The High Court has emphasised the gravity of breaching a freezing order, in the recent sentencing remarks in Barclays Bank PLC v Scott Dylan & Ors [2024] EWHC 2776 (Ch).
Mr Justice Rajah found that all three Respondents (Mr Dylan, Mr Antrobus, and Mr Mason) had lied to the Court “on a prolific scale” and knowingly brought about breaches of freezing orders.
All three Respondents were handed custodial sentences of 22 months.
The Breaches
The Respondents were found to have transferred virtually an entire group of some 60 companies out of the country, in breach of a freezing order. The Judge held that this was a “deliberate and planned flouting of the freezing order to move assets out of reach of this Court.”
During proceedings the Respondents had not co-operated, and they were found to have obfuscated and created false stories and explanations. Further, they had ample time to reverse what they had done but they failed to do so. There was no sign that the Respondents had any intention of returning the assets to this jurisdiction.
An Attack on the Administration of Justice
Mr Justice Rajah was resolute in his decision, saying that “a breach of a freezing order is an attack on the administration of justice which usually merits an immediate sentence of imprisonment of a not insubstantial amount.”
Mr Dylan’s defence to the liability proceedings centred around the argument that Barclays had not suffered tangible financial loss as a result of the breach. The Judge dealt with this in short shrift in the sentencing remarks:
“focusing on the monetary prejudice to Barclays can distract from the real corrosive effect of this breach of this court order. Harm is not to be judged purely by the monetary effect of the breach. Freezing orders are made for good reason and are intended to prevent the dissipation or spiriting away of assets. They are essential tools to secure the fair administration of justice in this country. A deliberate flouting of a freezing order is an attack on the delivery of justice.” (emphasis added)
The Sentences
The counts levelled against Mr Dylan were so serious that the Judge considered only a custodial sanction would suffice. Mr Dylan and the other Respondents, were sentenced to 22 months imprisonment, and entitled to unconditional release after 11 months.
Interestingly, the Judge took into account the current overcrowding in prisons and the support Mr Dylan gives to his family, when deciding the sentence. Mr Justice Rajah said that those factors “may have been able to tip the balance” if the offence had not been so serious, and the decision was on the cusp of whether the it should be suspended or not. However, these breaches were deemed too serious, and Mr Dylan’s culpability too high for a suspension to be appropriate, even with these considerations taken into account.
Analysis
Contempt of court is a serious offence, and the conduct of the Respondents in this case exacerbated the gravity of their breaches. The maximum sentence for contempt of court is two years in prison, and each of the Respondents’ sentences were close to the maximum.
Indeed, the Judge considered that the starting point was two years, and reduced it for slight mitigating factors and a very small credit to Mr Dylan for late admission of the counts against him.
Breaching a freezing order remains a serious offence, and any perceived or real dishonesty in trying to cover it up, or circumvent it will only make the sentence more punitive.
