Zenith Logistics Services (UK) Ltd v Halena Louise Coury
| Jurisdiction | England & Wales |
| Judge | Mr Justice Warby |
| Judgment Date | 03 April 2020 |
| Neutral Citation | [2020] EWHC 774 (QB) |
| Date | 03 April 2020 |
| Docket Number | Case Nos: QB-2019-000524 QB-2019-002869 |
| Court | Queen's Bench Division |
[2020] EWHC 774 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
MEDIA AND COMMUNICATIONS LIST
Remote hearing via Zoom
Mr Justice Warby
Case Nos: QB-2019-000524 QB-2019-002869
Nicholas Goodfellow (instructed by Holman Fenwick Willan) for the Appellants
Victoria Jones (instructed by Royds Withy King) for the Respondent
Louis Flannery QC (instructed by Stephenson Harwood LLP) for the Claimant
The Defendant did not appear and was not represented
Hearing date: 25 March 2020
Approved Judgment
Introduction
These two cases have been heard together because, although very different on their facts, they raise related issues of principle: whether it is compatible with the requirements of open justice for the Court to make an order staying proceedings on terms contained in a confidential agreement extraneous to the order, or in a confidential schedule to the Order.
Zenith v Coury (“the Appeal”) is an appeal against a decision of Master Davison. The action is brought by three companies, all part of the Uniserve group of companies, against 11 defendants. The claim is for damages in excess of £5m, and other remedies, arising out of the alleged misapplication of corporate assets by the first defendant, Peter Keates, for his own benefit and that of various individuals and companies with whom he is associated. Those individuals included the fourth defendant, Ms Coury, who is or was Mr Keates' girlfriend. The claimants and Ms Coury, who are both represented by solicitors and Counsel, reached a confidential compromise agreement. They put a consent order before the Court, in Tomlin form, with a Schedule referring to the compromise agreement. Master Davison indicated by email that his practice was not to “make Tomlin orders with confidential schedules unless confidentiality is justified on the usual grounds.” This prompted an exchange of correspondence, at the end of which the Master confirmed his decision to decline to make the order, on the grounds that it contravened the open justice principle. He gave judgment explaining that conclusion. He granted permission to appeal.
UUU v BBB (“the Application”) is an application for the Court to make a consent Order in Tomlin form. The action is a Part 8 claim by one (male) individual against another (male) individual for an injunction to restrain alleged harassment, contrary to the Protection from Harassment Act 1997 (“PHA”). The claimant is represented by solicitors and Counsel. The defendant is unrepresented. An interim injunction was granted at an urgent hearing on short notice, and later continued after a hearing on notice. The parties then reached a compromise of the action. They submitted a draft order, intended to give effect to the settlement. The draft Order was expressed as a “Confidential Consent Order”. It provided for a stay of proceedings, save for the purposes of enforcing the terms set out in a Confidential Schedule, which recorded undertakings to be given by BBB to the court. This was put before Master Davison for approval. In the light of his practice, and his decision in Zenith v Coury, the Master referred the Application to a Judge. It came to me, and I directed that the Application be determined by the same Judge as heard the Appeal.
The procedural history in more detail
The Appeal
The claim was issued on 13 February 2019, asserting three causes of action against Ms Coury: (1) participation in an unlawful means conspiracy, (2) dishonest assistance of breach of duty by Mr Keates (3) knowing receipt of benefits acquired in breach of duty. On 13 April 2019, a Defence was filed, denying any liability. Following service of Reply, there was a CCMC on 6 December 2019.
On the day of the CCMC, the claimants and Ms Coury reached a compromise agreement. The Master, informed of this, made an order that the claim against Ms Coury “shall be stayed on the terms set out in a Tomlin Order, to be approved by the Master”. The order made clear that the directions given in relation to the progress of the case generally were not to apply to the claim against Ms Coury.
On 9 December 2019, the claimants' solicitors wrote to the Master, recording that their clients and Ms Coury had “reached a settlement on terms set out in a confidential settlement agreement” and asked the Court to make a Tomlin order, “staying all further proceedings against the fourth defendant, save for the purpose of enforcing the terms of the settlement”. The letter enclosed “for the court's consideration” a draft Order signed by solicitors on behalf of all parties.
The draft Order was in this form:
“UPON reading the correspondence from the parties' solicitors dated 11 December 2019
AND UPON the Claimants and the Fourth Defendant having agreed confidential terms of settlement
IT IS ORDERED THAT:
1. All further proceedings in this action between the Claimants and the Fourth Defendant be stayed upon the terms set out in the confidential settlement agreement identified in the schedule to this Order (“Settlement Agreement”), save for the purpose of enforcement of those terms.
2. The Claimants and the Fourth Defendant shall each have permission to apply to the Court to enforce the terms of the Settlement Agreement, without the need to bring a new claim.
3. There shall be no order as to costs. Dated this day of December 2019
SCHEDULE
The terms of settlement are set out in a confidential settlement agreement between the Claimants and the Fourth Defendant dated 6 December 2019, the original of which has been kept by the Claimants' solicitors and a copy of which has been kept by the Fourth Defendant's solicitors”
The letter continued:
“Please kindly note that the Settlement Agreement contains a confidentiality provision stating that the Settlement agreement may only be disclosed to a third party either with the express consent of the other party, or in a limited set of defined circumstances, including insofar as it is necessary to comply with any Court Order made in the claim…. In those circumstances, the Court is invited to approve the Tomlin Order in accordance with the attached draft.”
The Master replied the following day, on the lines I have mentioned above. Having explained his practice, and the reason (that he regarded such orders as contrary to the open justice principle), the Master stated that the parties must “ether justify the confidentiality or submit an order with an open schedule”. He observed that it was open to them to settle the action other than by way of a Tomlin order.
Correspondence followed, on 11 and 12 December 2019. The claimants' solicitors submitted that the Master's approach was mistaken, and inconsistent with the authorities, and with established practice. They referred to Vanden Recycling Ltd v Kras Recycling BV [2017] EWCA Civ 354 [2017] C. P. Rep 33 and passages in the White Book. These included a passage in the Chancery Guide (at 22.23) stating that:-
“it is not the normal practice for Judges or Masters … to inspect schedules or agreements annexed to Tomlin Orders, and the Judge who makes the order undertakes no responsibility for the scheduled terms, and cannot be taken to approve them.”
The Master, who referred to JIH v News Group Newspapers Ltd [2011] EWCA Civ 42 [2011] 1 WLR 1645, was unpersuaded. On 13 December 2019 he emailed to say that he did not agree with the propositions advanced, and “will not make the Tomlin order in its present form”. He promised to provide a short formal judgment to that effect so that the claimants could seek to appeal if they wished.
In that judgment, given on 10 January 2020 ( [2020] EWHC 9 (QB)), the Master began by emphasising the centrality of open justice to the administration of justice, citing Scott v Scott [1913] AC 417, JIH (above) and R (C) v Secretary of State for Justice (Media Lawyers Association intervening) [2016] UKSC 2 [2016] 1 WLR 444. He reasoned that the only available justification for approving the draft Tomlin order would be that the principles of open justice “simply do not apply to such orders”. He analysed the parties' submissions as “boiling down” to “one proposition, which was that the schedule to the Tomlin order was not part of the order”. That proposition was rejected. The Schedule is, said the Master, a part of the order as a matter of language, and as a matter of substance and reality. There is little difference between a Tomlin order and an “ordinary” consent order:
“24 … Because the two types of order are, in reality, so similar, a common practice in the Queen's Bench Division (and in apparent contrast to that in the Chancery Division) is to scrutinise the schedule to a Tomlin order at the stage that the order is made. The purpose of this is to ensure that the terms are within the jurisdiction of the court to enforce and do not, for example, offend some principle of public policy. There would be no point in making an order providing for a subsequent application to enforce if it were clear that the terms were, in fact, unenforceable. The practice reflects the underlying reality, which is that a Tomlin order engages the coercive powers of the court in much the same way as an “ordinary” order does. Even if the open justice principle could be said to be restricted to coercive orders, (which, in my view, it is not), Tomlin orders are in this category.”
The Master made two further points. The first was that the default position under the CPR is that the...
To continue reading
Request your trial
-
Sukhbinder Singh Takhar v Lahrie Mohamed
...those disputes and allowing them to come back in order to give effect to that Tomlin Order.” 35 He referred to Zenith Logistics v Coury [2020] EWHC 774 as consistent with his suggestion that where a court is asked to enforce an order it will check that it is content that the enforcement sho......
-
Dr Erica Smith v Dr Christopher Backhouse
...terms of a settlement agreed by the parties: Watson v Sadiq [2013] EWCA Civ 822 and Zenith Logistics Services (UK) Ltd v Keates [2020] EWHC 774 (QB), [2020] 1 WLR 2982. In general, where the parties are represented, the court should not enquire as to the terms of the settlement which the......
-
SMO (A Child) by their litigation friend, Anne Longfield [acting as a representative claimant pursuant to CPR 19.6] v Tiktok Inc.
...42 [2011] 1 WLR 1645 [21], and CVB. I have applied them recently in other contexts: see Zenith Logistics Services (UK) Ltd v Coury [2020] EWHC 774 (QB) [2020] 1 WLR 2983 [37–40] ( Tomlin Orders) and R v Wright (Nigel) [2021] EMLR 3 [38–39] (anonymity for blackmail victims). In both cases,......
-
Dr. Erica Smith v Dr. Christopher Backhouse
...of a settlement agreed by the parties: Watson v Sadiq [2013] EWCA Civ 822 [49]. In Zenith Logistics Services (UK) Limited v Keates [2020] 1 WLR 2982 [67], Warby J suggested that, in general and where the parties are represented, the Court should not enquire as to the terms of the settleme......