Newson-Smith v Al Zawawi

Permission for a private person to bring committal proceedings for false statements requires a strong prima facie case capable of proof to the criminal standard. The court considers the public interest, the applicant’s suitability, proportionality and the overriding objective.

Recklessness requires conscious engagement with the statement’s truth. The maker must consciously have no idea whether it is right or wrong. Failure to make reasonable enquiries, carelessness or optimism does not alone establish recklessness or absence of honest belief. The maker must also intend, or know it is likely, that the false statement will interfere with the administration of justice.

A judgment creditor sought permission under rule 81.12(3) of the Civil Procedure Rules 1998 to bring committal proceedings against a director of two judgment-debtor companies. The proposed proceedings arose from the director’s participation in examinations and disclosure under Part 71.

The creditor alleged that the director had knowingly or recklessly made false statements about the use of loan monies, his knowledge of the loans, expenditure on projects in Mozambique and the group’s ability to repay. The court had to decide whether any ground disclosed a strong prima facie case and whether proceedings were justified by the public interest, proportionality and the overriding objective.

1. Permission refused and the application dismissed. None of the four grounds disclosed a strong prima facie case of contempt capable of proof to the criminal standard.

2. Recklessness required a subjective element. A person acts recklessly when consciously representing something as true while having no idea whether it is right or wrong. A failure to undertake sufficient checks does not itself establish dishonesty or want of honest belief. Carelessness, even serious carelessness, is insufficient. The court therefore rejected the applicant’s broader approach and applied JSC BTA Bank v Ereshchenko [2013] EWCA Civ 829 and Berry Piling Systems Ltd v Sheer Projects Ltd [2013] EWHC 347 (TCC).

3. Ground 1 failed because one impugned statement was literally true and both statements were made by the respondent’s solicitor on instructions from another person. The documents said to disprove the statements were disclosed with the same letter. There was no evidence of an intention to mislead, conscious disregard of truth or actual interference with the Part 71 proceedings.

4. Ground 2 failed because the documentary and affidavit evidence did not establish a strong prima facie case that the respondent knew of the loans. His conduct supported carelessness, but not conscious indifference to whether his evidence was true. Ground 3 failed because the witness statements did not adopt the alleged misstatement that all loan monies went to Mozambique. Brief errors in oral evidence were corrected by reference to bank statements and did not suggest an intention to mislead.

5. Ground 4 depended upon the alleged sale of a Botswana business. The evidence did not establish that any sale occurred or that proceeds were available to repay the loans.

6. In any event, committal proceedings would have been disproportionate and contrary to the public interest. The underlying enforcement proceedings had consumed extensive court time and costs. Earlier disclosure and costs orders had already addressed the respondent’s failings. Delay in making the application was unexplained, and there was a real possibility that committal was being used to pressure a person who was not liable for the judgment debt. Granting permission would not further the overriding objective.

This was a first-instance application arising from earlier enforcement proceedings under Part 71 of the Civil Procedure Rules 1998. The respondent had been ordered to attend for oral examination and produce documents concerning the assets of two judgment-debtor companies. The judgment describes numerous subsequent disclosure applications and related appeals, but no prior decision in the present committal application.