The Court of Appeal, England and Wales, gave its ruling on Wednesday in KJM Superbikes Ltd v Hinton [2008] EWCA Civ 1280. Honda initially sued KJM, alleging that its importation and sale of Honda bikes from Australia infringed its trade marks since the bikes had not been marketed in the EU by Honda or with its consent. It became clear during the proceedings that much of what Hinton had said in his witness statement was untrue.

KJM wrote to Hinton, pointing out that it was contempt of court for a person to include in a witness statement, verified by a statement of truth, a statement that was false and that he did not honestly believe to be true. As a result Hinton made a second statement in which he admitted that he had said several things in his first statement that were to his knowledge at the time untrue. According to Hinton, his aim was not to mislead the court but to protect Honda's reputation.

The judge (Sir Andrew Park) accepted that Hinton's behaviour amounted to contempt of court, but found that it would be disproportionate for proceedings to be brought against him. KJM submitted that, in reaching his conclusion, the judge had taken into account, or given undue weight to, matters that should not have featured to any great extent in the exercise of his discretion and had failed to recognise the gravity of the contempt. Hinton disagreed: the court should not interfere with the judge's exercise of discretion, he said, and in any event the public interest would be better served by referring the matter to the Attorney General.

The Court of Appeal (Lord Justice Mummery, Lady Justice Arden and Lord Justice Moore-Bick) allowed KJM's appeal, holding as follows:

* Proceedings for contempt of court were public law proceedings. Thus when considering whether to give permission for proceedings to be taken, the court must have regard to the public interest alone.

* In this case, by the time KJM's application reached the judge, Hinton had admitted that what he said in his first statement was to his knowledge untrue and, in view of the nature of the proceedings, it was certainly arguable that he was aware that his description of Honda's dealing arrangements might affect the outcome of the case.

* The judge was right to say that, if proved, the contempt was serious, but he was wrong to refuse permission to bring proceedings. Although he described the contempt as serious, he did not give it the weight it deserved and he was unduly influenced both by Hinton's experience in cross-examination and by his perception that proceedings for contempt would not be likely to result in a significant penalty or significantly affect the administration of justice in the future. Any witness in Hinton's position could expect to have a difficult time in cross-examination, but the judge could be trusted to ensure that he was not treated unfairly and that factor should not carry much, if any, weight on an application of this kind.

* it was hard to accept the judge's conclusion that proceedings for contempt would be unlikely to promote the integrity of the legal process or respect for it in future. The prosecution of proceedings for contempt here would be likely to have a salutary effect in bringing home to those who were involved in claims such as these the importance of honesty in making witness statements and the significance of the statement of truth.

* The judge had erred in the exercise of his discretion. He himself said that Hinton should count himself very fortunate in escaping proceedings, suggesting that in his own mind the decision was a narrow one. Having quite rightly formed the view that the alleged contempt was serious, he failed to appreciate or to take proper account of its true gravity, letting himself to be swayed by factors that were irrelevant or the significance of which he overestimated.

"Mr. Hinton currently lives in Australia. He was not a party to the proceedings between Honda and KJM and is not domiciled in this country. He could not be required to come to this country to answer a charge of contempt; indeed, unless he chooses to instruct solicitors to accept service on his behalf, it will not be possible to serve the proceedings on him unless he comes to this country and becomes amenable to personal service. The court has the power to dispense with service of the application for committal, if it thinks it just to do so (see RSC Ord. 52, r.4(3)), but it will not be able to impose any practical sanction on him while he remains outside the jurisdiction. Of course, his presence in this country was one reason for making the application as soon as he had completed his evidence. It is right to say that these factors do not appear to have influenced the judge's decision, but they inevitably raise the question whether anything is now to be gained by giving KJM permission to bring proceedings against him.

I can see that there may be some cases in which considerations of that kind might tip the balance against granting permission, but in general I do not think that they should weigh significantly against doing so. The international business community conducts a large amount of litigation in this country and it is common for statements to be provided by witnesses from abroad for use in procedural hearings. This case is a good example. The integrity of the system as a whole would be undermined if it were thought that foreign witnesses were not subject to the same discipline as witnesses from this country".