Advetec Holdings Ltd v Shaw & Anor

Permission to bring committal proceedings requires a strong prima facie case, but that is necessary rather than sufficient. The court must also decide whether committal proceedings are in the public interest, having regard to proportionality, the overriding objective and any overlap with the substantive trial. Although committal applications concerning disputed factual statements will ordinarily be premature before trial, an exceptional case may justify an early hearing where alleged dishonesty and non-compliance are extensive and threaten the integrity of the proceedings. An application must identify each allegedly false statement and explain why it is false and knowingly so. Where an interim non-competition injunction is legally linked to an undertaking to continue employment, release from the undertaking may require the injunction to continue only while the employment continues.

The claimant sought permission to bring committal proceedings against its former chief executive for alleged breaches of an injunction and allegedly false statements in witness statements and a defence verified by statements of truth. It also sought permission to amend its Particulars of Claim following extensive disclosure, release from an undertaking to continue employing the first defendant on full pay, and changes concerning security for costs.

The court considered whether there was a strong prima facie case, whether committal proceedings were premature and contrary to the public interest, whether the application was sufficiently particularised, and how the employment undertaking interacted with the interim non-competition injunction.

1. Permission to bring committal proceedings. The court applied the principles summarised in Elliott v Tinkler [2014] EWCA Civ 564. A strong prima facie case is necessary but not sufficient. The court must also consider the public interest, proportionality and the overriding objective. The strength of the evidence, the significance of the alleged falsehoods, the likely costs and court time, and the overlap with the substantive claim are relevant considerations.

2. Ordinarily, the truth or falsity of disputed statements should be determined at trial, when the evidence can be considered in its entirety. The guidance in KJM Superbikes Limited v Hinton [2008] EWCA Civ 1280, Cavendish Square Holdings BV v Makdessi [2013] EWCA Civ 1540 and TBD (Owen Holland) Ltd v Simons [2020] EWCA Civ 1182 required considerable caution. This case was exceptional. The court found a strong prima facie case concerning numerous allegedly false statements and two alleged breaches of the injunction. The alleged conduct was sufficiently extensive and significant that committal proceedings should be heard as soon as possible and before trial, so that the trial could proceed on a proper basis.

3. The application was sufficiently particularised. The alleged statements were identified, the reasons for alleging falsity were set out by reference to disclosed documents, and the nature of the allegations made it virtually inconceivable that the first defendant would not have known the statements to be false if they were false. The failure to warn in correspondence did not justify refusing permission.

4. The claimant was permitted to amend its Particulars of Claim. The amendment costs were reserved to the trial judge because the fuller case arose from substantial disclosure unavailable when the original pleading was drafted.

5. The claimant was released from its undertaking to continue employing the first defendant on full pay. The paragraph 4 injunction was to continue only while the claimant continued to employ him. If the claimant dismissed him, it could seek undertakings or apply for a further injunction. The claimant was not released from its undertaking to provide security for costs, and the security was not enlarged.

This was a first-instance decision. The judgment records earlier interim orders made by Foster J on 9 March 2020 and Griffiths J on 25 March 2020, including injunctions and undertakings, but no appeal from those orders.