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Contempt of Court

Author: Syedur Rahman  14 March 2022
3 min read

Posted in: Commercial Litigation.

Syed Rahman of Rahman Ravelli considers three cases that illustrate the degree of discretion available to courts when dealing with contempt of court allegations.

A trio of recent cases has demonstrated how courts can take a compassionate, reasoned approach to dealing with allegations of contempt of court, using the discretion that is available to them.

Dattani V Rasheed

In Dattani v Rasheed [2022] 3 WLUK 49, the court permitted a suspended suspension to be delayed pending compliance with a previous order. The claimants were judgement creditors of the first defendant for a sum in excess of £2 million. They obtained a charging order over his share of a property which he joint beneficially-owned with his wife. After the property was sold, the court made an order which was endorsed with a penal notice:

  1. prohibiting the defendants from disposing of half of the proceeds of sale;
  2. requiring them to provide to the claimants all information within their possession regarding one half of the net proceeds, along with what happened to, and the location of, those proceeds; and
  3. to prepare a witness statement or affidavit providing the above information. 

The claimants alleged that the first defendant failed to comply with that order and applied for his committal for contempt of court. The application was heard in the first defendant’s absence. The first defendant was found to be in contempt of court, and he was sentenced to two months’ imprisonment suspended for one year. Such suspension was conditional on the defendant complying within 30 days of the order. If he did not comply, then the sentence of imprisonment would take effect immediately. 

The defendant provided a statement. However, given that the statement did not have a statement of truth, nor did it give full information about the amount or location of payments that had been made with the sale proceeds, the claimants alleged again that he had not complied with the order.

The burden of proof was on the claimants to prove that the defendant had not complied to the criminal standard of proof. The defendant had been unable to access his bank statements and, therefore, had provided all the information that was known to him at the time. Therefore, he had complied with the first limb. However, he had not provided details of payments made or their location from the proceeds. As such, the prison sentence came into immediate effect.  

The claimants were also granted an order under the Bankers’ Books Evidence Act 1879, requiring the first defendant’s bank to produce his statements. The defendant claimed he had not been able to access his bank statements and was unaware that his statement needed a statement of truth. He also stated that he was in poor health and produced medical records, including a fast-track cancer referral and MRI scan. 

The judge stated that it was possible to vary the order to allow him one last opportunity to comply with the outstanding obligations. On balance, there were three reasons why the order should be varied:

  1. The medical evidence provided by the defendant;
  2. The bank statements were now available and the defendant was able to provide the missing information; and
  3. The claimants were seeking a form of authority authorising his bank to give them details of cash withdrawals of over £1,000, which would assist in verifying the missing details. 

The order was additionally varied to include further conditions, namely that the new witness statement contain a statement of truth and the first defendant sign the form of authority. 

Mitigation

This case demonstrates the court’s ability to use its discretion and its willingness to take into account the mitigation in order to resolve the situation sensibly and with compassion. Similarly, the court exercised some compassion in Eim v Lewis (also known as DRFG Invest II sro v Shire Warwick Lewis Capital Ltd), where an accountant who had deliberately transferred assets subject to a freezing order had his sentence reduced from nine months to five months. This reduction was made on the basis that most of the assets had been recovered and with regard to the impact that imprisonment would have on the accountant’s career and his dependants. 

GUH v KYT is another example of the courts taking a rounded approach to contempt of court. The defendant had breached a court order to not contact the claimant and had made threats to disclose private information. The fact that the threats had not been carried out and that no irretrievable damage had been done was taken into account by the judge - as was the fact that some of the action had taken place before the defendant had received legal advice. As such, it was not clear whether the defendant understood the gravity of her actions. Since receiving legal advice, she had apologised for her actions and complied with the orders. It was found that the finding of contempt was sufficient and that no further sanction was imposed. But the court did confirm that if there was any future breach, the defendant would face an immediate sentence. 

Conclusion

These three cases indicate that courts are using their discretion to find a resolution to the core issues at hand and dealing with cases with compassion where mitigation is appropriate. They are indicators of how courts take a wide, holistic view of a case and the facts when applying discretion. This is welcome proof that there is a place for mitigation in proceedings where there are clear grounds for it.

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Syedur Rahman

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Syedur Rahman is known for his in-depth experience of serious fraud, white-collar crime and serious crime cases, as well as his expertise in worldwide asset tracing and recovery, civil recovery, cryptocurrency and high-stakes commercial disputes.

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