Lexi Holdings Plc v Luqman

On 13 May 2010 the appellant, Waheed Luqman, was sentenced by Briggs J to a number of sentences of imprisonment to which I shall refer in a moment. The sentences were imposed as a result of a number of serious contempts of court committed by Mr Luqman. For present purposes it is sufficient to note that one was contested. Others were admitted but admitted at a late stage. The proceedings for contempt arose out of proceedings concerning a company called Lexi Holdings Plc in administration. It was the subject of alleged frauds involving the loss of some £40 million. Waheed Luqman was a de facto director of that company. His brother, Shaid, was a director. Both were involved in the affairs of the company, and it may be assumed for present purposes that both were involved in the disappearance of that £40 million.

The administrators obtained a freezing order against both Shaid and Waheed Luqman in November 2006. The freezing order, as is normal, froze assets of among others the Luqman brothers, Shaid and Waheed being brothers, but also required them to disclose information concerning the affairs of the company and its assets. Those obligations under the freezing order were that much more important because, when the administrators had come to take possession of the assets of the company, they found that its documents and indeed its computer had been removed, thus thwarting the efforts of the administrators to carry out their duty under the administration order to get in the assets of the company. The assets of the company would include its claims to the monies which had been wrongfully removed from it.

Neither Shaid nor Waheed Luqman complied with the disclosure orders. Indeed both of them were found guilty in separate proceedings of taking steps to frustrate the implementation of the freezing order and the efforts of the administrators to get in the company's assets and ascertain what had become of the very large sums of money that had been lost.

Before Briggs J, when there was an effective hearing of the contempt proceedings, Waheed admitted, as I have already indicated, a considerable number of separate acts of contempt. They are set out, sufficient for present purposes, under paragraph 2 of Mr Waheed Luqman's skeleton before us under letters a-h. The sentences were for imprisonment for three months, six months, six months, six months, 12 months, 12 months, three months and six months. For present purposes the effective sentences were those of 12 months, referred to as e and f, and the sentences of six months, there being a number of them.

There was a consecutive sentence under paragraph h in respect of a breach of a passport order which had been made by Norris J on 16 February 2010, and that had been breached by failure to deliver up a United Kingdom passport and failure to deliver up a stolen Pakistani passport, a personal identity card and tickets for travel by air to Pakistan. That contempt was admitted by the appellant. He had in fact left this country and sought to return to this country surreptitiously in between the making of the freezing order and the contempt proceedings. His attempts to avoid the restrictions on his travel imposed by the passport order was the subject of that last contempt.

All of the sentences other than the sentence in respect of a breach of the passport order were ordered to run concurrently. A sentence of six months’ imprisonment was imposed so far as that was concerned and it was ordered by Briggs J to run consecutively to the others. The total sentence was one of 18 months’ imprisonment. It can be seen, therefore, that for the purposes of this appeal the important sentences are the sentences of 12 months’ imprisonment which were imposed in respect of the breaches of the freezing order. On behalf of the appellant it has not been suggested that the sentence under paragraph h in respect of the breach of the passport order was in any way excessive and it is not suggested, and could not be suggested, that the judge was not right to have ordered that sentence to run consecutively.

The judge's sentencing judgment is a careful judgment, and it can be seen that he took all relevant matters into account. The relevant matters included the amount of money which had been lost from Lexi and the fact that no information had been provided as to its assets and affairs. The judge said that there had been a comprehensive flouting of the court's orders by Waheed Luqman constituting contempt of the gravest kind, and it has not been suggested by Mr Garlick that was a misdescription of what had occurred. The judge took into account the fact that at a very late stage in the proceedings the appellant had admitted all of the contempts but one, thus saving court time, a certain amount of expense and a certain amount of witness time. He did not, however, in giving his judgment identify any discount which he gave in respect of those late admissions.

The judge also referred to the sentences which had been imposed on Shaid and indeed his sister, Monuza, who had also been the subject of contempt proceedings, but he again did not expressly discuss any discount that might be appropriate in view of the fact that Shaid had disputed all of his alleged contempts, whereas ultimately Waheed had admitted all but one.

The appeal before us is restricted to three of the sentences: that of six months’ imprisonment for having assisted Shaid in his concealment of the beneficial ownership of a company called Imaan Incorporated; a 12-month sentence for having assisted Shaid in his attempts to avoid the provisions of tracing information requirements of the freezing order, on the ground that the bank account with the United National Bank belonged to a Gibraltarian entity called Lexi Holding Limited, and for having given evidence to support the false assertion by Shaid that the account belonged to the Gibraltarian entity; and lastly a sentence of 12 months’ imprisonment in respect of Waheed's breach of the freezing order by failing to disclose and deliver up documents and, in particular, failing to provide a list of documents and deliberately failing to provide the administrators with certain documentation, which ultimately had been retrieved from the boot of a car at an address identified in the order. That allegation had been contested before Briggs J. The judge found it to be proved and there is no appeal from that finding.

In respect of the first two of those sentences, the submission that is made on behalf of the appellant is that the judge failed to give credit for the belated admission of guilt. The sentences imposed were the same as those imposed on Shaid for the same offences. Shaid had, however, disputed the allegations whereas, albeit ultimately lately, Waheed had accepted that he had indeed committed those contempts. If viewed in isolation, there might be a very minor cause for complaint on the part of Waheed in that he received on those counts the same sentence as had his brother who had disputed them. However, the circumstances were not precisely the same because Waheed had avoided any trial of the contempt allegations against him for a considerable time by, on the first occasion, not appearing in February 2009 for the date which had been fixed for the hearing and then, subsequently, by putting forward what appeared to be patently unreliable -- at best -- medical evidence justifying his absence.

However, the effective sentences for present purposes are the sentences under paragraphs f and h. Paragaph h is not the subject of appeal. Paragraph h is the sentence of failing to disclose and deliver up documents and failing to provide the administrators with the company server and documentation which was found in the boot of a car which was under the control of the appellant. Those were undoubtedly very serious contempts. The failure to deliver up documents of the company relating to its affairs and assets frustrated the performance by the administrators of their duty, and without documents (and I include in “documents” information contained on the company server) the task of the administrators in seeking and securing the assets of the company which had been fraudulently removed from it would be made, at best, far more difficult and, at worst, impossible for them to perform.

In particular the concealment of the server and documentation in the boot of a car were not allegations which had been faced by Shaid and the allegation under paragraph f was disputed. It is said on behalf of the appellant, as I understand it, that the sentence of 12 months’ imprisonment imposed in respect of that matter was excessive. I do not accept that. These were, as the judge said, contempts of the most serious kind. It is difficult, and without the acts attributed to Shaid, would be extremely difficult to imagine more serious breaches of freezing and disclosure orders than those in the present case, both in terms of the conduct involved and the amounts of money which are in question. It seems to me that that sentence of 12 months’ imprisonment was amply deserved. Indeed a longer sentence could have been justified.

In those circumstances the total sentence of 18 months imposed by the judge is not a sentence which I would reduce. The effective sentence is one of 18 months and for my part I would not disturb the sentences imposed under paragraphs d and e, having regard to the fact that any reduction is entirely academic. In my judgment, but for the sentences imposed on Shaid, these sentences would be regarded as modest, possibly even lenient having regard to the conduct involved. I would dismiss this appeal.

I agree.

I also agree.