Jet 2 Holidays Limited v Hughes & Hughes [2019] EWCA Civ 1858

The Court of Appeal ruled that contempt proceedings could be founded on pre-action false statements.

Full judgment, dated 8 November 2019

Summary:

The Respondents, who had intimated claims for sickness on holiday via witness statements served on the Appellant, were the subjects of committal proceedings brought by the Appellant. The first instance judge had dismissed the proceedings at a preliminary hearing on the grounds that the court had no jurisdiction because the allegedly false statements were made before proceedings commenced.

The Court of Appeal found that there was jurisdiction, not under CPR 32.14 but under the common law power to commit for contempt, and gave lengthy guidance on the test for contempt proceedings.

Discussion:

This appeal concerned proceedings for committal brought by the Appellant against the Respondent in relation to witness statement supported by a statement of truth that had been prepared and served before proceedings were commenced.

The judgment begins by setting out the procedural and factual background. The proposed claims were for sickness suffered on a package holiday (1). HHJ Owen QC had dismissed the Appellant’s application to add new grounds of contempt and struck out the committal proceedings (2). The court referred to Liverpool Victoria Insurance Company Ltd v Yavuz [2017] EWHC 3088 (QB), in passing as a preliminary, as a previous authority that had pondered the question of whether pre-action statements could found a ground for contempt proceedings (3).

Factually, the Respondents had undertaken a holiday booked through the Appellant in December 2016. They claimed, by way of witness statements sent in mid-2017, to have suffered illness as a result of unhygienic conditions in resort. The Appellant found social media posts showing that the Respondents had been well throughout the holiday and rejected their claims. The Respondents did not commence formal proceedings. (4-9)

However, the Appellant did commence committal proceedings for contempt of court, based on the witness statements. HHJ Godsmark QC had given the Appellant permission to bring such proceedings. A CMC was listed before HHJ Owen QC, sitting as a High Court Judge, and he raised the question of jurisdiction on the basis that there were no proceedings in relation to which the witness statements were drafted. He ordered that the issue be determined as a preliminary issue. (10-15)

At the hearing of the same, he rejected the Appellant’s application on the basis that there was no jurisdiction. He rejected that the witness statements fell within CPR 32.14, stating that reading parts 32 and 22 together, including the practice directions thereto, it was clear that they only applied to witness statements filed in accordance with CPR 7.2. (18)

It would appear that the judge’s reason for so doing was essentially that the issuing of a formal claim with the court is an important step which engages the court’s duty to police the process and protect the administration of justice, and it was not to be equated with the process of merely intimating a claim pre-action. (20)

In discussing the appeal against that decision, the judgment first agrees that the jurisdiction to bring committal proceedings was not conferred by CPR 32.14 (26). However, the court noted that it has an inherent power to commit for contempt under PD81 para 5.7. It cited Sir Richard Scott V-C in Malgar Ltd v R.E. Leach (Engineering) Ltd [1999] EWHC 843 (Ch) as stating that the CPR did not change the law of contempt – CPR 32.14, it would appear, merely illustrates one means by which the inherent power to commit for contempt might be engaged (27). Furthermore, Simon Brown LJ is quoted in Griffin v Griffin [2000] EWCA Civ 119 as saying “[t]he power to commit to prison for contempt of court is a common law power which has never been fully regulated by statute or even by rules of court.” (28)

The test for contempt at common law is, pursuant to Attorney General v Leveller Magazine Ltd [1979] AC 440, “whether the conduct in question involved an interference with the due administration of justice either in a particular case or more generally as a continuing process.” (29)

The court cited Attorney-General v News Group Newspapers plc [1989] 1 QB 110 as authority for the proposition that acts done before proceedings were even imminent could constitute a contempt of court (there in the context of prejudicing a fair trial) (31). The court also cited a section of the judgment in Attorney-General v Newspaper Publishing Plc [1988] Ch 333 that provides that:

The law of contempt is based upon the broadest of principles, namely, that the courts cannot and will not permit interference with the due administration of justice. Its application is universal.”

Importantly, the court noted that in the present case the witnesses were served for the purported purpose of complying with the pre-action protocol. The court said (at 36):

A dishonest witness statement served in purported compliance with a PAP is capable of interfering with the due administration of justice for the purposes of engaging the jurisdiction to commit for contempt because PAPs are now an integral and highly important part of litigation architecture.”

The court set out why pre-action protocols were so important (37-43) and then at paragraph 44 quoted extensively from the judgment of Moore Bick LJ in KJM Superbikes Ltd v Hinton [2008] EWCA Civ 1280. Perhaps the most important section was as follows:

the fact that the pursuit of contempt proceedings in ordinary cases may have a significant effect by drawing the attention of the legal profession, and through it that of potential witnesses, to the dangers of making false statements. If the courts are seen to treat serious examples of false evidence as of little importance, they run the risk of encouraging witnesses to regard the statement of truth as a mere formality…In my view the prosecution of proceedings for contempt in the present case would be likely to have a salutary effect in bringing home to those who are involved in claims of this kind, of which there are many, the importance of honesty in making witness statements and the significance of the statement of truth.”

The court therefore found that it did have jurisdiction to deal with the proceedings and that the proceedings should be allowed to continue because they satisfied the common law test (45).

The court also addressed the fact that the Respondents had not pursued their claim, but gave them little credit for so doing:

Their decision not to do so does not detract from the fact that, if the original witness statements were knowingly untrue, as the appellant alleges, the respondents will have lied in order to procure money by deception pursuant to a conspiracy to defraud; nor does it detract from the fact that the appellant has had to face a claim with financial and reputational implications and to expend time and money to meet the claim.” (46)

Finally, the court opined that it was unsatisfactory that false statements made in witness statements served before proceedings were not dealt with in the rules and that it was “highly desirable” that they be addressed specifically therein. (50)

The court then went on to discuss the judge’s refusal to allow the Appellant to amend its grounds. The judge’s principal objection to amendment (the fact that the application for committal itself should not have been brought) had obviously fallen away. The court found that it was appropriate to grant permission (53) because the statements in the new witness statements (those filed in response to the committal proceedings) satisfied the tests in KJM Superbikes and Zurich Insurance plc v Romaine [2019] EWCA Civ 851 (54-55).

This decision is clearly of a piece with the decision in Zurich v Romaine and appears to flow from the same harsher attitude towards dishonest claimants in low value personal injury cases. There is, in particular, the same absence of credit for having ceased to pursue the claim when it became clear it was unmeritorious. It follows that all personal injury claimants, before they commence claims, should be advised not only of the costs consequences of fundamental dishonesty but also of the potential for committal proceedings.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s