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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Farrer & Co LLP v Meyer [2022] EWCA Civ 706 (26 May 2022) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2022/706.html Cite as: [2022] EWCA Civ 706 |
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ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Mr Justice Kerr
Strand, London, WC2A 2LL |
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B e f o r e :
LADY JUSTICE NICOLA DAVIES
and
LORD JUSTICE MALES
____________________
FARRER & CO LLP |
Respondent/Claimant |
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- and - |
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JULIE MARIE MEYER | Appellant/Claimant |
____________________
Liisa Lahti (instructed by
Farrer
& Co LLP) for the Respondent
Hearing date: 19 May 2022
____________________
VERSION
OF JUDGMENT APPROVED
Crown Copyright ©
Lord Justice Males: #
Introduction
Meyer,
against the order made by Mr Justice Kerr on 26th January 2022 finding her in contempt of court and sentencing her to a suspended sentence of six months' imprisonment.
Meyer
is a citizen of the United States, resident in Zurich, Switzerland. She is the Chief Executive Officer of
Viva
Investment Partners AG ("
Viva"),
an investment company which she says that she founded in July 2018, although she says also that she is not a shareholder or in control of any shares in the company. She describes herself as "the public face of the firm and its sole director".
Meyer
instructed the claimant, a firm of solicitors. The claim in this action is for unpaid fees of £187,227, together with interest. On 10th December 2019 the claimant obtained a default judgment against Ms
Meyer.
The claim form had been served on her pursuant to section 1140 of the Companies Act 2006 at two London addresses registered by her in connection with her role as a director of two English companies.
Meyer's
application to set aside the default judgment; he refused an extension of time for her to comply with an order to disclose certain documents; he refused to
vary
the order for disclosure and ordered her to attend in person at a hearing on 14th February 2022; he found that Ms
Meyer
was in contempt of court; and he sentenced her to a suspended sentence of six months' imprisonment. Ms
Meyer
sought permission to appeal on all of these matters, contending that the default judgment should be set aside; that the disclosure order was wrong in principle; that the judge had no jurisdiction to find her in contempt; and that the sentence imposed was excessive.
Meyer
did need permission to appeal on four of the five grounds (concerned with whether the default judgment was regular, whether the proceedings had been
validly
served on her, and whether the judge should have exercised his discretion to set aside the judgment), that those grounds had no prospect of success, and that his refusal to grant permission would be maintained. He accepted, however, that the defendant was entitled to appeal against the finding of contempt and the sentence imposed on her without permission pursuant to section 13 of the Administration of Justice Act 1960.
"The learned judge had no jurisdiction to find that the Appellant was in contempt of court, or to make a suspended committal order because the relevant provisions of CPR Part 71 and PD 71 were not complied with in respect of the 21 January hearing and the order made subsequently to it."
Meyer
is currently unrepresented and did not attend the hearing of the appeal. Nor did she provide the appeal bundle required by CPR 52 PD 6.3. On 11th May 2022 (i.e. eight days before the hearing of this appeal) Mr Stephen Gilchrist of her solicitors, Clarke & Co, notified the court that she had dispensed with the services of his firm and, as he understood it, of counsel. Ms
Meyer
has claimed that she did not attend the hearing on 14th February 2022 ordered by the judge because "her Swiss and US legal team has directed her not to appear in court nor to go to the UK for the foreseeable future". I infer that this remains her position.
Meyer
could not have attended the hearing of her appeal, save perhaps for her desire to avoid imprisonment in the event of it being unsuccessful. Equally, it has been her choice to dispense with the services of her lawyers here. She continues, apparently, to be advised by what she describes as her "Swiss and US legal team". Until recently she has had access to legal advice from solicitors and counsel here, but she has chosen not to provide the documents required for proper consideration of her appeal or to attend or instruct counsel to advance her case.
very
fairly identified the points which might have been made in favour of the appeal.
Background
Meyer
between April and November 2018. On 9th October 2019 the claimant sent a letter before claim to her address in Switzerland, but Ms
Meyer
did not respond. The claim was issued on 15th November 2019. On 19th November the claimant served the claim form at two London addresses registered by Ms
Meyer
pursuant to section 1140 of the Companies Act 2006 in connection with her role as a director of two English companies. Ms
Meyer
learned of the proceedings, apparently from a media source, and emailed Mr Julian Pike, a partner of the claimant, on 6th December 2019, saying that she had heard that a claim had been made. However, she did not acknowledge service.
Meyer
to attend at the Royal Courts of Justice on 5th March 2020 to provide information about her means for the purpose of enforcement of the judgment. The order explained that she would be required to produce documents to the court and answer questions on oath. The second penal notice warned that if she did not obey the order, she might be sent to prison for contempt of court. A list of documents to be produced was included.
Meyer
(at this point unrepresented) made an application to set aside the default judgment, challenging the
validity
of the service upon her. She complained that the claimant had provided a poor standard of service and that, at the most, only £50,000 was due to it rather than the full sum claimed. She sought also a stay of execution and an adjournment of the oral examination due to be held on 5th March 2020. That application came before Mr Justice Saini on 4th March 2020, with Ms
Meyer
represented by counsel, Mr Tom Bell. Mr Bell accepted that Ms
Meyer
owed money to the claimant, but could not put a figure on how much was owed. He submitted that she had a good defence to the balance of the claim, whatever that was, so that the judgment ought to be set aside. Mr Justice Saini dismissed the application to adjourn the oral examination due to take place the next day. He adjourned the remainder of Ms
Meyer's
application.
Meyer
did not attend, either remotely or in person (this was before the first coronavirus lockdown), but was represented by counsel. The court officer referred the matter to a Queen's Bench Master. There was then a
very
long delay during which the claimant chased the court on a number of occasions. Eventually, in June 2021, the claimant sought an order that Ms
Meyer
be held in contempt, requesting that a suspended sentence should be imposed, and that she should be ordered to attend court in order to comply with the order previously made under CPR 71. Mr Justice Lane ordered the matter into court, warning Ms
Meyer
that she would be in contempt if she did not attend the hearing by remote means. His order was endorsed with a penal notice.
Meyer
did not attend, although she was represented by Ms Perselli, instructed by Oakland & Co. Judge Simpkiss found that she was in contempt, ordered the CPR 71 hearing to be listed, and ordered that if she did not attend, the matter should be referred to a High Court judge under CPR 71.8 to decide whether to make a suspended committal order. His order contained a penal notice.
Meyer
did attend remotely, but was not represented. She made an affirmation and was questioned by Mr James McWilliams, counsel for the claimant. She said that she did not have any assets and was cash poor. She lives and works in Zurich for
Viva.
Her living expenses are paid by
Viva,
but she does not draw a salary. She said that until the business is successful, she will not be able to do so.
Meyer
had confirmed in her evidence, were:
(i) bank statements for any account held in the defendant's name at Banque Migros from the date that account was opened to the date of the order;
(ii) documents relating to the loan obtained by the defendant from Banque Migros, including but not limited to (a) the loan agreement; (b) bank statements and other documents showing the account or accounts into which the loan proceeds were paid; and (c) bank statements and other documents showing payment in respect of the loan and the accounts from which those payments had been made;
(iii) documents relating to or evidencing the status of her alleged director's account withViva
Investment Partners AG from the date of her first involvement with
Viva
Investment Partners AG (howsoever called) to the date of the order;
(iv) credit card statements in respect of any corporate card or credit card used by the defendant to fund her living and/or personal expenses from 2016 to the date of the order;
(v)
any correspondence or documents relating to her notification to Companies House as a Person with Significant Control in respect of Lattun Limited;
(vi)
her tax returns to the United States' Internal Revenue Service for each and every year from 2016 onwards;
(vii)
the two sale and purchase agreements to which the defendant referred during the course of her adjourned examination and under which her entitlement to earnout consideration arises; and
(viii)
any documents relating to the exercise of and sums held in her pension.
Meyer's
new solicitors, Birketts LLP, issued an application for relief from sanctions, an extension of time and an order requiring the claimant not to use documents disclosed otherwise than for the purpose of the litigation. In addition, on 24th November 2021, Ms
Meyer
applied to restore the application to set aside the default judgment, having done nothing to pursue this since it was adjourned by Mr Justice Saini on 5th March 2020.
Meyer
had not complied with the order made by Mrs Justice Heather Williams, and ordering that her application for relief from sanctions and an extension of time should be listed before a High Court judge. His order added that, at that hearing, "consideration is also to be given to the consequences of and steps to be taken in respect of the apparent and continuing non-compliance with the Williams J Order".
Meyer
attended remotely and was represented by Ms Perselli, who produced a detailed skeleton argument as well as making oral submissions.
The judgment
v
Zhevago [2021] EWHC 2522 (Ch). Service of the claim form at Ms
Meyer's
registered address pursuant to section 1140 was
valid
service. The judge recognised that he had a discretion to set aside the default judgment, but said that he had rarely seen a weaker case for exercising that discretion. In particular, there had been inexplicable, inordinate and inexcusable delay in pursuing the application to set aside the judgment, with nothing having been done between 4th March 2020 and 24th November 2021. Further, the merits of any defence were shaky, with a sum owing in any event that could be measured in tens of thousands of pounds and nothing in Ms
Meyer's
complaint that the claimant's bills were inadequately particularised: she was evidently well acquainted with the exact nature of the work done by the claimant.
Meyer's
behalf was that disclosure of the documents would be unlawful as a matter of Swiss law requiring secrecy of information that could harm a company's financial interests. The gist of the Swiss law advice was that disclosure would harm
Viva
Investments AG – despite the fact that the documents ordered to be produced concerned Ms
Meyer's
personal financial information and despite the fact that, on her own evidence, the company was already so unsuccessful that it could not afford to pay its Chief Executive Officer a salary. The judge firmly rejected this argument, saying that the defendant was in continuing breach of a mandatory order endorsed with a penal notice; that she had made no attempt to comply with the order nor any application to
vary
or discharge it; that medical evidence put forward as providing a partial excuse was inadequate and unconvincing; and that the Swiss law evidence relied on did not begin to excuse the non-compliance, applying the principles set out in Bank Mellat
v
HM Treasury [2019]EWCA Civ 449 and Tugushev
v
Orlov [2021] EWHC 1512 (Comm) at [32] to [38]. He concluded, therefore, that "the defendant is, and remains, in serious breach of the order of Heather Williams J, is not entitled to discharge of her obligations under it or any other relief from that breach and its consequences".
"171. I am satisfied that this is an appropriate case to exercise that jurisdiction. The defendant has shown herself in these proceedings to be a selfish and untrustworthy person, her word counts for nothing if it suits her to break it, she showed indifference to the respect properly due to the court and to the financial and resource burdens to which she continues to subject the claimant and the court."
Meyer
would not pay any fine if she could avoid doing so, while confiscation of her assets would be ineffective as she would be likely to put them beyond the reach of the court. A sentence of imprisonment was appropriate because the breach of the court's order was "deliberate, cynical and continuing" and because Ms
Meyer
would "continue to flout orders of the court unless coerced into obeying them". The judge suspended the order for imprisonment, as he was required to do by CPR 71.8(3), ordering Ms
Meyer
to comply with the order made by Mrs Justice Heather Williams and to attend in person (not remotely) at a hearing on 14th February 2022.
Meyer
did not attend the hearing on 14th February 2022, although she was represented by Ms Perselli. Mr Justice Kerr ordered (among other things) that a warrant be issued for Ms
Meyer
to be brought before a High Court judge. A warrant was duly issued.
The appeal
Meyer
was in contempt of court, or to make a suspended committal order, because the relevant provisions of CPR Part 71 and PD 71 were not complied with in respect of the hearing before Mr Justice Kerr.
The relevant provisions of CPR Part 71 and PD 71
Meyer,
so an order for alternative service was made pursuant to CPR 71.3(1). This provides:
An order to attend court must, unless the court otherwise orders, be served personally on the person ordered to attend court not less than 14 days before the hearing.
validly
served. However, the defendant did not attend, and therefore was in breach of the order. The breach is all the more glaring as she sought and was refused an adjournment of the examination at the hearing before Mr Justice Saini on 4th March 2020.
(1) If a person against whom an order has been made under rule 71.2—
(a) fails to attend court;
(b) refuses at the hearing to take the oath or to answer any question; or
(c) otherwise fails to comply with the order,
the court will refer the matter to a High Court judge or Circuit Judge.
(2) That judge may, provided the judgment creditor has complied with rules 71.4 and 71.5, hold the person in contempt of court and make an order punishing them by a fine, imprisonment, confiscation of assets or other punishment under the law.
(3) If such an order is made, the judge will direct that—
(a) the order shall be suspended, provided that the person—
(i) attends court at a time and place specified in the order; and
(ii) complies with all the terms of that order and the original order; and
(b) if the person fails to comply with any term on which the order is suspended, they shall be brought before a judge to consider whether the order should be discharged.
Meyer
had not asked for payment of travelling expenses and that the judgment debt remained unpaid in its entirety.
If a judge or court officer refers to a High Court judge or Circuit Judge the failure of a judgment debtor to comply with an order under rule 71.2, he shall certify in writing the respect in which the judgment debtor failed to comply with the order.
If the hearing is adjourned, the court will give directions as to the manner in which notice of the new hearing is to be served on the person ordered to attend court.
Ms
Meyer's
submissions
"11. Summarising the above, where a Part 71 hearing is adjourned, any orders re-listing the Part 71 hearing must be in accordance with r71.7 and, it is submitted, in form N79A, be served in accordance with r71.3 and an affidavit filed in accordance with r71.5. Where a person is considered to be in breach of a requirement under Part 71 and the matter is referred to a High Court Judge, they must certify in writing the respect in which the judgment debtor failed to comply with the order.
12. These procedures were not complied with in any respect in regard to the orders made subsequently to the Part 71 Order itself. In particular, neither the Williams J Order nor the Knowles J Order certified that the Appellant was in breach or made an order in form N39 or containing the same information contained in form N39. The Orders were not served personally on D and no orders were made for alternative service. C did not file affidavits in respect of the same. The Knowles J Order did not bear a penal notice putting C on notice that the hearing of her own applications on 21 January 2022 would be treated as an adjourned Part 71 hearing. Furthermore, the order of HHJ Simpkiss, leading to the hearing before Williams J and the order of Knowles J did not comply with the requirements of r71.2(6) and were not therefore orders made pursuant to r71.2. They did not specify attendance at a specified time and place. The Kerr J Order requiring the Appellant to attend on 14 February 2022 was not made in form N79A. It would only have been open for Kerr J to make a finding of contempt under r71.8 if it had been an order made under rule 71.2 that the Appellant had failed to comply with. Kerr J also needed to be satisfied that the requirements of r71.4 and 71.5 had been complied with. It is submitted that this required personal service on the Appellant, as no alternative method was authorised in those orders and further affidavits for service were also required. No such service or affidavits were produced. The retrospective dispensing with such service in the order of Kerr J of 17 February 2022 is a grossviolation
of the strict procedure required out of fairness for the Appellant in light of the serious consequences that she faces with her liberty being at stake.
13. Therefore, it is respectfully submitted that the finding of contempt in the Kerr J Order suspended sentence ought to be set aside for procedural non-compliance; …"
various
procedural complaints made. It appears to me, however, that they can conveniently be grouped into the following submissions as follows:
(1) orders other than the initial order requiring Ms
Meyer
to attend on 5th March 2020 needed to be personally served on her pursuant to CPR 71.3;
(2) there was no certificate of the respect(s) in which Ms
Meyer
had failed to comply with the order made under CPR 71.2, as required by paragraph 6 of PD 71;
(3) the orders made were not in the right form;
(4) there was no affidavit as required by CPR 71.5;
(5) the order made by Mr Justice Robin Knowles did not bear a penal notice;
(6) the order made by Judge Simpkiss was defective;
(7) the order with which Ms
Meyer
had failed to comply was not an order made under CPR 71.2; and
(8) the order made by Mr Justice Kerr at the hearing on 14th January 2022 dispensing retrospectively with personal service of the order appealed from was defective.
Meyer
the slightest prejudice. It is evident from the history which I have set out that Ms
Meyer
was aware of each and every order made in these proceedings, that she attended (albeit remotely) a number of the hearings including the hearing before Mrs Justice Heather Williams, and that she has been legally represented (almost) throughout. She has been in contact with the claimant and with the court, sometimes through her solicitors and sometimes in person, regarding the listing of the
various
hearings which have taken place. No claim to have been prejudiced could possibly have been made. The alleged deficiencies are entirely technical.
view
of the terms in which Lord Justice Coulson refused permission to appeal on this ground before it was appreciated that Ms
Meyer
was entitled to appeal as of right. He said:
"Ground 4: Contempt
23. Ground 4 appears to be a new and technical point, to the effect that an order relisting the Part 71 hearing had to be in a particular form and that there had to be an affidavit filed according to rule 71.5. Criticisms are made of the form of the orders made.
24. There is nothing in any of these points. First, they were not points made to the judge, and therefore they cannot arise on appeal. Secondly, they are in any event wrong. I consider that all the procedural requirements in Part 71 relevant to this contempt hearing and order were complied with. Thirdly, if they were not, any technical non-compliance was waived when no such objections were taken at the hearing before Kerr J.
25. Accordingly, for these reasons, I consider that there is nothing in Ground 4. It has no prospect of success."
Meyer's
skeleton argument to say so. But I do not think that he was mistaken. Certainly there is no reference to any of these points in the skeleton argument prepared by Ms Perselli for the hearing before Mr Justice Kerr. However, with conspicuous fairness, Ms Lahti (who did not appear below) pointed to one paragraph in the judgment where the judge recorded that Ms Perselli "does not accept that the court has the power under CPR rule 71 to make a suspended committal order as sought by the claimant". The judgment does not explain why this was not accepted. I would infer, given the judge's full treatment of the submissions made by both parties, that any submission to this effect was made
very
fleetingly and was not developed. Ms Lahti was able to shed some further light on this by reference to what happened at the hearing on 14th February 2022 (which she did attend). She told us that Ms Perselli said to Mr Justice Kerr on that occasion that she had raised the fact that the hearing on 26th January 2022 was not a hearing under CPR 71. Ms Perselli made the same point at the hearing before Lord Justice Coulson on 5th April 2022 (which Ms Lahti also attended).
Analysis
Meyer.
I say this for three reasons.
No new points on appeal
v
Hassan Khan & Co [2022] EWCA Civ 671 at [29].
Meyer
was represented and deployed in full through her counsel the submissions which she wished to make, not only on the issue of contempt but on the other issues which were before the judge. Accordingly it is too late for them to be advanced for the first time in this court. As Lord Justice Coulson put it, "any technical non-compliance was waived when no such objections were taken at the hearing before Mr Justice Kerr".
Meyer
to attend for examination on 5th March 2020 which (as she has not disputed) was
validly
served upon her.
Merits
various
points made are unfounded. I address them briefly by reference to the grouping suggested at [35] above:
Service
Meyer
had notice of the deadline of 15th November 2021 for disclosure of documents contained in the order made by Mrs Justice Heather Williams because she was present (remotely) in court when the order was made. She had notice of the order made by Mr Justice Robin Knowles because it was provided to her solicitors and in turn to her. There was, therefore, no failure to serve documents on Ms
Meyer
and no need for any directions in that regard.
Certificate
Meyer
had not complied with the order to produce documents as ordered by Mrs Justice Heather Williams. That was why she made an application for relief from sanctions. No further certificate was required.
Forms
Affidavit
Penal notice
Meyer
to do anything. It merely provided that the consequences of her failure to comply with the order made by Mrs Justice Heather Williams would be considered at the next hearing. There was therefore no need for it to bear a penal notice. Indeed, such a notice would not have made sense. The order with which Ms
Meyer
was required to comply was the order made by Mrs Justice Heather Williams, which did contain a penal notice.
The order made by Judge Simpkiss
Meyer
is to be punished is her failure to comply with the order of Mrs Justice Heather Williams, not the order of Judge Simpkiss.
An order under CPR 71.2
Meyer
failed to comply was not an order made under CPR 71.2.
Dispensing with personal service retrospectively
Dispensing with strict compliance
Meyer.
While such a general power cannot be used to override a specific provision in the rules (cf. Ideal Shopping Direct Ltd
v
Mastercard Incorporated [2022] EWCA Civ 14, [2022] 1 WLR 1541 at [146]), there appears to be nothing in CPR 71 which would prevent its use in circumstances such as the present.
Sentence
Meyer
before imposing a custodial sentence; (2) failed to take into account the alternatives to a custodial sentence; and (3) was wrong in imposing at this stage a suspended prison sentence. Those submissions are not explained or developed. I can deal with them briefly.
v
Mc Kendrick [2019] EWCA Civ 524, [2019] 4 WLR 65. It is sufficient to say that Lord Justice Hamblen and Lord Justice Holroyde emphasised the seriousness of a breach of a court order and the likelihood that nothing less than a prison sentence would suffice to punish such a serious contempt of court. As to the approach of this court, they said (omitting citations):
"37. In deciding what sentence to impose for a contempt of court, the judge has to weigh and assess a number of factors. This court is reluctant to interfere with decisions of that nature, and will generally only do so if the judge: (i) made an error of principle; (ii) took into account immaterial factors or failed to take into account material factors; or (iii) reached a decision which was plainly wrong in that it was outside the range of decisions reasonably open to the judge. …
38. It follows from that approach that there will be few cases in which a contemnor will be able successfully to challenge a sentence as being excessive …"
Meyer.
In effect, what this came to was the suggestion that she was prevented from disclosing the documents because to do so would be contrary to Swiss law. The judge considered that suggestion fully, but was not impressed. He was right not to be.
Meyer
was coerced into obeying it. She had been given more than enough time to comply, but had made clear that she would not do so. The suspended sentence of imprisonment for six months which the judge imposed cannot possibly be regarded as outside the range of decisions reasonably open to him. The term might well have been longer.
Disposal
Postscript – embargo
Meyer,
in
view
of the fact that she has been found guilty of contempt of court in the circumstances described in the judgment, demonstrating a willingness to disregard the orders of the court if it suits her to do so. Accordingly we sent the draft only to the respondent's lawyers and did not invite submissions at that stage, but only corrections. In order to ensure fairness to both parties, we will give Ms
Meyer an opportunity to correct any minor factual errors after this judgment has become public and, if necessary, will publish an addendum making any appropriate corrections. We now invite both parties to agree the terms of an order, if possible; or if not, to make brief written submissions.
Lady Justice Nicola Davies
Lord Justice Green