Hughes Jarvis Ltd v Searle [2019] EWCA Civ 1

Hughes Jarvis Limited v Searle [2019] EWCA Civ 1 was heard in the Court of Appeal, which allowed appeals against both committal orders made against the second appellant and a strike-out order terminating the underlying possession proceedings.

Hughes Jarvis Limited (“HJL”) brought a claim for possession of a first-floor flat at Gerrards Cross against Mr Searle, who had been the tenant since about 1989 under an assured or statutory tenancy governed by the Rent Act 1977. The claim was brought under Ground 9 of Schedule 2 to the Housing Act 1988 or alternatively section 98(10)(a) of the Rent Act 1977 on the basis that suitable alternative accommodation would be available to Mr Searle and his wife. HJL had acquired most of a parade of shops, including the flat, in 2014 with a view to redevelopment, had obtained planning permission for residential development in the form of self-contained apartments, and had secured vacant possession of much of the site save the flat and some other premises. The company proposed to provide Mr Searle with a two-bedroomed flat in Block B of the new development together with a parking space, with the option of a one-bedroomed flat and parking space in Block E once completed. Mr Searle resisted the claim, contending that the proposed accommodation lacked a garden which he required for his dog and would be too small, and that there was a substantial risk the development might not be completed. Mr Searle also brought a counterclaim against both HJL and Mr Neil Jarvis, the sole director and shareholder of HJL, for breach of repairing obligations under the tenancy and for obstructing a claimed right of way and trespassing on garages.

The trial was listed for three days commencing 25 April 2018. Mr Jarvis began his evidence that day and was being cross-examined at the time of the short adjournment. Before rising the judge gave Mr Jarvis the customary warning not to discuss his evidence with anybody. She repeated the warning before the overnight adjournment, though she gave Mr Jarvis permission to speak to his solicitors and counsel for the limited purpose of identifying certain architects’ drawings relevant to the development. Despite the warning, Mr Jarvis sent a number of emails overnight to his solicitors and to his counsel. The following morning counsel disclosed the existence of the emails to the judge but stated that she had not read them and had replied to Mr Jarvis by email that he must not communicate with her whilst under cross-examination.

Mr Jarvis continued to be cross-examined. During his evidence-in-chief he had indicated that if HJL failed to obtain vacant possession of the flat the company’s lenders would step in to demand repayment, would repossess the site and probably sell it in its existing state, which would also apply to charges over his house and might lead to his bankruptcy. However, when asked by Mr Hyams (counsel for Mr Searle) to clarify the position, Mr Jarvis said that the lenders including Limecourt Finance & Investments Limited would probably step in to complete the development at their own expense and then sell it to recoup their loans, leaving HJL with no profit and probably causing him to sell his home but not necessarily leading to his bankruptcy. Towards the end of the morning Mr Jarvis was re-examined by his counsel about why his evidence had changed. He volunteered that overnight he had spoken to Mr Shaun O’Neill, an adviser to Limecourt, to ask what would be his options if the claim for possession failed. The judge reminded Mr Jarvis that she had told him not to discuss his evidence with anybody. The thrust of Mr Jarvis’s replies was that he was only seeking clarification of Limecourt’s position if vacant possession could not be obtained. Counsel for HJL asked the judge to finish hearing Mr Jarvis’s evidence and then consider how to deal with the fact that he had spoken to Mr O’Neill. Mr Hyams submitted that Mr Jarvis had committed a very serious contempt in an attempt to perfect his evidence. The judge adjourned the hearing until 2.00 pm but indicated that as Mr Jarvis was still giving evidence he could not discuss the matter with his counsel or solicitors. He was also required to hand over his mobile phone to the court clerk.

When the hearing resumed the judge did not continue to hear Mr Jarvis’s evidence but instead invited both counsel to address her on how she should deal with Mr Jarvis. Counsel for HJL submitted that the judge should not proceed to determine whether Mr Jarvis was in contempt without first giving him the opportunity to put in evidence. The judge stated that she was satisfied that the sending of the emails and the conversation with Mr O’Neill amounted to contempt because they breached the explicit order she had made and constituted wilful disobedience. She said that Mr Jarvis was an intelligent and successful property dealer and she was satisfied those were contempts. The judge directed that a hearing to determine sentence should take place the following morning, the third day of the trial, and that it would not be necessary for it to be heard by a different judge, saying that it was not the type of contempt where Mr Jarvis had shouted abuse at the judge and she had no personal involvement or interest in it.

Despite that indication, the judge proceeded to remand Mr Jarvis in custody until the hearing the following morning. When counsel for HJL submitted that to remand Mr Jarvis in custody was not something which the judge should do lightly and that it would deprive him of any proper opportunity to give instructions, the judge replied that she had not done it lightly but with consideration, that what had happened in her courtroom could not be ignored and demanded an immediate response, and that her immediate response was to remand him in custody. Counsel persisted, saying that it would not be possible for Mr Jarvis to obtain criminal legal assistance by the following morning and that his imprisonment was not necessary. The judge responded that this was not about preventing further harm but about marking the seriousness of what had happened, that she did not yet know what was happening with the claim, and that she could not trust Mr Jarvis not to interfere with his own evidence by speaking to other people. Mr Jarvis was accordingly remanded in custody in prison overnight.

The following morning, by which time criminal counsel had been instructed to represent Mr Jarvis on the committal, counsel for HJL (who continued to act for Mr Jarvis and HJL in relation to a strike-out application issued that morning by Mr Searle) asked the judge to adjourn the hearing of the strike-out application and to give directions for the filing of evidence and skeleton arguments. The strike-out application sought an order either under CPR rule 3.4(2) or under the inherent jurisdiction by reason of Mr Jarvis’s contempt of court. Counsel submitted that as part of the strike-out application it would be necessary for the court to consider whether there could be a fair trial and Mr Jarvis should be given the opportunity of explaining what he did and what he had understood the judge’s warning to mean. The judge’s response was that it did not matter for the purposes of her consideration of whether the trial could be heard fairly what Mr Jarvis thought she meant at the time, as it made no difference to how she assessed his credibility or reliability or made a decision about whether a fair trial could continue. Despite further submissions that counsel would be unable properly to prepare in time for an effective hearing of the strike-out application that afternoon, the judge refused an adjournment and proceeded to hear both that and the adjourned committal.

Having heard the parties’ submissions, the judge made an order striking out the claim and the defence to counterclaim and entered judgment for Mr Searle on his counterclaim. Mr Jarvis and HJL were ordered to pay the costs of the claim and counterclaim on an indemnity basis. The judge said that she accepted that the sending of the emails had not affected the trial but that the contact between Mr Jarvis and Mr O’Neill was different. It was not possible, she held, to separate the infected evidence from the other evidence of Mr Jarvis in a way which would enable a fair trial. The judge then proceeded to hear submissions about the order she should make on the committal application. Having heard the effect which being remanded in custody had on Mr Jarvis and after taking into account his previous good character, the judge sentenced him to 14 days’ imprisonment suspended for 3 months. Mr Jarvis appealed as of right against the committal orders and he and HJL appealed with the leave of Arnold J against the strike-out orders.

The Court of Appeal considered first the committal. Lord Justice Patten (with whom Lord Justice Leggatt and Lady Justice Nicola Davies agreed) stated that witnesses are commonly given warnings by the trial judge not to discuss their evidence until completed, the purpose being to protect the witness from any attempt by a third party to influence their evidence and to ensure that the evidence given is the witness’s own best recollection unassisted by any other person. If a witness fails to comply, it is necessary for the judge to make an assessment of the damage caused. In this case the judge recognised that the emails which were not responded to caused no damage to the integrity of the trial process, so the only issue was whether they amounted to a contempt. As regards the conversations with Mr O’Neill, the judge took the view that this was a deliberate attempt by Mr Jarvis to improve his evidence and that she could not treat any of his evidence as credible or reliable. However, the judge’s conclusion was a non-sequitur. By the end of the first day of the trial and before he had spoken to Mr O’Neill, Mr Jarvis had already given his evidence-in-chief and had been cross-examined on a considerable part of it, including evidence relevant to the counterclaim. Although Mr Jarvis should not have spoken to Mr O’Neill when he did, the only purpose was to ascertain Mr O’Neill’s opinion about whether the lenders would step in and complete the development before selling it if HJL failed to obtain a possession order. This was opinion evidence from a third party on an issue on which Mr Jarvis had previously been asked a hypothetical question and had expressed his own view. Mr Jarvis attributed his change of opinion to what Mr O’Neill had told him, identified the source of his new evidence, and the judge was free to attach some or no weight to that evidence given that Mr O’Neill was not going to be called as a witness. That did not mean the evidence was untrue, still less that all the other evidence Mr Jarvis had given could not be believed or relied on. It was more accurate to say that Mr Jarvis was attempting to improve his evidence, but the change was in fact favourable to Mr Searle because it acknowledged that whilst the failure of the possession claim might make the development unprofitable for HJL, it would not lead to Mr Jarvis’s bankruptcy. None of what Mr O’Neill had said touched on any of the issues on the counterclaim, so the only basis on which the judge could treat Mr Jarvis’s evidence on those issues as unreliable was to infer that because Mr Jarvis had sought clarification on the lenders stepping in he was somehow to be treated as having given false evidence on every other issue. There was no proper basis for the judge to draw such an inference, particularly as Mr Jarvis had been quite open about how he obtained the new information and where it came from.

Lord Justice Patten observed that the judge adopted a summary procedure which deprived Mr Jarvis of the opportunity to obtain any considered legal advice on his position or of further explaining himself in evidence. Mr Jarvis appealed on both jurisdictional and procedural grounds. The order under appeal recited that the judge had made an order on 25 April that Mr Jarvis should not communicate with his legal representatives or speak to anybody about his evidence while he remained under oath and that this order was breached. Although trial judges frequently warn witnesses not to discuss their evidence whilst still under oath, Lord Justice Patten stated that he had never regarded that as amounting to an order as such, nor could it be treated as one in this case. The judge explained to Mr Jarvis why it was important that he did not discuss his evidence but did not warn him that if he did he would be in breach of an order and in contempt of court. An order was never drawn up in the terms of the recital and the language of the alleged order quoted in the recital was not the language used by the judge when she warned Mr Jarvis. The obvious sanction open to a judge who discovers that a witness has communicated with a third party about his evidence during the course of the trial is to ascertain what was discussed and, if appropriate, to discount or give no weight to the evidence. It is difficult to envisage why it would ever be necessary or appropriate for the judge to make such a warning an order of the court which if breached could lead to committal. If the judge had wanted to make her warning an order with consequences in terms of committal, it was incumbent on her to spell out not only the precise terms of the order but also the consequences which could follow from a breach. None of this was done.

Even if what the judge said was to be construed as an order, it was limited to an embargo on speaking about or discussing his evidence during the adjournments. Nowhere did the judge say that Mr Jarvis was prohibited from sending emails and documents to his legal representatives. Lord Justice Patten did not regard the sending of such emails as amounting to a discussion of his evidence given that they were not responded to. On this basis alone there was no contempt involved in the sending of the emails. Mr Hyams did not seek to support the committal order on the basis that Mr Jarvis was in breach of any order, but submitted that the judge really regarded Mr Jarvis’s breach of the warning as amounting to a contempt in the face of the court which the County Court has jurisdiction to deal with under section 118 of the County Courts Act 1984.

Lord Justice Patten summarised the powers the County Court has to punish various types of contempt. The County Court has jurisdiction to commit for a breach of its own orders by virtue of section 38 of the County Courts Act 1984, subject to observing the procedural requirements set out in CPR Part 81. In relation to criminal contempts, its jurisdiction is much more limited. Superior courts have an inherent jurisdiction to impose penalties for contempts in the face of the court, but the jurisdiction of the County Court as an inferior court of record has been clarified by section 118, which now provides an exhaustive statement of the powers of the County Court to deal with this species of criminal contempt. Section 118 provides that if any person wilfully insults a judge or any juror or witness or any officer of the court, or wilfully interrupts the proceedings of the County Court or otherwise misbehaves in court, any officer of the court may by order of the judge take the offender into custody and detain him until the rising of the court, and the judge may make an order committing the offender for a specified period not exceeding one month to prison or impose a fine not exceeding £2,500 or both.

The judge did not consider these provisions because she treated Mr Jarvis’s conduct as a breach of an order. It was clear that she had no jurisdiction to deal with the alleged contempt as one committed in the face of the court unless it could be said that it amounted to Mr Jarvis interrupting the proceedings within the meaning of section 118(1)(b). Mr Hyams submitted that one should give the statutory provisions a purposive construction broad enough to encompass any conduct which might interfere with the trial process. Lord Justice

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