Mrs Iman Said Abdul Al-Rawas v Hassan Khan & Company (A Firm)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Coulson,Lord Justice Arnold,Lord Justice Phillips |
| Judgment Date | 17 May 2022 |
| Neutral Citation | [2022] EWCA Civ 671 |
| Docket Number | Case No: CA-2021-003286/7 |
| Court | Court of Appeal (Civil Division) |
[2022] EWCA Civ 671
Lord Justice Coulson
Lord Justice Arnold
and
Lord Justice Phillips
Case No: CA-2021-003286/7
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEENS BENCH DIVISION
Mr Justice Morris
Royal Courts of Justice
Strand, London, WC2A 2LL
Ben Walker-Nolan (instructed by The Khan Partnership LLP) for the Respondents
The Appellants did not appear and were not represented
Hearing date: 28 April 2022
Approved Judgment
This judgment will be handed down remotely by circulation to the parties' representatives by email and released to the National Archives. The date and time for hand-down is deemed to be 10.30am on 17 May 2022
Introduction
On 25 April 2022 the appellants provided a copy of Form 253 in which they requested the dismissal of their appeal, with costs. At a hearing on 28 April, originally fixed to deal with the respondents' application that the appellants pay the outstanding sum of £3.76m into court (together with a further sum by way of security for costs), as a condition of being allowed to continue with their appeal, this court acceded to that request for dismissal of the appeal.
The only remaining matter concerned the basis of the assessment of the respondents' costs of the appeal. At the hearing on 28 April, Mr Walker-Nolan reiterated the point previously made in correspondence that the respondents would seek their costs of the appeal on an indemnity basis. Because neither of the appellants, nor their solicitors, chose to attend on 28 April, this court concluded that the best course was to order the respondents to prepare short written submissions setting out why they were entitled to indemnity costs, and to give the appellants the opportunity to put in any written submissions in response.
On 3 May 2022 the respondents provided written submissions as to why they were entitled to indemnity costs. Despite this court's order that the appellants respond in writing by 6 May, no submissions in response have been received. The issue, therefore, is whether the respondents are entitled to their costs of the appeal to be assessed on an indemnity basis.
The Factual Background
The lengthy factual background to this dispute is set out at length in the first contempt judgment of Morris J at [2021] EWHC 2583 (QB). It is unnecessary to repeat the detail for the purposes of this judgment. In short, the respondents are two-interrelated firms of solicitors. The appellants are husband and wife and resident in Oman. Between 2006 and 2009, the respondents acted for the appellants in relation to substantial litigation in the High Court in London. The appellants failed to pay their bills and, on 1 August 2013, the respondents commenced proceedings to recover the sums due.
By judgments dated 14 March 2018, the appellants were ordered to pay the respondents a total sum in excess of £1 million. No part of that sum has ever been paid. In addition, the appellants have continued to incur significant costs liabilities to the respondents, and interest has continued to accrue on the sums due. The total indebtedness is now in excess of £3 million.
The Two Contempt Judgments of Morris J .
By an application dated 15 January 2021 the respondents sought to commit the appellants for contempt of court. There were 14 charges, many of which were made up of more than one individual allegation.
The charges covered the whole spectrum of contempt of court in this kind of situation. Accordingly there were charges based on the failure to provide documents in accordance with court orders; the making of false statements to frustrate the enforcement proceedings and to evade payment of the judgment sums due to the respondents; the failure to disclose shareholdings and other assets; and the failure to provide information or documents in relation to other beneficial interests.
In the first contempt judgment, which addressed whether or not there had been contempt, Morris J found all 14 charges proved to the criminal standard, although there were one or two individual allegations within those charges which he did not accept. In particular:
(a) He found at [30(3)] that the defendants had ignored the Part 71 orders, failed to attend court on four occasions, and were twice found to be in contempt of court and made subject to suspended orders of committal;
(b) He found at [30(4)] that, once the appellants had become involved in enforcement proceedings, their approach was to dispute as much as possible “regardless of the merits of the arguments being advanced”.
(c) He found at [30(5)] that, although they had undertaken in the course of the Part 71 hearing to supply further documents, the appellants failed to do so and took an obstructive approach in the course of protracted correspondence.
(d) He found at [60] that the appellant's persistence in advancing unmeritorious arguments showed that “their objective remains to disrupt, frustrate and protract the proceedings rather than to participate in them in any meaningful fashion”.
In his second contempt judgment which addressed sentencing ( [2021] EWHC 3229 (QB)), Morris J sentenced the first appellant to 24 months imprisonment and the second appellant to 15 months imprisonment. They have not returned to the UK to serve their sentences or to purge their contempt. They have not even apologised, as the judge noted at [36]. At [33] of that same judgment, Morris J described the appellants' “serious, persistent and deliberate breaches of court orders and false statements [which]….are continuing. Their objective throughout, and over a considerable number of years, has been to disrupt, frustrate and protract proceedings and to avoid compliance with court orders and ultimately to evade payment of the judgment sums properly due [to the respondents]”. Amongst other things, he concluded that the respondents were entitled to their costs of the contempt proceedings on an indemnity basis.
The Appeal
On 29 December 2021, the appellants appealed against the findings of contempt and subsequent committal orders of Morris J. They claimed to be entitled to bring the appeal as of right without the need to seek permission, on the basis that appeals in contempt cases are in a special category. The appeal was based on a 25 page document which sought to take issue with the details of Morris J's judgment. The document is not signed. I shall call it “the grounds document”.
I address the grounds document in greater detail in paragraphs 27–30 below. However, I should say at once that, in my view, it is a further manifestation of the approach which Morris J referred to at [33] of the second contempt judgment, namely a further attempt to disrupt, frustrate and protract proceedings and to avoid compliance with court orders and ultimately to evade payment of the judgment sums properly due. To the extent that the appellants needed permission to argue their appeal, I am entirely confident that, on the basis of the grounds document, such permission would not have been granted.
The Security Application
On 22 February 2022, the respondents issued an application that the court order that the appellants' pursuit of the appeal should be made conditional upon the payment into court of the sum of £3.76m (said to be the full amount of the appellants' indebtedness, including costs and interest) together with security for costs in the additional sum of £225,000. The application made plain that the court could order lesser sums to be paid if it considered that that was appropriate. It was supported by a witness statement of Lucy Vials dated 9 February 2022 which ran to 35 pages.
The respondents produced a lengthy skeleton argument in support of their application. The appellants produced a 9 page skeleton in response, prepared by counsel. However, the appellants did not seek to put in any evidence to contradict the statement of Lucy Vials or to support the grounds document.
It appears that the making of this application forced the appellants to reconsider their appeal. On 22 April 2022, less than a week before the hearing of the application fixed for 28 April, they indicated to the CoA Office that they wanted to withdraw the appeal. They eventually produced the correct Form on 25 April which led to the dismissal of the appeal in the circumstances set out in paragraph 1 above. As indicated there, although the respondents did not object to the dismissal of the appeal, they maintained throughout that they were entitled to have their costs of the appeal paid on an indemnity basis.
The Relevant Principles
Contempt Appeals
Section 13 of the Administration of Justice Act 1960 provided that “an appeal shall lie under this section from any order for decision of a court in the exercise of jurisdiction to punish for...
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