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Home > Judgments > 2010 archive

Davies v Welch [2010] EWHC 3034 Admin

Application under CPR Part 8 for committal of the wife’s solicitor, who had disclosed financial documents from ancillary relief proceedings to the Child Support Agency. Application refused.

In March 2005, during the course of ancillary relief proceedings, the respondent solicitor had sent copies of the applicant husband's P60, payslips, and bank account details to the CSA. This led to the husband wholly withdrawing from AR proceedings, having applied unsuccessfully for an order that the court require the wife and her solicitor to give specific undertakings to prevent further disclosure. The husband had then appealed unsuccessfully to both a circuit judge, and to the Court of Appeal for permission. The AR proceedings, dealt with in the husband's absence, resulted in a £60,000 lump sum payment to the wife with costs against the husband. The husband brought committal proceedings.

The court stated that, in AR proceedings, there were both implied and express (r4 4.23 FPR 1991 – now replaced by r.10.20A) obligations upon a party to whom documents were disclosed not to disseminate them to third parties without the leave of the court.

At the time of the disclosure, it had still amounted to contempt (though at the time of judgment this was not the case on account of s.49B Child Support Act 1991, as introduced by s.39 Child Maintenance and Other Payments Act 2008),  and the respondent accepted that neither the change in the law, nor the fact that the court would almost certainly have given leave for the documents to be disclosed, had an application been made, provided her with a defence. She accepted the contempt and stated that it was as a result of an oversight on her part.

Despite stating that this was a surprising oversight, the court considered that the above matters were relevant in assessing the seriousness of the contempt, which they found not to be a serious one, and very different from a disclosure of a document for purposes inimical to the administration of justice. The court made no order on the committal application and no order for costs on the basis that, despite being entitled to bring the application on account of the contempt, H had also unsuccessfully sought £30,000 in compensation, which the court had no power to grant.

Summary by Gillon Cameron, barrister, 14 Gray's Inn Square

____________________________
 
CO/9116/2010
Neutral Citation Number: [2010] EWHC 3034 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
DIVISIONAL COURT
Royal Courts of Justice
Strand
London WC2A 2LL

Thursday, 4 November 2010

B e f o r e:
LORD JUSTICE RICHARDS

MR JUSTICE CRANSTON
 
Between:
DAVIES
Claimant

v

WELCH
Defendant
 
Computer Aided Transcript of the Stenograph Notes of 
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Mr G Davies Appeared In Person
Mr O Wise (Instructed By Welch And Co) Appeared On Behalf Of The Defendant
 
J U D G M E N T
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1. LORD JUSTICE RICHARDS: The court has before it an application by Mr Gwynne Davies by way of a claim under CPR part 8 for the committal of the respondent, Mrs Madeleine Welch, for contempt of court.  

2. The case is very straightforward.  Mrs Welch is a family solicitor.  While acting for Mr Davies' wife in ancillary relief proceedings, she sent to the Child Support Agency (the CSA) copies of certain financial documents that had been disclosed in those proceedings by Mr Davies and that were the subject of express and implied obligations of non disclosure.  She has admitted that she thereby acted in contempt, though it was an unwitting contempt, and she has apologised to the court and Mr Davies. 

3. We dealt at the outset of the hearing with a procedural matter, in that permission to make the application for committal was sought from and granted by a single judge of the Queen's Bench Division, whereas the rules require the matter to be dealt with in the ordinary course by a Divisional Court (see RSC Order 52, Rules 1(2) and 2(2)).  The problem was identified by Beatson J when the matter came before him and caused him to transfer the case across to the Divisional Court.  In order to cure the possible defect in the proceedings, at the outset of the hearing we granted permission for the application to be made, and we waived all other procedural requirements so that the substantive application following the grant of permission could be heard by us today and any delay be avoided.  We were satisfied that this caused no injustice to either party.  Mr Wise, for the respondent, made clear the respondent's readiness to proceed on the merits of the application if permission were granted. He addressed to us certain arguments to the effect that permission should not be granted at all.  We were satisfied, however, that the substantive application ought to be entertained by the court and that permission should be granted for that purpose.

4. The disclosures in question took place in March 2005, in the course of ancillary relief proceedings before Llewellyn DJ in the Swansea County Court.  Mrs Welch accepts that she sent a letter, dated 8 March 2005, to the CSA, enclosing copies of Mr Davies' form P60 and pay slips for the months of August 2004 to January 2005.  She also accepts that, on 10 March, she faxed to the CSA a copy of the letter of 8 March and its enclosures together with two further documents, namely a Post Office account and an Alliance and Leicester savings account statement. 

5. In her evidence, Mrs Welch refers to the Post Office account as being that of Mr Davies, but his own evidence is that it was his son's account; it was in the name of DGE Davies, whereas Mr Davies the claimant is GE Davies.  It is now accepted that it was the son's account but the distinction was not noticed by Mrs Welch at the time and I do not consider it to be of any great materiality for the present proceedings. 

6. Mr Davies says there was also disclosure of information concerning an investment account in the name of his daughter, but the page which he says constituted such disclosure has been withheld by the CSA on the ground that it relates solely to a person other than Mr Davies, and the point can be taken no further. 

7. The documents that were admittedly disclosed by Mrs Welch to the CSA on 8 March and 10 March 2005 had all been produced by Mr Davies in the ancillary relief proceedings.  Their onward disclosure to the CSA on those two occasions are the two acts of contempt relied on by Mr Davies in support of this application. 

8. It is not in issue, as I have said, that the disclosures were a contempt of court.  There is, at the very least, an implied obligation upon a party to whom documents are disclosed in proceedings for ancillary relief not to disseminate them, or copies of them, to third parties without the leave of the court: see Allan v Clibbery [2002] EWCA Civ 45 at paragraphs 67 to 74 and Gelber v Griffin [2006] EWHC 3666 (Fam).  Moreover in this case, at the material time, Rule 4.23 of the Family Proceedings Rules 1991 provided expressly that no document held by the court and relating to such proceedings was to be disclosed without the leave of the court, otherwise than to specified persons who did not include third parties such as the CSA.  Rule 4.23 was revoked with effect from 31 October 2005    after the date here in issue    but its substance was then replaced by Rule 10.20A, which is the rule that was considered in Gelber v Griffin. 

9. Mrs Welch's affidavit provides an explanation of and apology for her conduct.  At all material times she acted for Mrs Davies, not only in the ancillary relief proceedings but also in connection with the issue of child support for the two children of the family, and she had communicated with the CSA by letter on behalf of Mrs Davies.  She states at paragraphs 8 and 9:

"In March 2005 the Child Support Agency was seized of the matter and I considered that the agency required some basic recent documentary evidence about Mr Davies' means to be used for the purpose of making a fair assessment of his maintenance liability and, if necessary, to enforce that liability.  I thought that this could properly and fairly be done by my providing the Child Support Agency with copies of the documents referred to at paragraphs 6 and 7 above.  I profoundly regret that it did not occur to me that the court's permission was required before I sent those documents to the Child Support Agency.  If I had realised this I would have applied on Mrs Davies' behalf for permission to take this course and I would have acted in accordance with the court's decision on the matter.  Accordingly, I accept responsibility for disclosure of the copy documents referred to at paragraphs 6 and 7 above in contravention of Rule 4.23 of the Family Proceeding Rules 1991.  This was my mistake and my responsibility.  I acknowledge that, because I did not obtain permission, I am in contempt of court.  I apologise both to the court and to Mr Davies for this error."

10. It is right to say that that apology was seemingly prompted by the present proceedings against her.  There had been no previous apology.  Indeed, for a long time Mr Davies did not know whether it was his wife or his wife's solicitor who had made the disclosures.  The matter was not dealt with openly, as it could and should have been done, at the time when it was first ventilated before the district judge.  It was only in December 2009 that there was a clear written admission by Mrs Welch that she had made the relevant disclosures.  That admission was not accompanied at the time by an apology.  Nevertheless, once the claim was brought, Mrs Welch's expression of regret and her apology were prompt and unqualified. 

11. Wilson LJ, in a judgment refusing Mr Davies permission to appeal in the ancillary relief proceedings, was of the view that if an application had been made at the time to the court, the court would almost certainly have given leave for the documents in question to be disclosed to the CSA in aid of a fair assessment of maintenance for the children.  There may be some doubt about the position concerning the son's Post Office account.  Subject to that, however, I see no reason to disagree with Wilson LJ's assessment. 

12. There are certain other matters to which Mr Wise, on behalf of Mrs Welch, has made reference in his written submissions as bearing on the issue of disclosure.  First, the effect of Rule 10.21A of the Family Proceedings Rules was that the Secretary of State could have required disclosure of the documents for purposes connected with child support without the need to seek the leave of the court.  No such requirement, however, was imposed by the Secretary of State in this case. 

13. Secondly, the effect of section 49B of the Child Support Act 1991, as introduced by section 39 of the Child Maintenance and Other Payments Act 2008, is that what Mrs Welch did in disclosing the documents to the CSA would not now be a contempt of court at all.  But that is the law as it now stands, not as it stood at the time of the disclosures. 

14. Accordingly, as is accepted on behalf of Mrs Welch, none of these matters provides her with a defence.  At the relevant time, and in the circumstances that then existed, the leave of the court was required for the disclosures she made, yet she acted without obtaining such leave.  As an experienced practising solicitor specialising in this field, she ought to have realised the obligations to which she was subject and the need to obtain the leave of the court before acting as she did.  I have no hesitation in accepting her evidence that, as a matter of fact, she did not have the point in mind, but her oversight was surprising. 

15. Nevertheless, the fact that the court would almost have certainly given leave for disclosure of most, if not all, of the documents if an application to that effect had been duly made, and the existence of policy reasons in favour of such disclosure to the CSA, as exemplified by Rule 10.21A of the 1991 Rules and by section 49B of the Child Support Act 1991 as amended, are plainly relevant to an assessment of the seriousness of her contempt in acting as she did. 

16. Mr Davies says that, as a result of discovering the wrongful disclosure, he lost confidence in the court process and the protection afforded by the implied undertaking.  He applied for an order that the court require a specific written undertaking from his wife and his wife's solicitor to prevent further disclosure.  The district judge refused that application on the basis that he did not have power to impose such a requirement and, in any event, because the implied undertaking made an express undertaking otiose.  Mr Davies thereupon declined to disclose further documents or to play any further part in the proceedings.  The court dealt with the matter in his absence and made a lump sum order in the wife's favour in an amount of some £60,000, together with a costs order against Mr Davies.  He claims that this was all the result of Mrs Welch's breach of the express or implied obligation, but for which he would have taken a full part in the proceedings, would have received a share of the family assets and would not have been ordered to pay the full costs of those proceedings.  As it was, he says he did not get a fair hearing before the district judge. 

17. That line of argument is beset with difficulties.  Mr Davies appealed the district judge's order to a circuit judge.  The appeal was heard by HHJ Gaskell who considered that the district judge could have insisted on the wife or solicitors providing an express undertaking but had been entitled to take the view that the existence of the implied undertaking made an express undertaking unnecessary.  The circuit judge made the point that, particularly following the lengthy discussion in court about the existence of an implied obligation not to disseminate documents produced in such proceedings without permission, any later dissemination of them to third parties, whether by the wife or by her solicitors, would be a contempt, and quite possibly a serious one.  On that and other points the circuit judge dismissed Mr Davies' appeal. 

18. Mr Davies then applied for permission to appeal to the Court of Appeal against the circuit judge's decision.  That was refused by Wilson LJ, who was wholly unimpressed by Mr Davies' submissions and described the application as being totally devoid of merit (see [2007] EWCA 973).  That is the judgment to which I have made previous reference.  I will not extend my own judgment by quoting further from it, save to note that, at paragraph 8, Wilson LJ observed that the district judge's refusal to grant the leave sought by Mr Davies "appears to have precipitated, or given the husband what he pretended to be an excuse for, his extraordinary withdrawal from the proceedings".

19. I do not think that Mrs Welch can reasonably be blamed for that extraordinary decision by Mr Davies to withdraw from the ancillary relief proceedings, or for the consequences of his withdrawal.  I therefore reject the contention contained in the written submissions for Mr Davies, that the disclosure of the documents caused him loss to the tune of £30,000.  I would leave the fact that he chose to withdraw from the proceedings entirely out of account in assessing the seriousness of Mrs Welch's contempt. 

20. My conclusion, in the light of these various considerations, is that this is plainly not a case calling for the committal order sought by Mr Davies.  Indeed, in my judgment, it calls for no order at all, subject to consideration of the issue of costs.  Mrs Welch acted in contempt of court through an oversight; it was an oversight which should not have occurred, given her professional knowledge and responsibilities, but the breach was not a serious one.  This was a committed family solicitor who acted in good faith and for purposes which she considered to be entirely proper.  It is very different from a case of disclosure of a document for purposes inimical to the administration of justice.  If she had thought about the matter she would have realised that the appropriate course was to apply to the court and, as I have said, the court would almost certainly have granted leave for much, if not all, of the material to be disclosed.  Mrs Welch has expressed profound regret for what occurred; she has apologised to the court and to Mr Davies. 

21. In my judgment, Mr Davies was entitled to bring these proceedings to draw the contempt to the attention of the court and because he had not previously received a clear apology for what occurred.  But I have to say that, in the written material before the court, he has made far too much of a meal of all of this, though he was appropriately restrained in his short oral submissions today. 

22. For the reasons I have given, I would make no order on the application, leaving aside the question of costs on which I would invite the party's submissions.

23. MR JUSTICE CRANSTON:  I agree.

24. LORD JUSTICE RICHARDS:  So, where do we stand on costs?  Let me hear, first, from Mr Davies.  What do you say about the question of costs, Mr Davies?

25. MR DAVIES:  I should be entitled to recover my costs of bringing the application in today's hearing and the one before Griffiths Williams J.

26. LORD JUSTICE RICHARDS:  What sort of costs are you talking about?

27. MR DAVIES:  Driving down here to London.

28. LORD JUSTICE RICHARDS:  Have you got a list or schedule?

29. MR DAVIES:  It will be 198 miles to the hotel one way.  Back will be another 198.

30. LORD JUSTICE RICHARDS:  Have you incurred costs in court fees?

31. MR DAVIES:  Yes, the application fees.  Yes.

32. LORD JUSTICE RICHARDS:  What costs have you incurred by the way of court fees?

33. MR DAVIES:  £400 for the part 8 application and £75 for the application itself.

34. LORD JUSTICE RICHARDS:  For the application to   

35. MR DAVIES:  For permission.  Sorry, the permission first then the part 8.

36. LORD JUSTICE RICHARDS:  So you have incurred £475 in fees.

37. MR DAVIES:  That is right, yes.

38. LORD JUSTICE RICHARDS:  And you say you have incurred some travel and hotel costs.

39. MR DAVIES:  Travelling costs and obviously a hotel    it is easier to stop overnight than drive down in the morning.  The hotel is £65 per night, which would be two nights for the July hearing and today's hearing.  And my McKenzie friend's train fares, if that is allowed; £35.

40. LORD JUSTICE RICHARDS:  I see.

41. MR DAVIES:  I do not know if there is any charge for time, £9 per hour or something you get.

42. LORD JUSTICE RICHARDS:  Well, that gives us a broad picture anyway.  Thank you.  And you are seeking costs to cover those items?

43. MR DAVIES:  Yes.

44. MR WISE:  My Lord, having received the apology, I submit that there was no need to proceed any further, because he then obtained all the relief, really, that he has had up to this point in relation to costs.  That is my first point.  My second point is that, in his written argument he sought to recover a substantial sum of money, over £30,000, by way of compensation, plus something in relation to costs.  So the real reason for bringing this case, I would submit, is for financial compensation, which the court had no power to grant.  Plainly, I have had to research that question and to make submissions on why that result is something which should not be countenanced by this court. 

45. Your Lordships have decided that there should be no order on the application.  Your Lordships have therefore brought about a result which is absolutely at the bottom end of the scale which is in accordance with the submissions I have made on behalf of my client.  I accept that costs have been incurred on the other side, of course my client has incurred much greater costs because she has had to instruct counsel and she has had to come to court to defend an application for her committal.  The total counsel's costs which she has incurred are £4,000 plus VAT, so that puts into context the costs which have been incurred on the other side. 

46. I must draw to the court's attention that neither party has prepared a written statement for summary assessment, which is of course something required by the Rules.  The Rules say that you may take that into account in deciding whether to make a summary order or to direct a detailed assessment and the   

47. LORD JUSTICE RICHARDS:  Well, if we were to make an order for costs, surely it would be better for us to try to make some summary assessment rather than order a detailed assessment.

48. MR WISE:  I respectfully agree.  But, under section 13 of the Costs Practice Direction, each party who intends to claim costs must prepare a written statement of those costs, showing the number of hours and costs, fees, and so on.  That, as you have heard, has not been done.  My Lords, for those reasons I would submit that, although of course there is an admitted contempt, really in relation to the matters of relief and the impact on the parties, the right order would be no order for costs.  I observe that in the Home Office v Harman case, Park J, although expressing the view that it was a serious contempt, because he accepted that the respondent had acted in good faith said there should be no order as to costs.  In such matters, I would submit that no order for costs is the right course. 

49. If I may, I will just check whether there is anything else my solicitor wants me to say.  No, that is all, my Lords.

50. LORD JUSTICE RICHARDS:  Thank you very much.

51. MR DAVIES:  Well, the apology only came after the application was made and, as to the claim for damages, that was a punishment option for the court as well as committal.

52. LORD JUSTICE RICHARDS:  Thank you very much. 

53. We have decided to make no order as to costs for these reasons.  On the one hand, Mr Davies was entitled to bring these proceedings and we take into account that he incurred costs by way of application fees in bringing them.  On the other hand, having brought the proceedings he received an early apology for what had occurred.  He has pursued the proceedings, at the end of the day achieving no more than "no order" on the substance of the matter.  More importantly, he has developed arguments about the effect of the wrongful disclosures on his own conduct and in support of a contention that he suffered loss to the tune of £30,000 or thereabouts.  It appeared that he was seeking that by way of financial recompense for what had occurred.  In any event, he was inviting the court to take it into account as affecting the seriousness of Mrs Welch's conduct.  For the reasons already given by us, we regard that line of argument as wholly misconceived.  It was, nonetheless, an argument that Mrs Welch had to deal with and incur costs in dealing with. 

54. Taking those matters together, we come to the conclusion that fairness is achieved in this case by leaving the costs incurred to lie where they fell and making no order. 

55. Thank you very much.