Ocado Group Plc v Raymond McKeeve
| Jurisdiction | England & Wales |
| Judge | Mr Justice Adam Johnson |
| Judgment Date | 05 October 2022 |
| Neutral Citation | [2022] EWHC 2478 (Ch) |
| Docket Number | Case No: BL-2019-001768 |
| Court | Chancery Division |
[2022] EWHC 2478 (Ch)
Mr Justice Adam Johnson
Case No: BL-2019-001768
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND & WALES
BUSINESS LIST (ChD)
Royal Courts of Justice
Strand, London, WC2A 2LL
David Cavender KC and Alexander Brown (instructed by Mishcon de Reya LLP) for the Claimants
Robert Weekes KC and Gayatri Sarathy (instructed by Foot Anstey LLP) for the Defendant
Hearing dates: 4 October 2022
Judgment Approved by the court for handing down
(Corrected)
Introduction & Background
This is my judgment dealing with the questions of sanction and costs, following my earlier judgment of 3 August 2022 (the Liability Judgment) in which I determined that the Defendant, Mr Raymond John McKeeve, was liable on one of four Grounds of alleged contempt for having interfered with the due administration of justice. In what follows I will assume some familiarity with the Liability Judgment and will use the definitions adopted in that Judgment.
The present contempt Action arises out of an earlier Underlying Action between Ocado and three different Defendants, namely Today, Mr Faiman (the principal behind the Today business) and Mr Hillary, a former employee of Ocado who had moved across to join Mr Faiman's new operation. The allegations in the Underlying Action involved a claim for misuse of Ocado's confidential information, a claim for breach of contract against Mr Hillary, and a claim that the other two Defendants induced that breach of contract. The Underlying Action settled in 2021, on terms which involved “ a significant payment to Ocado” and publication of an Agreed Statement of Facts, recording admissions by the Defendants that (i) they had all breached their obligations of confidence to Ocado, (ii) Mr Hillary had breached certain contractual and fiduciary duties to Ocado, and (iii) Mr Faiman had induced Mr Hillary's breaches of contract.
Notwithstanding that settlement, Ocado have continued to pursue the present Action against Mr McKeeve. According to the costs information they have provided, their expended costs, excluding the costs of the present hearing, now total approximately £1.1m. That overall figure includes costs of approximately £627,000 since December 2021, when there was a directions hearing before Miles J which resulted in the Grounds of Contempt being amended to add a new Ground 5. In the event, Ground 5 was the sole ground on which the case against Mr McKeeve was made out.
Mr McKeeve has also expended costs in mounting his defence: these total roughly £615,000, including roughly £302,000 since December 2021.
Among other events, since the Liability Judgment was handed down on 3 August 2022, McKeeve has filed a Third Witness Statement. That deals with a number of topics. To begin with, Mr McKeeve has indicated that he accepts the contents of the Liability Judgment and, in particular, the finding that he committed a contempt of court by causing the destruction of the 3CX App and therefore preventing the material contained on that App from being searched. Mr McKeeve has also given evidence about the effect of the present Action on him both professionally and personally. He has produced a large number of character references.
Both parties have made helpful submissions on the question of the appropriate sanction. As to costs, the Claimants seek an order for their costs to be paid on the indemnity basis and ask for a payment on account of 80% of those costs. Mr McKeeve's position is that he has succeeded in defending three of the four Grounds of Contempt alleged against him, and should be entitled to his costs of doing so. He also seeks findings that the costs of Mr Libson's Third Affidavit – Libson 3 (referred to in the Liability Judgment at [121]) – be disallowed, and that Ocado should pay his (Mr McKeeve's) costs of and incidental to Libson 3.
In practical terms, Mr McKeeve argues that this outcome should be reflected in an order that (i) he recover all his costs up to the date of the December 2021 directions hearing before Miles J, at which Ground 5 was introduced for the first time and (ii) thereafter, Ocado should pay him 20% of his costs, that figure being said to represent the parties' relative success on the issues with which the Court was eventually concerned at trial.
Sanction
I then turn to the question of the appropriate sanction.
The Overall Approach
In Attorney-General v Crosland [2021] 4 WLR 103, the Supreme Court set out at [45] the following “recommended approach” to sentencing for criminal contempt:
“ 1. The court should adopt an approach analogous to that in criminal cases where the Sentencing Council's Guidelines require the court to assess the seriousness of the conduct by reference to the offender's culpability and the harm caused, intended or likely to be caused.
2. In light of its determination of seriousness, the court must first consider whether a fine would be a sufficient penalty.
3. If the contempt is so serious that only a custodial penalty will suffice, the court must impose the shortest period of imprisonment which properly reflects the seriousness of the contempt.
4. Due weight should be given to matters of mitigation, such as genuine remorse, previous positive character and similar matters.
5. Due weight should also be given to the impact of committal on persons other than the contemnor, such as children of vulnerable adults in their care.
6. There should be a reduction for an early admission of the contempt to be calculated consistently with the approach set out in the Sentencing Council's Guidelines on Reduction in Sentence for a Guilty Plea.
7. Once the appropriate term has been arrived at, consideration should be given to suspending the term of imprisonment. Usually the court will already have taken into account mitigating factors when setting the appropriate term such that there is no powerful factor making suspension appropriate, but a serious effect on others, such as children or vulnerable adults in the contemnor's care, may justify suspension.”
It follows that the first question to address is the seriousness of the contempt. In light of that, the Court must then determine whether the seriousness justifies a custodial sentence or whether a fine would be sufficient. The Court must then determine the appropriate term of the sanction. Finally, if a custodial sentence is to be imposed, it must consider whether the sentence should be suspended.
Seriousness
I come first to the initial question of seriousness. In determining seriousness, the factors identified by Popplewell J (as he then was) in Asia Islamic Trade Finance Fund Ltd v. Drum Risk Management Ltd [2015] EWHC 3748 (Comm) (‘ Asia Islamic’) at [7(6)] have been regularly applied. They are as follows:
i) Whether the claimant has been prejudiced by virtue of the contempt and whether any such prejudice is capable of remedy;
ii) The extent to which the contemnor has acted under pressure;
iii) Whether the breach of the order was deliberate or unintentional;
iv) The degree of culpability;
v) Whether the contemnor has been placed in breach of the order by reason of the conduct of others;
vi) Whether the contemnor appreciates the seriousness of the deliberate breach;
vii) Whether the contemnor has co-operated; and
viii) Whether there has been any acceptance of responsibility, any apology, any remorse or any reasonable excuse put forward.
It is common ground that factors (i) to (vii) are relevant to the question of seriousness. There is a dispute, however, as to factor (viii).
Factors (i) to (vii) are derived ultimately from a judgment of Lawrence Collins J (as he then was) in ( Crystal Mews Limited v. Metterick & Ors unreported, 13 November 2006). In Asia Islamic Popplewell J, having adopted those 7 factors as matters which might serve to make the contempt more or less serious, went on to add a further factor, namely factor (viii), as bearing on the same issue.
In making his submissions, Mr Cavender KC queried the correctness of this addition in light of the analytical structure referenced by the Supreme Court in the Crosland decision (above), because that refers to matters of mitigation such as previous good character and any expression of remorse only at a later point in the structure, after the question of the seriousness of the contempt, and the form of punishment, have been determined (see point (4) in the quotation at [9] above).
With respect, on this point I prefer the submissions made by Mr Weekes KC for Mr McKeeve. I do not think that the Supreme Court, in setting out its summary of the overall analytical structure, was intending to exclude from consideration in relation to the question of seriousness the relevance of any apology or expression of remorse by the contemnor. I think Mr Weekes KC is correct to say it would be illogical to do so, having regard to the other factors which it is common ground are relevant to that question. One such factor, for example, is the general question of the contemnor's culpability. It seems to me it would be relevant, in considering culpability, to have regard to whether a contemnor had expressed regret or given an apology for his or her actions, because an unrepentant contemnor who refuses to accept any responsibility is more culpable than one who has apologised. This illustrates the point that the factors are to some extent overlapping and inter-related. Moreover, the question of seriousness is a precursor to the next question, which is the question of whether some form of sanction or punishment is required for the contempt; and more specifically, whether a fine is a suitable punishment or whether a custodial sentence is necessary. In answering that question, it would seem...
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