Kay & Anor, R (on the application of) v Leeds Magistrates' Court & Anor

Factual and Procedural Background

This judicial review concerns a decision by a District Judge (Magistrates' Courts) ("the DJ") who refused to dismiss summonses for alleged fraud offences issued against the Claimants, Company A and its Managing Director ("Plaintiff"), following an ex parte application by a private prosecutor ("Appellant") representing Company B, a foreign entity. The summonses related to alleged fraudulent conduct between 2007 and 2012 concerning pricing negotiations and discount representations.

The Claimants contended that the Appellant breached his duty of candour by failing to disclose a binding Settlement Agreement between the parties, prior investigations and decisions by foreign prosecuting authorities and courts finding no evidence of criminal offences, and the Appellant's ulterior motive to use criminal proceedings to gain commercial advantage in ongoing arbitration disputes. The DJ declined to dismiss the summonses or stay proceedings, instead concluding that the appropriate venue for some issues was the Crown Court.

The Claimants challenge the DJ’s refusal, arguing that the Magistrates' Court had jurisdiction to reconsider and dismiss the summonses and that the DJ erred in law by deferring the abuse of process application to the Crown Court. The Appellant defends the decision, asserting compliance with the duty of candour and justifying the prosecutorial conduct and the DJ’s legal conclusions.

The background includes a longstanding commercial relationship between the parties, formal agreements, financial difficulties of Company B, share acquisitions by Company A, and a series of arbitration proceedings in a foreign jurisdiction. The criminal allegations arose after arbitration disputes, with the Appellant initiating private prosecutions in the Magistrates' Court following foreign prosecutorial investigations that discontinued the case. The DJ heard the matter on 7 October 2016 and gave judgment on 19 October 2016. Judicial review permission was granted on 4 May 2017.

Legal Issues Presented

1. Whether the Magistrates' Court has jurisdiction to reconsider and dismiss summonses issued on an ex parte application where material information was allegedly withheld in breach of the duty of candour.
2. Whether the DJ erred in law by refusing to dismiss the summonses and by deferring the abuse of process application to the Crown Court instead of determining it in the Magistrates' Court.
3. The scope and application of the duty of candour owed by private prosecutors in ex parte applications for summonses in the Magistrates' Court.
4. The appropriate forum for determining complex legal and factual issues arising from international commercial disputes intertwined with criminal allegations.

Arguments of the Parties

Appellant's Arguments

• The Appellant complied with any duty of candour and chose not to disclose the Settlement Agreement as irrelevant and unenforceable.
• The DJ properly considered all evidence, submissions, and legal authorities before refusing to dismiss the summonses.
• The DJ correctly concluded that the abuse of process application should be determined by the Crown Court, not the Magistrates' Court.
• The Claimants' complaints amounted to disagreement with the DJ's factual findings, which were not suitable for judicial review.
• The Appellant submitted evidence supporting the allegations of fraud, explained the non-disclosure of the undertaking, and asserted a genuine prosecutorial motive.

Claimants' Arguments

• The Magistrates' Court and this Court on review have jurisdiction to reconsider whether summonses should have been issued and to stay proceedings.
• The DJ erred in law by deferring the abuse of process issue to the Crown Court rather than deciding it at the Magistrates' Court.
• The Appellant breached the duty of candour by failing to disclose the Settlement Agreement, prior foreign prosecutorial decisions, and the commercial context and motives behind the prosecution.
• If the DJ had been properly informed, the summonses would not have been issued or would have been dismissed.
• The conduct of the prosecutor must be analysed under English law, not foreign law.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court emphasised the fundamental importance of the duty of candour owed by prosecutors, public or private, when applying ex parte for summonses. The Court found that the Appellant and his lawyers breached this duty by failing to disclose the Settlement Agreement and the history of foreign prosecutorial and court decisions that undermined the basis for the summonses.

The Court analysed the relevant legal framework, including statutory provisions and case law, confirming that issuing summonses is a judicial act requiring discretion and consideration of whether the application is vexatious or an abuse of process. The Court noted that the Magistrates' Court has jurisdiction to reconsider summons issuance and to stay proceedings but may defer complex or novel issues to the Crown Court.

The DJ's refusal to quash the summonses and deferral of the abuse of process issue to the Crown Court was found to be an error in that she failed to engage with the breach of duty of candour at all. The Court concluded that the breach would have made a difference to the decision, as it would have prompted enquiries, notification, and hearing of the Claimants before issuing summonses.

Although the DJ correctly recognised the complexity of the underlying international commercial dispute, this did not excuse the failure to address the duty of candour breach and its consequences at the Magistrates' Court stage. The Court exercised its supervisory jurisdiction to quash the decision and the summonses.

Holding and Implications

The Court GRANTED JUDICIAL REVIEW, quashed the District Judge's decision, and quashed the summonses issued against the Claimants.

The direct effect is that the summonses are set aside, and any future application for summonses must be preceded by full disclosure to the Claimants, including this judgment. The Court highlighted the critical importance of compliance with the duty of candour in ex parte applications to prevent misuse of court processes and protect fairness. No new precedent was established beyond reinforcing existing principles regarding prosecutorial candour and Magistrates' Court jurisdiction in such matters.