Consolidated Constractors International Company SAL and Another v Masri (Munib)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Aikens,Lady Justice Smith |
| Judgment Date | 03 February 2011 |
| Neutral Citation | [2011] EWCA Civ 21,[2011] EWCA Civ 64 |
| Date | 03 February 2011 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3/2010/2580 & A3/2010/2580A |
[2011] EWCA Civ 21
[2010] EWHC 2640
IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION, COMMERCIAL COURT
Mr Justice David Steel
Before: President of the Queens Bench Division
Lady Justice Smith
and
Lord Justice Aikens
Case No: A3/2010/2580 & A3/2010/2580A
Mr James Lewis QC and Mr Ben Brandon (instructed by SC Andrew LLP, London) for the Appellants
Mr Simon Salzedo (instructed by Simmons & Simmons, Solicitors, London) for the Respondent
Hearing dates: 12 January 2011
Lord Justice Aikens:
Background to this appeal
Consolidated Contractors International Company SAL ("CCIC") and Consolidated Contractors (Oil and Gas) Company SAL ("CCOG") are part of the international construction group known as CCC. I will refer to the two former companies collectively as "the companies". Both are incorporated in the Lebanon. Mr Wael Khoury is a member of the Khoury family which is the ultimate owner of the CCC Group. He and his two brothers, Tawfic and Samer Kuoury, have the day to day control of that group. Mr Wael Khoury took no part in the present aspect of the current proceedings although he is a party. Mr Munib Masri is a businessman resident in Amman, Jordan.
In July 2006, Gloster J delivered a judgment following a contested liability action in the Commercial Court. Gloster J found that the companies were parties to an agreement with Mr Masri concerning an oil concession in Yemen, known as the "Masila Concession". The agreement has been known as the 1992 Agreement. Gloster J further found that the companies were liable to Mr Masri for amounts due pursuant to that agreement and until the end of the Masila Concession. Following the liability judgment, quantum was assessed at US$ 75 million. The companies have not paid this outstanding judgment debt, despite the fact that, on their own admission, they have resources of great magnitude.
Since July 2006 Mr Masri has attempted to enforce this judgment debt, both in this jurisdiction and in many others. It is clear that the companies intend resisting enforcement with all the legitimate powers at their disposal, because they protest that Mr Masri should never have won his action in the first place. Mr Masri's determination to enforce the judgment and the companies' equal determination to resist it has resulted in many multi-jurisdictional proceedings. The parties have expended no less than £8 million on legal costs in the English enforcement proceedings alone.
Since Mr Masri obtained judgment he has attempted to enforce the judgment debt in this jurisdiction by various means. These include an order under CPR Part 71, freezing orders, an order for an affidavit of assets and, by orders of Gloster J and Tomlinson J, on respectively, 20 December 2007 and 21 October 2008, receivership orders. The first of the two receivership orders was in respect of CCOG and the second was in respect of CCIC. The two receivership orders appointed a receiver to collect revenues of these two companies from oil sales relating to the Masila Concession and the international construction contracts concluded by CCIC. Gloster J made a third receivership order on 1 December 2010 but that order remains subject to further argument. There is a single receiver, Mr LA Manning, who is a partner of Deloitte. A third receivership order has been granted by Gloster J at a without notice hearing on 1 December 2010 over CCOG's rights to the oil in the Masila Concession. This third order remains subject to further argument.
On 11 May 2010, Mr Masri's instructing solicitors issued and served an application notice on behalf of Mr Masri, as Judgment Creditor, for a declaration pursuant to CPR Part 40.20 that the companies, as Judgment Debtors, were in contempt of court. The application notice also sought orders that (i) Mr Wael Khoury be committed for the acts of contempt which it was alleged had been perpetrated by the companies as Judgment Debtors and (ii) that the companies be fined for committing acts of contempt of court.
A large number of allegations of contempt were made. For present purposes the relevant allegations against the companies are that: (i) they have received revenues under certain identified contractual entitlements over which the receiver had been appointed, to the exclusion of the receiver. (ii) The companies failed to cooperate with the receiver as required by the relevant orders, or positively interfered with the receivership. (iii) The companies failed to provide information or documents as required under various orders of the court in the enforcement proceedings.
The companies' defence to these allegations is that they were entitled to ensure compliance with legal requirements in the various states outside the UK where enforcement was being attempted. Furthermore the companies allege that it has not been possible to comply with the orders of the English court since December 2008 when judicial administrators of the companies were appointed by the Lebanese courts. It is further alleged by the companies that, even if any contempt has been committed, it is not contumacious.
The hearing of all these contempt allegations is due to take place before Christopher Clarke J at the end of this month, i.e. January 2011. The hearing is fixed for 8 days.
On 5, 6 and 10 October 2010, David Steel J held a Case Management Conference ("CMC") in relation to the committal application. On the last permissible day in the run-up to this CMC, the companies issued nine application notices supported by nine witness statements with numerous exhibits, including an experts' report on Lebanese law. The companies sought nine different orders. The majority of these are not relevant to the proceedings before this court and I will not deal with them.
The relevant applications and orders made by David Steel J centre on four matters. The first concerns the fact that enquiry agents were instructed on behalf of Mr Masri to assist in obtaining information that would help the enforcement process. The enquiry agents were specifically instructed to search for documents which might assist Mr Masri in enforcing the judgment debt.
On 11 May 2010, Mr Andrew Bartlett of Mr Masri's solicitors, Messrs Simmons & Simmons, swore his first affidavit in support of the contempt application. Mr Bartlett states, at paragraph 11, that the enquiry agents were instructed to search for such documents using only legitimate means.
Paragraphs 11 and 12 of that affidavit continue:
"11 As part of this search the enquiry agents searched for documents which had been discarded by [the companies] and which might assist Mr Masri in enforcing the Judgment Debt. In particular, they searched the documents discarded as rubbish on the pavement outside the London offices of [the companies]. I understand where they identified documents which might be relevant they made copies of those documents and returned the originals to the refuse sacks outside [thecompanies'] offices. The enquiry agents have confirmed to me that they have used these methods of obtaining documents for use in court proceedings on several other occasions before and that their conduct has not been criticised by the court when the means of obtaining the documents have been disclosed. I say this on the basis of information provided to me by the relevant enquiry agents, which I believe to be true.
12. The documents held by my firm have not been used for any purpose other than the ongoing enforcement proceedings between the Judgment Creditors and the Judgment Debtors. "
The companies assert that this process of searching for and finding documents in the companies' rubbish outside their London offices involved unlawful, not to say criminal, conduct (allegedly trespass, theft and/or breach of confidence) which will justify excluding any evidence, particularly documentary evidence obtained as a result of those activities. The companies go further. They assert that the contempt application is therefore an abuse of process which should be struck out or stayed.
David Steel J decided that the application to strike out or stay the whole contempt application and the application to exclude any evidence obtained as a result of the enquiry agents activities should be dealt with at the substantive hearing of the contempt application. However, David Steel J was invited by the companies at the CMC to make two orders concerning this activity of the enquiry agents which are relevant to the proceedings before us. First, he was asked to make an order that Mr Masri (through his solicitors) should identify "the source" of "matters of information or belief" which had been given to Mr Bartlett concerning the activities of the enquiry agents in collecting documents from rubbish outside the offices of the companies. In practice, this was an application that Mr Masri identify the individual or individuals in the enquiry agents that provided Mr Bartlett with the information set out in paragraph 11 of his first affidavit and the name of the firm of enquiry agents for whom the individual(s) worked. The companies relied on the provisions of CPR Part 32, Practice Direction Paragraph 4.2 (1) and (2).
David Steel J rejected that application in [42] – [47] of his judgment of 21 October 2010.
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