Zambia v Meer Care & Ors

LORD JUSTICE LAWS: In these applications I will ask Lord Justice Lloyd to give the first judgment.

LORD JUSTICE LLOYD: These are unusual applications for permission to appeal arising from an unusual trial. The appeals are by the seventh and ninth defendants respectively against an order of Mr Justice Peter Smith made on 4th May 2007 at the end of the trial of a Chancery action lasting over 50 days, of which a significant number were spent by the judge in Lusaka sitting as a special examiner.

Throughout the proceedings, a videolink was open between the court where the judge was sitting, whether in Lusaka or London, and the court in London or Lusaka as the case may be, so that all parties could, if they wished, observe and as appropriate take part in the proceedings. In addition, the Court sat in private until the delivery of the judgment.

The claim, which is by the Attorney General of Zambia on behalf of the Republic of Zambia, was for financial compensation in large sums for direct or indirect involvement in one or more of several alleged conspiracies to steal funds from the State of Zambia for the benefit of the former President, Dr Chiluba, and others closely associated with him.

In particular, for present purposes, there were two conspiracies, the main one known as the Zamtrop conspiracy in which the seventh and ninth defendants were both said to be implicated, and a second called the BK conspiracy which was alleged against the ninth defendant but not the seventh.

There were and are concurrent criminal proceedings in Zambia against, among others, the seventh and ninth defendants. It was these proceedings that gave rise to some of the special features of the trial.

Before the trial started, several defendants, including the seventh and ninth, applied to Mr Justice Peter Smith, who had already been identified as the trial judge and was handling the case management, for a stay of the proceedings pending the criminal proceedings in Zambia. This was refused by the judge, and his decision was upheld on 7th March 2006 by the Court of Appeal; see [2006] EWCA Civ 390.

I should mention incidentally that the seventh and ninth defendants have applied under rule 52.17 of the Civil Procedure Rules to re-open that appeal. That is of no materiality for today's purposes.

In the course of his judgment, Sir Anthony Clarke, Master of the Rolls, said this at paragraph 32:

"Thus an order will be made then [that is to say in April] to ensure that the trial will be in private and that no use will be made of any pleading document, witness statement or oral evidence filed, disclosed served or given in these proceedings. Moreover, the order should include an undertaking to that effect. I note in passing that it is envisaged that the trial will take place this summer."

Lord Justice May, agreeing, said at paragraph 52 this:

"To exemplify this point, can the Court be satisfied that the ring-fencing will prevent evidence given by the appellants in the civil proceedings from being used against them in the Zambia criminal proceedings? I am persuaded that the judge in England can and will make orders and arrangements which, assuming they are complied with, will fairly achieve this. Whether they will be complied with, centrally concerns whether the orders are capable of being enforced in this jurisdiction against Zambia. It is clear that Zambia has submitted to the jurisdiction of this Court for the purposes of the State Immunity Act 1978. Insofar as this by itself might not be sufficient under sections 1, 2 and 13 of the 1978 Act, to enable this Court to enforce its orders against Zambia, as to which I say nothing, I am satisfied that Zambia will give a sufficient written consent. It will be for the judge to deal with the details of this, and my agreement that this appeal should be dismissed assumes that he will do so."

I will come on shortly to what happened at the hearing in April in the light of those comments.

The seventh and ninth defendants are, as I mentioned, defendants in the Zambian criminal proceedings. They are unable to leave Zambia so they would or could have been beneficiaries of the arrangements for (a), a videolink, and (b), the sitting by the judge in Lusaka for the purposes of hearing evidence from Zambian-based defendants.

In fact, after the failure of the stay application and after some further steps in the course of the case management, they took no part in the proceedings, from a date in about June of 2006.

The ring-fencing order, which was originally made on 10th October 2005, provided that no documents disclosed by any defendant could be used for any purpose, including proceedings and investigations in Zambia, other than the Chancery claim.

In April 2006, at a case management conference which was due to be held in any event, but no doubt informed by what the Court of Appeal had said in dismissing the appeal on 7th March 2006, the ring-fencing regime was sought to be reinforced.

On 28th April 2006, the judge made an order which was relevantly made on an undertaking by the Attorney General, reinforcing the order made the previous year to the effect that without the permission of the Court:

"There will be no use made of any oral evidence or any documents including any Statement of Case or any witness statements filed, disclosed, served or ordered in the proceedings by the defendants or by the claimant in response thereto, for any purposes including but not limited to the conduct of investigations and/or civil and/or criminal proceedings in Zambia or any other country other than these proceedings."

In addition to recording that undertaking, the order provided at paragraph 13 that the trial in the High Court and the taking of evidence in Lusaka would take place in private, and it dealt at paragraph 15 with the question of immunity.

I will read the whole of that paragraph:

"For the avoidance of doubt, if, on the application in these proceedings of the third defendant, Dr Frederick Jacob Titus Chiluba; the sixth defendant, Mrs Stella Mumba Chibanda; the seventh defendant, Mr Aaron Chungu; and/or the ninth defendant, Mr Faustin M Kabwe, this Court should hold that the claimant, the Attorney General of Zambia for and on behalf of the Republic of Zambia, is in contempt of the order set out in paragraph 14 [which is the undertaking] in respect of any one or more of the said defendants, the claimant gives its consent within the terms of section 13(3) of the State Immunity Act 1978 for the giving of relief against the claimant or the issue of process against the claimant within the terms of section 13(2) of the 1978 Act that this Court may order in relation to such contempt. For the avoidance of doubt, this consent is given without prejudice to and does not restrict in any way any immunity and/or privilege conferred on the claimant by virtue of the Diplomatic Privileges Act 1964, the Consular Relations Act 1968 or similar. For the further avoidance of doubt, this consent is not given on behalf of the Bank of Zambia and does not extend to the giving of any relief or the issue of any process against the Bank of Zambia or its property within the meaning of section 13(2) of the 1978 Act or otherwise."

The seventh and ninth defendants contend that they decided to stop taking part in the proceedings as a result of the Attorney General's failure to address a number of concerns which they had expressed about the ineffectiveness of the ring-fencing regime, including allegations that he and his staff were in breach of the ring-fencing order and also that he may have misled the Court of Appeal by his undertaking to waive sovereign immunity. They complain that the continued provision to them during the trial of daily transcripts was made conditional on their being collected personally and on the basis of confidentiality undertakings. They also complain of not having had advance notice of the draft judgment and they complain of the publication of the judgment.

They say that they have suffered injustice through the publication of the judgment on the internet and the consequent adverse and hostile treatment by the public and potentially by the magistrate hearing the criminal proceedings.

The grounds of appeal fall into two categories: First, that the order was vitiated by serious procedural and other irregularities; and secondly, that it was wrong in law because the trial was conducted in breach of Article 6 of the European Convention on Human Rights.

The procedural irregularities that are relied on are first: proceeding to trial without properly dealing with the concerns of the appellants about the ring-fencing regime, including the question of its effectiveness if the Attorney General could not waive immunity or did not validly do so; secondly, that the judge, when he concluded that the appellants had themselves broken the ring-fencing order, did so without giving them the opportunity to be heard on that question; and thirdly, the decision of the judge to publish the judgment on the internet without having given these appellants the opportunity to make representations as to its impact on the Zambian criminal proceedings.

The breaches of Article 6 which are said to have been committed consist of: first, the inability of these appellants to participate in the trial for fear of jeopardising their defence of the criminal proceedings, a point which really goes with the ring-fencing points already mentioned; secondly, their inability to fund legal representation; and thirdly, the suggested inability of the judge, sitting in his capacity as special examiner in Lusaka, to compel the attendance of witnesses other than those in the public service.

Lately, the appellants have also applied to amend their grounds of appeal to allege bias or apparent bias on the part of the judge, but I will deal with that later.

In addition, the appellants apply for permission to rely on additional evidence, that is to say, the evidence which they have put in in support of their application under rule 52.17. Clearly it is appropriate to have regard to that evidence in considering whether the appeal has any sufficient prospect of success for permission to be granted, and Mr Umezuruike on their behalf has made reference to a number of points in the witness statements and the exhibits.

The appellants also apply for a stay of execution of the judgment and that is of course entirely dependent on whether permission should be granted.

Given the unusual nature and circumstances of the matters relied on as relevant to these appeals, when considering the applications on paper, I directed that these permission applications should be adjourned to an oral hearing before two Lords Justices and on notice to the respondent.

We therefore have the benefit of submissions on behalf of both appellants by Mr Umezuruike and for the respondent by Mr Sullivan leading Miss Brown. Moreover, the appellants as well as the Court had the benefit of notice of points from the respondents' written skeleton argument.

Mr Umezuruike has said all that can properly be said on behalf of his clients and, where he has refrained from pressing a point in oral submissions, he was wise, prudent and proper to do so.

The appellants' contention that they ceased to take part in the proceedings because of a lack of response to a letter written by them to the Attorney-General's solicitors, Messrs DLA Piper, dated 22nd June 2006 appears to be questionable. First, DLA did reply on 7th July 2006, although Mr Umezuruike says that there was no adequate response in that letter on a number of particular points, including the absence of any document whereby the Attorney-General might validly have waived immunity.

But the question of the absence of a document was not pursued after that, until after the appeal had been mounted. It seems to me plain that the order of 28th April 2006 is intended to be adequate for the purpose, and if it was not thought to be adequate for the purpose, the point should have been taken then and there.

Moreover, I note that the 22nd June letter asserts that the decision not to take part in the proceedings had been taken by and was announced on 13th June in an earlier letter.

Accordingly, it seems to me that this point is a good deal less than plausible. In the light of that, I need say no more, although more could be said, about the reliance in the appellants' written materials, not expanded on in oral submissions this morning, on what was said to have been reported as to the Attorney General's stated attitude to sovereign immunity in other proceedings before Mr Justice Andrew Smith in which the State of Zambia was the defendant.

As for the contention that the Attorney or his staff broke the ring-fencing order, the respondents' contention is that there is no evidence of that before the Court, and that, to the contrary, leaks to the press came from the defendants, though not necessarily from these particular defendants.

The appellants' case as to breaches on behalf of the respondent or his staff is entirely devoid of any particulars or detail, either as to who was responsible for any breaches, when they occurred or, most importantly, what was said to have been disclosed in breach of the orders.

That appears to me to be inadequate, to say the least, as any basis for a challenge to the judgment.

As regards the question of access to the transcripts of the proceedings at trial, it is not obvious to me why a requirement to collect them personally and to sign confidentiality undertakings should be regarded as improper, unfair or a breach of Article 6.

If, as I consider, there is no substance to any of these points, it seems also to follow that there is nothing in the argument that it was as a result of in effect enforced non-participation that judgment was given against these appellants for large sums of money at the end of the trial. There was evidence against them which they did not seek to refute. I can see no more substance in the contention that the defendants' rights were not properly respected by their not being sent a draft of the judgment, nor by the judgment being published without the opportunity for them to make representations why it should not be.

There was no prospect, in the light of their stated attitude, that these appellants would have participated at the late stage on sight of a draft, and accordingly that seems to me to be an empty point.

Equally, publication of the judgment has not revealed to the public anything about these appellants emanating from them, because there was in effect nothing available and certainly nothing new.

Mr Umezuruike has tried in vain to point to anything in the judgment which could remotely be regarded as jeopardising these appellants' position in the criminal proceedings, quite apart from the question whether, if there had been any such prejudice, the remedy would lie in those proceedings rather than in these.

The Article 6 points overlap in part with or repeat points already covered, and I will not go back over the same material.

There is a separate point to do with funding. The ninth defendant contended that he wanted to sell a farm in order to pay legal fees. This was originally subject to a restriction notice on the part of the Government, but the Government agreed to and did revoke it. No sale took place, notwithstanding this, and there does not appear to have been an adequate explanation for the absence of a sale. The defendant refused one substantial offer, presumably on the basis that it was inadequate, but that suggests that it was a matter of choice whether he collected liquid funds by a sale in order to be able to pay for representation, or not.

As to other points concerning the lack of funds, the claimant contends that the appellants' case should be viewed with caution because of its lack of detail.

I am wholly unpersuaded that there is any viable ground of appeal that could be based on this aspect of the case.

As to the point that the judge could not secure the attendance of witnesses other than those in the public service, this appears to be entirely without content since no relevant witness has ever been identified in relation to whom the position could have been put to the test. It seems to me, therefore, that there is no substance in any of these points.

I should say that the Taylor v Lawrence applications remain outstanding on these various points and will be dealt with in the ordinary way in due course.

As I mentioned, however, at a very late stage, the appellants applied for permission to amend so as to add new grounds of appeal, contending that the judge had showed bias or at least an appearance of bias against them, and in particular against the ninth defendant.

Only two of the matters relied on were not known to the defendants at the time of the original appellants' notice; the others were then known to them and could, if there had been any substance to them, have formed part of the grounds of appeal at that stage.

I will deal with them briefly. As to them, nothing said by the judge suggests that he thought Guardian Weekly, a publication in Zambia, which it is said tends to be critical of the present Government, was owned or controlled by, as distinct from sympathetic to, the Zambian defendants.

It is true that the judge noted the Guardian Weekly's failure to comply with his request not to publish material covered by the ring-fencing order, and that he inferred, on what appeared to be reasonable grounds, that the material so published had come from one or more of the defendants, not necessarily from these.

But I see no factual basis for the claim of bias on this ground. The same is true of the judge's critical comments against Dr Chiluba about his arguably extravagant purchases of clothes and shoes.

The third point, namely, the failure to notify the ninth defendant of a trial of an issue in relation to which the ninth defendant had no claim or concern, is even more clearly unable to support an allegation of bias.

The additional point based on material coming to light only since the judgment in this case, is this: as a result of the hearing of an appeal in the case called Howell, Thompson & Robinson v Millais & Others, [2007] EWCA Civ 720, in which judgment was given on 4th July, it became known generally that Mr Justice Peter Smith had for a time been in discussion with a firm of solicitors about the possibility of his joining them, having retired from his position as a judge, as a solicitor advocate.

These discussions are said to have taken place over the period November 2006 to May 2007, culminating in late May with the firm declining to pursue the idea.

The judgment of the Court of Appeal revealed that the judge expressed considerable disappointment at this, and among other things in an e-mail to the solicitors "stressed the considerable advantages of being associated with him, as a judge who had recently given judgment in a landmark decision on corruption": see the judgment of the Master of the Rolls at paragraph 11.

No doubt the reference to the judgment in question was to the present case. The contention is, therefore, that the judge may not only have referred to the judgment in his correspondence with the solicitors, but also have been influenced by the discussions with the firm in his conduct of and decision in the litigation.

That contention seems to me to be absurd. Whatever view one may have of the judge's negotiations with the firm, there is no conceivable basis for the suggestion that in relation to the conduct of the present case, or in deciding it, there could be the slightest ground for a supposition that the judge was influenced by those negotiations. Apart from anything else, he could have said exactly the same to the firm, whatever the outcome of the case.

One additional point is relied on, which is so thin and unpersuasive, quite apart from depending on matters of fact of which there is no evidence, that I do not propose to dignify it with any discussion.

I would refuse permission to amend to add these grounds to the appellants' notice and I would refuse permission to appeal.

We also have before us an application for permission to appeal on the part of the ninth defendant against a separate order of the judge made on 7th June 2007 by which he refused to vary a freezing order which he had continued in his order of 4th May, the variation sought being to permit the ninth defendant to spend a certain amount on legal expenses in England and Zambia.

This application is before the Court on the basis of an application for permission to appeal, with the appeal to follow immediately if permission granted since, if there is any substance to it, it is presumably urgent. Indeed, on 10th October, the ninth defendant wrote to the Court asking that the matter be expedited.

The main point that he made in his appellants' notice and grounds of appeal, as elaborated briefly and succinctly to us this morning by Mr Umezuruike on his behalf, is that until the 4th May 2007 there was a freezing order in place which did allow £1,000 a week for living expenses and a reasonable sum for legal representation, and that this proviso was removed without any explanation or reasons given when the order was renewed on 4th May.

The ninth defendant applied by letter dated 6th June, the eve of the consequential hearing, for a variation so as to reintroduce the proviso allowing expenditure. This was opposed for the Attorney General, and the judge ruled against it on grounds which are recorded in the transcript.

They can sufficiently be summarised by saying that the judge refused to consider the application in the absence of sworn evidence necessary to support and justify it, including evidence as to how the ninth defendant had been managing up to then, why there was a change of circumstances and what was the position in relation to a farm, Serioes Farm, which I have mentioned.

The judge made a secondary point, namely that after judgment, because the order was to protect execution of the order rather than just to preserve the position pending the proceedings, it was legitimate to look at the matter more critically.

Those observations plainly left it open to the ninth defendant to apply again to the judge with evidence in support to meet the points identified by the judge. Instead, he sought to appeal.

As it seems to me, that appeal is hopeless. Mr Kabwe would have to say that the judge was not entitled to require evidence in support of the proposition that the exception should be continued. That seems to me to be unarguable.

For the first time in evidence, in response to evidence put in on behalf of the Attorney General, in opposition to the application, and in case the matter might have proceeded to a substantive appeal, Mr Kabwe has put in some evidence as to his circumstances. That is not the correct approach. If he wishes to pursue the matter, he should now apply again at first instance, as he should have applied back in June, with evidence to justify a variation of the freezing order. Only if such an application were refused would it be appropriate even to consider taking the matter on appeal.

For those reasons, I would refuse permission to appeal in relation to this application as well.

LORD JUSTICE LAWS: I agree that the applications argued before us should be refused for all the reasons given by my Lord. I agree also that the Taylor v Lawrence application should be dealt with on the papers in the usual way in due course.