Rawlinson and Hunter Trustees SA v Tchenguiz & Ors

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”).

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.”

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 …”

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.

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.

For reasons which are set out in the 6^th 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.

In essence, Mr Segan submitted that the Order now sought provides such modest and proportionate solution in the particular circumstances in the present case.

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.

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.

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.

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).

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.

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.

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.

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.