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The oxygen of publicity: Paratus and Moore Blatch LLP

Not strictly speaking a housing case, though it is a mortgage repossession matter. But when a High Court Judge orders that a ‘clear and repeated contempt of court should attract proper sanction in the form of publicity’, who are we to refuse to assist?

Paratus AMC Ltd v Lewis [2014] EWHC 1577 (Ch)

Mr Lewis had had his property repossessed and sold by Paratus, the mortgage lender. There was a substantial surplus in the sale price, although “Paratus was entitled to recoup out of the proceeds of sale of the Property, as covered by its security, the sums loaned to Mr Lewis, interest and costs associated with the realisation of the security down to the date of the sale, which was 20th November 2013”. At a hearing before Mr Justice Norris, Paratus said that the sum over its deductions was £181,461.46, and an order was duly made on 24 February 2014 that Paratus should pay that amount into court.

Now if Paratus then disagreed with the amount in that order, there were, as Sales J sharply points out, various courses of action open to them: “>either to apply for a variation of his order in good time before it came into effect or, having failed to do that, to pay the sum it had been ordered to pay into court and then to apply back to the court for a variation of his order and a payment out of part of that sum back to it”.

Paratus did neither. Instead, Paratus paid in £168,726.66, some £12,734.80 less. Mr Lewis was understandably annoyed. He applied, and on 10 April Sales J granted an order that Paratus comply wight he order of Norris J.

Paratus had actually just filed an application dated 9 April 2014, seeking to vary Norris J’s order on the basis that it had miscalculated and that there were costs in realising the security of £2,460 and £6,060.60 that should have been deducted from the £181,461.46. This, of course, is not the same as the £12K odd that Paratus’s payment was short. And Paratus were in contempt of the order of Norris J in any event.

Paratus’s reaction to the order of Sales J of 10 April was to do… nothing. No further payment was made. Another contempt of court.

So, when Paratus’s application was heard on 16 April, by Sales J, they were in for a bumpy ride. As were Paratus’s solicitors, Moore Blatch LLP. The application was supported by a witness statement by an unfortunate paralegal. “Miss Edge does not offer any apology or explanation for the contempt of court by Paratus in failing to comply with the order of Mr Justice Norris of 24th February 2014 and my further order of 10th April 2014.” There was no further witness statement by anyone else, let alone anyone more senior at Moore Blatch.

Paratus got their order for the additional £2,460 and £6,060.60, but they and indeed Moore Blatch LLP may rather wish they hadn’t bothered.

The court deprecates the blasé attitude demonstrated by Moore Blatch LLP and Paratus in relation to ignoring two binding orders of the court made against Paratus. It is not for an individual litigant, even if convinced that the court has made a mistake, simply to ignore repeated orders of the court that they should do a particular thing, as Paratus was ordered to pay the full required sum into court. I am bound to say that I find it very surprising indeed that no one on behalf of Moore Blatch LLP thought it appropriate even to apologise to the court for the repeated breaches of court orders by Paratus through the agency of Moore Blatch LLP.

[…] Very late in the day, counsel appearing for Paratus today, Mr Cutting, has tendered an apology on behalf of Paratus for its breach of the orders of the court. It was less than satisfactory, to put it no higher, that that apology was tendered so late in the day and not at an earlier stage and in a witness statement on behalf of Paratus.

Mr Lewis had pro bono counsel, Josh Lewison, instructed under CLIPS. Mr Lewison deserves a hefty round of applause.

Given that Paratus’ contempt and Moore Blatch’s blaséness was not, in the end, enough to override their contractual entitlement to that £8k or so of costs of realising the security, but that the application was necessitated by their error, you would expect no order for costs, on the whole. In the first of two post judgment applications, Mr Lewison submitted:

I accept, of course, that the general principle is that successful parties get their costs and unsuccessful ones do not and Mr Lewis has not been successful on this application. Nonetheless, this was an application that contained very serious defects and which was based on very serious breaches of court orders. Mr Lewis might or might not have been able to make those points himself, but nonetheless those points have been made for him on his behalf under the CLIPS scheme and so I would invite your lordship to make an order that the costs of this hearing be paid by Paratus.

And despite counsel for Paratus mounting a rather desperate rear guard action, including pointing out that his rate was £150 per hour, so that should be the measure, not Mr Lewison’s £200 per hour, the order was:

In my judgment, this was a case where Paratus came to court seeking to put right its own mistake in the presentation of its case to Mr Justice Norris. Paratus had acted in repeated contempt of court in the way that I have described in my ruling and I consider that Mr Lewis was fully entitled in the circumstances to come to court to contest Paratus’s application on that basis. In substantial part, Mr Lewis was successful in his contentions, in that he has demonstrated that Paratus has acted in contempt of court and acted without promptitude in seeking to rectify its previous mistake. In my judgment, the just and appropriate order in the circumstances is that Paratus should be ordered to pay the element of costs I have indicated under a pro bono costs order [£400 – NL].

And then Mr Lewison’s coup de grace, the second part of his application:

MR LEWISON: The second was an invitation to your lordship to consider whether a transcript should be prepared at Paratus’s expense given that they have been in such flagrant breach of court orders—

THE JUDGE: Yes.

MR LEWISON: —and whether that should be published on BAILII.

Counsel for Paratus was incensed on his client’s behalf:

MR CUTTING: […] Regarding the transcript, that is a highly unusual order to ask this court to make and whilst it is fully accepted that Paratus have breached and been in contempt of court on two occasions, that will obviously be reported back to them when I provide them with a note of your judgment. What it would appear that Mr Lewis is attempting to do is to publicise to the wider world the breach of Paratus and I do not think that that—

THE JUDGE: Quite. Yes, he is.

MR CUTTING: Absolutely and in my submission I do not think that is an appropriate way for matters to be dealt with. It is certainly not something that I think is appropriate in the circumstances of this application and this particular breach, but, as I say, I have nothing further I can really say on that because it is a highly unusual request, but it is certainly something that is within your authority to order if you so wish.

Well yes, it was within the Court’s authority and Sales J was in no mood to allow Paratus and Moore Blatch to hide their conduct, so:

The second application that Mr Lewison makes is that the court should order that a transcript of the ruling should be prepared at Paratus’s expense and published on the BAILII website. I consider that it is appropriate to include this provision in the order. Paratus has acted in contempt of court. Although at the end of the day I thought it right to vary the order made by Mr Justice Norris on the application made to me by Paratus, I consider that Paratus’s clear and repeated contempt of court should attract proper sanction in the form of publicity for what it and Moore Blatch LLP have done and how they have treated the orders made by the court. It seems to me that the appropriate way to do that is by giving publicity to the ruling of the court on this occasion, which exposes their serious failures to respect the orders made by the court against them. Accordingly, I consider that it is appropriate to include this in the order which is made.

Josh Lewison is to be congratulated not just for the astute use of an application for a pro bono funding order (something we have noted before) but for the brainwave of seeking an order for transcription of an ex tempore judgment at the paying party’s expense, for putting on Bailii by the court. Why should bad behaviour by party and legal representatives where it amounted to contempt of court not be so publicised?

Also, well done to Moore Blatch LLP on their classy behaviour for leaving a paralegal to twist in the wind as their sole (and named) witness in a situation where they knew that they had failed to comply with two High Court orders.

[Apparently the £400 was paid to the Access to Justice Foundation promptly by Paratus/Moore Blatch]

Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London. You can find him on Linkedin and on Twitter. Known as NL round these parts.

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