Dispute Resolution analysis: The Divisional Court has rejected a number of legal arguments made on behalf of a litigant subject to a contempt application but nevertheless discharged the summons and brought the application to an end.
Wright v McCormack  EWHC 1030 (KB)
What are the practical implications of this case?
This is the latest in a number of reported judgments in relation to breaches of the embargo on reserved judgments in PD40E. It raises a number of interesting questions in relation to the status and admissibility of a report filed on behalf of the litigant accused of contempt in circumstances where the litigant claims that the report was submitted without his authorisation. The limited scope of a civil court dealing with a contempt application to investigate factual disputes in such circumstances was highlighted. Ultimately, in this case this led to the dismissal of the application rather than its referral to the Attorney General, having weighed the time and costs associated with such an investigation against the sanction likely to be imposed if the application succeeded.
What was the background?
Dr Wright claims to be “Satoshi Nakamoto”, the inventor of Bitcoin. Peter McCormack tweeted and said in a recorded discussion that this was a fraudulent and mendacious claim. Dr Wright sued Mr McCormack for libel. At trial, Chamberlain J concluded that some of Mr McCormack’s publications were defamatory and caused serious harm to Dr Wright’s reputation at the time that they were made. The Judge concluded that Dr Wright’s claim on liability was made out, however, he awarded only nominal damages of £1. On 26 July 2022, a draft judgment setting out those conclusions was circulated to the parties in confidence, and subject to the usual embargo in PD40E. On the evening of 26 July 2022, Dr Wright posed a series of messages on Slack which said:
“If a person would spend 4 million to receive a dollar plus and 2 million costs …
So the other side is bankrupt …
What would you think? …
Ie. the only thing that matters is crushing the other side … Well. I would spend 4 million to make an enemy pay 1.”
RPC, acting for Mr McCormack observed the messages and contacted Dr Wright’s solicitors, Ontier. RPC noted that Dr Wright’s initial budget was in the sum of £4 million and alleged that the messages breached the embargo applicable to the draft judgment. Ontier wrote to Chamberlain J via his clerk, indicating that they were aware of the messages and were treating the issues raised by RPC as a matter of urgency. The Judge demanded a report from Ontier and a report was duly provided. When Dr Wright’s counsel failed to address Ontier’s report in the consequentials hearing, the Judge concluded that Ontier’s report indicated that contempt may have occurred and he initiated a contempt application of his own motion pursuant to CPR r.81.6. Directions given in that application required Dr Wright to address allegations that he had committed contempt. Dr Wright then submitted two affidavits in which he said that “At no point did I give any instructions to my solicitors to file the Ontier report … In filing the report, Ontier acted entirely of their own volition and motion without any authority from me …” He accepted that he did have “… limited involvement in answering some questions to allow Ontier to prepare the report.” But he said that he had “explicitly asked Ontier not to file any report.”
Dr Wright instructed new solicitors and a new leading counsel. In their skeleton argument for the next hearing of the contempt application, counsel for Dr Wright raised five issues. (1) Whether there is any admissible evidence against Dr Wright; if so (2) whether the evidence discloses a case for him to answer; if so (3) whether the offences alleged against Dr Wright are known to English law; if so, in respect of each of the alleged contempts considered separately (4) whether the evidence establishes the requisite mens rea; and (5) whether the evidence establishes the necessary actus reus. In the time available to the Divisional Court, the first two issues only were considered.
What did the court decide?
The Ontier report was admissible. Although the report contained some hearsay, that did not render it inadmissible. The Court noted that the relevance of such hearsay depended on whether the proceedings could be classified as civil or criminal. However, in any event, the evidence pointed to the conclusion that the report was produced by Ontier on the instructions of Dr Wright and were made by his professional agents acting in the course of their engagement. This negated the contentions that the document contained privileged information and that the submission of the report negated Dr Wright’s right to remain silent. The Court concluded that Dr Wright had a case to answer on the face of the report and dismissed the suggestion that the report’s contents were inherently weak and self-serving. During the hearing, the Court raised of its own motion the question of whether, in submitting his evidence, Dr Wright became required to waive privilege, by analogy to authorities in the criminal appellate jurisdiction where a convicted defendant must waive privilege in order to appeal on the basis of failings by his representatives at trial. The Court concluded that it did not need to come to a conclusion on this issue, partly as a result of its conclusions on the first two matters and in light of its view as to the correct disposal of the application. The Court noted its lack of investigatory powers and how that hampered the Court from pursuing the application further in light of the dispute of fact relating to the Ontier report. There was a power to refer the matter to the Attorney General for further inquiry, however, the Court declined not to do so. It reasoned that even if proven, a limited sanction would follow for Dr Wright. Such a sanction would ultimately be disproportionate to the time and cost involved in further investigation. The summons was discharged.
- Court: High Court of Justice, King’s Bench Division, Divisional Court
- Judge: Lord Justice Warby and Mr Justice Nicklin
- Date of judgment: 5 April 2023
Article by Phillip Patterson – first published by LexisNexis