Den Norske Bank ASA (Incorporated Under The Laws Of The Kingdom Of Norway) v Antonatos & Anor [1998] EWCA Civ 649 (7 April 1998)

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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Den Norske Bank ASA (Incorporated Under The Laws Of The Kingdom Of Norway) v Antonatos & Anor [1998] EWCA Civ 649 (7 April 1998) URL: http://www.bailii.org/ew/cases/EWCA/Civ/1998/649.html Cite as: [1999] QB 271, [1998] EWCA Civ 649, [1998] Lloyd's Rep Bank 253, [1998] 3 WLR 711, [1998] 3 All ER 74

This is an appeal brought with our leave by the first defendant (DA) against the following interlocutory decisions made by Mrs Justice Steel: (1) a decision on 10 March 1998 that DA should attend on 12 March 1998 for cross-examination on his disclosure of assets; (2) a decision on 12 March 1998 that DA’s cross-examination should continue; and (3) decisions made on 12 and 13 March 1998 that DA should answer various specific questions put on cross-examination which he objected to answer on the grounds of self-incrimination.

The respondent plaintiff (DnB) is a bank. From 1986 until recently, DA was the manager of DnB’s Greek shipping finance business. In an affidavit sworn on 17 February 1998 by John Nicol Simpson, the chief executive of the London branch of DnB, DnB’s case against DA was in broad terms as follows. It is said that as early as 1995 some allegations were made in relation to bribes being taken by DA. But until January 1998 such investigations as were carried out by DnB did not produce any concrete evidence to support the allegations being made. On 27 January 1998 a declaration which had been given in evidence in proceedings in Singapore stated that DA had asked a customer to pay DA a bribe of $100,000 for approving a loan and that the customer had paid that sum at DA’s request to the bank account of a Liberian entity called “Skoukla Inc”. Investigations carried out thereafter indicated to the bank that between 1994 and 1997 DA had received at least ten secret commissions from four clients of DnB totalling $705,000 which were paid into two accounts in the name of Skoukla and probably at least one further secret commission of $150,000 into a different account. It was further alleged that the bribes enabled impecunious borrowers to borrow from DnB causing DnB losses on the loans of over $24m.

It is further asserted that between 1993 and 1994 DA orchestrated a fraud centred around the purchase of a resale of two ships, the Sea Diamond and Sea Jade. The assertion is that DnB were induced by lies told by DA to make loans to third parties to buy the ships at inflated prices. In the result it is alleged that a profit was realised on the transactions relating to the ships enabling a substantial sum to be paid into a Swiss bank account in the name of “Sea Dream Shipping Corporation”, (Sea Dream) a company which it is asserted was controlled by DA. The bank further asserts that Sea Dream was a Liberian company now struck off the register. The bank say that the Sea Dream account seems to have been operated well beyond the date of being struck off and they thus assert that Sea Dream was not a genuine trading company.

Based on that affidavit applications were made ex-parte for Mareva and Anton Piller orders. Both types of order were made on 18 February 1998. For the purpose of this appeal it is only the order for a Mareva injunction on which it is necessary to concentrate. That injunction ordered DA not to remove or dispose of assets up to the value of $20m or in any way to dispose of or deal with certain properties identified in the order. It further ordered DA not to dispose of money in certain identified bank accounts including a bank account in the name of Sea Dream at the office of Bankers Trust AG in Zurich. It further prevented DA from disposing of certain other assets including a Ferrari alleged to be owned by DA and a yacht alleged to be owned by DA. The order further provided by paragraph 2 that DA must not remove or in any way deal with “any monies whether commissions, gifts or other assets ... which he has received directly or indirectly (whether in his own name or not) during the course of his employment with the plaintiff from any of the companies or individuals named in Annexes C and D to this order or which he has received from any companies or individuals who are known by or who trade under the names or in association with the ships set out in Annexes C and D to this order and any other assets or monies which have been acquired by or which represents such monies or other assets (all hereinafter referred to as “the specific assets”) including but not limited to the monies set out in Annex E.”

By paragraph 3 of the order, the first defendant, DA, was required to inform DnB’s solicitors in writing “as soon as reasonably practicable, of all his assets and of the specific assets whether in or outside England and Wales ... or whether held by him legally or beneficiary or held by him through nominees or otherwise howsoever, and of the specific assets, giving the value location and details of all such assets and specific assets and (in the case of a specific asset) to the best of his knowledge and belief what has become of them, including without limitation details of all bank accounts including the name or names in which the account is held, the name of the bank, building society or other entity, the address of the relevant branch and the number of the account controlled by DA or to which DA is a signatory and details of all interests held by DA in any company, ship or partnership or joint venture relating to the companies, ships and individuals named in Annexes C and D to this order.”

The paragraph further states that “The first defendant [DA] may be entitled to refuse to provide some or all of this information on the grounds that it may incriminate him. In the event that DA claims to be entitled to the benefit of such privilege, he must provide such allegedly privileged information to the supervising solicitor who will hold such information to the order of the court.” In Schedule 4, the supervising solicitor undertook to explain to DA the effect of the order including his entitlement to avail himself of the privilege against self-incrimination.

DA swore an affidavit on 27 February 1998 in which he purported to confirm that he had informed DnB’s solicitors in writing to the best of his knowledge information and belief of all his assets save for the “specific assets”. What he stated was that he had informed the supervising solicitor of the specific assets and of the documents that he had in his possession power and control which relate to or evidence those specific assets, and he confirmed that he had made those disclosures to the supervising solicitor on the grounds that he claimed privilege against self-incrimination with respect to the information required to be disclosed.

That affidavit also dealt with the basis on which by this stage DA’s wife had been joined in the proceedings. It explained how DnB had discovered how breaches of the Mareva injunction had taken place; and it asserted that there were other accounts, first in the Channel Islands held in the name of MA (DA's wife), which were really held for DA, and second an account in the name of Clark Shipping which was also alleged to be simply a nominee account for DA. It was also asserted that it appeared that one of the alleged breaches of the Mareva was apparently designed to secure an interest in a shipping company being sold by a Captain Kardesis who was a customer of the bank (and whose name will appear again later in the story). All these assets of DA, it was alleged, had not been disclosed by DA so far.

"The essential element of an offence under the Prevention of Corruption Act 1906 is the payment of a bribe. Further evidence as to what the bribee has done with the bribe is not relevant to proving the offence, and does not increase the risk of prosecution for the offence. It follows that where DnB already possesses conclusive evidence as to what payments DA has received, evidence which would enable DA to trace these payments or to establish the present whereabouts and value of DA's assets is not incriminating. In practical terms, the only real increased risk of prosecution for bribery arises if the information or document shows further bribe payments about which DnB is presently unaware."

That affidavit was, as I have indicated, sworn on 10 March 1998. Prior to that date it is right to say that there had been a hearing in front of Richards J who had ruled that the issue raised in relation to self-incrimination should be resolved at a hearing to take place on 10 March 1998. It can be deduced that it was for that purpose at least in part that Mr Miller’s affidavit had been sworn. But DA had also sworn a further affidavit on the 9 March 1998. That affidavit was sworn in order to obtain the release of his passport. In para 4 of that affidavit he swore as follows:

It will be noted that there was no indication in Mr Miller’s affidavit that DA’s attitude to self-incrimination had been altered, but it may be DA’s further affidavit had not been served or fully digested when Mr Miller’s affidavit was drafted. On 10 March 1998 before Mrs Justice Steel, DnB, through its representatives, altered their attack. They did not proceed to allow the question of self-incrimination raised by DA to be resolved as a discrete question. They applied to cross examine DA. According to the reasons of Mrs Justice Steel which she ultimately gave on 13 March 1998, they did so because of their concern about DA’s “frankness and truthfulness insofar as his disclosure is concerned” and DnB’s concern in relation to the companies “which had not been disclosed by DA and sums which had been shown to be paid to and from accounts over which DA had some degree of interest or control”. The judge records in her reasons the fact that DA was seeking to claim privilege against self-incrimination but there is no indication in her reasons that DnB’s attitude had been altered because of the change they perceived in DA's attitude to self-incrimination in para 4 of his Third Affidavit. We were told however that reliance was placed on a perceived change of attitude when the application to cross examine was made.

As her reasons show Mrs Justice Steel directed herself by reference to House of Spring Gardens Limited v Waite [1985] F.S.R. 173 and was persuaded that “the only just and convenient way of ensuring that the defendant would not deal with his assets so as to deprive the plaintiffs of the fruits of their judgment” was to allow DA to be cross examined and to deal with any privilege questions as they occurred. DA was thus ordered to attend for cross examination “upon his affidavit concerning disclosure of assets sworn 27 February 1998”. There has been no order drawn up in the above terms, but that this was the form of order I deduce from DA’s draft notice of appeal to this court.

1. Pages 8 to 19 record general questions about whether DA had disclosed all his assets (to which his response was that he had), and as to whether he had received gifts from members of his family, to which no objection was taken until page 19. Then objection was taken to a general question about "who else" in the family might have assisted him on the grounds that "quite a lot of members of the family ... were clients of the bank ... and I have asserted privilege over any dealings with customers of the bank”. Mr Peto is recorded as submitting “that of course is far too wide”. The judge is recorded as saying “yes” and the cross examination continued.

3. After further questioning about receipts from family and outside the family, Mr Peto came to “loans” and asked generally whether anyone within the family had made “loans”. Mr Rubin, for DA, then made clear that “there is a loan which he had advised DA to claim privilege in relation to”; the judge suggested that it might be appropriate to deal with the privilege question at this stage, but Mr Peto objected and Mr Rubin made clear that the claim related to “loans made by a certain member of the family”. The judge suggested that it was appropriate to find out from whom DA said he received loans, and Mr Rubin, having made clear previously that his aim was to allow as much progress to be made as possible “without getting into this issue of privilege”, allowed the questioning to continue. Mr Rubin then suggested that it was better for Mr Peto to go through the names. Mr Peto did so, and in relation to one name, Kardesis, when asked whether any gift or loan was received from that family DA said “I would like to assert my right of privilege against self-incrimination”, 30/line 35. At that stage no attempt was made to obtain a ruling that the privilege was not properly claimed.

4. Cross examination continued, and while questions were being asked in relation to payments made to DA’s wife when they separated, DA stated that he had paid his wife $340,000 and this was a sum he had borrowed. When it was put to him that he had not previously revealed this borrowing, Mr Rubin stated that DA had previously claimed privilege and DA stated “that is relevant to this discussion”. When asked whether he would reveal the source of the loan, DA took the privilege point and it is in relation to this question and answer that there was then argument about whether DA was entitled to rely on the privilege against self-incrimination. Mr Peto’s submission in relation to this particular question and answer was that DA, having now revealed that he had borrowed money and from a source in relation to which privilege was being claimed, the cat was in effect out of the bag, thus questioning should be allowed to continue. Mr Rubin’s submission was first that what he was seeking to guard his client against was the risk of providing evidence to a prosecutor in criminal proceedings; he submitted that it might well be that exploration of where the loan came from and how it was made might for example lead to questions being asked about the companies whom DnB were suggesting were fronts and that such information would be of use to anyone seeking to prosecute DA for corruption. He further submitted that one could see that in fact by virtue of the way in which the questions and answers had developed from which Mr Peto could make the deduction he now claimed to make, showed that the procedure of allowing cross examination to take place had been itself unfair. He submitted that it might have been possible to conduct an examination limited to dealing with assets, but that the way in which the examination had been conducted demonstrated that DnB were intent on getting into the merits of their case and thus infringing the claim to privilege against self-incrimination, and that the examination should be stopped at that stage.

Mr Peto submitted that the judge was only dealing with a ruling in relation to one question. He submitted that on the documents available it was plain that $340,000 came from a Sea Dream bank account in Zurich. Documents showed payment into DA’s solicitor’s account, and then to an account in the Channel Islands. He submitted that on Mr Miller’s affidavit it was plain that there was already evidence that would convince any jury beyond reasonable doubt that DA was “actively concerned with its [Sea Dream’s] management, and that any attempt to suggest that answering the questions relating to where the money came from would land him in any worse trouble is simply unreal”. Thus he submitted rulings on privilege should be directed to particular questions. DA should be directed to answer the particular question.

5. At this stage Mr Rubin sought leave to appeal against the judge’s ruling on 10 March and her rulings made at this stage of the examination. Leave was refused and he then requested an opportunity to test the matter in the Court of Appeal before the examination continued. The judge would have been in favour of allowing that course, but Mr Peto then said he would not ask the question “where did you get the loan from”, and Mr Rubin said that without giving up any of the points he had taken he would not object to further questions “just dealing with assets in a general sense”. (see p.68/line 14).

6. Examination continued. Questions were asked about a flat in Athens. Mr Peto asked about the sources of money to buy that, and objection on grounds of privilege was taken. He did not press for an answer but asked about whether it was mortgaged. DA said there was a loan and Mr Rubin then asserted privilege, but before any ruling on that DA responded that he had no intention of mortgaging the flat and questions moved on; when a loan is once again mentioned, privilege was claimed and Mr Peto did not pursue the matter.

9. At page 82 line 42 Ginastera was raised and the question asked was whether DA had “any control over any of its assets”. Privilege was immediately claimed. Mr Peto’s submission to the judge was that DA had already said that he had disclosed all his assets, and thus that either the answer by DA should be “no”, or if yes, the only incrimination came from having told a lie earlier. After some interchanges, once again a question was asked “do you have any degree of control over the assets of Ginastera?” Privilege was claimed but the judge directed an answer to be given. The answer was “I have no ownership of this company”, and under questioning DA asserted that Ginastera’s assets are not his assets; the judge clearly thought that DA was being evasive, and permitted further questioning. Ultimately that turned to the authority to sign cheques. Again DA was evasive, but answered ultimately that he did have authority to sign. It was at this stage that an excerpt from the minutes of Ginastera was produced which showed as a matter of record that DA had such authority.

10. At 86 DA was then asked whether there were any other bank accounts over which he had signing powers. He said no and then is asked what about at the date of the Mareva, and he said “only insofar as a company over which we have claimed privilege”. (The next day DA in fact sought to clarify this answer as intending to say that at one time he had had the power to sign an account for which privilege was claimed, but not as at the date of the Mareva) . The inference drawn by Mr Peto probably accurately was that the account being referred to was that of Sea Dream. DA was then asked whether he was the only signatory on behalf of “Sea Dream” and a claim to privilege was made. Mr Peto sought a direction that DA be compelled to answer. Mr Rubin said that he did not mind a ruling but that execution of the ruling should be delayed so that the matter could be tested in the Court of Appeal. The judge ruled that the question should be answered, and Mr Peto pressed for immediate execution of that ruling, but then relented in order to save the examination hearing. The matter was adjourned at the end of that day, the understanding being that Mr Peto would investigate other areas leaving matters "in a basket" for the Court of Appeal.

11. On the second day Mr Peto sought to ask questions a. About Sea Dream; b. about Ginastera. At first a modus vivendi appeared to have been reached whereby if a claim for privilege was raised the judge ruled the question should be answered, and the arrangement was that DA would provide the answers to the supervising solicitor pending an application for leave to have the judge’s rulings tested in the Court of Appeal. Mr Peto for DnB became dissatisfied with that process. The judge was also concerned that DA was simply using a claim to privilege to frustrate DnB’s legitimate concerns to be able to obtain effective Mareva relief. The judge’s view was that insofar as the risk of prosecution was concerned, because “prosecution in relation to the bribes finishes on the payment thereof” information relating to what happened to any money received did not increase the risk of prosecution, and could not thus be the subject of a claim to privilege. (See e.g. Day 2 13 line 53). The question arose whether the matter should be taken to the Court of Appeal there and then, but both counsel were anxious to continue so far as it was possible to do so, Mr Peto because he felt in his clients’ interests understandably that there was some risk of dissipation of assets; and Mr Rubin because on behalf of DA he did not want to be seen to frustrate the inquiry at least in the areas outside that for which privilege was being claimed.

The judge, for the benefit of the Court of Appeal, gave a reasoned ruling to which I have already referred, explaining her reasons for allowing the examination to take place. She also supported her rulings on privilege, and as to why she ruled that the examination should be entitled to continue. Her reasons were essentially three-fold that (1) where the court is concerned with whether a bribe has been taken, the offence is complete when the bribe is taken, thus what has happened to the money is immaterial; (2) nothing that was being asked “would increase DA’s existing risk of prosecution", and (3) she had formed the view that DA’s attitude was “no less than a deliberate and determined attempt to frustrate these proceedings [i.e. the obtaining of effective Mareva relief] on grounds that were totally ill-founded”.

One must start by expressing sympathy for all those involved in the procedure summarised above, not least the judge. So far as DnB were concerned, they had a strong prima facie case that DA had taken bribes and been a party to a fraud, and utilised front companies to disguise the whereabouts of the spoils. They thought and think they are being frustrated in their attempts to discover what bribes DA did receive, and if he did receive them, where the monies went, and/or where the money is now. So far as DA was concerned there was (as the judge found) a risk of him being prosecuted in a criminal court for corruption. If only Parliament had done that for which there has been a need now for far too long, of extending the policy underlining Section 31 of the Theft Act to criminal offences more generally, the above sorry saga might never have needed to unfold in the way it did. Section 31 (1) provides as follows:-

"A person shall not be excused, by reason that to do so may incriminate that person or the wife or husband of that person of an offence under this Act - (a) from answering any question put to that person in proceedings for the recovery or administration of any property, for the execution of any trust or for an account of any property or dealings with property; or (b) from complying with any order made in any such proceedings; but no statement or admission made by a person in answering a question put or complying with an order made as aforesaid shall, in proceedings for an offence under this Act, be admissible in evidence against that person or (unless they married after the making of the statement or admission) against the wife or husband of that person."

If its ambit were wider so that it not only applied to offences under the Theft Act but to criminal offences more generally , DA could have been required to answer questions even though they incriminated him; DnB would have been able to protect such assets as they could have traced; and DA would have been protected from having the answers used in evidence against him in any criminal proceedings. The call for Parliament to act made in cogent terms in January 1990 by Sir Nicholas Browne-Wilkinson Vice-Chancellor (as he then was) in Sociedade v Lundqvist [1991] 2 QB 310 at 338 repeated by others since, including Lord Lowry in the House of Lords in Istel Ltd v Tully [1993] AC 45 at 69 appears to have gone unheeded.

The lack of power in the court needs emphasis in this case, because the order envisaged that somehow, by allowing matters which might otherwise incriminate an individual to be placed in the hands of a supervising solicitor, that that would provide the requisite protection. During the course of the hearing before us serious doubts were expressed by members of the court whether this did provide adequate protection. It is right to say in that regard that in the standard form Anton Piller order issued pursuant to the Practice Direction dated 28 October 1996 issued by the Lord Chief Justice with the concurrence of the Vice-Chancellor, the warning given to the defendant under paragraph 6 is in the following terms :

But in the body of the order under the heading “obtaining legal advice and applying to the court” it is stated that the defendant before permitting entry to the premises may “gather together any documents he believes may be incriminating or privileged and hand them to the supervising solicitor for the supervising solicitor to assess whether they are incriminating or privileged as claimed. If the supervising solicitor concludes that any of the said documents may be incriminating or privileged documents or if there is any doubt as to their status, the supervising solicitor shall exclude them from the search, and shall retain the documents of doubtful status in his possession pending further order of the court.” That form of order thus seems to contemplate that documents of doubtful status may be put in the hands of the supervising solicitor to alleviate the risk of self-incrimination. Of course I accept that putting documents in the hands of a supervising solicitor lessens the risk of prosecuting authorities becoming aware of the information.

But, if a prosecuting authority heard of what was happening, and if it sought an order for the handing over of the information in the possession of the supervising solicitor, it is difficult to see how the High Court would have any power to prevent the same. Furthermore, paragraph 3 of the Vice-Chancellor’s order in this case did not allow the supervising solicitor to return answers provided, even though they were clearly self-incriminating. The effect of the paragraph quoted in the standard form of the Anton Piller order, at least allows clearly incriminating documents to be returned, and in any event, since it is dealing with pre-existing documents, it may be regarded as acceptable. The effect of paragraph 3 is thus not simply to leave in the hands of the supervising solicitor documents about which there is doubt, but, documents which may clearly be incriminating.

"In no stage of the proceedings in this Court can a party be compelled to answer any question, accusing himself, or any one in a series of questions, that has a tendency to that effect: the rule in these cases being, that he is at liberty to protect himself against answering, not only the direct question, whether he did what was illegal, but also every question, fairly appearing to be put with the view of drawing from him an answer containing nothing to affect him, except as it is one link in a chain of proof that is to affect him ...

4. A mere statement by a witness that the answer may tend to incriminate that witness is not sufficient to found the claim for privilege against self-incrimination. The Court must be satisfied that there is reasonable ground and that the objection is taken bona fide: Jackson v Gamble [1983] 1 VR 552 at 556. The test is sometimes expressed as to whether there is a "real and appreciable risk of criminal proceedings ... being taken against" the witness: see Rank Film Distributors Ltd v Video Information Centre (A Firm) [1982] AC 380 at 441. A remote or slight possibility of legal peril to a witness may not, in a particular case, be sufficient to invoke the privilege and to sustain a refusal to answer a question: see R v Boyes, loc cit. In some circumstances, a person will lose the privilege if pardoned (as was the case in R v Boyes ) or if earlier dealt with by law upon the subject said to give rise to the apprehension of jeopardy. If criminal proceedings have been concluded (either by acquittal or by conviction and sentence) a person can stand in no further jeopardy of punishment upon the precise matters already dealt with;

5. Where a question arises as to whether the claimed privilege is not claimed bona fide or whether the danger apprehended is without substance, it is clear law that "great latitude should be allowed to [the witness] in judging for himself the effect of any particular question": see R v Boyes (at 311; 730). Thus, in R v Boyes , although a Crown pardon exempted the accused from the further jeopardy of criminal punishment, he stood liable to the risk of impeachment by the House of Commons because the offence alleged concerned bribery at an election for Members of Parliament. The Court accepted the submission. But it held that since the witness did not run the slightest risk of impeachment and was in no real danger from the evidence he was called upon to give, the pardon took away the privilege: see also Sorby (at 293). A reason for extending "the great latitude" referred to is that it will sometimes be more apparent to the witness than to the court how a particular line of questioning may open up the risk of further, future or different incrimination. The witness may perceive the manner in which an answer might open up to investigation indirect or derivative evidentiary material thereby exposing the person to a collateral risk of criminal or like proceedings not perhaps apparent to the questioner;

6. The foregoing considerations will be reasons for caution in deriving a conclusion that the claim of the privilege against self-incrimination is not made bona fide. There is authority to suggest that a want of subjective bona fides in invoking the privilege will remove the privilege; see e.g., Ex parte Reynolds; Re Reynolds (1882) Ch D 294 at 300; R v The Justices of Armagh (1883) 18 IR LTR 2 at 3; BTR Engineering (Australia) Ltd (formerly Borg-Warner Australia Ltd) v Patterson (1990) 20 NSWLR 724 at 730. However, in my respectful view this is a dubious principle. What is in issue, ultimately, is not the subjective fears of the witness claiming the privilege but the objective tendency of the question to expose that witness to the risk of criminal prosecution. One witness may not perceive such a risk. Unless the judicial officer presiding intervenes, the question will be answered and the privilege lost. One witness may have multiple motives and even mala fides. But if the question is such in fact as to expose him or her to the risk of future prosecution, it is the duty of the judicial officer to uphold the privilege. It will be easier and more reliable to assess the reasonableness of the apprehension than the genuineness of the sentiment. A court can quite readily speculate upon and judge the possible use of demanded oral testimony. The devil himself knoweth not the mind of man [or woman];

7. It is for the presiding judicial officer to determine whether the objection taken is good and whether there are reasonable grounds for the belief on the part of the witness that he or she is, or may be, in peril of future criminal or like proceedings if the answer is given. Just as the court must protect the privilege, it must also make sure that the rule is not abused; but applied only where its invocation is justified: see Triplex Safety Glass Co Ltd v Lancecgaye Safety Glass (1934) Ltd [1939] 2 KB 395 at 403. The proper procedure in a claim for privilege is to object to each question as it is asked: see Ex parte Reynolds (at 294); Brebner v Perry [1961] SASR 177 at 180. It is not proper to refuse to be sworn or to decline to answer any questions at all or to claim a global protection from the privilege. Such a refusal may amount to a contempt of court: see Smith v The Queen (1991) 25 NSWLR 1 at 9. Nevertheless, a point will be reached in questioning where it will be unnecessary to persist with an entire cross-examination which is clearly futile by reason of the invocation of the privilege against self-incrimination. To demand a tedious repetition of questions, rebuffed every time by a claim of privilege which is upheld, would be pointless; ....."

One of the main points taken by DnB in this case was that DA was not entitled to claim privilege because there was no greater risk of him incriminating himself by the answers that he might give, as compared with the risk that there already was. Reliance was placed on Brebner v Perry [1961] SASR 177. To consider that submission it is necessary to define the test in relation to whether an answer will incriminate. In many cases one sees the court using the test of "increase the risk of prosecution", the phrase used by the judge in this case. In my view, the authorities demonstrate that "risk of prosecution" is to put the test too narrowly. In Sociedade Nacional v Lundqvist [1991] 2 QB 310 at 324-325, Staughton LJ deals with this aspect.

"The substance of the test is thus that there must be grounds to apprehend danger to the witness, and those grounds must be reasonable, rather than fanciful. Other points that emerge from the cases are these: (i) the affidavit claiming privilege is not conclusive: see Reg. v Boyes , 1 B. & S. 311, Ex parte Reynolds , 20 Ch.D. 294 and Khan v Khan [1982] 1 W.L.R. 513; (ii) the deponent is not bound to go into detail, if to do so would itself deprive him of protection: see Short v Mercier (1851) 20 L.J. Ch. 289, 292, and the Westinghouse case [1978] A.C. 547; (iii) "if the fact of the witness being in danger be once made to appear, great latitude should be allowed to him in judging for himself of the effect of any particular question:" see Reg. v Boyes , 1 B. & S. 311, 330; the Westinghouse case [1978] A.C. 547 and Khan v Khan [1982] 1 W.L.R. 513; (iv) the privilege is not available where the witness is already at risk, and the risk would not be increased if he were required to answer: see Brebner v Perry [1961] S.A.S.R. 117 and the Westinghouse case; (v) "if it is one step having a tendency to criminate him, he is not to be compelled to answer" (see Paxton v Douglas (1809 Ves. Jun. 239 242) and "as it is one link in the chain of proof:" Paxton v Douglas (1812) 19 Ves. Jun. 225, 227. That last point recurs in other cases (e.g. the Westinghouse case), and may be important. I am inclined to think that it refers to any fact which a prosecutor would wish to prove in order to establish the guilt of the witness on a criminal charge. In the Rank Film Distributors case [1982] A.C. 380, 443, Lord Wilberforce said that disclosure: "may set in train a process which may lead to incrimination or may lead to the discovery of real evidence of an incriminating character." That may be thought to go rather further, and to protect a man from having to disclose the names of those who could give evidence against him - assuming that there was otherwise power to require that information: see also Short v Mercier , 20 L.J. Ch. 289, 292 - "how evidence can be got." I am not presently convinced that the privilege, by virtue of the doctrine of links in a chain, extends as far as that. But the point need not be decided in this case."

In Tate Access v Boswell [1991] Ch 512 at 529, Sir Nicholas Browne-Wilkinson V-C talks about a prosecutor finding documents "equally useful". In IBM United Kingdom Ltd v Prima Data International Ltd & ors [1994] 1 WLR 719, Sir Mervyn Davies at 731H applies a test of "some important facts that bear on establishing whether or not he has acted criminally." In Saunders v United Kingdom [1997] 23 ECHR 313 the European Court of Human Rights uses the test of testimony ... "which appears on its face to be of a non-incriminating nature - such as exculpatory remarks or mere information on questions of fact - may later be deployed in criminal proceedings in support of the prosecution case, for example to contradict or cast doubt upon other statements of the accused or evidence given by him during the trial or to otherwise undermine his credibility."

In Brebner v Perry the witness had provided a statement making admissions to the police and then when called to give evidence claimed the privilege. The ruling was not only that there was no increased danger to the witness in answering the questions but was also a ruling that the witness was taking the privilege against self-incrimination in bad faith. Clarke JA in Accidental Mutual Holdings Ltd v McFadden (supra) thought that the correctness of Brebner would need to be considered at some time (see p.433B) and at 433D -E said this:

“Finally it is submitted that, as Leathem had already provided a statement, he would not have exposed himself to further jeopardy by giving sworn testimony. As a matter of fact I do not think that is correct. Any witness who gives sworn evidence admitting to his guilt of a crime is exposing himself to jeopardy unless he has already been dealt with for that crime, he has been pardoned or there are other similar circumstances. The fact that he might have earlier admitted the crime in a signed statement, which he may or may not wish to disavow, cannot mean, in my view, that there is no additional prejudice in giving sworn testimony to like effect.”

In relation to bad faith it has been suggested that if the witness is acting in bad faith the privilege can be over-ridden. In my view the position is not as simple as that. If there is no serious risk of prosecution and if the witness does not believe that he will be prosecuted and is simply not answering the question because he does not wish to provide the evidence or the information, then he will not be entitled to claim the privilege. But, as pointed out by Kirby P in the passage in Accident Insurance Mutual quoted above, a witness may have mixed motives. If the question in fact exposes him or her to the risk of future prosecution, it is the duty of the court to uphold the privilege even if the witness is acting from mixed motives or even mala fide because he or she does not fully appreciate the risk.

There is one further point to emphasise. An Anton Piller order should not be made where it will require the defendant to incriminate himself. The authorities on this aspect are summarised in Cobra Golf v Rata [1997] 2 All ER 150 at 164-166. It is possible to build a mechanism into an order which provides a clear warning to the defendant through, for example, advice from the supervising solicitor. But the authorities summarised by Rimer J in Cobra show how difficult it is to provide adequate protection and there is no distinction in this regard between an Anton Piller and a Mareva order. Once again I emphasise that the expedient of ordering a defendant to place incriminating information in the hands of a supervising solicitor does not seem to me to provide adequate protection.

Sometimes Mareva orders are simply designed to protect assets generally in order to meet an ultimate judgment; sometimes they are designed to trace and protect specific assets to which the plaintiff claims a proprietary remedy; sometimes they get close to being an Anton Piller order designed to obtain evidence of fraud which might otherwise be destroyed. Sometimes the form of order does not distinguish clearly between its objectives. Paragraph 2 of the Vice-Chancellor’s order was clearly designed to protect assets defined as specific assets to which a proprietary remedy was being asserted. But the incorporation of the same definition into paragraph 3 prima facie had the effect of requiring the defendant to say whether or not he had received bribes from any of the identified sources. It was unfortunate that paragraph 3 was framed in the way that it was. An order should not be made which allows a plaintiff to interrogate a defendant so as to discover whether the plaintiff has a claim against the defendant. A fortiori, an order to discover whether the plaintiff has a claim against a defendant which would constitute a criminal offence risks falling foul of the principles relating to the granting of Anton Piller and Mareva orders set out above unless there is a clear machinery for protecting the defendant.

But the situation is different where a defendant is being asked to swear an affidavit as to his assets in the Mareva context, or indeed being cross-examined on that affidavit. In such circumstances the procedure is for the purposes of policing a Mareva, and the court should be astute to guard against that procedure being used for the gaining of evidence by some form of admission from a defendant, which may be useful for the plaintiff in proving the substantive case. (See Yukong v Rensdburg The Times 22 October 1996).

Whether or not the answers being sought might incriminate DA, it seems to me that the above is not a proper use of the Mareva jurisdiction. The orders are obtained ex parte without any ability on the part of DA to argue that he was being asked to deal with “fishing” interrogatories. The position however is more serious than that because it is quite clear that the answers might also incriminate DA and even if it is clear that they do so, the order required the information to be provided to the supervising solicitor. That does not provide full protection. Furthermore the claiming of privilege may provide DnB with an answer from which it would ask a court later to draw inferences.

It was originally intended that the issue on self-incrimination taken in the affidavit would be dealt with as a discrete issue. However DnB became concerned as to whether the injunction had been breached, and as to whether there were not matters which had not been disclosed in DA’s affidavit. In these situations things move fast and swift decisions have to be taken. But it seems to me clear that it would have been helpful if further consideration had been given to self-incrimination before commencing any examination. It is true that in normal circumstances where a witness is giving evidence at a trial, the usual course is to take the questions one at a time and see whether any objection is taken, and whether the objection is well founded. But where the question is whether the examination should take place in relation to an affidavit sworn pursuant to a Mareva injunction, and where self-incrimination is raised as in this instance in the affidavit, a ruling on that aspect would assist in deciding whether the examination will be of any purpose, and will further assist in defining those areas to which examination should be limited. In this case also it would have helped to clarify paragraph 4 of DA’s further affidavit on which much reliance was placed in this court. The paragraph is not easy to comprehend. We are told that in skeleton arguments produced for the judge some reference was made to the possiblity that the paragraph constituted a waiver in some way. If argument had been addressed to that paragraph and reliance placed upon it, it would have become apparent as it did in this court, that DA did not in any way intend to forego his claim to privilege at any stage and was not bound by such waiver (if any) as could be spelt out of the paragraph. Once that was clear, it seems to me that paragraph 4 has little further relevance.

That view was contrary to the principles that I have sought to outline. First, to suggest that the offence of bribery is complete once the bribe has been taken, and thus that what has happened to the money is not material (a) misunderstands the risk which has to be guarded against; and (b) misunderstood DnB’s case and thus the likely case of any prosecutor. The risk to be guarded against was the provision of evidence which would assist a prosecution. It was DnB’s case that they could corroborate their assertion that DA had taken bribes by demonstrating that he had himself, or through certain front companies, received certain sums. DA was in effect being asked to confirm that monies he, or the front companies, held, were bribes, or at the very least that he or the front companies had received monies from clients of DnB which corresponded to sums DnB asserted were bribes

In relation to the judge’s third reason, she had of course seen DA cross-examined in areas which she might not have done if she had correctly ruled on the privilege taken in DA’s affidavit before allowing the examination to begin. But it is convenient to say at this stage, that, as will appear, although I think that the judge was right in saying that DA became evasive, the difficulty was that the closer a question got to being incriminating, the more evasive he was likely to be if he was forced to answer it. It seems to me that albeit DA would be unenthusiastic to assist DnB, that does not make his answers mala fide if there was a risk of the answers assisting a prosecution. Evasiveness does not thus support mala fides unless it is possible to say objectively that there was no real risk of incrimination.

In any event it seems to me that the claim to privilege against answering on affidavit the questions posed by paragraph 3 of the Vice-Chancellor's order, insofar as it related to specific assets, should have been upheld. In those circumstances it is obvious that the information supplied to the supervising solicitor should be returned to DA. At the conclusion of argument before us we directed that the information provided to the supervising solicitor under paragraph 3 should be put into the hands of the solicitors acting for DA, and held by them to the order of the court. Equally obviously, those solicitors should now be released from the order requiring them to hold the said information.

DnB had justified concerns as to whether there had been breaches of the Mareva injunction. They were further concerned as to whether the entities, which they were now suggesting were fronts, were within DA's control so as to render the assets of those entities assets of DA and they could not know precisely what claim to privilege would be made to individual questions as opposed to the blanket form of order previously obtained. In my view in that context the judge would have been entitled to rule, having regard to the urgency, as she did, that some examination should be allowed.

There are serious objections to this way of dealing with matters. The concept for a layman and even a lawyer of “control” in relation to Liberian, Panamanian, or comparable off-shore entities, so that assets of such entities must be treated as his, bristles with problems. It is most unlikely that an individual having no natural connection with the place of incorporation of such entities will accept that he has control or that assets of the entities are his for whatever purposes the entities were used. On a cross-examination of the type that took place here relating to such entities, it may be legitimate to try and establish what assets the entities have, what has happened to them, who holds the shares in the entities, who operates the bank accounts, but questions about control can genuinely not be easy to answer and may well be irrelevant. Thus accusations of not revealing the assets of the entities as assets of the defendant may not be justifiable. Once such entities are discovered to exist, it is likely that the only fruitful course is to join the entities in the action so as to be able to get them to produce affidavits sworn by their proper officer as to the whereabouts of assets, bank accounts etc.

However, DA was entitled to claim privilege against self-incrimination in relation to any question that sought to establish the receipt of money coming from a client of DnB and/or the quantity thereof. Thus his privilege claimed at p.30/line 35 should have been upheld. Mr Rubin’s submission both as to privilege and at the line of questioning that followed the claim to privilege was leading to a revelation of further material over which DA was entitled to claim privilege should have been accepted. The fact (as was submitted by Mr Peto) that DnB had documents from which they could draw the inference that $340,000 came through Sea Dream, either showed that any question was unnecessary or (on the basis that the question was necessary) did not affect the right of DA not to be forced to assist with providing any further evidence to a prosecuting authority. Thus the ruling at p.65/line 48 was in my view wrong. Furthermore, if questioning had persisted in these areas also Mr Rubin’s submission that the examination should be stopped should have been upheld. Furthermore, the judge would in any event have stopped the examination at that stage to allow the matter to be tested in the Court of Appeal if some modus vivendi could not be reached. Entirely sensibly questioning continued without objection from Mr Rubin. During that questioning further claims to privilege were made about sources of funds in relation to the purchase of a flat in Athens, and the Ferrari which, having regard to the latitude which must be shown to someone claiming privilege, should also have been upheld.

There was then questioning to which no objection was taken before at p.82/line 42 the question of “control over the assets of Ginastera” was raised, and privilege was claimed. That claim also should have been upheld. In any event Mr Peto’s submission at this stage that the answer was either yes or no and if yes the only incrimination came from having told a lie earlier about his assets was entirely misplaced. There would always be a genuine dispute as to, whether assets of Ginastera were assets of DA for all the reasons already explained. Furthermore the risk of incrimination came from providing any admissions relating to the use of front companies on which DnB themselves relied as a link in establishing the bribery case, and on which a prosecuting authority would similarly rely. Once questioning was allowed to continue in relation to control, DA was bound to be evasive, and it would not be fair to conclude from that evasiveness that the claim to privilege was not being made bona fide.

As regards the further questioning which, despite some disagreement between Mr Peto and Mr Rubin at one stage, clearly took place on the basis that any claims for privilege could be taken, ruled on, and rulings tested in the Court of Appeal, DA’s claim to privilege against answering any questions relating to Sea Dream, Ginastera, ISC or any nominee account or the source of any funds e.g. the $340,000 loan, which by clear implication Mr Peto, for DnB, was seeking to say came from bribes or gifts from clients, should have been upheld. Further, much of the questioning seemed more to try and bolster DnB’s case than to protect assets covered by the Mareva; that emphasises the entitlement to claim privilege since, if the questions were thought necessary for DnB’s case, it is likely a prosecutor would have wanted to make use of the answers as well.

First, it must once again be recognised how very unsatisfactory the present position is in relation to the claim to privilege against self-incrimination. However, DnB and its advisers must work within the limits. In my view they obtained by paragraph 3 an order from the Vice-Chancellor that went beyond those limits. Furthermore, DA’s claim to privilege in his affidavit should have been upheld. Also, the claim to privilege in relation to answering the questions set out in the Schedule, with which we have been supplied, should have been upheld. As to whether there might be some more limited relief to which DnB might even now be entitled along the lines suggested in Lundqvist or after joinder of certain of the entities, is not for this court in my view to work out. But it seems to me, on the present material and on the basis of the present order, extremely unlikely that any further examination of DA should be allowed to proceed.

Should anything be done to expunge parts of the cross-examination which has now taken place? At this stage it seems to me that very little damage, of which DA has any right to complain, has in fact been done. Some questions have been asked to which no objection was or could have been taken. Some questions were asked to which objection has been made. The question may arise as to whether DnB can rely on any of the examination at the trial. In Yukong v Rendsburg (supra) Phillips LJ expressed the view concurred in by Kennedy LJ that in order to use the transcript of an examination on affidavit as to assets ordered to be sworn under a Mareva order in the substantive proceedings, an application for leave was necessary under Ord.29 r.1(A)(3). The matter has not been argued before us but it is right to record that I have some reservations about that being the proper construction of Ord.29 r.1(A)(3). It involves construing “proceedings in which the order for cross-examination was made ...” as the application for Mareva relief, as opposed to the more natural “main proceedings” in which that relief was being sought. It also seems that there would be a distinction between using the affidavit sworn by the defendant in the main proceedings (for which no leave would be needed) and the examination on that affidavit for which leave would be needed. The matter may need further consideration since it is also unclear how fully the matter was argued before Phillips and Kennedy LJJ. In any event, if an application as envisaged by Phillips LJ was successful or if after fuller argument a different construction was placed on Ord.29 r.1A, the question may arise at the trial whether DnB can rely on a refusal to answer questions on the grounds of self-incrimination and seek to persuade the court to draw inferences from that refusal. On this latter aspect there are competing views. Staughton LJ agreed with Leggatt J in Lundqvist that it was not right to be able to rely on the refusal to answer. However, Templeman LJ in the Court of Appeal in the Rank case (supra p.423) expressed very strong views to the contrary and Bridge LJ appears to have shared Templeman LJ’s views (see 425F). No disapproval appears to have been expressed in the House of Lords in relation to those views. Furthermore, even in the criminal context, section 34 and 35 of the Criminal Justice and Public Order Act 1994 have altered the position, and the present standard form of the Anton Piller order for example contains a warning that refusal to permit disclosure may be taken into account at a future stage.

In my view, it would not be right for this court to order destruction of the present transcript or to make any attempts to disentitle DnB using the answers received. That is a conclusion I have come to not without some anxiety having regard in particular to the criticisms that can be made of paragraph 3 of the Vice-Chancellor’s order and to the difficult position in which counsel for DA was placed. But ultimately my reasons for so concluding are (1) that it was proper for some examination to take place; (2) it did take place with a modus vivendi being worked out from time to time; (3) it does not leave DnB in possession of incriminating material which might be available to a prosecuting authority; (4) there would in any event be serious practical difficulties in relation to preventing “use” of information already in the minds of those representing DnB; and (5) the question whether the answers provide relevant evidence and/or whether it is right to allow inferences to be drawn from the answers given should be for the future (whether on an application under Ord.29 r.1A or at the trial) in the light of circumstances as they exist then bearing in mind this judgment

In the result in my view the appeal should be allowed against the judge’s rulings that DA should answer the questions set out in the Schedule with which we have been supplied. It follows that in my view also DA should not be required to provide answers to his own solicitors or the supervising solicitor, and any answers and/or information given to his solicitors and remaining subject to the order of the court, should now be free to be used as DA and his solicitors agree. In my view however also the appeal should be dismissed against the judge’s ruling to allow cross-examination at all and her decision to allow it to continue on the basis that it did.

England and Wales Court of Appeal (Civil Division) Decisions