Stobart Group Ltd & Ors v Elliott

Permission to bring contempt proceedings requires a strong prima facie case that the statement was false, that the maker knew it to be false or was reckless as to its truth, and that it was likely to interfere with the course of justice. The court must also consider the public interest, proportionality and the overriding objective. Particular weight attaches to knowingly false statements used to obtain relief without notice, because the applicant owes a heightened duty of disclosure. Contempt proceedings are brought in the public interest and are not barred by an unpaid private costs debt. They should nevertheless be confined to allegations that are distinct, material and proportionate. A counterclaim founded on non-existent torts, unavailable forms of malicious prosecution, time-barred malicious falsehood, or an improperly pursued derivative claim may be struck out.

The judgment concerned two applications arising from continuing litigation between Peter Elliott and the Stobart parties. Mr Elliott sought permission to bring contempt proceedings against Mr Tinkler and Mr Howarth based principally on allegedly false statements in witness statements. The Stobart parties sought to strike out Mr Elliott’s amended counterclaim in proceedings they had discontinued.

The court considered the threshold for contempt proceedings, the public interest in statements used for without-notice relief, and the elements of alleged claims for abuse of process, malicious prosecution, malicious falsehood, false imprisonment and fraud on behalf of shareholders.

1. Contempt permission. The court applied CPR Part 81 and held that permission requires a strong prima facie case of falsity, knowledge or recklessness, and likely interference with the course of justice. The court must then assess public interest, proportionality and the overriding objective. Authorities including Edward Nield v Loveday, Berry Piling Systems Ltd v Sheer Projects Ltd, Malgar Ltd v RE Leach (Engineering) Ltd, Kirk v Walton and KJM Superbikes Ltd v Hinton were applied or followed in stating those principles (paras [20]-[27]).
2. A heightened public interest arises where allegedly false evidence was used to obtain, or confirm information supplied for, relief without notice. The duty to disclose material matters rests on the applicant, and materiality is for the judge, not the applicant, to determine (paras [84]-[89]).
3. Permission was granted against Mr Tinkler in relation to allegations 3, 4, 8, 28 and 40, and against Mr Howarth in relation to allegations 13 and 19. Permission was otherwise refused. Repetitious allegations and allegations requiring disproportionate investigation were excluded (paras [97]-[102]).
4. Counterclaim. The pleaded torts of perverting the course of justice, perjury and contempt of court do not exist. The scope of abuse of process was governed by Land Securities Plc v Fladgate Fielder. A claimant must show an ulterior purpose unrelated to the litigation and that the proceedings would not have been commenced but for that purpose. Recoverable damage is restricted to the recognised heads identified in Gregory v Portsmouth City Council (paras [106]-[116]).
5. The malicious falsehood claims were time-barred or inadequately pleaded; the false imprisonment claims were not arguable; and the shareholder fraud claim was derivative and had not followed Companies Act 2006 ss 260-263. The amended counterclaim was struck out in its entirety (paras [117]-[121]).