Surzur Overseas Ltd v Koros & Ors [1999] EWCA Civ 863 (25 February 1999)

IN THE SUPREME COURT OF JUDICATURE QBCMI 98/0442/3
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN’S BENCH DIVISION
COMMERCIAL COURT
(Mr. Justice Longmore)
Royal Courts of Justice
Thursday, 25th February 1999
Before:
LORD JUSTICE HIRST
LORD JUSTICE ALDOUS
LORD JUSTICE WALLER
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SURZUR OVERSEAS LTD
Appellant -v-
KOROS AND OTHERS
Respondent
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(Handed down transcript of
Smith Bernal Reporting Limited
180 Fleet Street, London EC4A 2HD
Tel: 0171 421 4040 Fax: 404 1424
Official Shorthand Writers to the Court)
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MR. S. KENTRIDGE Q.C., MR. A. TEMPLE Q.C. and MR. S. KENNY (instructed by Messrs Clyde & Co., London, EC3) appeared on behalf of the Appellant/Plaintiff.
MR. A. SCHAFF (instructed by Messrs Bentleys, Stokes & Lowless, London, E1) appeared on behalf of the Thirteenth and Fourteenth Respondents/Defendants.
MR. J. LOCKEY (instructed by Messrs Waterson Hicks, London, EC3) appeared on behalf of the Second Respondent/Second Defendant.
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J U D G M E N T
(As approved by the Court)
Crown Copyright
Lord Justice Waller:
This is an appeal from a judgment of Longmore J given on 20 February 1998. He had before him applications by the Second (ET), Thirteenth (CE) and Fourteenth (EE) defendants to set aside service of proceedings against them. The applications raise issues as to whether the court had jurisdiction over the defendants. ET, CE and EE are individuals domiciled in Greece who would thus therefore prima facie have to be sued in Greece under Article 2 of the Brussels Convention as enacted by the Civil Jurisdiction and Judgments Act 1982 (as amended). The plaintiffs have sought to establish jurisdiction under Article 5(3) and Article 6(1). Originally the only issues that were to be brought before the court involved the applicability of Articles 5(3) and 6(1), but, shortly before the hearing of the applications, these defendants raised what can be called a threshold point.
It is undisputed that in order to justify invoking either Article 5(3) or Article 6(1) the plaintiff’s case has to pass a sufficient threshold of ‘arguability’. It is common ground that the relevant test is that set out in Tesam Distribution Ltd v Schuh Mode Team GmbH [1990] 1.L.Pr.149, namely that the plaintiff must satisfy the court that it has a ‘good arguable case’ in the sense that
“there is a serious question which calls for a trial for its proper determination.”
The judge decided that on a proper analysis of the plaintiff’s claim that claim was one of conspiracy to use unlawful means, those means being the procuring and deploying in court of false evidence, in consequence of which the court was wrongly deceived into varying a Mareva injunction resulting in loss and damage suffered by the plaintiff. The judge further held that assuming the facts and matters in the original points of claim were true they disclosed no serious issue to be tried as against the defendants on the basis that as a matter of law the defendants were immune from suit on the basis of what is referred to as the ‘witness immunity’ rule.
Accordingly the judge did not decide such other points as might have arisen on Article 5(3) and Article 6(1), and it is common ground that if the appeal were allowed on the arguability point the matter would have to return to the Commercial Court to have the further matters determined.
Before us the plaintiff has sought leave to amend the points of claim broadening the allegations that have been previously made. Mr Schaff, on behalf of CE and EE, and Mr Lockey, on behalf of ET, have not ultimately resisted with any degree of force this court approaching the question of ‘witness immunity’ by reference to the amended points of claim. In not seriously resisting leave to amend the points of claim, Mr Schaff did make certain points. First, he submitted that the plaintiff had now had plenty of opportunity to consider the position and that thus no more latitude should be granted. There is no difficulty with that since the plaintiff has not sought any further latitude. He then submitted that it was important to look critically at allegations now made in the amended points of claim in so far as they were inconsistent with the thrust of the earlier points of claim. Mr Kentridge QC for the plaintiff did not demur from that being a proper approach. Mr Schaff finally submitted that there might arise a point in relation to the court first seised and Article 22 of the Convention. He submitted that if the original points of claim were held not to contain a ‘seriously arguable cause of action’ then the appropriate course for the court to take might well be to set aside the original service and simply allow the proceedings as amended to be re-served or re-commenced. In that event he submitted that there might well arise the question as to whether the English court would then stay the re-served or fresh proceedings having regard to the fact that the defendants had commenced libel proceedings in Greece since the decision before Longmore J. It was his submission that this question of which court was first seised should in some way be left open for the Commercial Court to decide.
If there had been a likelihood that this was a case in which the court should insist on re-service of proceedings because some serious argument might then arise as to the court first seised, it might have been appropriate to find some way of preserving that point for Mr Schaff to argue. Since it does not seem to me to be a case where the court would insist on re-service or re-commencement and, since quite properly this aspect was not pursued with any force by Mr Schaff, the appropriate course is simply to give leave to amend the points of claim and leave the matter there.
What then are the issues on the appeal?
The broad issue as already stated is whether, on the amended points of claim, the plaintiffs can demonstrate a serious issue to be tried. The basis on which Mr Schaff and Mr Lockey, on behalf of their clients, submit that there is no serious issue to be tried is that on the allegations made in the amended points of claim either the witness immunity will defeat the points of claim in toto, or the witness immunity rule will lead to such substantial portions of the points of claim being excised that the remainder will not produce any serious question for the trial.
Mr Schaff is correct in his skeleton argument in stating that debate of the key issue involves enquiries into the following matters:-
(1). An analysis of the plaintiff’s cause of action;
(2). An analysis of the “witness immunity” rule;
(3). An analysis of the extent to which the plaintiff’s cause of action infringes the witness immunity rule; and
(4). Possibly consideration of whether the point of law should be determined on the jurisdiction summons at all.
Analysis of the plaintiff’s cause of action
It is right to record that the allegations made against the defendants by the plaintiffs are very serious indeed. The allegations on any view involve alleging the creation of false documents, the making of fraudulent and misleading statements and the deploying in court of false evidence. Those allegations are strenuously denied by the defendants and if required to do so the defendants will defend such allegations at trial whether in England or in Greece. But, for the purposes of this appeal, the court has to assume that the allegations made in the amended points of claim will be made good. The question is whether, even if those allegations could be made good, there is a serious issue to be tried.
The thrust of the amended points of claim, Mr Kentridge accepts, is different from the thrust of the points of claim which Longmore J had to consider. The thrust is altered by amendments to paragraph 9 and by the insertion of new paragraphs 68A and B of the amended points of claim. But, it should be noted that those amendments seek, in effect, to draw inferences from facts which have been pleaded throughout. In the original points of claim, the facts, to which I will turn in a moment, were pleaded and the inference alleged to be drawn was of a conspiracy in which “from January 1997 onwards the defendants (or any two or more of them) wrongfully dishonestly and with intent to cheat defraud and cause injury to Surzur agreed together to do so and to procure the acts set out below by unlawful means (particularly the procuring and deployment in court of false evidence) so as to permit the sale of the three vessels.” (See unamended paragraph 9).
The amendments now put the conspiracy in the following way:- “From January 1997 late 1996 onwards the defendants (or any two or more of them, as hereinafter set out ) wrongfully dishonestly and with intent to cheat defraud and cause injury to Surzur agreed together to do so and to procure the acts set out below by unlawful means including -( particularly:-
(i) concealing assets of Mr Koros with intent to assist him in deceiving and defrauding his creditors (including aiding and abetting him in the concealment of those assets from Surzur and from the court after he had been ordered by it to make disclosure)
(ii) making fraudulent and misleading statements intending them to be relied and acted upon by Surzur (among others)
(iii) forging documents intending that Surzur (among others) should accept them as genuine
(iv) giving fraudulent and misleading instructions to solicitors intending the solicitors to act upon them:
(a) by making false and misleading statements to Surzur such that Surzur would act and rely upon them and
(b) by making false and misleading statements to others including (if necessary) to the court, thereby perverting the course of justice
(v) making unfounded dishonest and malicious applications to the court such applications constituting abuses of the process of the court and contempts of court and
(vi) the procuring and deployment in and out of court of false evidence)
so as to deceive Surzur into believing that the three vessels had been sold at arms length and, if necessary, to deceive the court in order to persuade it to permit the sale of the three vessels.”
Mr Schaff submitted that, particularly having regard to the way that the affidavits on the jurisdictional summons supported the conspiracy as originally pleaded, the court must approach with caution the broader based allegations in the amended points of claim. That, as already indicated, is the proper approach and it must be right to analyse in the first place whether the facts pleaded support the broader based plea.
The central allegations against the defendants are as follows.
(1) Surzur had claims against various borrowing companies within the Blue Flag group, personally guaranteed by Mr Koros the controller of that group.
(2) On 6 December 1996 Surzur served notices of default at which stage the sum outstanding from the following companies was in excess of $54m.
(3) On 10 January 1997 Thomas J granted Surzur a worldwide Mareva injunction which prevented the defendants, including Mr Koros, from dissipating their assets and required a disclosure of assets.
(4) On 31 January 1997 Mr Koros swore an affidavit purporting to disclose his own assets and the assets of other defendants and he failed to disclose his ownership of shares and/or of beneficial interests in certain companies including “Hermes” and three shipowning companies “Bergitta”, “Fordel”, and “Veriosa”.
(5) In late December 1996, January 1997 and early February 1997 Mr Koros unsuccessfully sought to negotiate warehousing contracts first with Chartwold Shipping Corporation and then with Drytank S.A.. In February 1997 Mr Koros negotiated and concluded a warehousing contract principally drafted by CE. The warehousing contract was so called because it purported to transfer the three vessels to third-party buyers but on terms which enabled the selling interests to retain control over the vessels and to share in their earnings. The agreement further contemplated that there would be executed Memoranda of Agreement on the Norwegian Sale Form 1987 which would falsely recite terms of ostensible sales of the three vessels materially different from the true terms on which the three vessels had in fact been sold. The purpose of the false MOAs was to give the impression to any interested party that a genuine arms-length sale of the three vessels had taken place at prices which left no available or negligible equity against which Surzur could enforce any judgment.
(6) Surzur, or its advisers, became aware of the possibility of dealings in the three vessels at the end of February 1997. On the instructions of Mr Koros, Herbert Smith maintained to Clyde & Co, acting for Surzur, that the defendants in the action had no interest in the three vessels. However, on 3 March 1997 Surzur obtained from Rix J a variation to the Mareva which added a provision clarifying the injunction by the addition of a sub-paragraph so as to cover in particular “any shares or other legal or beneficial interest in any vessels, including but not limited to the following: MARINER LT, SKIPPER LT, WARRIOR LT, provided that nothing in this varied order shall prevent the sale of the three named vessels by or at the instance of the mortgagees … in circumstances where [the mortgagees] undertake to hold any proceeds of sale surplus to their entitlements under their mortgages to the order of the court.”
(7) After the order of Rix J “Bergitta”, “Fordel” and “Veriosa” instructed solicitors Stockler Charity because The Bank of Scotland, one of the financiers of the buying companies, was not prepared to assist with sales of the vessels without the consent of Surzur or the court. Thus, by letters dated 11 and 12 March 1997, Stockler Charity the solicitors for the three companies placed before Clyde & Co three false MOAs seeking the consent of the plaintiff to the sale of the three vessels without the need for any application to the court.
(8) Surzur would not consent to the sale and an application was made to Rix J on 13 March 1997. Much of the evidence was put in through an affidavit sworn by Mr Charity on information and belief. The false MOAs were introduced in evidence. They purported to show a sale price and sums due to financiers and sums due to trade creditors and the effect was to portray an arms-length sale under which the mortgagees would be repaid but there would be no or little surplus available thereafter. The warehousing agreement was not produced; if it had been that would have shown a rather different picture in that (a) it would have demonstrated the continuing interest of Mr Koros in the vessels and (b) demonstrated that there was in reality a considerable surplus. The difference in price between the false MOAs and the warehousing contract was $1m and the false MOAs purported to show trade debts of $4.6m whereas the warehousing contract showed only US$1.m. In addition, an affidavit was obtained from Mr Sarris a Cypriot lawyer and secretary of the selling companies swearing that the false MOAs were “at arms-length”. Furthermore CE swore an affidavit personally in which he swore that “so far as I am aware” none of the defendants including Mr Koros had any legal or beneficial interest in the selling companies.
(9) Rix J was not persuaded to vary the injunction on 13 March 1997. He at that stage was not prepared to exclude the possibility of collusion between Mr Koros and the buyers on the basis of the material that was before him.
(10) Further material was produced and it is asserted by Surzur that that included false documents and information verifying the trade debts described in the various false MOAs produced by EE. With that information a further application was made before Moore-Bick J on 3 April 1998 and at this stage the judge refused to draw an inference of collusion between Mr Koros and the buyers and permitted the sale of the vessels “in accordance with the MOAs”. By paragraph 68A of the amended points of claim it is alleged:- “Surzur will contend (insofar as necessary) that the application to the Court on 2/3 April 1997 involved the presentation of a wholly false unfounded dishonest and malicious case to the Court and constituted an abuse of the process of the Court and a contempt of Court on the part of those who aided abetted counselled or procured it including all the Defendants.”
By paragraph 68B they allege:-
“Further or alternatively the Defendants’ actions and intentions pleaded above are properly characterised as follows:
(1) At all material times it was the common intention and object of the Defendants to procure a “warehousing” of the three Vessels either in accordance with the terms of the warehousing contract of 26 February 1997 or on materially similar terms. At no stage did the Defendants intend that the Vessels should be sold in accordance with the fake MOAs or on similar terms; nor did they act to achieve sales of the Vessels on such terms.
(2) It was at all material times after 10 January 1997 the common intention and object of the Defendants to transfer the three Vessels in breach of the terms of the Mareva injunction granted by Mr Justice Thomas on 10 January 1997 however that order might be varied so as to permit arms-length sales of the three Vessels.
(3) In due course legal title to the three Vessels was transferred to the buying companies pursuant to the warehousing contract and not in accordance with the terms of the fake MOAs; and therefore in breach of the injunction in its original form and as varied by Mr Justice Rix and as varied by Mr Justice Moore-Bick.
(4) In the premises therefore the Defendants had conspired together to achieve (and did achieve) transfers of the three Vessels in breach of the Court’s injunction and in contempt of Court.”
(11) Surzur ultimately obtained judgment against Mr Koros in the sum of $36m. The essence of Surzur’s claim for damages is that by virtue of the conspiracy they have suffered damage. They assert:-
“Surzur has been deprived of the opportunity of obtaining security for its claims by arresting the three vessels or taking other conservative measures in appropriate jurisdictions and in executing its judgment against Mr Koros’s beneficial interest in the three vessels … “
Conclusions as to the cause of action
It seems to me that the pleaded facts support what is now alleged in the amended paragraph 9 of the points of claim. It was accepted before the judge that the production of the warehousing agreement, for example, could never have been said to have been produced for the purpose of it being deployed before a court because if the allegation be right it was an agreement always to be kept secret. So far as the false MOAs were concerned, before us Mr Schaff was inclined to accept that when originally produced they were not produced necessarily for the purpose of being placed before the court. If Surzur had been persuaded by their production to consent to a variation of the Mareva or consent to a sale of the vessels, there would have been no necessity ever to have deployed them before the court. It thus seems to me to be a fair characterisation of the conspiracy that it had as its objective the concealing of assets of Mr Koros and the deception of Surzur or any other interested party into believing that the three vessels had been sold at arms-length and “if necessary to deceive the court in order to persuade it to permit the sale of the three vessels.” It is however important to stress that the going to court was an important step in the causation of damage to Surzur. It may well be that Surzur would have suffered damage if they had been persuaded by the false MOAs to allow sale of the vessels without the necessity of a court application, but since they were not so persuaded it was the going to court which was a vital step in the vessels being made free to be sold.
There are one or two other points to emphasise. First, Mr Kentridge stressed that the amended points of claim was not seeking to allege any other cause of action other than a conspiracy. He made clear that so far as the new paragraphs 68A and 68B, which asserted abuse of process and contempt of court, were concerned, they were only so alleged as unlawful and overt acts in the context of a conspiracy plea and not as free-standing causes of action. This led during the course of argument to a debate as to whether where a plaintiff alleges a conspiracy to injure using unlawful means, those unlawful means have to be actionable at the suit of the plaintiff. Mr Schaff referred us to a dictum of Stuart-Smith LJ in Credit Lyonnais Bank Nederland NV v ECGD [1998] 1 Lloyd’s Rep. 19 at 32 where he said:-
“In this appeal Mr. Smith has put the bank’s claim in tort in the forefront of his argument. Before the Judge the bank’s claim was based primarily on the tort of conspiracy. In this Court Mr. Smith recognized that the claim in conspiracy added nothing to the claim in deceit, because in an unlawful act of conspiracy, which this was said to be, the unlawful act relied upon must be actionable at the suit of the plaintiff (Clerk & Lindsell on Torts, 17th ed., par. 23-80, Marrinan v Vibart , [1963] 1 Q.B. 528, Lonrho Ltd. V Shell Petroleum Co. Ltd. (No.2), [1982] A.C. 173 per Lord Diplock at p.186 etc.). If he could not succeed in deceit therefore he could not succeed in conspiracy.”
He also referred to the fact that that dictum has been adopted by Toulson J in Yukong Line Ltd of Korea v Rendsberg Investments Corporation of Liberia [1998] 1 W.L.R. 294.
In Watson & Anr v Dutton Forshaw Motor Group Ltd & Ors (Court of Appeal Transcript 22 July 1998) a marker was put down as to whether the above dictum accurately expresses the law relating to unlawful act conspiracies. I would go a little further on this occasion. The dictum was made on the basis of a concession. If one reads the paragraph in Clerk & Lindsell referred to, one finds inconsistent statements on this aspect. Furthermore, it is difficult to contemplate that unlawful means in the tort of conspiracy should be different from unlawful means in the context of other “economic torts”. In that context Stuart-Smith LJ was clearly not referred to a judgment of his own in ABP v Transport & General Workers Union [1989] 1 W.L.R. 939 at 965 where he expresses the view that unlawful conduct in the context of a tort of interference with trade with the intention of harm and the use of unlawful means could contemplate unlawful means that were not actionable at the suit of the plaintiff. In that view he was agreeing with Butler-Sloss LJ in the same case (see p.960).
Butler-Sloss LJ and Stuart-Smith LJ in the ABP case referred to Lonrho plc v Fayed [1990] 2 Q.B. 479 when that case was in the Court of Appeal in support of their view. The history of Lonrho v Fayed and the points in issue in that case could be said to give further support to the argument that unlawful means has the same meaning in the unlawful conspiracy context as in the interfering with business by unlawful means context, and further support for the view that in either of those contexts the unlawful means do not have to be actionable at the suit of the plaintiff. Lonrho’s case was in short that by making false and fraudulent representations to the Secretary of State the three defendants had interfered with their business unlawfully and conspired by unlawful means to injure Lonrho. Thus the unlawful means alleged were not actionable per se by Lonrho. The Court of Appeal allowed the appeal against striking out the claim in relation to the interference with business by unlawful means, but constrained by Metall und Rohstoff A.G. v Donaldson Lufkin & Jenrette Inc [1990] 1 Q.B. 391, could not reinstate the conspiracy claim. In the House of Lords in Lonrho v Fayed [1992] 1 A.C. 448 Metall und Rohstoff was overruled and the House of Lords reinstated the conspiracy claim approving it should be stressed the very broad statement of Lord Denning M.R. in Lonrho v Shell when that case was in the Court of Appeal quoted at 467B-E. There is no discussion as to whether “unlawful means” might be different as between the two torts the subject of that decision because the House of Lords held that in that case the two torts stood or fell together.
But all that said, what gives rise to the difficulty with expressing an absolutely firm view is that Lord Bridge’s starting point for a conspiracy by unlawful means is a dictum of Lord Devlin in Rookes v Barnard [1964] AC 1129 at 1204 where he said in relation to the second type of conspiracy which employs unlawful means:-
“In the latter type … the element of conspiracy is usually only of secondary importance since the unlawful means are actionable by themselves.”
What is more Lord Bridge could be taken to be saying that the conspiracy being alleged in Lonrho v Fayed was a conspiracy to interfere by unlawful means which would itself be actionable (see 469A-B). I would however draw attention to the use by Lord Devlin of the word “usually”, and I would further suggest that the House of Lords cannot be taken as having finally defined an unlawful means conspiracy as is clear from the speech of Lord Bridge and even more clearly spelled out by Lord Templeman in his short speech where he said:-
“I agree with my noble and learned friend Lord Bridge of Harwich, that some of the observations of Slade LJ in Metall und Rohstoff …. were not in accordance with previous authorities. Without encouraging the continuation or initiation of litigation by the present or any future disputants, I apprehend that the ambit and ingredients of torts of conspiracy and unlawful interference may hereafter require further analysis and reconsideration by the courts. I agree with the order proposed by Lord Bridge.”
Lords Brandon, Goff, and Jauncey agreed with both speeches.
This aspect was not debated in any detail before Longmore J at all and was raised very much at the last moment in argument before us. It would clearly be wrong to reach any final conclusion. What is clear, in my view, is that it is eminently arguable that in an unlawful means conspiracy the unlawful means do not have to be actionable at the suit of the plaintiff.
Thus, on a true analysis, it seems to me that the plaintiffs are alleging a conspiracy to injure the plaintiffs by a number of unlawful means, those unlawful means including, as matters developed, the giving of false evidence before the court. It is in that context that the witness immunity rule needs consideration.
Witness Immunity Rule
There was very little difference between the parties as regards the witness immunity rule. It is thus convenient to take a summary of the central principles from the judgment of Simon Brown LJ in Silcott v Commissioner of Police for the Metropolis reported in 8 Administrative Law Reports 633. At 636G he says:-
“Rather than refer in detail to the various authorities, I propose to set out, with only very limited citations, what I take to be the central principles in play.
(1) There exists a fundamental rule of law that:
“no action lies against parties or witnesses for anything said or done, although falsely and maliciously and without an reasonable or probable cause, in the ordinary course of any proceeding in a court of justice”;
per Kelly, CB in Dawkins v Lord Rokeby (1873) LR 8 QB 255. As Sellers, LJ put it in Marrinan v Vibart [1963] 1 QB 528 at 535:
“Whatever form of action is sought to be derived from what was said or done in the course of judicial proceedings must suffer the same fate of being barred by the rule which protects witnesses in their evidence before the court and in the preparation of the evidence which is to be so given.”
I shall call this the immunity rule.
(2) The public policy purposes underlying the immunity rule are essentially twofold. First, per Fry, LJ in Munster v Lamb (1883) 11 QBD 588:
“ … to protect persons acting bona fide , who under a different rule would be liable, not perhaps to verdicts and judgments against them, but to the vexation of defending actions.”
Second, as Lord Wilberforce said in Roy v Prior [1971] AC 470 at 480:
“ … to avoid a multiplicity of actions in which the value or truth of their evidence would be tried over again”,
in other words to avoid the impeachment of evidence given and conclusions reached in one trial by subsequent collateral challenge.
(3) The immunity rule applies in the context of criminal proceedings
“ … only where the statement or conduct is such that it can fairly be said to be part of the process of investigating a crime or a possible crime with a view to a prosecution or possible prosecution in respect of the matter being investigated”,
per Drake J in Evans v London Hospital Medical College and Others [1981] 1 All ER 715 at 720. The immunity does not extend to matters outside the relevant proceedings, for example to defamatory communications sent to the Bar Council prior to a disciplinary inquiry; see Lincoln v Daniels [1961] 1 QB 237.
(4) The immunity rule does not apply to proceedings “in respect of malicious abuse of process”, whether for malicious prosecution or malicious arrest – see Lord Morris of Borth-y-Gest in Roy v Prior [1971] AC 470 at 477G to 478A, itself a case of malicious arrest. This is so even though, as Lord Morris pointed out in that same passage:
“It must often happen that a defendant who is sued for damages for malicious prosecution will have given evidence in the criminal prosecution of which the plaintiff complains.”
As Lord Keith put it in Martin v Watson [1995] 3 WLR 318:
“The essential feature of malicious prosecution is an abuse of the process of the court. If that has occurred it is immaterial that the abuse has involved giving evidence in a court of law.”
(5) The immunity rule is not
“to be circumvented by alleging a conspiracy between witnesses to make false statements”;
see Lord Morris in Roy v Prior at p.477, approving the Court of Appeal decision to that effect in Marrinan v Vibart . Similarly, in Marrinan v Vibart itself the court noted the repeated attempts over the years one way or another to escape the immunity rule, attempts variously described as “in despair”, or “an obvious try-on”.
A recent decision in point is McDonagh and Another v Commissioner of Police of the Metropolis (1989) The Times, December 28, where Popplewell J refused to permit the plaintiff to add to a malicious prosecution claim an alternative cause of action for misfeasance in a public office, an action which he pointed out would succeed even without proof of absence of reasonable and probable cause.
(6) The immunity rule should extend only so far as is
“strictly necessary … in order to protect those who are to participate in the proceedings from a flank attack”;
per Devlin LJ in Lincoln v Daniels at p.263.
As Lord Wilberforce put it in Roy v Prior at p.480:-
“Immunities conferred by the law in respect of legal proceedings need always to be checked against a broad view of the public interest.”
It will be noted that Simon Brown LJ was concerned with criminal proceedings and for that reason limited his remarks to criminal proceedings. Although there may be a greater public interest in relation to the protection of witnesses in the criminal process, there is no doubt that the witness immunity rule also applies in civil proceedings (see e.g. Revis v Smith (1856) 18 C.B. 126). Furthermore, as the same case shows, it applies to affidavit evidence as much as it applies to oral evidence. It also applies to the preparation of oral evidence and/or affidavit evidence as much as to the evidence itself to prevent an outflanking of the immunity rule (See Watson v M´Ewan [1905] AC 480). None of that is really in issue. The real question is whether this action for conspiracy is against parties or witnesses for the evidence that they gave or the information that they supplied for the purpose of giving that evidence so as to bring it within the immunity rule.
In Roy v Prior [1971] AC 470 at 477 Lord Morris said:-
“It is well settled that no action will lie against a witness for words spoken in giving evidence in a court even if the evidence is falsely and maliciously given (see Dawkins v Lord Rokeby (1873) L.R. 8 Q.B.255, Watson v M´Ewan [1905] AC 480). If a witness gives false evidence he may be prosecuted if the crime of perjury has been committed but a civil action for damages in respect of the words spoken will not lie (see the judgment of Lord Goddard C.J. in Hargreaves v Bretherton [1959] 1 Q.B. 45). Nor is this rule to be circumvented by alleging a conspiracy between witnesses to make false statements (see Marrinan v Vibart [1963] 1 Q.B. 528).
This, however, does not involve that an action which is not brought in respect of evidence given in court but is brought in respect of an alleged abuse of process of court must be defeated if one step in the course of the abuse of the process of the court involved or necessitated the giving of evidence.”
What the above demonstrates is that it is certainly not every cause of action which includes an averment that false evidence was given which will be struck out on the basis of witness immunity. It also seems to me that what the above demonstrates is that it is not permissible to divide allegations up as Mr Schaff sought to do into those that involve giving evidence and those which do not. He sought to persuade us that even if allegations in relation to the warehousing agreement and the false MOAs survived, allegations which involved the deployment of the false MOAs in evidence should be struck out under the witness immunity rule. It seems to me that Lord Morris’ statement shows that that is not a proper approach.
In my view the statement of Lord Morris is capable of two interpretations, on either of which the plaintiffs, on the pleaded facts, will not be defeated by the witness immunity rule. On the first interpretation his statement should not be read simply as saying that malicious arrest or malicious prosecution alone are exceptions to the witness immunity rule. His statement, in my view, supports a broader proposition that if the action is not brought simply in respect of evidence given or supplied but is brought in relation to some broader objective during the currency of which it may well be that evidence was given witness immunity should not apply.
In my view the conspiracy here had a broader objective and it was not a necessary ingredient that false evidence should be given. It so happened that in the way matters turned out it was given. It is of assistance to test the matter in this way. It seems clear that in this case the plaintiff could have recovered damages in respect of the conspiracy to hide assets, by the bringing into being of false documents, if the defendants had succeeded in doing that without bringing the matter before the court. The suggestion has to be that because of Surzur’s diligence, by virtue of which they achieved an amendment to the Mareva, did not accept the false MOAs at their face value, and forced an application to the court, in some way their action for conspiracy is defeated. That would be absurd.
Mr Schaff would say that all he would argue is that the facts of deploying false evidence should not be entitled to be relied on, but that, as it seems to me, is not a proper appreciation of the witness immunity rule for the reasons already indicated. If the conspiracy is correctly characterised as a conspiracy to hide assets and cheat Surzur by the manufacture of false documents, then it seems to me it is not a cause of action to which the witness immunity rule applies. It is understandable, having regard to the way that the plaintiff pleaded their case originally, that Longmore J should have thought that the appropriate characterisation of the conspiracy was as one of deploying false evidence, but a proper appreciation of the facts as pleaded demonstrates that that was a wrong characterisation of the conspiracy.
In any event (and this is the alternative interpretation), if Lord Morris should be understood as simply creating an exception for malicious arrest or malicious prosecution, it seems to me that the plaintiffs should still succeed. Albeit there may not be a cause of action without a conspiracy for abusing the process of the court, as already indicated abuse of process can very arguably be the unlawful means on which a conspiracy can be founded. Clearly a conspiracy simply to give false evidence falls within the witness immunity rule and in one sense that could be characterised as an abuse of process as Mr Schaff pointed out. Equally however a conspiracy which had its aim and objective of defeating an order of the court and obtaining the release from a Mareva of assets by persons who were not, I emphasise, parties to the original action, must be a conspiracy to abuse the process very akin to the malicious arrest which was the subject of Roy v Prior . There is no logic in creating an exception for malicious arrest, and not a conspiracy to abuse the process entailing the defeating of something very close to an arrest, a Mareva injunction.
We were reminded of the proviso that exists in the Mareva injunction that was originally ordered so as to protect persons outside the jurisdiction. This was a proviso recognised as being necessary in Babanafte v Bassatne [1990] Ch. 13 and Derby v Weldon (Nos. 3 & 4) [1990] Ch. 65. Mr Schaff suggested that persons in the position of his clients would not be in contempt by virtue of that proviso even if they assisted Mr Koros in breaching the injunction. Again it seems to me unnecessary to decide that point. It may well be that no contempt would be committed, but if Mr Schaff’s clients are shown to have deliberately assisted Mr Koros in defeating the injunction by the production of false documents that would seem to me to be unlawful means without any reliance on a contempt having been committed.
Conclusion
It seems to me that by their points of claim Surzur have amply demonstrated a serious issue to be tried and I would allow the appeal.
Lord Justice Aldous: I agree.
Lord Justice Hirst: I also agree.
Order: appeal allowed; costs here and below to be taxed and paid forthwith; certificate for three counsel; application for leave to appeal to House of Lords refused.
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