Where a solicitors’ undertaking to the court has been breached the court can only commit an individual if the procedural requirements have been complied with or waived.
In Ahmed v Rehman [2023] EWCA Civ 1504 the Court of Appeal allowed an individual’s appeal against a committal order made against him for breach of a solicitors’ undertaking given in possession proceedings.
The appellant was a barrister who was also a designated member of Landmark Legal LLP. In 2019, Landmark had been instructed by a defendant to possession proceedings brought by the respondent (the claimant). The appellant appeared on behalf of the defendant at the possession hearing which was adjourned on the defendant’s application. The order adjourning the hearing provided that the defendant would pay the costs thrown away and also each month would pay to his solicitors a sum equivalent to the claimed monthly rent. It also contained an undertaking in the terms “Upon the defendant’s solicitors providing their undertaking that they will hold any [of the ordered rent] payments made by the defendant … in their client account pending order of the court”. The appellant did not tell the judge that he was a designated member of Landmark but did confirm that he had the authority to give the undertaking.
At the final hearing of the possession claim on 7 December 2022 the appellant continued to represent the defendant, but Landmark had been replaced by No 12 Chambers Limited (an entity of which the appellant was the sole director and majority shareholder). The judge granted possession to the claimant together with rent arrears in the sum of £111,342 and ordered the defendant to authorise Landmark to release the £57,600 held by them to the claimant’s solicitors by 4pm on 12 December 2022. The £57,600 was not transferred to the claimant but on 14 December was transferred to the defendant, with £9,000 of it being used by him to pay No 12 Chambers.
On 11 July 2023, the claimant’s solicitors issued proceedings for contempt of court against Landmark. At the first hearing (which the appellant did not attend) Landmark admitted the contempt and the hearing was adjourned. By the time of the adjourned hearing the contempt had been purged with the claimant receiving interest and costs on an indemnity basis. The judge considered the application and fined Landmark £20,000 and ordered that a copy of her judgment be sent to the SRA. She also considered the position of the appellant and another designated member of Landmark and committed the unrepresented appellant to prison for six weeks (of which three were to take effect immediately) and fined him £9,000.
The Court of Appeal was clear that the orders against the appellant should not have been made. The requirements of due process had not been met. To pursue committal of a director (or other officer of a body corporate), the committal application must name the individual, they must be served and the claim must disclose the basis on which it is alleged that the individual is responsible for the breach. A defendant to contempt proceedings must be told of their right to be legally represented. They should have sufficient opportunity to obtain advice and apply for legal aid. In this case, the defendant to the contempt application was Landmark and not the appellant (or any individual). The appellate court accepted that the appellant had not been afforded sufficient opportunity to take legal advice, seek representation, understand the importance of giving evidence, provide documentation to the court in his personal capacity or present any proper defence or mitigation.
Elizabeth Haggerty is a barrister
