Preston Borough Council v McGrath

An implied undertaking restricting the use of documents disclosed in court proceedings arises from the court process. It does not arise merely because police obtain material during a criminal investigation, whether compulsorily or voluntarily. Constraints on police use and disclosure instead arise from public duties, duties of confidence and applicable statutory powers. A person without a proprietary or confidentiality interest cannot ordinarily challenge disclosure by seeking to strike out later civil proceedings as an abuse of process. Judicial review, or an injunction founded on a private right, may provide the appropriate remedy.

The Council brought proceedings against Mr McGrath, a former councillor, alleging breach of fiduciary duty and undisclosed financial benefits from Balfour Beatty. The Council had learned of relevant material, including Heads of Agreement and a witness statement, during a police corruption investigation. Mr McGrath applied to strike out the proceedings, arguing that use of the material breached an implied undertaking to the Crown Court and constituted contempt and abuse of process.

Burton J rejected the argument that prosecuting authorities impliedly undertook not to use unused criminal-disclosure material for other purposes, but postponed the consequential question whether the proceedings should be struck out. The appeal concerned whether any such undertaking applied to material obtained during the investigation and disclosed to the Council.

1. The appeal was dismissed unanimously. The material obtained by the police from Balfour Beatty and Mr Stephen was not subject to an implied undertaking to any court merely because it had been obtained during a criminal investigation. The Council’s use of it therefore did not constitute contempt or an abuse of process.
2. The implied undertaking recognised in Taylor v Serious Fraud Office [1999] 2 AC 177 concerned material disclosed in criminal proceedings and the defendant’s use of that material. The rationale protecting those who provide information did not logically extend to material obtained by police powers outside the court process.
3. Marcel v Commissioner of Police of the Metropolis [1992] Ch 225 demonstrated that police use of material may be constrained by statutory powers, public duties and duties of confidence. Those constraints were not enforced through an undertaking to the court. A person without a proprietary interest in the material could not obtain a strike-out order on that basis; judicial review was the appropriate public-law challenge.
4. The police might owe a private duty of confidence to the owner or information provider, but that duty was not absolute. The public interest could justify disclosure to a potential victim, particularly where the information indicated a prima facie case of corruption. Best practice was to obtain the owner’s consent or await a subpoena before handing over documents. Disclosure of information about a document and its contents was distinct from handing over the document itself.
5. The reasoning in Miller v Scorey [1996] 1 WLR 1122, concerning documents produced on discovery in earlier proceedings, did not establish a basis for striking out these proceedings. In any event, Mr McGrath had himself pleaded and disclosed the Heads of Agreement, making any injunction to prevent reliance on it unavailable.

• Court of Appeal (Civil Division): Appeal from the decision of Burton J dated 21 December 1998. The appeal was dismissed unanimously.