First Capital East Ltd v Plana & Anor [2015] EWHC 2982 (QB)

Case No HQ14X02197[2015] EWHC 2982 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 23 October 2015
Before
HOS HONOUR JUDGE PETER HUGHES QCSitting as a Judge of the High Court
Between
FIRST CAPITAL EAST LIMITEDApplicantILMI PLANARespondentsARSIM PLANARespondent
Douglas Day QC and Peter Freeman (instructed by Kennedys Law LLP) for ApplicantStephen Field (instructed by McLarty’s Solicitors) for 1 st RespondentMartin Hodgson (instructed by McLarty’s Solicitors) for 2 nd RespondentHearing Hearing dates: 15 October 2015
JudgmentHHJ Peter Hughes QC :Introduction
[1]This is a contested application for permission to bring committal proceedings for contempt of court against the Respondents pursuant to CPR 81.18 in relation to statements made in support of a personal injury claim by the 1st Respondent.[2]The point raised by the application, on which I am told there is no existing authority, is whether it is ever appropriate to bring committal proceedings when the alleged contemnor has already been tried and acquitted by a criminal court on the same facts. It is well established that the fact that someone has been punished for contempt of court is no bar to a subsequent prosecution based on the same facts. This case raises the corollary to that situation.[3]In the background to the application is a sense of deep concern, felt by those who insure defendants to personal injury claims, about the increasing number of false and inflated claims. Insurers feel that there is a need for it to be made clear that such dishonesty will not be tolerated by the courts and will be punished as a contempt.

The Personal Injury Litigation

[4]The 1st Respondent started proceedings in the Romford County Court in November 2009 against his former employers. He alleged that, two years earlier on the 10th December 2007, he had had an accident in the course of his employment as a London bus driver. In this he said that he had fallen and banged his head. He claimed to have sustained some minor brain injury resulting in post concussional syndrome and causing him to suffer dizziness, prolonged headaches and blackouts.[5]The claim was supported by a medical report from a neurologist, Dr. Cockerell. He recorded that the 1st Respondent had told him that he couldn’t do anything around the house; that his son (the 2nd Respondent) had to be with him all the time, and that he stayed in doors and did nothing. Dr Cockerell trusted and accepted what he was told. He concluded that it was likely that the 1st Respondent had suffered some form of psychological functional seizure.[6]In July 2010 the Applicants’ insurers admitted liability, for 90% of the claim, and made an interim payment of £50,000.[7]In support of the claim dealing with quantum, the Respondents each filed two witness statements. The statements were signed and verified by statements of truth. In each the Respondents sought to present the picture of a claimant who had been left seriously incapacitated and in need of constant care.[8]In his second statement of the 2nd October 2012, the 1st Respondent described himself as nervous to leave his home in case he blacked out. He said that he couldn’t drive or do anything that involved heavy lifting and that he feared that he would never be able to work again.[9]His son, in his second statement dated the 1st June 2012, said that he had to be with his father all the time “to keep an eye on him to stop him going out”. He said that there had been no improvement in his father’s condition, and that, if anything, it was getting worse. He said that he had to drive him about as his father no longer held a driving licence.[10]The timing of these statements is significant, as they cover a period when the 1st Respondent was under surveillance arranged by the Applicant’s insurers.[11]The initial period of surveillance covered two days in June 2012, the 27th and the 28th. Before it was carried out the investigators made various database checks and ascertained that the 1st Respondent had in the past been a director of a car wash business in Barnet and that the 2nd Respondent was registered as a director of a car wash business trading in Hilldene Avenue, Romford.[12]Extensive still and video images over the two day period show the 1st Respondent leading a seemingly normal life, leaving home in the morning, and attending at the Romford car wash premises. There he can be seen playing an active part in the business, driving vehicles, instructing others, and going to the bank alone on foot.[13]On the 15th November 2012, only six weeks after his second statement, the 1st Respondent flew from Luton to Skopje. He appears to have stayed in his native Kosovo until he took a return flight on the 5th March 2013. Whilst he was away his solicitors submitted an up-dated schedule of loss dated the 4th February 2013. The statement of truth was signed by his solicitor on his behalf. There is no suggestion that the solicitor was acting dishonestly, so he could not have been informed of his client’s whereabouts.[14]In the schedule the 1st Respondent is described as in need of constant care and supervision and unable ever to work again. The value of the claim is put at £637,308, including £65,000 for general damages, £175,768 for future loss of earnings, and £177,504 for future care.[15]It was at this stage that the Applicant’s insurers showed their hand. In a robustly worded counter-schedule, they asserted that the claim was a sham, and that the 1st Respondent, supported by his son, was intent on deceit.[16]The Applicants applied for the claim to be struck out as an abuse of the process of the Court, pursuant to CPR 3.4(2)(b), and for the repayment of interim payments, which by that stage totalled £125,000.[17]Having considered the surveillance evidence, the 1st Respondent’s solicitors withdrew from the case.[18]The strike out application came before His Honour Judge Collender QC in the Central London County Court on the 15th August 2013. The 1st Respondent appeared in person and Mr Freeman represented the Applicants. Judge Collender viewed the surveillance evidence, and had no hesitation in concluding that the claim was fraudulent. He rejected the 1st Respondent’s case that the two days of the surveillance were isolated incidents and capable of innocent explanation, with the words “If that explanation had been true and was consistent with the disabilities suggested by the medical reports and detailed in the schedule of loss, then what one sees in the surveillance evidence would not have taken place.”[19]Judge Collender struck out the claim, and ordered the repayment of the £125,000 plus costs on an indemnity basis. In addition, he directed that the case be transferred to the High Court to enable an application to be made for permission to bring contempt proceedings.

Subsequent events

[20]Seven days after the hearing the 1st Respondent went back to Kosovo. He appears to have returned to the United Kingdom briefly over Christmas and New Year, and made further journeys between the two countries in early 2014. When he returned on the 26th March 2014, the Metropolitan Police were waiting for him. He was arrested the following day and remanded into custody.[21]On the 29th May 2014, the Applicants filed their application pursuant to CPR 81.18. They did not do so earlier, I am told, because of the 1st Respondent’s absence from the country. The Respondents filed statements in answer to the application on the 21st July 2014. In these they reiterated the claim, rejected by Judge Collender, that the personal injury claim was genuine. The 1st Respondent asserted that he was continuing to suffer blackouts even whilst on remand in Wandsworth Prison.[22]On the 8th September 2014, the 1st Respondent stood trial at Southwark Crown Court on a single charge of fraud contrary to Section 1 of the Fraud Act 2006. The particulars of the offence alleged that between the 10th December 2007 and the 15th August 2013 he had “made a false representation to [the Applicants] which was and which he knew was or might be untrue or misleading, namely, that he exaggerated the injuries that he claimed to have suffered in an industrial accident on the 10th December 2007.”[23]After a three day trial, he was acquitted by the jury on the 11th September 2014. The verdict may seem surprising in the light of Judge Collender’s observations, but these, of course, would not be before the jury, and the surveillance evidence, which I am told was. I have not seen a transcript of the proceedings, and it would not be right for me to comment further on the verdict.[24]The 2nd Respondent was not prosecuted. Apparently this is because the police or CPS took the view that there was insufficient evidence against him.[25]A final twist to the tale is that there was a second attempt to prosecute the 1st Respondent. This was a prosecution brought by the Department of Work and Pensions for fraudulently claiming benefits by not disclosing his true care and mobility needs. The case was based on the same evidence. It was stayed as an abuse of the process of the court by a judge sitting at Snaresbrook Crown Court.

The CPR and Part 81.18(3)

[26]CPR 32.14(1) provides – “Proceedings for contempt of court may be brought against a person if he makes or causes to be made, a false statement in a document verified by a statement of truth without an honest belief in its truth”.[27]CPR 81(18) (3) provides – “A committal application in relation to a false statement of truth or disclosure statement in connection with proceedings in the County Court may be made only –(a) with the permission of a single judge of the High Court; or(b) by the Attorney General.”[28]This provision differs from CPR 81.18(1) which, in the High Court, enables the committal application to be made with the permission of the court dealing with the proceedings in which the false statement was made. Indeed, the recognised practice is that the judge hearing the proceedings can, and should in the absence of special circumstances, deal with both the permission application and the substantive hearing, as the trial judge is likely to be best placed to do so justly and economically; see Summers v Fairclough Homes [2012] UKSC 26 (at para. 39). This has the advantage of ensuring that the matter can be dealt with whilst it is still fresh and without delay.[29]There are a number of recognised factors to which the court should have regard in deciding whether or not to grant permission. These were drawn together by Hooper L.J. sitting in the Divisional Court in the case of Barnes t/a Pool Motors v Seabrook [2010 EWHC 1849 (Admin)]. At paragraph 41, Hooper L.J. said: - “i) A person who makes a statement verified with a statement of truth or a false disclosure statement is only guilty of contempt if the statement is false and the person knew it to be so when he made it. ii) It must be in the public interest for proceedings to be brought. In deciding whether it is the public interest, the following factors are relevant: a) The case against the alleged contemnor must be a strong case (there is an obvious need to guard carefully against the risk of allowing vindictive litigants to use such proceedings to harass persons against whom they have a grievance); b) The false statements must have been significant in the proceedings; c) The court should ask itself whether the alleged contemnor understood the likely effect of the statement and the use to which it would be put in the proceedings; d) "[T]he 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." iii) The court must give reasons but be careful to avoid prejudicing the outcome of the substantive proceedings; iv) Only limited weight should be attached to the likely penalty; v) A failure to warn the alleged contemnor at the earliest opportunity of the fact that he may have committed a contempt is a matter that the court may take into account.” a) The case against the alleged contemnor must be a strong case (there is an obvious need to guard carefully against the risk of allowing vindictive litigants to use such proceedings to harass persons against whom they have a grievance); b) The false statements must have been significant in the proceedings; c) The court should ask itself whether the alleged contemnor understood the likely effect of the statement and the use to which it would be put in the proceedings; d) "[T]he 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."[30]I would also draw attention to the observations of Moses L.J. in South Wales Fire and Rescue Services v Smith [2011] EWHC 1749 (Admin) :- “2. For many years the courts have sought to underline how serious false and lying claims are to the administration of justice. False claims undermine a system whereby those who are injured as a result of the fault of their employer or a defendant can receive just compensation. 3. They undermine that system in a number of serious ways. They impose upon those liable for such claims the burden of analysis, the burden of searching out those claims which are justified and those claims which are unjustified. They impose a burden upon honest claimants and honest claims, when in response to those claims, understandably those who are liable are required to discern those which are deserving and those which are not. 4. Quite apart from that effect on those involved in such litigation is the effect upon the court. Our system of adversarial justice depends upon openness, upon transparency and above all upon honesty. The system is seriously damaged by lying claims. It is in those circumstances that the courts have on numerous occasions sought to emphasise how serious it is for someone to make a false claim, either in relation to liability or in relation to claims for compensation as a result of liability. 5. Those who make such false claims if caught should expect to go to prison. There is no other way to underline the gravity of the conduct. There is no other way to deter those who may be tempted to make such claims, and there is no other way to improve the administration of justice. 6. The public and advisors must be aware that, however easy it is to make false claims, either in relation to liability or in relation to compensation, if found out the consequences for those tempted to do so will be disastrous. They are almost inevitably in the future going to lead to sentences of imprisonment, which will have the knock-on effect that the lives of those tempted to behave in that way, of both themselves and their families, are likely to be ruined. 7. But the prevalence of such temptation and of those who succumb to that temptation is suchthat nothing else but such severe condemnation is likely to suffice.”[31]At paragraph 49 of the judgment, Moses L.J., having dealt with the merits of the case, and decided not to punish the contemnor because of delay in the case, added these general observation – “The message as I would see it is that in future it is vital that these cases are dealt with with urgency and with speed, so that the all-important message of deterrence, the all-important process by which it is brought home to false complainants that the likely consequence is prison, can be underlined.”

The Merits - Discussion

[32]I have no hesitation in finding that the case against both Respondents is a strong one. The statements that are alleged to have been false where highly significant in the context of a large personal injury claim made on the basis that the claimant was permanently incapacitated and in need of constant care.[33]I do not consider that delay in itself is a sufficient reason to refuse permission, because the delay was initially attributable to the 1st Respondent’s absence from the country, and thereafter to the criminal proceedings.[34]The factor that prompts pause for thought is the acquittal of the 1st Respondent in the Crown Court. Mr Douglas Day QC accepts that there is unlikely to be any material difference between the evidence relied on then and now in support of the present application.[35]It is well-established that the fact that a person has been punished for contempt of court is no bar to a subsequent criminal prosecution; see for example R vGreen [Times July 14, 1992 (CA), (1993) Crim LR 46). There it was held that breach of a molestation order leading to a finding of contempt did not give rise to a valid plea of autrefois convict in subsequent criminal proceedings based on the same facts.[36]The rationale behind this and other decisions like it is to be found in the case of CPS v Tweddell [2001] EWHC Admin 188. In that case, Latham L.J. said:
“14. In domestic law contempt proceedings and criminal charges have different purposes. As far as the proceedings for contempt are concerned, as Lady Justice Hale said in Hale v Tanner, there are two objectives. Firstly, the court has to mark the court's disapproval of disobedience to its order; secondly, it has to consider how best to secure future compliance with the order. Those are two considerations which are quite different and separate from the considerations which are raised by a criminal charge. Unlike contempt proceedings, which are essentially proceedings between the court seeking to enforce its order and the contemnor, criminal proceedings are between the public and are concerned with different considerations. 15. The essential feature of a criminal charge is the attempt to protect public order; the necessity to punish offenders and in so doing both deter the offender and others from committing offences and therefore provide protection for the public. Incidentally, of course in relation to the sentencing process, there will be considerations relating to the rehabilitation of the offender. But the important feature of a criminal charge is the fact that it is seeking to ensure that there is proper sanction for those who break the law. Not a court's order, but the law. 16. It seems to me in those circumstances that there can in domestic law be no justification for concluding that merely because someone has, on a given set of facts, been found guilty of contempt of court, that should in any way preclude the appropriate prosecuting authorities from bringing criminal proceedings for the purposes to which I have referred. 17. It is not only those considerations which need to be emphasised. Further, a criminal conviction is a public sanction which has consequences which are of significance in relation to the protection of the public for the future. Further, it may or may not be that, in view of the considerations which affected the court when dealing with a breach of an injunction, the way in which the court dealt with that matter was appropriate in considering the public interest so far as punishment is concerned. By that I mean it may or may not be the case that given the facts of the particular case here, three months' imprisonment would be an appropriate criminal sanction. One can envisage cases in which the court dealing with the contempt application will deal with the matter in a wholly different way from the way in which the criminal courts may consider appropriate.”
[37]Had contempt proceedings been dealt with in this case before the criminal prosecution, and had the 1st Respondent been found guilty of contempt, on the authorities that would have been no bar to the criminal trial proceeding. The question is what should happen when the converse situation arises.

The Relevance of the 1st Respondent’s Acquittal

[38]Mr Day QC submits that permission should be granted notwithstanding the acquittal of the 1st Respondent. He submits that there is a strong public interest element that justifies the grant of permission. He says that if contempt proceedings are not permitted in a case such as this, it will tend to confirm an increasingly widely held belief in society that this type of financially motivated deceitful and manipulative behaviour is tolerated and, by implication, acceptable.[39]Additionally, he submits that the verdict of the jury does not mean that the 1st Respondent is innocent; only that the jury were not sure of his guilt. Juries do not give reasons for their decisions, and their decision contrasts with the reasoned judgment of His Honour Judge Collender QC.[40]Finally, he submits that the 2nd Respondent cannot shelter behind the verdict of the jury and that the just result is that father and son should have to face contempt proceedings together.[41]Mr Stephen Field, for the 1st Respondent, supported in brief submissions by Mr Martin Hodgson for the 2nd Respondent, bases his submissions largely on the principle of autrefois acquit. He, also, submits that permission to bring contempt proceedings should not granted where the allegations concern factual issues that have already been determined in the respondent’s favour.[42]In this context he relies on a recent decision of His Honour Judge Cotter QC, sitting as a High Court Judge, in an unreported case, Ergun v Smith (10th June 2015). The case concerned a hotly contested property dispute between two litigants. The judge found that the application was an attempt to resurrect factual issues that had already been determined. The case comes within the principle set out by Hooper L.J. that care must be taken not to allow vindictive litigants to use committal proceedings as a way of perpetuating their grievance. In my view, it has no relevance to this case.

Double Jeopardy - Discussion

[43]As the Court of Appeal observed in CPS v Tweddle, contempt proceedings and criminal proceedings can serve different purposes; one is to mark the court’s disapproval of its orders and procedures not being complied with and to ensure future compliance; the other is to punish for criminal misconduct.[44]In most instances disobedience of the court’s order will not involve the commission of a criminal offence. It is only where the offence is committed in breach of a court order (as with assault in breach of a non-molestation order) or where a false statement has been made in the course of litigation with the object of misleading the court that the contempt and the criminal offence arise together from the same conduct.[45]Where the contemnor is punished first by the civil court, the criminal court will take account of the punishment in sentencing the offender; see CPS v Tweddle (above, at paragraph 18 of the judgment). In the course of submissions, I asked Mr Day whether this application would ever have been made (at least against the 1st Respondent) if he had been convicted in the Crown Court and appropriately sentenced. Mr Day tried to convince me that the application would still have been made. Were that so, which I rather doubt, I do not think, though, that permission would have been granted. This is because the Respondent’s misconduct would already have been publicly exposed and appropriately punished. No sufficient purpose would have been demonstrated to justify further proceedings for contempt.[46]The point was made by Moses L.J. in the Smith case that contempt proceedings need to be brought “with urgency and with speed”. The same point was made by the court in the case of Green. The difficulty arises where the application for permission is made to the court only after the criminal proceedings have been concluded, and the case rests on the same evidence.[47]The answer does not lie, in my judgment, in pleas of autrefois acquit, but on broader considerations and the exercise of discretion whether or not permission should be granted.[48]In the recent case of R v J(JF) [2013] EWCA Crim 569, the Court of Appeal, presided over by the Lord Chief Justice, reviewed the law on double jeopardy and emphasised the narrow basis of the principle of autrefois acquit. The Lord Chief Justice cited with approval a passage from a case in the Supreme Court of the United States, Green v United States (1957) 355 US 184 at 187-8. Black J. said: - "The underlying idea, one that is deeply ingrained in at least the Anglo-American system of jurisprudence, is that the State with all its resources and power should not be allowed to make repeated attempts to convict an individual for an alleged offense, thereby subjecting him to embarrassment, expense and ordeal and compelling him to live in a continuing state of anxiety and insecurity as well as enhancing the possibility that even though innocent he may be found guilty."[49]This is, in my view, a principle that is relevant to the exercise of discretion in the context of a case such as this.

Conclusions

[50]In the case of the 1st Respondent, two important and competing considerations have to be weighed in the balance. The first consideration, relied on by the Applicant, is that the court should itself punish those who seek to rely on false statements in civil proceedings before it with a view to financial gain. The second, based on the principle of finality in litigation, is that the same allegations should not be litigated twice over.[51]Each case must be considered on its merits. I do not believe that the acquittal by the jury is an absolute bar to permission being granted for committal proceedings, but, in my view, permission is unlikely to be granted except, for example, where there is material evidence that was not before the jury, or where important new evidence has since come to light. This is not such a case.[52]Were permission to be granted, the judge hearing the committal application would be invited to reach a different conclusion to the jury on the same evidence and applying the same standard of proof. That is not an attractive proposition.[53]If it is inappropriate to grant permission to bring committal proceedings against the 1st Respondent, it must logically follow that it would not be appropriate to grant permission in his son’s case. This is because the same problem would arise; that the judge was being invited to reach a different conclusion to the jury as the son’s statement could not be found to be false without the same finding, by implication, being made in relation to the father.[54]For these reasons, and with reluctance, I refuse permission in the case of both Respondents.[55]The lesson in all of this is that emphasised before, that applications for permission to bring contempt proceedings need to be made without any delay. That applies particularly to cases before District and Circuit Judges, who hear the bulk of personal injury litigation, and where the trial judge does not have the power to grant permission to institute the proceedings.[56]This difference of approach may be something that the Civil Procedure Rule Committee might wish to consider in view of the importance of ensuring that those who make and rely on false statements to make bogus or inflated claims are punished speedily and effectively. The County Court is a creation of statute. Empowering judges who sit in the County Court to deal with contempt applications of this nature would require legislation, as it is not covered by Section 118 of the County Courts Act 1984, as amended. It might, in any event, not be felt appropriate having regard to the seriousness of the matter. It ought, though, to be possible to streamline the practice and procedure to ensure that applications arising out of County Court proceedings are referred to the High Court immediately and fast-tracked to ensure that a decision is made with the minimum of delay.

Cited in 1 later judgment