England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		17/07/2015

Mr Justice Green :

A. Introduction

1. There is before the Court (a) an application for summary judgment and for costs, and (b) an application for committal of the First Defendant, Thomas Shorey (hereafter "the Defendant"), for contempt of Court. The facts of this case may be stated relatively shortly. The Claimant is the owner of certain valuable confidential information. The Defendant was a former senior executive of the Claimant. He resigned by serving notice on 8^th April 2014 and as part of the departure arrangements entered into a detailed Settlement Agreement on 9^th May 2014 ("the Settlement Agreement").
2. This contained comprehensive restrictive covenants which included an 8 month non-compete restriction, and restrictions upon the use and dissemination of confidential information belonging to the Claimant set out in Schedule 6.
3. The Claimant subsequently came to learn of information to the effect that the Defendant was violating the restrictive covenants and on 22^nd August 2014 the Claimant's solicitors wrote requiring the Defendant to cease and desist.
4. On 26^th August 2014 the Defendant replied flatly denying that he had engaged in any conduct in breach of contract. Nonetheless, the Claimant persisted and issued proceedings in September 2014 which included an urgent application for an interim injunction. The application came before Cooke J on 2^nd October 2014. In defence of that application on 2^nd October 2014 the Defendant served a Witness Statement categorically denying breach. However, to compromise the application undertakings were offered by the Defendant through counsel pending a suitable return date. The undertakings were to the following effect:

1. Until the return date of the Claimant's application or further Order, whichever is sooner, the Defendant undertakes not to use or disclose Confidential Information that he acquired in the course of his employment with the Claimant including in particular:

1.1 Contact details of Customers, Prospective Customers and Restricted Entities;

1.2 Details of Customers, Prospective Customers and Restricted Entities requirements and terms of business;

1.3 Details of the Claimant's pricing information provided to Customers, Prospective Customers and Restricted Entities; and

1.4 Details of the Claimant's employees and officers and the remuneration and benefits paid to them.

5. The expressions "Confidential Information" and other terms such as "Customer" and "Restricted Entity" were defined in Schedule 1 to the Court Order and replicated the definitions in the Settlement Agreement.
6. Prior to the return date the Defendant gave undertakings cast in broader terms. These were embodied in the consent Order which contained the usual penal notice. It was signed by the Defendant on 28^th October 2014. He undertook to the Court:

"i. Until trial or further order not to use to disclose confidential information, in the same terms as the undertakings given on 2^nd October 2014;

ii. Until 31 January 2015, not to solicit any business custom or order for any Restricted Products or Restricted Services from any Customers, Prospective Customers and Restricted Entities;

iii. By 4.30pm 7^th November 2014, to swear and serve an affidavit giving full particulars of the following matters:

a. Identifying any Confidential Information within his possession and control…and its location;

b. Stating what use if any he has made of the Claimant's Salesforce Database and/or other Confidential Information;

c. Identifying any third Party, if any, to whom he has disclosed any confidential information and exhibiting copies of any correspondence with such third parties through which such Confidential Information was disclosed;

d. Stating which if any Customers, Prospective Customers and Restricted Entities he has contacted using Confidential Information, including but not limited to any information derived from the Claimant's Salesforce database;

e. Stating that in respect of any Confidential Information, he has returned any hard copies and deleted any soft copies;

f. Verifying that he no longer has in his possession any Confidential Information in any form".

7. The affidavit sworn by the Defendant on 7^th November 2014 averred that the only confidential information that he had was a hard drive kept in his attic, an electronic folder relating to certain other litigation, the contact details of a number of individuals that were automatically downloaded from the iCloud on to his newly purchased iPhone (which he had now deleted), and a copy of the agreement relating to the Claimant's price rates which he himself drew up in 2002. In relation to use of confidential information he swore that he had made no use whatsoever of any such information save with regard to certain limited exceptions. He also swore that he had not disclosed any confidential information to third parties. The thrust of his affidavit of 7^th November 2014 responding to the requirement in the Court Order was consistent with his Witness Statement evidence of 2^nd October 2014. A Defence was also served which followed the approach of denying the allegations.
8. Subsequently, a Mr Daniel Cross-Bates, an employee of the Second and Third Defendants, came to be employed by the Claimant. In due course it emerged that the Defendant's Witness Statement of 2^nd October 2014 and the affidavit of 7^th November 2014 were both false as was his Defence which he had signed under a statement of truth. It became clear that he had retained all along, on a USB stick, a copy of the Sales force database and a volume of other confidential information. In particular it appeared that he had retained and disseminated to the Second and Third Defendants a significant volume of information alleged to be confidential and a document known as the Bookings List which contained not only the names of the Claimant's customers, but the dates upon which they travelled, the price of the trip (thereby enabling recipients to identify the most lucrative customers) and personal contact details for the individuals responsible for leading school trips. Evidence before the Court indicates that the Second Defendant has admitted that one of its employees used the communicated list for its own commercial purposes.
9. The information provided to the Claimant by Mr Cross-Bates has, in effect, forced the Defendant to come clean. In a second affidavit sworn on 15^th January 2015 the Defendant now admits that he gave false evidence in both his Witness Statement dated 2^nd October 2014 as well as in the affidavit of 7^th November 2014. He admits that the volume of information that he retained was saved on to the USB stick at various points during late 2013 and in the course of 2014, prior to the termination of his employment with the Claimant. He does suggest, however, not to have done this for the purpose of retaining it after his employment terminated. He also admits that he made a certain amount of use of the Claimant's database inter alia providing copies of the All Accounts and Contacts List and Bookings List to employees of the Second Defendant and/or associated companies.
10. The Second and Third Defendants admit being in receipt of the Claimant's information, it having been communicated to them by the Defendant. The position of the Second and Third Defendants (insofar as relevant for the purposes of the present applications) is that they have made but limited use of this information. I was informed, during the course of the hearing in this case, that the Claimant has now compromised its claim against both the Second and Third Defendants.
11. A Defence to the action commenced by the Claimant was served on 2^nd January 2015. This was initially drafted so as to reflect the false position set out in the early Witness Statement and affidavit. However, it was subsequently amended to take account of the information set out in the affidavits sworn on 15^th January 2015 by the Defendant and, accordingly, contains a number of admissions.
12. I have read with care the second affidavit of the Defendant. It is comprehensive and explains what information the Defendant took away with him when he left the employment of the Claimant. It gives an account of each false statement made in previous Witness Statements and affidavits and gives a detailed account of the extent and nature of the violation of the restrictive covenants. It is plain that a very great deal of care and attention has been deployed in the preparation of this affidavit by the Defendant. Although there are minor respects in which the Claimant cavils with its contents, for example alleging that certain statements are ambiguous, it is in large measure unchallenged by the Claimant. In this second affidavit the Defendant apologises unreservedly. He accepts that his conduct was wrong and amounts to a contempt of court. He does not seek to undermine or diminish the seriousness of his conduct. The affidavit describes the steps that he has taken to purge his contempt by, for example, contacting those to whom he had communicated information with a view to preventing further dissemination. The Defence has been amended to take account of the admissions now made.

B. Claimant's summary judgment application

13. The Claimant now seeks summary judgment upon the basis of what are said to be admissions contained within the second affidavit and reflected in the Amended Defence. In its original application the Claimant sought judgment on the action as a whole with quantum to be determined later. However, as the case progressed the Claimant incrementally reduced the scope of the claims. This included the complete abandonment of claims based upon alleged breach of the restrictive covenants in the Settlement Agreement (e.g. non-solicitation and canvassing and poaching); and the allegations of conspiracy. During the hearing itself Mr Rivalland for the Claimant also identified a series of important paragraphs in the Particulars of Claim which were to be struck through. The case for summary judgment thus evolved into a far more limited application than it had been at the outset.
14. I indicated during the hearing that I was prepared to grant summary judgment in relation to those matters which constituted admissions, or as to which there could be no sensible defence. This was upon the basis that I had the power under CPR PD 24.1 to give judgment upon an "issue on which the claim in whole or in part depends".
15. However I had some real difficulty in identifying what was, and what was not, agreed. To endeavour to overcome this difficulty and upon my urging (over the adjournment in the hearing) the Claimant produced a Scott Schedule which, under four headings, identified the issues upon which it sought judgment. During the hearing one heading was abandoned. Much of the Schedule was agreed and only two relatively short and self-contained issues remained disagreed.
16. As to the areas agreed the Defendant does not dispute that his retention of the Claimant's information (such as the Salesforce database and the Bookings List) amounted to a breach of the Settlement Agreement. Further, he accepts that, at least in some limited respects, he used that information for instance by transmitting it to the Second Defendant. I should record that the Second Defendant is connected to the Third Defendant which may explain why it also came into possession of some of the Claimant's information. There is also an acceptance that in some respects his conduct amounted to the breach of fiduciary duty that he owed to the Claimant.
17. I am now able to identify those matters in respect of which it is proper to give summary judgment. I identified during the resumed hearing precisely which allegations of breach were agreed. I do not set those items out here. The parties are to draw up an order which incorporates my conclusion that I give judgment for the Claimant in relation to the admitted issues.
18. As to the two disputed matters I deal with these below. I have some sympathy with the Claimant on these matters which has pleaded a solid prima facie case. However, in relation to both matters I have come to the conclusion that there is simply not enough information at this stage to be able to form a sufficiently clear view to justify giving judgment upon these issues. In relation to both there are pure questions of fact which are outstanding and they will have to be resolved at trial.
19. Contact data: First, it is alleged that the retention and use of contact data was a breach of clause 8.1.1, 8.1.3 and 8.2 of the Settlement Agreement. The Defendant's position is that whilst he accepts that he wrongfully retained confidential contact details, the emails he sent to people were based upon contact details that he had acquired from other sources. He says that much of this was in his possession prior to his taking up employment with the Claimant, or was information he obtained from social media or other third party sources and that therefore it is not information over which the Claimant can assert confidentiality vis-à-vis the Defendant. Ultimately this is a question of fact which I cannot resolve on a summary basis.
20. Vitesse Arnhem: Secondly, it is alleged that the transmission of contract and pricing information to Vitesse Arnhem were breaches of clause 13.1 of the Settlement Agreement and clause 2.2.2.3 of Schedule 6. The main evidence relied upon is an email dated 22^nd July 2014 in which the Defendant refers to the provision of a draft agreement showing various commercial rates to a Mr Janssen of Vitesse Arnhem. The Claimant submits that this was a confidential agreement belonging to the Claimant. There is no dispute from the Defendant that this was a confidential document belonging to the Claimant. However, he says that although this was post-termination, all that the email refers to is a request made by Vitesse Arnhem for Mr Shorey to provide to them, in effect, as a continuation of his former employment, a document they wanted as part of their ongoing business relationship with the Claimant. In his Amended Defence (paragraph [10]) he thus avers that the contract was not communicated with a view to winning business from this company. He thus denies misuse of the information. On my reading of the email itself this is a possible, if somewhat surprising, inference to draw. However, it raises a question as whether, if indeed this turns out to be true, there was misuse of the confidential information. On balance I do not consider that this can be resolved prior to trial. I decline to give summary judgment upon this particular matter.
21. The parties are to draw up an Order reflecting those findings.
22. The Claimant has indicated that it might seek Wrotham Park damages (cf. Wrotham Park Estate Co v Parkside Homes [1974] 1 WLR 798). For the avoidance of doubt nothing in this Judgment is to be treated as indicating any view on whether those admitted breaches will, in due course, turn out to be material or otherwise sound in monetary terms.
23. Mr Solomon, for the Defendant, questioned whether the net effect of the abandonment of claims meant that the only issues upon which the Claimant now sought to go to trial were those which were the subject matter of the summary judgment application. Mr Rivalland did not express a view on this. I was left somewhat uncertain as to what was left of the claim over and above the admitted matters and the identified disputed matters (upon which I have ruled). Lest there be any doubt so far as other matters set out in the Claimant's original application are concerned (and which have not been abandoned) I decline to grant summary judgment. First, they raise factual disputes which it is not possible for me to resolve in these proceedings. There appears to be a broad dispute as to whether certain information retained or used was within the public domain and therefore was "confidential" or not. Alternatively, even if the information was in the public domain, there is a dispute as to whether nonetheless it is able to attract a level of confidentiality because of the manner in which it is aggregated or organised by the Claimant which means that, in effect, the sum of the information and data is materially greater than the value attributable to the (publicly available) individual parts: see Coco v A N Clark (Engineering) [1969] RPC 41. There are also material disputes about whether any use led to loss. I was informed by the Claimant that very shortly prior to the first hearing the Claimant had entered a settlement agreement with the Second and Third Defendants. The terms of that agreement were not before the Court. However, this led Mr Solomon, for the Defendant, to submit that summary judgment could not be granted without an analysis of this Settlement Agreement. This was because in Jameson v Central Electricity Generating Board [2001] 1 AC 455 the House of Lords held that the liability of concurrent tortfeasors for the same harm was discharged by a settlement which had been agreed with one of them. As a matter of principle, once a Claimant's claim has been fully satisfied by one of a number of concurrent tortfeasors his cause of action for damage is extinguished against all of them. The effect of a compromise was to fix the amount of a plaintiff's claim in just the same way as if the plaintiff had obtained judgment after trial. Mr Solomon submitted that the same principle, which was underpinned by a policy of preventing double recovery, applied equally to claims in contract. He submitted that if, upon a proper analysis of the Settlement Agreement with the Second and Third Defendant, the Claimant received all that it was entitled to then its claim against the Defendant would be extinguished or at least might be materially reduced. It is not possible for me at this stage to say whether the Settlement Agreement with the Second and Third Defendants would have an impact upon the claim against the Defendant. However, I cannot rule this out since it is possible that any loss attributable to the "use" by the Defendant of the Claimant's information will depend upon what the Second and/or Third Defendant did with that information. A claim compromised against those defendants might therefore impact upon the scope and effect of the Defendant's liability. See for an example of a case where a claim against one defendant impacted upon (otherwise successful) non-tortious claims against another defendant by reducing the quantum recoverable DSD & NBV v The Commissioner of Police for the Metropolis [2014] EWHC 2493 (QB) paragraphs [15], [56] – [65].
24. For all the above reasons the only matters upon which summary judgment is granted are those referred to above.

C. Application for committal for contempt of Court

(a) The application for Committal

25. I turn now to the issue of contempt of Court. The Claimant, in March 2015, issued an application for committal of the Defendant for contempt of Court. The basis of the application is said to be the Defendant's conduct in knowingly swearing and serving the false affidavit on 7^th November 2014 which it is said was in "flagrant breach" of the Court Order dated 28^th October 2014. It is submitted that the Defendant "knowingly swore and served a false affidavit". It is said that in the circumstances the Defendant committed a contempt of Court. Paragraph [4] of the application is in the following terms:

"4. In circumstances where the contempt in question relates to a false affidavit, it is not necessary to seek the permission of the Court or Attorney General before proceeding with a Committal Application: see for example Hydropool Hot Tubs Limited v Robertjot & Another [2011] EWHC 121 (Ch) paras, 54 – 62 (per Arnold J)".

26. Paragraphs [5ff] set out alleged particulars of falsity and contempt. This essentially relies upon the admissions contained within the second affidavit compared and contrasted with the position adopted by the Defendant in the first affidavit.
27. I have already recorded that the Defendant accepts that the first affidavit was false in that in it he denies possession of certain information belonging to the Claimant, using information belonging to the Claimant, and disseminating it to third parties. It is now accepted that the giving of false evidence amounts to a contempt of Court.

(b) Whether the application should be adjourned pending trial

28. Before considering how I should exercise my discretion as to punishment there are two preliminary matters which were raised. These were, first, whether I should adjourn the application pending the outcome of the litigation between the parties; secondly, whether I should refuse to hear the case because the permission of the Court has not been sought in accordance with the CPR 32.24 and CPR 81.17. I will address each issue separately.
29. First, as to the timing of the application, Mr Solomon, for the Defendant, submitted that it was inappropriate for the application to be made now since there would be a trial even if the summary judgment application prevailed. It was submitted that the Claimant was not seeking summary judgment on all issues and other significant issues, such as in relation to the alleged breach of the non-poaching covenant, and as against the Second and Third Defendants and as to whether certain information was in fact confidential etc., remained extant. It was submitted that the issue of the Defendant's breaches went to the core of the outstanding issues in the litigation. He cited in support the observation of the Divisional Court in Barnes v Seabrook ("Barnes") [2010] EWHC 1849 (Admin):

"47…it is important not to impose any improper pressure on a witness who may later be called to give oral evidence. In particular, if the alleged contemnor is to be called as a witness, an application under Rule 32.24 should not be made, and if made should not be entertained by the Court, until he is finished giving his evidence".

30. Mr Solomon also relied upon the observations of the Court of Appeal at KJM Superbikes v Hinton (Practice Note) [2008] EWCA Civ 1280 ("KJM Superbikes") at paragraphs [18] – [19]. This case, and that of Barnes, concerned the exercise of the Court's discretion to allow or refuse the bringing of contempt proceedings under CPR 32.14 and CPR 81.17.
31. In fact, the law is not quite as black and white as Mr Solomon would have it or as is suggested in Barnes. In KJM Superbikes the Court of Appeal made a number of observations about the exercise of the Court's discretion to grant or refuse permission to pursue contempt proceedings. Lord Justice Moore-Bick observed that cases were bound to differ widely both as to their nature and as to the circumstances of the alleged contempt and that each would have to be considered according to its own facts (ibid paragraph [15]). Further, that an important issue for a Court considering permission was not whether a contempt had been committed but whether proceedings should be brought to establish whether it has or not. In this regard he cited with approval the judgment of Sir Richard Scott VC in Malgar Limited v R E Leach (Engineering) Limited [2000] FSR 393. A further consideration was the obvious need to guard carefully against the risk of allowing vindictive litigants to use committal proceedings to harass persons against whom they had a grievance (whether justified or not) and the Court should be astute to ensure that the applicant "…was liable to be directly affected" by the underlying complaint (ibid. paragraph [17]). Lord Justice Moore-Bick also emphasised the need to further the overriding objective and not permit applications for committal to become satellite litigation disrupting the progress of the substantive proceedings (ibid. paragraph [18]). Finally, in paragraph [19] he stated that in some cases it was possible to deal with an application at an early stage especially if the alleged contempt related to a matter which had passed and had no continuing relevance to the proceedings. It was in this context that he made the observation in Barnes, relied upon by Mr Solomon, that it was important not to impose improper pressure upon witnesses who may be later called to give oral evidence.
32. All in all the position is clear: the Court should be wary of entertaining applications for committal if this would risk impacting adversely upon the fairness of future proceedings, and in particular upon the ability of the alleged contemnor to give oral evidence at a future point in time. However, this was not an immutable rule and a Court would have to weigh, carefully, all the relevant surrounding circumstances.
33. In the present case I have decided that it is appropriate to address the question of contempt now. There are a number of reasons for this conclusion.
34. First, and most importantly, the facts and matters set out in the Defendant's second affidavit are not materially in dispute. It has not been necessary for Mr Solomon to call his client in order to give evidence (though he was prepared to give evidence), or for him to be cross-examined. Mr Rivalland, for the Claimant, did not wish to go beyond the four corners of the second affidavit and was prepared to treat it as correct. There is no risk, therefore, of the Defendant giving evidence in the course of the committal proceedings which may conflict with or prejudice the position the Defendant may be entitled to take in future proceedings. Indeed, as the Claimant points out, the claim against the Second and Third Defendants has been compromised so the only extant issues relate to the conduct of the Defendant and as to these they are limited in scope given the admissions and might now relate to loss issues only. The basis upon which I propose to proceed is exclusively upon the matters which are admitted as being in contempt of Court and which flow out of the second affidavit. In addressing the issue now and in this way I can identify no sensible risk to the ability of the Defendant to give evidence later or to the fairness of future proceedings.
35. Secondly, I am aware that various attempts at mediation have already occurred and this type of case is, classically, the sort of case that does settle prior to trial. If I were to adjourn this application until after the trial but it were then to settle before trial then the net effect might be either that the application disappears out of sight (which would not serve the due administration of justice because there is a public interest in the Courts being seised of and ruling upon the propriety of the conduct of parties) or that it is pursued at a point in time long into the future when the amount of time which has elapsed between the contempt and the punishment is very substantial and during which period the threat of contempt proceedings will have hung over the Defendant. I do not view this as satisfactory on the facts of this case. In a real sense, viewed from the perspective of the public interest, justice delayed may be justice denied.
36. For all these reasons I propose to address the matter now, and not adjourn the application pending trial.

(c) Whether the application is a nullity?

37. The second matter raised by Mr Solomon, for the Defendant, was that the application was an abuse because it was predicated upon the mixture of violations of Court Orders, failure to act truthfully or honestly in Witness Statements, and failure to act truthfully or honestly in affidavits. Mr Solomon characterised the application as "hybrid". He submitted that in such circumstances the Claimant was bound to obtain the consent of the High Court prior to the bringing of the application and in default thereof the application was a nullity. Pursuant to CPR 32.24 proceedings for contempt of Court may be brought against a person if he makes, or causes to be made, a false statement in a document verified by a Statement of Truth without an honest belief in its truth. CPR 81, Section 6, contains provisions in relation to committal for making a false Statement of Truth and these include the obligation to obtain the permission of the High Court or the Attorney General before the making of an application for Committal.
38. CPR 32.15 provides that evidence must be given by affidavit, instead of or in addition to a Witness Statement, if this is required by a Court, or a provision contained in any other rule, a practice direction or in an enactment. There is however no equivalent of CPR 81 in relation to false statements in affidavits. The CPR thus draws a distinction between Witness Statement and affidavit evidence. The notes to the White Book (32.15.1, page 1080 (2015)) state that affidavits must be used "where sworn evidence is required". CPR 32.15.4 states that an affidavit should, if practicable, be in the deponent's own words and should be expressed in the first person and should indicate which of the statements within the affidavit are made from the deponent's own knowledge and which are matters of information and belief and the source for any matters of information or belief.
39. Pursuant to CPR 81, Section 6, before an application for committal for contempt of Court may be made upon the basis that an alleged contemnor made a false Statement of Truth or disclosure statement, the permission of the Court is required. Indeed this is a necessary pre-condition for the bringing of an application which will be a nullity in the absence thereof. The requirement for permission is set out in CPR 81.17. The obligation to obtain permission is provided for in CPR 81.18. This makes clear, in sub-paragraph [3], that a committal application in relation to a false statement of truth or disclosure statement may be made only with the permission of a Single Judge of the High Court or by the Attorney General. In KJM Superbikes Limited (ibid.) the Court of Appeal explained that as proceedings for contempt of Court were public law proceedings, when considering whether to grant permission the Court would have regard to the public interest alone. When the Court granted permission to a private party, that person was, in effect, being allowed to act in a public rather than a private capacity to pursue the public interest. It was therefore necessary for the Court when addressing permission to consider whether the pursuit of committal proceedings was in the public interest. The pursuit of contempt proceedings in ordinary cases may serve the public interest by drawing the attention of the legal profession, and through it to potential witnesses, to the dangers of making false statements. The Courts were not to treat serious examples of making false evidence as of little importance, otherwise the Courts encouraged witnesses to regard the Statement of Truth as a mere formality. The Court then went on to consider the sorts of considerations that should govern the exercise of discretion to grant or refuse permission.
40. The distinction between Witness Statements and affidavits was considered in Hydropool Hot Tubs Limited by Arnold J, at paragraphs [58] and [59] who stated as follows:

"58. In my judgment CPR rule 32.14 has no application to an allegation of contempt by knowingly swearing a false affidavit. The purpose of rule 32.14 is to enable proceedings for contempt to be brought in respect of false statements made in a document verified by a statement of truth, such as a statement of case, a disclosure statement or a witness statement. The requirement for such documents to be verified by a statement of truth was a procedural innovation introduced by the CPR. As Sir Richard Scott VC (as he then was) pointed out in Malgar Ltd v R.E. Leach (Engineering) Ltd [2000] FSR 393 at 395-396, a means for policing statements of truth was necessary and that is what rule 32.14 provides. In doing so, the CPR did not make any substantive change in the law of contempt. Whether the making of a false statement in a document verified by a statement of truth amounts to a contempt depends on the general law. He suggested that it would do if, but only if, the maker of the statement knew that it was false and the false statement was likely to interfere with the course of justice.

59. As Scott VC also pointed out, however, knowingly to swear a false affidavit has always rendered the maker liable to be prosecuted for perjury. This is because the affidavit includes a jurat. It is therefore the equivalent of testimony on oath. Although Scott VC did not say so, it has long been the case that knowingly giving false evidence, including swearing a false affidavit, is also a contempt of court: see Arlidge, Eady and Smith on Contempt (3^rd ed) at 10-159 to 10-161. Nowadays it is unusual for false evidence to be the subject of contempt proceedings rather than a prosecution for perjury, but in principle the sanctions for contempt remain available in an appropriate case".

41. The distinction is thus one based largely upon procedural history. It is noteworthy that the judgment of the Vice Chancellor in Malgar cited in this context approvingly by Arnold J was also cited with approval by Lord Justice Moore-Bick in KJM Superbikes (ibid.): see paragraph [23] above. It thus follows that there is a clear distinction to be drawn between the position in relation to an application founded upon an affidavit, and that founded upon a Witness Statement. I am bound to say that I find the distinction drawn hard to sustain. In so far as it is considered that a false affidavit should be treated more seriously than a false witness statement (hence doing away with the need to obtain permission) this seems anachronistic. Further, it assumes that the law attributes less weight and significance to a formal Statement of Truth than to a formal affidavit, which in my view is not a reflection of modern litigation practice: see the observations of the President of the Queen's Bench Division in Adil Akram & Amir Akram v SSHD [2015] EWHC 1359 (Admin) at paragraphs [24] – [27]. Nonetheless, a distinction does exist between the two which is inherent in the procedural rules governing contempt proceedings and it is one which in this case advantages the Claimant.
42. As I have set out above, the Claimant has framed this application for committal upon the basis of false statements made in an affidavit. References to prior Orders, Witness Statements and the like are merely context and are not relied upon to support the application. As such this is not a case where permission is required.
43. Mr Solomon for the Defendant relied upon the ruling of the House of Lords in Seal v Chief Constable of the South West of the Police [2007] UKHL 31; [2007] 1 WLR 1910. This case concerned the scope of Section 139 of the Mental Health Act 1993. It concerned proceedings brought by Mr Seal against the Defendant for false detention. Pursuant to Section 139 proceedings may not be brought by a person subject to the MHA 1993 without the consent of the High Court or the DPP. In the case consent had not been obtained. The Chief Constable applied to strike out the proceedings upon the basis that since they had not been brought with consent they were thereby a nullity. Mr Seal contended that lack of permission, even when required as a precondition, was an irregularity which could be rectified and was not a fatal flaw invalidating the proceedings. The House of Lords, by a majority, held that the precondition was mandatory and the proceedings pursued in breach thereof were a nullity. The majority arrived at this conclusion by reference to a close analysis of the statutory language and history. In my view, this judgment has no impact upon the present proceedings. In so far as it is relevant it is to the effect that I must simply construe the rules for what they are worth and apply then the conclusion arrived at. The present application for committal falls outwith the scope of CPR 81. According to the judgment in Hydropool (ibid.) there is a clear historical and jurisprudential basis for the Courts differentiating between Witness Statements and affidavits. If this may seem to be an anachronism it is nevertheless good law until the rules are changed. This is not a case of a hybrid application in which the Claimant relied upon affidavit and other evidence falling within the scope of CPR 81. In this case the claim rests exclusively upon affidavit evidence. I express no view as to the position that would pertain were this matter to be hybrid with part resting upon the contents of an affidavit and another part resting upon a Witness Statement. I thus conclude that there is no requirement upon the Claimant to seek and obtain leave before bringing these proceedings.

(d) The appropriate sanction in this case

44. I turn now to the substantive issue before me. The Court has power by virtue of its inherent jurisdiction and under the Contempt of Court Act 1981 to punish the Defendant for his admitted contempt of Court. I have the power to impose a sentence of custody for up to 2 years and/or a fine. I also have the power to suspend any custodial sentence that I consider it appropriate to impose. The Claimant submits that I should impose a custodial sentence of some months' duration.
45. In the text below, I have sought to measure the Defendant's conduct by reference to the sorts of factors which Courts in other case have considered relevant. There is no fixed list of relevant criteria and the sorts of facts and matters taken into consideration reflects typical considerations which might be seen as mitigating or aggravating factors in criminal sentencing e.g. degree of personal culpability, level of harm, whether there has been an admission and efforts already taken to purge the contempt and show contrition, etc. Guidance in this regard may be found (inter alia) in: JSC Banks v Solodchenko [2010] EWHC 2843 (Ch) at paragraphs [18] and [19]; and Barnes v Seabrook [2010] EWHC 1849 at [47]. In this case I have paid particular regard to: (i) the intrinsic seriousness of the contempt and whether it passes the custody threshold; (ii) whether there has been an early and comprehensive admission and purging of the contempt and the credit to be given for this; (iii) personal circumstances including previous good character; (iv) whether a custodial sentence would serve the purpose of securing compliance with the order breached; and (v), the existence of prejudice to the applicant. Given that these proceedings are penal (quasi-criminal) and in principle a punishment of custody might be imposed it is appropriate to adopt an approach which has regard to the sorts of facts and matters that would be relevant in a criminal sentencing exercise.
46. I start by considering the intrinsic severity of the contempt. In the present case the Defendant has admitted proffering knowingly false evidence in an affidavit. This was part of the perpetuation of a series of false and misleading statements designed to subvert the due administration of justice. My necessary starting point is that this was a serious infringement committed deliberately and with knowledge, with the specific intent of undermining judicial proceedings. A Court would be remiss if it did not conclude that this is the sort of conduct where in many instances the custody threshold will prima facie be passed. In my view this particular case hovers at or fractionally beyond the custody threshold. I can contemplate many more serious infringements; but that does not undermine the seriousness of the contempt of Court which is before the Court. My starting point, therefore, is that in principle a custodial sentence would prima facie be appropriate.
47. I turn now to consider mitigation. There are 4 main points to make.
48. First, the Defendant is to be given substantial credit for: admitting the contempt; the early stage at which the admission occurred; and the steps taken to purge the contempt and prevent harm. The affidavit that he swore on 15^th February 2015 is, as I have recorded above, detailed and comprehensive. It amounts to 43 paragraphs. It deals comprehensively with the unlawful retention of confidential information. It deals both with the use and disclosure of confidential information and makes a series of admissions as to use. It explains the steps that the Defendant took to purge his contempt once he was aware of the Claimant's application against him. He provides commentary upon each of the statements made in his earlier affidavit identifying which was true and which were not true and why and how. He apologises unreservedly and wholeheartedly to the Court and to the Claimant for his earlier provision of false evidence and for the consequential breach of the Court Order. The accuracy of the preponderant part of the affidavit is not seriously in challenge. There are some areas of disagreement but, in the light of my consideration of the summary judgment application, I accept that where there is disagreement there may be sufficient basis for a non-admission or a denial. A contemnor is not bound to roll over and play dead in litigation simply to convey a message of good faith to the court dealing with the contempt where there is a proper basis for raising a defence. In the circumstances, in my judgment, I am bound to give substantial credit to the Claimant. This affidavit represented an early facing up to the realities of the situation that he faced.
49. Secondly, I attach some weight to personal circumstances and good character. As to the explanations given by the Defendant for his conduct, these include personal pressures at home and at work. They do not, in any way, justify the conduct. Nonetheless, I give some modest weight to the facts and matters raised. Equally, I give some modest weight to the fact that the Defendant has no previous convictions. I give only "modest" weight to this factor because, unlike in criminal proceedings, it is common for defendants whose conduct in civil proceedings is said to amount to a contempt, to have no previous convictions. Nonetheless, because the Defendant faces the risk of prison, I am entitled to attach some relevance to the fact that he is a man of previous good character.
50. Thirdly, I bear in mind the purpose of punishment in cases such as this. The purpose behind the imposition of sanction is twofold. First, it is to demonstrate the Court's displeasure and condemnation of the contemnor's conduct. Secondly, it is to secure (coercive) compliance with an Order in the future. This of course assumes that there has yet been no or no sufficient compliance. In this case the purpose of coercion has no continuing relevance given the history of compliance. A term of imprisonment may of course remain appropriate even though it exerts no coercive effect and the contempt has already largely been purged, where it nonetheless remains the proper course of action to take to reflect the severity of the conduct in question. However, in the absence of a coercive effect a punishment short of custody may be more appropriate. In the present case as observed there is no need to punish through a custodial sentence in order to secure compliance.
51. Fourthly, I also take into account whether the Claimant has been prejudiced by virtue of the contempt and whether the prejudice is capable of remedy. The Defendant purged his contempt in January 2015 and has set out steps taken to avoid further dissemination of the Claimant's information. In large measure it appears that the harm consequential upon the breach has been limited. It is possible that to some degree the opening of the stable door might have allowed the horse to bolt on a permanent and irretrievable basis but the extent that this is so is very far from clear and no evidence has been placed before me to suggest that there is material outstanding prejudice. As already recorded the Claimant has settled (or is in the course of settling) with the Second and Third Defendants and, as I understand matters, this settlement addresses and prevents unauthorised present and future use. The imposition of a custodial sentence would not therefore serve to reflect the infliction of serious or grave continuing or irreparable harm to the Claimant.
52. In conclusion, I have come to the view that this is the sort of case which, in principle, is capable of passing the custody threshold. In considering whether to impose a custodial or a lesser sentence I have taken account of the mitigating factors set out above and I have concluded that considering all factors in the round a custodial sentence is unnecessary and would be disproportionate. I therefore conclude that a financial sanction is the appropriate punishment to impose. As to this, I have been shown a statement of means of the Defendant. It is clear that his present and potential liabilities exceed his assets. Accordingly, a relatively modest fine is in my judgment sufficient to mark the displeasure of the Court. I impose a fine of £1,000 to be paid within 28 days.

D. Costs

53. There remains a series of costs issues to resolve.
54. First, there are the costs of the initial applications made by the Claimant for interim relief which were compromised upon the basis of consent orders. It is normal practice in cases of this nature for the Defendant to give undertakings to resolve the issue without the need for a contested hearing upon the application for relief. This is upon the basis that the Defendant's position is protected by a cross-undertaking in damages and the Court will order that costs are to be resolved at trial when the merits are finally determined. In the present case the consent orders stipulated that costs were reserved. I am now asked by the Claimant to make an order for the costs of those applications prior to trial upon the basis that the Defendant's conduct in lying on affidavit and in view of the admissions should be reflected by a costs order now. I am not prepared to depart from the normal practice. The costs should be resolved at trial. The conduct giving rise to the contempt has been addressed separately and the Defendant has been sanctioned accordingly. There is no basis for imposing a form of double costs penalty burden upon the Defendant by taking into account his contempt in making a costs order in relation to these interim applications unless it can be said that the conduct amounting to the contempt in a real sense added to the costs of the applications for interim relief. As to this the conduct amounting to contempt post dated the consent orders in question and did not add to or cause any of the costs incurred in those proceedings. Indeed, in my view, the Claimant would have brought the application for interim relief even had the Defendant come clean much earlier. In such a case once proceedings had commenced the Defendant could hardly have resisted interim relief based upon his own admissions of wrong doing; I do not see such an application being contested by the Defendant upon the basis that since he had admitted his wrongdoing there was no longer a basis for an injunction. In such a case a court would have granted the relief or at least extracted undertakings from the Defendant. In all likelihood the parties would have entered into a consent agreement in terms not dissimilar to those actually agreed. There is another matter I take into account. It is now plain that the Claimant's case has substantially shrunk since the date of the consent orders yet there remains some significant outstanding factual matters to resolve, including as to damages. As such it follows in logic that the Defendant succumbed voluntarily to a consent order containing a deferred costs provision upon a basis that the Claimant now accepts it cannot maintain or which might not be made out at trial. In these circumstances without knowing a very great deal more about the merits it seems to me to be wrong to disturb the existing order.
55. Secondly, I turn to the costs of the committal proceedings. The Defendant does not oppose costs. The issue is whether I should summarily assess those costs. I have decided against summary assessment. Once again, the Claimant's case on contempt shrunk at the hearing itself in terms of the allegations made to support the application. Their case was also advanced upon the basis that it was appropriate that I should imprison the Defendant. I am in possession of a Schedule of costs; if I had summarily assessed costs I would have considered reducing the percentage to be recovered to take account of the fact that the scope of the application reduced at the last moment and that therefore the Defendant had to address by way of preparation facts and matters that were not being pursued. I consider that on balance the best solution is to give the Claimant its costs of this application on a standard basis but for them to be subject to detailed assessment if not agreed and the modification of the scope of the application can be a matter that would be taken account of during a detailed assessment if it gets to that point. I would reduce the costs by 25%. I will however make an interim payment in favour of the Claimant in the sum of £2,500 to be paid within 56 days.
56. Thirdly, there is the application for the costs of the summary judgment application. As to these I have granted the Claimant summary judgment upon certain admissions. I have refused summary judgment on certain other issues. Following the initial application the scope of the case has considerably reduced. The Defendant submits that had a proper schedule been advanced at the outset then he would have made formal admissions at that time upon the basis of the admissions already set out in his second affidavit and there would have been no need for this application at all. He submits, through Mr Solomon, that the initial application as drafted was vague and over ambitious and this made it very difficult for him to know how to respond and this is proven by the fact that not only were claims withdrawn but at the resumed hearing the Particulars of Claim was itself sought to be re-drawn by the crossing through of key allegations. He submits that given the admissions made in the second affidavit the sensible course for the Claimant should simply have been to press forward to trial using those admissions without this intermediate excursion into summary judgment territory. In some measure I agree. It is uncertain whether the present application will serve to progress in a meaningful way the present proceedings. Such may be evident only at trial. I will reflect these considerations in my Order but together with the fact that the Claimant has prevailed to some extent by a direction that the Claimant is to be awarded 30% of its costs on a standard basis to be subject to detailed assessment if not agreed.

E. Conclusions

57. The parties are to draw up an order reflecting the conclusions in this Judgment for submission to me for approval.