The High Court has criticised a leading private prosecutions law firm for the information it provided to persuade a judge to issue summonses alleging fraud against three people.
District Judge Sternberg at Westminster Magistrates’ Court subsequently set the summonses aside after further disclosure was made by London firm Edmonds Marshall McMahon (EMM).
He concluded that the proceedings were an abuse of process, as their client’s goal was to put pressure on the defendants to settle a civil claim he had also brought against them.
The decision was upheld last week by Lord Justice Davis and Mrs Justice Stacey in the Administrative Court.
EMM acted for Pradeep Morjaria (PM), a wealthy businessman resident in Dubai, and his wife in seeking the summonses against Camran Mirza, his wife, son and their company, Tydwell Ltd, alleging one count of conspiracy to defraud and six counts of fraud.
They related to replacement cladding installed by Tydwell on a property in London that the two families co-owned.
DJ Sternberg had been satisfied, on the basis of the material provided to him in August 2022, that there was prima facie evidence of the offences.
City firm Jones Day acts for PM on the civil claim and the district judge set aside the summonses in January this year on the basis of subsequently disclosed e-mail correspondence between PM and both Jones Day and EMM. This followed a court order.
He held that PM’s primary motive in issuing the summonses was to exert leverage over the defendants to settle the civil claim and not “a desire to see justice done”. This was an abuse of process.
The High Court said: “The judge determined that the attitude of PM as evidenced by his exchanges with his lawyers whether in the civil proceedings or in relation to the criminal summonses was the key indicator of his motivation.”
The failure to make proper disclosure at the time of the application and the breach of the duty of candour was “serious and substantial”, DJ Sternberg found.
However, he stressed: “I do not find that the material was deliberately concealed so as to manipulate the application for a summons. Nor do I make any finding of misconduct against the lawyers acting for the prosecutor in these proceedings.”
The High Court described this view as “generous to the lawyers” – the material should have been before the district judge at the time of the application.
It said: “A matter of weeks prior to the application for the issue of the summonses, EMM had observed in writing that, if the criminal court considers that a primary motivation of a criminal prosecution is to put pressure on the defendant and to obtain a settlement, then it will take a dim view of that.
“EMM had gone on to say that PM had made it clear many times that justice was his number one priority yet this was not something apparent from the e-mail exchanges between EMM and PM and smacks of disingenuity.
“Indeed, PM’s response to EMM at this point was to qualify the proposition that justice was the number one priority.”
This showed that EMM was “alive to the issue of motive and its impact on the propriety of criminal proceedings”, the court said, and was “not easy to reconcile” with the case summary served in support of the issue of the summonses. This document was “misleading at best”.
It went on: “The judge may not have found that the failure to disclose the messages between PM and his lawyers was manipulation of the application for the summonses or that there had been misconduct.
“In our view the judge did not exculpate the lawyers. There was a failure to disclose highly relevant material. That failure was a serious error irrespective of culpability.”
Any lack of gross culpability on the part of the lawyers did not mean there was no breach of the duty of candour either, the court added, but that was a side issue.
The judges rejected the challenge to DJ Sternberg’s decision that the criminal proceedings were an abuse of process, saying it “cannot be open to sensible criticism”.
They added: “The fact that there was and is prima facie evidence of fraud on the part of [Mr Mirza] and others cannot legitimise criminal proceedings when their purpose was to threaten.”
In a statement, EMM said: “Our firm was instructed by individuals who believed themselves to be victims of a sophisticated and long-running fraud by these defendants.
“Any criticisms made by the defence and court in these early stage proceedings do not relate to the honesty of the allegation or the strength of the evidence. Neither court challenged that the evidence showed a prima facie case of serious and sustained fraud.
“The court stopped this case on the basis that our clients were motivated by a desire to secure the return of the defrauded funds, and that they intended the prosecution to induce these defendants to repay the funds in parallel civil litigation.
“The court found that due to this motivation the case should not be allowed to proceed to trial despite the strength of the allegations.
“An appeal is currently under consideration and we cannot further comment on the case at this stage.”
London firm CANDEY acts for the defendants.