Super Max Offshore Holdings v Rakesh Malhotra
| Jurisdiction | England & Wales |
| Judge | Sir Michael Burton GBE,Sir Michael Burton |
| Judgment Date | 15 October 2019 |
| Neutral Citation | [2019] EWHC 2711 (Comm) |
| Docket Number | Case No: CL-2016-000797, CL-2016-000798 & CL-2018-000312 |
| Court | Queen's Bench Division (Commercial Court) |
[2019] EWHC 2711 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Sir Michael Burton GBE
(sitting as a Judge of the Hight Court)
Case No: CL-2016-000797, CL-2016-000798 & CL-2018-000312
Ms Bingham QC & Ms Rogers (instructed by Clifford Chance) for the Claimants
Mr Marshall QC & Mr McCourt Fritz (instructed by Hill Dickinson) for the Defendant
Hearing dates: Monday 7th, Tuesday 8 th & Thursday 10th October 2019
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This has been the hearing of an application by Mr Marshall QC on behalf of the Defendant to strike out some of the grounds of application in the four contempt applications which have been put before me.
The Defendant was, until his dismissal for gross misconduct (as found by Popplewell J in his judgment of 13 December 2017 [2017] EWHC 3246 (Comm) at 117–118), the Executive Chairman of Super Max Offshore Holdings (“SMOH”) (the First Claimant), and he remains non-executive Chairman under the terms of the governing shareholder agreement.
In December 2016 the Defendant sought to remove Mr Anindo Mukherji, the Group's CEO and other senior employees, and appoint himself as CEO with immediate effect, contrary to (inter alia) the terms of the Second Claimant's right of veto under that agreement. This led to the grant of injunctive relief by Picken J on 20 December 2016 (“Picken 1”), which was followed by a series of injunctions granted and continued by this Court, relevantly to this judgment by Baker J on 6 January 2017 (“Baker 1” and “Baker 2”), by Males J on 27 January 2017 (“Males I”), by Baker J on 3 March 2017 (“Baker 3”) and by Popplewell J on 8 August 2017 (“Popplewell 1”) and then, after his judgment, on 13 December 2017 (“Popplewell 2”) and, by final Order, on 27 March 2018 (“Popplewell 3”).
Popplewell J, in his judgment at 116, concluded as follows:
“(1) [The Defendant] staged a coup whereby he removed Mr Anindo Muherji as CEO, installed himself as CEO and exercised the powers of a CEO to dismiss four senior employees, rearrange reporting lines and responsibilities, and to appoint Mr Khan to a senior position. He knew he was not entitled to do so. This behaviour constituted a breach of [his contract].
He conducted a sustained campaign of aggressive abuse and disparagement towards Mr Anindo Mukherji and Mr Abraham intending thereby (a) to force them to resign (b) to foment dissent and insubordination from junior employees (c) seriously to undermine them in the eyes of the workforce and (d) thereby to impede their ability, and that of senior management, to exercise effective management of the workforce and the business. This behaviour constituted a breach of [his contract].”
The relevant clauses of the above Orders in issue before me can be briefly summarised as follows (I do not set out Baker 1, Males 1, Baker 3 and Popplewell 2 and 3 because any differences are not material for this purpose, save as discussed below):
(i) Picken 1:
“2. The Defendant must not directly or indirectly:
(a) Take any steps to procure or implement the suspension or removal of Anindo Mukherji from his position as Chief Executive Officer of the Super-Max group of companies;
(b) Take any steps to procure or implement the suspension or removal of any Relevant Employeee (save in accordance with Clause 17.2.1 of the Subscription and Shareholders' Agreement entered into in respect of [SMOH] dated 4 December 2010 (as amended);
Hold himself out as or purport to act as Chief Executive Officer of the Super-Max group of companies.”
(ii) Baker 2:
“2. The Defendant must not:
(a) communicate directly or indirectly with any Relevant Employee in terms that are disparaging of any of the Relevant Management [as defined] /Independent Officers or calculated/likely to undermine their authority in their respective positions, save that nothing in this clause 2(b) prevents the Defendant from participating in discussions amongst members of the Super Max Group Advisory Board at meetings of the Advisory Board about the performance of the Super Max Group; or
(b) communicate directly or indirectly with any Relevant Employee otherwise than for the purpose of discharging the responsibilities allocated to him in the Authority Matrix…. [these are then set out as (i) to (xvii)]
provided always that nothing in this clause 2(c) shall prevent the Defendant from communicating with the Super Max Group Advisory Board of Relevant Employees for the purpose of discharging any of his other duties under his employment contract or with the prior written consent of Actis Consumer Grooming Products Limited (such consent not to be unreasonably withheld or delayed).”
(iii) Popplewell 1:
“The Defendant must not:
(a) [almost exactly as per clause 2 (b) of Baker 2, but with the proviso that
“nothing in this clause 2(d) shall prevent the Defendant from communicating with his personal assistants (Ms Linet Pereira and Ms Antoinette Fernandes) members of the Super Max Group Advisory Board or Relevant Management [as defined] for the purposes of discharging any of his duties as (i) non-executive Chairman of the Super Max Group Advisory Board 0r (ii) a director of SMOH or any Group Company.”
The contempt applications now brought by the Claimants relate to alleged breaches by the Defendant of the various Orders, to the making by the Defendant of false statements in a significant witness statement, and to harassment and intimidation of witnesses. Several of the breaches, relating to the Defendant's sending of abusive and threatening WhatsApp and SMS messages to Mr Mukherji and others in March 2018 in breach of clause 5 of Popplewell 2, are not denied.
I now turn to the strike out application, which is made in respect of some, but not all, of the alleged contempts. I shall first set out the principles which have guided me in considering this strike out application, coupled with the emphasis that it is the Defendant who has the onus of establishing that the applications should be struck out.
First, the court order and the particulars of breach of it must be clear and comprehensible, and the particulars must make plain the thrust of the claimant's case (see e.g. per Woolf LJ in AG for Tuvalu v Philatelic Distribution Corporation Ltd [1990] 1 WLR 926 at 42).
Secondly, the particulars of breach must be supported by prima facie evidence contained in the affidavits or witness statements, and any exhibits, accompanying the application, so as to show a real prospect of success.
Thirdly, an application must not be brought for an illegitimate purpose.
Fourthly, an application must be proportionate (see Sectorguard plc v Dienne [2009] EWHC 2693 (Ch)) to the need of enforcing court orders and preventing interference with justice.
Fifthly, both the order and the particulars of breach must be seen and read in context and given their natural and ordinary meaning, in the light of the knowledge of the relevant participants (see Pan Petroleum AJE Limited v Yinka Folawiyo Petroleum Co Ltd [2017] EWCA Civ 1525 per Flaux LJ at 41(3)).
Sixthly, in construing an order there is need to pay regard to the mischief sought to be prevented by that order.
Seventhly, an order is not vitiated by cross-referring to documents, including contractual documents, but indeed the reference to such documents may assist in making it clear; and such injunctions are frequent, and rightly so (as for example in Pan Petroleum). The principle still remains whether the order was clear as to what a recipient should do (see Woolf LJ in Harmsworth v Harmsworth [1987] 1 WLR 1676 at 1686D). Harris v Harris [2001] 2 FLR 923, referred to by Mr Marshall, where a ‘layman was left to disentangle a complicated set of orders’ (per Munby J at 292) is not an apt analogy.
Eighthly, whereas at the end of a committal hearing, after all the evidence has been considered, if there can be seen to be more than one reasonable inference to be drawn, and at least one of them is inconsistent with a finding of contempt, or if an innocent explanation of the contempt is a real possibility (see Daltel Europe Ltd v Makki [2005] EWHC 749 Ch at 30 per David Richards J, followed by Teare J in JSC BTA Bank v Ablyazov [2012] EWHC 237 (Comm) at 9), the claimant fails. But that is not the appropriate test in considering a claimant's claim at the outset, such as I am doing here.
Ninthly, a negative injunction may carry within it an obligation to ensure compliance by, as in Hone v Page [1980] FSR 500, himself, his servants, or agents or otherwise howsoever. That includes the need for reasonable endeavours where an instruction has been given to someone under a defendant's control who has obeyed that instruction, and who can be procured by the person who gave it to withdraw or recall that instruction, in compliance with the order. The passage in Slade J's judgment in Hone v Page at 507, as approved by the Court of Appeal in Tuvalu and in World Wide Fund For Nature v THQ /Jakks Pacific LLC [2004] FSR 10, is not limited to a defendant's employees but extends to anyone whom the defendant can control (as to which see paragraph 20 below).
I turn then, in the light of that, to the result, which must be concise, given that this is a strike out application and...
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