Super Max Offshore Holdings v Malhotra

In contempt proceedings, the alleged acts must be identified with precision in the application notice. A general assertion that a communication was disparaging is insufficient, and an unparticularised allegation cannot be introduced for the first time on appeal.

Whether words breach an injunction prohibiting disparagement is assessed by their reasonable meaning in the communication as a whole. Context referring to other actors does not prevent words from disparaging protected management where an ordinary recipient would understand them as criticism of that management. Language portraying management as ineffective, chaotic and undeserving of respect is disparaging.

The claimant, holding company of the Super-Max group, obtained injunctive relief against the defendant, its former executive chairman, following a shareholder and management dispute. The order prohibited communications to trade contacts that were disparaging of relevant management.

The High Court, in [2017] EWHC 3246 (Comm) and subsequent contempt proceedings, found that a letter to the claimant’s bank breached the injunction by describing complete anarchy in the management of a subsidiary. Two other allegations were rejected. The defendant appealed against the contempt finding. The central issues were the proper scope of the pleaded allegations and whether the disputed passages, read in context, disparaged protected management.

1. Disposition. The Court of Appeal unanimously dismissed the appeal against the finding of contempt. David Richards LJ gave the leading judgment, with Moylan LJ and Morgan J agreeing. The separate challenge to the indemnity costs penalty was not permitted by Males LJ.
2. Particularisation. Under Civil Procedure Rules 1998, r 81.10(3)(a), an application notice must set out in full the grounds for committal and identify separately and numerically each alleged act of contempt. The claimant had therefore been confined to the three allegations particularised in its application notice. It could not rely on the letter’s subject heading as an additional ground on appeal, since that allegation had not been pleaded.
3. Meaning of disparagement. The words must be assessed by their reasonable meaning in the letter as a whole. The statement that there was complete anarchy in the management of the subsidiary could not reasonably be confined to board deadlock or the conduct of the investor. An ordinary recipient would understand it as criticism of the management, including the subsidiary’s chief executive, portraying it as ineffective and chaotic and as undeserving of respect or good opinion. That was disparagement within the injunction.
4. Additional ground. The High Court had correctly rejected the allegation based solely on paragraph 3 of the letter. However, it had failed to read that paragraph with paragraph 2, which stated that the investor had put the management in place. Read together, references to inept and erratic management necessarily included the protected senior officers. The Court of Appeal therefore upheld the contempt finding on that additional basis as well.

1. Court of Appeal (Civil Division) — In [2020] EWCA Civ 641, the appeal against the contempt finding was dismissed. The finding was also upheld on an additional pleaded ground.
2. High Court of Justice, Commercial Court — Robin Knowles J found the defendant in contempt for breach of the injunction and ordered payment of £250,000 costs on an indemnity basis. The court rejected two other allegations.