Tchenguiz v Director of the Serious Fraud Office

Public law unlawfulness and private law liability are distinct. Quashing an unlawful warrant, or declaring searches unlawful on public-law grounds, does not itself establish liability in trespass or another tort. The claimant must plead and prove a recognised private-law cause of action. The Administrative Court’s power under the Senior Courts Act 1981, section 31(4), is procedural and does not alter that substantive rule. Where an order confines its declaration to public-law grounds and transfers civil damages claims for pleading and determination, it does not determine private-law liability. Cause of action estoppel therefore does not prevent private-law defences being raised in the transferred proceedings.

The appellants challenged search warrants obtained by the Serious Fraud Office and the resulting entries, searches and seizures. The Divisional Court quashed the warrants, declared the entries and searches unlawful, and transferred any civil claims for damages to the Queen’s Bench Division: [2012] EWHC 2254 (Admin).

In subsequent proceedings, Eder J held that res judicata did not prevent the SFO from defending a private-law claim in trespass and permitted withdrawal of an earlier concession on liability: [2013] EWHC 1578 (QB). The appeal concerned only whether the Divisional Court’s order had already determined trespass liability and thereby barred the SFO’s proposed defences.

Appeal dismissed. Pitchford LJ gave the leading judgment. Vos LJ agreed, adding that it was unnecessary to decide whether public-law unlawfulness was a recognised legal concept, and Patten LJ agreed with the result and reasoning.

1. The power under section 31(4) of the Senior Courts Act 1981 is procedural. It permits damages, restitution or recovery of a sum due where the statutory conditions are satisfied, but it does not create a substantive right to damages for unlawful administrative action. A claimant must establish a recognised tortious liability, restitutionary right or other basis for recovery. Section 8 of the Human Rights Act 1998 provides a separate power concerning Convention rights.

2. Percy & Anr v Hall & Others [1997] QB 924, Olotu v Home Office & Anr [1997] 1 WLR 328 and Regina (Lunn) v Governor of Moorland Prison [2006] EWCA Civ 700 demonstrate the distinction between public-law unlawfulness and private-law liability for acts done under apparently valid legal authority.

3. The Divisional Court’s declaration that the entries were unlawful was expressly made on the grounds set out in its public-law judgment. That judgment did not determine whether the entries constituted actionable trespass. The transfer under CPR Part 54.20 of civil damages claims for pleading and determination in the Queen’s Bench Division showed that both private-law liability and quantum remained outstanding.

4. No cause of action estoppel therefore prevented the SFO from relying on common-law justification or the Constables Protection Act 1750. The merits of those defences were matters for determination in the Queen’s Bench Division. The appeal was dismissed.

• Divisional Court — The warrants were quashed and the entries, searches and seizures were declared unlawful on public-law grounds. Civil damages claims were transferred to the Queen’s Bench Division: [2012] EWHC 2254 (Admin).
• High Court of Justice, Queen’s Bench Division — Eder J held that res judicata did not prevent the SFO from raising private-law defences and permitted withdrawal of its earlier concession: [2013] EWHC 1578 (QB).
• Court of Appeal (Civil Division) — The appeal against the res judicata ruling was dismissed.