COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
MR JUSTICE PETER SMITH
London, WC2A 2LL
B e f o r e :
LADY JUSTICE HALE
LORD JUSTICE CARNWATH
| JONATHAN GUY ANTHONY PHILLIPS
|ROBERT ANDREW HARLAND (suing as administrators of the estate of Christo Michailidis)
|- and -
|ROBIN JAMES SYMES
ROBIN SYMES LIMITED
Smith Bernal Wordwave Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Mr Stephen Schaw-Miller (instructed by Messrs Bracher Rawlins) for Bracher Rawlins on the preliminary applications only for the Defendants/Applicants
Crown Copyright ©
Lord Justice Waller:
History of the Litigation
The Issue on the First Appeal and How it Arose
The First Application – The Issue of Ownership of the Statue
Background to Cross Examination and Recusal Appeals
"1. The 1st Defendant do by 4 pm on 5 June 2003 swear an Affidavit setting out with full details to the best of his knowledge information and belief (and, subject to matters of privilege, providing all relevant documentation) what funds he has received from third parties during the course of this action, the amount of such funds, the date or dates on which such funds were received, the terms on which they were paid, what has become of the said funds and in each case the identity of the third party.
2. The 1st Defendant do by 4 pm on 20 June 2003 swear an Affidavit:
(a) identifying, to the best of his knowledge information and belief, each and every company used for the purposes of the partnership business carried on between himself and Christo Michailidis (whether as trading vehicles or otherwise) and where each such company is registered, giving the relevant company number if known, and
(b) giving full particulars of the person or persons responsible for the management of such company.
3. The 1st Defendant do by 4 pm on 31 July 2003 procure the delivery to the Claimants' solicitors of copies of all the records and other documents of each such company referred to in paragraph 2 above."
1. It sought now to cross examine Mr Symes "generally on his evidence herein in relation to the matters raised in the claimants' points of claim and skeleton argument dated 11th August 2003".
2. It sought a ruling as to whether the purported compliance by Mr Symes with paragraphs 1, 2, and 3 of the order of 22nd May, and the undertakings in 1, 2, 6, 7, 8, 9, 10 and 11 had been complied with, and if non-compliance was found "whether Mr Symes should be held in contempt of court in respect of such non-compliance and whether suspension on (sic of) the existing committal order should be lifted".
3. It sought leave to bring a further committal application for contempts of court particularised in the points of claim delivered with the application.
4. It sought further general disclosure in accordance with a draft order [which we should say we have not located with the papers].
"the Claimants submit that consideration of the detailed evidence as explained in this Skeleton, and in particular of the documents obtained from 3rd parties to which reference will be made, leads to the irresistible conclusion that it is only after full cross examination of Mr Symes that the Court might be able to get to the truth of precisely what assets the partnership held – and where they are now."
"Mr Slade, whom I have spoken to this morning, has indicated, contrary to apparently the view which was taken before your Lordship on Tuesday, that if there is to be cross examination of Mr Symes he now, I think, accepts that it would be preferable for that to go over to another date and for there to be cross-examination in relation to all matters. He says he has not had an opportunity to consider the evidence which came in late yesterday and so far as the other matters are concerned he makes the point that if an order should be made for cross-examination of his client he might wish to consider appealing that order." [see Transcript day1 28th August 2003 internal page 13 - page 282 bundle A.]
"1. Save as set out below, the issues raised by the Claimants' Application and the 1st Defendant's application be stood over to a date to be fixed with a time estimate of 10 days if heard by Mr Justice Peter Smith, and a time estimate of 15 days if heard by another judge.
2. The maker of any witness statement or affidavit which it is intended to be relied upon at the substantive hearing of the Claimants' Application and the 1st Defendant's Application do attend for cross-examination thereon (for the avoidance of doubt such including all or any affidavits sworn by the 1st Defendant intended to be relied upon as compliance by him with the Order of 22 May 2003 and his undertakings contained therein), unless the other party gives notice in writing not less than 7 clear business days before the substantive hearing that such person is not required so to attend.
3. If any such person does not attend for cross-examination, the relevant witness statement or affidavit may not be relied upon, unless otherwise ordered by the court.
4. Permission to the parties to apply in respect of the necessity of any such person attending for cross-examination.
5. The 1st Defendant's application for permission to appeal the orders at paragraphs 2 and 3 above be refused and the 1st Defendant's application for a stay pending any appeal be similarly refused.
6. Time for the 1st Defendant to file an appellant's notice seeking the permission of the Court of Appeal be extended until Friday 19 September 2003.
7. So far as necessary the Claimants do have permission pursuant to CPR 32.14 to make application for the 1st Defendant's committal to prison (or such other relief as may be just) as more particularly set out in the Re-Amended Application and Points of Claim dated 11 August 2003.
8. The court to dispense with personal service of the Re-Amended Application and evidence in support thereof. All evidence relating to the Re-Amended Application served on Bracher Rawlins shall be deemed to be good service on the 1st Defendant."
(1) He took the view that the skeleton argument forewarned Mr Symes of the areas in which he could be cross examined (see paragraph 4).
(2) He thought he had a general discretion as to whether to order cross examination and its ambit (see paragraph 8 and his reliance on CPR 32.7). Reliance on that rule also however led him to the conclusion that if Mr Symes did not appear for cross examination he was free to treat the compliance affidavits as if they had not been delivered (see paragraph 9).
(3) He said that the evidence put in by the claimants raised "a strong prima facie case that Mr Symes did not comply with his undertakings", and that the compliance affidavits and Mr Symes' answers to the claimants' evidence "raise serious questions which can only realistically be resolved by cross examination".
(4) He said that it was important that judgment had been entered and therefore Mr Symes was under a duty as a partner to answer questions as to assets of the partnership (paragraph 15); and in paragraph 16, 17, 18 and 19 he said:
"Post judgment, the matter is one of execution. It is analogous (and I stress the word analogous for the benefit of Mr Slade's note) to an order for oral examination of a judgment debtor. There is no question of orders for examination of judgment debtors being refused because that might incriminate them. The matter is also analogous to a situation where there is a proprietary claim. In the case of freezing orders in respect of the proprietary claim, the principle of non cross-examination is not applicable because the claimant there is seeking to know the whereabouts of assets that belong to the claimant. Those are questions which they are entitled to pursue.
In the present case, Mr Symes is bankrupt. He has no interest in these assets unless there is a surplus of assets after his bankruptcy. The claimants are therefore entitled to pursue what are proper post judgment proprietary claims. In that context, I observe that irrespective of the claims for proprietary entitlement to the asset, Mr Symes has a substantial costs liability to the claimants which is entirely unsatisfied in excess of £1m on an interim basis, and potentially several million Pounds on a full assessment basis. Those monies will be payable out of any partnership assets in any event, and represent a substantial liability which justifies the claimants seeking the assets.
The claimants, despite extensive efforts have recovered only limited assets. Further, the circumstances where assets have been revealed by Mr Symes actually posed more questions themselves. In this context I refer to the articles deposited with Mr Slade's firm, and the articles found in the possession of Biri Faye. None of these had been revealed by Mr Symes before their presence was revealed in the last two months or so without explanation.
Throughout this action Mr Symes has been evasive and has repeatedly failed to comply with orders that have been made against him. Looking at all of those matters, the balance of justice plainly favours an order for cross-examination. This is supported by the extract from Gee on Mareva Injunctions & Anton Piller "relief" at page 354, where the learned author indicates that the cases where the courts exercised a discretion not to cross-examine, were generally limited to cases pre-judgment and had no application to post-judgment or proprietary claims. It follows therefore that the claimants ought to be entitled to cross-examine Mr Symes and the other deponents in order to further their rights to seek to recover property that belonged to the deceased."
(5) His view was that the application was not a contempt application requiring proof to the criminal standard
"If all that is being sought to establish is breach of the court order, that is capable of establishment to the civil standard…"(paragraph 21)
However, he added:
"Whoever makes the application has the burden of proving it… It does not follow from a failure to prove by (the claimants) that Mr Symes wins on an establishment that he has complied. Thus Mr Symes cannot (in my mind) simply sit back and require the case to be proved if he wishes to be released from the suspension, he must lead a positive case…" (paragraph 22).
(6) He did not think in this case Mr Symes had the right to submit no case to answer. The first reason was that he thought that submission would have no reasonable prospect of success. But he in any event thought that it would not be right to allow a submission of no case, and then an adjournment for there to be an appeal with all the delays that would entail. He said:
"It would not be right to allow him to produce the affidavits of compliance, and to deprive the claimants of a fair opportunity to present their case by submitting that evidence to the test of cross-examination.
This is not an injustice because the purpose of the exercise as regards the establishment of the breach, as I have indicated in this judgment, is just that. It is not for the purposes of establishing that he is in contempt, and I do not believe that the claimants amended application notice in paragraph 3 properly read can have any other conclusion drawn from it. Of course, if it is established that Mr Symes is in breach a number of consequences might follow. One might be that I make no order beyond establishing that he is in breach making no doubt an order for costs and requiring his passport to remain within the jurisdiction so long as he is in breach. That will then give him an opportunity to re-visit the question of non-compliance. The other possibility is that I would conclude that he is in breach, and that therefore it would be appropriate for me to lift the suspension of the sentence of imprisonment. That is not a sentencing for contempt, that is a lifting of the condition as a result of his failure to comply with the pre-existing contempt. The third possibility would be to deliver a judgment establishing that Mr Symes is in breach and then adjourning further consideration to allow Mr Symes to re-consider his position. The fourth possibility is that I accept that he has complied, I discharge the condition and release the passports.
All of those as between the parties are available options and in fairness to both parties, those options can only be properly considered by me as the judge after both sides have had a full opportunity to present their case, and that involves both cases deploying their evidence in full and cross-examining the other parties. That is why in the reality of this case, the submission of no case to answer is not a realistic prospect." (paragraphs 23-5)
(7) He dealt with Mr Slade's submission that Mr Symes may be subject to questions and answers that might be used to prove contempt. He said:
"The matters are fully resolved, in my view by the judgment of Mr Justice Rimer in Cobra Golfing – v – Ratta (1998) CH 109. Mr Slade referred me to a decision of Mrs Justice Arden (as she then was) in Memory Corporation – v – Sidhu (2000) CH 645. I do not think that that case has any impact on the substantive decisions made by Mr Justice Rimer. If they did and there was a conflict between the two authorities, I would prefer the decision of Mr Justice Rimer to that of Mrs Justice Arden (as she then was). It seems to me that all the arguments have been deployed fully by Mr Justice Rimer, and he has dealt with them in a judgment which I can only describe as impeccable.
The procedure cannot be used as a stalking horse for proving contempt. That is what Cobra established, and Mr Steinfeld QC who appears for the claimants acknowledged that.
Second, Mr Symes cannot decline on incrimination grounds to answer questions which involve determining whether he has complied with orders in the existing proceedings. That is an exception which self evidently remains [see Cobra pages 157 to 159]. If such an exception was available, it would make enforcement of any orders of the court impossible because it would be impossible for any party to obtain answer because somebody would simply decline to answer on the grounds that it might incriminate them.
In committal proceedings, Mr Symes is entitled to decline to answer questions that might incriminate him – see the Comet case (1971) 2 QB 67. However, that case does not go on to conclude, and there is no case so far as I am aware which addresses the consequence that a judge trying a civil contempt can draw from a person who declines to answer. I see no reason why it is not possible for a judge to conclude in a question of civil contempt that the person who declines to answer is doing so because he knows he is guilty. That is an argument for submission at a later stage."
(8) He then finally dealt with the limits of the cross examination. He made clear that if anyone did not attend including Mr Symes the affidavits so far served would not be able to be relied on. Then his ruling from Paragraph 30 appears to be that there was no limit within the ambit of the skeleton argument but that it was unlikely that he would allow the claimants to go beyond that.
Consideration of the Judge's Order
i) The perfectly proper desire to trace and preserve the partnership assets has led to a number of different techniques being used at once, in such a way that it is difficult to work out the proper and fair procedures for determining the various issues before the court It is necessary to draw careful distinctions between the four issues raised in the applications before the judge:
a. Is Mr Symes in breach of the undertakings given on 22 May? Initially both parties sought a ruling on this, the claimants with a view to lifting the suspension of the committal and Mr Symes with a view to lifting the committal (but it appears that Mr Symes has withdrawn his application).
b. Is Mr Symes in breach of the order made on 22 May? The claimants have alleged that he is and want a ruling with a view to a further committal on that.
c. Is Mr Symes in breach of other orders, or otherwise guilty of contempt of court, as particularised in the points of claim?
d. Should Mr Symes be cross-examined generally on his evidence by reference to matters raised in the points of claim and skeleton argument of 11 August 2003?
ii. Where someone has purported to comply with either undertakings or orders to make disclosure by affidavit, we doubt whether it is right to place the deponent in the position that, unless he is prepared to be cross examined on his affidavits, they count for nothing at all. On the other hand, without cross examination, the court is entitled to attach little weight to them: see Comet Products UK Ltd v Hawkex Plastics Ltd  2 QB 67, CA.
iii. Where a party comes to court alleging that those affidavits do not comply with an undertaking or an order, the burden of proving this will obviously lie on that party. The standard of proof will depend upon the purpose for which the allegation is made. If it is for the purpose of supporting a fresh allegation of contempt with a view to obtaining a fresh order for committal, then clearly it will be to the criminal standard. If it is for some other purpose, such as obtaining an order for further affidavits, the civil standard will suffice. We are not aware of any authority dealing with the standard of proof to which non-compliance with the conditions of suspension of a committal order must be proved. Yet this is a question which theoretically arises every time a suspended committal order is used to secure compliance with some procedural requirement, an everyday occurrence in county courts up and down the land. The committal order has already been imposed, following the proof of a contempt to the criminal standard. A breach of condition may or may not involve a further contempt of court, but the application is not to impose a further sentence but to implement the one which has already been imposed. It is not self-evident that proof to the criminal standard is required. In practice, we suspect that the difficulty is more apparent than real: it will usually be obvious whether or not the condition has been complied with.
iv. Whatever the position in relation to the privilege against self incrimination in proceedings alleging further contempts, there can be no such privilege in proceedings concerned with whether or not the conditions of suspension have been complied with. The relevant contempt has already been proved and the only question is implementation of a sentence already imposed. The right time to worry about whether committal is the right order is when the committal order is made. Thereafter, it would not be right to ignore the fact that the committal order has been made and treat any subsequent application in relation to it as a fresh application to commit.
v. The judge was right to refer to the width of the court's discretion when ordering "post judgment" cross examination for the purpose of assisting execution. However, we are troubled about blending cross examination of that more general kind with cross examination aimed either at establishing a breach of the conditions of a suspension or at establishing further contempts of court.
(i) First, a preliminary decision should be made as to whether there is a prima facie case that Mr Symes has not, by delivering his compliance affidavits, fulfilled his undertakings. If he has done then the prison sentence falls away. (We say at once that the case is a very strong one that he had not complied, as was the view of the judge; but, if Mr Symes wished, he was entitled to a ruling on that issue by reference to the individual undertakings and the affidavits submitted within the time permitted.)
(ii) Secondly, if there is a prima facie case of non-compliance, it would not be in the interests of the claimants or the court to lift the suspension and impose imprisonment, if Mr Symes were prepared now to comply. The court could then direct that if Mr Symes wished to have a further opportunity of fulfilling his undertakings, he should attend to be cross-examined on his compliance affidavits and on any further affidavit he sought to rely on as assisting him on compliance even if now late. (This, we think, was what the judge had in mind in referring in the course of argument to the possibility of allowing Mr Symes to have "a second bite at the cherry" [see pages 123-124 of Day 1].)
(iii) Thirdly, cross examination should be aimed at achieving compliance with the undertakings. Obviously some latitude would have to be allowed to the cross-examiner in achieving that end and, having regard to the nature of the undertakings, the cross examination is bound to be fairly wide ranging. But that is not the same as allowing the full width of a post-judgment cross examination. We will return to that point below.
(iv) Fourthly, Mr Symes should be entitled to claim privilege against self-incrimination in the proceedings alleging fresh contempts, even though that relates to the very order under scrutiny, and in relation to any further contempts which might be alleged in these proceedings. (Although contrary to the view expressed by the judge, based on passages from Rimer J's judgment in Cobra Golf Ltd v Rata  Ch 109 where he discussed the point without deciding it, this is now conceded by the claimants to be correct, having regard to Arden J's ruling in Memory Corporation v Sidhu  Ch 645). But he should not be able to claim that privilege in relation to compliance with the undertakings, if no fresh contempt proceedings are being brought in relation to them, and all that is in issue is the lifting of the suspension.
Fresh allegations of contempt
Submissions of the Parties
Conclusion on Cross Examination Aspect
i) The claimants' applications that there has not been compliance with undertakings 1, 6, 7, 8, 10 and 11 be listed as soon as possible.
ii) Mr Symes do attend for cross examination on whether the affidavits filed in purported compliance with the undertakings given on 22 May do so comply and with a view to securing compliance if they do not.
iii) If he refuses so to attend, or to answer questions if he attends, the affidavits may be admitted in evidence but the weight to be attached to them is a matter for the judge. This refusal to answer questions would only be a contempt of court if the judge had concluded that prima facie his compliance affidavits did not fulfil his undertakings.
iv) Mr Symes be permitted to put before the court further evidence either by way of affidavit or orally so as to fulfil the obligation of compliance, but must attend for cross examination thereon with a view to achieving compliance.
v) If before Mr Symes puts in or gives evidence he wishes to challenge the affidavits put in by the claimants in any material respect, he should give notice that the deponents should attend for cross examination prior to his giving evidence.
vi) If Mr Symes desires to give evidence on the contempt applications, the undertakings aspect and the committal applications should be heard together.
vii) If Mr Symes does not desire to give evidence on the contempt applications, the contempt applications should proceed first, and a finding be made as to whether contempt is established.
viii) If it is not established, the applications should be dismissed; if established, sentence should be adjourned pending the hearing of the undertakings aspect.
(1) First as regards the comment made while considering whether Mr D and Mrs N should be joined, the judge relied on the fact that Mr Burnett QC representing Mr Symes at the May hearing expressly waived any reliance on the making of that comment as a ground for suggesting that the judge should not have heard that issue; that ruling meant it was not open to Mr Symes to raise the point in relation to the trials of later issues.
(2) In any event he was of the view that his criticisms of Mr D and Mrs N were justified.
(3) He relied on the fact that Mr Slade had on Tuesday 26th August sought to persuade him to continue with the claimants' application, in so far as it related to considering whether Mr Symes had complied with his undertakings, and only raised the question of recusal during the hearing on the 28th August and then only in connection with the fact that the judge would have to decide the Akhenaten statue point, which might involve the evidence of Mr D and Mrs N.
(4) His view was that this was just another tactic by those acting for Mr Symes to delay matters.
(5) That there was nothing which he had said about Mr D or Mrs N which could be said to have led to a conclusion that a reasonably minded observer would think he was biased against them.
"When the Strasbourg jurisprudence is taken into account, we believe that a modest adjustment of the test in R v Gough is called for, which makes it plain that it is, in effect, no different from the test applied in most of the circumstances which have a bearing on the suggestion that the judge was biased. It must then ask whether those circumstances would lead a fair-minded and informed observer to conclude that there was a real possibility, or a real danger, the two being the same, that the tribunal was biased."
"MR BROWNE-WLKINSON: The reason I say that is twofold. First to make such a direction without notice to Domercq or Nussberger would be regrettable and secondly, it might give rise to frightful difficulty in the context of contempt proceedings to at this stage.
MR JUSTICE PETER SMITH: You mean the rogues might fall out?
MR BROWNE-WILKINSON: I am sorry?
MR JUSTICE PETER SMITH: You mean people might fall out?
MR BROWNE-WILKINSON: No, I do not……"
"….. why should they then be reluctant to come to this court to produce their evidence and be cross-examined (like I am cross-examining you and have been cross-examining Mr Symes) in relation to their case?
A. Because they have a constitutional right upon which they chose to rely to have their laws respected.
Mr Justice Peter Smith: Why did they provide the witness statements then? The witness statement showed they were willing to have the issue determined in this court because they gave evidence on that issue?
The Witness: This is an interpretation.
Mr Justice Peter Smith: There's no interpretation about it. They provided the witness statements in this court before I made the order for the purposes of assisting Mr Symes in the determination of the issue of the ownership of the statue.
A. That is correct
Q. They were quite willing to provide that evidence so they were not going to insist upon any constitutional rights?
A. No. There are two different things at least in our understanding: one is to give evidence and the other one is to join in a claim.
Q. Absolutely. You're absolutely right. That is one thing that I was going to ensure that did not happen, that in effect your clients would have two bites of the cherry. They would come along here as witnesses. They were disbelieved, they could then say we were not parties, so we are not bound. Therefore the decision is nothing. That would be a complete waste of everybody's time if the parties were to have to relitigate the same issue again? Wouldn't it?
A. This is a completely different way?
Q. It is not. They came here as witnesses.
Q. They said in evidence we have a one third share and I disbelieved them. What you've said is that does not matter. They can then go away and say well as we are not parties, that decision does not affect us. That would be a waste of the claimants' time especially, because it would mean they would have to prove the same thing over again in another court. It would be a waste of Mr Symes' time because his evidence would be conclusive, and it would be completely contrary to the spirit of the Lugano Convention, which is designed to ensure that you do not have the same issues being decided in courts around the world isn't it?
A. That is correct."
"That answer with respect demonstrates why instead of writing letters saying I am not playing, she should have been here. She was willing to have this court adjudicate on the issue because she provided a witness statement for use by Mr Symes when that issue was going to be determined. She knew that this court (at the very least) involving the dispute between the claimant and Mr Symes was going to address this issue as to ownership. She provided evidence to assist on that.
A. Yes, and she has an interest in helping this matter on.
Q. She should be here and not playing games."
Order: Application dismissed. Minute of Order to be agreed on paper.