The agent required the contractual counterparty to pay a bribe of pounds 70,000 to an offshore account.
Held: The bribe was held to be recoverable by the principal whether the principal rescinded or affirmed the contract because it was a secret profit. ‘The remedy is not confined to cases where the agent has taken a bribe or secret commission in the strictest sense. It is available whenever, without his principal’s knowledge and consent, the agent has put himself in a position where his interest and duty may conflict. A principal is entitled to the disinterested advice of his agent free from the potentially corrupting influence of an interest of his own. Any such private interest, whether actual or contemplated, which is not known and consented to by his principal, disqualifies him.’
Millet LJ: ‘It is well established that a principal who discovers that his agent in a transaction has obtained or arranged to obtain a bribe or secret commission from the other party to the transaction is entitled, in addition to other remedies which may be open to him to rescind the transaction ab initio or, if it is too late to rescind, to bring it to an end for the future.’
An application was made to strike out the action in the middle of the substantive hearing on the ground that the responsible director of the plaintiffs had ‘deliberately suppressed [a crucial document] and, for a time, successfully concealed its existence from the Court.’
Held: The Court’s processes had not been defeated and the proceedings should be allowed to proceed.
Millet LJ said: ‘That is a very serious allegation indeed if true it would deserve the serious consequences for which the defendants ask, but it must be clearly proved . . it does not have to be proved in accordance with the criminal standard of proof. Deliberate disobedience of a peremptory order for discovery is no doubt a contempt and, if proved in accordance with the criminal standard of proof, may, in theory at least, be visited with a fine or imprisonment. But to debar the offender from all further part in the proceedings and to give judgment against him accordingly is not an appropriate response by the Court to contempt. It may, however, be an appropriate response to a failure to comply with the rules relating to discovery, even in the absence of a specific order of the Court, and so in the absence of any contempt, not because that conduct is deserving of punishment but because the failure has rendered it impossible to conduct a fair trial and would make any judgement in favour of the offender unsafe. In my view a litigant is not to be deprived of his right to proper trial as a penalty for his contempt or his defiance of the Court, but only if his conduct has amounted to an abuse of the process of the Court which would render any further proceedings unsatisfactory and prevent the Court from doing justice. Before the Court takes that serious step it needs to satisfied that there is a real risk of this happening.’ and ‘The deliberate and successful suppression of a material document is a serious abuse of the process of the Court and may well merit the exclusion of the offender from all other participation in the trial. The reason is that it makes the fair trial of the action impossible to achieve and any judgment in favour of the offender unsafe. But if the threat of such exclusion produces the missing document, then the object of order 24 rule 16 is achieved. ‘
Millet LJ
Times 05-Mar-1988, [1988] 1 WLR 1256
England and Wales
Citing:
Cited – Husband’s of Marchwood Ltd v Drummond Walker Developments Ltd 1975
The object of Order 24 Rule 16 is not to punish the offender for his conduct, but to secure compliance with the Rules of Court and orders of court relating to discovery, and the fair trial of the action in accordance with the due process of the . .
Cited by:
Cited – Arrow Nominees Inc, Blackledge v Blackledge ChD 2-Nov-1999
The applicants sought to strike out a claim under section 459. The two companies sold toiletries, the one as retail agent for the other. They disputed the relationship of the companies, and the use of a trading name. Documents were disclosed which . .
Cited – Landauer Ltd v Comins and Co (a firm) CA 14-May-1991
The first instance Judge had struck out a claim under the provisions of order 24 rule 16(1) in circumstances where a number of relevant documents did not appear on the plaintiffs list of documents and were found to have been destroyed, the . .
Cited – London Borough of Lambeth v Blandford EAT 20-May-1997
The tribunal considered making an order to strike out Lambeth’s case for failure to comply with orders for directions made by the Tribunal. On the question of the circumstances in which a striking out would be justified under rule 4 of the Tribunal . .
Cited – Arrow Nominees Inc and Another v Blackledge and Others CA 22-Jun-2000
A petition had been lodged alleging unfair prejudice in the conduct of the company’s affairs. The defendants alleged that when applying for relief under section 459, the claimants had attempted to pervert the course of justice by producing forged or . .
Cited – Fiona Trust and Holding Corp and others v Privalov and others ComC 20-Oct-2006
The parties disputed whether their claim should be arbitrated.
Held: A claim as to whether the contract itself had been made was not one which could be arbitrated by provisions in that contract. It does not arise ‘under’ the contract. The . .
Cited – Fiona Trust and Holding Corporation and others v Privalov and others CA 24-Jan-2007
The court was asked whether when contracts have been induced by bribery and have been rescinded on discovery of the bribery, that constitutes a dispute which can be determined by arbitration in the context of a common form of arbitration clause.
Cited – Bilta (Uk) Ltd v Nazir and Others ChD 24-Nov-2010
The company had been wound up by the Revenue on the basis that it had been used for a substantial VAT fraud. The liquidators now sued those said to have participated. A defendant denied the jurisdiction because of a disputed arbitration agreement. . .
Cited – Hughes Jarvis Ltd v Searle and Another CA 15-Jan-2019
The claimant and director appealed from orders associated with a finding of contempt of court. The Director, the case having been adjourned overnight during the course of his evidence, and despite warnings to the contrary had sought to communicate . .
Lists of cited by and citing cases may be incomplete.
Litigation Practice, Contempt of Court, Agency
Updated: 13 December 2021; Ref: scu.211359