No right of silence when theft charge likely

Renworth Ltd v Stephansen and another; Court of Appeal (Lord Justice Neill, Lord Justice Morritt and Sir John Balcombe); 21 December 1995

Where a person's answers to questions might expose them to the risk of prosecution for a number of different offences, the fact that the privilege against self-incrimination or "right of silence" had been abrogated in relation to those offences with which it was most likely that they would be charged, namely theft, might be sufficient to compel them to answer the questions notwithstanding the remote possibility of their being charged with another offence, such as conspiracy, in relation to which the privilege remained.

The Court of Appeal dismissed an appeal by the first defendant, Mrs Sherry Stephansen, against the order of Mr Justice Buxton, on 11 August 1995, requiring her to comply with the order of Mr Justice Newman on 20 June 1995, that she should provide by affidavit certain financial information in connection with a civil claim by the plaintiff, Renworth Ltd.

Gilbert Gray QC and James Lewis (Gouldens) for Mrs Stephansen; Roger Henderson QC and Adrian Salter (Palmer Cowen) for the plaintiff.

Lord Justice Neill said that the plaintiff appointed Mrs Stephansen, an interior designer, to manage the development by the second defendant, Stephansens Properties Ltd, of a property at 22 Prince's Gate, Kensington, London, which the plaintiff had acquired for pounds 4.2m in December 1994. The contract price was pounds 687,000 excluding VAT and the contractual completion date was 15 May 1995.

Between December 1994 and April 1995 the plaintiff paid Mrs Stephansen 10 interim payments, totalling pounds 674,806 including VAT, which she had requested to pay subcontractors. The plaintiff's agent then became concerned that some of these sums had not been used in accordance with the contract.

On 20 June 1995 the plaintiff issued a writ claiming damages against the defendants for, inter alia, breach of contract and conversion, and obtained a Mareva injunction preventing the removal or disposal of assets to the value of pounds 350,000. The judge also ordered Mrs Stephansen to swear an affidavit specifying the sums received under the contract, the accounts into which they were paid, the payments made to subcontractors, the location of any balance and a list of the defendants' bank accounts.

Mrs Stephansen declined to provide some of this information on the ground of privilege against self-incrimination.

The common law privilege against self-incrimination , had been modified by, inter alia, the Theft Act 1968, section 31(1) of which provided that a person should not be excused thereby from answering questions in proceedings for the recovery of property or for an account of dealings with property, but that any statement or admission made in answering such questions would not be admissible in evidence against that person for an offence under that Act.

The difficulty was that this modification of the privilege only applied to offences under the Theft Act; it did not apply to other offences which might have been committed in the course of a financial fraud.

If it was clear that a person's answers might disclose offences other than offences under the Theft Act, or some other Act which modified the common law privilege, then the privilege against self - incrimination remained available.

In this case, it was alleged that Mrs Stephansen's answers might expose her to the risk of prosecution for conspiracy instead of or as well as for theft, and therefore the privilege was retained.

In his Lordship's judgment, the matter should be looked at realistically. Where there was a risk of exposure to prosecution for several possible offences, the fact that a person's answers would clearly tend to expose them to proceedings for some of the offences might reduce to almost vanishing point the risk of exposure to other offences.

The judge was right to say that on the evidence presently available it was fanciful to suggest there might be a charge of conspiracy as well as Theft Act offences. The judge took the view that Mrs Stephansen was the person involved in any possible offences. In these circumstances, to answer the questions would not, in any realistic sense, "tend to expose" Mrs Stephansen to proceedings for offences other than Theft Act offences.

Lord Justice Morritt and Sir John Balcombe concurred.