ADM International SARL v Grain House International SA & Anor

A person to whom a court order is addressed is guilty of a contempt of court if they breach the court order, in accordance with principles which are helpfully summarised by Christopher Clarke J in Masri v Consolidated Contractors Intl Co SAL & Ors [2011] EWHC 1024 (Comm) at [144]-[147]. Third parties who have notice of a court order may also be guilty of contempt if they do something which is a wilful interference with the administration of justice: Seaward v Paterson [1897] 1 Ch 545, 555-6, Attorney-General v Times Newspapers Ltd [1992] 1 AC 191, 218-9. The former is often described as a civil contempt and the latter a criminal contempt. Although these labels are controversial and in some circumstances misleading, it is convenient to adopt them for the purposes of the issues which arises in this case. A criminal contempt is committed if the third party aids and abets a breach of the court order. It provides the mechanism whereby, for example, freezing orders are made effective against foreign defendants with money in English bank accounts: notice to the bank puts the bank at risk of committing a criminal contempt if it facilitates transfer of the funds, and so the account is effectively frozen.

The principal difference between civil and criminal contempt in the present context is the mental element involved in establishing the contempt, as Lord Oliver explained in Attorney-General v Times Newspapers at pp. 217-218. For a civil contempt the position was accurately summarised by Briggs J in Sectorguard Plc v Dienne Plc [2009] EWHC 2693 (Ch) at [32]: “The mental element required of a contemnor is not that he either intends to breach or knows that he is breaching the court order or undertaking, but only that he intended the act or omission in question, and knew the facts which made it a breach of the order.” By contrast, for a criminal contempt by a third party what is required is a wilful interference in the administration of justice, which in the case of a court order requires an intention that it be breached.

Directors and officers of a corporation have been treated as a special category where the order is made against the corporation. At least since 1860 and at least until 2020 they could be treated as responsible as civil contemnors for breach of an order made against the corporation where they were culpably responsible for the corporation’s failure to comply with the order in accordance with principles laid down in Attorney General of Tuvalu v Philatelic Distribution Corp Ltd [1990] 1 WLR 926 and Dar Al Arkan v Refai. An issue arises in relation to Contempt 5 as to whether the principle pre-dated 1860, and whether it survived a revision to the Civil Procedure Rules in 2020.

There were two strands to Mr Moxon Browne’s submission:

The difficulty with the first of these submissions is that there was no evidential support for it in the material put before us. We were not provided with the credit facilities in either their redacted or unredacted forms. The only material before us casting light on the extent and significance of the redactions is to be found in the transcript of the hearing below, which records Mr Akka’s submissions about them. In short there is nothing there, or elsewhere, to cast any doubt on the Judge’s conclusion on the point.

As to the second strand, what Briggs J said in Sectorguard at [47] was this:

I would readily associate myself with those views. Moreover, I would accept Mr Moxon Browne’s submission that although they are expressed in terms of case management powers, the abuse jurisdiction can be used at the committal hearing itself, in an appropriate case, to decline to find contempt even where, as here, there has been no prior application to dismiss the committal proceedings for abuse.

However, the principle has no application in the current case. When the committal proceedings were commenced GHI was still in breach of the ADO in having failed to supply an unredacted copy of the Société Générale facility. That breach, and its past breaches in relation to all the facilities, formed part of a pattern of behaviour relied on in support of arguments that the other breaches were deliberate; and as relevant to the appropriate sanction for GHI’s conduct as a whole. In that context there was nothing abusive about proceeding with that contempt and asking the Judge to adjudicate upon it. Had it stood alone the position might have been different, but it did not stand alone.

Mr Moxon Browne did not develop his arguments orally but relied on the same point he had made in relation to Contempt 1, that the contempt was technical and so ought not to have been determined. This complaint fails for similar reasons. The breach by failure to disclose bank accounts was in the end determined to be deliberate, and was part of a pattern of conduct properly relied on by ADM in support of the more serious alleged breaches in Contempt 3 and 4 and as relevant to sentence. There was nothing abusive about pursuing it.

Mr Moxon Browne distilled his argument into three propositions which can be summarised as two arguments:

Mr Akka KC argued that the Judge had been right to construe “value” as meaning unencumbered value for the reasons she gave. As a matter of law, if an order was ambiguous, it nevertheless had to be construed, and if a person’s conduct breached the order, properly construed, a contempt was established. If a person acted in an honest but mistaken belief as to its meaning that might be taken into account in determining sanction. That did not arise on the facts of this case because even if, contrary to his primary submission, the word value was ambiguous, GHI and Mr Boutgueray did not understand it to mean market value, but rather interpreted it as meaning unencumbered value.

On this issue I take a different view from that of the Judge. I have concluded that the appellants are correct in their submission that it means market value rather than unencumbered value, by reference to a number of considerations which point to that conclusion.

First, as a matter of ordinary language, reference simply to the value of real property would normally be understood to mean market value. If a person were asked to give the value of their house, they would naturally respond with an estimate of what it could be sold for, not what equity they held after taking account of a mortgage.

Secondly, there is a well-recognised principle that because a person is exposed to criminal sanctions for breach of an order, and in the context of freezing orders because they can have a potentially draconian effect, such orders should be “strictly construed”: see JSC BTA Bank v Ablyazov (No 10) [2015] UKSC 64 [2015] 1 WLR 4754 at [19]. That principle is easy to apply to an injunction intended to have a restrictive effect; it dictates a construction of the order which gives it the less restrictive effect. It is not so obviously applicable to the present context where the choice is simply whether the ‘value’ which has to be disclosed means one thing rather than another. However, if ADM’s construction were correct, it would require more onerous disclosure than would be required by the appellants’ construction: identification of the unencumbered value would involve both the market value and details and valuation of the encumbrances, the last of which might well involve considerable research because assets may be charged to secure borrowings which change from day to day. The principle of strict construction does therefore apply to add weight to the appellants’ construction as being the least onerous.

Thirdly, paragraph 1(a) of the ADO requires disclosure of the “balance” on bank accounts. It is well known that corporate bank accounts in credit are often charged, for example as part of a floating charge to secure borrowings. Paragraph 1(a) of the ADO is therefore unequivocally concerned with gross value of the relevant asset, not the unencumbered value. That strongly suggests that paragraph 1(c) is also to be construed in this way, because they all serve the same purpose and are part of a single disclosure order contained in one paragraph, of which they are sub-paragraphs.

Fourthly, and most importantly, the appellants’ construction gives greater effect to the purpose of the ADO, which is the context in which it must be construed. The words of the order must be given their ordinary meaning, but the purpose for which orders are made will influence that meaning: JSC BTA Bank v Ablyazov (No 10) [2013] EWCA Civ 928 [2014] 1 WLR 1414 (in the Court of Appeal) at [37]; Michael Wilson & Partners Ltd v Emmott [2015] EWCA Civ 1028 at [22]. The relevant purpose of the ADO is, as the Judge said, aimed at assisting in enforcement of the judgment obtained against GHI.

For those purposes, a claimant would normally wish to know both the market value and the extent of any alleged encumbrances, but, as Mr Akka accepted, this order cannot be construed as requiring both. The question is whether a claimant’s purpose in getting disclosure of assets to assist in enforcement is better served by knowing in the first instance only the market value or by knowing only the unencumbered value.

The answer, to my mind, is the former. If unencumbered value is the correct construction, the assets may not fall to be disclosed at all, if that unencumbered value falls below the US$75,000 threshold. That, on ADM’s case, is the position in respect of all the properties which Mr Boutgueray identified, because the encumbrances reduce their value to GHI to below the threshold. Yet a judgment creditor in ADM’s position would want to know about the properties so as to be able to investigate the extent of GHI’s beneficial interest. Encumbrances may change value on a daily basis with fluctuations in levels of borrowing, and may disappear entirely if the borrowing they secure is repaid or restructured by the provision of other security. Disclosure of value only has to be made at the snapshot of time required by the terms of the court order; it is not subject to constant updating. Yet unencumbered value may change so as to bring the unencumbered value of a valuable asset above the monetary threshold for disclosure and something of real value as a target for enforcement. Moreover there is often room for dispute about the existence or validity of alleged encumbrances, and it is a common experience that recalcitrant debtors assert that valuable property which they are apparently enjoying is in fact beneficially that of someone else. If a defendant maintained that a very valuable house registered in their own name had been beneficially transferred to another, on ADM’s construction of the order it would not fall to be disclosed; yet a judgment creditor in its position would want to know of the existence of a house with a large market value against which enforcement might potentially be available upon inquiry into the position as to beneficial ownership. Moreover different properties may each be charged to secure a single debt. If value means unencumbered value, then because it would be for the creditor to choose which property or properties to enforce against, the debtor could not know which specific property or properties should be treated as being encumbered with the debt. At least arguably all would fall below the threshold, and none would need to be disclosed. That would be a bizarre result, because the security could only be enforced up to the amount due, and if the overall position is considered, there would be substantial unencumbered value to GHI against which enforcement would be available.

These considerations can be illustrated by posing hypothetical examples and applying the rival construction arguments. So, for example, if GHI owned a piece of real property worth US$4 million, which was fully charged to secure borrowing in excess of that amount, on ADM’s case it would not fall to be disclosed, even though it might the following day become wholly unencumbered by repayment or restructuring of the borrowing so as to represent US$4m worth of available assets against which ADM could enforce. To take another example, GHI might own a number of properties worth more than the US$75,000 threshold, and they might all be charged to secure the same borrowing. So if, for example, there were ten properties worth US$100,000 each, and each were charged to secure borrowing of US$50,000, on ADM’s construction none would have to be disclosed (as Mr Akka confirmed in argument) because each individually would have an unencumbered value below the threshold. Yet the position would be that if only ADM knew about them, they would provide US$950,000 worth of available assets against which to enforce. Suppose, yet again, that GHI owned a property worth US$5 million currently subject to a charge of US$4,920,000. On ADM’s construction all it would be told would be that there was a property with a value of US$80,000. That would not reveal what it would want to know, which was that there was ownership of a very valuable property which might be available in due course for enforcement.

I am unable to agree with the Judge’s conclusion that there would be no point, on ADM’s construction, in “knowing the locations of [worthless] assets with a [meaningless] value of $4m.” That would not be a meaningless value if the encumbrance were removed shortly after disclosure, and the asset would not be worthless. Moreover, knowledge of an asset worth US$4 million which was said to be fully encumbered would enable ADM to investigate both the validity of the alleged encumbrance and its continuing size or existence. If the order means unencumbered value, ADM never learns of such a property. If, on the other hand, it means market value, that would not of itself require disclosure of encumbrances; but it would be open to ADM to make its own inquiries, to make further requests for information, and, if appropriate, to seek a further order.

What this illustrates is that in a well-drawn disclosure order what might properly be required expressly is both gross value and any encumbrances or beneficial interests of others which are said to reduce that value to a lesser one in which the defendant has a beneficial interest, which is the target of enforcement (subject to care being taken to ensure that what is required by way of disclosure is proportionate and not oppressive). But where only one is asked for, as here, it is the market value, not unencumbered value, which provides the claimant with most assistance in the first instance, because it identifies all substantial assets which might ultimately be available for enforcement; and any encumbrances or beneficial interests of others can be investigated and monitored thereafter, if necessary through further orders.

Aspinall’s v Lim does not cast doubt on this conclusion. That decision concerned what was meant by the words “up to the value of” in the restraining part of a freezing order in the terms of the standard wording in Appendix 11 to the Commercial Court Guide, which by a subsequent paragraph had the equivalent of what is in the WFO in this case, namely an express reference to the “unencumbered value” of such assets. Murray J endorsed the view expressed in Gee on Commercial Injunctions (now in the 7^th edn at 21-036) and applied by Ms Joanna Smith QC in PJSC Commercial Privatbank v Komoloisky [2018] EWHC 482 (Ch) at [36] to [38], that “value” there meant unencumbered value, because what was to be frozen was what was intended to be available for execution of a judgment in due course. I would endorse the correctness of that decision, although it would be desirable to amend the standard form to refer to unencumbered value to remove any room for doubt in the mind of a defendant without access to legal advice. The rationale does not apply, however, where what is being sought is disclosure for the purposes of policing a freezing order, or a disclosure order in aid of execution, at least where there is no equivalent to the WFO wording expressly referring in another part to unencumbered assets.

That is sufficient to dispose of the appeal on Contempt 3 in favour of GHI and Mr Boutgueray: on the true construction of the ADO there was no obligation to identify more than market value and therefore no breach in failing to disclose encumbrances. That makes it unnecessary to determine Mr Moxon Browne’s alternative submission based on the ADO requiring information as to unencumbered values, but being ambiguous. However because it raises a point of law which has been fully argued I will address it.

In Redwing, Jenkins J was concerned with an application in a passing off action in which undertakings had been given by the defendant company. The plaintiffs sought an order for sequestration alleging breach of the undertakings. There was evidence from the defendant’s manager that he had acted in accordance with his understanding of what was allowed or prohibited by the undertakings. Jenkins J held that on the true construction of the undertakings there had been no breach. He went on to remark, obiter, as follows at p. 71:

In Hadkinson, the relevant passage relied on was obiter, this court having concluded that upon the true construction of the order, Mr Hadkinson was not in breach of it. Mummery LJ, with whose judgment Nourse and Pill LJJ agreed, said at p. 1705:

Mummery LJ also cited a passage of the judgment of Ipp J in the decision of the Supreme Court of Western Australia in R & I Bank of Western Australia Ltd v Anchorage Investments Pty Ltd (1993) 10 WAR 59 at p 69, where Ipp J had identified that there were two reasonably possible constructions of the word asset in the court order in that case, and had said “contempt of court is not established if, on the proper construction of an ambiguous court order, it is revealed that the order has been breached by the defendant.”

In Michael Wilson & Partners Ltd v Emmott [2015] EWCA Civ 1028 this court was concerned with whether conduct came within the exception in a freezing order as amounting to dealing with assets “in the ordinary and proper course of business.” The Court concluded that it did, such that there was no breach of the order. Lewison LJ, with whom Gloster and Black LJJ agreed, said at [22]:

The more extreme form of the argument advanced by Mr Moxon Browne was that where there is ambiguity, the conduct of the defendant cannot be treated as a breach of the order, if it is conduct which would be in accordance with an arguable but erroneous construction of the order, whatever the defendant’s own understanding and intention about the order. In that form it would plainly lead to absurd results. A defendant could with impunity deliberately flout an order which on its true construction restrained him from doing X, where he understood it to mean X, merely on the grounds that it was arguable, but wrong, that it meant Y, which was not his understanding.

The more realistic form of the argument, based on the defendant’s own understanding of the meaning of the order, might appear at first sight to derive some support from the passages cited above. However the true principle, in my view, is that where the court decides what the order means, and upon that construction the defendant’s conduct breaches the order, the defendant is in contempt. That is the principled consequence of the relevant ingredients of civil contempt, as summarised in Masri, and in particular that the defendant need not intend to breach the order; all that need be established is that the defendant intended to carry out the conduct in question and that such conduct amounts to a breach of the order, objectively construed. Subjective understanding or intention in relation to the meaning of the order is logically irrelevant to the existence of a civil contempt because there is no requirement of an intention to breach it.

This is consistent with the many statements to be found in the authorities about the importance of avoiding ambiguity in court orders. For example in A-G v. Punch Ltd [2003] 1 AC 1046 Lord Nicholls said at [35]:

It is because a defendant will be in contempt if he fails to comply with an ambiguous court order that an ambiguous order puts him “at risk of being in contempt.”

However, subjective understanding is relevant to the sentence to be imposed for any contempt. Where a defendant acts in accordance with an erroneous understanding of the order, that is less culpable than a deliberate breach. And where the understanding is a reasonable one because it is one of two reasonable constructions of an ambiguous order, the usual position is that he should not be punished for contempt, to use the language of Mummery LJ in Hadkinson.

That may also mean that in an appropriate case he should not be held to be in contempt. That is not because his breach does not amount to a contempt, but by application of the abuse jurisdiction referred to by Briggs J in Sectorguard. When Jenkins J said in Redwing that a defendant in that position “should not be held to be in contempt” he is to be taken to mean that where the claimant has no prospect of making a court sure that the defendant acted otherwise than in accordance with a subjective interpretation of the order which is a reasonable one in the face of an ambiguity, it will usually be an abuse to pursue the allegation of contempt, notwithstanding that the contempt exists upon what the claimant contends is the true construction of the order.

I should make clear that I do not consider that this principle could have assisted GHI or Mr Boutgueray in this case. Nowhere is it said in their evidence that they understood the order to require disclosure of market value only, and their evidence is inconsistent with such an understanding, in particular paragraph 29 of Mr Boutgueray’s third affidavit and paragraph 23 of Mr Boutgueray’s sixth affidavit. GHI and Mr Boutgueray never took issue with the statement in Ms Pritchard’s affidavit of 21 April 2021 that the order required unencumbered value and that a failure to disclose encumbrances and their value was a breach of the order. Rather, details of encumbrances were disclosed in Mr Boutgueray’s second affidavit, albeit misleadingly Although that followed requests in correspondence, it is clear from the whole history which I have recounted that GHI and Mr Boutgueray were concerned to comply with the ADO to the least extent possible. Had they thought that there was no obligation to disclose encumbrances, they would have said so and refused to do so.

Mr Moxon Browne accepted that GHI had been trading. He also accepted that the Judge had been entitled to be sure that the disclosed properties in Morocco had an unencumbered value of virtually nothing by reason of the undisclosed encumbrances attested to by ADM. However, he submitted that ADM had failed to prove that GHI did not have assets in Morocco worth US$4m or more. He said that the asset disclosure given did not establish the absence of such assets, even if the unencumbered value of the properties was zero or virtually zero, because Mr Boutgueray said in paragraph 23 of his third affidavit that “[ADM]’s assets far exceed the value of the Award and the amount that ADM has sought to freeze pursuant to the WFO”. He submitted that ADM must have known from GHI’s published accounts that it had assets vastly exceeding US$4m. In this respect he relied upon the material exhibited to the sixth affidavit of Mr Boutgueray, as well as Ms Pritchard’s first affidavit.

I cannot accept this submission, which was not advanced before the Judge. The sixth affidavit was not before the Judge prior to her findings of contempt and only fell to be taken into account to the extent appropriate for the purpose of sanction. In that context it was only relied on as an indication that steps were being taken to purge the contempt, albeit they were incomplete and would need further work and explanation. None of the material exhibited to Mr Boutgueray’s affidavit has been put before us, and the affidavit itself is only in evidence in this court because it was in evidence before the Judge for the purpose of sentencing, not for the determination of the contempts. It would require a fresh evidence application if it were to be relied on in the appeal against the findings of contempt. No such application was made, and it would not be able to satisfy the first limb of Ladd v Marshall [1954] 1 WLR 1489 as evidence which could not with reasonable diligence have been available at the hearing when contempt was being determined. Moreover, Mr Moxon Browne referred to it below as containing unpublished accounts, such that there is no warrant for suggesting that it was available to, let alone known to, ADM.

Ms Pritchard’s first affidavit was sworn in support of the original application for the ADO which came before Waksman J. It revealed what had theretofore been discovered about GHI’s assets. That included a statutory auditors’ report for the period ending 31 December 2017. Ms Pritchard deposed that the report appeared to show fixed assets to a value of about £18.2 million, “investments” to a value of about £187.1 million, an inventory of goods worth about £25.3 million and receivables worth about £90 million. Ms Pritchard made the point that this included some £15 million said to be in bank accounts, something which was impossible to reconcile with the lack of funds in the Moroccan bank accounts which had been the subject of enforcement attempts there; and that there was no detail of where any of these assets were to be found.

That referred to the position in 2017. The Judge was concerned to identify the position between 5 June 2019 when the WFO was first made and 17 February 2022 when the Second Committal Application was made, because it was over the whole of this period that Contempt 4 charged GHI with trading in breach of the WFO. The historical position was of little evidential value in relation to the period in question.

The bare assertion in paragraph 23 of Mr Boutgueray’s third affidavit of assets “far exceeding” US$4 million was of no worth without any supporting detail of corroborative evidence.

Most importantly, the Judge cannot be criticised for proceeding on the basis of all the evidence before her, including the disclosure made by GHI that its only assets in Morocco were the properties disclosed in Mr Boutgueray’s second affidavit, his third affidavit saying that it had no assets outside Morocco, and ADM’s unchallenged evidence that the unencumbered value of the properties in Morocco which had been disclosed was virtually zero. Mr Moxon Browne’s submission amounts to saying that she should have disregarded that evidence and assumed it to be false by reference to a worthless unparticularised assertion in the third affidavit of unidentified assets. It is self-evident that she was not obliged or indeed entitled to make such an assumption contrary to the evidence, and it was no doubt for this reason that this was not a point taken by Mr Hilton before the Judge.

Mr Moxon Browne also maintained the point which Mr Hilton had made to the Judge about the possibility of there being numerous assets below the threshold amounting in total to more than US$4 million. Like the Judge, I can see no force in this point. It would require more than 50 individual assets of almost US$75,000 (and many more if of lower value). No example has been posited of what a cereals trading company with GHI’s profile might possess of that kind. Nowhere in the evidence was it suggested on behalf of GHI that such assets existed, and had they done so, GHI could have been expected to have advanced such evidence. That is not to reverse the burden of proof, as Mr Moxon Browne submitted, but merely to observe that what is a theoretical and highly improbable possibility can be ignored if it is not the subject matter of any evidence where evidence could be expected. As Whipple J observed in VIS Trading Co Ltd v Nazarov [20115] EWHC 3327 (QB) [2016] 4 WLR 1 at [31], in an appropriate case it may be fair to draw an adverse inference from silence where a matter is in dispute in contempt proceedings and a defendant can reasonably be expected to supply evidence if it exists; that does not involve reversing the burden of proof, provided that it is borne in mind that silence alone cannot establish guilt.

Accordingly I would dismiss the appeal from the finding of contempt in respect of Contempt 4.

In Tuvalu this court considered what had to be established for directors and officers to be treated as responsible, for the purposes of civil contempt, for failure by the corporation to comply with an order against it. Cockerill J applied those principles to the allegation of contempt by Mr Boutgueray, including the mental element appropriate for civil contempt. Mr Moxon Browne does not submit that if civil contempt was applicable to Mr Boutgueray, she misapplied the test for civil contempt or reached an erroneous conclusion on the evidence. Rather, he submitted that what he described as the anomalous position of directors’ liability for civil contempt rested on a power in CPR r 81.4(3) which was removed by the revision to the Civil Procedure Rules in October 2020, leaving directors in the same position as any other third party to an order, namely susceptible to criminal contempt only, with the required mental element of an intention that the order should be breached. Since the Judge had not found Mr Boutgueray to have the mens rea for criminal contempt, the consequence would be that the findings of contempt against him cannot stand.

This point was not advanced before the Judge, before whom it was common ground that Mr Boutgueray was exposed to civil contempt of the order made against GHI in accordance with the Tuvalu principles, if fulfilled. The change of position on the appeal is said to have been prompted by Mr Boutgueray’s legal advisers becoming aware of the decision of Foxton J in Olympic Council of Asia v Novans Jets LLP [2023] EWHC 276 (Comm) which postdated the Judgment, in which this point was addressed (and rejected). Mr Akka objected to the point being taken, relying on the principles generally applicable in civil appeals to new points of law not raised below, as set out in Pittalis v Grant [1989] QB 605 at p 611, Singh v Dass [2019] EWCA Civ 360 at [15]-18] and Notting Hill Finance Ltd v Sheikh [2019] EWCA Civ 1337 [2019] 4 WLR 146 at [23]-[28]. In particular, he submitted that had the point been taken below, the case would have been run differently before Cockerill J; and/or ADM could not be adequately protected in costs in the light of GHI’s failure to pay costs orders to date.

The court has a general discretion as to whether to allow new points of law to be taken on appeal, the ultimate test being whether it is in the interests of justice, applying the principles identified in the cases cited above. That will depend upon an analysis of all the relevant factors, which include the nature of the proceedings which have taken place in the lower court, the nature of the new point, and any prejudice that would be caused to the opposing party if the new point is allowed to be taken, especially where it would have required additional evidence.

In my view, applying those principles the interests of justice are clearly in favour of allowing the point to be taken. The most important considerations are that this is not a case in which there would have been any different evidence had the point been taken below; it is doubtful whether if it had been taken below the course of the hearing would have been any different; it is doubtful that if the point is allowed to be taken and is a good one, that would result in any positive award of costs, whether of the appeal or hearing below, in ADM’s favour (as opposed to depriving GHI/Mr Boutgueray of any award of costs in their favour); and, to my mind most importantly the nature of the proceedings.

Committal proceedings are criminal in nature because they seek the imposition of criminal sanctions. Mr Boutgueray’s liberty is potentially at stake. It is therefore appropriate to take account of the principles applicable to whether a point of law can be taken for the first time on an appeal against conviction in criminal cases. In that context the law is clear that where the indictment charges an offence not known to the law, the court will quash the conviction: R v Bhagwan [1972] AC 60; R v C [2005] EWCA Crim 2827 (2006) 1 Cr. App. R. 20. This is the case even if the point was not taken at trial and the appellant pleaded guilty: R v Whitehouse [1977] Q.B. 868 (1977) 65 Cr. App. R. 33. As Lord Bingam CJ stated in R v Graham (1997) 1 Cr. App. R. 302, at p. 309E:

Those principles can readily be transposed to the present context, because if Mr Moxon Browne’s submissions are correct, Contempt 5, as interpreted by the parties before the Judge and the Judge herself, contains particulars of a contempt which is not known to the law.

In Olympic Council of Asia v Novans, Foxton J concluded that the principle that directors and officers can be liable for civil contempt in respect of orders made against the corporation, which he termed ‘the Body Corporate Provision’, was unaffected by the repeal in 2020 of CPR 81.4(3). Mr Moxon Browne submits that the decision is wrong. I have concluded that it is right, for similar but broader reasons.

The parties traced the statutory sources back to the Common Law Procedure Act 1860 (‘the 1860 Act’) which provided in section 33:

It is, however, necessary to delve further back. I have been much assisted in that task by the scholarly research and analysis contained in a draft article prepared extra-judicially by Sir David Foxton since his decision in Novans. It is awaiting publication.

The Court’s inherent jurisdiction to punish disobedience to its orders as a contempt of court is of very long standing, and had been recognised and applied for many centuries before the 1860 Act. In Jennison v Baker [1972] 2 QB 52, Salmon LJ observed at p. 61:

In Attorney-General v Times Newspapers Ltd Lord Oliver explained that it was a fundamental aspect of the efficient administration of justice. He said at p. 216:

As is apparent from the terms of s. 33 of the 1860 Act, the relevant remedies for enforcing court orders at that time included attachment and sequestration.

The writ of attachment, addressed to the sheriff, was a form of process in existence as early as the thirteenth century to secure the attendance of a party before justices for felonies and breaches of the peace. It was available in two forms, per corpus suum (arrest) and per vadium et salvos plegios (by security and sureties): Bracton De Legibus et Consuetudibus Angli Folio 149. The former was for arrest of the person; the latter required the sheriff to seize goods by way of security for appearance: Blackstone’s Commentaries on the Laws of England Book 3 p.280. By Blackstone’s time attachment was a form of process to compel attendance in civil suits in the courts of King’s Bench and Common Pleas (ibid at p284). The form per corpussuum came to be the usual form and in due course the form per vadium fell into abeyance.

The writ of attachment was also used in cases of contempts and remained as a mechanism for enforcing certain types of court order after it had been abolished as a means of compelling attendance: Harvey v Harvey (1884) 26 Ch D 644, 653. This aspect of its use appears to have taken place mostly in the courts of equity, where the remedy of specific performance was most readily available, and where the power of the Chancellor to punish for contempt was clearly established before the position at common law: Sir William Holdsworth A History of English Law vol 1 p. 458. It remained the mechanism for arrest for failure to obey court orders in the mid-nineteenth century (Harvey v Harvey, 653), including for non-payment of money orders, although by 1860 money orders in the Court of Chancery had the effect of judgments at common law and were subject to the same processes of execution, such as fieri facias; and imprisonment of debtors for non-payment was soon to be heavily restricted by the Debtors Act 1869. So at the time of the fusion of common law and equity, a writ of attachment was described in the first Order 44, scheduled to the Supreme Court of Judicature Act 1875 as “… a writ directed to the sheriff commanding him to attach the person against whom it is issued and have him before the court to answer his contempt.” By reason of its original purpose, a writ of attachment could be issued by a party without any court order.

Attendance could also be achieved by a writ of committal which was executed by the tipstaff who brought the prisoner to the Court Prison at Holloway. Unlike attachment, this required an order of the court. The distinction between cases in which attachment and committal was the appropriate remedy was addressed in a memorandum by Mr Registrar Lavie, reported as a note to In Re Evans, Evans v Noton [1893] 1 Ch 252, 259, who said that the well-established position prior to the Judicature Acts was that a man was committed for doing what he ought not to do and attached for not doing what he was ordered to do.

These were means of bringing contemnors before the court and to act coercively to encourage compliance, but were not addressed to the sanctions imposed where the contemnor was found to be in contempt. These included committal to prison; or the imposition of fines. Imprisonment and fine were supplemented by the writ of sequestration, which came into use at least as early as the seventeenth century, if not earlier. The writ involved seizure of the respondent’s personal estate and the rents, income and profit from their real estate. It could be imposed in addition to imprisonment (Pope v Ward (1785) 1 Cox Eq Cas 194, 29 ER 1125). By the early nineteenth century it had become a common sanction for corporations who failed to comply with court orders (see Agar v The Regent’s Canal Company (1815) 19 Ves Jr 379, 380, 34 ER 558). The processes involved are described in Halsburys Laws of England 4^th edn Reissue 7(1) at [218]-[222]. It is essentially coercive in its effect rather than by way of execution, operating in rem against the relevant assets in order to encourage compliance with the order.

Two forms of body corporate with separate legal personality were known to the law from the earliest times, namely corporations aggregate and corporations sole. The latter presented no difficulty with personal forms of enforcement because the corporation was constituted by a single individual, against whom the remedies of attachment and sequestration could be levied, and a successor was bound to respond to a writ of sequestration levied against their predecessor. Corporations aggregate presented greater challenges. It was well established that they could not be the subject of a writ of attachment which was a personal remedy available only against natural persons: Morgan v The Corpn of Carmarthen (1673) 3 Keb 350, 84 ER 760; London v Lynn (1789) 1 H Bl 206, 209; United Company of Merchants of England Trading to the East Indies v Kynaston (1832) Bli 153, 163, 4 ER 561, R v J G Hammond & Co Ltd [1914] 2 KB 866, 867.

However the writ of mandamus came to be used to seek to achieve the same objective. A prerogative writ of mandamus, addressed to a sheriff, would lie against the members or officers of a corporation to secure performance of their obligations towards the corporation. These were often incorporated by charter, and later private Act of Parliament, and sometimes, but by no means always, were addressed to those carrying out what we would now describe as public functions: see for example R v The Mayor of Hereford (1705) 2 Salk 701, 91 ER 593, in which an order of mandamus was directed to the mayor to admit a person to the office of town clerk; and R v The Mayor, Sheriffs, citizens and Commonalty of the City of Norwich (1830) 1 B & Ad 809, 109 ER 802 in which the writ of mandamus was directed to the mayor, sheriffs and entire citizenry of Norwich to perform their obligations to appoint twenty persons to be guardians of the poor of the city.

Mandamus also lay where the obligation of the corporation was to comply with a court order as to its private law obligations. So in Corpe v Glyn (1832) 3 B & Ad 801, 110 ER 294 it was directed to the treasurer and directors of a dock corporation to see to it that the corporation performed its obligations to pay money under an arbitration award which had been made a rule of court.

By this process mandamus could lie against directors or officers to see to it that an order of the court directed to a corporation was obeyed. Once that mandamus was issued, addressed to natural persons, they were personally exposed to contempt proceedings in the event of non-compliance, including attachment: Salmon v The Hamborough Company (1671) 1 Ch Cas 204, 22 ER 763. Approved Men of Guildford v Mills (1666) 2 Keb 1 may be another example, and was treated as such by James Stephen in The Common Law Procedure Act 1860 with Notes and Introduction (1860) at p. 68, although the report of the case is too exiguous to be certain.

The ability to use attachment in this way came to be expressed in a form which conflated the two steps in the procedure, mandamus directed to the corporation and mandamus directed to the officers. In Francis Buller’s influential treatise, An Introduction to the Law Relative to Trial at Nisi Prius 5^th Edn (1790) at pp. 201-2 he stated that “where a mandamus is directed to a corporation to do a corporate act, the attachment is granted only against those particular persons who refuse to pay obedience to the mandamus.” In A Practical Treatise on the Law of Corporations in general as Well Aggregate as Sole (1854) James Grant stated the position (at p. 261) to be that “if the writ [of mandamus against the corporation] is disobeyed, the course is to issue an attachment against those members of the corporation who are responsible for the disobedience”. James Stephen summarised the position thus at p. 68 of his 1860 work:

That this was a conflation of the procedural position is apparent from Cope v Glyn, in which attachment of the treasurer had been sought to enforce the order for the corporation to pay the award, prior to any mandamus directed to him. The attachment was refused; but mandamus granted directed to him and the directors to secure that the corporation paid the amount. The conflation may have been well understood by practitioners, but its expression in this form masked the cumbersome nature of the procedure. Applications for prerogative writs of mandamus involved the preliminary step of applying for leave to issue such a writ, and were subject to considerable inconvenience and delay for procedural reasons explained by Robert Kerr, later a Judge of the Sheriff’s Court of the City of London, at pp. vii-viii of his work The Common Law Procedure Act 1854 with Practical Notes (1854).

By the mid-nineteenth century a number of statutes had come to be enacted requiring private corporations, such as railway, dock or utility companies, to carry out works for the benefit of private individuals, enforcement of which, at common law, involved this cumbersome procedure. This was remedied by the Common Law Procedure Act 1854 (‘the 1854 Act’), which enabled a party seeking specific performance of such an obligation to include a claim for mandamus which could be addressed to the party, not the sheriff, and granted in the same way as a claim for damages. Such mandamus was to be treated in the same way as a prerogative (‘peremptory’) writ of mandamus, and section 73 provided that such mandamus could be enforced by attachment.

What section 33 of the 1860 Act achieved, which went further, was to extend the process to injunctions, and to give effect to the conflation I have identified so as to further streamline the process. The attachment of the responsible individual directors and officers, where liable, could take place notwithstanding that the injunction or mandamus was addressed to the corporate body, not the directors or officers, without the need for a further mandamus directed to the individuals. This was the interpretation of what s. 33 achieved by another commentator on the 1860 Act, John Day, later Mr Justice Day, in his work The Common Law Procedure Acts (1863), who observed that the words “as in the case of a mandamus” were inaccurate because a mandamus addressed to a corporation aggregate could not then, nor ever before, be enforced by attachment against the directors or other officers, although such ‘vicarious punishment’ (as he put it), had specifically been provided for in the case of railway and canal companies by s. 3 of the Railway and Canal Traffic Act 1854. He said of s. 33 of the 1860 Act that “the words ‘as in the case of mandamus’ may, however, be construed by the courts as something not descriptive of something pre-existing but as operative”, which although ungrammatical would give effect to the intention of the legislature.

What this brief historical survey demonstrates is that s. 33 of the 1860 Act was not concerned with the substantive law which made directors and officers liable in contempt for failures by a body corporate to comply with a court order if they were responsible for its disobedience. There was already in existence a principle of law which enabled contempt proceedings to be brought against them using the writs of mandamus and attachment. I shall call this, as a shorthand, ‘the responsible persons liability principle’. What s. 73 of the 1854 Act and s. 33 of the 1860 Act did was to apply the procedure which had previously existed to coercive orders made in the common law courts whether by way of mandamus or injunction; and to streamline it by removing the cumbersome aspects of applying for leave to issue a prerogative writ of mandamus. They did not create any new substantive principle of law.

Following the fusion of equity and the common law, Rules of the Supreme Court were drawn up which initially included in the 1883 version (‘the 1883 RSC’) Order 42 rule 7 and rule 31 in the following terms:

What was meant by “wilfully disobeyed” in rule 31 was considered by Warrington J in Stancomb v Trowbridge Urban District Council [1910] Ch 190 at 194. He held that “wilfully” was intended only to exclude casual or accidental or unintentional acts. The expression did not require an intention to breach the order. It recognised, therefore, that the responsible person liability principle referred to in Order 42 rule 31 only required the mental element of a civil contempt.

For some while s. 33 of the 1860 Act and Order 42 of the 1883 RSC remained in force together, but the 1860 Act was repealed by The Statute Law Revision Act 1950.

When the Rules of the Supreme Court underwent substantial revision in 1965 (‘the 1965 RSC’), the relevant Order became Order 45 rule 5 in the following terms:

Order 45 rule 7 provided for prerequisites to enforcement under rule 5, and included the requirement for a penal notice to be endorsed on the copy of the order served, by rule 7(4):

These were the rules in force when Tuvalu was decided by the Court of Appeal in 1989. In that case the first instance judge had held the second defendant director in contempt as a result of breaches of undertakings given by a company of which he was the chairman and managing director, by application of Order 45 rule 5. That aspect of his judgment was upheld on appeal. Woolf LJ identified the relevant principles at p. 936E-F in the following terms:

He went on at p. 938A to say:

The second defendant was held to be in contempt in that case because:

This reveals a further difference between the liability of directors for civil contempt from that for a criminal contempt. Mere inactivity in the form of failure to supervise is sufficient for the former, whereas it would not found liability for the latter.”

When the Rules of the Supreme Court were replaced by the Civil Procedure Rules in 1998, contempts were initially dealt with by retaining Order 45 RSC. In 2012 Order 45 was replaced by a new CPR Part 81 (‘the 2012 CPR’). Rule 81.1 was headed “Scope” and 81.1(a) provided:

Rule 81.2(1) provided:

The 2012 CPR 81.4 corresponded to the previous Order 45 rule 5 by providing:

Rule 81.9 contained the requirement for a penal notice but did not replicate the wording of Order 45 rule 7 RSC in its warning to “any individual responsible” for disobedience to an order by a body corporate.

Writs of sequestration generally were dealt with in Part 83 of the 2012 CPR. Section 7 of Part 81 was concerned with writs of sequestration in relation to enforcement of court judgments, orders and undertakings. It included Rule 81.20 in terms which mirrored rule 81.4:

These were the rules in force when Dar Al Arkan was decided. In that case the relevant issue was whether the liability of a director to civil contempt proceedings contained in or recognised by CPR 81.4(3) could be enforced by service on the director out of the jurisdiction. Beatson LJ, giving the leading judgment, treated that issue as turning on whether the Rule Committee intended CPR 81.4(3) to have extra-territorial effect. In concluding that it did, he said at [32]-[33]:

By the Civil Procedure (Amendment No 3) Rules 2020 (SI 2020/747) Part 81 was entirely replaced, mostly with effect from 1 October 2020, by a simplified and reduced Part 81 (‘the 2020 Revision’). As explained in the foreword to the Consultation Paper leading to the 2020 Revision by the then Deputy Head of Civil Justice, Coulson LJ, the revisions followed a consultation to address procedural aspects of contempt proceedings which were causing frequent difficulties. The revisions were intended, he said, to omit substantive law which was replicated in the existing part 81, and to retain and revise procedural provisions. He said that the revisions were intended to strengthen the procedural rules.

This was reflected in the new Rule 81.1(2) and (3) which provided:

The 2020 Revision removed the previous Rule 81.4. In relation to penal notices the new 81.4(2)(e) contained a requirement that the committal application must allege that the order contained a penal notice, which was defined in Rule 81.2 in a way which alluded to the liability of directors and officers for breaches of orders made against corporate bodies previously reflected in rule 81.4(3):

The previous Rule 81.20 was replaced but subject to a saving contained in paragraph 2(1) of SI 2020/747 which provided:

The effect of this was that after October 2020 the previous version of 81.20(3) (which in accordance with a convention coined by the editors of the White Book is referred to as 81x 20(3)) continued to apply to writs of sequestration in enforcement of court judgments, orders and undertakings where no proceedings for contempt of court were brought.

Rule 83.2A was itself repealed by the Civil Procedure (Amendment) Rules 2021 (SI 2021/117) but only prospectively in relation to applications/writs of sequestration issued after 6 April 2021.

I have reached the clear conclusion that the responsible persons liability principle is a matter of substantive, not procedural law, which was not dependent upon the 1860 Act, the Rules of the Supreme Court prior to 2012, or the Civil Procedure Rules prior to 2020, and remains unaffected by the 2020 Revision. My principal reasons are as follows.

First, the power to punish disobedience to orders of the court as contempt derives from the inherent jurisdiction of the court to secure the effective administration of justice. It is a matter of substantive law fashioned by the courts for that end, and is therefore not something which one would expect to be created or confined by procedural legislation, whether a common law procedure statute, such as that of 1860, or procedural rules of court. Indeed it is not something which can be changed by rules of court, which are made by the delegated statutory authority conferred under section 1 of the Civil Procedure Act 1997 to make rules in relation to “practice and procedure” (including specific matters of that nature set out in Schedule 1).

Reference is often made to matters of substantive law in procedural rules of court, but that does not provide any indication that the rules are the source of such law; nor does it render the rules the source of that law. I agree with the editors of the White Book in their observation on rule 81.2(1) of the 2012 CPR at paragraph 81.2.1 that :

Secondly, there was already a responsible persons liability principle governing the liability of directors and officers (and others) for contempt of civil orders, which was enforced prior to the 1860 Act. The 1860 Act did not create such liability, but merely made some procedural changes to give more streamlined effect to its enforcement. It did not purport to define the circumstances in which such liability was owed, either by reference to which members directors or officers counted as responsible for the disobedience, or the state of mind required for contempt to be established. It is apparent from the passage in Stephens’ 1860 book quoted above, that the category of those who could be held liable did not necessarily extend to all members directors or officers but only to those responsible for the corporation’s contempt, although I have not found in prior case law any clear delineation of the boundaries.

The responsible persons liability principle arose so as to render effective orders against corporate bodies which have legal personality but can only act through natural persons. They are for that reason treated as a special case, for which a particular principle has been fashioned independently of the criminal law of aiding and abetting. The rationale for a special principle is that identified by Beatson LJ in Dar Al Arkan at [33], quoted above, namely that absent such a principle the court’s powers to enforce orders against corporate bodies would be significantly weakened, and that the policy is to exert pressure on those who have accepted responsibility by virtue of their offices or position in the corporate body.

Thirdly, the rules of court in their various iterations did not purport to define the content of the responsible persons liability principle. They do not address the substantive question of what degree of involvement, knowledge or culpability amounted to responsibility so as to render directors and officers liable for the company’s contempt. That was so throughout the period when the RSC 1883, RSC 1965 and CPR 2012 were in force and when, Mr Moxon Browne accepts, the principle applied. Order 42 in the 1883 RSC required “wilful” disobedience but that was not addressed either to the identity or to the state of mind of the director or officer who might be liable, and that wording disappeared in the 1965 RSC. The content of the responsible persons liability principle is not to be found in the rules. They recognise its existence but do not seek to define it.

Fourthly, and relatedly, the development of the law in this area since 1883 has proceeded not by way of construction of the rules, but by way of principles which give effect to the court’s inherent powers governing contempt. In Tuvalu, the court sought to define the content of the principle, and what amounts to responsibility for the purposes of the principle. It did not do so by any exercise of construction of the words of Order 45 in the 1882 RSC, which were silent on the question, but rather by an expression of view as to what the law ought to be. This was the court identifying the principles applicable to its inherent jurisdiction. Beatson LJ’s judgment in Dar Al Arkan is more directly concerned with the construction of Part 81 of the 2012 CPR, but that is because the issue in that case was whether the accepted jurisdiction to hold directors and officers liable in contempt could be exercised extraterritorially; it did not concern the substantive content of that jurisdiction but rather its territorial scope, which is the classic domain of procedural rules of court: see Masri v Consolidated Contractors International Company SAL [2009] UKHL 43 [2010 1 AC 90 per Lord Mance at [10]-[15].

Fifthly, it is clear, as Foxton J concluded in Novans, that the 2020 Revision did not intend to effect any change to this aspect of the law of contempt. As Nugee LJ said in BMF4 PLC v Rizwan Hussain [2022] EWCA Civ 1264 at [70]-[72], the 2020 Revision was not intended to effect any change to the substantive law of contempt. That is not, as Mr Moxon Browne submitted, a conclusion merely as to the subjective intention of the Rule Committee derived from Coulson LJ’s foreword in the Consultation Paper; it is to be derived objectively from the terms of the 2020 Revision, and in particular rule 81.1(2) and (3). It also follows that the members of the Rule Committee must have considered that the power to commit a director or officer for contempt of an order made against the company, reflected in rule 81.4(3) of the 2012 Rules, did not derive from the rules but existed as a matter of substantive law, because its removal must have been deliberate. I agree with their view: the principle is one of substantive law. Similarly it is implicit in rule 81.2 that there was no intention to remove the principle previously reflected in rule 81.4(3) of the 2012 Rules: the requirement retained in rule 81.4(2)(e) of the 2020 Revision that the order be endorsed with a penal notice in accordance with rule 81.2, which requires it to allude to the liability of officers and directors for breach of orders against corporate bodies, is a clear indication that it was understood that the substantive law in respect of such liability, previously reflected in rule 81.4(3) and its predecessors, was to subsist.

The editors of the White Book, in supporting this conclusion, also rely in support on the transitional retention of rule 81x.20. I do not treat that as an indication in either direction. It relates to the ability to sequester the property of directors and officers but was made inapplicable to sequestration for contempt. This is consistent with the removal of rules 81.4(3) and 81.20(3), so far as applicable to contempt, taking place because they reflected the substantive law of contempt, from which rule 81 was to be cleansed by the 2020 Revision.

Mr Moxon Browne suggested that the historical analysis was undermined by the concept of separate corporate personality for companies not being established until the decision of the House of Lords in Salomon v Salomon & Co [1897] AC 22. That is mistaken. The very essence and raison d’être for bodies corporate, from their earliest existence, was that they should have separate legal personality from their members so as to have perpetual succession; and that they could sue and be sued in their own name rather than that of their members: see for example Blackstone’s Commentaries at Book 1 467-8, 475; and The Case of Sutton’s Hospital [1610] Co Rep 1, 27a, 32b, 77 ER 937, 964-5, 973. Salomon v Salomon simply involved the application of an accepted background of separate legal personality for companies to the particular factual circumstances of the case involving a one man company: see the argument at p. 28.

Mr Moxon Browne also submitted that “the corporate veil doctrine” precludes the existence of the responsible persons liability principle which is why (a) at common law directors will only be liable for criminal acts by their companies upon proof of their own direct criminal involvement and (b) numerous statutes creating criminal offences by companies include special provisions imposing statutory liability on directors who consent to or connive at and/or permit or ignore such offences, citing by way of example Bribery Act 2010 s14, Theft Act 1968 s 18, Fraud Act 2006 s. 12, and Health and Safety at Work Act 1974 s. 37. However, this submission proves too much because these matters existed between 1860 and 2020 when it is accepted that the responsible persons liability principle was in force. They have no bearing upon the principle because the matters relied on are concerned with liability for criminal offences, whereas the responsible persons liability principle is concerned with civil contempt by a corporate body.

In conclusion on this point I can refer to the way the appellants framed the point in their supplementary skeleton argument: “the true issue, and the only material issue, is whether the Court’s jurisdiction to make orders for committal in respect of breaches of court orders by companies against the companies’ directors, is inherent, and/or is based on pre-existing statutory or common law, independently of the former CPR 81.4. In which case the purpose of CPR 81.4 was merely to serve as a reminder of the existing law. If so, the repeal of CPR 81.4 would leave that jurisdiction unaffected. But if it is not, the repeal of CPR 81.4 will have removed the sole basis in law for that jurisdiction.” For the reasons I have endeavoured to explain, the former is the case. The Court’s jurisdiction to make orders against directors and other officers in respect of breaches of the court’s orders addressed to corporate bodies is inherent; and it is based on law independent of the former CPR 81.4 and indeed of its predecessors in rules of court and the 1860 Act.

The principles governing an appeal against sentence are those set out in Financial Conduct Authority v McKendrick [2019] EWCA Civ 524 at [37]-[38]:

The Judge identified and paid careful heed to the principles applicable to sentencing, including JST BTA Bank v Solodchenko (No 2) [2011] EWCA Civ 1241 [2102] 1 WLR 350 in relation to breaches of freezing orders. No criticism can validly be made of her approach.

In relation to GHI, the Judge applied a fine of £75,000 for the totality of the Contempts she found proved, Contempts 1 to 4. I have concluded that ADM only established Contempts 1, 2 and 4. If my Lords agree, it is therefore necessary to reconsider sentence on GHI (remission not being necessary or appropriate). That is a matter for our judgment applying the applicable principles, but I feel constrained by the sentence imposed by the Judge. It would not be right to impose a greater sentence, and some reduction is required by virtue of the successful appeal on Contempt 3. The result is not necessarily that at which I would have arrived if sitting at first instance.

I would reduce the fine to £50,000 taking into account that the Judge will have applied the principle of totality, rather than simply adding up the total of the penalties which would have been appropriate had each contempt stood alone; and the view she expressed that Contempt 4 was a serious breach which involved a deliberate breach of the freezing element of a freezing order over a period of several years and which is continuing. I too regard that as serious.

In relation to Mr Boutgueray, the penalty of imprisonment for 12 months on Contempt 3 falls away with the successful appeal against the finding of contempt. The arguments advanced in respect of the 6 month penalty imposed for Contempt 4 (which were addressed compendiously to both Contempts 3 and 4) were as follows.

First it was submitted that that the Judge failed to take any or any sufficient account of the fact that the contempt was not contumelious with the deliberate intention of defeating the court’s order; and had not been committed in furtherance of dissipation. This is not true of Contempt 4. The Judge found it was deliberate and involved dissipating assets in breach of the WFO.

Next it was submitted that the Judge failed to pay adequate heed to the efforts made by Mr Boutgueray to purge the contempts in the short time available. There is no merit in this criticism. The Judge did pay heed to them and reduced the sentence she had otherwise been minded to impose from 18 months to 12 months. In order to purge the continuing breach of the freezing aspect of the WFO Mr Boutgueray would have to show that his continuing trading did not affect unencumbered assets of U$4 million. His sixth affidavit did no more than show he had started to take such steps and Mr Moxon Browne recognised before the Judge that further work was required and greater explanation needed to be given. Sufficient account was taken of such initial steps in a sentence of 6 months imprisonment on Contempt 4.

Next it is said that the Judge was wrong to give too little weight to “the apparent fact, supported by affidavit evidence, that GHI’s net assets exceeded US$4 million”. This is not a fair representation of the evidential position at the time of sentence. There was simply a mass of material which was not properly explained which cannot have led the Judge to be able to draw any conclusions from it as to GHI’s assets, in fairness to ADM.

Finally it was submitted that an order for immediate imprisonment was unnecessary and that the sentencing hearing should have been adjourned and/or the sentence should have been suspended. This is hopeless. The refusal of the adjournment was a case management decision which was entirely justified by the history of the proceedings and the unheralded production at the very last minute of material in a form which could not properly be put before the court. It is always open to a contemnor who subsequently purges his contempt to apply for a sentence to be reduced. The Judge was undoubtedly entitled to proceed to sentence on the material which had properly been adduced at the time. A sentence of 6 months immediate custody was justified for Contempt 4, which involved a deliberate flouting of a freezing order over a period of several years and which was, on the evidence properly before the Judge, continuing. Declining to suspend the sentence was well within the range of decisions properly open to the Judge, indeed inevitable.

I would therefore dismiss Mr Boutgueray’s appeal against sentence in respect of Contempt 4.

I would therefore allow GHI’s appeal to the extent of quashing the finding of contempt on contempt 3 and reducing the sentence to a fine of £50,000. I would allow Mr Boutgueray’s appeal to the extent of quashing the finding of contempt and sentence on contempt 3, which has the effect that his overall sentence is reduced from 12 months to 6 months. Save in these respects I would dismiss the appeal.