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Case No: CHANI 1999/1219/A3
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM Mr Justice Burton
Royal Courts of Justice
Strand, London, WC2A 2LL
Friday 12 May 2000
B e f o r e :
LORD JUSTICE MORRITT
LORD JUSTICE WALLER
and
LORD JUSTICE TUCKEY
- - - - - - - - - - - - - - - - - - - - -
|
PRESTON
BOROUGH COUNCIL
|
Claimant/
Respondent
|
|
-
and -
|
|
|
McGRATH
|
Defendant/
Appellant
|
- - - - - - - - - - - - - - - - - - - - -
(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 180 Fleet Street
London EC4A 2HD
Tel No: 0171 421 4040, Fax No: 0171 831 8838
Official Shorthand Writers to the Court)
- - - - - - - - - - - - - - - - - - - - -
E Bartley Jones Esq QC (instructed by Messrs Davies Wallis Foyster for
the Respondent)
Michael Supperstone Esq QC; Mr Daniel Janner (instructed by Messrs John
Gibbs & Co for the Appellant)
- - - - - - - - - - - - - - - - - - - - -
Judgment
As Approved by the Court
Crown Copyright ©
LORD JUSTICE WALLER:
Introduction
This is an appeal from the decision of Burton J given on 21 December 1998. He
ruled that prosecuting authorities do not impliedly undertake to the court that
they will not use unused material disclosed in criminal proceedings other than
for the purposes of the criminal proceedings. He postponed consideration as to
what would have been the effect of ruling that there was such an implied
undertaking, and in particular whether the proceedings brought by the Council
against Mr McGrath should be struck out on the basis that they were an abuse,
and brought in contempt of court.
Before us Mr Supperstone QC, who appeared for Mr McGrath, appreciated that the
appeal raised questions which were much wider than he had asked the judge to
consider, and related not simply to whether some implied undertaking was given
by the prosecuting authorities in relation to unused material, but whether an
undertaking was impliedly given to the court in relation to any material
obtained either compulsorily or voluntarily during a criminal investigation,
and whether it was disclosed to the defence or not and whether it had been used
in open court or not.
Proceedings
On 13 February 1996 Preston Borough Council (The Council) commenced proceedings
against Mr McGrath claiming damages for breach of his fiduciary position as a
Councillor. The allegation in the general endorsement on the writ was that Mr
McGrath received undisclosed financial benefits from a subsidiary or associated
company of Balfour Beatty Limited (Balfour Beatty). Reference in that regard
was made to certain Heads of Agreement alleged to be dated 20 March 1990 but in
fact dated 29 March 1990 whereunder it was alleged that Balfour Beatty advanced
at least £125,000 to Mr McGrath in respect of the property known as 457
Clifton Drive North, Lytham St Annes, Lancashire. It seems, albeit we have not
in our papers the complete correspondence, that Mr McGrath immediately
protested about the reference to the Heads of Agreement being referred to in
the writ, he believing that the Council only knew of the existence of the Heads
of Agreement as a result of information being disclosed to the Council by the
police.
The Background
The police had carried out investigations known as "Operation Angel" into
suspected corruption in relation to officers of the Council, one of whom had
been Mr McGrath. The prosecuting authority indeed sought to prosecute Mr
McGrath for corruption but in 1993 the Attorney General refused his consent in
respect of such prosecution. Other charges were brought against Mr McGrath
involving allegations of deception of Midland Bank. But in September 1994
certain of those charges were dismissed at Liverpool Crown Court and in
December 1994 the balance was ordered to lie on the file not to be proceeded
with without leave of the court. Thus no criminal proceedings have been
prosecuted to trial against Mr McGrath.
From the affidavit of Mr Wood, sworn on behalf of the Council, the following
appears to be the history of the Council's receipt of information. Mr Driver
was the Town Clerk/Chief Executive of the Council from June 1993 to March 1996.
When Mr Driver joined the Council in June 1993 the Town Hall was rife with
rumours that Mr McGrath had received payments from Balfour Beatty while a
councillor. That led to Mr Driver writing to the Chief Constable of Lancashire
Police a letter dated 19 January 1994 (which is not in fact with our papers
albeit said to be exhibited to Mr McGrath's affidavit). That led to disclosure
of certain witness statements with the consent of the witnesses to Mr Driver in
January 1994. It seems that in the course of Operation Angel the Lancashire
Constabulary had obtained a copy of the Heads of Agreement from Balfour Beatty.
Mr Wood was informed that Balfour Beatty disclosed those Heads of Agreement
voluntarily to the police. A solicitor, Mr Stephen, was then asked by the
police to give his opinion on the Heads of Agreement which opinion was reduced
to a witness statement. This was one of the witness statements provided to Mr
Driver in January 1994.
On seeing that statement of Mr Stephen the existence and the content of the
Heads of Agreement would become known to Mr Driver, and ultimately others
acting for the Council.
History of the proceedings
Once Mr McGrath had protested at the reference to the Heads of Agreement in the
original writ, the Council amended the writ taking out any reference to those
Heads of Agreement. The amended writ, endorsed with the statement of claim,
was reissued on 21 June 1996.
A defence was served on 26 July 1996 of an uninformative nature. The Council
sought to obtain further and better particulars from Mr McGrath aimed at
obtaining an admission as to receipt of the £125,000 from Balfour Beatty
but no such particulars were delivered. The Council then served a list of
documents dated 18 April 1997 and it was in response to that list that
solicitors for Mr McGrath once again returned to the attack. They suggested
that the Council had relied on certain witness statements disclosed in that
list being the witness statements supplied by the police. They alleged that
the Council were, as a result, in breach of an implied undertaking given to the
Crown Court in relation to the use of material obtained during the prosecution
of the criminal proceedings.
That led to the issue of a summons on 11 June 1997 applying to strike out the
Council's amended statement of claim pursuant to Ord.18 r.19 and/or the
inherent jurisdiction of the court on the grounds that the Council's action
constituted an abuse of the process of the court. That summons was supported
by an affidavit sworn by Mr McGrath in which he set out the history of
attempted criminal prosecutions, so far as he was concerned. He made clear
that the basis of the application for strike out was that the Council were
seeking to rely upon information which only became available during the
criminal investigation and in relation to the use of which the Council had not
obtained the proper authority of a court of competent jurisdiction. The
affidavit also asserted that the actions of the Council were prima facie a
contempt of court.
The affidavit in response was sworn by Mr Wood on behalf of the Council who set
out the circumstances in which the Council had learned of the Heads of
Agreement of 29 March 1990 as a result of being supplied with the witness
statements of Mr Stephen. Mr Wood further stated that before service of the
writ as at 13 May 1996 the decision had been taken that whatever the status of
the witness statements there was sufficient information in the public domain to
enable the Council to proceed with its action in the form of the amended
statement of claim. Thus, he asserted, there was knowledge in the public
domain that Mr McGrath had received £125,000. He relied inter alia on the
fact that in circumstances which are unclear, two reports appeared in Private
Eye on 25 February 1994 and 4 March 1994 and a further two reports appeared in
the Independent on 18 March 1994 and 3 May 1994 in all of which it was
suggested that Balfour Beatty admitted that they had paid Mr McGrath
£125,000.
On 18 February 1998 Mr McGrath amended his defence and pleaded explicitly the
Heads of Agreement dated 29 March 1990. He then swore a further affidavit on
27 February 1998 exhibiting the amended defence and the Heads of Agreement. He
persisted in that affidavit in his objection to the proceedings saying that
they were an abuse of the process of the court and a contempt of court relying
on the fact that the witness statements had been received, as Mr Wood had
explained, and on the fact that, as Mr McGrath asserted, the Council should not
have used the statements without obtaining a subpoena for their production from
the Lancashire police before a court and giving notice to Balfour Beatty and
himself of the application.
Mr McGrath further disputed the fact that the Heads of Agreement had been
handed over voluntarily by Balfour Beatty. He asserted that they were obtained
by the police during the course of the police investigation using powers under
the Police and Criminal Evidence Act 1984. It is not clear what his basis for
so suggesting was, and before us I understood Mr Supperstone to accept that
Balfour Beatty had handed over the Heads of Agreement voluntarily.
The basis for a strike out
The argument for persuading the court to strike out the proceedings depends on
establishing that the proceedings have been brought making use of material in
contempt of court. It is not argued that if the Council wrongfully obtained
evidence in some way, other than in contempt of court, that the remedy of
strike out should be available. That is a recognition of the fact that the
remedy in such circumstances would be limited to an application for an
injunction to restrain use of such evidence, and the availability of such a
remedy would depend on Mr McGrath establishing a cause of action or an
equitable entitlement to such remedy; see Marcel v Commissioner of
Police of the Metropolis [1992] Ch.225 from 237H to 239A in the
Vice-Chancellor's judgment at first instance. No injunction has been sought,
and for reasons that will appear, nor could it have been. The argument in this
case is thus dependent on establishing that the Council have used documents in
breach of an undertaking given to the court or assisted another to breach such
undertaking as per the decision of Rimer J in Miller v Scorey [1996] 1
WLR 1122.
In that case Rimer J struck out an action where proceedings were commenced in
reliance on documents produced on discovery in an earlier action, where the
consent of the court had not been obtained prior to the commencement of the
second action. That decision is the foundation of Mr McGrath's summons in this
case.
The main issue
The critical question is whether the Lancashire Police and/or the Council were
bound by any implied undertaking to the court not to use the material obtained
from Balfour Beatty for any purpose other than the criminal proceedings, and
not to use the witness statement of Mr Stephen for any purpose other than any
criminal proceedings that might be pursued.
The argument begins with the undisputed proposition that in criminal
proceedings, compliance by the prosecution with its obligation to disclose
generates an implied undertaking on the part of the defendant to the court not
to use documents for any purpose other than the conduct of the defence see
Taylor v Serious Fraud Office [1999] 2 AC 177. What lies behind the
imposition of this undertaking it is correctly submitted is the need to protect
persons who supply information. Lord Hoffmann put it this way at page 211
B-D:-
"Many people give assistance to the police and other investigatory agencies,
either voluntarily or under compulsion, without coming within the category of
informers whose identity can be concealed on grounds of public interest. They
will be moved or obliged to give the information because they or the law
consider that the interests of justice so require. They must naturally accept
that the interests of justice may in the end require the publication of the
information or at any rate its disclosure to the accused for the purposes of
enabling him to conduct his defence. But there seems to me no reason why the
law should not encourage their assistance by offering them the assurance that,
subject to these overriding requirements, their privacy and confidentiality
will be respected."
Thus, the argument continues, because it is the interest of the witnesses and
those that come forward to the police requiring protection against any
disclosure by the police which generates the implied undertaking, the
prosecution must be subject to the same implied undertaking to the court in
relation to any material which the prosecuting authorities gather during the
criminal process because the same interests must be protected.
The argument is however logically flawed. The fact that the identified
mischief generates an implied undertaking to the court when the subject matter
is discovery in the course of proceedings in court, does not mean that the same
mischief must generate an undertaking to the court where the police are using
their powers outside court process.
To put the same point more explicitly. I accept that there are, as Marcel
v Commissioner of Police [1992] Ch.225 demonstrates, constraints
placed on the prosecuting authorities. But once it is appreciated that the
contention of Mr McGrath has to be that the constraints which should be placed
on the prosecuting authorities arise whether or not proceedings are on foot and
whether or not proceedings are ever brought, it can be seen how impossible it
is to suggest that constraints are imposed by some form of undertaking to the
court.
There are, as I see it, a variety of different strands that must be
disentangled one from the other.
There is the duty on the police in relation to material collected during the
currency of a criminal investigation. In Marcel reference was made to
Sections 18, 19, 20 and 22 of the Police and Criminal Evidence Act 1984.
Dillon LJ summarised the position helpfully as follows at 253F to 254E:-
"The relevant provisions of the Act of 1984 are as follows. Section 18
provides by subsection (1) that a constable may enter and search any premises
occupied or controlled by a person who is under arrest for an arrestable
offence if he has reasonable grounds for suspecting that there is on the
premises evidence, other than items subject to legal privilege, that relates to
that offence or some connected or similar arrestable offence. Section 18(2)
provides that a constable may seize and retain anything for which he may search
under subsection (1). Section 19 provides by subsections (2) and (3) that a
constable who is lawfully on any premises may seize anything which is on the
premises if he has reasonable grounds for believing that it has been obtained
in consequence of the commission of an offence or if it is evidence in relation
to an offence, and if another condition is satisfied. It is, however,
expressly provided by subsection (6) that no power of seizure conferred on a
constable is to be taken as authorising the seizure of an item which the
constable has reasonable grounds for believing to be subject to legal
privilege.
. . . .
Section 22 of the Act of 1984, which has the side heading "Retention," provides
by subsections (1) and (2):
"(1) Subject to subsection (4) below, anything which has been seized by a
constable or taken away by a constable following a requirement made by virtue
of section 19 or 20 above may be retained so long as is necessary in all the
circumstances. (2) Without prejudice to the generality of subsection (1) above
- (a) anything seized for the purposes of a criminal investigation may be
retained, except as provided by subsection (4) below - (i) for use as
evidence at a trial for an offence; or (ii) for forensic examination or for
investigation in connection with an offence; and (b) anything may be retained
in order to establish its lawful owner, where there are reasonable grounds for
believing that it has been obtained in consequence of the commission of an
offence."
Section 22(4) then provides that nothing may be retained for either of the
purposes mentioned in subsection (2)(a) if a photograph or a copy would be
sufficient for the purpose.
Under paragraph B6.9 of Code of Practice B, made by the Secretary of State
under section 66 of the Act and brought into operation by an order made by a
statutory instrument approved by a resolution of each House of Parliament, the
person from whom documents are seized is entitled to be supplied by the police
with copies at his own expense, subject to a restriction that is immaterial.
"
There was not unanimity in the Court of Appeal as to whether those sections
dealt simply with duration or also with the purpose of retention by the police.
Dillon LJ accepted the view of the Vice-Chancellor at first instance that the
section was concerned with duration [255F-256E] and Sir Christopher Slade was
of the opposite view [262H]. But for present purposes that point matters not,
because the court accepted by one route or another that there were constraints
on the police, and there was no dissent from the broad proposition of the
Vice-Chancellor quoted with approval by Dillon LJ at 255G to 256D in the
following terms:-
"However, there manifestly must be some limitation on the purposes for
which seized documents can be used. Search and seizure under statutory powers
constitute fundamental infringements of the individual's immunity from
interference by the state with his property and privacy - fundamental human
rights. Where there is a public interest which requires some impairment of
those rights, Parliament legislates to permit such impairment. But, in the
absence of clear words, in my judgment Parliament cannot be assumed to have
legislated so as to interfere with the basic rights of the individual to a
greater extent than is necessary to secure the protection of that public
interest. In the case of this Act, it is plainly necessary to trench upon the
individual's right to his property and privacy for the purpose of permitting
the police to investigate and prosecute crime; hence the powers conferred by
Part II of the Act. But in my judgment Parliament should not be taken to have
authorised use of seized documents for any purpose the police think fit. For
example could the police provide copies of seized documents to the Press save
in cases where publicity is necessary for the pursuit of their criminal
investigations? . . .
"In my judgment, subject to any express statutory provision in other Acts, the
police are authorised to seize, retain and use documents only for public
purposes related to the investigation and prosecution of crime and the return
of stolen property to the true owner. Those investigations and prosecutions
will normally be by the police themselves and involve no communication of
documents or information to others. However, if communication to others is
necessary for the purpose of the police investigation and prosecution, it is
authorised. It may also be, though I do not decide, that there are other
public authorities to which the documents can properly be disclosed, for
example to City and other regulatory authorities or to the security services.
But in my judgment the powers to seize and retain are conferred for the better
performance of public functions by public bodies and cannot be
used to make information available to private individuals for their
private purposes."
All three members of the Court of Appeal however found difficulty in defining
with precision the extent of the duty, but were clear (disagreeing with the
Vice-Chancellor on this point), that whatever the constraints on the police
those constraints did not require the court to set aside a subpoena for the
production of documents at the suit of the owners of the documents where the
owners would themselves have been bound to produce the same pursuant to a
subpoena.
In Marcel however there were certain documents which had in fact been
disclosed by the police without the subpoena being served on the police.
Dillon LJ thought Mr Jaggard should not be prevented by an injunction at the
suit of the owners of those documents, from using those documents because the
law had not been clarified when the police had disclosed the same; and Nolan LJ
thought it was unrealistic to distinguish between the categories of documents
(presumably because it was simply an error by the solicitor that he had failed
to take the subpoena with him to obtain the first category of documents). But
Sir Christopher Slade spent the greater part of his judgment considering the
principles by reference to this first category of documents, and his conclusion
was that "this is a case where justice and the proper balancing of the public
interest require the disclosure of the documents and information in category 1
(ie this category of documents) for the purpose of the civil proceedings," a
factor being even in this instance that the documents could have been obtained
on subpoena from the original owners. In a later passage in the judgment he
made clear that he contemplated that the police would not be entitled to remain
silent if they appreciated that false evidence was being given at the civil
trial.
It is also of interest that Dillon LJ at page 256E-H, with whom Nolan LJ agreed
expressly (page 261 ), said about certain practices of which they had been
informed as follows :-
"I am not concerned in this judgment with documents which have been put in
evidence in open court in criminal proceedings and whose contents can thus be
said to have entered the public domain. Equally nothing in this judgment or,
in my view, in the Vice-Chancellor's judgment, is to be treated as directed in
any way towards suggesting that there is any impropriety in the present
practice of the police in any of the following areas which were drawn to our
attention by Mr. Gompertz as possible matters of concern, viz.: (i) the
supplying by the police of information and witness statements to interested
parties where there is a possibility of civil litigation after a road accident,
and in particular the supplying of the names and addresses of parties involved
in the accident whom an injured person could well otherwise have difficulty
tracing; (ii) conferences with and the supplying of information to the social
services and welfare agencies and doctors in relation to the welfare of a minor
(even if there has been a decision not to prosecute) where there has been an
allegation of child abuse, whether sexual or not; and (iii) the supplying of
information to the Criminal Injuries Compensation Board where a victim has
claimed compensation and there has been no prosecution because the alleged
criminal has died or fled the country."
Thus what in my view Marcel can be said to indicate is (1) that it is to
the owner of documents that the police will owe a duty of confidence and who
may have a cause of action to prevent that breach of confidence; (2) that duty
of confidence is not itself absolute and there will be circumstances in which
in the public interest information can and should be disclosed by the police
overriding the duty of confidence owed to the owner; (3) unless they can obtain
the consent of the true owners, it is best practice for the police to await the
receipt of a subpoena before disclosing documents to aid civil proceedings, and
best practice to inform the owner before disclosing the same so that the
question whether the confidence should be overridden can be considered by the
court; and (4) apart from the duty owed to the true owner of the documents the
duty of the police is simply a public duty, and any question of acting outside
that public duty would be a matter for judicial review.
What is of course of particular interest so far as Marcel is concerned
is that there is no suggestion whatever that the constraints on the police in
relation to documents seized by them during the currency of a criminal
investigation, are enforced by some form of undertaking to the court. If
someone in the position of Mr McGrath ie a person without any proprietorial
interest in documents held by the police, were to challenge the police for
exceeding their powers, it cannot thus be by an application to strike out an
action as an abuse of process. Furthermore such a person has no private cause
of action in confidence or anything of that nature, and thus no remedy by way
of an injunction to prevent use of the documents disclosed founded on such a
cause of action. Judicial review would be the only appropriate form of
challenge.
To return finally to discovery in criminal proceedings. Reciprocity has been
put forward as the basis for imposing an obligation on the prosecution in
relation to unused material reliance being placed on the fact that in civil
proceedings implied undertakings are given by both sides. But the analogy with
civil proceedings is false. Reciprocity in the civil context means an
undertaking by a defendant not to disclose documents disclosed by compulsion by
the claimant, and a corresponding obligation of the claimant not to disclose
documents disclosed compulsorily by the defendant. The fact that the claimant
discloses documents to the defendant does not impose an obligation on the
claimant not to disclose those same documents to someone else. The claimant's
rights to disclose to third parties the documents he holds in his power and
possession (and must disclose to the defendant as a result) depends entirely on
private rights that may exist between him and third parties, and not on any
obligation that he owes to the court.
The position in this case
The police obtained the Heads of Agreement from Balfour Beatty. They obtained
a witness statement from Mr Stephen in relation to it. Whatever constraints
may have been placed on the police as to the use they might make of that
document or the witness statement of Mr Stephen, no implied undertaking to any
court was generated by obtaining the document or taking the witness statement.
It follows that the foundation for any argument that the action commenced by
the Council against Mr McGrath should be struck out as an abuse of process has
disappeared. The disclosure to the Council was not in breach of any
undertaking to the court, and was not a contempt, and thus if the Council did
use the statement of Mr Stephen and referred to the Heads of Agreement for the
purpose of bringing the proceedings, the Council could not be in contempt, or
commencing proceedings in abuse of the process of the court.
Mr McGrath should not however feel that I am simply taking a procedural point,
and that some other procedure might have been invoked for preventing reliance
on the witness statement or the Heads of Agreement. There is no doubt that the
police had a public duty in relation to the use of the heads of agreement, and
the witness statement and in my view that existed whether they had obtained the
same voluntarily, or under compulsion. They further owed prima facie a private
duty to Balfour Beatty and Mr Stephen. But there could be no possibility of
any breach of private or public duty if the police obtained the consent of Mr
Stephen (which Mr Wood was told they did) or from Balfour Beatty (about which I
accept there must be more doubt, although Balfour Beatty do not appear to have
protested).
If the seizure of the Heads of Agreement had been under compulsory powers
or despite Balfour Beatty's co-operation were to be treated as such, and if
Balfour Beatty did not consent to disclosure of the document, the question
would arise primarily as between the police and Balfour Beatty but also in
considering the extent of the public duty of the police, whether the duty of
confidence to Balfour Beatty should be overridden. In my view, where the
police have information that tends to indicate a prima facie case of corruption
against a Council, the interests of justice point in favour of the police being
entitled to reveal that information to the Council. The distinction between
disclosing information as to the existence of a document and its contents and
handing over the document itself appears a fine one, but it is a distinction
that will exist during the currency of a criminal investigation where the
police must be entitled to show a victim the contents of a document such as the
Heads of Agreement, but would not be entitled to hand over the document itself.
Furthermore the statutory provisions seem to recognise the duty of the police
to return property to its true owner, and it seems to me consistent with that
duty to be entitled to inform victims of the existence of a potential claim to
the return of money that belongs to the victim. Furthermore the supply of the
information which would lead to either the police or the owner of the documents
being subpoenaed seems to me to be in accordance with the instances identified
by Dillon LJ in Marcel as not to be the subject of criticism. It seems
to me to accord with Nolan LJ's proposition "only in the public interest and
with due regard to the rights of individuals". More plainly still it seems to
me to be in accordance with the reasoning of Sir Christopher Slade in the same
case.
In fact all that the police did in this case was to reveal that information by
disclosing Mr Stephen's statement with his consent. They did not hand over the
Heads of Agreement albeit they disclosed its existence and contents. Best
practice would suggest that they should obtain the consent of the owner of the
documents or await a subpoena if the owner refuses his consent before handing
over documents, and this appears to have been the practice adopted.
I would just add for completeness that if the Heads of Agreement were obtained
voluntarily from Balfour Beatty and not pursuant to any compulsory powers,
depending on the precise circumstances it may even be that no duty of
confidence would be owed to Balfour Beatty at all, and in those circumstances
the police would be in the same position as any other member of the public who
obtained information relating to corruption, and entitled to inform the Council
as a possible victim thereof that they had such a document.
It thus seems to me unlikely that any other remedy was ever available to Mr
McGrath in relation to the disclosure by the police of the existence of the
Heads of Agreement. But now that Mr McGrath has in fact disclosed the Heads of
Agreement himself by pleading the same, that is a final and conclusive reason
for no remedy being available to Mr McGrath which might prevent the Council
relying on the same.
Conclusion
I would dismiss the appeal.
LORD JUSTICE TUCKEY: I agree.
LORD JUSTICE MORRITT: I also agree.
Order: Appeal Dismissed; section 18.
(Order does not form part of the approved judgment)
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