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DAVID GRIER AGAINST CHIEF CONSTABLE, POLICE SCOTLAND and DAVID GRIER AGAINST THE LORD ADVOCATE [2022] ScotCS CSOH_2 (11 January 2022)
URL: http://www.bailii.org/scot/cases/ScotCS/2022/2022_CSOH_2.html
Cite as:
2022 GWD 2-31,
2022 SLT 199,
[2022] ScotCS CSOH_2,
[2022] CSOH 2
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OUTER HOUSE, COURT OF SESSION
[2022] CSOH 2
CA86/19 & CA72/20
OPINION OF LORD TYRE
In the cause
DAVID GRIER
Pursuer
against
CHIEF CONSTABLE, POLICE SCOTLAND
Defender
and in the cause
DAVID GRIER
Pursuer
against
THE LORD ADVOCATE
Defender
Pursuer: Smith QC, MacLeod, Markie, Black; Kennedys Scotland
Defender (Chief Constable): Duncan QC, Watts, Laurie; Ledingham Chalmers LLP
Defender (Lord Advocate): Moynihan QC, Ross QC; Scottish Government Legal Directorate
11 January 2022
Introduction
[1]
On Friday 14 November 2014, the pursuer was detained by the police at his home in
England. He was taken to Glasgow, where he was arrested and charged, together with three
2
co-accused, with participation in a fraudulent scheme along with Mr Craig Whyte to acquire
a controlling shareholding in The Rangers Football Club plc ("the Club"), and further
charged with attempting to pervert the course of justice. He remained in custody over
the weekend and appeared on petition, along with the others who had been arrested, at
Glasgow Sheriff Court on Monday 17 November 2014, when he was bailed.
[2]
On 15 September, 2015, an indictment was served on the pursuer and others. The
pursuer was charged with fraud and with involvement in serious crime by participation in
a fraudulent conspiracy. A second indictment was served on the pursuer and others on
2 December, 2015. In this indictment the pursuer was charged with seven offences including
fraud, money laundering, and carrying on a business with intent to defraud.
[3]
At a preliminary hearing before Lord Bannatyne on 5 February 2016, four of the
charges against the pursuer were withdrawn by the advocate depute. In two judgments
issued in February and April 2016, Lord Bannatyne upheld the pursuer's plea to the
relevancy of all of the remaining charges against him. On 13 May 2016, the Appeal Court of
the High Court of Justiciary refused the Crown's appeal against Lord Bannatyne's decisions.
The criminal proceedings against the pursuer came to an end.
[4]
In these two actions the pursuer seeks damages from the Chief Constable and from
the Lord Advocate for wrongful, unlawful and malicious prosecution. Although the action
against the Lord Advocate was raised some time after the action against the Chief Constable,
the cases were latterly managed jointly, and a proof before answer was heard in the two
cases together. The proof proceeded against the background of my having held, in the
action against the Lord Advocate, that there was no relevant defence pled to the pursuer's
case that from the stage of indictment the prosecution continued in the absence of objective
3
relation to the existence of subjective and objective reasonable and probable cause and
malice remained alive for the proof.
Factual background
Introduction
[5]
The fraud that was suspected of having been committed, in relation to Mr Whyte's
acquisition (via Liberty Capital Ltd, a company under his control) of a controlling
shareholding in the Club, can be summarised as follows: that it was fraudulently
represented to the sellers, Murray International Holdings ("MIH"), that the funds which
Mr Whyte intended to use to repay the Club's bank debts came from his own resources,
when in fact he had no such resources and intended to (and did) obtain most of the
necessary funds by selling the Club's future season ticket revenues to an American company
called Ticketus, and that the sellers were thereby induced to sell their interest in the Club
for £1.
[6]
Nobody has been convicted of any offence in relation to Mr Whyte's acquisition of
the Club. All of the charges against the pursuer's co-accused, Mr David Whitehouse and
Mr Paul Clark, were either withdrawn or dismissed as irrelevant. Claims by Mr Whitehouse
and Mr Clark for damages for malicious prosecution have been settled, with an admission of
liability by the Lord Advocate. The charges against the co-accused Mr Gary Withey (since
deceased) were either withdrawn or dismissed on grounds of oppression due to the
recovery and use of legally privileged material. In June 2017 Mr Whyte was acquitted by
a jury of the two remaining charges against him.
[7]
The police investigation of alleged wrongdoing in relation to the acquisition of the
Club was lengthy and complex. Large quantities of documents, including voluminous email
4
correspondence, were recovered either by voluntary production or by execution of search
warrants. The investigation generated its own voluminous documentation. It is not the
purpose of this opinion to provide an exhaustive narrative of the circumstances giving rise
to the prosecution of the pursuer or of the prosecution itself. The following summary
focuses upon the events that are now founded upon by the pursuer as demonstrating that
the prosecution was initiated and pursued maliciously and without reasonable and probable
cause.
Events giving rise to the charges
Early contact
[8]
The pursuer is a business consultant with a background in banking. In 2010-11
he was employed by Menzies Corporate Restructuring ("MCR"). He first met Mr Whyte
in 2010. Towards the end of that year he became aware that Mr Whyte had been expressing
an interest in acquiring the Club which at that time was known to have financial difficulties,
including a major dispute with HMRC over its past use of employee benefit trusts to avoid
tax ("the big tax case"). At a meeting in December 2010 Mr Whyte explained that he was
receiving advice from Mr Withey, a partner in Collyer Bristow, solicitors, London, and from
Mr Phil Betts, an asset finance broker. The pursuer offered to put together a scheme for
reduction of the Club's debt to Lloyds Bank ("Lloyds").
[9]
On 25 January 2011, before any formal engagement had been agreed, the pursuer
had a short meeting in London with Mr Betts immediately before a meeting with, among
others, representatives of Lloyds and MIH. After that meeting, the pursuer and Mr Betts
went to a pub for a chat and, according to the pursuer, Mr Betts confirmed that all that he
and Mr Whyte wanted MCR to do was to negotiate the debt owed to Lloyds. According to
5
a statement provided in April 2013 by Mr Betts to the police, however, Mr Betts also told
the pursuer that Mr Whyte would be using funding from Ticketus to buy the Club.
The cash flow projection
[10]
In December 2010, Mr Withey, acting on behalf of Mr Whyte, engaged Saffery
Champness, chartered accountants, to carry out financial due diligence on the Club and to
prepare financial projections based upon assumptions provided by Mr Whyte and Mr Betts.
One of the documents produced by Saffery Champness was a forecast of monthly cash flow
for a period covering 2011 and most of 2012. In its original form, this document included
entries showing incoming funds of £20 million described as "Ticketus Advance". Ticketus,
a subsidiary of Octopus Investments, had an existing commercial relationship with the
Club in terms of which Ticketus advanced funds to be used as working capital against the
security of some of the proceeds of future season ticket sales. In accordance with an
instruction given on 17 March 2011 by Mr Betts to Mr Niraj Patel of Saffery Champness, the
reference in the cash flow forecast to "Ticketus Advance" was amended to "Wavetower",
being the name of the company that Mr Whyte intended to use to acquire the Club.
Whether this amounted, on the one hand, to a fraudulent concealment from MIH of the true
source of Mr Whyte's funding or, on the other, to a normal and non-suspicious commercial
reluctance to reveal a funding source, has remained a matter of con troversy. On 21 March
2011, a meeting was held between Mr Betts and representatives of MIH at which the
document containing the reference to Wavetower (instead of Ticketus) was presented.
6
The "letter of comfort"
[11]
By the beginning of April 2011 Mr Whyte was looking for means of demonstrating
to the MIH board that he had the resources needed to purchase the Club. The MIH board
members were insisting that the deal could not progress until it was demonstrated to them
that funds were in Collyer Bristow's client account. Ticketus had concerns about the risk
of non-repayment of its advance if the Club's appeal in the big tax case were to fail and the
Club's liability exceeded its assets. A second and separate tax liability had also recently
come to light. In an email dated 5 April 2011 sent to, among others, Mr Whyte, Mr Withey
and Mr Betts, and forwarded by Mr Betts to the pursuer, Mr Ross Bryan, an investment
manager with Octopus Investments and Mr Whyte's principal point of contact at Ticketus,
sought comfort for Ticketus's investment committee regarding the likely outcome of the big
tax case and the implications for Ticketus if loss of the tax case were to lead to insolvency.
At 22.53 on 5 April, Mr Betts emailed the pursuer inquiring:
"Are you around first thing tomorrow?
It is imperative that we deal with this as soon as possible to make sure we send a
robust response that will give our 3rd party funder the confidence to release funds
to Gary Withey, with a view to completing by close of play tomorrow.
There is a real fear that if we don't complete tomorrow, the deal will fall away."
[12]
On 7 April 2011, the pursuer drafted a letter which has come to be referred to in
these proceedings as "the letter of comfort" (although that is not a description assented to by
the pursuer). The origin of the draft appears to have been an email sent by Mr Clark to the
pursuer on 6 April containing "quick thoughts on the two issues for inclusion in our draft
note". The pursuer used Mr Clark's email to produce a first draft the following morning,
and then a letter addressed to Mr Whyte, which was sent to Mr Whyte and copied to
Mr Withey and Mr Betts by email at 12.55. The letter narrated that MCR's opinion had been
7
sought on two matters, namely the potential to negotiate a settlement with HMRC of the big
tax case, and "issues affecting a lender which has the rights to receive future income from...
the sale of season tickets". In relation to the first of these matters, the pursuer's letter
expressed optimism that HMRC would act reasonably and seek to agree a repayment plan
with the Club. As regards the second, the pursuer noted MCR's understanding as being that
the Club would "contract with a funder who will receive future benefit from the revenue
created through the future sale of season tickets", and expressed the view that if the Club
were to go into administration, the administrator would be bound to honour such a contract.
[13]
A number of substantial amendments to the draft letter were suggested by
Mr Withey and Mr Betts. At 20.53, Mr Betts sent an email to the pursuer saying:
"Are you able to act on this tonight please, so I can forward it to our funder. Our
main contact there is in Utah at the moment, so able to act on it immediately. He
is standing by."
At 22.10 the pursuer requested clarification of a point by Mr Withey. At 22.18 Mr Betts sent
an email to the pursuer and Mr Withey saying:
"Thanks to you both for working on this tonight.
It would be helpful to send Ross an email tonight if at all possible and then educate
Craig and I on your findings/concerns tomorrow."
At 23.29 the pursuer sent an email comprising a revised draft of the letter to Mr Whyte,
incorporating Mr Withey's amendments, which was copied to Mr Withey and Mr Betts.
Mr Betts replied:
"Thanks, David, very much appreciated.
I will forward a copy to Ross now..."
8
Mr Betts duly forwarded the email to Mr Bryan with the comment "Please find attached a
note from David Grier, Partner of MCR regarding the tax case. I hope this makes you and
your IC feel a little more comfortable..."
[14]
In fact the forwarding of the email to Mr Bryan shortly before midnight on 7 April
2011 had no direct causative effect. Earlier in the afternoon, funds had been transferred
from the client account of Ticketus's solicitors, Clarke Wilmott, to a client account in the
name of Collyer Bristow, to be held there jointly with Clarke Wilmott. Although the funds
could not be withdrawn from that account without the consent of Ticketus or their solicitors,
that transfer had been regarded by Mr Withey as sufficient to enable him to inform MIH that
he held the funds necessary to repay the bank debt in a Collyer Bristow client account. The
pursuer was aware, prior to producing the revised draft that went to Mr Bryan, that the
transfer had occurred.
The "Don't tell David" email
[15]
On 8 April 2011, Mr Withey emailed a document to Mr Whyte and Mr Betts for
review. He followed this with another email in which he enquired:
"What should I be disclosing to David. At the moment I have kept him away from
the spa [ie the share purchase agreement].
I don't really know what he is discussing with Mike or David but we do need to be
careful that he doesn't fall foul of the takeover code nor let the bank start to feel too
comfortable as there are still issues to be resolved with them."
Mr Whyte replied:
"Don't disclose anything to David other than what is required for him to negotiate
with the bank. That is all that he's engaged to do."
It is common ground that the "David" referred to in the latter email is the pursuer. This has
come to be referred to as the "Don't tell David" email.
9
The Independent Committee meeting
[16]
As part of the process of deciding whether to enter into a sale agreement with
Mr Whyte, the board of directors of the Club set up a committee, referred to as the
Independent Committee, to provide the board with advice. The Independent Committee
comprised five of the Club's directors: Messrs Alastair Johnston, Donald McIntyre,
Martin Bain, John Greig and John McLelland. It excluded those directors who had
themselves expressed an interest in purchasing the Club, or who represented MIH on
the board. The committee had no statutory status or power to take any decisions, but
was expected to be influential in the Club's decision -making process. A meeting of the
committee, chaired by Mr Johnston, was held on 24 April 2011. In attendance were
Mr Whyte, Mr Withey and the pursuer. Solicitors with Dickson Minto, including one who
took minutes, attended by telephone conference. According to the min utes (which the
pursuer does not accept as accurate), the purpose of the meeting was to focus on certain
specific areas. These included cash flow, the tax appeal, and the transfer of the bank debt to
Wavetower. In relation to cash flow, the pursuer is minuted as stating that "he was very
comfortable with the forecasts and the re-worked working capital position". Mr Whyte is
minuted as explaining that their assumptions reflected all that they had been told in a
working capital meeting that had previously taken place between the Club and Saffery
Champness. The minute further records: "Mr McIntyre asked if their financial model relied
upon using the season ticket income as working capital and Mr Whyte confirmed that it
did...".
10
[17]
In relation to the tax case, the minute records the following exchange:
"Mr Bain explained the nervousness of the Independent Directors surrounding
Wavetower's ability to settle the tax liability. Mr Grier said that he was comfortable
that Mr Whyte had the resources and he felt that as an adviser, that was
important..."
Under "Miscellaneous questions", the minute records:
"Mr McIntyre asked if the funding for the transaction is coming from Craig Whyte
the individual. Mr Whyte confirmed that it was him personally and that this
transaction was nothing to do with the new fund recently launched by Merchant
House."
[18]
After the meeting, the chairman, Mr Johnston, also circulated a draft report based on
his own notes. The draft included the following passages:
"...(b) Whilst a working capital plan was provided by Craig's advisors it came in a
format that was essentially unreadable, and it was agreed it would be re-circulated
in a more user-friendly manner...
...(g) Craig confirmed that it was indeed all his personal funds that were being
tendered to acquire the Lloyds debt as well as provide the working capital facility
commitment to funding the Club's account..."
The Independent Committee did not recommend acceptance of Mr Whyte's proposal to
purchase the Club. On 6 May 2011, however, an 85.3% shareholding in the Club was sold
to Wavetower for £1. Wavetower changed its name to the Rangers FC Group Limited
("RFCG"). On 9 May 2011, the Club entered into an agreement with Ticketus and, with the
authorisation of Clarke Wilmott, £18 million was transferred from the Collyer Bristow client
account referred to above to settle the Lloyds debt.
The Club's insolvency
[19]
In late 2011, MCR was acquired by Duff & Phelps LLC, an international organisation
engaged in corporate valuation, restructuring, administration and liquidation proceedings.
11
Mr Whitehouse and Mr Clark became partners in Duff & Phelps. The pursuer was given the
title of managing director and Head of Business Advisory.
[20]
On 14 February 2012, the Club was placed in administration. Mr Whitehouse and
Mr Clark were appointed as joint administrators. At an early stage they began to investigate
whether there had been criminality in the acquisition of the Club by Mr Whyte, in relation to
the financing of the debt repayment. In April 2012 an action for damages was raised in the
name of the Club (in administration) against Collyer Bristow and RFCG in the High Court in
London. The administrators also reported their concerns to the police.
[21]
On 22 October 2012, Clyde & Co, solicitors acting on behalf of Collyer Bristow, sent
a pre-action protocol letter to Duff & Phelps intimating a claim to hold them liable for a
contribution in the action raised by the administrators. The letter was accompanied by a
lever arch folder ("the black folder") containing a large number of documents, including
pleadings and correspondence, in support of the claim. Among the documents in the
"correspondence" section was the monthly cash flow prepared by Saffery Champness in its
unamended form, ie containing the reference to "Ticketus Advance" rather than Wavetower.
It was accompanied by a page titled "Schedule 9 - Cash Flow Forecasts" because it had been
Schedule 9 to the agreement entered into on 9 May 2011 between the Club and Ticketus.
Commencement of the police investigation
[22]
On 17 January 2012, Mr Johnston made an allegation to the police of criminal
conduct by Mr Whyte in connection with his acquisition of the Club. On 20 February 2012
a meeting was held between police officers and Mr Whitehouse and a member of his
administration team, during which Mr Whitehouse expressed concern over how the
acquisition had been funded. The police requested further information and a disagreement
12
arose between the administrators and the police regarding the extent of the administrators'
duty to assist the police with their investigation. The administrators provided details of the
London action against Collyer Bristow and RFCG. On 23 May 2012, a programme entitled
"The Men Who Sold the Jerseys" was broadcast in Scotland by the BBC. The programme
was primarily concerned with the big tax case but also included an allegation that in
accepting appointment as administrators, Messrs Whitehouse and Clark had breached rules
regarding conflict of interest. It was further alleged that the pursuer had at all times been
aware that the funding for the acquisition was being provided by Ticketus. Statements were
issued by Duff & Phelps and by the pursuer denying the allegations.
[23]
On 22 June 2012 the Crown Office instructed Strathclyde Police to conduct a criminal
investigation into the acquisition of the Club and its subsequent financial management. An
incident room was set up and from that time forward the police and the Crown worked
closely together. The investigation received a name: Operation Iona.
[24]
On Wednesday 17 October 2012 BBC Scotland published details of an interview
in which Mr Whyte stated that MCR had known everything about the agreement with
Ticketus. Mr Clark issued a statement refuting the allegation.
[25]
The first direct police contact with the pursuer was on 23 and 24 October 2012 when
he was interviewed as a witness and statements were taken from him by (as they then were)
DS James Robertson and DC Jackie O'Neill. Because these two officers received promotions
in the course of the events with which this opinion is concerned, I shall refer to them, to
avoid confusion, as Mr Robertson and Ms O'Neill. The second of the pursuer's statements
covered inter alia the provision of the letter of comfort, and the pursuer is noted as having
said that he was unaware at that time of who "Ross" was, or who the funder mentioned in
the emails was. In relation to the Independent Committee meeting on 24 April 2011, which
13
he recalled lasting not more than an hour, the pursuer described being asked to comment on
cash flow, explaining his experience in dealing with HMRC, and providing a "time to pay"
proposal. He is noted as having been satisfied with the minutes.
[26]
On Wednesday 24 October 2012, BBC Scotland published what they described as a
secret recording of a meeting on 31 May 2012 between Mr Whyte and the pursuer, in the
course of which the pursuer appeared to acknowledge that he had been aware of the
substance of the Ticketus agreement. On 7 November 2012, the pursuer gave a third
statement to the police, and provided a summary of his response to Mr Whyte's allegation.
[27]
On 20 November 2012, Mr Robertson took a statement from Mr Charles Simpson, a
partner and head of corporate finance at Saffery Champness. Mr Simpson was shown the
cash flow projection produced by his firm in January 2011 and asked if it had been adjusted
to remove the name of Ticketus. He confirmed that Mr Betts had asked for the name of
Ticketus to be removed and replaced with Wavetower. He had not been told why.
However, Mr Simpson did not consider this to be unusual; funders often did not want to
disclose their identity until all funding approval had been put in place.
[28]
Mr Robertson produced a lengthy Summary Report dated 4 December 2012, the
second part of which highlighted "misrepresentations and acts of commission and omission
by Craig Whyte, Phil Betts and Gary Withey which constitute criminality". This report
included, within a section headed "Knowledge of the Ticketus deal", the following passages:
"David Grier stated that he was present when Craig WHYTE and Gary WITHEY
presented the Wavetower proposal to the Independent Directors of RFC at Murray
Park Glasgow on Sunday 24 April 2011. It is following this meeting that the
directors support the dispensation allowing the deal to progress to completion on
6 May 2011. It is noted in the minutes of the meeting that John McLelland asked
Craig WHYTE `if the funding for the transaction is coming from Craig WHYTE
the individual' WHYTE confirmed that it was him personally.
14
David Grier also provided that a financial forecast was provided to the directors
at this meeting concerning cash flow. He stated that £20 million is shown on the
sheet with Wavetower being the provider of funds. Grier stated he later (after
administration) learned from Phil BETTS that Saffery Champness who provided
the data initially had listed the source of the funds as 'Ticketus'. BETTS said that
WHYTE instructed Saffery Champness to change this to 'Wavetower'."
In his conclusion, Mr Robertson expressed the opinion that "Craig Whyte assisted by
Gary Withey and Phil Betts acquired Glasgow Rangers Football Club by fraud".
[29]
By 15 March 2013, Mr Robertson's view of Mr Betts had changed. He now reported a
belief, after assessment, that Mr Betts' role showed a lack of involvement in criminality, and
that he was more of a paid adviser to Mr Whyte "in the same way as Cairn Financial, MCR
and Saffery Champness". He indicated an intention to approach Mr Betts for a witness
statement. On 27 March 2013 Mr Robertson and Ms O'Neill met Mr Betts, who was
accompanied by a solicitor, at a hotel at Stansted Airport. Ms O'Neill took a manuscript
note which included the following:
"What's ur knowledge of DG's knowledge of [Ticketus] deal
He knew about it
When? I asked CW if DG knew, he said yes as DG was part of team - Jan/Feb 2011
walking from meeting to DG's offices & went for pint (meeting at D&W offices) CW
not present.
Told DG `funded against future season tickets' wouldn't have been full breakdown
as I don't think I knew myself."
[30]
This meeting note was not transcribed or put to Mr Betts for signature as accurate.
Instead, further meetings were held on 2, 3 and 4 April 2013 at which statements were taken
from Mr Betts, again in the presence of a solicitor. These statements were transcribed and
confirmed to be accurate by Mr Betts. With regard to the pursuer's knowledge of the
Ticketus agreement, Mr Betts' third statement has this:
15
"I told David about the deal after a meeting we had at Dundas Wilson offices in
London, with Lloyds Bank...
Craig Whyte was not at this meeting. I had asked him about telling David Grier
of the Ticketus, either on the morning of the meeting or the day before.
After the meeting, David and I walked away together and before returning to our
work places, we stopped off at a pub, at the back of the Strand in London. I am not
sure how it came out, but I told David, Craig Whyte was using Ticketus funding to
buy the club. David didn't understand what that meant. He had never heard of
Ticketus before, so I explained to him how Ticketus worked. I didn't tell him the full
breakdown, but I did tell him he was raising funds against the future sale of season
tickets. The meeting in the pub lasted probably about an hour."
Police suspicion of criminal activity by the pursuer
[31]
By the summer of 2013 the police had decided to seek evidence that the senior
MCR - now Duff & Phelps - staff (ie Mr Whitehouse, Mr Clark and the pursuer) had been
aware, during the negotiations for acquisition of the Club, of the details of Mr Whyte's
agreement with Ticketus. They sought and obtained a warrant to search Duff & Phelps'
offices in London and Manchester. The London search was carried out on 28 August 2013.
Among the items seized was the black folder, which was taken by Ms O'Neill and another
officer from a cupboard to a conference room in the office from which the police were
conducting their operation. Ms O'Neill carried out what was later described as an "initial
sift" of the folder and found the cash flow forecast (containing the Ticketus reference) with
the Schedule 9 title page. She considered that this might be a document of significance and
showed it to Mr Robertson. Neither officer had in mind that the contents of the black folder
might be subject to legal privilege. Mr Christopher Polwin, a Duff & Phelps senior manager,
was given a handwritten schedule of the documents seized. He objected on the ground of
legal privilege to the seizure of two folders marked with the initials "HFW" (ie Holman
Fenwick & Willan, who were Duff & Phelps' solicitors), which were returned by
16
Mr Robertson. After the police had left with the documents seized, and having taken legal
advice, Mr Polwin contacted the police to assert legal privilege in relation to a number of
further files that had been taken, including documents in the black folder.
[32]
The claim of privilege in relation to the files seized remained a matter of dispute for
some considerable time. In September 2013 Mr Polwin, accompanied by Duff & Phelps
colleagues and solicitors, travelled to Glasgow with files assembled by HFW that have been
referred to as "the chronological bundle". Documents in relation to which privilege was
claimed were removed from the chronological bundle by Mr James Clibbon, the partner in
HFW responsible for dealing with the case. With regard to the documents seized during the
search, the Duff & Phelps team were permitted to review them and mark those for which
any form of privilege was asserted, but were not permitted to take the latter away as they
had expected to do.
[33]
On 23 November 2013, Mr Robertson submitted an interim report to the Crown
Office stating, for the first time, his opinion that there was a sufficiency of evidence available
showing that the acquisition of the Club could not have been completed without the
involvement of the pursuer and Messrs Clark and Whitehouse, and that they had had full
understanding of the Ticketus deal. Mr Robertson expressed the view, based on the
contents of an email sent by Mike Bills, an MCR and subsequently Duff & Phelps employee,
on 1 June 2011, that Duff & Phelps' motivation had been to see the Club become insolvent
and obtain a lucrative appointment as administrators. Mr Robertson noted that he planned
to interview the pursuer, Mr Clark and Mr Whitehouse under caution.
[34]
In April 2014, Mr Robertson submitted a further interim report, said to have been
prepared prior to "executive action to trace detain and interview" Messrs Whyte, Withey,
Whitehouse, Clark and the pursuer. The report contained what Mr Robertson considered to
17
be the relevant information and evidence to support charges of (i) fraudulent scheme against
all five accused; (ii) contravention of section 678(3) of the Companies Act 2006 (financial
assistance) against Messrs Whyte and Withey; and (iii) attempt to pervert the course of
justice against the pursuer, Mr Whitehouse and Mr Clark.
[35]
Among the further enquiries that Mr Robertson proposed to pursue were:
"To assess the documentary productions seized under warrant from the premises
of Duff and Phelps both Manchester and London once legal privilege issues are
resolved... Liaison is ongoing with SOCD and solicitors for Duff and Phelps.
With regards to the one page document identified at initial sift (with no
accompanying email) which is a financial forecast spread sheet which shows
Ticketus as the funder for the acquisition, this is the spread sheet Saffery Champness
prepared and was instructed to remove reference to Ticketus and replace with
Wavetower. Knowledge of this has always been denied by GRIER, CLARK and
WHITEHOUSE. This document will form part of the interview plans to establish
how and when and to who it came to at Duff and Phelps..."
At this time the one page document with the cash flow forecast had not yet been released
from the claim of privilege. However, on 20 May 2014, Mr Polwin and Mr Clibbon attended
a meeting with the police at which the claim was withdrawn in relation to some of the
documents held by the police, including the cash flow forecast.
[36]
In response to a request from the Crown Office, Mr Robertson wrote and submitted
on 8 August 2014 a Standard Prosecution Report, marked for the attention of Ms Sally Clark,
a senior procurator fiscal depute in the Crown Office's Serious and Organised Crime
Division. The report named Messrs Whyte, Withey, Whitehouse and Clark and the pursuer
as the accused. The proposed charges included a charge against all five accused of
fraudulent scheme and a charge against the pursuer of attempting to pervert the course of
justice. The report included a "Summary of misrepresentation and criminality". So far as
relating to the pursuer, this summary was in substantially the same terms as the April
interim report. I return to the Standard Prosecution Report later in this opinion.
18
Appearance on petition
[37]
The consequence of submission of the Standard Prosecution Report was that a
decision was taken by the Crown and police on 6 October 2014 to move to "executive
action", ie to detain and charge the five accused. The action was planned for Monday
17 November 2014. This was initially changed to Sunday 16 November to avoid a clash with
a Scotland/England football match. It was changed again to Friday 14 November because
the police received information that Mr Whitehouse was intending to fly to Portugal that
morning (as indeed he was, for a family holiday). As already narrated four of the accused,
including the pursuer, were detained at their homes and driven to Glasgow where they
were arrested and charged, and held in custody over the weekend.
[38]
The petition was drafted on 14 November by Ms Clark, who considered that there
was sufficient evidence to meet the legal test to place the pursuer on petition. Due to lack of
time because the executive action date had been brought forward, Ms Clark's assessment of
the case against the pursuer was done by consideration of the Standard Prosecution Report,
police subject sheets and Mr Betts' police statement, rather than the source evidence. She
did not recall discussing the sufficiency of evidence to place the pursuer on petition with
any of her colleagues.
[39]
On Monday 17 November 2014 the pursuer appeared along with the three other
accused at Glasgow Sheriff Court. (Mr Whyte appeared a few weeks later.) The charges,
so far as applicable to the pursuer, were as follows:
"(001) Between 1 January 2010 and 28 February 2012, both dates inclusive, at [various
locations], having formed a fraudulent scheme to obtain a controlling shareholding
in Rangers Football Club plc (`the Club') from Murray MHL Limited (`Murray'), in
pursuance of said fraudulent scheme you [the five accused] by your own hands and
19
by the hands of employees of MCR, Saffery Champness, Collyer Bristow LLP, Cairn
Financial and Noble Grossart directed by you;
...
(i) you did pretend to Sir David Murray, representatives of Murray, the board
of directors of the Club and others that you CRAIG THOMAS WHYTE, through
companies of which you were the beneficial owner, had sufficient funds to acquire
the controlling shareholding in the Club and you did thereby induce said
Sir David Murray and representatives of Murray to sell the controlling share in the
Club and did induce said board of directors to consent to the sale of the controlling
shareholding in the Club to you CRAIG THOMAS WHYTE;
...
(iv) on 24 April 2011, you DAVID HENRY GRIER and CRAIG THOMAS WHYTE
did attend a meeting with the Independent Committee of the board of directors of
the Club at which you did pretend that you CRAIG THOMAS WHYTE did have
sufficient funds of your own to acquire the controlling shareholding in the Club and
to meet the ongoing working capital requirements of the Club and you did thereby
induce them to consent to the sale of said controlling shareholding in the Club to
Craig Thomas Whyte;
...
(vi) you DAVID HENRY GRIER, PAUL JOHN CLARK and DAVID JOHN
WHITEHOUSE did prepare a letter addressed to your client, Craig Whyte dated
7 April 2011, providing advice on matters related to the acquisition of the controlling
shareholding in the knowledge that said letter would be produced by Craig Whyte to
Ticketus and used to induce Ticketus to release the aforementioned £18,161,500 to a
Collyer Bristow account controlled by Gary Martyn Withey
...
the truth being as you all well knew that you CRAIG THOMAS WHYTE did not
hold sufficient funds to acquire the controlling shareholding in the Club and said
acquisition of the controlling shareholding in the Club had been funded through
the sale of the Club's season tickets to Ticketus...
...
(005)
On various occasions between 23 October 2012 and 7 November 2012, both
dates inclusive
,
at the premises of Duff & Phelps
,
43 - 45 Portman Square
,
London
,
you DAVID HENRY GRIER did state to Jackie O
'
Neill
,
Detective Constable
,
and
James Robertson
,
Detective Sergeant, respectively then conducting a cr
i
minal
investigation into the acquisition and management of Glasgow Rangers Football
Club PLC by Craig Thomas Whyte
,
that you had not known that said Craig Thomas
Whyte had funded said acquisition of the Club through contracting with Ticketus
LLP and Ticketus LLP 2 to sell 3 years' of said Club's season tickets and this you did
in the knowledge that you had been aware of said contractual arrangements and th
i
s
you did with intent to pervert the course of justice and you did attempt to pervert
the course of justice..."
20
Events post-petition
[40]
The police investigation continued. On 10 December 2014, Mr Andrew Gregory,
a senior solicitor with DWF now instructed on behalf of Duff & Phelps, visited the
police/Crown operation centre at Gartcosh, Glasgow, to attempt to resolve the issue of
privilege claimed in relation to documents taken during the August 2013 search. This gave
rise to a further dispute as to whether Mr Robertson and Ms O'Neill breached privilege by
reading emails identified as privileged during Mr Gregory's visit. By February 2015 claims
of privilege had been withdrawn by Mr Gregory in relation to most of the documents in
respect of which they had previously been made.
[41]
In July 2015, DI Robertson sought and obtained a warrant for a further search of
Duff & Phelps' premises in Manchester and London. The London warrant was executed
on 8 July. Ms Clark was present with the police. The focus was on electronically stored
material relating to the period of the Club's administration. As the amount of material was
likely to be very large, Mr Gregory agreed a procedure with Ms Clark whereby Duff &
Phelps would review it and put to one side documents subject to a claim for privilege (by
Duff & Phelps or by some other person, such as the Club). The process of review ing and
assembling the electronic material took several months. Once identified, the material was
transferred to compact discs, separated into privileged and non-privileged. The discs
containing material for which privilege was claimed were placed in sealed envelopes on
which was written
"These emails contain material that is subject to legal professional privilege and
the envelope should not be opened and the contents should not be read without
the written consent of those parties entitled to the benefit of the legal professional
privilege or by an order of the court. DWF LLP".
21
Discs were delivered to the police between October and December 2015.
The first indictment
[42]
In the meantime the Crown were proceeding towards service of an indictment. Since
October 2014, Mr James Keegan QC had been the allocated advocate depute. The Solemn
Legal Manager co-ordinating the case was Ms Caroline MacLeod. A number of other
COPFS staff were engaged in reviewing the voluminous material coming in from the police
to the operation centre at Gartcosh, and in drafting the indictment.
[43]
It is standard Crown practice when preparing a case for indictment to produce a
document known as a Precognition. The meaning of that term, used in this context, was
explained by Lord Mulholland, who was Lord Advocate at the time of the events with
which these proceedings are concerned and who gave evidence at the proof. A Precognition
consists of the case papers on the basis of which decisions will be taken by Crown Counsel
on what case to prosecute and where. It includes lists of witnesses, productions and labels
for the assistance of the indicter who will draft the indictment. It should contain a detailed
narrative of the evidence, and an analysis of whether the evidence is sufficient to support
criminal charges. In modern practice it is in electronic form. For the prosecutions with
which these proceedings are concerned, Ms Clark was the officer responsible for the
Precognition. It was never completed or formally submitted to the Crown Office. Ms Clark
did however draft lengthy chapters entitled, among others, "Role of David Grier/MCR in
Craig Whyte's acquisition of the Club" and "The Independent Committee" which were
accessible in electronic form by the indicters. It is a feature of Ms Clark's draft that it
contains numerous action points, requesting further information or evidence, or describing
a further investigation to be undertaken.
22
[44]
The Precognition required to be countersigned. The countersigning officer was
Ms MacLeod. On 9 August 2015, she made a recommendation in the following terms:
"After a two year delay caused by the assertion of legal privilege, the evidence in
Operation Iona is now being assessed. What is very clear is that rather than being
exculpatory it is providing a greater clarity in the role played by the accused.
The proposed draft charges for the indictment as at 9 August 2015 are simply
charges 1 & 2 of the petition. In the event that the S65 application for an extension
is not granted then this indictment shall be served on 10 September but will be
superceded by a more comprehensive indictment in due course.
It is recommended that in the case of Craig Whyte, Gary Withey and David Grier
there is a clear sufficiency of evidence for Charges 1 &2.
...
The later charges of attempting to pervert the course of justice have been removed
for the purpose of the draft indictment due to the fact that the RO's [ie Reporting
Officer's] statement although over 28 pages lon g is not yet near completion.
The sums of money involved in this fraudulent scheme are in excess of
£20-£30 million. The allocated AD, James Keegan QC has been kept abreast
of developments in the case as has the Lord Advocate.
It is respectfully recommended that the case is indicted to the High Court."
[45]
It is necessary to mention at this point that a second investigation was now in
progress, in relation to alleged criminality connected to the acquisition of the business
and assets of the Club from the administrators in June 2012 by Mr Charles Green; this was
known as Operation Guyra. The two operations were treated as interlinked by the police
and the Crown. On 2 September 2015, five accused, including Mr Whyte, Mr Green,
Mr Whitehouse and Mr Clark (but not the pursuer) appeared on petition charged with
inter alia a fraudulent conspiracy whereby the business and assets of the Club were acquired
at a discount from their true value.
[46]
On 3 September 2015 an application under section 65 of the Criminal Procedure
(Scotland) Act 1995 was made by Mr Keegan to Sheriff Murphy at Glasgow Sheriff Court for
23
an extension of time in which to commence the preliminary hearing and the trial of pursuer
and the other accused in both petitions. On 7 September the sheriff granted a three month
extension. His reasons for so doing included accepting information provided to him by
Mr Keegan that 39 boxes of relevant materials had been received by the Crown in July 2015,
in response to the August 2013 search warrant, as a result of oversight by Duff & Phelps. In
the course of the hearing of an appeal on 3 December 2015 by Messrs Whitehouse and Clark
against the granting of the extension (see [2017] HCJAC 46), it was admitted by Mr Keegan
that the information provided to the sheriff about recovery of documents at both an initial
hearing and an adjourned hearing had been incorrect, and an apology was tendered.
Having considered the matter of new, the court refused the appeal.
[47]
On 15 September 2015, Mr Keegan issued a Crown Counsel Instruction ("CCI") to
indict all of the accused in both petitions in the High Court. As regards the pursuer, the
CCI noted that
"there is a substantial body of evidence that points to knowledge on the part of
Mr Grier and Mr Clark that money obtained from Ticketus (`secured against' an
assignation agreement that related to the upfront sale of season tickets at a discount
over three football seasons) was utilised by Mr Whyte with the connivance of
Mr Withey to acquire [the Club]".
[48]
The first indictment was served on 15 September 2015. The charges, in so far as laid
against the pursuer, were of fraudulent conspiracy, with particular reference to false
representations and pretences to the Independent Committee (charge 1), and participation
in the furtherance of the commission of serious organised crime (charge 4). The preliminary
hearing took place on 16 October 2015.
24
The second indictment
[49]
On 2 December 2015, the second indictment was served. It contained 15 charges of
which seven were laid against the pursuer and others:
Charge 1 was in the same terms as charge 1 in the first indictment;
Charge 3 was a charge under section 330 of the Proceeds of Crime Act 2002
of failure to disclose the identity of a person engaged in money laundering;
Charge 4 was in the same terms as charge 4 in the first indictment;
Charges 7, 8 and 9 were charges of obtaining money from the Club by fraud
by issuing invoices to the Club for services provided to Liberty Capital Ltd;
Charge 10 was a charge under section 993 of the Companies Act 2006 of
carrying on the business of the Club with intent to defraud its creditors.
[50]
Most of the accused lodged minutes containing preliminary pleas and preliminary
issues. A preliminary hearing on the second indictment took place on 3 and 4 February
2016, at which pleas relating to competency, relevancy and specification were heard. In the
course of the hearing the advocate depute withdrew charges 4, 7, 8 and 9, and significantly
amended charges 1, 3 and 10. In an opinion dated 22 February 2016, the preliminary hearing
judge (Lord Bannatyne) dismissed charge 3 as irrelevant. In relation to charge 1 as directed
against the pursuer, Lord Bannatyne considered that he had to hear evidence to determine
its relevancy. The overall effect of the withdrawal of charges by the advocate depute and
Lord Bannatyne's decision was that charges remained live against only three accused:
Mr Whyte, Mr Withey and the pursuer.
[51]
A further preliminary hearing was held on 26 February 2016, following which
Lord Bannatyne heard evidence of the role of the In dependent Committee. In the light
of that evidence he issued an opinion dated 15 April 2016 in which he held that charge 1
25
against the pursuer was irrelevant. It did not relevantly aver the crime of fraud because no
practical result was brought about by the pursuer's conduct. Lord Bannatyne described the
advocate depute's submission that the pursuer's conduct in relation to the Independent
Committee smoothed the path of the acquisition as "a last and desperate attempt to show
that there was a practical effect". The other remaining charge against the pursuer was also
dismissed as irrelevant.
[52]
The Crown appealed. In its opinion dated 13 May 2016, the Appeal Court upheld
Lord Bannatyne's decisions, holding that because there was no apparent link between the
pursuer's alleged actings and the practical result, the essentials of a charge of fraud were not
present and the libel was irrelevant. The charge of carrying on a business with intent to
defraud was also held to be irrelevant because it contained no allegation that the accused
was trading while the Club was insolvent.
Search of HFW premises
[53]
On 5 December 2015, a few days after service of the second indictment, Mr Robertson
applied to the sheriff court for, and was granted, a warrant to search the premises in London
of HFW (who, it will be recalled, were Duff & Phelps' solicitors). In his application to the
Crown Office for authority to apply for the warrant, Mr Robertson's stated purpose was to
search for all material held by HFW in relation to their involvement in the production of the
unedited chronological bundle and the revised chronological bundle subsequently produced
to the police: in essence the purpose was to recover documents that had been removed from
the chronological bundle by Mr Clibbon under a claim of privilege. The warrant, however,
craved authority to take possession of "any material in relation to the acquisition, running,
administration and disposal of the assets of [the Club]" and "all material which
26
James Clibbon had access to and/or were reviewed in consequence of which `chronological
bundles' of material were produced".
[54]
The application was granted by the sheriff at Glasgow, Sheriff Wood. No mention
was made by Mr Robertson during the hearing of the fact that a High Court indictment had
been served which meant that the warrant application ought properly to have been made to
the High Court and not the sheriff court. No notice of the application was given to Duff &
Phelps or HFW. There was no discussion of legal privilege.
[55]
The warrant was executed on 9 December 2015. The police arrived at HFW's offices
without warning while a business entertainment event was in progress and seized 47 boxes
of documents despite claims for legal privilege being made. On the same evening, HFW
obtained an injunction from the Administrative Court of the High Court of Justice, Queen's
Bench Division, prohibiting the police from examining the documents and requiring them to
hold the documents in a secure room pending further orders. The court described the use of
the warrant as an abuse of state power. At the same time an application was made to the
High Court of Justiciary for a bill of suspension of the warrant. On 18 December 2015, the
High Court of Justiciary ordered the return of the material to HFW, to be kept in a secure
room and reviewed by "independent counsel". On 5 February 2016, the court passed the bill
and suspended the warrant. The court noted that there had been a degree of confusion and
possibly obfuscation in relation to HFW's entitlement to claim legal privilege in relation to
their clients' documents. It was held, however, that because no intimation had been given
to the sheriff that the documents sought were subject to an ongoing dispute in relation to a
claim of legal privilege, the warrant was oppressive. The vagueness and width of the
warrant also rendered it oppressive.
27
Return of discs to DWF
[56]
By 13 May 2016 the criminal proceedings against the pursuer had ended. One
further contentious matter requires, however, to be narrated. On 6 October 2017, by prior
arrangement, all of the material recovered by the police under search warrants was returned
to Duff & Phelps' Manchester office by Mr Robertson and Ms O'Neill. Mr Gregory and a
trainee solicitor were in attendance. When Mr Robertson brought out of a box the envelopes
containing the CDs provided by DWF to the police in pursuance of the search warrant dated
8 July 2015, Mr Gregory noticed that some of the envelopes, including envelopes with the
script identifying the contents as privileged, had been opened. Mr Robertson claimed that
he had just opened them in front of Mr Gregory; Mr Gregory stated that this was not true
and that he would report the matter to his clients. Ms O'Neill reported the exchange in an
email to Ms MacLeod.
Summary of the pursuer's claim
[57]
The pursuer's claim is that both the police and the Crown were responsible for the
commencement and continuation of a malicious prosecution of him. His detention and
charge was without reasonable or probable cause and was malicious, as was the
continuation of the prosecution.
[58]
As regards the police, the pursuer founds his case upon the following contentions:
Mr Betts was treated as a witness and not a suspect in order to make a case
against the pursuer and his two Duff & Phelps colleagues;
The interview with Mr Betts at Stansted Airport was not disclosed to the Crown
or to the defence because Mr Betts had made remarks inconsistent with the
pursuer's guilt;
28
Legal professional privilege was breached during the search of Duff & Phelps'
London office when the black folder was examined;
The Standard Prosecution Report contained two deliberate misrepresentations
in relation to the sending of the "letter of comfort" on 7 April 2011 and the
presentation made by the pursuer to the Independent Committee meeting on
24 April 2011;
The "Don't tell David" email was not disclosed to the defence;
The envelopes containing the CDs produced by DWF were accessed in breach
of legal professional privilege;
Mr Robertson's conduct during interviews with witnesses was aggressive and
inappropriate;
When applying for the warrant to search HFW's offices, Mr Robertson failed to
inform the sheriff that a High Court indictment had been served, and failed to
acknowledge that the warrant included material over which privilege was
asserted.
[59]
As regards the Crown, the pursuer's case is founded on the following contentions:
The Crown failed to carry out a proper case analysis, including the preparation
of a finalised and comprehensive Precognition;
Crown Office staff allowed the advocate depute to mislead the sheriff by
providing incorrect information in support of the section 65 application for
an extension of time;
The second indictment was served for tactical reasons in case the defence
appeal against the allowance of an extension of time was successful, and thus
for an improper purpose;
29
The Crown were complicit in the police actings in relation to non-disclosure of
Mr Betts' Stansted interview, non-disclosure of the "Don't tell David" email,
accessing the CDs in breach of legal professional privilege, and obtaining a
warrant to search HFW's offices without adequately addressing legal
professional privilege.
Malicious prosecution: the law
Introduction
[60]
In Whitehouse v Lord Advocate 2020 SC 133, a court of five judges held, overruling
Hester v Macdonald 1961 SC 370, that the Lord Advocate was not immune from suit in respect
of a prosecution carried out maliciously and without probable cause. The decision in
Hester v Macdonald was found not to have been supported by the authorities upon which the
court had relied. The court in Whitehouse went on, obiter, to address and uphold an
alternative argument that if Hester v Macdonald was not overruled as incorrectly decided, it
should nevertheless be overruled on the ground that the ratio was no longer sustainable. In
the absence of modern Scottish authority, the court examined the development of the law in
other jurisdictions including England and Wales, Australia, Canada and the United States.
Lord President Carloway expressed the view (at paragraph 106) that "Canada and Australia,
in large part, demonstrate how matters should be analysed in modern society".
[61]
In Nelles v Attorney General for Ontario [1989] 2 SCR 170, Lamer J in the Supreme
Court of Canada accepted, under reference to Fleming, The Law of Torts (5th ed, 1977) at
page 598, that there were four necessary elements which had to be proved for a plaintiff
to succeed in an action for malicious prosecution:
30
(a) the proceedings must have been initiated by the defendant;
(b) the proceedings must have terminated in favour of the plaintiff;
(c)
the absence of reasonable and probable cause; and
(d) malice, or a primary purpose other than that of carrying the law into effect.
In the present case the existence of elements (a) and (b) is accepted by the Lord Advocate.
The Chief Constable accepts that element (b) is satisfied but not element (a) in relation to the
police. Elements (c) and (d) are separate from one another and must both be established.
The police as "prosecutor"
[62]
In Scottish criminal procedure a clear distinction is drawn between investigation of
a criminal offence and prosecution. Prosecution is the responsibility of the Crown and not
the police. The prosecution of indictable crime is in the hands of the Lord Advocate and
subordinate public prosecutors acting under his control. The Lord Advocate is the only
competent public prosecutor in the High Court (see eg Renton & Brown, Criminal Procedure
(6th ed) at paragraph 3-02. In Smith v HM Advocate 1952 JC 66, Lord Justice Clerk Thomson
put the matter thus (page 71):
"...(T)he duty of the police is simply one of investigation under the supervision of
the procurator-fiscal and the results of the investigation are communicated to the
procurator-fiscal as the inquiries progress. It is for the Crown Office and not for the
police to decide whether the results of the investigation justify prosecution. The two
functions are quite distinct."
[63]
It is, however, established in English case law that a person other than the official
prosecutor may be a "prosecutor" for the purposes of the first element in an action for
malicious prosecution. The circumstances in which this may occur have been considered in
a series of cases, namely Martin v Watson [1996] AC 74, Mahon v Rahn (No.2)
31
adopt the test enunciated in these cases. The first three are concerned with whether a person
who falsely reports the commission of a crime to the police can be a "prosecutor", liable to
be sued for malicious prosecution. In Martin v Watson, Lord Keith of Kinkel stated the test
as follows (page 86):
"...Where an individual falsely and maliciously gives a police officer information
indicating that some person is guilty of a criminal offence and states that he is willing
to give evidence in court of the matters in question, it is properly to be inferred that
he desires and intends that the person he names should be prosecuted. Where the
circumstances are such that the facts relating to the alleged offence can be within the
knowledge only of the complainant, as was the position here, then it becomes
virtually impossible for the police officer to exercise any independent discretion or
judgment, and if a prosecution is instituted by the police officer the proper view of
the matter is that the prosecution has been procured by the complainant."
In Mahon v Rahn, the test, so far as applicable in a "simple case", was distilled by Brooke LJ
(at paragraph 268) into three questions:
"(1) Did A desire and intend that B should be prosecuted? (2) If so, were the facts so
peculiarly within A's knowledge that it was virtually impossible for the professional
prosecutor to exercise any independent discretion or judgment? (3) Has A procured
the institution of proceedings by the professional prosecutor, either by B furnishing
information which he knew to be false, or by withholding information which he
knew to be true, or both?"
In AH v AB, Sedley LJ at paragraph 37 described this as "probably as near as one can get
to a working test of the identity of the prosecutor". Sedley LJ went on to observe (at
paragraph 47) that it would have been necessary to establish that the complainer had
"deliberately manipulated [the police and the CPS] into taking a course which
they would not otherwise have taken if, pursuant to Martin v Watson, she was to
be regarded in law as the prosecutor".
[64]
Rees v Commissioner of Police for the Metropolis is of particular interest for present
purposes because in that case the person alleged to be the prosecutor was the Commissioner
of Police. The senior investigating police officer in a murder investigation (DCS Cook) was
32
found to have prompted an unstable individual to give a false witness statement that he had
been present at the scene of the murder and witnessed the aftermath. Three accused
persons, the charges against whom had been withdrawn, sued for damages for malicious
prosecution, and the question arose of whether the police were the "prosecutor". The
Court of Appeal held that they were. McCombe LJ summarised his conclusions at
paragraphs 58-60:
"58. It seems to me that the case falls squarely within what this court said in AH v
AB. DCS Cook deliberately manipulated the CPS into taking a course which they
would not otherwise have taken (Sedley LJ). The decision to prosecute was
`overborne and perverted' (cf Wall LJ) by DCS Cook's presentation of the material
to the CPS with the implicit suggestion that its procurement was not tainted in the
manner that it was.
59. This is not to say... that the mere provision of false information to a prosecuting
authority leading to a prosecution makes the provider a prosecutor. I accept that the
test is...'drawn more restrictively'. However, the cases are fact specific: see in this
respect the very different results reached in not entirely dissimilar cases in Martin v
Watson and in AH v AB. This present case was one in which DCS Cook took it upon
himself to present to the independent prosecutor for a prosecution decision a case
which he knew included an important feature procured by his own criminality.
There is nothing more likely to have `overborne or perverted' the decision to
prosecute. The CPS were deprived of their ability to exercise independent judgment.
60. In my judgment, therefore, DCS Cook was undoubtedly a `prosecutor' in the
sense decided by the authorities."
[65]
Applied to the Scottish context in which responsibility for prosecution rests upon the
Crown and not on the police, the conclusion that I derive from these au thorities is that
before the police can be held to be the "prosecutor" for the purposes of a claim of malicious
prosecution, it must be established that the Crown was (a) deprived of the ability to exercise
independent judgement by (b) presentation of information by the police which they knew to
be false or (per Rees) so tainted by criminality or other impropriety as to be worthless as
evidence.
33
Absence of reasonable and probable cause
[66]
In Whitehouse v Lord Advocate, Lord President Carloway cited with approval (at
paragraph 108) the following observations of the majority of the High Court of Australia in
"[J]ustice requires that the prosecutor, the person who effectively sets criminal
proceedings in motion, accept the form of responsibility, or accountability, imposed
by the tort of malicious prosecution. Insofar as one element of the tort concerns
reasonable and probable cause, the question is not abstract or purely objective. The
question is whether the prosecutor had reasonable and probable cause to do what he
did; not whether, regardless of the prosecutor's knowledge or belief, there was
reasonable and probable cause for a charge to be laid. The question involves both an
objective and a subjective aspect."
These observations accord with Lamer J's analysis in Nelles that there must be actual belief
on the part of the prosecutor, and that the belief must be reasonable in the circumstances.
The belief to which Lamer J was referring, this time under reference to Hicks v
"an honest belief in the guilt of the accused based upon a full conviction, founded on
reasonable grounds, of the existence of a state of circumstan ces, which, assuming
them to be true, would reasonably lead any ordinarily prudent and cautious man,
placed in the position of the accuser, to the conclusion that the person charged was
probably guilty of the crime imputed".
[67]
In so far as the dictum of Hawkins J might suggest that the prosecutor must have
an honest belief that the person charged was "probably guilty of the crime imputed",
subsequent English authorities indicate that this would, without qualification, set the test
too high. In Glinski v McIver [1962] AC 726, Lord Denning commented on it at page 758 as
follows:
"In the first place, the word `guilty' is apt to be misleading. It suggests that, in order
to have reasonable and probable cause, a man who brings a prosecution, be he a
police officer or a private individual, must, at his peril, believe in the guilt of the
accused. That he must be sure of it, as a jury must, before they convict. Whereas in
truth he has only to be satisfied that there is a proper case to lay before the court ..."
34
To the same effect, Lord Devlin observed at page 766-7:
"...[R]easonable and probable cause... means that there must be cause... for thinking
that the plaintiff was probably guilty of the crime imputed: Hicks v Faulkner. This
does not mean that the prosecutor has to believe in the probability of conviction:
Dawson v Vandasseau (1863) 11 WR 516, 518. The prosecutor has not got to test the
full strength of the defence; he is concerned only with the question of whether there
is a case fit to be tried."
In Willers v Joyce [2018] AC 779, Lord Toulson summarised the views of Lord Denning and
Lord Devlin at paragraph 54:
"In order to have reasonable and probable cause, the defendant does not have to
believe that the proceedings will succeed. It is enough that, on the material on which
he acted, there was a proper case to lay before the court..."
[68]
In Rees v Commissioner of Police for the Metropolis, in relation to reasonable and
probable cause, McCombe LJ at paragraph 69 posed the question: Does a prosecutor have
subjective reasonable and probable cause for a prosecution if he presents a case heavily
reliant upon evidence which, because of his own misconduct, he knows is "certain or at least
highly likely" to be ruled inadmissible by any trial judge? He concluded, under reference to
Glinski v McIver, that the case presented by the police officer to the Crown Prosecution
Service was not a "proper" one, nor "fit to be tried". It could not therefore be said that, as
a prosecutor, the police officer believed that he had reasonable and probable cause to lay
murder charges against the accused. It made no difference that there might, objectively,
have been sufficient evidence without the tainted witness evidence to provide r easonable
and probable cause to prosecute.
[69]
The requirement of absence of reasonable and probable cause was examined in
greater detail by the Supreme Court of Canada in Miazga v Kvello [2009] 3 SCR 339.
Guidance had been sought on two matters, namely (1) the standard of belief which should
inform the prosecutor's decision to initiate or continue a prosecution; and (2) whether the
35
third element should turn solely on the existence or absence of objective grounds, leaving
any inquiry into the prosecutor's subjective state of belief to the fourth element, the question
of malice. The court's analysis includes the following propositions:
(i)
The reasonable and probable cause inquiry in a public prosecution is not
concerned with the prosecutor's personal views as to the accused's guilt, but with his
or her professional assessment of the legal strength of the case. Belief in "probable"
guilt therefore means that the prosecutor believes, based on the existing state of
circumstances, that proof beyond a reasonable doubt could be made out in a court
of law (paragraph 63).
(ii) As a matter of logic, the plaintiff, who bears the burden of showing an absence
of reasonable and probable cause, can succeed on the third element by showing either
an absence of subjective belief or an absence of objective reasonable grounds
(paragraph 70).
(iii) That the plaintiff should succeed by showing an absence of objective grounds,
even though the prosecutor believed they existed, is consistent with the rationale
underlying the third element of the tort. A purely subjective belief in a person's guilt
without any basis in actual fact does not constitute sufficient justification for
initiating a criminal prosecution against the plaintiff (paragraph 71).
(iv) Conversely, however, the prosecutor's mere lack of subjective belief in
sufficient cause, where reasonable grounds do in fact exist, cannot provide the same
determinative answer on the third element in the context of a public prosecution.
Where objective reasonable grounds did in fact exist at the relevant time, it cannot be
said that the criminal process was wrongfully invoked (paragraph 73).
36
(v) It follows that the third element of the test necessarily turns on an objective
assessment of the existence of sufficient cause. The presen ce or absence of the
prosecutor's subjective belief in sufficient cause is nonetheless a relevant factor on
the fourth element, the inquiry into malice (paragraph 73).
[70]
The second and third of these propositions taken together, ie that a claimant can
succeed on the third element by showing an absence of objective grounds (regardless of the
prosecutor's subjective belief) finds support in A v New South Wales at paragraph 77 where
the court stated that
"...the negative proposition that... the defendant prosecutor acted without
reasonable and probable cause... may be established in either or both of two ways:
the defendant prosecutor did not `honestly believe' the case that was instituted or
maintained, or the defendant prosecutor had no sufficient basis for such an honest
belief..."
It is also consistent with Lord Denning's analysis in Glinski v McIver at page 759:
"...Honest belief in guilt is no justification for a prosecution if there is nothing
to found it on. [The prosecutor's] belief may be based on the most flimsy and
inadequate grounds, which would not stand examination for a moment in a court
of law. In that case he would have no reasonable and probable cause for the
prosecution. He may think he has probable cause, but that is not sufficient. He must
have probable cause in fact. In this branch of the law, at any rate, we may safely say
with Lord Atkin that the words `if a man has reasonable cause' do not mean `if he
[71]
I am not aware of any Scottish authority that is inconsistent with that analysis. The
point did not require to be addressed in Whitehouse v Lord Advocate. In Craig v Peebles
Lord Young, Lord Justice Clerk Moncrieff and Lord Gifford are concerned with objective
probable cause. The point at issue there was a point of law and no mention is made of the
prosecutor's subjective belief. In my opinion it is appropriate for Scots law to adopt the
same approach as English, Canadian and Australian law and to hold that the third element
37
of the test is satisfied if it is proved that the prosecution had no objective reasonable and
probable cause, without also having to prove that the prosecutor had no subjective belief
that there was a proper case to lay before the court. There is less agreement among the other
jurisdictions as to the converse, ie whether the third element is satisfied if it is proved that
there was objective probable cause but the prosecutor had no subjective belief that he had
sufficient cause (compare, eg, Miazga at paragraph 73 with Lord Devlin in Glinski at
page 777). In the light of my findings in fact later in this opinion, it is unnecessary to
address this conflict in order to decide the present case.
Malice
[72]
There is general agreement across the jurisdictions regarding the meaning of malice
in the context of an action founded on malicious prosecution. It has a broader meaning than
the non-technical concept of personal spite. It is not to be inferred from a finding of absence
of reasonable cause and is not even necessarily to be inferred from an absence of subjective
belief in the adequacy of the grounds for prosecution. In A v New South Wales at
paragraph 89, the court cited with approval the following passage from Fleming on Torts
at page 685:
"At the root of it is the notion that the only proper purpose for the institution
of criminal proceedings is to bring an offender to justice and thereby aid in the
enforcement of the law, and that a prosecutor who is primarily animated by a
different aim steps outside the pale, if the proceedings also happen to be destitute
of reasonable cause."
The Australian High Court went on (at paragraph 91) to hold that, to constitute malice, the
sole or dominant purpose actuating the prosecutor must be a purpose other than the proper
invocation of the criminal law: an "illegitimate or oblique motive".
38
[73]
A similar approach has been taken in the Canadian cases. In Nelles, Lamer J
described malice (at page 193) as "a deliberate and improper use of the office of the
Attorney General or Crown attorney"; see also Miazga at paragraphs 79-89.
[74]
In Glinski v McIver, Lord Devlin at page 766 noted that it was agreed that malice
covers "not only spite and ill-will but also any motive other than a desire to bring a criminal
to justice". This was expanded upon (obiter) by Lord Toulson in Willers v Joyce at
paragraph 55:
"[Malice] requires the claimant to prove that the defendant deliberately misused the
process of the court. The most obvious case is where the claimant can prove that the
defendant brought the proceedings in the knowledge that they were without
foundation... But the authorities show that there may be other instances of abuse.
A person, for example, may be indifferent whether the allegation is supportable and
may bring the proceedings, not for the bona fide purpose of trying that issue, but to
secure some extraneous benefit to which he has no colour of a right. The critical
feature which has to be proved is that the proceedings instituted by the defendant
were not a bona fide use of the court's process."
On the basis of what was said by Lord Devlin in Glinski and by Lord Toulson in Willers, the
Court of Appeal held in Rees v Commissioner of Police of the Metropolis that where the police
officer deliberately misused the processes of the court to present evidence tainted by the
suborning of the witness, the prosecution was malicious.
[75]
There is also general agreement that proof of malice is (and should be) a high hurdle
for a claimant to overcome. In Whitehouse v Lord Advocate at paragraph 107, Lord President
Carloway cited with approval the following passage from Miazga (paragraph 81):
"...[T]he malice element of the tort... ensures that liability will not be imposed in
cases where a prosecutor proceeds, [in the absence of] reasonable and probable
grounds, by reason of incompetence, inexperience, poor judgment, lack of
professionalism, laziness, recklessness, honest mistake, negligence, or even gross
negligence."
Lord Justice Clerk Dorrian's observations at paragraph 148 are to the same effect. It may be
noted, however, that in Robertson v Keith 1936 SC 29, a decision of a court of seven judges,
39
Lord Justice Clerk Aitchison considered (page 47) that malice may be inferred from
recklessness, a view consistent with Lord Toulson's reference in Willers to indifference as
to whether the allegation is supportable.
Assessment of witnesses
[76]
In addition to giving evidence himself, the following (some of whom have already
been mentioned) were called as witnesses by the pursuer:
Michael Rainford, solicitor, Manchester.
Paul Smith, a managing director in Duff & Phelps' Manchester office.
Philip Duffy, a managing director in Duff & Phelps' London office.
Christopher Polwin, a senior manager in Duff & Phelps' London office.
Andrew Gregory, solicitor and former partner in DWF LLP, Manchester.
Mairi Boyle, Crown Office.
Sheriff Lindsay Wood.
Lord Mulholland.
[77]
The following were called as witnesses by the Chief Constable:
DCI James Robertson.
DI Jacqueline O'Neill.
Christina Herriot, Solemn Manager, Glasgow Sheriff Court.
DC Gordon Stevenson.
DC Stephen Divers.
Ruaraidh Nicolson, retired Deputy Chief Constable.
Kenneth Thomson, retired Detective Superintendent.
DC Veronica McLean.
40
Brian Wright, retired Detective Chief Inspector.
In addition, it was agreed that witness statements by Inspector Margaret Seagrove and
DI Graeme Everest would be treated as equivalent to parole evidence.
[78]
The following were called as witnesses by the Lord Advocate:
Sally Clark, Crown Office.
Caroline MacLeod, Crown Office.
Helen Nisbet, Crown Office.
Jonathan Willis, Crown Office.
Alistair Logan, Crown Office.
Alan MacDonald, Crown Office.
James Keegan QC.
William McVicar, advocate.
[79]
Subject to what follows, I found the witnesses to be credible and generally reliable
and am satisfied that they were doing their best to assist the court. I deal separately below
with the expert evidence.
The pursuer
[80]
Although submissions were made on behalf of both the Chief Constable and the
Lord Advocate regarding the pursuer's credibility and reliability, both senior counsel
recognised that this was only indirectly relevant to the issues to be determined in these
proceedings. The pursuer was acquitted of all charges and it was not in dispute that that
acquittal cannot now be called into question. It was, however, submitted that in so far as his
explanations of contemporaneous events and documents was found to be unsatisfactory,
this supported the defenders' contentions that inferences drawn by the police against the
41
pursuer had been reasonable and that there had accordingly been reasonable and probable
cause for the prosecution. For present purposes it is sufficient for me to state that I did not
find any of the pursuer's explanations so obvious as to constitute, of themselves, evidence of
either absence of subjective reasonable and probable cause or malice on the part of either the
police or the Crown. In any event, in order to be relevant, the explanations would have to
have been furnished to the police at the time of the investigation. It is neither necessary nor
appropriate for me to make findings as to the pursuer's credibility and reliability in relation
to the events which resulted in his detention, charge and eventual acquittal. As regards
events at and after the time of his detention, I accept his evidence as credible and reliable.
DCI Robertson
[81]
The pursuer's claim of malicious prosecution focused primarily on the actions of
Mr Robertson and Ms O'Neill, especially the former. The presence of malice was said to
be supported by two matters in particular, namely Mr Robertson's disregard of legal
professional privilege and his inappropriately aggressive behaviour when interviewing
witnesses. In relation to both of these matters I found Mr Robertson's evidence to be evasive
and unreliable.
[82]
Mr Robertson's view of legal professional privilege, at the time of the investigation
and at the time of the proof, appeared to be that it was a device used by lawyers to conceal
their clients' wrongdoing. His explanation that he had opened the DWF envelopes clearly
marked as privileged because of excusable confusion was patently untrue. His narrative of
the events in 2017 when the discs were returned to DWF was equally improbable. He
expressed distrust of Mr Gregory but on further investigation it appeared that this referred
to Mr Gregory's likely reaction to discovering that the envelopes had been opened. At one
42
time he proposed the detention of Mr Clibbon for obstructing the police enquiry; this was
resisted by Mr Keegan. I am unable to accept as credible or reliable any eviden ce given by
Mr Robertson on his handling of material in respect of which privilege was claimed.
[83]
As regards behaviour during interviews, there was evidence , which I accept, from
Mr Smith, corroborated by Mr Rainford, and Mr Duffy (neither of whom was suspected
at any time of an offence) of unacceptable intimidatory and threatening behaviour by
Mr Robertson during interviews: for example, telling Mr Smith that he would arrest him
and did not care how many people he arrested; telling Mr Rainford (Mr Smith's solicitor) to
"shut up or I will put you out"; and telling Mr Duffy "Don't get smart with me, sonny" and
describing the Duff & Phelps principals as "thick as thieves". None of these witnesses was
challenged on their accounts, and I do not believe Mr Robertson's denials.
[84]
In other respects I found Mr Robertson's evidence unsatisfactory. At the outset he
attempted to decline to provide any oral evidence on the basis that his evidence was in his
written statements, and he had to be instructed to answer questions. At some times he
professed lack of memory because of the passage of time; at others he demonstrated a
detailed recollection of events when it was in his interest to do so. I have not accepted his
evidence on contentious matters without support from other sources.
DI O'Neill
[85]
My impression was that Ms O'Neill was generally doing her best to assist the court.
This was not the case, however, when she was asked questions about wrongdoing by
Mr Robertson. I reject as untruthful her evidence that she did not discuss the finding of
the cash flow schedule in the black folder during the search of Duff & Phelps' office with
Mr Robertson, and that she only noticed it in the folder because it was "obvious". I give my
43
reasons below for rejecting her evidence in relation to the return of the discs to DWF. I
found her evidence evasive in relation to Mr Robertson's aggressive conduct during
interviews. On other matters, however, I find no reason not to accept her evidence. In
particular I accept her evidence as to why it was thought appropriate to hold a meeting
with Mr Betts and his solicitor at Stansted prior to the formal interviews during which his
evidence would be noted and transcribed into a formal statement.
The pursuer's case against the Chief Constable
Introduction
[86]
It is accepted by all concerned that in the court's assessment of whether the test for
malicious prosecution is met, regard must be had to the actions and beliefs of the prosecutor
(or alleged prosecutor) at and during the time when the prosecution was commenced and
continued. It would be incorrect to consider whether, with the benefit of hindsight, there
was or was not a sufficiency of evidence linking the person prosecuted with the offences
alleged.
The case presented by the investigating officers to the Crown
[87]
The case presented to the Crown for decision on whether to proceed with a
prosecution is, in my view, most appropriately to be derived from the Standard Prosecution
Report presented by Mr Robertson on 8 August 2014. It ran to over 150 pages and included
a chronology of the events of 2011 and of the police investigation, lengthy extracts from
communications and witness statements, lists and details of proposed witnesses and
productions, and the "Summary of misrepresentation and criminality" to which I have
already referred.
44
[88]
So far as the pursuer was concerned, Mr Robertson summarised the evidence of
misrepresentations as follows:
"On 25 January 2011 the witness Phil Betts first explained the Ticketus deal to
David GRIER. On 6 April 2011 after a meeting with CLARK and GRIER,
Gary WITHEY emails CLARK a synopsis of the Ticketus deal. On 7 April 2011
David GRIER on behalf of MCR sends a letter to WHYTE via WITHEY to be used
as comfort for the Ticketus Investment Committee to release the funds to WHYTE.
Information later denied and or misrepresented by GRIER, WHITEHOUSE and
CLARK to protect their appointment as administrators.
...
On 24 April 2011 in Glasgow WHYTE, WITHEY and GRIER presented false
information concerning the source of WHYTE's funding to the Independent
Committee of Rangers Directors.
...
On 11 May 2011, less than 1 week after acquisition, GRIER emailed an attachment
to the witness Mike Bills with no instruction or comments. The attachment was a
financial forecasts, profit and loss cash flow and balance sheet forecasts. It also had
other tabs of information which was information of the specific years of season
tickets sold to Ticketus. It was for the next 4 years and showed money coming in
from Ticketus and money (circa £20 million) going out to Lloyds. This email
originated from the witness Ross Bryan via Phil Betts to GRIER.
On 1 June 2011 the witness Mike Bills sends an email to the witness John Norris
where he outlines the deal WHYTE did to acquire the Club, he names GRIER,
WHITEHOUSE and CLARK as involved and states the 'end game' for MCR
(Duff and Phelps) is when the Club goes 'bust'.
...
That after administration and to protect their appointment as Administrators
David GRIER, David WHITEHOUSE and Paul CLARK did present as true,
information they knew to be false, concerning their knowledge of how
Craig WHYTE funded the acquisition of the Club and the Ticketus deal to police
officers in the form of signed witness statements, to Lord Hodge in the form of a
signed report (WHITEHOUSE and CLARK), to the Insolvency Practitioners
Association in the form of a report and to the public in general in the form of
prepared media statements."
[89]
Mr Robertson described the cash flow summary, which by the time of preparation of
the Standard Prosecution Report had been released from the claim of privilege, as follows:
"From the search under warrant at Duff & Phelps London, a 3 page document
recovered from a ring binder folder has been identified as significant. The document
45
is a cash flow document with a cover sheet and was preceded in the folder with
emails dated 19 April 2011 and followed by a CV document of David GRIER,
Gary WITHEY and Craig WHYTE dated 22 April 2011. The cash flow part of the
document details the agreement WHYTE completed with Ticketus on 9 May 2011.
Ticketus name is included in the document as providing an advance of £20 million
excluding VAT with a season by season breakdown also included.
This clearly contradicts statements and evidence provided by Duff and Phelps
that they were unaware of the Ticketus deal prior to acquisition. David GRIER in
particular presented a version of this document on and around 24 April 2011 to the
Rangers Directors and Murray Group personnel which had Ticketus name removed
and replaced with Wavetower..."
Although Mr Robertson noted that "As yet it has not been established how the document
came to be with Duff & Phelps", the report contains no indication as to what, if any, enquiry
was being pursued to ascertain how the "ring binder folder" (ie the black folder) had come
into the possession of Duff & Phelps.
[90]
Reference had been made earlier in Mr Robertson's report to the taped conversation
between the pursuer and Mr Whyte on 31 May 2012 which was published by the BBC and
which contained the following exchange:
"DG: You know we we we went to see counsel yesterday for a full sort of debrief
of all the email correspondence
CW: Yeah
DG: Now the fact is that we probably did know what was going on with Ticketus
CW: Yeah
DG: But there's no email traffic whatsoever
CW: [Undecipherable] that says that you did
DG: That says we did
CW: But we all know you
DG: Yeah
CW: You did
DG: Yeah yeah but there's
CW: And fucking hell no no
DG: But we were not involved in dealing with Ticketus directly
CW: Yeah so you knew you knew the structure of the deal but you were dealing
with Lloyds and
DG: Absolutely
CW: The the Ticketus part was Saffery
DG: Safferys
CW: Yeah
46
DG: So we've maintained that line quite rigorously
CW: Yeah"
No mention is made of this in the summary and it unclear what weight, if any, Mr Robertson
attached to it in his assessment of the evidence.
[91]
The evidence relied on by the police to support their conclusion that the pursuer had
committed the offences of fraud and attempting to pervert the course of justice, and on the
basis of which the pursuer's arrest and charging proceeded, was therefore as follows:
Mr Betts' statement that he had told the pursuer on 25 January 2011 that money
from Ticketus would be used by Mr Whyte to fund the acquisition of the Club;
The provision on 7 April 2011 by the pursuer to Messrs Whyte and Withey of
the letter to be used as comfort to the Ticketus investment committee to release
funds to Collyer Bristow;
Presentation of false information to the Independent Committee on 24 April
2011;
The sending by the pursuer of an email after the acquisition with an attachment
containing a cash flow schedule showing money coming in from Ticketus and
money going out to Lloyds Bank;
The email by Mr Bills to a colleague on 1 June 2011 which appeared to state that
the pursuer, along with Messrs Whitehouse and Clark, had known that the
purchase was being funded by sale of future season ticket revenue;
The pursuer subsequently denying knowledge of the Ticketus deal;
(Possibly) the comments made by the pursuer during the taped telephone
conversation with Mr Whyte.
47
The cash flow statement was clearly also regarded at this time as a significant piece of
evidence, demonstrating that the pursuer and others were untruthful in stating that they
had been unaware of the Ticketus deal prior to the acquisition.
[92]
As is now acknowledged by the police, the above analysis contained significant
errors. The letter drafted by the pursuer, revised by others and eventually sent as an email
to Mr Whyte and others shortly before midnight on 7 April 2011 did not persuade the
Ticketus investment committee to release funds because these had been transferred earlier
that day to an account which was nominally a client account of Collyer Bristow, albeit that
withdrawal from that account remained subject to the consent of Ticketus or their solicitors.
The pursuer did not present the cash flow statement containing Wavetower's name to the
Independent Committee at the meeting on 24 April 2011. The version of the cash flow
statement containing the reference to Ticketus Advance found by the police in the black
folder did not come into the possession of Duff & Phelps until October 2012, and was
accordingly of no evidential value. If these matters are stripped out of Mr Robertson's
evidence of misrepresentations, there remains little more than ex post facto statements by
Mr Betts, Mr Bills and, perhaps, the pursuer himself that he knew prior to the acquisition
that funds from Ticketus were being used to finance the purpose.
[93]
The question of whether the pursuer has proved all of the elements of malicious
prosecution must, however, as I have already observed, be addressed having regard to
the evidence as it was summarised and presented at the time. Especially in relation to
assessment of the existence of subjective reasonable and probable cause and malice, it would
be wrong to disregard factors that were relied upon in error but which were nevertheless
relied upon. Against the background of the Standard Prosecution Report, I now turn to
consider whether all of the elements of malicious prosecution have been proved.
48
Objective reasonable and probable cause
[94]
I begin by considering whether the conclusion of the police that the pursuer had
committed the offences with which he was charged had objective reasonable and probable
cause. In my opinion it did not. Although the charges recommended in the Standard
Prosecution Report were not identical to those in the indictment that were eventually held
by the court to be irrelevant, they were undermined by similar flaws. The essence of the
proposed charge of fraud was that the pursuer participated in the presentation of false
information to the Independent Committee, knowing that it was false. The reason given by
the court for dismissing the charge in the indictment as irrelevant, namely that there was no
link between representation and practical result, is equally applicable to the charge
recommended in the Standard Prosecution Report which formed the basis of the first charge
in the petition. The essentials of the crime of fraud were no more present in the Standard
Prosecution Report than they were in either indictment.
[95]
The police reliance on the 7 April 2011 email (the letter of comfort) adds nothing to
this because as a matter of fact it did not induce the release of funds. Once that too has been
removed, all that remains is a collection of circumstantial evidence that the pursuer was
aware at the material time of the true nature of the deal with Ticketus. Even if that were
true, in the context of a charge of fraud it amounts to nothing without any link to a practical
result.
[96]
In support of his argument that there had been objective reasonable and probable
cause for the police reporting, senior counsel for the Chief Constable submitted that undue
emphasis had been placed by the pursuer on the two errors in the police analysis and that
there had been "a substantial body of evidence" that permitted inferences to be drawn by
49
the police (a) that the pursuer had known the true nature of the acquisition funding prior to
the transaction and (b) that he had been involved in key steps in securing that funding and
in concealing it from important protagonists. The difficulty with that approach is that it fails
to take account of the reasons why the fraud charge was ultimately held to be irrelevant.
Knowledge, even if established on the basis of ex post facto witness statements, would not of
itself amount to the commission of an offence, and when one attempts to identify the "key
steps" in which the pursuer was considered by the police to have been involved, there is
nothing to be found except participation in the drafting of the letter of comfort and
attendance at and participation in the Independent Committee meeting. As neither of those
"involvements" was linked to any practical result, I find that there was no objective
reasonable and probable cause for the police conclusion that the pursuer had committed the
offence of fraud.
[97]
Nor, in my opinion, was there objective reasonable and probable cause for the police
conclusion that the pursuer had committed the offence of attempting to pervert the course of
justice. The essence of that charge was denying knowledge of the true nature of the Ticketus
deal. In HMA v Turner 2021 JC 92, Lord Turnbull held at a preliminary hearing that the
scope of the offence did not extend to denial by an accused person of guilt of the charge
against him. Lord Turnbull observed at paragraph 36:
"...The Crown has arrived at a decision as to the conclusions which it will ask the
jury to reach in relation to charge 1. However, arriving at that decision simply
triggers the process of assessment. It may be or it may not be that the Crown's
analysis of the events will come to be accepted. The Crown's analysis may be right
or it may not be. The accused's account may be true or it may not be. The eventual
decision arrived at after trial, whether it is one of guilt or innocence, will be the point
at which justice is reached and delivered. That process of reaching justice will
require full weight and consideration to be given to the accused's account of events.
The fact that an accused person gives an account which is inconsistent with the case
brought against him by the Crown does not constitute an 'interference' with what
would otherwise be expected to have come to pass in the ordinary and uninterrupted
50
course of justice in the particular case. The fallacy, it seems to me, in the Crown's
approach lies in the inherent implication of a claim to be the proprietor of justice.
The Crown's theory is that the account given by the accused must be an attempt to
pervert the course of justice because, if accepted, it defeats the basis upon which the
principal charge is brought. In my view, the uninterrupted flow of the course of
justice includes an assessment of the accused's defence. The course of justice is not
'interfered' with by having to take account of a claim to be innocent, whether that
claim is in the end rejected or not. On the contrary, the uninterrupted course of
justice requires that such a claim is fully weighed..."
[98]
Lord Turnbull's decision post-dated the events with which the present case is
concerned. His analysis is not, as I understand it, necessarily accepted to be correct by either
of the defenders in this case. For my part, I respectfully find it persuasive. However it
seems to me that the circumstances here are more clear cut than in HMA v Turner. The
charge of attempting to pervert the course of justice was based upon the police conclusion
that the pursuer knew the true nature of the Ticketus deal. Where, for the reasons above,
such knowledge did not amount to the commission of an offence, it cannot be said that the
course of justice was affected by the pursuer's denial of knowledge, whether true or not.
Because of the irrelevant nature of the fraud charge, the proper course of justice in the
present case was acquittal, and there was no alternative outcome with which the pursuer's
denial was capable of interfering.
[99]
For these reasons I hold that there was no reasonable and probable cause for the
police report recommending the prosecution of the pursuer on any criminal charge. In
accordance with my analysis above, having decided that there was no objective reasonable
and probable cause, the third element of the malicious prosecution test is satisfied and it is
unnecessary to address subjective reasonable and probable cause. I shall however do so, not
merely for the sake of completeness but because it is interlinked with the other two elements
of the test, namely characterisation of the police as prosecutor, and proof of malice.
51
Subjective reasonable and probable cause
[100]
On behalf of the pursuer it was contended that absence of subjective reasonable and
probable cause had been proved. Regardless of any contrary assertions by the individual
officers concerned, it could be inferred from their actings that they knew that, or were at
least reckless as to whether, without improper manipulation, the case against the pursuer
was unfit to lay before a court. The police had deliberately breached their obligation to
disclose evidence that might be relevant to the case for or against the pursuer in relation to
(i) the "Don't tell David" email and (ii) the interview with Mr Betts at Stansted Airport.
They had also acted improperly (iii) by accessing privileged material (the cash flow
statement in the black folder and the CDs produced by DWF in sealed envelopes marked
as privileged) and (iv) later, by failing when seeking the HFW search warrant to inform
Sheriff Wood that High Court proceedings had been commenced.
[101]
The response to these allegations on behalf of the Chief Constable was as follows:
(i)
The "Don't tell David" email. Mr Robertson did not draw this to the attention
of the Crown because he did not consider it to be exculpatory. The email chain was
provided by the police to the Crown and was disclosed by the Crown to the defence
on 6 June 2015. The defence team were in any event aware of it. The view of the
Crown was that it had little exculpatory significance when considered against a
larger body of evidence which indicated that the pursuer knew how the deal was
being funded.
(ii) The interview with Mr Betts. There was nothing wrong in principle with
meeting Mr Betts and his solicitor in advance of other meetings at which formal
statements were taken. Ms O'Neill's description of the meeting as an initial
discussion to understand his knowledge of various topics should be accepted. The
52
notes of the meeting were not going to be relied on as evidence. In any event there
was no material difference between the content of the notes and of the statements.
Omission of the words "as I don't think I knew myself" from the witness statement
was no more than an indication that Mr Betts did not say this.
(iii) Accessing privileged material. The police had been in possession of the cash
flow schedule (referring to "Ticketus Advance") before the search of Duff & Phelps'
London office, having been provided with copies by Mr Clark and Saffery
Champness. Information from the pursuer had made them aware of the alteration.
No claim of privilege was made during the search in relation to the black folder.
Ms O'Neill's "initial sift" had been carried out to identify whether the folder was
covered by the warrant. She had been unaware of the significance of the fact that the
folder related to a litigation. The claim to privilege in respect of the folder was made
after the police had left the premises. The folder had not been accessed again until
after it was released from privilege in May 2014. In any event there was no evidence
that the document was in fact privileged. As regards the envelopes containing CDs,
it was acknowledged that Mr Robertson had opened these envelopes and looked at
certain discs, in breach of a clear instruction not to do so. However there was no
suggestion that the discs at issue had any relevance to the criminal case against the
pursuer. Mr Robertson's evidence was that it was confusion that led him to access
the discs. He made no secret of the fact that he had done so. He did not look at the
contents of the discs. The events of October 2017 had no relevance to the questions
of subjective reasonable and probable cause or malice at the time of preparation of
the Standard Prosecution Report, and it was difficult in any case to be certain as to
what had happened that day.
53
(iv) The HFW search warrant. Mr Robertson had been acting under the supervision
and direction of the Crown. The application had been made with the knowledge of
the advocate depute, Mr Keegan. The question of whether the sheriff was told about
the High Court proceedings was irrelevant when the Crown were directing the
application. It had not been one of the reasons why the bill of suspension was
passed. The sheriff should have been alive to issues of privilege when deciding
whether or not to grant the warrant. The purpose of the warrant had not been to see
if HFW had a copy of the cash flow schedule. Lord Justice General Carloway had
observed in the Bill of Suspension proceedings that the Crown's actings had not been
motivated by bad faith and that there had been at least some basis for seeking
recovery of a limited part of the material covered by the warrant.
[102]
I have already observed that I formed an unfavourable impression of Mr Robertson
as a witness. I am, however, in no doubt that at the time when the Standard Prosecution
Report was submitted, the police officers primarily responsible were genuinely of the view
that there was evidence to indicate that the pursuer was a participant in a fraudulent scheme
to acquire the Club. Mr Robertson's reprehensible actings, including in particular his wilful
disregard for legal professional privilege and his improper behaviour during interviews of
witnesses, were largely driven by his groundless suspicion that the Duff & Phelps witnesses
and their lawyers Mr Clibbon and Mr Gregory were deliberately obstructing the
investigation. However, as a distinction between the present action and Rees v Commissioner
of Police of the Metropolis, the case that Mr Robertson presented to the Crown was not, in my
judgement, tainted by misconduct on his part that would have rendered the evidence
inadmissible. I am satisfied that the errors that infected his analysis of the evidence in
relation to the letter of comfort and the pursuer's contribution at the Independent
54
Committee meeting were honest ones, albeit that the fact that they were made does not
reflect well on the quality of his investigation. I find no basis in the evidence for the
submission on behalf of the pursuer, which was never directly put to any of the police
witnesses, that they consisted of a deliberate misrepresentation to the Crown. Given the
police's mistaken belief as to the extent of the pursuer's participation in the facilitation of
Mr Whyte's acquisition of the Club, together with the statements of Mr Betts and Mr Bills, I
am satisfied that Mr Robertson and the other officers concerned in the investigation honestly
believed, to adopt the phraseology of Lord Toulson in Willers v Joyce, that there was a proper
case to lay before the court. That is sufficient to satisfy the test of subjective reasonable and
probable cause although, because I have held that there was no objective reasonable and
probable cause, the matter is to that extent academic.
[103]
In relation to the four matters founded upon by the pursuer, I find as follows. The
existence of the email chain that contained the "Don't tell David" email was disclosed by the
police to the Crown in June 2014. Mr Robertson did not draw attention to the email because
he did not regard its terms as exculpatory. It was not, of course, for Mr Robertson alone to
make that assessment, but I do not regard the terms of the email as so obviously exculpatory
that he was under a duty to flag it up expressly. By at latest 16 June 2015 the pursuer's
defence team were aware of it and were founding upon it as a reason why the Crown ought
to terminate the prosecution of the pursuer. In these circumstances I find that no deception
or deliberate concealment took place on the part of the police in relation to the existence of
this email.
[104]
Nor, in my view, was there anything sinister about the non-disclosure by the police
of the meeting with Mr Betts at Stansted Airport. I accept the evidence of Ms O'Neill that
this was of the nature of a preliminary discussion to ascertain in general terms the matters
55
upon which Mr Betts should be asked to provide a statement. The notes of the meeting were
not made with a view to transcribing them into a formal statement and they were never put
to Mr Betts to check their accuracy. I see nothing untoward in the fact that Mr Betts had a
solicitor present during this meeting as well as during the others: the criminal investigation
was at an early stage and Mr Betts might then or subsequently have been suspected of
having committed an offence. Formal statements were of course taken from Mr Betts within
a few days after the meeting at Stansted. Nothing of significance can be taken from the
absence from the formal statements of the phrase "as I don't think I knew myself" in
Ms O'Neill's notes in relation to the pursuer's knowledge of the Ticketus deal. Even if
Mr Betts is accurately recorded as having said those words during the initial meeting, their
absence from the formal statement appears to mean no more than that he did not say them
when the statement was taken, possibly because he no longer regarded them as correct. The
point for present purposes is that in both versions Mr Betts told the police that the pursuer
knew about the deal but not "the full breakdown", and there was in my view no significant
difference that required the handwritten notes to be disclosed as if they were a separate
statement.
[105]
I am in no doubt that one of the objectives of the search of Duff & Phelps' offices in
August 2013 was to try to discover a copy of the cash flow forecast in its original form in
their possession. I am satisfied that one of the purposes of Ms O'Neill's "initial sift" of the
black folder was to look for a copy of that document. It would have been clear without
detailed examination, firstly, that the folder related to Rangers and, secondly, that it had the
name of a firm of solicitors on it, creating at least a possibility that it was subject to privilege.
In these circumstances there was no justification for Ms O'Neill's search of it for what she
and Mr Robertson were at that time viewing as incriminatory evidence. Discovery of the
56
document had the very unfortunate consequence of reinforcing the police view that
evidence was being withheld or concealed from them by the Duff & Phelps staff and their
legal advisers. It was still being referred to as "significant" when the Standard Prosecution
Report was presented, and it remains unclear, at least to me, how long it was before the
police disclosed to the Crown that they had realised that the document had come into
Duff & Phelps' possession too late to have any evidential value.
[106]
There is, however, no evidence that the police used the cash flow forecast to falsify
the case they were presenting to the Crown. Although they were obviously aware of its
presence in the black folder, the police made no use of it until it had been released from the
claim of privilege. As a matter of fact there was nothing about it that attracted privilege.
In these circumstances I find that any impropriety attaching to the means by which the
document was seized does not affect my conclusion that the police believed that they had
a proper case to lay before the court.
[107]
As regards the discs produced by DWF during late 2015 and returned in
October 2017, I accept Mr Gregory's evidence as truthful and accurate. I find that
Mr Robertson had opened sealed envelopes clearly marked as containing privileged
material and that there had been no reasonable basis for any confusion on his part. What he
did with the discs themselves is unclear but the opening of the envelopes was of itself a
serious breach of his duty to conduct the investigation with propriety. I find that when the
time came to return the discs, he and Ms O'Neill were aware that Mr Gregory would
discover what had been done and attempted to create a scenario in which it might appear
that the envelopes had been opened as part of the exercise of checking off the material being
returned. I do not believe that Ms O'Neill made any report to a senior officer of improper
conduct. Her superior had no recollection of such a report being made. Her email to
57
Ms MacLeod adopted the police position that the envelopes had been opened during the
visit to return them and in my judgment was sent as a pre-emptive alert of a possible
complaint by Mr Gregory.
[108]
Once again, however, I find nothing in Mr Robertson's willingness to disregard
claims of privilege or in his efforts to conceal his breach of privilege that amounts to
misrepresentation to the Crown of the case against the pursuer. The discs did not come into
the hands of the police until after the first indictment had been served. They were not
returned until after the prosecution had come to an end. There was no evidence that
anything that was accessed on the discs played any part in either the police investigation or
the prosecution of the pursuer. Mr Robertson's actings may be indicative of his mindset but
do not affect my conclusion that he believed he had a proper case to lay before the court.
[109]
Finally in this chapter, as regards the application for the HFW search warrant, I
accept that the sheriff ought to have been alerted to the service of the indictment and that
consideration ought to have been given to legal privilege. Having regard, however, to the
late stage at which this warrant was sought, it appears to me that the primary responsibility
for these omissions rests with the Crown who instructed the application without giving
them proper consideration. Moreover, the measures to be taken to respect potential claims
to legal privilege in a search of solicitors' offices ought, in my view, to have been raised and
scrutinised by the sheriff who heard the application. On this matter I accept Mr Robertson's
evidence that the object of the search was not to trace the origins of the cash flow forecast in
the black folder (whose evidential value had by then been discounted) but rather to recover
documents not included in the chronological bundle. The criticism directed against the
warrant by both the High Court in London and by the Appeal Court in Edinburgh
concerned the scope of the warrant and the failure to hear representations in relation to
58
privilege. In all of this I regard the police as having played only a supporting role and again
I do not find anything to affect my view that the police had had subjective reasonable and
probable cause at the time when the Special Prosecution Report was presented almost a year
and a half previously.
Were the police a prosecutor?
[110]
The factors that I have identified in relation to subjective reasonable and probable
cause are also of significance in deciding whether the first element of the test for malicious
prosecution is met, namely whether the police were a prosecutor.
[111]
At paragraph 65 above, I set out my conclusion that it had to be established that
the Crown was deprived of the ability to exercise independent judgement by presentation
of information by the police which they knew to be false or tainted by criminality or other
impropriety. In my opinion that test has not been met. I have found that the information
presented to the Crown in the Standard Prosecution Report was not known or believed by
the police to be false or tainted by criminality or other impropriety. Important elements of
it were factually incorrect but that is not enough of itself to clothe the police with the
designation of prosecutor. The decision to proceed to detain and charge the pursuer, along
with the other accused, was made by the Crown. It was submitted on behalf of the
Chief Constable that the errors had been discoverable by the Crown. I do not accept that
this was so at the stage of the decision to proceed with detention and charge. The Standard
Prosecution Report was very long and difficult to absorb because of the amount of
unprocessed material that it contained. It did not present the evidence in way that would
alert the reader to the possible presence of the errors in relation to the letter of comfort and
the Independent Committee meeting. The Crown officials were entitled to and did rely on
59
the accuracy of the report. That is not, however, according to the authorities, enough to
satisfy the first element of the malicious prosecution test.
Malice
[112]
My summary of the law in relation to malice, the fourth element of the test for
malicious prosecution, is at paragraphs 72 to 75 above. In my opinion that test is not met
either. I find that the police had no motive other than to bring an individual perceived to
be a criminal to justice. It was emphasised by the court in Whitehouse v Lord Advocate that
malice was not to be inferred from, among other things, incompetence, poor judgment, lack
of professionalism or recklessness. Much of the police investigation suffered from these
faults but that is not enough to meet the test. No "illegitimate or oblique motive" or
deliberate misuse of the process of the court has been demonstrated. In so far as the police
recommendation to charge the pursuer might be characterised as reckless, I use that word in
the sense of over-zealousness, as opposed to indifference as to whether the case against him
was supportable and I do not therefore consider that it is recklessness of a kind from which
an improper motive can be inferred.
[113]
The pursuer placed emphasis on the decision made by the police to treat Mr Betts as
a witness and not as a suspect. It was submitted that it was impossible to understand why it
had been thought that Mr Betts had committed no criminal offence yet the pursuer had.
Mr Robertson had declared himself satisfied that there was no criminality involved in
Mr Betts' instruction to Saffery Champness to alter the cash flow schedule by inserting
Wavetower as the source of funds, yet knowledge by the pursuer of that alteration was
regarded as an important part of the case against him, and the only inference to be drawn
was that there was an improper drive to "get" the Duff & Phelps employees, including the
60
pursuer. It appears to me that Mr Robertson's approach was driven by his view that
Mr Betts had been frank and truthful about the making of the alteration whereas the pursuer
had stated untruthfully that he had been unaware of the alteration when he attended the
Independent Committee meeting on 24 April 2011. This suggests that Mr Robertson formed
an unduly early view as to the relative trustworthiness and reliability of Mr Betts and the
pursuer which coloured his attitude to the investigation thereafter and led him, for example,
to place weight on Mr Betts' evidence that he told the pursuer about the Ticketus deal in
January 2011. It does not, however, in my opinion afford evidence of an improper motive
for charging the pursuer.
Conclusion
[114]
For these reasons I hold that the pursuer's case of malicious prosecution against the
Chief Constable has not been made out.
The pursuer's case against the Lord Advocate
Petition stage
[115]
I do not understand it now to be contended that the test of malicious prosecution
was met by the Crown at the stage when the pursuer appeared on petition. The pursuer's
position, as I understand it, is that at that stage the Crown were being misled by the police.
In relation to the cash flow schedule it was submitted that the Crown knew that it was being
relied upon by the police at a time when privilege had not been resolved; however as set
out above privilege had been resolved before the petition was drafted and I do not consider
that there is any point to be made.
61
[116]
I should however state that my conclusions in relation to the absence of objective
reasonable and probable cause at the time when the police presented the Standard
Prosecution Report apply equally to the petition. There was no material difference between
the charges recommended by the police (who had had drafting assistance from Ms Clark)
and the charges in the petition. My reasoning above therefore applies to the Crown in
relation to the petition as it does to the police in relation to the recommendation in the
Standard Prosecution Report. Given that it is not now contended that any of the other
requirements of the test for malicious prosecution by the Crown were met at the petition
stage, this is of no practical consequence.
Indictment stage
[117]
I have previously held that there was no objective reasonable and probable cause for
the prosecution at the indictment stage and I turn now to address the other elements of the
test for malicious prosecution.
Argument for the pursuer
[118]
A number of matters were founded upon by the pursuer as evidencing both absence
of subjective reasonable and probable cause and malice. Of these, the greatest weight was
placed upon two: pursuit of the prosecution without a proper and adequate case analysis,
and the misleading of the court by Ms MacLeod in order to obtain an extension of time.
[119]
In respect of the first of these, it was submitted that the internal Crown Office
regulation that required preparation of a completed Precognition was not complied with.
The consequence was that there was no proper analysis of the evidence and no-one with a
sufficient understanding of the evidence to make an informed decision on whether the
62
prosecution of the pursuer should proceed. The draft Precognition that was in course of
preparation by Ms Clark betrayed ignorance of the facts on an incomplete factual
background. For his part, Mr Keegan was ignorant of many important aspects of the case,
such as the Stansted meeting which ought, he said, to have been reported to the defence, and
the misconduct of the police. The issue of the CCI was qualified and without any proper
analysis of the evidence. This too was a departure from procedure. There could not have
been subjective reasonable and probable cause when the information was so lacking. It had
been a major feature of the decision to admit liability for the malicious prosecution of
Messrs Whitehouse and Clark that there had been a failure to prepare a Precognition and
carry out an analysis of the evidence. The same concession ought to have been made to the
pursuer.
[120]
As regards the application for extension of time, the sheriff's decision had been a
marginal one. If it had not been granted, as the Crown were not in a position to proceed the
proceedings would have become time barred. Ms MacLeod had essentially perpetrated a
fraud on the court by making the application and allowing it to continue on false
information. It was an attempt to defeat the ends of justice and a clear indicator of malice.
[121]
Other matters founded upon were knowledge of the police accessing the privileged
discs; complicity in failing to disclose the "Don't tell David" email and in the application for
the warrant to search HFW's offices; and the service of the second indictment "tactically" to
beat the time limit in case there was a successful appeal against the grant of an extension of
time to serve the first indictment.
[122]
For these reasons, it was submitted that (i) absence of subjective reasonable and
probable cause and (ii) malice had been demonstrated.
63
Argument for the Lord Advocate
[123]
On behalf of the Lord Advocate it was emphasised that a number of individuals
were involved in the decision to proceed with the prosecution. As the Australian High
Court had observed in A v New South Wales (above, at paragraph 42), it was more difficult
to prove that a prosecutor was acting with an improper purpose in a bureaucratic setting,
where the prosecutor's decision was subject to layers of scrutiny and potential review.
According to the evidence of Lord Mulholland, the prosecution of the pursuer had been
directed by Mr Keegan and "the prosecution team" whose members included Ms Clark,
Ms MacLeod, Mr Logan, Mr MacDonald, and Ms Nisbet (Deputy Head of SOCD). All had
given evidence that they had considered that there was a sufficiency of evidence against the
pursuer. When Mr Keegan had, in the exercise of his discretion, withdrawn some of the
charges against the pursuer, he had continued to believe that there was merit in the others.
He had not regarded as critical either the timing of the sending of the letter of comfor t or the
identity of the person who presented the cash flow statement to the Independent
Committee.
[124]
It was accepted that there had been failures in the procedure leading up to the first
indictment, starting with the failure to complete the Precognition. However, this did not
demonstrate doubt about the indictment of the pursuer, Mr Whyte and Mr Withey. When
Mr Keegan had issued the CCI it was his opinion that there was a sufficiency of evidence
against the pursuer, and the other members of the team had been in agreement with that
assessment. The decision to indict was not final. Mr Keegan could have terminated the
prosecution at any stage if he were of the opinion that the evidence or the law did not
support the charges. There had been no impropriety in serving the second indictment in
case the appeal against the extension of time was successful.
64
[125]
In relation to the application to the sheriff for an extension of time, the incorrect
reference to 39 boxes of material had been an error for which an apology had been tendered
to the Appeal Court. If the pursuer had wished to raise this as a matter of alleged
criminality, it would have been necessary to do so expressly and to raise the possible need
for a warning to Ms MacLeod against self-incrimination. There was no basis for the
allegation that Ms MacLeod had induced the advocate depute to make a false statement to
the sheriff.
[126]
It was also acknowledged that serious mistakes had been made in relation to the
HFW search warrant in December 2015. Mr Keegan had sanctioned it without properly
applying his mind to the issue of privilege.
[127]
None of this, however, was sufficient to meet the legal test of malice. The pursuer's
case did not fall to be judged relative to the prosecution of any of the other accused nor the
state of preparation of the prosecution as a whole: the question was whether there was a
malicious prosecution of the pursuer. This had not been a case where the prosecution was
mounted in the knowledge that there was no evidence against the pursuer. Assessment of
the available evidence was a matter of professional judgment. It had been legitimate to
serve an indictment immediately lest a successful defence appeal against the extension of
time rendered a later prosecution time barred.
Decision
[128]
As a matter of generality, there is force in the submission on behalf of the
Lord Advocate that it is less likely that malice will be present where a decision to prosecute
is taken in the bureaucratic setting of the office of a public prosecutor than where the
"prosecutor" is a private individual. In the bureaucratic setting, the establishment of malice
65
would generally require a finding that the prosecution had an improper purpose (as defined
above) which was known to and shared by all of those principally concerned in its
instigation and continuation. Such collective responsibility may, however, break down
where, as in the present case, there were significant failures to follow the normal procedure
designed to ensure that decisions to prosecute are subject to rigorous checks and controls.
[129]
Reliance has been placed by the Lord Advocate on the draft Precognition as
demonstrating the analysis underlying the decision to proceed to indict the pursuer on
charges of fraud and other criminal conduct. In my opinion much of that reliance is
misplaced. Firstly, the document was never completed. It was clearly a work in progress
full of questions and instructions for further investigation which indicate that even in
mid-2015 there were many uncertainties requiring to be resolved. The fact that the process
of indictment proceeded in the absence of such resolution was a serious breach of standard
procedure. Secondly, the document was never formally submitted to the Crown Office. The
advocate depute who had the responsibility for issuing the CCI did not see it. It must
therefore be doubtful whether it has any relevance at all to the central question of whether
the prosecution that proceeded had an improper purpose.
[130]
Thirdly, the draft Precognition displayed similar flaws to those already described in
relation to the police's Standard Prosecution Report. The evidential basis for a belief that
criminal offences might have been committed by the pursuer was strikingly sparse. In its
essence it depended, as did the police analysis, on acceptance of Mr Betts' evidence that he
told the pursuer in January 2011 that the deal was being financed by funds from Ticketus.
Everything that followed in the draft proceeded upon the assumption that that evidence was
truthful and accurate. In particular, the evidence regarding the pursuer's contributions
during the meeting with the Independent Committee was assessed on this assumption.
66
Whilst I recognise that corroboration was not, as a matter of law, required for what were no
more than individual elements of the narrative of the fraudulent conspiracy charge against
the pursuer and the other accused, it might be thought that without corroboration the
evidence of Mr Betts ought to have been subjected to closer scrutiny. There is a reference in
the draft Precognition to an email by Mr Withey on 6 April 2011 as "clearly spelling out the
Ticketus arrangements" which, in fact, clearly spells out the pre-existing unexceptionable
arrangement with Ticketus. Otherwise the only supporting evidence con sists of Mr Bills'
emails which are construed as demonstrating knowledge by the pursuer during the
negotiations that Ticketus were funding the acquisition. At best, the draft Precognition is
evidence of a subjective belief on the part of Ms Clark that there was reasonable and
probable cause to proceed with indictment of the pursuer. Because it was not completed or
submitted to the advocate depute, I do not attach weight to it in deciding whether malicious
prosecution has been established.
[131]
Ms MacLeod's recommendation that there was a sufficiency of evidence against
the pursuer was based on her reading of the draft Precognition chapters. I set out her
recommendation at paragraph 44 above. It is brief and contains no reasons for the
recommendation. In her oral evidence she was clear that the decision-maker was the
advocate depute, Mr Keegan. She did not recall giving Mr Keegan an assurance that there
was sufficient evidence, or of providing him with the analysis that he had sought of how the
case was to be proved. In these circumstances I find that Ms MacLeod's participation in the
decision-making process provides no assistance to the Lord Advocate's case. Nor, on the
other hand, does it afford evidence of an improper purpose. I address the point regarding
the application for an extension of time below.
67
[132]
I derive little assistance from the evidence of Ms Nisbet. In a statement prepared for
the actions at the instance of Messrs Whitehouse and Clark and annexed to her witness
statement for the purposes of this action, Ms Nisbet asserted that in August and
September 2015 she had no view as to sufficiency of evidence and deferred to the views of
other members of the team. Her view that there was a stronger case against the present
pursuer than against Messrs Whitehouse and Clark was based upon him having been
directly involved in the email communications regarding the letter of comfort, and having
been the "front man" for MCR in dealings with Messrs Whyte, Betts and Bryan. She was not
a decision-maker in relation to proceeding to indict.
[133]
Lord Mulholland described his role as being to supervise the enquiry, receiving
updates on the progress of the case and being advised of the case strategy as it developed.
He took the decision to serve the indictment within the unextended period, to avoid the risk
that an extension, if granted, would not be upheld on appeal. He did not however take the
decision to indict. He did not see the draft Precognition. He formed no opinion of his own
on the sufficiency of the evidence against the pursuer, regarding that as a matter for the
allocated advocate depute and his team. He was content that Mr Keegan would exercise his
own judgment in deciding whether to indict the pursuer. When cross-examined as to
whether he had had his "hands on the tiller", he reiterated that the tiller had been operated
by Mr Keegan and the prosecution team, and that he (Lord Mulholland) had had a
supervisory role. Again, therefore, I find his evidence to be of little assistance in addressing
the question whether all of the elements of the malicious prosecution test have been met.
[134]
I turn then to consider the evidence of those individuals who were most closely
associated with the decision to indict the pursuer. As already noted, Mr Keegan issued the
CCI. As the advocate depute responsible for conducting the prosecution, his state of
68
knowledge and understanding from time to time are of particular importance. When he was
allocated as advocate depute in September 2014, the primary sources of his knowledge of the
case were the Standard Prosecution Report and a summary of the evidence prepared for the
purposes of the drafting of the petition. Thereafter, according to his oral testimony, he was
provided with large amounts of information and documentation, including witness
statements, in a haphazard manner. He repeatedly asked to be provided with an analysis of
the evidence, but none was supplied until 19 February 2016 when a note analysing the
evidence against the pursuer was prepared by Irene Brisbane, a fiscal who worked part time
at SOCD. When Mr Keegan issued the CCI, he was worried about having to indict at a time
when the case was still being investigated. The tactical decision that was taken was to indict
(ie the first indictment) within the unextended time available, in case the appeal against the
extension of time was successful, with a view to issuing a second indictment later.
[135]
In cross-examination Mr Keegan was referred to a passage in Ms O'Neill's
handwritten notes of the meeting with Mr Betts at Stansted Airport, stating "Instructions
from CW/GW not to [discuss] Ticketus deal. Ticketus didn't want anyone else to know in
case the Club wanted them to front deal and Ticketus won't deal with club." He had not
been provided with the notes and agreed that it would have been extremely useful to have
had this information when considering Mr Betts' official statements and assessing him as a
witness.
[136]
Mr Keegan was nevertheless able to form a view that there was a sufficiency of
evidence against the pursuer of conspiracy to commit fraud. As regards the letter of
comfort, he had been aware that the funds had been transferred before any email was sent
to Mr Bryan, but did not regard that as significant because they could not be withdrawn
without Ticketus's consent. He saw the pursuer's involvement in the drafting of the letter as
69
evidence of his knowledge of an arrangement to borrow money secured on the future
income of the Club, and therefore as a step in a conspiracy among Mr Whyte, Mr Withey
and the pursuer. His view in relation to the Independent Committee meeting, based on the
minutes, was that the pursuer had participated in misrepresentations which, though not
decisive by themselves, formed part of the course of a conspiracy to acquire the Club by
fraud. His position, set out at greater length in his witness statements, was summarised in
the course of re-examination as follows:
"I felt at that time that there was a sufficiency against Mr Grier, based on what I've
already said. Based on his communications, his activities with Whyte in particular,
based on evidence from Betts, based on what we understood to be the position in
relation to the letter at that point in time, based on what we understood the position
to be in relation to representations to the Independent Committee..."
(Mr Keegan also referred to post-acquisition events in the running of the Club, but after
objection that aspect was not pursued.)
[137]
Mr Keegan discussed the charges against the pursuer with Mr Logan and
Mr MacDonald, the recipients of his instruction to prepare the indictment. They too were
independently of the view, based upon the same material as that relied upon by Mr Keegan,
that there was a sufficiency of evidence against the pursuer in relation to all of the charges
against him in each of the two indictments. Both adopted witness statements explaining the
basis for their respective views. Neither was cross-examined.
[138]
I accept the evidence of the Crown witnesses regarding their respective roles in the
decision to indict the pursuer and to proceed with the prosecution, the views that they held
at the time of service of each of the indictments, and the reasons they held those views. Not
all of those views have proved, in the light of subsequent events, to have been sustainable.
Some, such as the credibility and reliability of Mr Betts, have never been tested in court.
However I am satisfied (i) that all of the individuals concerned in the prosecution of the
70
pursuer were subjectively of the view that there was reasonable and probable cause to indict
the pursuer for the offences with which he was charged and, separately, (ii) that their actings
were not motivated by any purpose other than the pursuit of the interests of justice. I have
not dealt in detail with all of the charges in each of the two indictments because the
conclusion that I have reached applies equally to all of them; nor, in this regard, do I
consider that any different considerations apply to the first and second indictments
respectively.
[139]
Turning to the application for an extension of time, I accept Mr Keegan's evidence
that he was not alerted by Ms MacLeod to the possibility that the factual basis upon which
he was presenting the application was inaccurate. I regard that as reprehensible. It is clear
from Ms MacLeod's evidence that she was aware over the weekend that intervened between
the days of the hearing that there was uncertainty about what documentation had been
received, from whom and when, and in particular whether the figure of 39 boxes was
correct. When the hearing resumed she had not received a clear explanation from the police.
In these circumstances she owed a duty to the court to alert Mr Keegan to the risk that he
had presented the application on an inaccurate basis, and it is difficult to understand why
she did not do so.
[140]
I am not, however, persuaded that her acquiescence in the presentation of incorrect
information is demonstrative of malice in the relevant sense. It is not, in my view,
comparable to the presentation of tainted evidence that was held to constitute malice in
Rees v Commissioner of Police for the Metropolis, where the actings of the policeman were
intended to procure a prosecution that he was concerned would not otherwise take place.
The failure of one member of staff to ensure that the submission in support of the
application for an extension was accurately presented is not in my view an indication of an
71
improper motive on the part of the Crown in relation to the prosecution as a whole. Nor in
the event did it have any practical consequence. On appeal the court, properly apprised of
the facts, addressed the matter of new and upheld the granting of the extension of time.
And in any event the first indictment was served, on the Lord Advocate's instructions,
within the unextended time limit.
[141]
I am not persuaded that any of the other matters founded upon by the pursuer are
supportive of a finding of improper motive. There was no conclusive evidence that the
Crown officials knew of, far less were party to, the accessing of privileged material by the
police. The existence of the "Don't tell David" email was not at any time concealed from the
defence by the Crown. Mr Keegan candidly admitted to errors in connection with the HFW
search warrant but there was no evidence of any improper motive on his part or on the part
of any other Crown official. The issue of "tactical" service arose in relation to the first and
not the second indictment, and was done for the reasons already explored, which contain no
impropriety.
Conclusion
[142]
For these reasons I hold that the pursuer's case of malicious prosecution against the
Lord Advocate has not been made out.
[143]
I recognise that comparisons may be drawn between my decision in this case and the
outcome of the actions at the instance of Mr Whitehouse and Mr Clark, in each of which the
Lord Advocate admitted liability for malicious prosecution. I do not regard it as appropriate
to attempt to identify reasons why admissions of liability were made in those cases but no
finding of liability is made in this case. The admissions of liability were decisions taken by
the Crown in the light of the factual circumstances as they were perceived. My task is to
72
assess the evidence presented to the court by the parties in relation to the claim by the
present pursuer, without being influenced by the extra-judicial outcome of those other cases
or by anything said by the Lord Advocate by way of explanation for that outcome.
Causation
[144]
The parties were sharply divided on the approach that the court ought to take to
the question of causation of loss. As I have held that the pursuer's case against the
Chief Constable and his case against the Lord Advocate both fail, the question of causation
is academic. I should however express my opinion as to the correct approach to be taken.
Argument for the pursuer
[145]
On behalf of the pursuer it was submitted that the court did not require to consider
what wrong caused what damage to the pursuer. The pursuer's detention, appearance on
petition and prosecution on indictment led to a single loss. In the absence of any plea by
either defender that there should be apportionment between them (which would have
required a third party notice in each case to convene the other defender), the court could not
and should not make any finding as to which part of the loss is attributable to which wrong.
The law was clear: as long as a wrong materially contributed to the overall ultimate loss
then the entire damages were payable for the whole loss, regardless of whether the loss was
caused by "innocent causes" as well as "guilty" causes, or was caused by more than one
"guilty" action. In Simmons v British Steel plc 2004 SC (HL) 94, Lord Hope of Craighead had
made clear that a pursuer was entitled to the whole damages where the negligence made a
material (ie not de minimis) contribution to the whole. In the present case the loss suffered
by the pursuer was caused by the wrongful conduct of both defenders. Accordingly, decree
73
was sought against both for the full sum. There was nothing wrong with granting two
decrees for the same loss (see eg Steven v Broady Norman & Co 1928 SC 351). The pursuer
would not be permitted to enforce his decrees for more than the total amount of his losses
but could choose against whom to enforce them.
Argument for the Chief Constable
[146]
On behalf of the Chief Constable it was submitted that the line of authority to which
Lord Hope had referred in Simmons v British Steel plc, relating to industrial disease where
there was scientific or medical uncertainty about causation, was not in point. The pursuer's
losses were not indivisible. Where loss was caused cumulatively by different factors, and it
was possible to identify the extent of the contribution made by a defender's particular legal
wrong, the defender was only liable to the extent of that contribution. The pursuer had
failed to discharge the onus upon him to prove the nature and extent of the losses he
claimed to have suffered as a result of the prosecution. Firstly, as the pursuer had ultimately
accepted in cross-examination, he had suffered damage as a result of the allegations
broadcast by the BBC. Secondly, if the pursuer had sustained any loss as a consequence of
malicious prosecution by the police, the chain of causation was broken when the Crown
exercised independent judgement to proceed with the prosecution after the petition stage.
Argument for the Lord Advocate
[147]
On behalf of the Lord Advocate it was submitted that there had been multiple factors
that may have impacted on the pursuer's business reputation and earning capacity: his
association with Craig Whyte; the BBC broadcasts; his detention, arrest and charge by the
police; his appearance on petition; and his indictment. Only the last two concerned the
74
Lord Advocate. Where, as here, there were sequential wrongful acts by different
wrongdoers each inflicting damage, the wrongdoers were not jointly and severally liable
for the aggregate of the loss. A later wrongdoer was not liable for the loss caused by a
predecessor, even if the later wrong could itself have caused that same loss. It was
necessary to identify the loss caused by each wrongdoer. Chronologically, the first damage
was inflicted by the BBC broadcasts. The pursuer did not specify the damage, nor was there
any evidence to enable it to be quantified. Next came detention, arrest and charge, most of
which occurred before any Crown involvement and which attracted considerable publicity.
There was no specification by averment or evidence of whether the indictments themselves
caused any further detriment to the pursuer's reputation and earnings. These difficulties
could not be avoided by granting decrees for the whole loss against both the police and the
Crown, allowing the pursuer to enforce one or other at will.
Decision
[148]
In my opinion the submissions on behalf of the Chief Constable and the
Lord Advocate are correct. I reject the proposition that the present case is on all fours with
the industrial disease cases where it was not scientifically possible to separate the damage
caused by the defender's fault from damage from another cause. Not surprisingly, it
appears to be accepted by the pursuer that at least some damage to his reputation and
earning potential was caused by the BBC broadcasts which preceded any alleged
wrongdoing by either the police or the Crown. I understand that the pursuer has raised an
action against the BBC for defamation which is sisted to await the outcome of these
proceedings. On the hypothesis upon which these actions proceed, there was then further
damage attributable to police action, including in particular the pursuer's detention, arrest
75
and charge, all of which received widespread publicity, and still later damage attributable to
his appearance on petition and his subsequent indictment and court appearances, which
were also widely reported. There is in my view no single indivisible wrong but rather a
consecutive series of alleged wrongs, each of which had its own consequences.
[149]
In Performance Cars Ltd v Abraham [1962] 1 QB 33 (CA), the defendant negligently
collided with the plaintiff's Rolls Royce and it was agreed that the lower part of the car
would have to be resprayed. As it happened, however, the car had been in a collision
two weeks previously which also necessitated its respraying. Judgment had been obtained
against the person responsible for the first collision but the plaintiff was unlikely to recover
anything from it. The Court of Appeal held that the plaintiff was not entitled to recover the
cost of respraying from the defendant in relation to the second collision. The car had been in
a damaged condition and the expense of respraying would have been necessary in any case.
This decision has been cited with approval and applied in a number of subsequent cases, of
which Steel v Joy [2004] 1 WLR 3002 (CA) is of interest for present purposes. The claimant
was injured in an accident involving the first defendant. Some two years later, he was
injured in an accident involving the second defendant. His actions against the two
defendants were consolidated. Both admitted liability. According to the evidence, t he
second accident aggravated the pre-existing problems producing a temporary exacerbation
of these. The court held that the historical fact of damage having occurred as a result of the
first accident could not be expunged simply because the same damage would have been
caused by the second accident if the first accident had not occurred. The two defendants
were not joint wrongdoers whose respective contributions were to be fixed by the court.
[150]
Performance Cars was also cited with apparent approval by the House of Lords in
Baker v Willoughby [1970] AC 467. In that case the plaintiff suffered leg injuries in a road
76
accident for which the defendant was held 75% to blame. Three years later the plaintiff,
while at work, was shot in his injured leg by a robber. The leg then had to be amputated.
The House of Lords held that the occurrence of the second injury did not diminish the
damages payable by the wrongdoer who caused the first injury. In the course of his
judgment, Lord Reid referred to Performance Cars and another case, observing:
"These cases exemplify the general rule that a wrongdoer must take the plaintiff (or
his property) as he finds him: that may be to his advantage or disadvantage. In the
present case the robber is not responsible or liable for the damage caused by the
respondent: he would only have to pay for additional loss to the appellant by reason
of his now having an artificial limb instead of a stiff leg."
[151]
In the present case, on the hypothesis that the pursuer suffered loss and damage as
a consequence of malicious prosecution by the police, such damage was inflicted after the
occurrence of whatever damage he sustained as a consequence of the adverse publicity that
he had received in the BBC broadcasts in May and October 2012. On the hypothesis that he
suffered loss and damage as a consequence of malicious prosecution by the Crown, such
damage was inflicted after the occurrence of whatever damage he sustained as a
consequence of both the adverse publicity and the malicious prosecution by the police. It is
also possible, in a manner analogous to Baker v Willoughby, that damage occasioned by the
BBC broadcasts continued to accrue after the events which form the subject matter of this
action, and/or that damage occasioned by the actings of the police continued after the events
founded upon as wrongdoing by the Crown. In such eventualities, apportionment of loss
would be required.
[152]
In my opinion, all of these issues would have to be addressed in order to identify
losses for which the Chief Constable or, separately, the Lord Advocate would be liable if the
pursuer's claim succeeded against one or other or both. There was, however, no evidence
led that would enable me to carry out such an assessment. Nor were the two expert
77
witnesses on quantum provided with data that would have enabled them to offer a view
upon it. There is at least some basis in the evidence relating to quantum to suggest that
material damage was occasioned to the pursuer by adverse publicity prior to his detention,
arrest and charge. Within the restructuring division of Duff & Phelps, the pursuer in 2011
was ranked no 1 as "Referral MD" (out of a total of 18 or 19 fee earners) with over
£3.6 million of work won. In that year he was ranked no 12 as "Project MD". In 2012 his
rankings as Referral MD and Project MD were 6 and 14 respectively, with £1.7 million of
work won. In 2013 his rankings were 19 and 17 with £320,000 of work won, and in 2014 they
were 19 and 16 with £106,000 of work won. I found the pursuer's explanation that future
income from a project would be allocated to the insolvency practitioner responsible for the
case unconvincing as a reason for such a dramatic decline. The pursuer also acknowledged
that the allegations in the BBC broadcasts had had an effect on his business relationship with
HMRC. I do not accept the position initially taken by the pursuer in his evidence to the
court that the 2012 publicity was not damaging. Nor do I accept that because the BBC
broadcasts focused on alleged conflicts of interest of the administrators (which did not
concern the pursuer), the allegations made against him that he had been aware of the true
nature of the Ticketus deal caused little or no damage to him. Such limited evidence as there
is suggests that they may have had a significant effect before any prosecution had begun.
[153]
In these circumstances there is an unquantified, and on the material placed before me
unquantifiable, gap in the evidence in relation to causation of the pursuer's loss. Had I
found in the pursuer's favour on the merits of his case against the Chief Constable and/or
the Lord Advocate, I could not have pronounced decree for payment of a sum or sums
arrived at on a sound evidential basis. Allowance would have had to be made for damage
sustained by the pursuer prior to the police action, and for such proportion, if any, of
78
damage sustained thereafter as remained attributable to the pre-detention publicity as
opposed to the police action and subsequent prosecution by the Crown.
Quantum
Introduction
[154]
In the light of my conclusions on the merits and on the evidence as to causation, my
decision in relation to quantification of the pursuer's claim is doubly academic. However, in
recognition of the work and time expended upon it in preparation for and at the proof, I
shall again express my views briefly. It was common ground that in quantifying the loss
sustained by the pursuer as a consequence of malicious prosecution, three elements would
require to be assessed: (i) lost earnings; (ii) solatium; and (iii) expenses of defending the
criminal proceedings.
Lost earnings
[155]
In respect of lost earnings, expert evidence on behalf of the pursuer was provided by
Ms Sally Longworth, a chartered accountant and managing director of Longworth Forensic
Accounting Ltd. Ms Longworth has over 25 years of experience as a forensic accountant,
having previously been a partner in GLF (part of Baker Tilly), a director in Deloitte LLP and
a partner in Grant Thornton UK LLP's forensic and investigation services team. On behalf
of both defenders, expert evidence was given by Ms Catherine Rawlin, a chartered
accountant and partner in Baker Tilly, with a specialisation in forensic accounting since 1988.
I found both expert witnesses amply qualified to express their opinions on t he matters
covered by their respective reports and oral evidence.
79
[156]
In preparation for the proof, Ms Longworth and Ms Rawlin had discussed their
reports and produced a very helpful joint report setting out their areas of agreement and
disagreement, including a calculation of the sums produced by their respective approaches
to quantification. In making my assessment of quantum I have used the figures in the tables
in the joint report (subject to an arithmetic correction intimated by Ms Rawlin at the outset of
her oral evidence).
Matters not in dispute
[157]
The pursuer was aged 60 at the date of the proof. His role within Duff & Phelps
at the material time had been a bespoke one, not directly comparable with any of his
colleagues. Following the completion of the sale of MCR to Duff & Phelps, the pursuer was
in a lock-in arrangement that was due to expire in late 2014. His gross base annual salary
was £210,000, to be reviewed annually with no contractual entitlement to an increase. His
base salary did not in fact increase from £210,000 between 2012 and 2021. The pursuer
received bonuses in 2013, 2014 and 2015 of £68,000, £122,000 and £203,000 respectively. He
received no bonus in any subsequent year. His total earnings for the period from 2015
to 2021 were approximately £1,483,000. He has been on administrative leave since
December 2015. In 2019 there was some discussion of his moving to an administrative role
within Duff & Phelps' Chief Revenue Office but this has not happened and the pursuer
continues to be paid but does little or no work.
[158]
Both experts calculated future loss of earnings on the assumption that the pursuer
would retire at age 65. A discount factor of -0.75% pa was applied.
80
Ms Longworth's calculation
[159]
Ms Longworth calculated the pursuer's lost earnings by means of two comparisons.
In the first, she used the earnings of partners/members in a number of comparable
businesses, including the "big four" and other large accountancy practices whose activities
included a financial advisory service comparable to the business of Duff & Phelps. Having
calculated the average profits per member in the comparator firms, she compared this with
the pursuer's earnings in the years ending 2013, 2014 and 2015. During those years his
earnings had been gradually increasing by reference to the comparators, and Ms Longworth
assumed that from 2016 onwards, the pursuer would have had earnings equal to the average
for each year. On this basis she calculated (after correction) a net loss of earnings to 2021,
after tax and NIC, of £1,305,000.
[160]
Ms Longworth's second comparator was the pursuer's Duff & Phelps colleague
Mr Duffy, to whom reference has already been made as he gave evidence at the proof
(although he was not asked any questions on quantum-related matters). The pursuer
suggested that Mr Duffy was at a similar level to himself. Mr Duffy's base salary in 2013
was £400,000 (ie almost double the pursuer's) and had not increased since then. His bonus
entitlement had been affected by the impact of the court actions on the business as a whole.
Ms Longworth assumed, in accordance with Duff & Phelps' income model, that Mr Duffy's
base salary would amount to about 60% of his expected income (after bonuses etc) and used
the grossed-up figure as the amount that the pursuer would also have earned. On this basis
she calculated (after correction) a net loss of earnings to 2021, after tax and NIC,
of £1,672,000.
[161]
For loss of future earnings, Ms Longworth used the same two comparators. In
respect of each, she carried out two calculations, one on the assumption that the pursuer
81
would continue to be employed until age 65 at his current level of earnings, and the other on
the assumption that he would be made redundant at the conclusion of these proceedings.
After application of the annual discount and arithmetic corrections, the aggregate net future
loss produced by each of these combinations of assumptions was as follows:
Average profits per member; no redundancy
£1,173,000
D&P colleague; no redundancy
£1,558.000
Average profits per member; redundancy
£1,503,000
D&P colleague; redundancy
£1,883,000
Ms Rawlin's calculation
[162]
Ms Rawlin carried out calculations of past loss on five different scenarios, as follows:
Scenario A: The pursuer's expected earnings were his base annual salary
of £120,000 plus an annual bonus of £130,936 which equated to his average
bonus between 2012 and 2016. This produced a total net loss, attributable
solely to loss of bonuses, after arithmetic correction of £398,000.
Scenario B1: The pursuer's base salary increased incrementally from £210,000
in 2016 to £400,000 in 2021, with a 30% annual bonus. This produced a total net
loss after correction of £605,000.
Scenario B2: The pursuer's base salary increased incrementally from £210,000
in 2016 to £400,000 in 2021, with a 67% annual bonus, in line with Duff &
Phelps' income model. This produced a total net loss after correction
of £961,000.
Scenario C1: The pursuer's expected earnings were calculated by reference to
the relationship in 2011-2015 between his pre-arrest earnings and the average
82
profits per member of the firms used by Ms Longworth. For this purpose the
pursuer's earnings were taken to be 59.5% of the average profits per member,
continuing the pre-arrest relationship. This produced a total net loss after
correction of £439,000.
Scenario C2: The pursuer's expected earnings were calculated by reference to
the relationship between his pre-arrest earnings and the average profits per
member of those firms used by Ms Longworth which were directly comparable
with Duff & Phelps, ie excluding the larger firms. For this purpose the
pursuer's earnings were taken to be 67.6% of the average profits per member,
continuing the pre-arrest relationship. This produced a total net loss after
correction of £766,000.
[163]
For future loss, Ms Rawlin carried out three calculations based on each of her five
scenarios, assuming (1) that the pursuer continued to be employed until age 65 with his
current salary and benefits of around £240,000; (2) that he continued to be so employed but
with residual annual earnings of £120,000; or (3) that he was made redundant and had no
earnings. As I understand it, Calculation 2 was intended to provide a midpoint, in line with
possible residual earnings identified by another expert witness previously instructed on
behalf of the pursuer. The total future loss produced by the various permutations ranged
from £357,000 (Scenario A; no redundancy) at the lower end to £1,986,000 (Scenario B2;
redundancy) at the upper end.
83
Experts' comments on one another's methodology
[164]
In their joint note Ms Longworth and Ms Rawlin provided additional reasons for
preferring certain aspects of their calculation to those of their opposite number. These
included the following:
Ms Longworth's Basis 1 and Ms Rawlin's Scenarios C1 and C2: Whereas
Ms Longworth assumed that the pursuer would have earned a salary
equivalent to the average earnings achieved across the comparator group,
Ms Rawlin assumed in Scenario C1 that the pursuer would earn 59.5% of the
average. Ms Longworth preferred her basis because the pursuer's bonuses
appeared to have been on an upward trajectory prior to the incident, with the
relationship to the comparators having increased from 35.2% in 2011 to 76.5%
in 2015. Ms Rawlin noted that the bonuses received by Mr Grier during the
pre-arrest period appeared to be related to lock-in arrangements put in place
following Duff & Phelps' acquisition of MCR and, therefore, were not
necessarily indicative of expected ongoing bonuses. She considered it
appropriate to adopt a longer basis period to account for the impact of the
lock-in and retention and, therefore adopted the average relationship
percentage from 2011 to 2015. In Ms Rawlin's Scenario C2 she assumed that
the pursuer would earn 67.6% of the average for the direct comparator firms,
the percentages again being derived from a comparison over the period 2011
to 2015. Ms Longworth made the same comments as for Scenario C1 regarding
the use of an average of 67.6% when the relationship increased from 58.8%
in 2011 to 80.5% in 2015. She noted that Ms Rawlin considered there to be a
stronger correlation between the comparators and the pursuer than the direct
84
comparators, suggesting Scenario C1 may be more reliable, possibly because
the direct comparator sample was smaller. Ms Rawlin noted that the direct
comparator group of firms had experienced more significant growth in
earnings during the post-arrest period, which she considered to be reflective of
the variability and growth in earnings of more direct comparators. Whilst
lower than for the full comparator group, the correlation to the direct
comparator group was still high at 93%.
Ms Longworth's Basis 2: Ms Longworth had applied inflationary increases
of 3% per annum for the period after 2016. Ms Rawlin did not consider it
appropriate to apply an inflationary increase to the base salary, and
consequently pension benefits, as Mr Duffy's base salary had not increased
since 2013. Ms Longworth considered it unreasonable to assume that, but for
negative impact of the events on the firm's profitability, a senior employee's
base salary would not increase between 2013 and 2021.
Ms Rawlin's Scenario A: Ms Rawlin assumed no loss of salary and benefits on
the basis that they were reflective of the pursuer's market value when he joined
Duff & Phelps, at which time he received a £60,000 (40%) pay increase.
Ms Longworth noted that the pursuer's bonuses showed an upward trend
from £68,000 to £203,000, so that by using an average rather than the later
bonus a calculation on this basis was understated. Ms Rawlin reiterated the
point that the pursuer's bonuses appeared to be, in the round, related to
"lock-in" arrangements.
Ms Rawlin's Scenarios B1 and B2: Ms Longworth noted that Mr Duffy had
already achieved a salary of £400,000 by 2013. She noted further that a bonus
85
of 67% was in line with the Duff & Phelps normal income model and was
therefore more realistic than one of 30%. Ms Rawlin noted that Mr Duffy was a
registered insolvency practitioner and appeared to have joined Duff & Phelps
on an annual salary of £400,000 having been an equity partner in MCR. This
differed from the pursuer who, upon joining Duff & Phelps, had received a 40%
pay increase from £150,000 to £210,000 which Ms Rawlin would expect to be
representative of his market value at that time.
Decision
[165]
Quantification of the pursuer's lost earnings is not a question with a single correct
answer. The fact that the two expert witnesses have, between them, produced seven
different possible methods of calculation demonstrates that this is a matter of judgement to
be exercised having regard to the whole circumstances of the case. Having considered all
of the alternative methods proposed, I conclude that the most appropriate would be
Ms Rawlin's Scenario C2. My reasons for preferring this alternative are as follows.
[166]
It is agreed that the pursuer's role within MCR and subsequently Duff & Phelps was
a bespoke one. It is apparent from the evidence that his value to his employers lay in his
performing a "front of house" role, attracting business to the firm and creating and
maintaining business relationships with clients and others such as the client's other advisers
and HMRC. As such his value is not, in my view, comparable with that of an insolvency
practitioner such as Mr Duffy whose qualifications would suit him to a more technical role.
It is also more likely that an employee whose value lay in his ability to create and maintain
business relationships would be remunerated in a performance-related manner, ie with an
emphasis on bonuses rather than base salary. I also regard the pursuer's base salary as too
86
far removed from that of Mr Duffy for the latter to be regarded as a reliable comparator,
whether immediately or after incremental increases. I therefore reject Ms Longworth's
Basis 2 and Ms Rawlin's Scenarios B1 and B2.
[167]
I consider that a comparison with average earnings in an appropriate comparator
group is the most reliable means of estimating the pursuer's lost earnings. Although the
individual employees within this group will be a mix of practitioners with different skills
and specialties, it seems to me that in the absence of availability of comparators with more
or less the same attributes as the pursuer, an average derived from of this group is the most
helpful comparison. It takes account not only of bonuses but also of base salary increases. I
regard that as a strength rather than a weakness of this comparison. Although the pursuer
had no contractual entitlement to annual base salary increases, I am not prepared to assume
that he would not have received any increases between 2015 and 2021 if, as I presume for
present purposes, he was proving his worth to Duff & Phelps. I therefore reject Ms Rawlin's
Scenario A, which assumed no base salary increase.
[168]
The choice among the remaining options (Ms Longworth's Basis 1 and Ms Rawlin's
Scenarios C1 and C2) is concerned with (i) whether the comparison should be done on the
basis of the whole average earnings of the comparator group or only on the proportion
thereof achieved by the pursuer in the pre-arrest period; and (ii) whether the comparison
should be with the whole comparator group or only those within directly comparable firms.
As to the first of these, I consider that Ms Rawlin's approach is preferable. If the pursuer
was earning only around 60% of the average during the pre-arrest period, I see no reason to
assume that in 2015 he would have moved to earning 100% of the average. I also consider
that adopting an average of the percentage relationships is appropriate because I am not
satisfied that the amounts of bonuses received by the pursuer in 2013, 2014 and 2015
87
represented a sustainable progression justifying use of the last amount alone instead of the
average. As to the second, I consider that restricting the comparison to the employees of
those firms most closely comparable to Duff & Phelps is appropriate as being likely to
increase the proportion of individuals within the group whose skills and exper tise are most
similar to those of the pursuer.
[169]
In their submissions senior counsel for the Chief Constable and the Lord Advocate
invited me to discount Scenario C2 because the calculation used pre-arrest earnings of the
pursuer that included the bonuses paid in 2013, 2014 and 2015, which were non-recurring
lock-in bonuses not directly referable to work won. I accept that that is so, but I do not
regard it as a reason for excluding them from the computation. The comparison being made
is simply between all of the earnings of the pursuer in the relevant years and the average of
all of the earnings of the employees in the comparator groups. No enquiry is being made
into how those earnings have been calculated, and in my view it would be distortive and
unfair to exclude particular elements of the pursuer's earnings without any information as
to whether parallel exclusions ought to be made in calculating the averages. I am satisfied
that this scenario, without any discounting, provides a fair and reasonable basis for
estimating the pursuer's lost earnings between 2015 and 2021. The figure produced by
Ms Rawlin's calculation for net loss of past earnings, after deduction of tax and NIC and
after correction, would be £766,000, to which interest would fall to be added.
[170]
Turning to loss of future earnings, I would continue to adopt Ms Rawlin's
Scenario C2. The principal issue here is what assumption ought to be made regarding the
pursuer's actual future earnings, and particular whether he is likely to be made redundant
following the conclusion of these proceedings.
88
[171]
The pursuer's evidence was that he was uncertain how Duff & Phelps would feel
about continuing to employ him after these proceedings had ended. They had been very
supportive of himself and his colleagues who were also prosecuted, but he could not expect
that to continue indefinitely. He was currently being paid at a rate that was excessive for
what he was doing. Attempts had been made to find him a suitable back office role within
the business but these had not been successful. He had now been out of client-facing work
for some years and had lost his value to the firm in that regard.
[172]
My assessment of quantum of loss proceeds, obviously, on the hypothesis that the
pursuer has been successful on the merits, ie that the court has held that he was maliciously
prosecuted. I have not so held, although I have made a finding that there was no objective
reasonable and probable cause for either the detention and charging of the pursuer or his
subsequent prosecution. It is difficult to gauge what effect, if any, a finding of liability and
an award of damages would have had upon the attitude of the pursuer's employers to his
continued employment. His business reputation would not have been restored as if the
events that began with the BBC allegations had never occurred. In any event his long
absence from client-facing work would have rendered it unlikely that he could resume such
a role. It would be unrealistic to expect his employers to continue to remunerate him for
doing nothing or at least nothing that would justify the salary that he was being paid.
[173]
On the other hand there was no clear evidence that the pursuer's employment was
likely to be terminated at the close of these proceedings. The pursuer emphasised that he
missed working, and I find no reason to assume that efforts to find him a role within the
firm would not continue or, alternatively, that he would, assisted by the court's findings,
have succeeded in obtaining alternative employment. I conclude that I should regard the
prospect of redundancy as a risk rather than a likelihood and adopt the midpoint approach
89
proposed by Ms Rawlin. That approach could alternatively be treated as a finding of
likelihood of the pursuer remaining in employment but at a much lower level of
remuneration than he would have achieved if the events since 2012 had not occurred.
The figure produced in Ms Rawlin's Scenario C2 for future loss with residual earnings
of £120,000, after correction, would be £998,000.
[174]
It was submitted on behalf of the pursuer that his loss of future earnings should be
increased to take account of the increased work likely to be generated during the next few
years by insolvencies caused by the Covid-19 pandemic. Ms Longworth's view was that
as Government support for businesses wound down, there was likely to be a significant
increase in work in the UK restructuring market, with some of the additional revenue being
shared with employees via increased bonus pool allocations. Ms Rawlin agreed in principle
that there was likely to be an increase in restructuring work in coming years, but regarded
the timing and extent of increase in work to be too uncertain to factor into her calculations.
In my opinion there are too many uncertainties to take the potential impact of Covid on
businesses into account. Events since the proof have further demonstrated th e
unpredictability of the economic effect of Covid, and the timing of that effect. I would have
regarded this aspect of the claim as impossible to quantify and would have made no
adjustment for it.
[175]
A further claim was made by the pursuer for a lump sum of £500,000 to represent
lost earnings from post-retirement consultancy work. There was no evidence that the
pursuer would have been likely to continue to work beyond age 65 and I would not have
made any award in this regard.
90
Solatium
[176]
On behalf of the pursuer, reference was made to case law demonstrating that even
short periods of detention without reasonable and probable cause led to awards of damages.
As regards the scale of the award in the present case, a comparison could be drawn with
actions of defamation involving reputational damage, hurt feelings and harassment from
journalists and members of the public. Reference was made to Clinton and Barry v News
Group Papers Ltd, 18 December 1998 (unreported) in which an award in respect of unfounded
allegations of sexual impropriety between a priest and a teacher was made with a value
adjusted for inflation of £218,000. In Rees v Commissioner of Police for the Metropolis
(at [2019] EWHC 2339), two of the claimants were awarded damages, including aggravated and
exemplary damages, amounting to £155,000. In the present case an appropriate award
would be £200,000 with 75% thereof attributable to the past.
[177]
On behalf of both the Chief Constable and the Lord Advocate it was submitted that
the court should adopt the approach in Thompson v Commissioner of Police of the
Metropolis [1998] QB 498, which concerned two cases in which damages were awarded for
false imprisonment and malicious prosecution. In one case the plaintiff was
awarded £10,000 compensatory and aggravated damages and £25,000 exemplary damages;
in the other the plaintiff received £20,000 compensatory and aggravated damages
and £15,000 exemplary damages. Thompson had been applied in Scotland in Shehadeh v
Secretary of State for the Home Department 2014 SLT 199. The sums awarded to the plaintiffs
in Rees by way of basic awards for distress (£27,000) were consistent with Thompson. It was
doubtful whether awards in defamation cases were truly analogous. High awards of
damages for defamation were likely to include unquantifiable amounts of economic loss
caused by damage to reputation, which would duplicate an award for loss of earnings.
91
[178]
I agree with the defenders' submission that Thompson (adjusted for inflation)
provides an appropriate starting point, although of course no award is made under Scots
law for aggravated damages or exemplary damages. In that case Lord Woolf MR, delivering
the judgment of the Court of Appeal, provided the following guidance at 515-6:
"In a straightforward case of wrongful arrest and imprisonment the starting point is
likely to be about £500 for the first hour during which the plaintiff has been deprived
of his or her liberty. After the first hour an additional sum is to be awarded, but that
sum should be on a reducing scale so as to keep the damages proportionate with
those payable in personal injury cases and because the plaintiff is entitled to have a
higher rate of compensation for the initial shock of being arrested. As a guideline we
consider, for example, that a plaintiff who has been wrongly kept in custody for
24 hours should for this alone normally be regarded as entitled to an award of
about £3,000. For subsequent days the daily rate will be on a progressively reducing
scale..."
...
"...In the case of malicious prosecution the figure should start at about £2,000 and for
prosecution continuing for as long as two years, the case being taken to the Crown
Court, an award of about £10,000 could be appropriate. If a malicious prosecution
results in a conviction which is only set aside on an appeal this will justify a larger
award to reflect the longer period during which the plaintiff has been in peril and
has been caused distress."
In the present case, having regard to the period during which the pursuer was imprisoned
and the length of time during which he was under threat of criminal proceedings, I would
have acceded to the suggestion by senior counsel for the Lord Advocate that a total sum
of £30,000 would be appropriate of which, had it been necessary to do so, I would have
allocated £7,500 to the pursuer's imprisonment and the balance of £22,500 to his prosecution
from service of the petition until final disposal of the Crown appeal.
Criminal defence expenses
[179]
The pursuer's claim for reimbursement of the expenses of his criminal defence was
maintained only in the action against the Lord Advocate. A statement by Mr Gregory and
92
an accompanying spreadsheet were produced on the last day of the proof. These showed
that expenses amounting to £935,859 had been incurred. This sum would in principle be
recoverable as an element of the pursuer's damages claim. There is, however, a question as
to whether they will ultimately be borne by the pursuer himself. According to Mr Gregory's
statement, Duff & Phelps accepted an obligation to meet defence costs reasonably incurred
by the pursuer. There was no evidence as to whether or in what circumstances the pursuer
would be obliged to reimburse Duff & Phelps. Shortly before issuing this opinion I was
informed that no agreement had been reached between the pursuer and the Lord Advocate
as to whether this sum was recoverable in the event of success on the merits. Had I held that
damages were payable to the pursuer, I would have allowed him an opportunity to make a
supplementary submission with a view to clarifying the matter and, in absence of agreement
between the parties, permitting a decision to be made by the court.
Disposal
[180]
In the action against the Chief Constable, I shall sustain the defender's third plea in
law and grant decree of absolvitor.
[181]
In the action against the Lord Advocate, I shall sustain the defender's third plea in
law and grant decree of absolvitor.
