 1991 – see Price Waterhouse . v BCCI Holdings [Luxembourg] SA 1992 BCLC 583. The eighth "consideration" which Millett, J. took into account is particularly relevant to the position now being taken by Price Waterhouse:- "8. In all the cases which have been cited to me in which the disclosure of confidential information has been resisted, albeit unsuccessfully, disclosure has been not merely against the wishes of the person to whom the duty is owed but has been contrary to his interests, often very seriously so indeed. That has not been demonstrated to my satisfaction in the present case." The furthest that Price Waterhouse have been able to go in this regard is in the four lines at top of page 7 of Messrs Herbert Smith's letter. Reference is made to Price Waterhouse being "a defendant in a number of proceedings which, although not particularly active at present, have not been disposed of." No details are given of these proceedings. They are not even said to be related to the subject matter of the Bingham enquiry. They are admitted to be inactive. If they do arise out of the demise of BCCI it is likely that they have been dormant for a very long time." There is also reference in Messrs Herbert Smith's letter to the fact that Price Waterhouse are the subject of a disciplinary inquiry being undertaken by the Joint Disciplinary Scheme of the Institute of Chartered Accountants in England and Wales which is currently ongoing. The form of my order which I noted at paragraph 6 above affords in my judgment sufficient protection in that regard. Put shortly, as Lord Neill submitted, nothing could be more central to the enquiry which this case involves at any rate so far as concerns the years 1988 to 1991 than the material which casts light upon the role played by Price Waterhouse. They certified the accounts in the relevant years and were making additional reports, including the critical reports of April 1990, October 1990 and further reports culminating in the Section 41 report in late June 1991. It is obvious that in the case of material supplied to the enquiry by Price Waterhouse and the material which that in turn generated the interests of justice override such confidentiality as attaches to the documents.(iii) DTI . I understand that such concerns as the DTI had have at any rate for the time being been resolved by agreement between the parties.(iv) The New York District Attorney . On 30 September 2002 the Treasury Solicitor wrote to Messrs Lovells, the Claimants' solicitors, in these terms:- "Mr Moscow of the New York District Attorney's Office has, by telephone today, indicated that he does not object to the use of any documents given by his office to the Bingham enquiry. However, in connection with any notes made by the Bingham enquiry of meetings between the NYDA and Lord Bingham, he did not wish to consent to their disclosure. Mr Moscow indicated that it is the practice of the NYDA to be as frank and open as they could be to assist investigations, but that it was not their practice to provide notes of such discussions to third parties. He did not wish to obstruct the process of the UK courts but requested that the court be told that he would just as soon that the document was not used." I understand and respect that position. Mr Moscow's concern is I think accommodated by the form of order which I have made. The content of the Department's discussions will not come into the public domain without further order of the court.(v) Deceased Witnesses . I have considered separately the position in relation to five persons who gave evidence to or supplied information to Bingham, LJ but have subsequently died, Lord Harris of Greenwich, David Youngman, Sir Alan Hardcastle, Nigel Robson and Lord Swaythling. The last three named were all members of the Board of Banking Supervision. Lord Harris had had exposure to BCCI and was able to tell Bingham, LJ of a number of expressions of concern by law enforcement agencies. He was also able to give evidence concerning a number of matters which are relevant to contemporary perceptions of BCCI. David Youngman was previously an adviser to the Majority Shareholders. He had been a partner at Ernst and Whinney (Middle East) but was separately represented at the Binghame enquiry, and apparently gave evidence not in his capacity as an ex-partner of that firm but personally about his role as adviser to the Majority Shareholders. The evidence of Sir Alan Hardcastle, Mr Robson and Lord Swaythling was concerned with the meetings of the Board of Banking Supervision which took place from 1986 to 1991. The contributions of Mr Robson and Lord Swaythling in particular appear to be absolutely central to the issues in the case, and the necessity for disclosure is made out in the other three cases also. In relation to Mr Youngman's material it may be necessary to redact the identity of an informant. I am quite satisfied that the interests of justice override any confidentiality which may survive the death of these five persons.(vi) The Right Honourable Anthony Nelson . Correspondence reached this gentleman only belatedly and I allowed him an opportunity to consider whether he wished to make any representations in relation to the disclosure of his material. The concern which he subsequently raised is accommodated by the form of order.(vii) I do not need to deal separately with persons or organisations who received the appropriate letters from the Treasury Solicitor inviting objections to disclosure but have not responded. There was some uncertainty whether a response received on behalf of the Coordinating Committee of BCCI Authorities had been sent on behalf of all involved. Bearing in mind the concern of the local authorities who lost deposits on the day of the bank's collapse I have no doubt that they would wish their material to be disclosed.(viii) Finally some respondents asked for disclosure to be on certain conditions to which the parties have agreed. Special mention in that regard should be made of the Board of Governors of the Federal Reserve System in Washington and in particular to their letter to the Treasury Solicitor of 9 September 2002. The Claimants' solicitors agreed to those conditions by letter to the Treasury Solicitor dated 13 September 2002 as did the Bank's solicitors by letter dated 2 October 2002.[11]I am satisfied that it is appropriate to add to Schedule 1 the material generated by four further persons who gave evidence to Bingham LJ, Mr S A Hussein, Mr R D Whitby, Mr C Twitchin and Mr C Jones. Their respective roles were such that it is sufficiently made out that the material generated by them is of potential relevance.[12]Appendix 8 to the Bingham Report . At the hearing on 4 October 2002 I had to give preliminary consideration to a PII application in respect of certain parts of Appendix 8, which gives a summarised account of the involvement of the British intelligence services in the affairs of BCCI until 5 July 1991. Two short passages had in fact been redacted on the grounds of irrelevance and I ruled, by analogy with the approach adopted by the Court of Appeal in Great Atlantic Insurance Co . v Home Insurance Co [1981] 1 WLR 529 in relation to privileged documents, that it was unsatisfactory to look at these two short passages, which I had not then seen, in isolation when the document was intended to be read as a whole.[13]Unfortunately, because the point had not been foreshadowed before the hearing, my attention was not drawn to the decision of the Court of Appeal in G.E. Capital v Bankers Trust [1995] 1 WLR 172 in which it was decided that, as a matter of principle, redactions may be made on grounds of relevance to a document which is otherwise disclosable. I am now told that it has in fact long been Government practice in relation to PII material to make redactions on grounds of relevance.[14]In the present case I was merely concerned with two short passages of which it was said that they could be said to be irrelevant if looked at in isolation. My judgment should not be taken as intended to pronounce any general statement of principle that redactions can never be made to a document that is otherwise relevant on the grounds that particular passages are themselves irrelevant. Rather it should be read as concerned simply with the particular redaction of two short passages in paragraphs 8.5 and 8.40 of Appendix 8 by reference to the particular circumstances in which that document was produced. It provides no guide as to the procedure which should ordinarily be followed when dealing with documents in respect of which PII considerations may be involved.

Cited in 2 later judgments