Permission for committal application for false statements (Makdessi v Cavendish Square Holdings)

The Court of Appeal has dismissed an appeal against the Commercial Court’s decision to grant the respondents permission to bring committal proceedings against Mr Makdessi for making false statements in his pleadings (Cavendish Square Holdings BV and another company v Makdessi [2013] EWCA Civ 1540).

While the discretion of the court to allow private litigants to pursue committal proceedings is to be exercised with caution, it is in the public interest to discourage the making of false statements in order to preserve the integrity of the legal system. The court highlighted the requirements of CPR 81, which governs contempt of court applications, particularly with regard to the evidence required, noting that the requirements must be complied with in what amounts to a quasi-criminal process of committal.

The respondent companies sought permission to bring committal proceedings against the appellant in respect of an alledgedly false statement made in his defence and counterclaim in the substantive proceedings, which was verified by a statement of truth. The statement concerned activities, which the respondents alleged breached certain restrictive covenants and which were the focus of the substantive proceedings. The appellant later amended his statement with the result that many of the issues scheduled for trial fell away. The first instance judge granted permission to the respondents to apply for committal and the appellant appealed.

The Court of Appeal dismissed the appeal, allowing the respondents permission to apply for committal.

Practical implications

Several practical implications arise from this judgment:

  1. the discretion of the court to grant permission to bring committal proceedings will be exercised with great caution and there must be a strong prima facie case against the alleged contemnors (para 41 of the judgment)
  2. the overriding question to be addressed in considering whether to grant permission to apply for committal is whether to do so would be in the public interest. The relevant principles are summarised by Hooper LJ, in Poole Motors, at para 41 (see para 28 of the present judgment)
  3. in particluar, these include 'the significance of the statement in the context of the case, the clarity of its meaning, the strength of the contention that the maker of it had known it to be untrue, the status of the maker, the seriousness of the consequences of it having been made, the length of time over which, and the circumstances in which, it had been maintained, and any explanation as to why it had been made' (para 79 of the judgment)
  4. the court highlighted that discouraging the making of false statements is in the public interest and goes to the heart of our system of justice, which depends above all upon honesty (para 81 of the judgment)
  5. of interest to practitioners will be the judge's comments in relation to the provisions of the CPR. CPR 81 and CPR PD 81 govern applications and proceedings in relation to contempt of court. Given the quasi-criminal nature of an application for committal, the judge found that compliance with the rules regarding evidence under CPR 81 took precedence over the more general provisions of CPR 32.6. In particular, CPR 81.14(1)(b) required the exhibition of 'all' documents relied upon and must be complied with even if this represents a more onerous requirement on the respondents, so that a person facing a committal application is provided with all documents levelled against them. In the instant case, certain documents exhibited to statements of case had not been exhibited to the affidavit in support of this application. Although there had been a failure to comply with the rules, the Court of Appeal recognised that the judge at first instance had been able to reach his decision even ignoring the omitted materials and also, the appellant had responded in his pleadings to the documents in dispute (paras 48–52 of the judgment)

Court details:

Court: Court of Appeal, Civil Division

Judge: Lord Justice Christopher Clarke gave the leading judgment, with whom Lords Justices Tomlinson and Patten agreed

Date of judgment: 26 November 2013

Note: For a summary of the facts, subscribers of Lexis®PSL can view our digest, with a link to the full judgment.

This article was first published on Lexis®PSL Dispute Resolution on 28 November 2013. Click here for a free 24 trial of Lexis®PSL.

Filed Under: Court of Appeal

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