[2018] CSOH 93 A295/16 OPINION of LORD MALCOLM in the Cause

OUTER HOUSE, COURT OF SESSION [2018] CSOH 93 A295/16 OPINION OF LORD MALCOLM in the cause DAVID JOHN WHITEHOUSE Pursuer against PHILIP GORMLEY QPM AND OTHERS Defenders Pursuer: Currie QC, Duthie; Urquharts LLP First Defender: Maguire QC, Watts, Lawrie; Ledingham Chalmers LLP Second and Third Defenders: Moynihan QC, Ross QC, Charteris; SGLD 6 September 2018 [1] David John Whitehouse (the pursuer) is one of the former administrators of Rangers Football Club Plc. He has raised an action against first, the Chief Constable of Police Scotland, second, the Procurator Fiscal For Specialist Casework in the Crown Office, and third, the Lord Advocate. He seeks payment by the defenders, jointly and severally or severally, of £9 million by way of damages for alleged wrongful detention, arrest and prosecution based on common law fault and breaches of articles 5 and 8 of the European Convention on Human Rights (ECHR). A similar action has been raised by Mr Whitehouse’s co-administrator, Mr Paul Clark. This opinion follows upon a joint 2 procedure roll debate in both actions when various issues of law were discussed. The main topics were the nature and extent of the Lord Advocate’s immunity from civil suit at common law, and whether, in respect of complaints concerning the conduct of police officers, it is necessary to demonstrate that they acted maliciously and without probable cause. The circumstances and the parties’ contentions as set out in the pleadings [2] At the outset it is necessary to describe the background to and the circumstances of the present action. The pleadings extend to over 250 pages, therefore what follows should be understood as a summary of what is a detailed and complicated picture. In late 2010 a Scottish businessman, Craig Whyte, expressed interest in acquiring Rangers Football Club. In March 2011 he engaged David Grier of MCR, a corporate restructuring advisory firm of which the pursuer was a partner (prior to MCR’s acquisition by Duff & Phelps in October 2011), to assist in negotiations with the club’s lenders, Lloyds Banking Group. In May 2011 Craig Whyte, through an acquisition vehicle, Wavetower Limited, entered into an agreement for the purchase of a controlling shareholding in the club and was appointed as a director. The club struggled to meet its liabilities. In February 2012 it entered administration. The pursuer and his colleague were appointed joint administrators. Later that month the pursuer met with senior officers from Strathclyde Police and informed them that preliminary investigations suggested that the acquisition of the club by Wavetower may have involved illegal financial assistance. The administrators initiated proceedings at the Royal Courts of Justice in London seeking payment of sums due to the club held by Collyer Bristow, a firm of solicitors acting for Wavetower. Subsequently the administrators raised proceedings for payment claiming an unlawful means conspiracy, on the basis that Craig 3 Whyte and Gary Withey (Mr Whyte’s legal advisor and a partner at Collyer Bristow) had made false representations to the previous owners as to the availability of funds to finance the acquisition, and had acquired the controlling shareholding by fraud. The police were notified of these allegations. [3] On 25 June 2012 the Crown Office issued a press statement in the following terms: “The Crown Office has today instructed Strathclyde Police to conduct a criminal investigation into the acquisition of Rangers Football Club in May 2011 and the subsequent financial management of the Club. The investigation into alleged criminality follows a preliminary police examination of information passed to them in February this year by the Club administrators. The Procurator Fiscal for the west of Scotland will now work with Strathclyde Police to fully investigate the acquisition and financial management of Rangers Football Club and any related reports of alleged criminality during that process.” At the hearing it was confirmed that the press release was issued on the instructions of and with the authority of the then Lord Advocate. [4] The club was marketed for sale by the administrators. In May 2012 a consortium led by Charles Green entered into an agreement with the administrators. It obliged him to pursue a company voluntary arrangement, with funding of £8.5 million, which failing to purchase the business and assets of the club for £5.5 million. In June 2012 the creditors rejected the CVA proposal. Mr Green’s acquisition vehicle, Sevco (Scotland) Limited, acquired the business and assets of the club and paid £5.5 million to the administrators. In October 2012 Jane Stephen and Malcolm Cohen of BDO were appointed joint liquidators, with the pursuer and his colleague vacating office. [5] During the police inquiry officers recovered materials by executing search warrants at a range of locations, including the premises of banks and professional advisors involved in the transaction. It is averred that the second defender, through his deputes, and the Lord Advocate at all times directed the police investigation. They were made aware of all 4 evidence recovered and approved all lines of inquiry. In August 2013 officers from Police Scotland attended at the London and Manchester premises of Duff & Phelps, the pursuer’s employers, and executed search warrants previously granted by a sheriff at Glasgow Sheriff Court. Many documents were seized, including material over which privilege was claimed, and material which was said to be beyond the scope of the warrant. Duff & Phelps instructed their solicitors to liaise with the police in relation to this matter. It is averred that in February 2014 the Crown assured Duff & Phelps that the police had not reviewed or intromitted with material subject to the privilege claim, however officers had carried out a preliminary sift of all such material. The fact of that sift was not revealed at the time. In November 2014 Duff & Phelps’ solicitor attended a meeting at Crown Office in Edinburgh with a procurator fiscal depute and James Keegan QC, the allocated depute of the Lord Advocate. The solicitor was informed that his clients were to be treated as suspects and would be detained. It is averred that the advocate depute asked him whether that would change his position on privilege. It is stated that it was erroneously believed that the privilege dispute would be resolved by the appearance of the pursuer and his colleague on petition. [6] At dawn on Friday 14 November 2014 the pursuer was detained at his home in Cheshire by officers from Police Scotland. This was said to be in terms of section 14 of the Criminal Procedure (Scotland) Act 1995 (the 1995 Act). The pursuer was informed that the basis for his detention was “fraudulent scheme and attempt to pervert the course of justice”. He was taken to Helen Street Police Office in Glasgow where he was interviewed, arrested and charged. He was held in police custody until Monday 17 November 2014 when he appeared in Glasgow Sheriff Court. Requests for him to be released or liberated on an undertaking were declined, the police citing direction by the Crown. On 17 November he 5 was committed for further examination and admitted to bail. It is averred that there were no reasonable grounds to suspect that the pursuer had committed an offence. In any event the detention was unnecessary. [7] The pleadings set out lengthy averments and counter-averments in connection with the proposition that there was no reasonable foundation for what occurred. For example, averments are made as to the basis upon which the reporting officer, DCI Robertson, was of the opinion that there was a sufficiency of evidence available to give rise to a reasonable suspicion that Mr Whyte’s allegedly fraudulent transaction could not have been completed without the involvement, knowledge or advice of the pursuer and his colleagues, and that the pursuer had misled the police about his knowledge of and advice as to the financing of the transaction (sometimes referred to as the “Ticketus deal”). It is stated that DCI Robertson suspected that crimes of fraud and attempting to pervert the course of justice had been committed by the pursuer. He provided a briefing to the detaining, interviewing and arresting officers prior to the executive action being taken, which included reference to the matters which informed his suspicion. It is averred on behalf of the chief constable that the totality of material available was sufficient to give rise to a reasonable suspicion such as to justify interviewing the pursuer and others under caution and in detention. It was not appropriate to seek to make arrangements for voluntary attendance at a police station by multiple accused in which the offences suspected included an attempt to pervert the course of justice. It should be understood that the intention was to detain the pursuer, Mr Clark, and others as part of executive action to detain a number of suspects at the same time. [8] At 7.15 pm on 14 November 2014 the pursuer was informed by the arresting officer that he was charged with a fraudulent scheme and an attempt to pervert the course of justice. The fraudulent scheme arose because of the false pretence which had been 6 proffered, namely that Craig Whyte was a wealthy man who was investing his own capital in the acquisition of the club, when in fact he was using funds advanced by Ticketus. The practical result of the fraudulent pretence was that Mr Whyte was able to gain control of the club, and then force an administration, to the financial benefit of the pursuer whose firm was appointed administrators. Without the false pretence, Sir David Murray, the controlling shareholder of the club, would not have been willing to sell his shares to Mr Whyte.

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