R v K(A)

[2009] EWCA Crim 1640; [2009] WLR (D) 269

A party to ancillary relief proceedings was not entitled to invoke the privilege against self-incrimination to withhold information about his income and assets that exposed him to a risk of prosecution but since he would in those circumstances be acting under compulsion the information he provided would not be admissible against him in criminal proceedings.

The public interest in prosecuting crime was sufficient to outweigh the public interest in the settlement of disputes and therefore admissions made in the course of “without prejudice” negotiations were not inadmissible in criminal proceedings simply by virtue of the circumstances in which they were made.

The Court of Appeal, Criminal Division, so held when allowing in part the appeal of K, and the cross-appeal of the Crown, pursuant to s 35 of the Criminal Procedure and Investigations Act 1996, against rulings made by Judge Karsten QC at Blackfriars Crown Court on 9 March 2009 relating to an indictment charging K with two counts of failing to account for income tax and capital gains tax in relation to income received in and gains accruing upon funds held in various banks in Switzerland and Liechtenstein.

K and his wife were involved in divorce proceedings and on Mrs K’s application for ancillary relief both parties were under an obligation to disclose their financial means. The majority of the prosecution evidence against K was derived from information so disclosed. At the preparatory hearing K argued that he had been unable to invoke the privilege against self-incrimination and so had been compelled to disclose information that exposed him to a risk of prosecution. Accordingly, he submitted that the evidence should be excluded from the trial in accordance with the principle in Saunders v United Kingdom (1996) 23 EHRR 313. He also submitted that admissions made in the course of several meetings were made in “without prejudice” discussions and therefore could not be adduced in evidence against him at trial. Judge Karsten QC ruled that K had been entitled to invoke the privilege against self-incrimination in the ancillary relief proceedings and that, accordingly, the information he provided was not obtained under compulsion and did not therefore fall within the “Saunders exclusionary rule”. But he said that if the information had been obtained under compulsion it would be unfair to allow it to be adduced at trial and he would have exercised his discretion in favour of excluding it. He also held that the first part of one of the meetings was not held on a “without prejudice” basis so that K’s admissions made in the course of it were not protected but that those statements made in the course of the “without prejudice” part of the meeting were inadmissible at the trial. The judge gave both parties leave to appeal.

MOORE-BICK LJ said, in the reserved judgment of the court, that five issues fell to be decided: (1) whether K had been entitled to invoke the privilege against self-incrimination in the ancillary relief proceedings to withhold information about income and assets which he had unlawfully failed to disclose to the Inland Revenue; (2) if not, whether the information he provided was admissible against him at the trial; (3) whether the statements he made during one of the meetings about his failure to account for tax on his assets abroad were made in the course of “without prejudice” discussions; if not, (4) whether they were admissible against him at the trial; (5) whether the statements he made in the course of admittedly “without prejudice” discussions were admissible against him at the trial. The court’s jurisdiction to make financial provision and property adjustment orders in divorce proceedings was derived from ss 23 and 24 of the Matrimonial Causes Act 1973. It was argued on behalf of K that although the 1973 Act itself, unlike most statutes which had been held to abrogate the privilege against self-incrimination, did not itself require the parties to ancillary relief proceedings to provide information about their financial resources, or for that matter other relevant information, the Family Proceedings Rules 1991 (SI 1991/1247) did impose such a duty. The fact that a party was compelled by rules of court to disclose information and documents did not of itself abrogate the privilege against self-incrimination but these rules, which were contained in secondary legislation and had the approval of Parliament, had to have been intended to have abrogated the privilege against self-incrimination since the court could not discharge the duty imposed on it by s 25 of the 1973 Act unless all parties were required to disclose all relevant information even if tending to incriminate them. That argument was well-founded. In their Lordships’ view the purpose of the legislation would be frustrated if parties could withhold from the court relevant information on the grounds that to disclose it would tend to incriminate them. Accordingly, parties to such proceedings were not entitled to invoke the privilege against self-incrimination in order to withhold information. K had, therefore, provided the required information under compulsion. K’s statements took the form of admissions and as such were prima facie admissible against him under s 118(1) of the Criminal Justice Act 2003. If he had wilfully refused to comply with an order for disclosure that would have amounted to a contempt of court which might have attracted the not insignificant sanction of imprisonment. The social purpose for which the Crown sought to adduce the evidence in criminal proceedings was the suppression of tax evasion which was no doubt an important social objective but in their Lordships’ view the admission of evidence obtained from the accused under threat of imprisonment was not a reasonable and proportionate response to that social need to punish and deter tax evasion so as to justify such an infringement of the right of the accused not to incriminate himself. Accordingly the use of the admission made by K in the ancillary relief proceedings would deprive K of the fair trial to which he was entitled under art 6 of the Convention for the Protection of Human Rights and Fundamental Freedoms and had therefore to be excluded by the judge in the exercise of his powers under s 78 of the Police and Criminal Evidence Act 1984. If parties to a dispute had entered into “without prejudice” communications with a view to compromising their differences, the protection which normally attached to such communications covered whatever was said in the course of them and it was not permissible to isolate some parts and treat them as falling outside that protection. However, there was nothing to prevent parties from expressly agreeing, as they had in this case, that some communications were “on the record”, ie unprotected, and others were not. There was no doubt that it was understood by all present that the first part of the meeting was intended to be “on the record” and that the “without prejudice” protection was invoked later. But the information that K was being asked to provide “on the record” in this case was designed to elicit further information about his assets, ie he was being asked to provide orally information that he would otherwise have had to provide in written form and it was therefore provided under compulsion. The question then arose whether incriminating statements made by K during a later “without prejudice” meeting were admissible in subsequent criminal proceedings. The judge held that they were not and the Crown cross-appealed against that ruling. To answer the question posed by the Crown’s cross-appeal it was necessary to consider the nature of “without prejudice” privilege. The defendant submitted that the public policy of encouraging uninhibited negotiation with a view to the settlement of disputes pointed strongly in favour of prohibiting any use whatsoever in subsequent proceedings of statements made in “without prejudice” communications without the consent of the parties to them. Since the Crown was a third party to the negotiations between K and Mrs K the question whether the “without prejudice” rule applied to prevent admissions made by K in the course of those negotiations being used as evidence against him in criminal proceedings could not depend on the express or implied agreement of the parties but had to depend entirely on considerations of public policy. Criminal proceedings involved different parties and were of a different nature. To that extent they were necessarily at one remove from the dispute that gave rise to the negotiations. In those circumstances their Lordships considered that the public interest in prosecuting crime was sufficient to outweigh the public interest in the settlement of disputes and therefore that admissions made in the course of “without prejudice” negotiations were not inadmissible simply by virtue of the circumstances in which they were made. If the trial judge were of the view that for some reason the admission of the evidence would render the trial unfair, it would be his duty to exclude it in the exercise of his discretion under s 78 of the Police and Criminal Evidence Act 1984 but in this case it had not been suggested that any such basis for doing so existed.

Appearances: Ian Winter QC and Clare Sibson (instructed by BCL Burton Copeland) for K; Miranda Moore QC and Cairns Nelson (instructed by Revenue and Customs Prosecutions Office) for the Crown.