Contempt proceedings against an evasive foreign party: Court of Appeal considers service and jurisdiction issues

The Court of Appeal recently allowed an appeal by a party whose application to commit an opponent for civil contempt had been dismissed when he was unable to locate the individual to serve the contempt proceedings on him personally. The lower court judge had been wrong to regard the contempt proceedings as bound to fail because of that service difficulty and the fact that the defendant was not within the court's jurisdiction: Smith v Kirkegaard [2024] EWCA Civ 698.

The judge had however been correct that, to the extent that the committal application relied on the defendant's non-payment of costs orders, it was bound to fail. The decision confirms that costs orders, like other judgment debts, generally cannot be enforced by committal to prison. Payments due under such orders must instead be pursued via the civil courts' various enforcement mechanisms, such as freezing and attachment orders.

However, in respect of conduct that can properly be the subject of committal action, the Court of Appeal's decision confirms:

• A foreign national who invokes the English court's substantive jurisdiction in order to pursue a claim here thereby also submits to the court's contempt jurisdiction regarding matters incidental to the claim. There is no need in such cases to separately establish jurisdiction for the contempt proceedings or to obtain permission to serve them abroad; and
   
• Although the default rule is that contempt proceedings should be served on a defendant personally, the court may authorise service by an alternative method where there are good reasons to do so.  A court may be particularly open to doing so where, as here, the defendant is suspected of evading service and there is a method of communication likely to be effective in bringing the proceedings to their attention (in this case, email and/or social media).

The availability of alternative service in contempt proceedings would seem particularly important in cases such as this where the inability to effect personal service has been contributed to by the very conduct that is alleged to be a contempt (here, providing an allegedly false address on a claim form).

However, given that civil contempt actions are penal and can result in deprivation of an individual's liberty, the civil courts apply a high standard of procedural fairness in such proceedings. As noted in the judgment, while a judge could permit service by an alternative method, the court ultimately determining the contempt proceedings would need to satisfy itself, on all the evidence then available, that the permitted method had in fact been effective to bring the proceedings to the defendant's attention.

That high standard of procedural fairness is also reflected in another recent decision, where the Court of Appeal held that any permission for alternative service must be specific to the contempt proceedings – a serving party cannot simply rely on an earlier order in the underlying proceedings permitting alternative service of documents generally (Commercial Bank of Dubai PSC v Al Sari [2024] EWCA Civ 643).

Background

The underlying proceedings involved a libel action by one blogger, Mr Kirkegaard, against another, Mr Smith. When the proceedings were discontinued, Mr Smith was entitled to his costs of the action and obtained a costs certificate, in addition to an earlier costs order – together totalling approximately £40,000.

Mr Kirkegaard failed to make any payment, despite Mr Smith's extensive attempts to enforce the orders, including via formal enforcement actions in Denmark and in Germany.

Mr Smith filed a committal application with the English court alleging that Mr Kirkegaard had: (i) failed to comply with the costs orders; and (ii) made a false statement verified by a statement of truth on his claim form - by providing an address in Germany when he was at that time residing in the US.  

Mr Justice Nicklin ordered that the application and supporting evidence be served on Mr Kirkegaard personally, with a certificate of service to be filed by a specified date.  

Before that date, Mr Smith filed an affidavit detailing extensive unsuccessful attempts to locate Mr Kirkegaard, said to be due to evasive activity - such as vacating a property, deregistering his company address, closing bank accounts and failing to attend a summons in the German enforcement action. Mr Smith requested permission to serve by an alternative method under CPR 6.15, and confirmed that he had sent the documents to three of Mr Kirkegaard's known email addresses and by post to his mother's house and the vacated property, as well as alerting him to the contempt proceedings on social media.  

When the date specified in the original order passed, Nicklin J ordered (on the papers) that the contempt application be dismissed unless the service orders were complied with by a revised deadline. Mr Smith confirmed that he remained unable to effect personal service and Nicklin J accordingly dismissed the application.

Nicklin J subsequently refused an application for relief from that sanction. His stated reason was that there was no point in permitting the contempt application to be restored as it was hopeless and "bound to fail", because:

• Mr Smith's "fundamental problem is that he has no reliable method of communicating with the Defendant. As such, and because the Court must be sure that contempt proceedings have come to the attention of the relevant defendant, the Court will never permit him to proceed with a Contempt Application (even if he surmounted the permission requirement)" (emphasis in the original order);
   
• The court "could not exercise its contempt jurisdiction over someone who was not within the jurisdiction" and, unless Mr Kirkegaard voluntarily submitted by coming to England, the proceedings would be pointless; and
   
• A failure to comply with a costs order could not be enforced by contempt proceedings.

Mr Smith appealed that decision, including challenging each of the above reasons for considering the proceedings hopeless.

Decision

The Court of Appeal allowed the appeal, granting relief from sanctions and remitting the matter to the High Court to determine the application for alternative service.

Lord Justice Dingemans gave the lead judgment, with which Lady Justice Asplin and Lord Justice Bean agreed.

Alternative service

The court noted that, under the CPR rules governing contempt proceedings (in Part 81), the default requirement that such applications must be served on the defendant personally is subject to the court's power to direct otherwise, under the general service rules in Part 6.

It was clear that alternative service may be ordered in contempt applications and, in Dingemans LJ's view, there were good reasons in this case to authorise service by email and by social media. In particular, the defendant appeared to be actively avoiding service, the proposed email addresses were known to be used by him and, since he was an active user of social media, service via those means was very likely to bring the proceedings to his actual notice.

Whether they would do so would ultimately be a matter for the court determining any contempt proceedings. But the proceedings could not be said to be hopeless because, on the information currently available, a court might properly make an order for alternative service (though this would be a matter for the lower court on the material before it), and a court might be able to be sure that a permitted method of substituted service had been adequate to bring the proceedings to the defendant's attention (though, again, this would be based on the evidence then before the court).

Submission to the court's contempt jurisdiction

The court dealt briefly with the suggestion that the contempt proceedings were bound to fail unless Mr Kirkegaard voluntarily submitted to the court's contempt jurisdiction (by coming to England or otherwise).

It considered it established law that a foreign national who invokes the court's substantive jurisdiction is subject to its contempt jurisdiction in respect of matters incidental to the claim, and can therefore be served with the contempt proceedings outside the jurisdiction without permission (referring to Vik v Deutsche Bank AG [2018] EWCA Civ 2011 at para 55 – although it is notable that the Court of Appeal in that referenced passage appears to be referring to all situations where the court's substantive jurisdiction over a defendant has been established – ie on any basis, not only by virtue of the defendant invoking the jurisdiction to bring a claim).

The court's jurisdiction over Mr Kirkegaard had already been established in the underlying libel proceedings. He invoked the jurisdiction of the English court in order to bring that action, and the contempt jurisdiction related to those proceedings. There was no need for him to make a further submission to the jurisdiction before the court could exercise its contempt jurisdiction over him.

Committal for non-payment of costs

The court noted that the rule providing that judgments and orders may be enforced by an order for committal (CPR 81.4) is expressly "subject to the Debtors Acts 1869 and 1878".  

The Debtors Act 1869 effectively abolished committal to prison for non-payment of judgment debts. Section 4 provides that "no person shall be arrested or imprisoned for making default in payment of a sum of money", apart from in a number of listed circumstances. Those include (non-exhaustively): payments in the nature of penalties, certain payments in bankruptcy, court-ordered payments by fiduciaries, and costs ordered against solicitors for misconduct. Mr Kirkegaard's non-payment of the costs orders did not fall within any of the section 4 exceptions.

The court noted that section 5 of the 1869 Act appears to permit short-term imprisonment for small debts, but that provision no longer has any operation outside certain proceedings in the Family Court.

The failure to pay the costs may amount to a contempt of court, and some courts have exercised a discretion not to permit a party in such default to take any further part in proceedings (which was not relevant in this case). However, it cannot be enforced by imprisonment. The courts have developed other remedies, such as the freezing order, to assist judgment creditors to enforce judgments.

Relief from sanctions

Nickin J had therefore been wrong to find that the contempt proceedings were hopeless because of the inability to serve the defendant personally, or because the court could not exercise its contempt jurisdiction over him.

The judge was correct that committal was not possible in respect of the failure to pay costs. However, there was another basis for Mr Smith's application - namely the allegation that Mr Kirkegaard had given a false address on the claim form. Proceedings for contempt of court can be brought against a person who makes a false statement in documents verified by a statement of truth (CPR 32.14).

Because Nicklin J had concluded that the proceedings were hopeless, he did not go on to consider whether Mr Smith should be granted relief from sanctions by reference to the three-stage test set out in Denton v TH White [2014] EWCA Civ 906. The court therefore undertook that task. It found that:

• the failure to comply with the orders to effect and certify personal service was a serious breach of the rules, because the court had made an "unless order". However, its significance was reduced because Mr Smith had applied promptly for an order for alternative service (which the court here had concluded might properly be made);
• he had done everything that he could reasonably be expected to do in order to serve the proceedings, and his efforts had been frustrated by the defendant's successful efforts to avoid service; and
• there were good reasons in favour of granting relief in the circumstances, including the evasive conduct and the potential for Mr Smith to pursue the contempt proceedings in respect of the alleged false address on the claim form. The court had a principled interest in ensuring that misleading statements are not made in court documents.

On that basis, it was appropriate to grant Mr Smith relief from sanctions and allow him to pursue his application for alternative service of the committal application.