Mark Alexander Newson-Smith v Alawi Quais Abdul Mumem Al Zawawi
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Whipple |
| Judgment Date | 21 July 2017 |
| Neutral Citation | [2017] EWHC 1876 (QB) |
| Docket Number | Case No: HQ17X00760 |
| Court | Queen's Bench Division |
| Date | 21 July 2017 |
[2017] EWHC 1876 (QB)
Mrs Justice Whipple DBE
Case No: HQ17X00760
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice,
Strand, London, WC2A 2LL
Mr Richard Walford (instructed by Eversheds Sutherland LLP) for the Applicant
Mr Thomas Grant QC and Mr James Kinman (instructed by Irwin Mitchell) for the Respondent
Hearing dates: 26, 27 and 28 June 2017
Judgment Approved
Introduction
The applicant is Mark Newson-Smith. He is a judgment creditor against three parties: JARZ Mozambique Holdings Ltd ("JARZ"), ZR Energies Mocambique Limitada ("ZREM") and Jason Rosamond ("Mr Rosamond"). Judgment was entered on 20 October 2014 in the amount of £3.183m plus costs and interest. The judgment debt remains unpaid and continues to accrue interest.
The Respondent is Alawi Al Zawawi. He was, at all times material to the creation of the judgment debt, a director and (indirectly, through intermediate companies) a shareholder of each of JARZ and ZREM.
After judgment was entered, the applicant initiated proceedings under CPR Part 71 in order to obtain information from JARZ and ZREM to enable him to enforce the judgment debt (these are the " CPR 71 proceedings"). As an officer of JARZ and ZREM the respondent became involved in those proceedings, and in the course of them was ordered to attend for oral examination and to produce documents.
The applicant alleges that during the CPR 71 proceedings, the respondent interfered with the due administration of justice by making false statements. The applicant now seeks permission pursuant to CPR 81.12 (3) to initiate committal proceedings for contempt of court against the respondent.
The Law
The applicant argues the respondent has interfered with the administration of justice, and is in contempt, in the three following ways:
a) he knowingly or recklessly made false and misleading statements in purported compliance with the order for disclosure in the CPR 71 proceedings (Ground 1);
b) he knowingly or recklessly put forward a false case in his oral and written evidence to the Court (Grounds 2 and 4);
c) he knowingly or recklessly made false and misleading statements in witness statements attested by a statement of truth (Grounds 2 and 3).
The first two categories ((a) and (b)) are covered by Part III of CPR 81 ( CPR 81.12–81.14). The third category (c) is covered by Part VI of CPR 81 ( CPR 81.17–81.18). However, it is common ground before me that the precise categorisation is not material to the approach that I should take. As to the approach, that again is in large part agreed. The leading cases are cited in the White Book at CPR 81.18.2 and are: KJM Superbikes Ltd v Hinton (Practice Note) [2008] EWCA Civ 1280, Barnes v Seabrook [2010] EWHC 1849 (Admin), Berry Piling Systems Ltd v Sheer Projects Ltd [2013] EWHC 347 (TCC), and Daltel Europe Ltd v Makki [2005] EWHC 749 (Ch). I summarise the relevant principles as follows:
a) The question for the Court at this stage is not whether a contempt of court has in fact been committed, but whether proceedings should be brought to establish whether it has or not.
b) Because proceedings for contempt of court are public law proceedings, when considering whether to give permission the Court must have regard to the public interest alone. That involves two key considerations:
i) Is the case one in which the public interest requires that the committal proceedings should be brought; and
ii) Is the applicant a proper person to bring them?
c) A number of factors are likely to be relevant to the assessment of the public interest in any given case. On the one hand, there is a public interest in drawing the attention of the legal profession and potential witnesses to the dangers of making false statements to the Court. On the other hand, the Courts should guard against exercising the discretion too freely in favour of allowing proceedings to be pursued by private persons. Specifically:
i) the court should not grant permission unless there is a strong prima facie case that the allegations will be proved to the criminal standard at a substantive hearing;
ii) the Court must not stray into determining the merits of the case at the permission stage;
iii) in cases where false statements are at issue, the applicant must show a strong prima facie case not only that the statement was false but also that it was known at the time to be false;
iv) in assessing the strength of the applicant's prima facie case, the Court will take account of all the circumstances of the case, and will have regard in particular to the circumstances in which the statement was made, the state of the maker of the statement's mind, including his understanding of the likely effect of the statement, the use to which the statement was put in the proceedings, the extent to which the false statements were persisted in, and any delay in warning the respondent that he or she may have committed contempt by making a false statement at the earliest opportunity; and
v) The court must guard against the risk of allowing vindictive litigants to use committal proceedings to harass persons against whom they have a grievance.
d) The Court must also consider whether it is proportionate to allow committal proceedings to be brought. That involves an assessment of the strength of the case against the respondent(s), the amounts in money terms which were involved in the proceedings in which the allegedly false statements were made and which were affected by those statements, the likely costs involved on both sides, and the amount of court time likely to be involved in managing and hearing the matter.
e) The Court must also consider whether contempt proceedings would further the overriding objective of the CPR to deal with cases justly.
I would add the following observations, specific to this application. First, to establish a contempt, the false statement must have been made with the intention that, or at least in the knowledge that it was likely that, the administration of justice would be interfered with as a result, see Tinkler v Elliot [2014] EWCA Civ 564 at [44]:
"in order for an allegation of contempt to succeed it must be shown that … in addition to knowing that what you are saying is false, you had to have known that what you are saying was likely to interfere with the course of justice" citing Edward Nield v Loveday [2011] EWHC 2324 (Admin).
Secondly, a false statement is one which was not true, and which when made the maker knew was not true, or did not honestly believe to be true. There is a fine dividing line between mere carelessness or negligence on the one hand, and recklessness in the making of the statement on the other. Recklessness is sufficient mens rea for contempt ( Berry Piling Systems Ltd at [27]). However, a statement is made recklessly only if the maker
"consciously has no idea whether it is right or wrong … Recklessness is a concept which judges can address as they do in a criminal context. Logic also suggests that a person who represents as true something which he or she consciously does not know whether it is true or not is consciously misleading the Court and that should be considered as contemptuous" (ibid, at [28]).
Optimism or even carelessness in the making of statements will not be sufficient to establish that a party is in contempt (ibid, at [30(c)]).
At this point, and only in relation to this point, the parties' submissions diverge. They take different views on what recklessness means, in the context of false statements. The applicant argues that if the maker of a statement does not take sufficient steps to check whether the statement is true or not, then he makes a recklessly false statement, because he can have no honest belief in the truth of it. The respondent argues that a failure to conduct sufficient checks is insufficient, in and of itself, to render a statement false by recklessness, because the maker may still believe that statement to be true, even if he has not conducted those checks; it is only if he does not care whether it is true or not – a different and higher hurdle to surmount — that it can be said that he lacks an honest belief in the truth of the statement.
In resolving this divergence of view, I am assisted by the Court of Appeal's judgment in JSC BTA Bank v Ereshchenko [2013] EWCA Civ 829. In that case, the applicant argued that the respondent, Mr Ereshchenko, was in contempt because he lacked an honest belief in his statements to the Court, based on his failure to engage with the terms of a Norwich Pharmacal order and his failure to make reasonable enquiries as to the truth of the position. Lloyd LJ rejected that argument, saying this:
"[42] … What the Bank has to persuade the court of, to make out its case of contempt as regards each or any of the statements in question, is that Mr Ereshchenko's statement was not true, and that when he made it he knew it was not true or did not honestly believe it to be true. That applies to every aspect of Mr Ereshchenko's relevant statements. If Mr Ereshchenko had not in fact made all reasonable enquiries before making his statement in answer to the Disclosure Order, then in that respect the answer may be untrue, if the answer includes a statement (express or implicit) that he has made all reasonable enquiries. The Bank may be able to show that this is the case if Mr Ereshchenko has not applied his mind properly to the obligation. That is an objective question. But to prove this does not show that Mr Ereshchenko knew that his enquiries, whatever they may have been, were not all that he could and should reasonably have made. That question is subjective and depends on Mr Ereshchenko's state of mind when he made the statement. It is not...
To continue reading
Request your trial
-
Deutsche Bank AG v Sebastian Holdings Inc.
...based on dishonesty.” 205 Mr Vik also contends that there are obvious parallels with the position in Newson-Smith v Al Zawawi [2017] EWHC 1876 (QB) at [82]–[85], where Whipple J refused permission for contempt proceedings to be brought where there had been delay, there was a risk that the ......
-
Simon Kevin Frain (Aka Simon Kevin Reeves, Aka Bill Reeves) v Louise Michelle Reeves
...KJM Superbikes at [16]–[17]; Stobart Group Ltd v Elliott [2014] EWCA Civ 564, per Gloster LJ at [44]; Newson-Smith v Al Zawawi [2017] EWHC 1876 (QB) per Whipple J at [6]–[12] and Patel. Without trying to re-invent the wheel, I set out the key passages from Newson-Smith at [6], which summa......
-
Astrid-Caroline Cole v Sean Avram Carpenter
...and that the applicant is the proper person to bring them. The first is the decision of Whipple J in Newsome Smith v Al Zawawi [2017] EWHC 1876 (QB) at [6] where she explained that, as well as the strength of the proposed proceedings, questions of proportionality and the need to consider t......
-
UK Insurance Ltd v Syed Mohammed Yusuf Ali
...militated against permission being granted. The same point was made by Whipple J, as she then was, in Newson-Smith v. Al Zawawi [2017] EWHC 1876 (QB), at [83], when she observed that the respondent had “paid literally and heavily for his misdemeanours.” See also Frain, at [20(ii)] and, at ......