Rawlinson and Hunter Trustees SA v Tchenguiz & Ors [2015] EWHC 937 (Comm)

2015] EWHC 937 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Venue Royal Courts of Justice, Rolls Building, Fetter Lane, London, EC4A 1NLDate 1 April 2015
Before
MR JUSTICE EDER
Between
RAWLINSON AND HUNTER TRUSTEES S.A. (a company incorporatedin Switzerland, in its capacity as trustee of the Tchenguiz Family Trust)
Between
VINCOS LIMITED (a company incorporated in England,trading as Consensus Business Group)
Between
EURO INVESTMENTS OVERSEAS INC (a company incorporatedin the British Virgin Islands)Respondents in 2013 Folios 1448 & 1449
Between
VINCENT TCHENGUIZAMORA INVESTMENTS LIMITED (a company incorporatedin the British Virgin Islands)Respondents in 2013 Folio 1448
Between
ROBERT TCHENGUIZR20 LIMITEDRAWLINSON AND HUNTER TRUSTEES S.A. (a company incorporatedin Switzerland, in its capacities as trustee of the Tchenguiz Discretionary Trust,the Tchenguiz Discretionary A Trust and the NS One Trust)Respondents in 2013 Folios 1450 and 1451DIRECTOR OF THE SERIOUS FRAUD OFFICEApplicant in all claims
JAMES SEGAN (instructed by Treasury Solicitor) for ApplicantLORD DAVID PANNICK QC and JONATHAN ALLCOCK (instructed by Stephenson Harwood LLP) for Respondents in 2013 Folios 1450 & 1451Hearing Hearing dates: 26 March 2015
Judgment
[1]These proceedings were settled in July 2014. Notwithstanding, this is an application by the Serious Fraud Office (“SFO”) for an order pursuant to CPR 31.22(2) restricting or prohibiting the use of certain documents which were previously disclosed in the proceedings. The claimants in 2013 Folios 1448 and 1449 have now given certain undertakings as a result of which the parties have agreed that there be no order on the application against those claimants. However, the application is resisted by the claimants in 2013 Folio 1450 and 1451 (the “RT claimants”).[2]The original order sought by the SFO has been modified to take account of certain particular objections raised by the RT claimants and, as modified, is in the following form:
“If the Claimants in 2013 Folios 1450 and 1451 propose to make any use (including any further disclosure) other than for the purpose of these proceedings of any or all of the documents listed in the Slaughter and May Schedule which was sent to those Claimants on 26 March 2015 (save insofar as those documents were the subject of paragraph 3 of the court’s Order dated 10 February 2015) and/or any information derived from such documents on the ground that the material in question has, before the date of this hearing “been read to or by the court, or referred to, at a hearing which has been held in public” (CPR r.31.22(1)(a)), they shall provide the Defendant’s solicitors, the Treasury Solicitor’s Department, with 14 clear days’ notice in writing of such proposed use in advance of such proposed use, and shall identify the documents and information to be used and the nature of such proposed use.”
[3]CPR 31.22 provides in material part as follows:
“31.22(1) A party to whom a document has been disclosed may use the document only for the purpose of the proceedings in which it is disclosed, except where – (a) the document has been read to or by the court, or referred to, at a hearing which has been held in public … (2) the court may make an order restricting or prohibiting the use of a document which has been disclosed, even where the document has been read to or by the court, or referred to, at a hearing which has been held in public …”
[4]The background to the application may be summarised as follows. Before the main proceedings were settled, there had been a substantial number of interlocutory hearings. On 19 January 2015, the RT claimants issued two applications – which became known as the “public domain applications” – which sought a declaration that certain documents disclosed by the SFO had lost CPR 31.22(1) protection, by reason of the exception in subparagraph (a) i.e. because they had “… been read to or by the court, or referred to, at a hearing which has been held in public …” during those interlocutory proceedings. By the time the public domain applications were heard on 6 February 2015, it was common ground that 26 of the documents identified by the RT claimants had indeed lost such protection; and the RT claimants did not pursue their application in respect of the remainder.[5]However, the SFO did succeed in a counter-application under CPR 31.22(2), which was issued on 2 February 2015, the effect of which was to re-attach CPR 31.22(1) protection to the 26 documents for reasons set out in my Judgment which is reported as [2015] EWHC 266 (Comm), in particular at paras 74-95 (“Public Domain Judgment”). I understand that the RT claimants have applied for permission to appeal to the Court of Appeal. I should mention that Lord Pannick QC made plain that the RT claimants take the position that my previous decision was wrong but rather than repeat R&H’s previous submissions, they will instead pursue these points on appeal as necessary.[6]For reasons which are set out in the 6th witness statement of Mr Raymond Emson served on behalf of the SFO in support of the application, it appears that the SFO consider that the same logic which caused the 26 documents to have lost CPR 31.22(1) protection may also apply to further documents which formed part of the voluminous material put before the Court during the interlocutory stage of the proceedings before they settled. As Mr Emson explains in his witness statement, those documents have now been identified. Shortly before the commencement of the present hearing, a list of such documents was produced and provided to the RT claimants’ solicitors. It is regrettable that this was not done before then. Be that as it may, the list shows that there is a total of approximately 550 documents which are potentially relevant i.e. documents which may have been read to or by the Court or referred to at a hearing which has been held in public. It is important to emphasise that at this stage, the SFO does not necessarily say that that is indeed the case so as to trigger the exception in CPR 31.22(1)(a). Rather, the SFO’s position is simply that these are documents which may fall within such exception; and that in order to determine whether or not each of the documents does or does not fall within the exception would require further detailed analysis, an exercise which Mr Emson says would cost up to £26,000 excluding VAT. Unsurprisingly, the SFO’s position is that it would prefer to avoid incurring these costs if there is a more proportionate solution.[7]In essence, Mr Segan submitted that the Order now sought provides such modest and proportionate solution in the particular circumstances in the present case.[8]Further, Mr Segan submitted that there were very good, indeed compelling, reasons for making the Order sought by the SFO. In particular, he emphasised four reasons as follows. i) First, the SFO’s disclosure consists in large part of documents relating to its KAU01 criminal investigation, and which therefore engage the strong public interest against collateral use which has been consistently referred to in previous judgments. It is clearly appropriate that the SFO should have a meaningful opportunity to persuade the Court that such public interest, together with the other factors listed by the Court in the Public Domain Judgment, outweigh what would (or might) be the ordinary operation of CPR 31.22(1)(a). ii) Second, of the two ways in which such an outcome could be achieved (i.e. an “omnibus” CPR 31.22(2) application or a notice requirement), the option sought by the SFO (a notice requirement) is by far the more proportionate. It is indeed a comparatively modest restriction, which would – by contrast with an “omnibus” CPR 31.22(2) order imposed now – leave the burden upon the SFO to bring a CPR 31.22(2) application within the 14-day notice period at an appropriate juncture in the future by reference to a specific proposed collateral use. iii) Third, there is no suggestion that the RT Claimants will suffer any prejudice from the making of the Order. The RT Claimants had not until the day before the hearing advanced any reasons at all for opposing the Order, other than a mere assertion in correspondence that it would be “unreasonable and unwarranted” (see Emson 6 ¶23). In the absence of any explanation of this assertion, it was impossible, at least at the time its skeleton argument was filed, for the SFO to respond. For the reasons set out in its skeleton argument and oral submissions, the SFO considers that its proposed Order is both warranted and reasonable, and in fact represents the least intrusive way of achieving an appropriate measure of protection of the public interest. iv) Fourth, the SFO again emphasises the Court of Appeal’s guidance that “… if too demanding a standard is imposed under CPR 31.22(2) in respect of documents that have been referred to inferentially or in short at the trial, it may be necessary, in order to protect genuine interests of the parties, for more trials or parts of trials to be held in private, or for instance for parts of witness statements or skeletons to be in closed form” (Lilly Icos Ltd v Pfizer [2002] 1 WLR 2253 at §25(v) per Buxton LJ). That guidance applies strongly to the present situation: a notice requirement is a very limited imposition upon the Claimants which is plainly justified in the circumstances, and making such an Order will avoid any lesson being drawn from the present proceedings that a greater number of interlocutory matters should be heard in private, which would be highly undesirable as the Court of Appeal explains.[9]In response, Lord Pannick raised a threshold objection. He submitted that the Order now sought is impermissible and indeed outwith the scope of CPR 31.22(2). In particular, he submitted that such an Order could not or at least should not be made in circumstances where the SFO does not positively assert whether the relevant documents have in fact been read to or by the Court or referred to at a hearing which has been held in public or, if so, when such one or more events occurred. At the very least, submitted Lord Pannick, the SFO should be required as a condition of any Order that the Court might make to perform that exercise by reference to each and every document now identified in the list which I have referred to above.[10]I do not accept those submissions. First, I do not accept that the Order now sought falls outwith CPR 31.22(2) or is otherwise impermissible as such. CPR 31.22(2) is in wide terms. In particular, the only pre-condition to the making of an Order restricting or prohibiting the use of a document is that such document “has been disclosed”. As it seems to me, there is no requirement on any applicant under that rule to show that any such document has been read to or by the Court, or referred to, at a hearing which has been held in public. The latter part of CPR 31.22(2) simply makes plain that the Order that the Court has power to make arises even where one or more such events have occurred.[11]Notwithstanding, I accept that the present situation is somewhat unusual. In particular, it is noteworthy that this is not a case where a party (here, the RT claimants) has given any particular indication of any present intention to use any particular document(s) for any collateral purpose; nor even that any such document(s) falls within the exception in CPR 31.22(1)(a).[12]Lord Pannick submitted that if I were to grant the Order now sought, it would, in effect, reverse the burden that would otherwise arise in relation to any application under CPR 31.22(2). In particular, he submitted that the effect of the Order would require the RT claimants, rather than the SFO, to identify which documents had been read to or by the Court, or referred to, at a hearing which had been held in public. I was initially much impressed by that argument. However, in my judgment, it is flawed or at least outweighed by other considerations. First, if I do not make the Order and the RT claimants want to obtain the benefit of the exception in CPR 31.22(1)(a), they will themselves have to carry out the exercise of identifying what particular document(s) have been read to or by the Court, or referred to, at a hearing which had been held in public. To that extent, I accept Mr Segan’s submission that the grant of the limited Order now sought does not have the effect of transferring the burden of carrying out such exercise on to the RT claimants. It is fair to say that if I were not to grant the Order, the SFO would in effect have to take the risk of such exercise having to be carried out properly by the RT claimants and those representing them. That must follow, as Mr Segan accepted, because the exception in CPR 31.22(1)(a) does not depend on any permission by the Court but, on the contrary, operates automatically. Thus, I accept that the Order now sought gives the SFO protection that it would not otherwise have. However, in my judgment, such additional protection is very limited indeed.[13]Second, if I do not make the Order, the effect will almost inevitably be that the SFO will have to incur substantial costs as referred to above which may be in whole or in part completely unnecessary. Having regard to the overriding objective and the four points advanced by Mr Segan, it seems to me that that is a course I should try to avoid if possible.[14]For these reasons, I have concluded that I should make the Order sought subject to one additional point raised by Lord Pannick with regard to “confidentiality”. This requires further explanation. In essence, Lord Pannick submitted that if and when the RT claimants give notice of intended use as contemplated by the draft Order, there should be some restriction on the SFO notifying any relevant third parties about such intended use. Mr Segan submitted that that would inevitably result in further applications to the Court. However, at this stage, it is unclear what if any use might be made of what, if any, document(s). If and when any notice is given, the position would, I hope, be clearer. In the meantime, it seems to me that a proviso should be included in the Order to protect the RT claimants’ interests for the time being. I will of course give the parties liberty to apply. Having said that, I would very much hope that any particular question or difficulty would be resolved by agreement. Failing agreement, the Court will if necessary resolve such dispute – although the parties will no doubt bear in mind that there may be significant costs consequences if the Court were to consider that one or other of the parties had acted unreasonably.

Conclusion

[15]For these reasons, I would grant the Order sought subject to the proviso as referred to in the previous paragraph. Counsel are requested to agree a draft Order for my approval.

Cited in 1 later judgment