Outer House rejects Crown defence to malicious prosecution suit
A judge in the Outer House of the Court of Session has rejected a defence pled by the Crown in response to an action for damages for wrongful and malicious prosecution brought by a man who was unsuccessfully prosecuted for fraud for his role in the acquisition of Rangers FC by Craig Whyte in 2011 prior to the club entering administration.
The charges brought against David Grier in 2015 were held to be irrelevant in law following preliminary hearings of his case in February and April 2016. He argued that the Crown had failed to plead relevant and sufficiently specific defences to the action.
The case was heard by Lord Tyre. The pursuer was represented by Smith QC, and the defender by Moynihan QC.
The pursuer was one of five people charged with offences including conspiracy to defraud based upon an allegation that in 2011 the then-owners of 85% of the shares in Rangers FC, Murray MHL Ltd, were persuaded to sell those shares to a company controlled by Craig Whyte, Wavetower Ltd, on the false pretence that the funding for purchase came from his own funds. In truth, Mr Whyte obtained the funds from an entity called Ticketus LLP in exchange for the proceeds of sale of season tickets for the next three football seasons.
At the material time the pursuer was employed as a consultant in business restructuring by MCR Business Consulting, London. In February 2016 he appeared on an indictment which libelled that he had wilfully concealed the Ticketus agreement from an Independent Committee set up to make recommendations to Rangers’ board in respect of Mr Whyte’s offer and led them to believe there was no requirement to arrange ring-fenced accounts for season ticket sales for the forthcoming football seasons up to 2013-14.
Following the initial dismissal of the charges, the Crown appealed. Delivering the opinion of the appeal court, the Lord Justice-General, Lord Carloway, said that there was no apparent link between the fraudulent representation and the practical result, namely the acquisition of a majority shareholding in Rangers, as the alleged fraudulent act had not been directed towards Murray.
The court further noted that the concealment of the Ticketus agreement from Murray was not libelled in the charge, nor was it stated that the accused knew that the concealment of the agreement from the Independent Committee could, or did, have any effect on Murray’s corporate thinking. The Crown appeal was therefore refused.
It was averred by the pursuer that no evidence existed to prosecute him for any of the charges brought against him, and that the Crown failed to follow proper procedures in bringing the prosecution. Their conduct amounted to conduct that no reasonable prosecutor would have followed and, further, was for that reason malicious.
In respect of the defences pled by the defender, it was submitted for the pursuer that there was no sufficient defence that met the requirements for relevancy and specification. The defender had adopted a “blunderbuss approach” to pleading by submitting large quantities of documents and, in effect, stating their defence was contained somewhere within them.
Necessary link missing
In his opinion, Lord Tyre noted: “The only matter arising for my determination at this stage is whether the defender has pled a relevant and sufficiently specific defence in relation to the issue of whether there was reasonable and probable cause for the prosecution of the pursuer.”
Lord Tyre said of the requirements to establish this: “I was not referred to any Scottish authority on what constitutes absence of reasonable and probable cause in the context of a public prosecution. No doubt this is partly due to the fact that it was decided in Hester v Macdonald (1961) that the Lord Advocate and his deputies had absolute immunity from suit, even in relation to a prosecution pursued maliciously and without probable cause.”
He went on to say: “That case having been overruled by a Court of Five Judges in Whitehouse v Lord Advocate (2020) (a case concerning two of the present pursuer’s co-accused), it becomes necessary to address the issue raised in the course of this debate.”
Addressing whether there was objective justification for the prosecutions he said: “Where, as here, the charges were dismissed as irrelevant, it seems to me that it will normally be difficult to argue that reasonable and probable cause existed from an objective standpoint. A decision that a charge is irrelevant is a decision that even if the Crown were to prove all of the facts narrated in the indictment, the essentials of the criminal charge are not present.”
Returning to the definition of fraud and the findings of the Appeal Court, Lord Tyre said: “There was no apparent connection between the pretence said to have been made by or in the presence of the pursuer and the alleged practical effect on the owners of the Club. The necessary link between false pretence and result was accordingly missing from the charge. It appears to me to follow from the decision of the court that, on an objective assessment, there was no ‘case fit to be put into court’.”
He concluded: “Nothing further is relied upon in the defences, and I accordingly hold that there is no relevant defence pled to the pursuer’s case that the prosecution was initiated and continued in the absence of reasonable and probable cause.”
In respect of further procedure, he noted: “A finding of absence of reasonable and probable cause does not necessarily imply that the prosecution was malicious, and that, at least on the law as currently understood, the pursuer will require to prove malice before his claim for damages can succeed.”
The case was therefore put out by order and dates reserved for a proof before answer.