Coghlan v Bailey

Contempt based on a false statement in a witness statement requires proof beyond reasonable doubt that the statement was false, materially interfered with the course of justice, and was made without an honest belief in its truth, with knowledge of its likely effect.

Interference with the course of justice does not depend on the false evidence changing the ultimate result. The court must assess the maker’s personal state of mind, rather than organisational failings or the shortcomings of the investigation generally. Honest belief is assessed in the light of the whole evidence, including the probabilities and the apparent failure to make obvious inquiries. Carelessness, assumption or inadequate checking may explain an inaccurate statement without establishing dishonesty.

The applicant sought the committal of the respondent, a financial investigator formerly employed by the Serious Organised Crime Agency, for contempt of court. The application concerned a witness statement supporting earlier civil recovery proceedings under Part 5 of the Proceeds of Crime Act 2002.

The statement said that a £18,000 deposit had been paid by banker’s draft from an unknown source. The applicant contended that the available conveyancing and investigation material showed that the immediate source was an account held by Mr Kayes. Permission to bring committal proceedings had previously been granted. The central issues were whether the statement was materially false, whether it interfered with the course of justice, and whether the respondent had made it without an honest belief in its truth.

The application was dismissed. The applicant had not proved beyond reasonable doubt that the respondent lacked an honest belief in the truth of the statement.

1. The court confirmed the applicable requirements for contempt based on a false statement verified by a statement of truth: the statement must be false; it must interfere with the course of justice in a material respect; and, when making it, the maker must have had no honest belief in its truth and must have known of its likelihood to interfere with justice.

2. The description of the instrument as a banker’s draft was not materially false. Nor was the use of £18,000 rather than £18,030 materially false, since £18,000 represented the 10 per cent deposit and the additional £30 was an administration fee. The statement that the source was unknown was inaccurate. The immediate source was an account in Mr Kayes’s name, although that did not necessarily identify the ultimate provenance of the money.

3. A false statement may interfere with the course of justice even where the court ultimately reaches the same result. The relevant question is whether untrue information was capable of, and likely to, influence the court. The statement was potentially material because it suggested a more direct connection between the applicant and the deposit funds.

4. The decisive issue was honest belief. This was assessed against the probabilities and the surrounding circumstances, including the failure to make obvious inquiries and the failure to notice several indications of the source of the funds. The evidence nevertheless supported the possibility that the respondent had assumed that the source was unknown, copied earlier briefing material, and failed to check it carefully.

5. The respondent’s conduct was more consistent with carelessness, inexperience and inadequate systems than with deliberate suppression of information. Organisational shortcomings by SOCA did not establish the respondent’s personal dishonesty. The criminal standard of proof was not met.

The judgment described earlier civil recovery proceedings in which Simon J ordered recovery of the property, followed by unsuccessful attempts to challenge or set aside that decision. The present committal application was determined at first instance by the High Court.