Watson v Sadiq

MR JUSTICE HICKINBOTTOM:

On 1 February 2010, the Claimant Julian Watson issued proceedings in the Watford County Court against the Defendant brothers, Tariq and Khalid Sadiq, claiming monies alleged to be owed by them to him in respect of the sale and purchase of an interest in a property known as 25 Goldcroft, Bennetts End, Hemel Hempstead, Hertfordshire, which had, since 31 August 2007, been jointly owned by the Claimant and the First and/or Second Defendant. In the claim, it was alleged that the Defendants had agreed to buy out the Claimant’s interest; and the Claimant claimed various sums which, he said, were due to him as compensation when that deal went wrong.

The trial of the action was listed before Mr Recorder Bueno QC sitting at Luton County Court on 26 March 2012. On the fourth day of the trial, 29 March 2012, the action was compromised and formally concluded by a consent order in Tomlin form. Under the agreed terms, the First Defendant was required to pay the Claimant £67,000-odd and the Defendants were ordered to pay 60 per cent of the Claimant's costs. The substantive sum was paid. However, the Claimant did not take the appropriate action to get the costs assessed, and it is now too late to do so.

Despite the compromise being set out in a consent order, the Claimant sought to appeal. The appeal proceedings did not run an entirely even course. The Defendants made various applications to the Court of Appeal which failed, and for which they were ordered to pay the Claimant's costs; although, as with the costs of the substantive action, the Claimant in the event took no timely action to have those costs assessed and it is, again, now too late for him to do so. The Claimant’s application for permission to appeal was granted by the Court of Appeal; but the appeal itself was dismissed on 16 July 2013. It was ordered that the Claimant should pay the Defendants' costs of the appeal to be assessed, if not agreed; and he should pay them £5,000 on account of those costs by 6 August 2013. Undaunted, the Claimant sought to appeal to the Supreme Court; but permission was refused by the Supreme Court on 4 February 2014. Under that order, the Claimant was required to pay the Defendants' costs of the appeal to the Supreme Court. On any view, the Supreme Court order brought the substantive proceedings to an end.

The Court of Appeal costs were, in due course, assessed by the Senior Courts Costs Office at £47,448.90; and the Defendants have the benefit of a costs certificate in that sum, plus £140 fixed costs. That certificate is, of course, the equivalent of a judgment which can be enforced as such.

In addition, the Defendants have the benefit of a number of other costs orders, namely:

In addition, as I have indicated, the Claimant is responsible for the Defendants' costs of the Supreme Court application, but those have not yet been assessed. They are claimed in the sum of £1,137.75.

Excluding those unassessed costs, the Claimant thus now owes the Defendants costs plus interest in the sum of £62,163.07. The Defendants, by virtue of their previous dealings with the Claimant, were and are convinced that he has sufficient assets to satisfy the outstanding costs orders.

In respect of the costs certificate for the Court of Appeal costs, the Defendants applied to the Watford County Court, under CPR rule 71.2, for an order requiring the Claimant, as a judgment debtor, to provide information about his means. In accordance with paragraph 1.2(6) and (7) of CPR PD 71  - the practice direction accompanying CPR Part 71 – the application set out specific documents sought and, in particular, questions the Defendants wished the Claimant to answer. Additional documents and questions were added later.

At a hearing on 11 August 2014, District Judge Chesterfield ordered the Claimant to attend an oral examination on the next available date, with a time estimate of four hours; and the order identified the written questions to be put to the Claimant initially, and the documents he was required to produce at the oral examination. The order contained the rubric required by CPR rule 71.2(7) to the effect that, if the Claimant did not comply with the order, he might be held to be in contempt of court and imprisoned or fined or his assets seized.

The oral examination was set down for hearing on 1 May 2015 at Watford County Court. The hearing was assigned to Deputy District Judge Shah. A transcript of the proceedings is available.

At that hearing, the First Defendant Tariq Sadiq appeared, and applied to make two further individuals parties to the oral examination, namely the Claimant's son (Lawrence Watson) and a Kay Fraser. Lawrence Watson, in fact, accompanied the Claimant to the hearing, and he sat at the back of the court. That application appears to have been made during the course of the hearing. Insofar as it was informal and thus arguably dealt with on the court’s own motion, the Defendants certainly encouraged the Deputy District Judge to make such an order. When the judge was considering it, he asked the Defendant for details of his son, such as his address and his age. The Claimant refused to tell him, saying that, if the judge wished to ask Lawrence Watson about his address and age, he (the judge) should simply ask him. The judge did so; but Lawrence Watson did not give the information sought, simply saying that he was "not a part of this" and he was just there to "sit in and view this". The judge then asked him (Lawrence Watson) to step outside the court, which he apparently agreed to do so. However, the Claimant objected, saying that his son was there as his carer, and he did not think that the judge had any authority to send him from the court. He said that, if the judge did exclude Lawrence Watson, then the Claimant himself would leave because, he said, he was not prepared to be there without his carer. Laurence Watson then left the court, and the Claimant immediately followed. The judge indicated at once that he considered that this was a contempt of court.

Following further discussion with the Defendant, the judge ordered as follows:

At the 11 August 2014 hearing, before he left, the Claimant gave his address as 55 Baccara Grove. That his address was 55 Baccara Grove was set out in his application dated 19 May 2014, and repeated in court at the August 2014 hearing. The Defendants believe that address to be false, because they have evidence that the Claimant was evicted from that address in November 2013. The Defendants told the judge that the Claimant had a history of providing false addresses in court proceedings, in the form of addresses of properties which he does not occupy or no longer occupies. By giving a false address to the court in the course of the oral examination, that too, it was submitted, was a contempt of court. The Defendants say they have evidence that 55 Baccara Grove was sold by Ms Fraser on 11 July 2014 and, although the Claimant had lived at that address much earlier, he had not lived there for some considerable time.

In accordance with the order of 1 May 2015, the matter was consequently transferred to the Royal Courts of Justice. In this court, it came before Knowles J on the papers, on 25 June 2015. He gave various directions, including that a hearing be fixed before a High Court judge, with a time estimate of two hours, for consideration of:

Knowles J required the Claimant to attend the High Court hearing personally, and strongly encouraged him to seek legal advice. He gave various other case management directions, including permission to any party, including Lawrence Watson and/or Ms Fraser, to apply for further or amended directions. Neither Lawrence Watson nor Kay Fraser have made any such application. Lawrence Watson has not played any part in the matter: he has not, so far as I am aware, contacted either the court or the Defendants and although present, he has not formally appeared before me today. Ms Fraser, on the other hand, has instructed solicitors who have themselves instructed Mr Sinclair of Counsel. Written submissions on her behalf have therefore been lodged, and Mr Sinclair has appeared for her today. The Claimant has attended in person, and has lodged documents in response to the "show cause" order.

Before I deal with the extant matters before me, may I say that, although, for the reasons I shall give, I am afraid I do not consider the Deputy District Judge got everything right, I have some considerable sympathy for him. On any view, reading the transcript, the Claimant was less than fully cooperative and the hearing before the Deputy District Judge was difficult.

Turning to the matters now before me, and dealing with the most straightforward matter first, it is submitted on Ms Fraser's behalf that the judge had no power to order her to be the subject of an oral examination. There is no judgment against her and, says Mr Sinclair in his skeleton argument, Ms Fraser is at a loss as to why the Defendants sought to join her to the present proceedings, and as to why the judge did so. Mr Isaac for the Defendants readily and abjectly concedes – correctly – that the judge had no such power. CPR rule 71.2 gives the court a power to require a judgment debtor, but no-one else, to attend the court. Ms Sinclair is not a judgment debtor of the Defendants.

For those reasons, I shall, as indicated during the course of debate, vary the order of Deputy District Judge Shah dated 1 May 2015, by striking out paragraphs 1, 3 and 4 of that order, together with the references to the individuals in paragraphs 5 and 6. Insofar as necessary, I make that variation of that order of the County Court as a County Court judge.

Mr Sinclair submits that Ms Fraser is entitled to her costs of being put to the inconvenience of responding to the 1 May 2015 Order. Although her primary response has been that the court had no jurisdiction to make the order, the order was not made entirely on the court's own motion, but as a result of an application by the Defendants or at least after their encouragement. The initial response of the Defendants, Mr Sinclair submits, was made on 11 June; and that response was to insist on Ms Fraser's attendance at the hearing today. The Defendants were litigants in person. The first indication of acceptance by them that Ms Fraser should be removed from these proceedings was by way of a letter on 5 October, by which time no doubt they had obtained some legal advice. However, Mr Sinclair submits with some force that, even then, the Defendants did not accept that they should pay the costs of Ms Fraser's involvement. Ms Fraser made no formal application to remove herself from the proceedings, he says, because that would have simply added to the costs burden. He has had to attend today, he submits, to protect the position of Ms Fraser in relation to costs. In the event, he has relied upon a statement of costs in the sum of £2,189.76.

For the Defendants, Mr Isaac submits that no costs order should be made. The court had not power to bring in Ms Fraser into the oral examination proceedings, and that has been accepted by the Defendants themselves, upon receipt of legal advice.

Although I have sympathy with the Defendants as litigants-in-person (as they were at the relevant time), they clearly either applied for or encouraged the bringing of Lawrence Watson and Ms Fraser into the oral examination proceedings, wholly wrongly. Unfortunately, the Deputy District Judge did not appreciate that he had no jurisdiction to make the order for which they pressed.

In all of the circumstances, I consider that it is appropriate to make an order that the Defendants pay her proportionate and reasonable costs. In looking at the statement of costs provided, I am satisfied that the bottom line to which I have already referred is proportionate; and, looking at the individual items claimed, I am satisfied that each is both reasonable and proportionate, in terms of the time spent. The hourly rate claim for the grade B fee earner is not challenged. The only disbursement is in respect of Mr Sinclair's fees, which relate to the hearing but which also include his written submissions. I accept his submission that he is here reasonably and out of necessity, properly to protect Ms Fraser's position with regard to the costs she has incurred.

For those reasons, I shall order the Defendants to pay Ms Fraser's costs in relation to this matter, which I will summarily assess in the sum of £2,189.86.

I therefore turn to the position of the Claimant. He has submitted two written documents in relation to the order, effectively to show cause why he did not commit any contempt of court. Both are dated 20 July 2015. The longer document sets out a response to the requests and orders for information and documents. The shorter document sets out why he felt moved to leave the proceedings on 1 May, in the circumstances that I have described.

I will consider the question of whether a contempt of court was committed in a moment. However, it is clear from the documents and the Claimant's submissions to me today that he has indicated that he is prepared to engage constructively and fully with the oral examination process set out in CPR Part 71; and, indeed, he has now purported to answer all of the written questions put to him and disclose all documents requested of him, “truly and completely”. He has endorsed his answers in writing to that effect.

The Defendants, through Mr Isaac, have doubted whether the answers and disclosure are complete. For my own part, I see the force of some of the submissions which Mr Isaac has made. They are matters which the Claimant will wish to consider.

However, CPR Part 71 sets out what is, in effect, a comprehensive scheme in relation to orders to obtain information from a judgment debtor, which includes an oral examination before an officer of the court or a judge, following provision of written answers and disclosure. Rule 71.8 sets out what happens in the event of a failure to comply with an order, namely that, if a person against whom an order has been made under Rule 71.2 (a) fails to attend court, (b) refuses at the hearing to take the oath or to answer any question, or (c) otherwise fails to comply with the order, the court will refer the matter to a High Court judge or a circuit judge. Under rule 71.8(2), that judge may make a committal order against that person. But, if a committal order is made, by virtue of rule 71.8(4), the judge will direct that the order shall be suspended, provided that the person attends court at the time that they specify in the order and complies with all the terms of that order and the original order. I emphasise the mandatory nature of that provision.

Those provisions are regularly and well trodden in county courts up and down the country. What they mean in practice is that, if a judgment debtor fails to attend an oral examination or, having attended, refuses to answer any proper questions put to him at the hearing, the matter is referred, usually, to a circuit judge to make a suspended committal order, the condition of which is the judgment debtor's attendance at a second hearing.

In the circumstances of this particular case, it seems to me that, given the Claimant's indication that he is now prepared to engage constructively and fully with the oral examination, the matter should return to Watford County Court to enable that court to send out a further rule 71.2 notice, with a new date for the Claimant’s oral examination in it, at which the answers that the Claimant has given in writing can be tested – if necessary, vigorously – by cross-examination. As the Claimant well knows, it is a contempt of court not to obey a summons for an oral examination or not to answer proper questions put at such examination or not to disclose documents in his possession for which an order has been made.

Although it is a matter for those who assign judges in Watford County Court, given the historical difficulties in this case, it may well be that they will consider it appropriate to assign an experienced District Judge to deal with that application hearing. As with the original notice, the new notice should give the oral examination a time estimate of half-a-day.

Turning to the contempt which the Deputy District Judge considered had been, or may have been, committed, I accept that, where a judgment debtor absents himself from an oral examination part-way through, that may conceptually amount to a contempt in the face of the court. However, more pertinently, as I have described, the situation is specifically covered by CPR rule 71.8. In this case, although the Claimant attended the hearing, he left without answering proper questions which were put to him. He left knowing that, by leaving, he would frustrate the examination. It is no answer for him to say, as he does, that he made his intentions clear by saying that, if his son were excluded from the court, he would leave. I am bound to say that I am unsure of the jurisdiction under which the Deputy District Judge was acting when she purported to exclude the Claimant's son from the hearing. Although oral examinations are conventionally heard "in private", in the sense of without attendance of the public, I do not see why Lawrence Watson should have been excluded from that hearing, although clearly he was, with some justification, not willing to answer questions put to him by the judge. Turning to the Claimant, he says that he suffers from an anxiety condition which makes it helpful to have someone with him when he finds himself in anxiogenic circumstances, such as a court hearing. I have not seen any medical evidence to support that proposition, but nor have I sought it. In all the circumstances, I am far from persuaded that the Claimant himself could properly and appropriately absent himself from the hearing.

Turning to the second limb of the application, i.e. the alleged contempt by the Claimant in misleading the court as to his current residential address, before me today, the Claimant has given his residential address as 4 Roveley Court, Stony Stratford, Milton Keynes; and, indeed, that address is on some of the documents which he has disclosed. He says that he had understood the address required was the address for service, which was the address I have already referred to; and, consequently, he says, it was something of a misunderstanding – although he also says that he has been reluctant to give his residential address to the Defendants, for fear of adverse consequences of so doing. He considers that there is a risk that the Defendants will create at least a nuisance, if they are aware of his address. However, I have seen no evidence of that risk; and, in any event, if they were to create such a nuisance, then that is a matter which the Claimant could bring back to the court

I do not think it would be fruitful or helpful to investigate further whether an act of contempt was committed by the Claimant at the earlier hearing. If the Claimant fully complies with his obligations under CPR Part 71, in writing and at the new hearing, then there will be no need to consider committal again at all. If he fails to comply with his obligations, then the mechanism in Part 71 will roll forward, including, if the judge dealing with the oral examination considers it appropriate, a reference to a circuit judge who may make a committal order under those provisions, of course taking fully into account the guidance in relation to such matters that has been given by the higher courts.

Today, the Claimant has clearly said that he intends fully to cooperate and engage with the oral examination procedure; and, despite Mr Isaac's scepticism, for the reasons I have given, I consider he should be given every opportunity to do so. In those circumstances, a further CPR rule 71.2 notice should be sent to the Claimant and the Defendants, giving a further appointment date for the oral examination. That notice should be sent out by the Watford County Court. Insofar as this matter has been transferred to this court, I consequently transfer it back to Watford County Court.

.

Is there anything else, Mr Isaac?

MR ISAAC: My Lord, you said that it was provided -- well, you said you would deal with the question of his address in relation to that being a contempt. You mentioned what he has submitted today in relation to that, but you did not refer to the relevant part of the transcript which makes it clear that that information cannot possibly be correct.

MR JUSTICE HICKINBOTTOM: What I propose is this. I do not propose to do anything further, including making findings, in relation to CPR rule 71.8 today. However, if the Claimant fails to comply with his obligations under Part 71 in the future, then those matters have not been dealt with – and they can be relied upon in any future application under rule 71.8.

MR ISAAC: Very well, my Lord.