Civil claims and private prosecution: abuse of process?

R v Takhoul [2022] EWCA Crim 1254: concurrent civil claims sufficient to render a private criminal prosecution an abuse of process?

The Defendant was, with others (including a family investor, N), a participant in a project for the purchase and redevelopment of a flat in Knightsbridge, London. It had been purchased for ￡7.75 million in February 2015. The Defendant’s role was to administer and run the project, for which he was to be paid five per cent of the profits on resale of the flat. In the event, there were no profits. It turned out that the flat’s freeholder had not given permission for the refurbishment works, mortgage payments had been missed, and the project came to a final end with the flat being sold at auction in 2017 for ￡5.5 million, as a result of which the N lost their entire investment. N’s view was that the Defendant had committed persistent fraud and deception.

So N took the relatively rare step of instituting a private prosecution of the Defendant, alleging that he had committed various offences contrary to the Fraud Act 2006 and the Forgery and Counterfeiting Act 1981. The Defendant was tried on indictment and convicted of all of these offences, and sentenced to a total of seven years' imprisonment.

The Defendant appealed to the Court of Appeal against both conviction and sentence. It is his appeal against conviction which is of immediate interest, because he brought it on two grounds:

(a)          That the trial judge had erred in refusing to stay the proceedings as an abuse of process. The private prosecution, the Defendant argued, had been commenced in order to exert pressure on the Defendant’s father to pay a financial demand in settlement of the dispute relating to the failed development. The motive was to cause the Defendant’s father to reach a settlement in order to spare the Defendant from the risk of prosecution;

(b)          That the trial judge had further erred in ruling that no questions could be asked, and the applicant could not give evidence, concerning:

(i)           the fact that the case was a private prosecution; and

(ii)          the facts surrounding a settlement agreement between the prosecutors and C, another participant in the failed venture.

In arguing ground (a), the Defendant relied principally on a note written by an adviser to N – a Mr S - to two solicitors in the firm which eventually acted for the private prosecutors, in which Mr S said:

“[the Defendant] does not have any money. The father has the money. The objective is to force the father to buy him out to force him to save his son by putting enough pressure on him. The only thing he will understand is a criminal charge. We have discussed this for 12 months. We 99 per cent think that he stole the money. The only way the father will step in is if his son is in big trouble and is facing bankruptcy. That is the only way the father will step in."

The Court of Appeal noted that the solicitors:

 “…gave entirely proper advice about how to go about commencing a criminal investigation and what steps might follow. They made clear that: "We can't say that you have to pay us money otherwise we will prosecute you. That would be blackmail." [paragraph 20 of the judgement].

This was a “second limb” abuse of process case, where the Court was concerned with whether "…it offends the court's sense of justice and propriety to be asked to try the accused in the particular circumstances of the case" (per Lord Lowry in R v Horseferry Road Magistrates Courts, ex p Bennett [1994] 1 AC 42, at 74G) and where to refuse a stay would lead to "the degradation of the lawful administration of justice" (per Rose LJ in R v Mullen [2000] QB 520, at 534 C-D). The categories of cases in which it may be unfair to try the accused will include, but are not confined to, those cases where there has been bad faith, unlawfulness or executive misconduct.” (per Sir Brian Leveson P in R v Crawley & ors [2014] EWCA Crim 1028 at paragraph 21). 

The Court of Appeal endorsed and upheld the trial judge’s application of this principle to the facts of this particular case, by setting out and approving the trial judge’s written ruling on the point. In summary:

·     The judge had accepted that Mr S’ remarks (and certain other evidence) could lend some support to the Defendant’s application, but balancing that material against other material tending in the opposite direction, the judge had concluded that this was a case of mixed motives, and that the desire to achieve a settlement could not be taken in isolation;

·     The judge had held that, to succeed, the Defendant would have had to show that the motive for pursuing a settlement with the Defendant’s father was

(a) a primary motive and one which is so unrelated to the proceedings that it rendered it a misuse or an abuse of the process;

(b) an oblique motive which is so dominant and so unrelated to the proceedings that it rendered them an abuse of process;

(c)  even if the motive behind the prosecution had been indirect or improper, it would have had to have been one that rendered the conduct truly oppressive; or

(d) that the proceedings had been tainted by mala fides or spite or some other oblique motive.

·     Given the nature of the close business relationship between the parties, the family ties and nature of the resolution of the business it was unrealistic to say that the primary motive was 'so unrelated to the proceedings' so as to render it a misuse, nor was it an 'oblique' one or 'so dominant' as to render the process an abuse;

·     The desire for compensation for loss suffered and the wish to see justice done sat readily alongside one another, and the combination would be a commonplace in crimes involving property;

·     Even if the motive of achieving a settlement was categorised as indirect or improper, it would have to render the proceedings 'truly oppressive' – but oppressive against the Defendant. In this particular case, there was no oppression against the Defendant, who had faced a considerable body of evidence against him which called for explanation;

·     The prosecution was based upon strong prima facie evidence of dishonesty by the Defendant, and could not therefore be categorised as tainted by mala fides or spite.

On the ground of appeal relating to the question of N’s settlement with C, the Court of Appeal (again agreeing with the trial judge) said this, at paragraph 32:

“The issues raised by the proceedings against [C] were quite different and much more limited than the allegations made against the [Defendant]. The submission that something might turn up if the [Defendant] were allowed to investigate the reasons or motivation behind the settlement with [C] is at best an invitation to go fishing. It was rightly declined by the judge. We decline it too.”