Masri v Consolidated Contractors International Company SAL & Ors

On an application to strike out committal proceedings, the court should determine only whether the application is abusive, procedurally incurable, or has no real prospect of success. Where material facts are disputed, the court should avoid conducting a mini-trial.

An alleged corporate officer may be liable for contempt arising from a company’s breach of an order if responsibility is established through participation, aiding and abetting, or wilful failure to take reasonable steps to secure compliance. The terms “director” and “officer” in RSC O.45, r.5 are arguable concepts whose application may depend on the facts. Procedural requirements concerning service and penal notices protect the alleged contemnor, but the court may dispense with them where justice requires and no injustice is caused.

The applicant sought to commit the third respondent, Wael Khoury, for contempt arising from alleged breaches by two judgment debtor companies of enforcement orders made in aid of substantial judgments. Mr Khoury applied to strike out the committal application on the grounds that he was not a relevant director or officer, that the application was procedurally defective, abusive, and unsupported by reasonable grounds.

The issues included the meaning of “director or other officer” in RSC O.45, r.5, the effect of failures to name or serve Mr Khoury in penal notices, delay and overlapping proceedings, and whether the evidence disclosed a real prospect of proving contempt.

1. Application dismissed. The court declined to strike out the committal application.
2. The question whether English or Lebanese law governed the meaning of “director or other officer” was arguable and should be decided, if necessary, on evidence at the committal hearing. It was therefore inappropriate to determine the issue summarily.
3. The terms “de facto director” and “shadow director” have been elucidated in the authorities and their application is objectively determined on the facts. The term “officer” was not self-evidently confined to a person employed under a contract. The alleged construction of RSC O.45, r.5 was sufficiently arguable to avoid strike-out.
4. A committal notice must identify each alleged act of contempt, separately and with sufficient particularity to enable the respondent to defend himself. The acts of contempt must be particularised in the notice, but the factual evidence supporting an alleged status as an officer or de facto or shadow director may be contained in accompanying evidence. In a case based partly on inference, it is sufficient at this stage to make clear the thrust of the case.
5. Under RSC O.45, r.5, a company’s order may be enforced against a director or other officer where responsibility is established by aiding and abetting or by wilful failure to take reasonable steps to ensure compliance. RSC O.45, r.7 requires personal service and an appropriate penal warning, but does not itself require the individual director to be named. The court may dispense with service, including for mandatory orders, under r.7(7), and may proceed despite omission of a penal notice where justice requires and no injustice is caused. That discretion should not be exercised readily.
6. The issues concerning delay, alleged collateral purpose, multiplicity of proceedings, timing of service, and the effect of omitted names in the penal notices depended on disputed facts and the overall circumstances. They did not establish abuse of process at the strike-out stage.
7. The evidence concerning Mr Khoury’s role in the corporate group and responsibility for compliance was materially disputed. Unlike a case where the evidence was all one way, determining whether the application had a real prospect of success would require an impermissible mini-trial. The issue whether contempt could be proved to the criminal standard was left to the judge hearing the committal application.

First-instance decision. The judgment itself refers to earlier enforcement and appellate proceedings in the same litigation, including Masri v Consolidated Contractors International (UK) Ltd (No 4) [2010] 1 AC 90, but those proceedings were not appeals from this decision.