RECLAIMING MOTION IN THE MINUTE AND ANSWER PROCEEDINGS ARISING FROM THE PETITION BY MARTIN & CO (UK) LIMITED AGAINST (FIRST) KENNETH STENHOUSE AND (SECOND) GRAHAM MAIN FOR AN ORDER UNDER SECTION 1 OF THE ADMINISTRATION OF JUSTICE (SCOTLAND) ACT 1972
EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
[2015] CSIH 86
P1217/12
Lady Paton
Lady Smith
Lady Dorrian
OPINION OF THE COURT
delivered by LADY PATON
in the reclaiming motion
in the minute and answer proceedings
arising from the petition
by
MARTIN & CO (UK) LIMITED
Petitioners, minuters and reclaimers;
against
(FIRST) KENNETH STENHOUSE and (SECOND) GRAHAM MAIN
Respondents:
for
an order under section 1
of the
Administration of Justice (Scotland) Act 1972
Petitioners, minuters and reclaimers: A Smith QC; Simpson & Marwick
Respondents: Sandison QC; Brodies LLP
1 December 2015
Alleged contempt of court in the course of a commission and diligence
[1] The minuters sought certain recoveries in terms of section 1 of the Administration of Justice (Scotland) Act 1972 in relation to a franchise agreement. The court granted the necessary interlocutor. A senior member of the Scottish bar, Mr D I Mackay QC, was appointed as commissioner.
[2] On Friday 16 November 2012 at 10.19 am the commissioner, accompanied by staff all as detailed in his report, entered premises in Hamilton. He explained the purpose of his visit. His report sets out certain allegations concerning the behaviour, language, and general reaction on the part of the respondents. Read short, the commissioner reports that they were not co-operative. It is further recorded that a female member of staff left the premises carrying two cardboard boxes containing files, despite being instructed not to do so by the commissioner. On the basis of the report, it would appear that the commissioner was unable to commence carrying out his duties until much later in the day (15.40 pm) and only after having contacted the court and having obtained and exhibited an e-mailed interlocutor containing a power of arrest.
[3] On Monday 19 November 2012 at 15.35 pm the commissioner, again accompanied by staff, entered premises in Airdrie. The first respondent was present and did not seek to prevent the commissioner carrying out his duties. However the commissioner reports that he found no files or computers, all as detailed in his report.
[4] On 23 November 2012, a further stage of the commission took place. Senior counsel questioned the two respondents and Miss Little. Each stated that they had no documents relating to the franchise, and did not know where they were. The minuters were unable to make further progress. They obtained an award of expenses against Miss Little and against one of the respondents.
[5] The minuters concluded that they had made every effort to achieve recovery of documents, without success. They decided that they would take no further proceedings to try to enforce the orders, as Miss Little and one of the respondents had become bankrupt. However they were concerned that there had been a major contempt of court and a challenge to the court’s authority. They considered that it was their duty to take proceedings, and accordingly instructed the present proceedings by way of a minute.
[6] The respondents lodged answers, averring that what had occurred during the commission was banter, although adding that they had been irritated by the unjustified intrusion into their business. They denied saying that they would physically stop the execution of the commission.
[7] In view of the disputes in fact, senior counsel for the minuters moved the Lord Ordinary (Lord Glennie) to fix a proof on the minute and answers. Senior counsel for the respondents invited the Lord Ordinary to fix a shorter hearing, at which the case of Sovereign Dimensional Survey Ltd v Cooper 2009 SC 382 could be considered, and the Lord Ordinary could decide whether it would be proportionate or sensible in the circumstances to order a proof.
[8] The Lord Ordinary appointed the matter to a “hearing on proportionality” (paragraph [2] of his opinion). At that hearing, he heard submissions on the proportionality of continuing with the minute and answers proceedings. He made no finding of contempt, but ultimately decided, on the basis of the commissioner’s report, other papers, and submissions, that even if the respondents had been in contempt, it would not be proportionate for the minute and answers to continue. By interlocutor dated 21 February 2014 he dismissed the minute.
[9] The minuters reclaimed.
Submissions for the minuters
[10] Senior counsel submitted that the Lord Ordinary had erred in law. There was a clear dispute in fact. If the commissioner’s report was accurate, it was a serious matter (cf Cordiner, petitioner, 1973 JC 16). The authority of the court had been undermined. The commissioner should be allowed to give evidence, and in particular to give his view as to whether what had occurred was intended as a joke. The appropriate course of action was to fix a proof. The case of Sovereign Dimensional Survey Ltd was distinguishable, as, in the present case, the minuters were no longer pursuing their main action (which was not therefore available as a means of dealing with the alleged contempt). In any event, the alleged contempt was more serious than in Sovereign.
[11] The Lord Ordinary had not made a finding whether or not there had been contempt of court. He had not heard evidence which would enable him to decide one way or the other. Senior counsel invited this court, on the basis of the conduct admitted in the answers, to find that there had been a contempt of court. Alternatively the case should be remitted to a different Lord Ordinary to hear a proof on the matters in dispute in the minute.
Submissions for the respondents
[12] Senior counsel submitted that the reclaiming motion should be refused. The Lord Ordinary’s decision was a discretionary one, and could be the subject of review only on the well-recognised grounds of erring in law, taking into account an irrelevant factor, leaving out of account a relevant factor, or going “plainly wrong” by reaching a decision which no reasonable judge would reach.
[13] The Lord Ordinary had looked at the allegations as a whole. He had concluded that the behaviour was not laudable, but was not of such a level of severity as to affront the dignity of the court. Moreover he considered that there was no point in trying to progress the minute and answers as the respondents were bankrupt. The Lord Ordinary had carried out a balancing exercise, taking into account the dignity of the court, and had concluded that the circumstances were not such that further judicial resources should be used. That might be a decision with which an appellate court disagreed: but it was a discretionary decision, and the Lord Ordinary had not erred. It was open to the Lord Ordinary to proceed as he did without hearing evidence.
[14] If the court was not with the respondents, the case should be remitted to a Lord Ordinary for a proof.
Reply for the minuters
[15] It was wrong to submit that the Lord Ordinary’s decision was entirely a matter of discretion. This court was not prevented from overturning the Lord Ordinary’s decision.
Discussion
[16] Contempt of court is a serious matter. Maxwell, Court of Session Practice, at pages 96 to 98, notes that contempt can take many forms, including:
“ … absolute defiance of the orders of the court, as when a person … failed to produce … a document which he had been ordered to produce … disrespectful behaviour of a party in court.”
As was pointed out by Lady Smith in Martin & Co (UK) Limited, petitioners, 2014 SLT 71:
“If litigants can ignore orders of the court, and act in the manner complained of in the minute … the very foundation of the system of justice can be defeated with impunity.”
Contempt of court can result in criminal penalties, for example, imprisonment or fines.
[17] Where contempt is alleged, it is necessary in our view for the court to ascertain whether the contempt is admitted. Legal representation should be made available. If the contempt is not admitted, the court must, before making any finding of contempt, order a proof on the minute and answers, and hear submissions. Only then is it open to the court to make a finding of contempt.
[18] If contempt is admitted or proved, the contemnor should be given an opportunity to purge the contempt (if possible), and/or to make submissions in mitigation. The appropriate disposal can then be made.
[19] As Lord Reed explains at paragraph [31] et seq of Sovereign Dimensional Survey Ltd v Cooper Ltd 2009 SC 382:
“[31] The rationale of the court’s jurisdiction in contempt is to uphold the rule of law by protecting or enforcing the authority of the court. As Lord Justice-General Emslie said in HM Advocate v Airs 1975 JC 67 at page 69, the court’s power to punish contempt
‘arises from the inherent and necessary jurisdiction to take effective action to vindicate its authority and preserve the due and impartial administration of justice’.
Since the jurisdiction is inherent in the court and is exercised in order to protect the administration of justice, it is for the court to determine the circumstances in which it will permit the jurisdiction to be invoked. As Lord Diplock observed in Attorney General v Times Newspapers Ltd [1984] AC 273 at page 312, in relation to the corresponding English procedure of committal for contempt:
‘[I]t is a procedure which if instituted by one of the parties to litigation is open to abuse … The courts have therefore been vigilant to see that the procedure for committal is not lightly invoked in cases where, although a contempt has been committed, there is no serious likelihood that it has caused any harm to the interests of any of the parties to the litigation or to the public interest … [T]he court’s discretion in dealing with a motion for committal is wide enough to entitle it to dismiss the motion with costs, despite the fact that a contempt has been committed, if it thinks that the contempt was too venial [‘pardonable, excusable, not very wrong’: Oxford English Dictionary definition] to justify its being brought to the attention of the court at all.’
In a case such as the present, where the alleged contempt has not caused any harm to the interests of the minuters, the only question is whether it is in the public interest that the court should permit its jurisdiction to be invoked.
[32] When answering that question, there are many factors which the court will require to consider, depending on the circumstances of the case. They will include factors bearing on the gravity of the alleged contempt, including whether it was persisted in to the point at which it was likely to interfere with the course of justice. They will include factors bearing on the extent to which the proceedings would be likely to promote the authority of the court and the administration of justice: whether, for example, … the discontinuation of the proceedings would run the risk of encouraging parties to treat the court’s orders as being of little importance. They may include the relationship between the contempt proceedings and other proceedings: whether, for example, the contempt proceedings will disrupt the progress of the substantive proceedings or will involve a duplication of evidence; or whether, as was indicated in the Anton Pillar case, the party in contempt may be effectively penalised through the contempt being brought out in the substantive proceedings, with the effect of damaging his credibility. The court will also wish to have regard to whether the proceedings would be likely to justify the public resources that would have to be devoted to them: particularly in a complex case, contempt proceedings may involve a substantial call on court time and resources. These are not considerations which the court can disregard: the proper administration of justice includes ensuring that cases are dealt with expeditiously and without undue demands on the resources of the court …”
[20] Lord Glennie, in paragraph [38] of his opinion, refers to Sovereign Dimensional Survey Ltd and summarises the factors referred to by Lord Reed. However in paragraph [39] et seq, the Lord Ordinary in effect makes findings-in-fact about what occurred at the commission, although he had heard no evidence from the witnesses concerned. For example, in paragraph [42] he states:
“[42] In the present case, with one possible exception to which I shall return, the commissioner was faced with anger and bluster but not, in my opinion, with actual obstruction … nothing in the general threats, abuse or bluster by Mr Stenhouse and, more particularly, by Mr Main, impeded the commissioner in the execution of the commission. It may be that he started the commission an hour or two later than he might otherwise have done had Mr Stenhouse and Mr Main been entirely co-operative, but no prejudice was caused by that delay.”
[21] The “one possible exception” referred to is expanded upon in paragraph [43] as being the removal from the premises, after the arrival of the commissioner and despite his instruction to desist, of two boxes of files.
[22] In our opinion, the Lord Ordinary erred in several respects. First, we consider that disputed questions of fact – for example, whether, and if so, why, the commissioner was impeded to any extent in the execution of his commission – requires the leading of evidence from the witnesses concerned. The minute and answers disclose disputed issues of fact. For example, in statement 6(d), the minuters aver that the second respondent obstructed the execution of the commission “by stating that he would physically stop the commissioner from removing items of property”. That is denied in answer 6(d) where it is averred “The respondent made no such remark”. In statement 6(a) the minuters aver that the second respondent obstructed the execution of the commission “by making threats to the commissioner, stating ‘over my dead body you’ll be searching for files in here’ and by stating ‘I’m getting fucking sick of you disrupting my business’”. That is denied in answer 6(a) where it is averred inter alia “The commissioner was neither upset nor alarmed by any statement of the respondent, and did not as a result of any such statement take or refrain from carrying out any action which he would otherwise have taken or refrained from taking”. Thus evidence is necessary to resolve conflicting issues of fact and to establish, after proof, what occurred and whether and to what extent the commissioner was in fact obstructed in carrying out his duties. Issues of credibility and reliability, and matters involving the weight of any evidence, will require to be resolved. Until evidence is led, it is not, in our opinion, open to the Lord Ordinary to rule out the possibility that the evidence might establish that the commissioner was significantly impeded in the execution of the commission.
[23] Secondly, even if it were thought appropriate to hold some sort of preliminary hearing in an attempt to assess the proportionality of permitting the minute and answers procedure to continue (in relation to which, see paragraph [28] below), we consider that the appropriate test in such circumstances is whether, even if all the minuter’s averments were to be proved, it is plain that the behaviour in question is so trivial and so unimportant that it does not merit any further court procedure. We have carefully considered the minuters’ averments in this case. Those averments describe aggressive, threatening, and disrespectful language and behaviour aimed directly at the commissioner with a view to keeping files, papers, and computers out of his reach. Our conclusion is that at this stage, assessing matters on the basis of the averments supplemented by the commissioner’s report, it cannot be said that the minute is bound to fail, or that no reasonable Lord Ordinary, having heard the evidence, would conclude that what had occurred was a serious matter, and not trivial. In our view, the language and behaviour alleged to have occurred strike at the very heart of the dignity and the power of the court and its officers, and are likely to interfere with the course of justice. The discontinuation of the proceedings would, in our view, run the risk of encouraging the parties (and others in similar situations) to treat the court’s orders as being of little importance: cf Lord Reed in paragraphs [31] and [32] of Sovereign Dimensional Survey Ltd; and Maxwell, The Practice of the Court of Session pages 96 to 98. It is irrelevant that an alleged contemnor may have become bankrupt: the court is not restricted to monetary penalties.
[24] Thirdly, the Lord Ordinary, when assessing the possible effect of the respondents’ behaviour at the commission, observes:
“[42] … It may be that [the commissioner] started the commission an hour or two later than he might otherwise have done had Mr Stenhouse and Mr Main been entirely co-operative, but no prejudice was caused by that delay.
[43] The one possible exception to this concerns the removal by the female employee of two boxes containing files labeled ‘Martin & Co’ … In some cases that might be of importance. Had the petitioners sought in the minute to set up a case that the documents removed were important to their making progress in the case against the respondents, then it might well be seen that the failure to assist in identifying who had taken the documents and where those documents were could amount to contempt of which the court would take a dim view. But nothing in the petition instructs such a case. It is not said, for example, that there is a missing category of documents without which the petitioners are unable to make good their case against the respondents. So while the removal of two boxes of files may have resulted in a number of documents not being recovered by the commissioner, it is not shown nor even suggested that the removal of those files had any material effect on the success or otherwise of the commission. For aught known, they might have been documents of which the petitioners already had copies. At all events, the recovery of the documents by the commission has not led to litigation being commenced by the petitioners against the respondents or any of them, and there is no suggestion that that is because of any obstruction to the execution of the commission.”
The Lord Ordinary therefore concludes that “no prejudice was caused by that delay” and that the petitioners failed to demonstrate that the documents removed in the two boxes of files “were important to their making progress in the case against the respondents”.
[25] In our opinion, in so doing the Lord Ordinary focused solely upon the private interests of the parties, and gave no consideration to the public interest. The commission involved not only the private interests of the parties in the pursuit of their dispute, but also (importantly) the public interest, in particular the upholding of the rule of law by protecting or enforcing the authority of the court; the preservation of the due and impartial administration of justice; the question whether any conduct was persisted in to the point at which it was likely to interfere with the course of justice; and the question whether the discontinuation of the current minute and answer proceedings would run the risk of encouraging parties to treat the court’s orders as being of little importance (Lord Reed at paragraphs [31] and [32] of Sovereign Dimensional Survey Ltd). The Lord Ordinary appears not to have taken those important factors into account.
[26] Furthermore, even in the context of the private interests of the parties, it is impossible for the minuters to demonstrate that the documents in the two boxes were important to their case, as they were never permitted to recover and examine these documents. The crucial matter is that files (which may have fallen within the calls which the court had authorised in terms of its interlocutor) were removed from the premises despite the commissioner’s attempt to prevent their removal, and the commissioner’s authority was thus flouted at the very outset of the commission.
[27] We therefore agree with the submissions made on behalf of the minuters. Taking their pleadings at their highest (as is appropriate in a legal debate the purpose of which is to assess whether a relevant case has been made out), the minuters aver that a senior counsel acting as an officer of the court was met, at one locus, with rude and aggressive language, and obstructive and evasive behaviour, all arguably constituting “absolute defiance of the orders of the court” (Maxwell, Practice, page 96); at the other locus he found premises which had the appearance of having been stripped of the relevant files and computers. That sort of alleged defiance of court orders cannot, in our opinion, be regarded as unimportant, nor any proceedings following thereon as “disproportionate”. Once the facts have been elicited, or admissions made, the court has a discretion. The court may decide that it is appropriate to impose a modest penalty or an admonition for any contempt found proved; alternatively the court may decide that a more serious penalty is called for. But in our view the Lord Ordinary erred in deeming the allegations of defiant language and behaviour as being unworthy of further investigation, and by concluding that further proceedings connected therewith would be disproportionate. We consider that the discontinuance of the present proceedings would be likely to encourage the respondents and others to treat the court’s orders as being of little importance.
[28] That is sufficient for the disposal of the reclaiming motion. For completeness we would add that Sovereign Dimensional Survey Ltd was, in our opinion, a rather special case. There the non-compliant behaviour was of a much lesser nature than is alleged in the present case, and the effect of that behaviour was fairly swiftly remedied. Moreover a proof in the main action was still to take place, and it was considered that any non-compliant behaviour was best explored in that proof without the distraction or encumbrance of separate minute and answer proceedings concerning contempt. It was observed that the question of any compliance with the commissioner could be elicited in evidence in the main action, and might affect credibility and reliability. As the circumstances were particular to that case, we are not persuaded that any novel protocol in relation to contempt proceedings (such as a preliminary debate on proportionality) was – or was intended to be – introduced. We consider that the well-established procedure whereby allegations of contempt of court, if not admitted, must be the subject of a proof, remains unaltered.
Decision
[29] For the reasons given above, we shall allow the reclaiming motion, recall the interlocutors of the Lord Ordinary dated 21 February 2014 and 20 October 2014, and remit the minute and answers to a different Outer House judge to proceed as accords. We continue the question of expenses.