Gap Group North East Limited v Paul Palmer

JUDGE WALDEN-SMITH: This is the hearing of the application made by Gap Group North East Limited on 23 September 2024 to commit Paul Palmer. As this is a committal hearing, there should be a transcript of this judgment made at public expense.

This hearing had been listed to take place on 22 November 2024. Prior to that hearing there had previously been an agreement between the parties to adjourn the initial hearing. The hearing on 22 November 2024 was met by late application to adjourn on the part of the defendant. On that occasion, there already having been an adjournment of the initial hearing, the claimant did not agree to the adjournment as it was both willing and ready to proceed. The defendant, Mr Palmer,and his solicitor, Mr Turton, appeared remotely via a CVP link arranged by the court in order to ensure that Mr Palmer could take part in the proceedings. At that time, Mr Palmer said he was too ill to travel to court and his solicitor said that he had only recently been instructed and was committed at court and was therefore unable to attend in person. There was a failure on the part of the solicitor to attend in the afternoon by way of remote link. He has provided an affidavit to set out the reasons as to why he said that happened.

I am grateful in this matter to both Mr Crammond of counsel who also appeared before me on 22 November 2024, and Mr Scully of counsel who appears before me today for the first time. They have both provided helpful written and oral submissions.

The history of this matter is lengthy. The claim brought against Mr Palmer by the Gap Group came before Martin Spencer J. on 30 October through to 8 November 2023. In summary, Mr Palmer had been an employee of the Gap Group which is a company operating in the north-east of England in the sphere of waste collection, processing and resource recovery, with associated operations in haulage and logistics. In December 2021, another company had become interested in acquiring the claimant and issues arose in relation to the valuation of Mr Palmer’s shares in the claimant and the amount that he might be paid out on a sale. Figures were circulated based upon different valuations of the claimant company and Mr Palmer was aggrieved at the sums that had been set out which would be forthcoming to him.

It appears that over 23 and 24 January 2022, matters came to a head. Mr Palmer had made clear to Mr Moody, the managing director of the claimant Gap Group, the sums to which he believed he was entitled. When it was made clear to him that those sums would not be forthcoming, on 25 January 2022 Mr Palmer sent an email to 12 recipients, including competitors of the claimant, making allegations of bribery and disclosing confidential information about the Gap Group. That was, unsurprisingly, the end of the defendant's relationship with the claimant.

In the proceedings before Martin Spencer J, the trial started on 30 October. It ended on 8 November. Mr Palmer had given evidence between Thursday, 2 November and Monday, 6 November 2023, three days of being in the witness box. At the end of his evidence, his counsel took instructions. When the court reconvened, indication was given on behalf of Mr Palmer that he had decided to admit liability. As the judge says:

"It was my understanding (and that of Mr Crammond, counsel for the claimant) that this constituted an admission of all the allegations of breach of contract, breach of confidence and the associated causes of action in full. Although, at the start of final submissions on Wednesday 8 November, Ms Canneti [counsel for Mr Palmer] indicated that in fact the admissions made were selective in relation to the allegations of breach. After some discussion, she conceded, having taken further instructions, that the position was as had been understood the previous Monday, and that all the allegations set out in the particulars of claim were now admitted in full."

I refer to that as it is obviously an important part of the context of this matter and the way in which Mr Palmer has presented his position today.

At the conclusion of the reserved judgment being given on 1 December 2023, and a second judgment being given on 20 December 2023, a final order and injunction was made. There had been an interim injunction against Mr Palmer ordered by Master Sullivan on 14 March 2022. That order had been entered into by agreement and it was set out in the recitals that:

"Upon the defendant on day 6 of the trial admitting liability in full in respect of (1) all of the claimant's claims of breach of contract set out at paragraphs 86 to 87 inclusive of the particulars of claim; and (2) all of the claimant's claims for breach of confidence set out in paragraphs 88 to 89 inclusive of the particulars of claim; and upon the court handing down its judgment on 1 December 2023, which included an award of a permanent final injunction and damages with interest, and upon the court considering it appropriate to make a final permanent injunction order against the defendant (the terms of which are agreed by the defendant), the parties agreed to dispense with personal service, the defendant being represented at that time, and that and the terms of the injunction order are accepted by the defendant today."

The important parts of the final permanent injunction, and which are relevant for the purposes of today, are as follows:

"1.

The defendant must, by no later than 4 pm on 10 January 2024 deliver up to the claimant's solicitors any documents containing confidential information that are in his possession, custody or control, together with, in the case of documents in electronic form, any passwords needed to access them. For the avoidance of doubt, this includes but is not limited to electronic documents in their native format with the metadata. This also includes but is not limited to all documents containing confidential information held by the defendant's solicitors, Kleyman & Co Solicitors Ltd. The claimant shall then be entitled but not obliged to destroy them.

2.

The defendant must not make or retain copies of any confidential information.

3.

Without prejudice to paragraphs 1 and 2 above, the defendant shall use his best endeavours and take all reasonable steps to keep confidential information confidential.

4.

The defendant shall not use or disclose to any person, company or other organisation whatsoever any confidential information. This restriction does not apply to: (a) disclosure to the police, HM Revenue and Customs or another public authority pursuant to section 43.8.L of the Employment Rights Act 1996; (b) any use or disclosure authorised by the claimant in writing after the date of this order."

Paragraph 8 of the agreed order further provides that:

"The defendant shall, by 4 pm on 12 January 2024, swear an affidavit confirming his compliance with the provisions herein before the affidavit."

Pursuant to the provisions of paragraph 9:

"The defendant must also ... (b) detail within the affidavit to whom and when the defendant disposed of or sold his laptop as referred to by the defendant in the defendant's witness evidence; and (c) detail within the affidavit and deliver up to the claimant's solicitors with the affidavit in both PDF form and in their native format with the metadata his 60 emails and any attachments to those emails that the defendant sent to himself and the defendant shall specify when the defendant did so for each email as referred to by the defendant in the defendant's witness evidence. If the defendant is unable to deliver up the said emails, he should explain in the affidavit why he is unable to do so and in that event the claimant shall be at liberty to apply to Martin Spencer J for further order should the claimant consider that the defendant's explanation is inadequate or untenable."

Paragraph 10 provides:

"The defendant must not make allegations concerning or detrimental to any Group company to any third party save as permitted by paragraph 4 of this order."

As matters proceeded today before me, there was a great deal of agreement between the parties. The defendant accepts the factual account provided in the affidavit evidence of Mr Moody in support of this application. There was initially a contention raised by counsel on behalf of the defendant that paragraph 10, which I have just repeated for the purpose of this judgment, falls foul of both articles 10, that is free speech, and article 7. The issue, apparently, with respect to article 7 was raised on the basis that the penal provision has to be foreseeable. It seems to me difficult, if not untenable, for those arguments to be taken any further, not only as a matter of law but because the order itself was one to which the defendant had agreed to in 2023. Whilst he had sought to appeal aspects with respect to the costs of the orders made, there was no attempt to appeal with regards to the form of the injunction which had been agreed.

I tested counsel in respect of the basis in law upon which he was making the submissions he was with regard to the Human Rights Act and after a very short adjournment and an opportunity to take instructions from the defendant, those two points were not proceeded with. Having not received any submissions of any detail with regard to the basis upon which those arguments were being raised, it is my judgment that they are not arguments that could properly have been raised and they would not have found favour with the court. They were arguments that would be bound to fail in any event.

The defendant did not seek to challenge that evidence of Mr Moody, either on the basis of its facts or the legal consequences of it. The only evidence that the court has before it is that contained in the affidavit dated 23 September 2024 together with the other affidavits which have been put forward now on behalf of the defendant. The defendant has a right to silence, but he decided to put forward an affidavit dealing with matters that ought to have been dealt with in accordance with the order at an earlier stage.

With respect to the affidavit of Mr Moody, he sets out a number of matters giving rise to the allegations that have been summarised by counsel in this case. The schedule of allegations contains 11 separate matters. It is submitted on behalf of the defendant that in fact there really are only five allegations of contempt. For the reasons I will set out, whilst I appreciate that the allegations can be grouped into five sections, in my judgment they are each allegations of separate contempts.

The first matter that is raised in the affidavit is with respect to an email that was sent on 10 May 2024. Following receiving the interim charging order for damages, that email is alleged by Mr Moody to amount to a blackmail by stating that unless the claimant ceased and walked away, Mr Palmer would be putting a post on LinkedIn. The email of 10 May 2024 from Mr Palmer said:

"You've had your pound of flesh. You need to cease now and walk away or at 9.00 Monday morning my first post will go live on LinkedIn with an explanation of everything that occurred and starting with your falsifying your damages claim to enable you to take me to the High Court. You know when I tell you I am going to do something, I do exactly that, which I will if I have not received confirmation that we now both walk away and that will be an end to it."

In paragraph 15 of the affidavit, Mr Moody sets out that the threat was followed by Mr Palmer posting an article on LinkedIn on 13 May 2024. That post named the claimant, made allegations concerning or detrimental to the claimant, namely that the claimant had grossly inflated or fabricated their damages claim to a value of approximately £496,000 to enable their claim to be made in the High Court and that, at the conclusion of the case, the claimant had immediately withdrawn £465,000 of their claim.

That is an allegation that there was a breach of paragraph 10 of the order made by Martin Spencer. I am satisfied to the criminal standard, on the basis of the unchallenged evidence of Mr Moody, that Mr Palmer is in breach of paragraph 10 of the order and that he is consequently in contempt of court with respect to that allegation.

There is a further allegation that, on 9 September 2024, it came to the attention of the claimant that Mr Palmer had posted an article on his LinkedIn profile. The title of that article was "Bribery and Corruption" with the subtitle "GAP Group: My Experience and the Legal Challenges 09 September 2024". Within that article, there are a number of allegations about Gap Group, those allegations being iterations of the allegations that he had made during the trial, there being a finding by Martin Spencer J that Mr Palmer's allegations of bribery in the form of cash payments made between Mr Moody and Mr Tomlinson were completely unfounded.

That post made on 9 September, including the title "Bribery and Corruption", the damages claim that the defendant said were falsified by the claimant, the allegation that there were shares that were transferred into Mr Moody's name, that Mr Tomlinson was given shares as a reward while he was employed by Valpak, that the claimant had a competitive advantage due to the relationship between Mr Moody and Mr Tomlinson, that Mr Tomlinson was employed by the claimant to allow him to give evidence at trial and that the claimant offered financial advantages in return for improper conduct, are all allegations made by Mr Palmer which, in my judgment, put him beyond reasonable doubt and to the criminal standard in breach of the injunction contained within paragraph 10 of the order. Mr Palmer is consequently in contempt of court with respect to that LinkedIn post of 9 September 2024.

The posting on 9 September I find, also beyond reasonable doubt and to the criminal standard, to be a breach of paragraph 3 of the injunction as it exhibited extracts of documents containing confidential information. Mr Palmer therefore failed to use his best endeavours and to take all reasonable steps to keep confidential any confidential information. The post of 9 September was further in breach of paragraph 4 of the order, as it used and disclosed confidential information. The post also put Mr Palmer in breach of paragraph 1 of the order as he had exhibited extracts of documents containing confidential information within the article, which he purported to have delivered up on 22 November 2023. Finally, that post of 9 September put Mr Palmer in breach of paragraph 2 of the injunction granted by Martin Spencer J in that he had exhibited extracts of documents containing confidential information within the article which evidences that he had made or retained copies of confidential information.

The various breaches that occurred by reason of Mr Palmer making that post on LinkedIn of 9 September 2024, to which I have referred, are all breaches that I am satisfied, to the criminal standard, put him in breach of the injunction order. That means that there are five further separate breaches of the order and a total, so far, of six incidents of contempt.

The next issue which arose in September 2024 was when, on 11 September, there was an email from the claimant's solicitors to Mr Palmer requesting him to remove the 9 September article on the basis that it was breaching the terms of the order. On that 11 September Mr Palmer responded by email saying that Martin Spencer J did not realise that the email which Mr Palmer exhibited in his email concealed a crime. He reiterated his position that the claimant was guilty of bribery and corruption and that they were further guilty of conspiring to defraud HMRC. Mr Palmer in that email confirmed that he would be seeking advice on how to bring his allegation to the authorities. The 9 September article was not removed in response to the solicitor's email of 11 September and a response was then sent by the solicitors for the claimant at 18:01 confirming that the post remained live.

True to his word, on 12 September, Mr Palmer made a further post on his LinkedIn profile, adding to the original article of 9 September stating that he had been contacted by the claimant's lawyers. In that post, he continued to make allegations of bribery and corruption and stated that the claimant's lawyers were also guilty. Those allegations again were in breach of paragraph 10 and I am satisfied to the criminal standard that amounts to a further instance of contempt.

Finally, with respect to the articles that were posted, on 15 September, there was a further article containing allegations by Mr Palmer that there had been fabrication of the damages claim to a level which would allow the claim to be heard in the High Court and that it was immediately withdrawn when challenged. I am satisfied to the criminal standard that Mr Palmer has again breached the order made by Martin Spencer J, and that the post of 15 September 2024 is a contempt.

There is consequently a total of eight contempts. The further breaches that are alleged, 9, 10 and 11, which are allegations 1, 2 and 3 on the schedule of allegations, I am satisfied are all proven to the criminal standard of beyond reasonable doubt. They all relate to the failure to provide the affidavit that ought to have been provided by 24 January 2024. The defendant is in breach by reason of his failures to comply with paragraph 8, the obligation to provide the affidavit; paragraph 9(b), the obligation to detail within the affidavit to whom or when he disposed of or sold his laptop; and paragraph 9(c), the delivery up of the 60 emails that he sent to himself, specifying when he did so with respect to each email or in the alternative why he was unable to deliver up the 60 emails. As I have already indicated, the defendant does not seek to challenge the evidence of Mr Moody with regard to any of these allegations. I am satisfied to the criminal standard that all 11 acts of contempt that are set out in the schedule, albeit that I have dealt with them in a slightly different order, are made out. It is my obligation to deal with Mr Palmer on the basis of those 11 contempts that have been established to the criminal standard..

It is correct that, to a certain extent, Mr Palmer has sought to and has purged his contempt. The article that was posted up on 13 May 2024 has been brought down; it is not entirely clear to me as to when that was taken down from LinkedIn, but I am satisfied from what I have been informed today that it is no longer live and posted onto LinkedIn. With respect to the three further posts of 9 September, 12 September and 15 September 2024, I understand those posts were removed at or about the time proceedings were issued on 23 September 2024.

With respect to the failure to comply with the obligation to provide an affidavit, an affidavit was provided late yesterday afternoon; that is of course after the first hearing took place in this matter on 22 November. That affidavit, by reason of the fact that there is an affidavit, complies with paragraph 8, albeit some 13 months late, and with paragraph 9(b) of the order, in that he has provided details of how the laptop was sold through eBay to an individual. Paragraph 9(c), which raises the 60 emails which Mr Palmer sent to himself, has not yet been dealt with, although I am told that it is something that he can deal with.

I will make it an order of this court that he complies by providing an affidavit as required in the order of 2024 that he is to deliver up the 60 emails which he sent to himself; that he shall specify when he sent each email to himself; and, if unable to deliver up each of those emails, he must explain in the email why he is unable to do so with the claimant having liberty to apply for further order should it be considered by the claimant that his explanation is inadequate or untenable. I order that is complied with by the defendant by no later than 4 pm on Friday, 14 February. I appreciate that he indicated through counsel that he could do it within the week. I see no justification for him needing a full week to deal with something he ought to have dealt with in January 2024. This should have been dealt with in the affidavit he provided late yesterday.

I have been referred to some very helpful authorities with respect to the sentencing powers of the court. CPR 81.9 provides:

"(1)

If the court finds the defendant in contempt of court, the court may impose a period of imprisonment (an order of committal), a fine, confiscation of assets or other punishment permitted under the law.
(2) Execution of an order of committal requires issue of a warrant of committal. An order of committal and a warrant of committal have immediate effect unless and to the extent that the court decides to suspend execution of the order or warrant."

Section 14(1) of the Contempt of Court Act 1981 provides that:

"In any case where a court has power to commit a person to prison for contempt of court and (apart from this provision) no limitation applies to the period of committal, the committal shall (without prejudice to the power of the court to order his earlier discharge) be for a fixed term, and that term shall not on any occasion exceed two years in the case of committal by a superior court, or one month in the case of committal by an inferior court."

In the judgment of Edwin Johnson J in Tonstate Group Limited v Wojakovsky [2023] EWHC 3447, he makes reference to, in the first place, Attorney General v Crosland [2021] UKSC 15 where reference is made to the general guidance as to the approach to penalty provided by Liverpool Victoria Insurance Ltd v Khan [2019] EWCA (Civ) 392. That case was a case of criminal contempt consisting in the making of four statements of truth by expert witnesses. It was suggested in that case that:

"1.

The court should adopt an approach analogous to that in criminal cases where the Sentencing Council's Guidelines require the court to assess the seriousness of the conduct by reference to the offender's culpability and the harm caused, intended or likely to be caused.

"2.

In the light of its determination of seriousness, [the] court must first consider whether a fine would be a sufficient penalty.

"3.

If the contempt is so serious that only a custodial penalty will suffice, the court must impose the shortest period of imprisonment which properly reflects the seriousness of the contempt.

"4.

Due weight should be given to matters of mitigation, such as genuine remorse, previous positive character and similar matters.

"5.

Due weight should also be given to the impact of committal on persons other than the contemnor, such as children [or] vulnerable adults in their care.

"6.

There should be a reduction for an early admission of the contempt to be calculated consistently with the approach set out in the Sentencing Council’s Guidelines on reduction in sentence for a guilty plea.

"7.

Once the appropriate term has been arrived at, consideration should be given to suspending the term of imprisonment. Usually, the court will already have taken into account mitigating factors when setting the appropriate term, such that there is no powerful factor making [a] suspension appropriate, but a serious effect on others, such as children or vulnerable adults in the contemnor’s care may justify suspension."

Reference in the decision of Edwin Johnson J is also made to the decision of Leech J in Solicitors Regulation Authority v Khan, which made the following points:

"1.

There are no formal sentencing guidelines for sentence/sanction in committal proceedings.

"2.

Sentences / sanctions are fact specific.

"3.

The court should bear in mind the desirability of keeping offenders, and in particular first time offenders, out of prison.

"[...] 6. Committal to prison may serve two distinct purposes: (a) punishment of past contempt and (b) securing compliance.

"7.

It is good practice for the court sentence to include elements of both purposes (punishment and compliance) to make clear what period of committal is regarded as appropriate for punishment alone ...

"8.

Committal may be suspended."

It is important in this time in light of the overcrowding in prison to bear in mind the judgment of Edis LJ in R v Ali [2023] EWCA (Crim) 232 where, having made reference to his earlier decision in R v Manning [2020] EWCA (Crim) 592, he said as follows:

"We have concluded that there were strong arguments for suspending the sentence in this exceptional case, for the reasons we have given. Any doubt we may have had on that issue is resolved by this additional factor which we do take into account in dealing with this appeal. This factor will principally apply to shorter sentences because a significant proportion of such sentences is likely to be served during the time when the prison population is very high. It will only apply to sentences passed during this time. We have identified above the starting point for the relevance of this consideration for sentencing, which we take to be the implementation of Operation Safeguard 14 days after 6 February 2023. Sentencing courts will now have an awareness of the impact of the current prison population levels from the material quoted in this judgment and can properly rely on that. It will be a matter for government to communicate to the courts when prison conditions have returned to a more normal state."

It is right to note that that case was considering the situation in the circumstances of Operation Safeguard in February 2023. The prison population has not improved in numbers since then and indeed there have been early release schemes in order to lessen the prison population. Therefore, in light of Ali, it is plainly a continuing relevant factor for a court to determine on short sentences whether, regardless of other reasons as to why sentence might or should properly be suspended, whether prison population is a reason for suspension.

In addition to those cases which deal with the overarching principles with respect to sentencing, I have also been referred to a number of cases and the sentences given there. All of those cases are relevant in the sense that they give some guidance as to where sentences fall for contempt but they are, as was noted by Leech J, very much cases determined on their own facts, as this must be, and therefore of relative limited value.

I will consider this case firstly on the basis of seriousness, looking at culpability and harm. In my judgment, this is moderately high culpability. These are serious and repeated breaches. They are breaches made in the face of requests to stop, and indeed the requests to stop appear to motivate Mr Palmer to carry on and commit further breaches. There have been some attempts to purge the contempt: mainly, those have been with respect to the taking down of the posts, but that has only been done very late and only with respect to the September posts in the face of contempt proceedings being commenced.

With respect to the provision of the affidavit, as I have indicated that has only been provided approximately13 months after the affidavit ought to have been provided and some months after this matter was initially due to be heard by this court. It does not give much credit to Mr Palmer and in my judgment he has wilfully and flagrantly breached the injunction in many ways over a persistent period.

With respect to harm, the evidence before the court is that it does not provide evidence of any specific incidents of harm, such as loss of trade or direct evidence of loss of reputation. The harm here is towards the higher level of low harm. The reason I say that is that it is quite plain from the comments that have been made by Mr Palmer that these posts are reputationally harmful. That was his motivation for posting has he has.

Taking into account the high level of culpability and the low level of harm, this would, if there were sentencing guidelines, fall within the moderate bracket. In my judgment, that means that this case does not fall within one where a fine would be an appropriate sanction. It quite plainly crosses the custody threshold and that is clear from the manner in which Mr Palmer has persisted in the way that he has.

However, I do not consider that it is a matter that should dealt with by way of an immediate custodial sentence and I find that partly because of Mr Palmer’s own personal mitigation and his particular poor health. He was unable to attend on the last occasion due to his ill health. A separate application for contempt has not been made because he failed to attend that hearing. He said that this was because he was ill and that he was unable to travel more than 40 yards. He was able, however, to travel to Mauritius within weeks of that hearing. While, as I say, that does not form a separate application for contempt, it certainly gives some context to the way in which Mr Palmer treats an order of this court and while I do not formally find him in contempt, it could be said to be contemptuous.

The other matter that is in favour of Mr Palmer is that this is his first offence, albeit that there are a number of breaches. It is to be hoped that, now that he has the benefit of full legal advice, he will understand that he cannot continue to behave in the way that he has done and that, however strong his feelings may be, he has to act maturely and, in the interests of his own health, sensibly and to desist from the behaviour that he has previously exhibited. There is some hope that his behaviour going forward will improve.

I have considered the length of sentence that would be appropriate and I have taken into account the degree to which he has now purged his guilt. I will impose a custodial sentence of 14 weeks. That would have been 16 weeks had it not been for the recent steps that he has taken with respect to the provision of the affidavit. Despite the f short period of time of custody that I have imposed, the period of suspension (and I have already indicated in the submissions that this is what I would be doing) will be lengthy. The reason for that is that I consider that Mr Palmer needs time to be held to a very high standard of compliance with the order that was made by Martin Spencer J and that over that period of time, knowing that if he fails to comply that he will go to prison will be sufficient for him to see some sense and to calm down with regard to these matters.

Consequently, that period of custody of 14 weeks I will suspend for a period of 18 months. That means that if, during the period of suspension, Mr Palmer breaches the order again, then he will be brought back to court and not only considered for further contempt proceedings, but also to have that suspended sentence activated. He must understand that a sentence of imprisonment, albeit suspended, is exactly that: it is a sentence of imprisonment, suspended only on the basis of his good behaviour.

Attached to the suspension will be two conditions. The first is that the suspension is conditional upon his compliance with the court order during the period of 18 months. If there is any breach of the court order in the actions by Mr Palmer during that period of suspension, the term of 14 weeks' imprisonment will be immediately triggered. If he complies with the court order, then at the end of that period of suspension, it will come to an end. The other condition which applies is the other court order that I am making today, namely that he provides the evidence with respect to the 60 emails in compliance with 9(c) of the original order by no later than 4 pm on Friday 14th. That condition, attached to the suspended sentence for imprisonment, will make him appreciate the importance of complying with that order, albeit 13 months after it was originally imposed.

The order I make is therefore: 14 weeks suspended for 18 months.