No truck with ABSs and litigants in person? Stobarts in hot water

For those in the professions, or elsewhere, who like to wax lyrical about the problems created by litigants in person and the potential problems of Alternative Business Structures then the Stobart Group Limited and Others v Peter Elliot [2013] EWHC 797 (QB) makes interesting reading. It is also an important reminder for lawyers of their obligations when filing ex parte applications. I also think it is more interesting about what it says about litigant in person than for what it says about Stobarts. However, I expect more hay to be made than I will do out of their most recent press release which begins with the words: In the legal world, reputation is everything.

This case was one of series brought by Mr Elliot, a whistleblower turned litigant in person various people connected with Stobarts. For our purposes the most interesting of these is Mr Trevor Howarth, Stobarts Group Legal Director and Managing Director of Stobarts Barristers. Mr Elliot’s case is a troubling one on a number of levels, which HH Judge Pelling QC sets out admirably. Twice committed for contempt (once suspended), and bearing a significant grievance for having a final hearing proceed in his absence shortly after (he alleges) leaving prison and having attempted suicide he has somewhat remarkably managed to get some of his 59 allegation of contempt beyond the leave stage. The case is a salutary lesson in how, buried within long, irrelevant and ill-founded applications sometimes made by litigants in person, even those at the more difficult end of the spectrum, may have points. And points of some significance.

It is probably wiser for me not to stray too much into the allegations, but some key points can be outlined. They relate to allegations that an injunction was sought ex parte restraining Mr Elliot on the basis of oral evidence, and then witness statements which, in material respects were untrue. Two of those questionable statements were made by Mr Howarth. It is worth saying that Mr Elliot was imprisoned as a result of subsequently breaching that injunction.

To succeed at this hearing Mr Elliot had to provide strong, prima facie evidence that the allegedly false assertions contained in witness statements filed by the Stobart Defendants were made knowing them to be false, and that they would be likely to interfere with the course of justice. Knowledge is also proved if a statement was made by someone who effectively does not care whether it is true or false (i.e. they are reckless). Carelessness is not sufficient.

At trial, he will have to show this beyond reasonable doubt. As a litigant in person. I am guessing he’ll be up against a QC, but I may be wrong. The mind begins to boggle and judges begin to book their holidays or have a quiet word with their listing officers. Mind you, he has done astoundingly well to get this far, and all credit to Judge Pelling on the patience necessary (I apprehend) to deal with the pleadings and the considerable care needed (I imagine) during the hearings. As the judge points out: permission will only be granted if there is a strong prima facie case shown and the Judge is satisfied a) the public interest requires the committal proceedings; b) they are proportionate; and c) in accordance with the overriding objective. These are not easy tests to satisfy, although that does not mean his allegations are made out. He also had to satisfy the judge that his applications should succeed even though he had been previously found to be an untruthful witness by another judge on another occasion. HHJ Pelling appears, then, to have been looking very carefully at corroboration in deciding which allegations should proceed.

In a nutshell, the key points in so far as they related to Mr Howarth, are that his supporting of two statements made by the current CEO of Stobarts in the injunction proceedings were untrue and made knowingly (or recklessly). One of those is a claim that it was his opinion that Mr Tinkler has been held to misrepresent documents was wholly untrue. This was in spite of the fact that Sharp J having had said that Mr Tinkler had “misrepresented the effect of a document that he had not exhibited” at a previous hearing (para. 60). Mr Howarth claims he did not recall this adverse statement against his client when making his own statement to the court. As the judge puts it, “The proximity between the date of the judgment (15thMarch 2012) and the date of the statement to which this Allegation relates (13 June 2012) does not make this self evidently correct. It does not justify simply rejecting the allegation out of hand without at least requiring it to be tested by cross examination.”

One defence appears to be that this was just a slip at the time. That is, Mr Tinkler’s mispresentation was made in error. The judge rejects the relevance of this, “In my judgment the material available establishes a sufficiently strong prima facie case that Mr Howarth’s statement was false in the sense that he could not honestly hold the opinion claimed, and was known to him to be false at the date he signed the statement as was the fact that if it was false the misstatement was likely to interfere with the course of justice.”

A second allegation is that when Mr Howarth says that “… as a consequence of the previous outrageous and incorrect allegations made by Mr Elliott to the CAA that WADI was conducting its flying operations unlawfully, a long expensive and detailed investigation was undertaken by the CAA into the WADI operation”. Saying Mr Elliot’s allegations were “…outrageous and incorrect …” was false and was known to Mr Howarth to be false at the date of his witness statement. There is a letter from another firm of solicitors suggesting that the Company knew, even perhaps accepted, that there was substance to the allegations. Again the judge finds a sufficiently strong prima facie case that the assertion that his allegations were false and known to Mr Howarth to be false to pass the threshold test allowing the allegations to proceed to trial.

Again, I emphasise this is not the same as saying the allegations are made out. Whether they are or not, there is though the broader point which is worth remembering: Mr Howarth’s statement was presumably being made as legal director for the company on the basis that his statements of opinion and fact would carry greater weight with the court as a lawyer. Whether Mr Howarth’s claims were made knowing or reckless as to their truth, they were wrong. Was he straining too hard to help his employer company?

A point raised in the judgment is, is this case just a vendetta by a failed litigant in person with a familiar sense of grievance at his treatment by the courts (or more pertinently perhaps his opponents)? Was he seeking to re-litigate the previously failed litigation and smear Stobarts in the process? Whether this is the case or not, I was surprised to see Stobart Defendants’ counsel, “submit that even if a strong prima facie case of contempt has been demonstrated the court should refuse permission because to give permission would be to facilitate Mr Elliott’s ulterior purpose.” That is if there is a prima facie case of dishonesty by a party and their legal director we should pass over it because it pours oil on the troubled water stirred up by a litigant in person. That is an argument I would not relish making: should we do not care about the honesty of lawyers in such situations? It may illuminate, though, an attitude that litigants in person might thought by some as somewhat beyond the normal respect of the courts or the rule of law.

Thankfully, the judge rejects the argument on the basis that a contempt hearing will be confined to the contempt allegation. But also on this basis:

The real point however is this – if, as is alleged, Mr Tinkler and Mr Howarth have knowingly made false statements then the fact that the proceedings may attract unwanted publicity or expose the respondents to unwanted litigation ought not to be permitted to trump the public interest issues that I mentioned at the start of this section of the judgment. Likewise the fact that the Stobart parties were able to obtain the Tetlow Order in the absence of Mr Elliott and without any meaningful consideration of the evidence or the law ought not be permitted to prevent the investigation of the limited number of allegations of contempt where I have found a sufficiently strong prima facie case to justify granting permission.  The requirement for a strong prima facie case to be demonstrated before permission is granted operates as a filter to prevent scurrilous allegations from being made and if the allegations should ultimately be found not to have been proved then a judgment to that effect will vindicate those against whom the allegations are made.

We shall see.

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About Richard Moorhead

Director of the Centre for Ethics and Law and Professor of Law and Professional Ethics at the Faculty of Laws, University College London with an interest in teaching and research on the legal ethics, the professions, legal aid, access to justice and the courts.
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