Masri v Consolidated Contractors International Company SAL & Ors

This judgment is concerned with the single issue of whether Consolidated Contractors International Company SAL and Consolidated Contractors (Oil and Gas) Company SAL (“the Companies”) require permission to appeal to this Court against an Order made in the Commercial Court whereby Christopher Clarke J found them to be in contempt of court. The judgment which gave rise to the order bears the neutral citation [2011] EWHC 1024 (Comm). No sanction has yet been imposed following the findings of contempt. That aspect of the case stands adjourned. However, in a subsequent judgment, Christopher Clarke J granted the Companies permission to appeal in relation to the findings of contempt. That permission was granted subject to onerous conditions. A number of issues then arose. One was whether the Companies could appeal against the conditions. We are not concerned with that. I simply note that it gives rise to jurisdictional difficulties: see R (ota Medical Justice) v Secretary of State for the Home Department [2011] EWCA Civ 269. The point with which we are concerned is the more fundamental one of whether the Companies can appeal the findings of contempt as of right, without the need for the permission of Christopher Clarke J or of this Court. This point was alluded to in submissions in the Commercial Court and the Companies reserved their position in relation to it. It was not considered in the judgment.

As this issue is one of pure law, it is not necessary to detail the factual background to the protracted litigation. It is sufficient to record that Mr Masri has obtained judgment against the Companies for about $75million; that the judgment remains unsatisfied; that in enforcement proceedings a number of orders have been made against the Companies; and that the Companies have not complied with those orders. It is that non-compliance that gave rise to the contempt proceedings and the findings that the Companies wish to appeal. The orders in question related to such matters as affidavits of assets and freezing and receivership orders. Mr Masri is also proceeding against Mr Wael Khoury but the contempt proceedings in relation to him stand adjourned. He is alleged to be a de facto or shadow director of the Companies. The application notice that initiated the contempt proceedings sought a declaration that the Companies are in contempt, an order that the Companies be fined for committing acts of contempt and an order that Mr Khoury be committed for the acts of contempt perpetrated by the Companies.

It is common ground that an individual who is committed to prison for contempt of court, whether criminal or civil, may appeal as of right. By section 13(1) of the Administration of Justice Act 1960:

“Subject to the provisions of this section, an appeal shall lie under this section from any order or decision of a court in the exercise of jurisdiction to punish for contempt of court (including criminal contempt) … ”

In a civil case, the appeal lies from the High Court to this Court. In a criminal case, it lies from the Crown Court to the Court of Appeal Criminal Division: section 13(2), which also provides for routes of appeal when the original order is made in an inferior court. Since 1960, civil and criminal cases have become subject to different statutory provisions. Although in his skeleton argument Mr Michael Brindle QC, on behalf of the Companies, sought to support his submissions with material from the criminal jurisdiction, before us he acknowledged the differences in the statutory regimes in the two jurisdictions and he confined his submissions to the civil provisions and the authorities to which they have given rise.

At the time of the 1960 Act, there was no general requirement for permission to appeal to the Court of Appeal Civil Division. The innovation came in the Access to Justice Act 1999, section 54 which provided:

“(1)

Rules of court may provide that any right of appeal to –

…

(c)

the Court of Appeal,

may be exercised only with permission

(2)

This section does not apply to a right of appeal in a criminal cause or matter.”

Pursuant to that provision, CPR52.3(1)(a) provides:

“An appellant or respondent requires permission to appeal –

(a)

where the appeal is from a decision of a judge in a county court or the High Court, except where the appeal is against –

(i)

a committal order;

(ii)

a refusal to grant habeas corpus; or

(iii)

a secure accommodation order made under section 25 of the Children Act 1989; or

(b)

as provided by Practice Direction 52.

(Other enactments may provide that permission is required for particular appeals).”

Before this Court, Mr Brindle made it clear that he was contending for an expansive construction of “committal order” in CPR52.3(1)(a)(i) – neither more nor less.

The essential submission on behalf of the Companies is that “committal order”, properly construed, means any order in relation to a contemnor which is part of the process leading to punishment for contempt. It matters not that a corporate contemnor cannot be committed to prison. It has, and is intended to have, the same protection as that enjoyed by individuals whose liberty is at stake. On any view this is a bold submission because the natural meaning of the words “committal order” is an order whereby the person to whom it relates is committed and a corporation cannot be committed.

Mr Brindle’s submissions can be grouped under three headings. First, he sought to derive support from provisions in the Rules of the Supreme Court (RSC) which have survived the introduction of the CPR. Secondly, he endeavoured to plot an advantageous route through the authorities, the preponderance of which, on the face of it, does not support the construction for which he contended. Thirdly, he submitted that the natural meaning of the words, as I have described it, gives rise to anomalies which a more expansive construction would avoid.

The RSC point

RSC Order 52 is headed “Committal”. 052.r1(1) provides that the power of the High Court or Court of Appeal to punish for contempt of court “may be exercised by an order of committal”. It is followed by a number of procedural provisions. 052.r9, which is headed “Saving for other powers”, then provides:

“Nothing in the foregoing provisions of this order shall be taken as affecting the power of the court to make an order requiring a person guilty of contempt of court, or a person punishable by virtue of an enactment in like manner as if he had been guilty of contempt of the High Court, to pay a fine or to give security for his good behaviour, and those provisions, so far as applicable, and with the necessary modifications, shall apply in relation to an application for such an order as they apply in relation to an order of committal.”

As Christopher Clarke J said in his judgment (at paragraph 350) this provision recognises the jurisdiction of the High Court to impose a fine and applies the provisions of RSC 052 to such an application. It is in play in the present case in relation to the application against the Companies. The point sought to be advanced on their behalf is that it demonstrates that the word “committal” is sometimes used in the Rules in a broader sense than “committal to prison”, and has an extended meaning which embraces the imposition of a fine on a contemnor. It is said that this submission receives some support from the judgment of Neuberger J in Bird v Hodkinson [2000] CP Rep 21, where he said:

“… the applicant decided not to proceed with the motion to commit in the sense of seeking any punitive relief in the form of committal or fine.”

However, it seems to me that that was no more than a passing observation in an ex tempore judgment which was solely concerned with costs in relation to an application which was no longer pursued. It was made before the CPR came into force and, in my view, does not assist in the construction of CPR52.3(1)(a). I am satisfied that RSC 052.r9 does not represent an expansive meaning of “committal”. It merely acknowledges, at a convenient place, the continuing availability of financial penalties and prescribes the requisite procedure.

The authorities

Mr Brindle frankly acknowledged that the preponderance of the post-CPR authorities presents difficulties for him but he sought to circumnavigate those difficulties.

In Tanfern Limited v Cameron-Macdonald [2000] 1 WLR 1311, Brooke LJ took the opportunity to give general guidance on the recently promulgated CPR52.3. When addressing the exceptions to the requirement of permission to appeal, he said (at paragraph 23):

“Permission to appeal will not be required where the appeal is against a committal order, a refusal of habeas corpus or a secure accommodation order made under section 25 of the Children Act 1989, CPR52.3(1)(a). In these cases, where the liberty of the subject is in issue, appeal lies as of right.”

Tanfern itself was not a contempt case.

The meaning of “committal order” in CPR52.3(1)(a) was at the heart of Government of Sierra Leone v Davenport [2002] EWCA Civ 230. The appellant Government had been the applicant in committal proceedings in the Chancery Division where the judge had made no order on the application save as to costs. The Government maintained that it did not need permission to appeal. Jonathan Parker LJ accepted a submission on behalf of the respondent that the appeal regime set out in section 13 of the Administration of Justice Act 1960 had been radically changed by the introduction of the CPR pursuant to section 54 of the Access to Justice Act 1999. He said (at paragraph 8):

“The natural meaning of the expression ‘committal order’ is an order which commits a party to prison. That that is its true meaning in the context of CPR52.3(1)(a) is in my judgment confirmed when one looks at the other two exceptions to the requirement of permission to appeal, namely a refusal to grant habeas corpus and a secure accommodation order, both such orders being ones which affect personal liberty. [This] order is manifestly not a committal order in that that sense of the expression. On the contrary, it expressly records that no order is made on the claimant’s application. Nor can I see any basis for saying that s13 of the 1960 Act somehow limits the effect of s54 of the 1999 Act on the operation of r52.3 of the Civil Procedure Rules. It follows, in my judgment, that permission to appeal is required.”

Laws LJ expressed his “entire agreement”. He also expressed the provisional view (at paragraph 34) that, even where a contemnor has been committed to prison, only he and not the applicant has an appeal as of right.

Tanfern and Government of Sierra Leone were considered by this Court in Barnet London Borough Council v Hurst [2002] EWCA Civ 1009, where Brooke LJ (with whom Dyson and Simon Brown LJ agreed) said (at paragraph 26):

“It is therefore clear that for the purposes of the CPR appellate regime a distinction has to be drawn between an order by which a party is committed to prison (for which permission to appeal is not required) and any other order or decision made by a court in the exercise of jurisdiction to punish for contempt. Such orders come within the ambit of section 13 of the 1960 Act, whether they consist of ‘no order save as to costs’, as in the Davenport case, or an order for the adjournment of the whole or part of the application, as in the present case.”

Brooke LJ later acknowledged (at paragraph 31) that “it is not possible to legislate in advance of every type of situation” but hoped that “the general principles will now be clear”.

In Wilkinson v Lord Chancellor’s Department [2003] EWCA Civ 95, the order in question was a suspended committal order. Hale LJ (giving the judgment of the Court, including the Lord Chief Justice and Latham LJ) said (at paragraph 55):

“There is no doubt that a suspended committal order is an order which commits a person to prison.”

That much is plain and obvious in the analogous situation of a suspended sentence of imprisonment following conviction in a criminal court. However, the judgment is significant for its consideration of the origin of CPR52.3(1). Hale LJ said:

“On the other hand, [a suspended committal order] does not result in the immediate imprisonment of the person concerned. A further order of the court is required. Unlike an immediate committal order, the refusal of habeas corpus, or a secure accommodation order, the person concerned is not immediately deprived of his liberty. It could be said, therefore, that the policy of the exception does not require an automatic right of appeal without the delay involved in having first to seek the permission either of the trial judge or the appeal judge. The origin of CPR52.3(1) lies in the Report of Sir Jeffrey Bowman, Review of the Court of Appeal (Civil Division) (September 1997). This recommended that the requirement of leave to appeal be extended to all appeals apart from those which ‘fundamentally affect the legal position of minors or the liberty of the subject’ (para 23)”

In fact, the general recommendation about minors was later dropped.

Returning to suspended committal orders, Hale LJ said (at paragraph 57):

“Although a suspended committal order does not immediately deprive the contemnor of his liberty …, it hangs a sword of Damocles over his head which puts his liberty at much greater risk than did the order which he has been found to have breached. To the extent that there is any doubt about the meaning of the rules, it should be resolved in favour of the citizen whose liberty is thus put in jeopardy. In our judgment, therefore, a suspended committal order is a committal order for the purpose of CPR52.3(1)(a) and may be appealed without permission.”

Kynaston v Carroll [2004] EWCA Civ 1434 concerned a proposed appeal by an applicant who sought to challenge the suspension of the committal order which had been made on her application. The applicant appeared in person and the respondent was neither present nor represented. Neuberger LJ expressed hesitation about embarking upon detailed analysis without the benefit of submissions from counsel but he clearly took the view (at paragraph 19) that the applicant needed permission to appeal (which was refused) on the basis that an appeal as of right is only available to the committed contemnor. He (and Clarke LJ, at paragraph 37) agreed with the view expressed by Laws LJ in Government of Sierra Leone.

Pausing there, it is clear that, whereas there is no authority which has held in terms that a corporate contemnor requires permission to appeal findings of contempt, the thrust of the above authorities is all in the same direction and presents a serious obstacle to Mr Brindle’s submissions. Is there anything pulling in the opposite direction? Mr Brindle’s supposed manna from heaven is to be found in the most recent case: S-C (Children) [2010] EWCA Civ 21.

In S-C the trial judge had found the children’s mother to be in contempt and had imposed a £100 fine by way of sanction. The mother successfully appealed the order. The father was not present or represented in the Court of Appeal. Wall LJ, giving the judgment of the Court (of which Thorpe LJ was the other member) consistently referred to the appealed order as “a committal order”. Having concluded that “the judge’s committal order cannot stand and must be set aside”, he added (at paragraph 14):

“Although not directly relevant to our conclusion, we do not understand why the appellant required permission to appeal. This is a committal order and permission is not required, see CPR 52.3(1)(a)(i).”

On behalf of Mr Masri, Mr Gavin Kealey QC submitted that this statement was obiter, per incuriam and wrong. It was plainly obiter and acknowledged by the Court to be “not directly relevant to our conclusion”. It was also made without the benefit of citation of authority or adversarial argument. Whether or not it is properly classified as per incuriam, I do not consider that it is binding upon us. With all due respect, I believe it to be wrong.

In my judgment, the earlier authorities all point in a consistent direction. They demonstrate that the purpose behind the wording of CPR52.3(1)(a)(i) was related to personal liberty. That is apparent not only from the Bowman Report but also from the drafting which specifies three exceptions to the requirement for permission, the singular theme of which is interference with, or deprivation of, liberty. I appreciate that a financial penalty may impact harshly on a contemnor but the considerations which underlie the impact of a deprivation of liberty are absent. Apart from S-C, the post-CPR authorities all point away from an expansive construction of “committal order”. Notwithstanding Mr Brindle’s attempts to circumnavigate them, I consider that they are fatal to his case.

The anomaly

It often happens that a hard-edged rule produces anomalies but that does not necessarily or often compel a strained interpretation of the rule. Here it was submitted on behalf of the Companies that the natural meaning of “committal order” is productive of anomalies as between the Companies and Mr Khoury such that they call for a different construction. I make it clear that it is not suggested that the requirement of permission to appeal in relation to one category of contemnor co-existing with an exemption from the requirement of permission in relation to another is anomalous. Plainly it is not. On the face of it, there is no reason in logic or policy why the rule applicable to individuals whose loss of liberty is at stake, must apply the same procedural protection to a corporation which is only susceptible to financial sanctions. Mr Brindle’s invocation of anomaly is more subtle than that. It is rooted in the unusual circumstances of the history of these contempt proceedings.

Mr Khoury has secured an order that the contempt proceedings seeking his committal to prison be adjourned but on the basis that, when they are heard, he will be bound by the findings of fact in Christopher Clarke J’s judgment. This, submitted Mr Brindle, could produce a situation in which the Companies are unable to appeal those findings of fact, whether as a result of an inability to satisfy the imposed conditions or otherwise. Mr Khoury would then be unfairly handicapped in his defence of the application to commit him. He would be stuck with findings of fact. I am wholly unimpressed by this submission. It is based on the unusual circumstances of this case which Mr Khoury was complicit in procuring – no doubt for what seemed to be good reasons at the time. Nor am I convinced that, upon a hearing of the application to commit him and against this historical background, the judge will be unable to revisit the order that Mr Khoury be bound by the existing findings of fact. In any event, I reject the suggestion that this case-specific conundrum should be permitted to compel a strained construction of the clear wording of CPR52.3(1).

For all these reasons, I am satisfied that the Companies do not have an unqualified right of appeal to this Court. They can only appeal with permission. The Companies have failed to satisfy the stringent conditions that were attached to the permission granted by Christopher Clarke J within the deadline for compliance which he gave. As such, they will have to obtain unconditional or less conditional permission from this Court. Arrangements have been made for the consideration of such an application. Although the Companies have formulated an application for permission to appeal against the conditions imposed by Christopher Clarke J, that would face the obstacle created by R (ota Medical Justice) v Secretary of State for the Home Department [2011] EWCA Civ 269, whereby there can be no appeal against conditions attached to grant of permission. The aggrieved party must either accept them or treat his conditional permission as a refusal and pursue a fresh application for permission in this Court.

I agree.

I also agree.