CEDH · CASELAW;DECISIONS;ADMISSIBILITY;ENG — 10 juin 2003

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Pellonpää , President ,   Sir   Nicolas Bratza ,   Mrs   V. Strážnická ,   Mr   R. Maruste ,   Mr   S. Pavlovschi ,   Mr   L. Garlicki ,   Mr   J. Borrego Borrego, judges , and Mr M. O’Boyle , Section Registrar , Having regard to the above application lodged on 12 July 1999, Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant, Having deliberated, decides as follows:                 THE FACTS The applicant,   David Mond, is a United Kingdom national, born in 1945 and living in Cheshire. He is represented before the Court by   Mr Andrew Livesey, a lawyer practising in Manchester. A.     The circumstances of the case The facts of the case, as submitted by the parties, may be summarised as follows. The applicant is a chartered accountant and a licensed insolvency practitioner. Having accepted an appointment as trustee in bankruptcy of the estate of a bankrupt on 8 October 1993, his appointment was confirmed by the Secretary of State on 13 October 1993. The purpose of his appointment was to ensure that substantial court damages due to the bankrupt were transferred to him as trustee for the benefit of the bankrupt’s creditors. He claims that on accepting the appointment the Assistant Official Receiver (“AOR”) had led him to believe, in a conversation on 13 October and in a letter of   14 October 1993 addressed to the bankrupt’s solicitors, a copy of which was sent to the applicant, that he (the AOR) had not waived the interest of the creditors in the award. However, the bankrupt was of the view that the AOR had in fact waived all claims over the award of damages and therefore commenced proceedings in December 1993 against the applicant, as trustee, seeking a declaration that the applicant had no interest in the award. The applicant defended the proceedings because of the AOR’s assurances of October 1993. During the proceedings, the AOR confirmed the statements made in October 1993 in a letter to the applicant’s solicitors dated 27 January 1994 and in an affidavit filed for the purposes of the proceedings. The bankrupt was successful. The judge held that he was satisfied that the AOR had disclaimed all right to the proceeds of the bankrupt’s claims and that the evidence satisfied him that the AOR was at the time very much overburdened with his general caseload of insolvency work. The bankrupt’s costs (approximately 114,000 pounds sterling (“GBP”)) were awarded against the applicant. The applicant’s own costs were in the region of GBP   80,000. The applicant was personally liable for the costs and, though he had a claim against the estate, this did not assist him as there were no other assets in the bankrupt’s estate. The applicant commenced proceedings in his own name for negligent misstatement against the AOR and against the Department of Trade and Industry (“DTI”) as allegedly vicariously liable for the tort of the AOR. The defendants applied to the High Court to have the proceedings struck out as disclosing no cause of action or as being frivolous and vexatious and an abuse of process. They mainly argued that the statements of the AOR were made in his capacity as a potential witness and as a witness in proceedings (those of the bankrupt against the applicant) and that the AOR was entitled to immunity in that respect. On 22 January 1997, the High Court found that the AOR was entitled to “immunity from suit” as a witness in respect of statements he had made as a potential witness in the bankrupt’s proceedings against the applicant. While that immunity did not apply to the statements of October 1993 as they were made prior to those proceedings even being contemplated, the pleadings did not disclose that those statements were negligent and there was, in any event, no causal link between those statements and the applicant’s loss. On 16 July 1998, the Court of Appeal rejected the applicant’s appeal. Giving the principal judgment of the court, Beldam LJ. identified the main question as being whether the AOR was entitled to immunity from suit in respect of the statements made to the applicant. However, since the existence of a cause of action depended on proof that the statements were negligent and were relied upon by the applicant and that he had suffered loss by doing so, Beldam LJ examined those matters first. He found that the statement of claim did disclose a cause of action for negligent misstatement and that the claim should not have been struck out on the basis of a lack of a causal link between the statements and the applicant’s loss. The next question identified by Beldam L.J. was whether the AOR owed a duty at law to take care in statements which he made to the trustee in bankruptcy. He noted that the High Court judge had found that the AOR owed such a duty and stated that, if the same arguments had been advanced to him, he would have similarly concluded. However, he considered the question to be “intimately connected with the question whether the [AOR] is entitled to immunity from action”. It therefore seemed convenient to consider the question of immunity first because if the AOR was exempt from suit (either as a witness as argued in the High Court or as an officer of the court as argued before the Court of Appeal), “there would be no duty enforceable at law on which the appellant could found his claim”. Beldam LJ noted that bankruptcy proceedings were proceedings in a court of law, that throughout those proceedings the Official Receiver (“OR”), and consequently an AOR, was an officer of the court both in connection with the proceedings “in court” and as regards his powers, duties and functions in the bankruptcy generally. The question was whether the AOR in making the statements relied on in the present case was “liable to be sued in negligence”. It was considered “well settled” that in a court of law, solicitors, counsel, witnesses and judges were “immune from action for statements made in the course of the proceedings, even if made maliciously”. As to whether an OR acting in the course of the liquidation of a company was similarly entitled to immunity from suit, reference was made to the case of Burr v. Smith ([1909] 1 K.B. 306 ) where the court held that a libel action could not be brought against an OR for a statement made in his capacity as OR and contained in the official report submitted under the companies’ legislation for the purpose of company liquidation proceedings, the performance of such a duty being absolutely privileged. As to whether that immunity should extend to the statements in the present case (the statements made by an AOR to the trustee in bankruptcy in October 1993 about the AOR’s interest in the award), Beldam LJ reiterated that the courts should be slow to extend the scope of absolute privilege. He observed that, whenever a court denied a right of redress to a citizen who had suffered substantial loss on the grounds of public policy, it had to be recognised that the court was making a choice between the common interest and harm to the individual “on political rather than legal grounds”. A denial of the right to seek justice could only be justified on strong rational grounds and any policy arguments (such as a “floodgates” argument) demanded detailed analysis. He noted that the court in the Burr v. Smith case gave two reasons for the application of the immunity in that case: the duty of the OR to report with the greatest frankness all relevant matters ascertained by him and the fact that he was performing his duties as an officer of the court in connection with an inquiry which could be rightly considered judicial. In the present case, Beldam LJ considered that the need for the greatest frankness was, of itself, sufficient justification for holding that statements made in the course of such a report should be entitled to absolute privilege and that the OR should be immune from action in respect of them. He also considered that the administration of justice would be seriously impeded if this were not the case, as in the case of statements which formed part of an investigation carried out by the Serious Fraud Office ( Taylor v. Director of the Serious Fraud Office [1997] 4 All. E.R. 887 ). In this regard, he did not find the undoubted distinction between an action for defamation and an action for negligence sufficient to reject a claim to absolute immunity from action in the latter case. Beldam LJ concluded: “To be afforded immunity from suit in respect of the statements made, the official receiver must be acting in the course of the bankruptcy proceedings and within the scope of his powers and duties. In the preparation of his reports, which are to be accepted as prima facie evidence, statements which he makes are it seems to me as much in need of immunity as statements made by a witness in the preparation of a proof of evidence or in the course of investigating offences of fraud. In the present case the official receiver was acting pursuant to his duty ... “to give [the trustee in bankruptcy] all such information respecting the bankrupt and his estate and affairs as may be necessary or conducive to the true discharge of the duties of the trustee”. The getting in of the assets of the bankrupt’s estate for the purpose of being distributed to the creditors is part of the bankruptcy proceedings and accordingly I would hold that in making the statements on which reliance is placed by the appellant the official receiver is entitled to immunity from suit.” He went on to reject the contention that the DTI (the other defendant in the proceedings) was vicariously liable for statements made by the AOR and held that, in any event, given the AOR’s immunity from suit, the applicant could not establish a liability which would fall to be met vicariously. In so concluding, Beldam LJ specifically responded to the argument that the law should encourage the use of all due care in the making of such statements and that the use of immunities did not have that effect. He replied: “The answer to this submission is, I think, to be found in the observation of Fry L.J. in Munster v. Lamb , 11 Q.B.D. 588, 608: “A court of justice has control over all proceedings before it: it has very great powers, to which I need not particularly refer, with regard to witnesses, solicitors and counsel; the court can always check improper conduct. If such actions were allowed, persons performing their duty would be constantly in fear of actions.” Thus the need to encourage the greatest frankness of expression by the [OR] and the power of the court to control or check breaches of duty by him, for example in failing to take proper care in making statements in the reports, counterbalance any suggestion that to grant immunity from action might encourage laxity or carelessness.” Leave to appeal to the House of Lords was refused on 18 January 1999. B.     Relevant domestic law and practice The Official Receiver The Official Receiver (OR) is appointed by the Secretary of State. Because of his statutory office, the OR is an officer of the courts to which he is attached. He is therefore answerable to the courts for carrying out the courts’ orders and for fulfilling his duties under law. When an individual is declared bankrupt, the OR has initial responsibility for the bankrupt’s estate. He can in turn appoint an Assistant Official Receiver (AOR) who can represent the OR in all matters. The trustee in bankruptcy (the person in whom the bankrupt’s property initially vests) is, generally speaking, the OR or the AOR when there is little property to administer in relation to the bankrupt’s estate. Where a substantial asset does emerge, it is the practice for the OR or the AOR to request a licensed insolvency practitioner to accept an appointment as the trustee in bankruptcy. Once accepted, the appointment of the trustee in bankruptcy will be made by the Secretary of State. As described by Beldam LJ in the present case (judgment cited above), the OR is a key figure in bankruptcy proceedings, which are regarded as proceedings in a court of law. Amongst other functions, under section 73 of the Bankruptcy Act 1914,   it is the OR’s duty to investigate and report on the debtor’s conduct, take part in his public examination and, in the case of a fraudulent debtor, to assist in his prosecution if directed by the Department of Trade and Industry to do so. Under rule 351(4) of the 1952 Rules, the OR is also under a duty to give the trustee in bankruptcy all such information respecting the bankrupt and his estate and affairs as may be necessary or conducive to the true discharge of the duties of the trustee. “Throughout the proceedings in bankruptcy, therefore, the official receiver as an officer of the court will be required to make reports and statements on which the court, the trustee, committee of inspection, creditors and others will rely.” COMPLAINTS The applicant complains about a denial of access to court in violation of Article 6 of the Convention. THE LAW The applicant complains that the striking out of his claim for damages for negligent misstatement brought by him against an assistant official receiver on the basis of an immunity of suit denied him access to court contrary to Article 6 § 1 of the Convention which provides: “In the determination of his civil rights and obligations ..., everyone is entitled to a fair ... hearing ... by [a] ... tribunal...” A.     The parties’ submissions The Government accepted that Article 6 was applicable in the present case on the same basis as in Z. and Others v. the United Kingdom , (no. 29392/95, [GC], ECHR 2001-V, namely, there was at the outset of the proceedings a genuine and serious dispute as to whether domestic law permitted a claim for damages to be maintained in the circumstances. The legal issues arising from that dispute were litigated in two instances and the domestic courts balanced the competing considerations of public policy in a manner indistinguishable from the duty of care analysis in issue in the Z. and Others case. It was irrelevant, or of minimal importance, that the word “immunity” was used by the domestic courts. The courts were determining the scope of   domestic substantive law and their interpretation could not be regarded as disclosing a restriction on access to court. In any event, the immunity pursued a legitimate aim and was proportionate, as shown by the full and careful reasoning set out in the Court of Appeal judgment. In particular, the effect of the restriction was designed to be no greater than the needs of the administration of justice required and the courts exercised control over those acting as its officers to protect against careless statements by such persons. The applicant argued that the decisions of the domestic courts denied   him a judicial determination of his civil rights as a matter of public policy and that this constituted an absolute and disproportionate bar to his right of access to court. He argued that his case differed from the Z. and Others case, as the decision in his case had the effect of an arbitrary and blanket immunity for all official receivers for negligently made false statements in relation to all their functions. The Court of Appeal’s reasons for immunizing a group of state officials from the reach of negligence law were sweeping and generalised. They were not founded upon a careful analysis of decision-making functions in the circumstances of the case but a general historical assumption that all persons (judges, counsel, witnesses etc) engaged in court proceedings could not, consistently with the public policy of finality in litigation, be sued for negligence in the performance of those functions. No explanation was given as to why the blanket rule was extended to functions outside “true litigation” where the statements were not made in court or even for the purpose of a hearing in court. Nor why this class of official needed especial protection. The courts have also recently recognised that a blanket immunity for lawyers is not justified. There were no other avenues by which alleged failings could be addressed and the notion of court supervision of the AOR’s conduct was theoretical at best and did not, in his view, cover statements made out of court. He was left as a result bearing a loss of upwards of GBP 200,000. B.     The Court’s assessment 1. Applicability of Article 6 § 1 of the Convention The Court recalls its constant case-law to the effect that “Article 6 §   1 extends only to contestations (disputes) over (civil) ‘rights and obligations’ which can be said, at least on arguable grounds, to be recognised under domestic law; it does not itself guarantee any particular content for (civil) ‘rights and obligations’ in the substantive law of the Contracting States” (see James and Others v. the United Kingdom, judgment of 21 February 1986, Series A no. 98, p. 46, § 81; Lithgow and Others v. the United Kingdom , judgment of 8 July 1986, Series A no.   102, p. 70, § 192; the Holy Monasteries v. Greece judgment of 9   December 1994, Series A no. 301, p.   37, § 80). It will however apply to disputes of a “genuine and serious nature” concerning the actual existence of the right as well as to the scope or manner in which it is exercised ( Benthem v. the Netherlands judgment of 23   October 1985, Series A no. 97, p. 15, § 32). In the present case, the applicant was claiming damages on the basis of   negligent misstatement, a tort in English law which is largely developed through the case-law of the domestic courts. His case was rejected by the High Court on 22 January 1997 on the basis that the AOR was immune from action in respect of the later statements as a potential witness and   that the earlier statements did not disclose a reasonable cause of action. On 16   July 1998, the Court of Appeal dismissed his appeal and, though it found that the claims did disclose a reasonable cause of action, it held that the AOR was entitled to immunity from suit in respect of statements made in the exercise of his functions. Given the fact that the issues were litigated to the Court of Appeal and disclosed some diversity of interpretation of domestic law, the Court is satisfied that at the outset of the proceedings there was a serious and genuine dispute about the existence of the right asserted by the applicant under the domestic law of negligence. In such circumstances, the Court finds that the applicant had, on at least arguable grounds, a claim under domestic law.   Article 6 was therefore applicable to the proceedings brought by the applicant. The Court must therefore examine whether the requirements of Article 6 were complied with in those proceedings. 2.     Compliance with Article 6 § 1 of the Convention The Court, in the Golder case, held that the procedural guarantees laid down in Article 6 concerning fairness, publicity and expeditiousness, would be meaningless if there were no protection of the pre-condition for enjoyment of those guarantees, namely, access to court. It established this as an inherent aspect of the safeguards enshrined in Article 6, referring to the principles of the rule of law and the avoidance of arbitrary power which underlie much of the Convention (see Golder v. the United Kingdom , judgment of 21 February 1975, Series A no. 18, pp. 13-18, §§ 28-36).   Article 6 § 1 “may ... be relied on by anyone who considers that an interference with the exercise of one of his (civil) rights is unlawful and complains that he has not had the possibility of submitting that claim to a tribunal meeting the requirements of Article 6 § 1” (see Le Compte, Van Leuven and De Meyere v. Belgium , judgment of 23 June 1981, Series   A no.   43, § 44). Where there is a serious and genuine dispute as to the lawfulness of such an interference, going either to the very existence or the scope of the asserted civil right, Article 6 § 1 entitles the individual “to have this question of domestic law determined by a tribunal” (see Sporrong and Lönnroth v. Sweden, judgment of 23 September 1982, Series A no. 52, §   81; see also Tre Traktörer v. Sweden , judgment of 27 July 1989, Series   A no. 159, p. 18, § 40). The right is not however absolute. It may be subject to legitimate restrictions, as, for example, statutory limitation periods, security for costs orders, regulations concerning minors and persons of unsound mind (see Stubbings and Others v. the United Kingdom , judgment of 22 October 1996, Reports 1996-IV, pp. 1502-3, §§ 51-52; Tolstoy Miloslavsky v. the United Kingdom , judgment of 13 July 1995, Series A no. 316-B, pp. 80-81, §§ 62-67; the Golder judgment, cited above, p. 19, § 39). Where the individual’s access is limited either by operation of law or in fact, the Court will examine whether the limitation imposed impaired the essence of the right and, in particular, whether it pursued a legitimate aim and there was a reasonable relationship of proportionality between the means employed and the aim sought to be achieved ( Ashingdane v. the United Kingdom , judgment of 28 May 1985, Series A no. 93, pp. 24-25, § 57). If the restriction is compatible with these principles, no violation of Article 6 will arise.   It is contended by the applicant in this case that the decisions of the domestic courts striking out his claim in negligent misstatement on the basis of the AOR’s immunity from suit deprived him of access to court as it operated as a blanket ban which prevented his claim from being decided on the merits.   The Government argued, on the other hand, that the courts were applying principles of substantive law, drawing comparison with Z. and Others v. the United Kingdom , in which no restriction of access arose where the courts, having balanced competing considerations of public policy, struck out actions on the ground that no duty of care was owed. The Court observes, firstly, that the Court of Appeal found that the statements on which the applicant based his claims were capable of disclosing negligence. His claims were not struck out on the basis of any missing ingredient in the basic cause of action but rather because the statements by the AOR in the performance of his functions were protected by an immunity from suit. This discloses some similarities with the case of   A. v. the United Kingdom , no. 35373/97, ECHR 2002-X) which concerned the absolute privilege in defamation attaching to statements made by Members of   Parliament in carrying out their functions in Parliament. However, the Court did not decide in that case whether the privilege acted as a restriction on access to court as in any event the same issues of legitimate aim and proportionality arose under the applicant’s substantive complaints under Article 8 (§ 65). It may be noted however that in A. v. the United Kingdom the Court observed, albeit in obiter terms, that the absolute privilege conferred by Article 9 of the Bill of Rights was framed not in terms of a substantive defence to civil claims, but rather in terms of a procedural bar to the determination by a court of any claim which derived from words spoken in Parliament. In this case, the immunity applied by the Court of Appeal did not derive from any statute but from its interpretation of domestic law and previous case precedent. Nonetheless, Beldam LJ took the view that the applicant’s claim for negligent misstatement should not have been struck out on the basis that there was no arguable cause of action and was of the opinion, as was the first instance court, that there was a duty of care owed by the OR to the applicant. While Beldam LJ did state that the question of the duty of care was intimately connected with the question as to whether the OR was entitled to immunity from action, it may be noted that he went on later to observe that the rule according immunity from action in respect of statements made by judges, officers of the court, witnesses, counsel etc did not depend on the cause of action to which they might give rise, attaching equally to defamation as to tort actions. It therefore appears that the immunity has a scope wider than the substantive cause of action in this case and to that extent may be distinguished from the situation in the Z. and Others v. the United Kingdom case, where the action in negligence failed due to the inability of the applicant to make out one of the substantive ingredients of the claim, namely, the existence of a duty of care. The Court considers therefore that in the present case the application of the immunity may be regarded as a bar on the   applicant’s access to court. It has therefore examined whether it may be regarded as pursuing a legitimate aim and demonstrating a reasonable relationship of proportionality between the means employed and the aim sought to be achieved. As regards the aim, the Court recalls the explanation given by the Court of Appeal which found that the immunity was necessary to ensure that the OR, acting as an officer of the court in bankruptcy proceedings, was not hindered in the execution of his functions. In particular, it was regarded as vital that he be able to report frankly to the court and others involved in the proceedings without fear of harassing litigation. This may be regarded as a legitimate aim pursuing the interests of the administration of justice. The applicant has argued that nonetheless the immunity bestowed on the AOR in this case was disproportionate, pointing in particular to its blanket nature and to the large bill of costs which he was left to bear. The Court would observe that, to be afforded immunity from suit, the Official Receiver must,   according to the Court of Appeal in the applicant’s case, be acting in the course of the bankruptcy proceedings and within the scope of his powers and duties. The courts have therefore shown themselves careful to restrict the immunity to the purposes for which it is aimed. As regards the argument that the immunity allows or encourages official receivers to act with impunity or carelessness, the Court notes that they are under the control of the court which can act to check improper conduct that is brought to their attention. It is not persuaded that the lack of opportunity to sue the Assistant Official Receiver, who was found by the courts in this case to have been overburdened by a heavy caseload at the relevant time, can be regarded as disclosing a failure in accountability for abuse in the system. In regard to the costs bill which the applicant faced at the end of the proceedings which he allegedly defended on the basis of the Assistant Official Receiver’s misrepresentations, the Court does not find that this rendered the immunity disproportionate. The applicant enjoyed a claim against the estate for any losses caused to him but due to the particular situation was unable to derive any benefit from that possibility.   The Court of Appeal noted that it was unattractive that a responsible Department of State should leave an individual bearing such a loss but in examining the competing considerations concluded that the administration of justice would be seriously impeded if the immunity was not found to attach to the Official Receiver in the course of his conduct during bankruptcy proceedings and that thus strong rational grounds supported the restriction on access to justice. The making of exceptions in particular cases would defeat the purpose of the rule as persons performing their duties would remain in constant fear of vexatious actions. The Court considers that in the circumstances the domestic courts carried out a careful balancing of the policy reasons for and against the immunity attaching to the allegedly negligent statements made in this case. In conclusion, the restriction on access to court in this case may be regarded as compatible with Article 6 § 1 of the Convention. The application must therefore be rejected as manifestly ill-founded within the meaning of Article 35 §§ 3 and 4 of the Convention. For these reasons, the Court by a majority Declares the   application inadmissible.   Michael O’Boyle   Matti Pellonpää   Registrar   President