A PARTY CANNOT SIMPLY ADD A PENAL NOTICE TO A COURT ORDER: IF THE COURT DOESN’T ORDER IT THEN IT SHOULD NOT BE IN THE ORDER

In  Taray Brokering Ltd, Re [2022] EWHC 2958 (Ch) HH Pearce held it was not open to a party to place a penal notice on a court order when the court itself had not placed such a notice on the original order.  There are earlier cases, and some texts, that suggest the opposite.  These are no longer good law.

“A party to litigation is not at liberty to add a penal notice to an order of the court of its own motion; rather, that party must apply to the court to vary the order if it wishes a penal notice to be added.”

THE CASE

The claimant obtained an order  in Part 8 proceedings that the defendants rectify of the register of members of the second defendant company.  The defendants did not attend the application.  The first defendant was served with the order, but did not comply.  The order did not contain a penal notice.

SERVICE OF THE ORDER WITH A PENAL NOTICE

The claimant then issued contempt proceedings, which were compromised.  However the judge was concerned about the penal notice that had been placed on the order when served the second time.

Again the First Defendant did not comply.

1. 1. The Claimant then applied to commit the First Defendant for non-compliance with the order. That application was listed before me on 14 November 2022. The parties reached terms pursuant to which the application was withdrawn.

1. Counsel appeared in front of me at the hearing on 14 November 2022 because I had expressed concern that the second version of the order that had been sent to the Court had never directed that a penal notice be attached to the order, yet the second version of the order served had such a penal notice attached. She made oral submissions on the issue and has subsequently added to those with written submission. I am grateful to her for her diligent research on the issue.”

THE JUDGE’S JUDGMENT ON THIS ISSUE

The judge held that it was not open to a party to simply add a penal notice to a Court order.

1. 1. A penal notice is defined by CPR 81 as meaning:

“A prominent notice on the front of an order warning that if the person against whom the order is made (and, in the case of a corporate body, a director or officer of that body) disobeys the court’s order, the person (or director or officer) may be held in contempt of court and punished by a fine, imprisonment, confiscation of assets or other punishment under the law.”

1. 1. It is immediately striking that, whilst the description of a penal notice as a warning on the front of an order or judgment remains the same as between the previous and current versions of CPR 81, the wording of the new CPR 81.4 goes further in referring to confirmation that the “order … included a penal notice” (my emphasis). Thus it contemplates that the penal notice is part of the order itself. This distinguishes the position from that both in Kermanshahchi and Deery v Deery, in both of which the central point was that the penal notice was appended to a copy of the order, rather than that forming part of the order itself. Indeed, this is the basis for the authors of Blackstone and Gee considering that the court’s authority was not required to add the penal notice.

1. 1. I note in passing that, whilst the 2022 Edition of Blackstone refers to the new version of CPR Part 81, the Seventh Edition of Gee pre-dates the revision and refers to the former version.

1. 1. There can be no doubt that a court order is the document which the court authorises rather than the parties’ interpretation of what the court has ordered. That is implicit in the whole structure of CPR 40 dealing with judgment and orders. For example, there would be no need for a “slip rule” in the terms of CPR 40.12 if the parties were at liberty to correct errors in orders. Further, the very description of the document as a “court order”, as well as its status as an expression of the coercive power of the court, must mean that it is the court and not the parties that determine its content.

1. 1. It follows that, on the wording of the current version of CPR 81, I am satisfied that a party is not at liberty to add a penal notice to an order of its own volition.

1. 1. I should add that I have some doubt as to whether the practice of adding a penal notice after the order was drawn up could have amounted to proper compliance with the pre-requisite of enforcement under CPR 81.9 in its previous form as set out above. Such a notice would itself arguably form part of the judgment or order. So, for example, the practice adopted here of adding an extra sheet of paper to the order (albeit at the front of a series of pages containing a copy of the order), is arguably not a display “on the front of the copy of the judgment or order” (the wording of the former CPR 81.9) or “on the front of the copy of an order served under this rule” (the wording of RSC 45.7(4)).

1. 1. Thus I consider it arguable that Kermanshahchi was wrongly decided. However, it is unnecessary for the determination of this issue to consider that further, in light of the changes that appear in the new version of CPR Part 81.

CONCLUSION

1. 1. For these reasons, I am satisfied that the passage in Blackstone’s Civil Practice cited above it no longer good law (if it ever was). A party to litigation is not at liberty to add a penal notice to an order of the court of its own motion; rather, that party must apply to the court to vary the order if it wishes a penal notice to be added.

1. I should make clear that nothing in this judgment deals with the position where a party seeks to enforce by way of committal a court order that does not contain a penal notice. A court order is binding on the party to whom it is addressed regardless of whether it contains a penal notice. The court has in other cases considered whether the failure to attach a penal notice is fatal to a committal application or whether it is a defect that can be waived. In my judgment, the statement in paragraph 81.4.4 of the White Book 2022 on this issue remains good law. It must also follow that that, even where the order does not contain a penal notice, it is open to the party seeking to enforce it to point out to the party who is disobeying it that their breach of the order may have penal consequences.