Tonstate Group Limited (In Liquidation) & Anor v Edward Wojakovski

This is my reserved judgment upon the trial of a contempt application. By the application the Claimants in this action seek an order for the committal of the Defendant in this action, Mr Edward Wojakovski, to prison. The application was made by application notice issued on 6^th July 2021. It will be noted immediately that the application has taken a quite extraordinary amount of time to come to a substantive hearing.

The grounds of the application (“the Contempt Application”) are that the Defendant is guilty of multiple and serious contempts of court, comprising failures to comply with four court orders and knowingly making false statements in a witness statement and in an affidavit. The alleged acts of contempt of court are set out in more detail in a table attached to the application notice. Depending upon how one classifies the alleged acts of contempt in the table, the alleged acts of contempt fall under five or six separate heads.

The allegation of breaches of one of the orders of the court is now formally admitted by the Defendant. The Claimants’ case is that these particular breaches had already been the subject of a binding admission. The remainder of the allegations are disputed by the Defendant.

The hearing of the Contempt Application was originally listed to be heard before me on 20^th July 2023 (“the July 2023 Hearing”). The July 2023 Hearing had to be adjourned however, after I was informed by leading counsel for the Defendant that she and junior counsel representing the Defendant were obliged to withdraw from acting for the Defendant, for reasons which leading counsel was not at liberty to disclose. This left the Defendant without legal representation at the July 2023 Hearing. For the reasons which I set out in a judgment which I delivered at the July 2023 Hearing, I reached the reluctant conclusion that the hearing of the Contempt Application, already long delayed, would have to be adjourned. The Contempt Application came back before me for determination on 19^th October 2023. I will refer to this hearing, that is to say the substantive hearing/trial of the Contempt Application, as “the Trial”.

The Claimants were represented at the Trial by Andrew Fulton KC and Sam Goodman, counsel, as they were at the July 2023 Hearing. The Defendant was represented at the Trial by Rupert Bowers KC and Claire Overman, counsel. For the avoidance of doubt, I should add that Mr Bowers and Ms Overman are new counsel. They did not appear for the Defendant at the July 2023 Hearing.

No witness was called to give oral evidence at the Trial, although a number of affidavits were filed in connection with the Contempt Application. I will need to come back to the affidavit evidence later in this judgment. There was a substantial bundle of documents prepared for the Trial. I also had the benefit of skeleton arguments from counsel, in addition to their oral submissions at the Trial. Following the Trial I received further written submissions and accompanying additional authorities on evidential issues which had arisen in the course of the Trial.

Given that this is a contempt application I would much prefer to have delivered a judgment immediately following the Trial, without having to leave the parties and, in particular, the Defendant, in a state of suspense. Unfortunately, and while this was not the fault of any party, the volume of material and argument which I had to consider, including the subsequent submissions and additional authorities, precluded this course. The result is this reserved judgment, which has been produced as soon as has been practicable.

The background to the Contempt Application is lengthy and complex litigation involving the Tonstate group of companies, the Defendant and various other parties. For present purposes however, I can state this background fairly briefly.

The first three Claimants are companies in the Tonstate group of companies. All three are in members’ voluntary liquidation. The Tonstate Group is a group of companies which have been involved in the property investment business for over a quarter of a century. The Defendant is a former director of the Claimant companies. The Fourth Claimant is Mr Matyas. The Defendant was formerly married to the Fourth Claimant’s daughter. The entire group became effectively deadlocked, as a result of a dispute between the Defendant, who was the beneficial owner of 50% of the Group, and the Fourth Claimant who was, with his wife, the beneficial owner of the other 50% of the Group.

In relation to what I have said about beneficial ownership, I should add that, in a separate action, the Fourth Claimant and his wife sought the rescission of transfers of shares in the First Claimant which they had made to the Defendant. I understand that this separate action (“the Shares Action”) was settled, on 20^th May 2020, on terms that the Defendant’s shares in the First Claimant were transferred to the Fourth Claimant, his wife and their daughter, with the Defendant retaining 22,500 of these shares.

It is common ground that both the Fourth Claimant and the Defendant had, for some years prior to this action, been extracting funds from the Tonstate Group without lawful authorisation. This action (BL-2018-000544) was commenced as a derivative action, against the Defendant and a number of other parties as additional defendants. In this action, which I will refer to as “the Main Action”, the First to Third Claimant companies sought the return of the monies unlawfully extracted from them by the Defendant. The Defendant was therefore, strictly speaking, the First Defendant in the Main Action but, for the purposes of this judgment, it is convenient to refer to Mr Wojakovski simply as the Defendant. The Fourth Claimant is a party to the Main Action by reason of his prior status as a derivative claimant, advancing claims on behalf of the previously deadlocked companies. There were also additional claims made in the Main Action. I understand that these additional claims were also settled on 20^th May 2020.

In addition to the Main Action, and the Shares Action, the Defendant commenced an action of his own, by unfair prejudice petition, seeking various forms of relief against the Fourth Claimant and Mrs Matyas and other entities in the Tonstate Group. I will refer to this third action as “the Petition”. I will use the expression “the Actions” to refer collectively to these three actions.

On 20^th November 2019 Zacaroli J made an order striking out parts of the Defence filed by the Defendant in the Main Action and, consequent upon that strike out, ordered that judgment should be entered against the Defendant in relation to what were referred to as the Transactional Payments, which I understand to have been a reference to the sums wrongfully extracted from the First to Third Claimants by the Defendant. The Defendant was ordered to pay the sum of £12,994,642.43 to the Claimants. The Defendant was also ordered to give an account of what he had done with the monies extracted from the Claimant companies and whether he had extracted monies from any other company in the Tonstate Group.

The order for payment was subject to a temporary stay, pending a case management conference. The case management conference was held on 16^th January 2020, consequent upon which Zacaroli J made the first of the four orders in the Main Action with which I am concerned in the Contempt Application. By paragraph 3 of the order of 16^th January 2020 the stay on the earlier order of 20^th November 2019, for payment of the judgment sum of £12,994,642.43 and any other sum due on the account to be given by the Defendant, was extended to 4.00pm on 31^st March 2020. As from that time the judgment debt and any other sum due on the account were stated to be immediately payable.

By paragraph 4 of the order of 16^th January 2020 Zacaroli J also directed that the Claimant companies had a proprietary interest in the judgment debt and its traceable proceeds, which were held by the Defendant on trust for the Claimant companies.

As part of the same order of 16^th January 2020, the Fourth Claimant, Mr Matyas, consented to an order that he should give an account in the same terms as the account which the Defendant was ordered to give. The Fourth Claimant also agreed to pay to the Claimant companies the sum of £3,215,469.75 and any other sum found to be due on the account which he was ordered to give.

The Defendant has not paid the judgment debt of £12,994,642.43. A relevant point to make in this context is that the Defendant was made bankrupt, on 15^th August 2020, on the petition of a Mrs Rachel Robertson, who had been joined as an additional defendant to the Petition. The Claimant companies however have a proprietary interest in the monies comprising this judgment debt; see paragraph 4 of the order of 16^th January 2020. I will refer to these monies, being monies wrongfully extracted from the Claimant companies by the Defendant, as “the Extractions”. This proprietary interest entitles the Claimant companies to continue to pursue payment of the Extractions and their traceable proceeds.

In the four years since the above orders were made the Claimant companies have, by a number of routes, sought to enforce payment of the judgment debt which exists in relation to the Extractions. The Claimants’ case is that the Defendant has waged a four year campaign of resistance to the Claimants’ attempts to enforce their judgment debt, displaying what is characterised as a persistent disregard for the authority of the court. The result, so the Claimants say, is that they have been driven to make the Contempt Application.

A very large number of orders have been made in the Actions. In order to distinguish the four particular orders with which I am concerned, I will use the following, admittedly rather cumbersome expressions, to refer to the four orders. I will refer to the order of 16^th January 2020 as “the January 2020 Order”, the order of 6^th July 2020 as “the July 2020 Order”, the order of 27^th August 2020 as “the August 2020 Order” and the order of 14^th May 2021 as “the May 2021 Order”.

So far as the allegations of contempt are concerned, it is convenient to follow the same course as the table attached to the Claimants’ application notice (“the Table”), and to divide the allegations into five allegations or sets of allegations, using the same numbering as in the Table. I will therefore use the expression “Allegation 1” to refer to the allegation (numbered (1) in the Table) that the Defendant has committed breaches of the January 2020 Order, “Allegation 2” to refer to the allegation (numbered (2) in the Table) that the Defendant has committed breaches of the July 2020 Order, and so on through the allegations numbered (3), (4) and (5) in the table. In the case of Allegation 4, which is split into two categories comprising, respectively, alleged breaches of the August 2020 Order and the making of knowingly false statements, I will use the expression “Allegation 4(1)”, to refer to the alleged breaches, and “Allegation 4(2)”, to refer to the alleged making of knowingly false statements.

References to the Claimants mean, as the context requires, either the Claimant companies, who have the proprietary interest in the Extractions and their traceable proceeds and the right to be paid the same by the Defendant, or the Claimants, who together bring the Contempt Application. Italics have been added to quotations in this judgment.

In this judgment I am considering the question of whether the allegations of contempt of court, save in so far as admitted, have been proved by the Claimants to the requisite standard of proof. So far as the question arises, I will deal with the question of sanction in a separate hearing. I put the matter in these terms because, as matters stand, it is only Allegation 1 which is the subject of an admission. Whether the Claimants have succeeded in proving any of the remaining Allegations is what I have to consider in this judgment.

The question of what has to be proved in a contempt application, and to what standard is conveniently summarised by Roth J in Jones v Hamilton [2023] EWHC 1216 (Ch) at [43]-[45]:

I was also referred to the summary of the contempt jurisdiction provided by Nugee LJ in Kea Investments Ltd v Watson [2020] EWHC 2599 (Ch), at [7]-[19]. I highlight the following parts of this summary.

At [13] Nugee LJ quoted at length from the summary of the principles regarding the burden and standard of proof given by Rose J (as she then was) in JSC Mezhdunarodniy Promyshelnniy Bank v Pugachev [2016] EWHC 192 (Ch):

At [15] Nugee LJ drew attention to the need to consider the overall picture:

At [16] Nugee LJ noted that although each essential element of a charge of contempt must be proved to the criminal standard, it is not necessary that every fact relied on in support of the charge must be proved beyond reasonable doubt, quoting Rix LJ in JSC BTA Bank v Ablyazov [2012] EWCA Civ 1411:

In terms of proof by inference and circumstantial evidence, Nugee LJ quoted, at [17], Christopher Clarke J (as he then was) in Masri v Consolidated Contractors International Company SAL [2011] EWHC 1024 (Comm):

Finally, at [18], Nugee LJ noted the ability of the court to have regard to the cumulative effect of purported explanations which, taken together, can lead to the conclusion that the relevant evidence is deceitful:

In summary therefore, and returning to the basic position, the burden is upon the Claimants to prove, to the criminal standard of proof, the Allegations, save in so far as the same are admitted. In relation to each of the Allegations which remain in dispute I must be satisfied, so that I am sure, that each of the elements which is required to establish the relevant contempt has been proved by the Claimants.

Beyond these basic propositions, and subject to one exception, I approach the evidence in the Contempt Application keeping in mind the guidance which can be found in Kea and in the other authorities to which I was referred on the question of the burden and standard of proof and on the question of how I should approach the evidence.

The exception relates to the question of drawing adverse inferences from silence, which is referred to in the quotation from Masri above. In the present case the question of whether I could draw any such inferences generated considerable argument, which was the subject of further submissions following the Trial itself. I will return to this particular question later in this judgment, at the point where it is relevant to my analysis.

In the remainder of this judgment, where I make findings of fact or state that I have reached a particular conclusion on a matter of fact, I make such findings and arrive at such conclusions on the basis of the criminal standard of proof. Where I refer to the question of proof I mean, unless otherwise indicated, the criminal standard of proof.

The Claimants’ case is that the Defendant has been in serial breach of court orders in the Actions. I was told that the Allegations are the equivalent of specimen charges, brought by the Claimants in the hope of bringing home to the Defendant the necessity of complying with court orders. It seems to me however that I must concentrate on the Allegations. Given that this is a contempt application, I do not think that it is open to me to take into account allegations of serial breaches of court orders which are not the subject of the Contempt Application. This has been made clear in a number of cases. The position is usefully summarised by Nugee LJ in Kea, at [22]. I can see that other conduct of the Defendant in relation to court orders might have some relevance, in considering the question of whether any particular Allegation has been proved. Subject to this point, it seems to me, as I have said, that I must concentrate on the Allegations.

The evidential position in the Contempt Application is not straightforward, and requires some analysis.

Broadly, the evidence in the Contempt Application falls into two parts.

First, there is a considerable mass of documentary evidence, including witness statements and affidavits made in the Actions, separately from the Contempt Application, which has accumulated over the course of the Actions and has been included in the core bundle and the hearing bundle for the Trial. This includes documentation, such as bank statements and correspondence, obtained or coming into existence in relation to the Contempt Application.

Second, there is the evidence filed for the Contempt Application. This requires individual listing:

At the Trial itself the Defendant elected not to give evidence himself or to call Mr Marx to give oral evidence. The Defendant also elected not to rely upon his own affidavit evidence or the witness statement of Mr Marx which had previously been filed for the Trial.

In oral submissions Mr Fulton drew my attention to CPR 32.5 and to the decision of the Court of Appeal in Williams v Hinton [2011] EWCA Civ 1123 [2012] H.L.R. 4, specifically at [43], where Gross LJ explained that witness statements made by witnesses who were not called to give evidence at the relevant trial were not in themselves evidence, unless put in as hearsay evidence. On this basis Mr Fulton submitted that the position was that there was no evidence from either the Defendant or Mr Marx, in relation to the Contempt Application itself. The Defendant could not rely upon his own affidavit evidence. Nor could the Defendant rely on the witness statement of Mr Marx. The only exception to this was that Mr Fulton did not object to Mr Martini’s evidence being put before the court.

I understood Mr Bowers not to dispute this analysis of the position. He also maintained however that this meant that the second and third affidavits of Mr Rechtschaffen could not be relied upon, because they contained evidence in reply to the evidence of the Defendant and Mr Marx, which was not before the court. For this purpose Mr Bowers relied upon what was said by Cockerill J in Deutsche Bank AG v Sebastian Holdings Inc [2020] EWHC 3536 (Comm), at [53], in relation to affidavit evidence in a contempt hearing which was not formally adduced at the hearing:

I should also quote the extract from the judgment of Eder J in Templeton Insurance Limited v Motorcare Warranties Limited [2012] EWHC 795 (Comm), at the second paragraph 24 in the judgment, which was relied upon by Cockerill J in Deutsche Bank:

In principle, and on the basis of these authorities, it seems to me that Mr Bowers was right to say that the Defendant’s decision not to give evidence or to call evidence from Mr Marx meant not only that there was no evidence, written or oral, from either of these individuals, but also that the second and third affidavits of Mr Rechtschaffen could not be relied on. I reach this conclusion because both of these affidavits contain evidence in reply to the affidavit of the Defendant and the witness statement of Mr Marx, neither of which is now in evidence. Applying what was said by Cockerill J in Deutsche Bank, it seems to me that the second and third affidavits are not themselves admissible in evidence.

In terms of admissible evidence therefore, this leaves Mr Rechtschaffen’s first affidavit and accompanying exhibit, and the affidavit of Mr Martini, in addition to the mass of documentation which I have identified above as comprising the first category of evidence before the court in the Contempt Application. Mr Rechtschaffen was not required to be cross examined on his first affidavit. Nor was Mr Martini required for cross examination on his affidavit. There is also the 21^st witness statement of Mr Rechtschaffen, which I will come back to later in this judgment, at the point where it becomes relevant.

The absence of any evidence from the Defendant generated the further issue which I have identified earlier in this judgment. This was the question of whether I could draw any adverse inferences from the absence of any evidence from (i) the Defendant and/or (ii) Mr Marx, and/or (iii) a Mr Rugova. another associate of the Defendant. As I have said, I will return to this question later in this judgment, at the point where it is relevant to my analysis.

In referring to the point at which the above matters become relevant I am, for ease of reference, referring to the point, later in this judgment, where I come to my analysis of Allegation 3.

Although Allegation 1 is now admitted, it is necessary to say something about Allegation 1, as it has potential relevance to the remaining Allegations. The Claimants submit that the brazenness of the Defendant’s “misconduct” in relation to Allegation 1 is relevant to the assessment of the remaining Allegations. There is also the question of whether the breaches comprising Allegation 1 had already been the subject of an admission, prior to the admission of Allegation 1 made for the Trial.

Paragraph 5 of the January 2020 Order contains the proprietary injunction granted against the Defendant. Paragraph 5 is in the following terms:

The sum of £13,594,642.43 was identified in paragraph 4 of the January 2020 Order in the following terms:

As noted earlier in this judgment, paragraph 4 of the January 2020 Order confirmed that the Claimants had a proprietary interest in the sum for which judgment was entered by paragraph 3 of the order of 20^th November 2019. As also noted earlier in this judgment, this judgment was entered in respect of the Extractions.

The allegations of breaches are in the following terms, in the Table:

It is common ground that the Defendant purchased a number of properties in Scotland, through a Jersey company called Quastus Holdings Limited (“Quastus”), using monies from the Extractions. It is now formally admitted by the Defendant that, following the January 2020 Order and on various occasions, the Defendant received rental income from these Scottish properties, in the total sum of £70,000, into the Lloyds Bank account, which was in his own name. The Defendant then spent that money for his own purposes. This breached paragraph 5 of the January 2020 Order, because the rental income represented the traceable proceeds of the Extractions or profits generated thereon.

The Defendant’s bank statements, for his Lloyds account, are available for the period from January 2020, exhibited to Mr Rechtschaffen’s first affidavit. The bank statements disclose that the pattern of the Defendant’s spending, funded by the Quastus monies coming into the account, remained consistent, after the January 2020 Order, with his previous pattern of spending. Nor was this spending confined to subsistence. The bank statements disclose expenditure on items such as a skiing trip, wine, entertaining (including entertainment at two Mayfair clubs) and professional fees of solicitors and a tax adviser. Essentially, the Defendant continued to maintain his existing lifestyle, after the January 2020 Order, using monies which were caught by the proprietary injunction in paragraph 5 of the January 2020 Order.

The Defendant formally admitted the breaches of paragraph 5 of the January 2020 Order which comprise Allegation 1 shortly before the Trial. The admission was made by the Defendant’s counsel in paragraph 1.1 of their skeleton argument for the Trial, which is dated 10^th October 2023. In their skeleton argument the Defendant’s counsel accepted, in my view both fairly and correctly, that there should have been formal acceptance of “the breach” (which I take to be a reference to the breaches of the January 2020 Order which comprise Allegation 1) much earlier in the proceedings.

The Defendant also filed what was described as a second affidavit, sworn on 6^th October 2023, making formal admission of the breaches which comprise Allegation 1. As I have explained however, the Defendant chose not to give any evidence of his own at the Trial, or to call evidence from any other witness. In addition to this, the Defendant had no permission to serve this second affidavit. Directions for the service of further evidence in relation to the hearing of the Contempt Application were given by the Directions Order. Those directions were supplemented/varied by further directions contained in my order of 20^th July 2023, made at the July 2023 Hearing. Neither set of directions permitted the service of the second affidavit of the Defendant shortly before the Trial. The Defendant did issue an application, on 6^th October 2023, for permission to serve this second affidavit out of time, but this application was not pursued at the Trial.

In any event, I agree with the Claimants that the Defendant had already made binding admissions in relation to the breaches which comprise Allegation 1. I say this for the following three reasons.

First, on 8^th April 2020 the Claimants and other parties in the Actions made an application for a debarring order against the Defendant, seeking to debar the Defendant from participating in the Actions unless he discharged accrued costs orders. This application came before Zacaroli J on 24^th April 2020. Zacaroli J gave a written judgment on the application on 28^th April 2020. For the reasons set out in that judgment, Zacaroli J made an order debarring the Defendant from defending unless he paid the relevant costs order within 14 days. In response to the debarring application the Defendant made what was described as a fifth witness statement dated 23^rd April 2020. In paragraphs 8-10 of that witness statement the Defendant admitted that, since the January 2020 Order, £70,000 had been paid out of Quastus’ account and into the Defendant’s personal Lloyds account, which the Defendant had then used for his own expenditure.

Second, the Defendant was represented at the hearing of the application for a debarring order by leading counsel. In his skeleton argument for the hearing Mr Haque KC set out the following apology on behalf of the Defendant:

Despite the expectation of leading counsel that the Defendant would be able to purge his contempt, this has not occurred. As I understand the position, the sum of £70,000 has never been repaid by the Defendant.

Third, Mr Haque repeated the Defendant’s apology at the hearing of the debarring application. The transcript of the hearing discloses the following exchange between leading counsel and Zacaroli J:

It seems to me that these earlier admissions would have prevented the Defendant from disputing Allegation 1 even if the Defendant had sought, at the Trial, to continue to dispute Allegation 1. As I have said, the Defendants’ counsel accepted in their skeleton argument for the Trial, both fairly and correctly, that there should have been formal acceptance of the breaches comprising Allegation 1 much earlier in the proceedings.

The above is all I need to say about Allegation 1 for the purposes of this judgment. For the avoidance of doubt, I am satisfied, on the basis of the Defendant’s admissions and, for that matter, on the basis of the admissible evidence which I have seen, that the Defendant committed the breaches of the January 2020 Order which comprise Allegation 1 and that these breaches constituted acts of contempt of court. The question of sanction will be for a separate hearing.

I now turn to deal with the remaining Allegations, all of which remain in dispute.

The July 2020 Order dealt with various applications made by the parties. One of these was an application for disclosure made by the Claimants. By paragraph 12 of the July 2020 Order Zacaroli J made an order for the Defendant to swear and serve on the Claimants an affidavit setting out information about his assets. For present purposes the relevant parts of this order can be found in sub-paragraphs (4) and (5) of paragraph 12, which required the provision of the following information:

The reason for the difference in language between these two sub-paragraphs is that the Defendant’s father had died prior to July 2020 Order. The Defendant’s mother was alive at the time of the July 2020 Order but, sadly, has since died.

In relation to these two sub-paragraphs, paragraph 13 provided as follows

I should also set out paragraph 15 of the July 2020 Order, which featured in the argument in relation to Allegation 2. In relation to what constituted assets of the Defendant, paragraph 15 provided as follows:

The allegations of breaches which comprise Allegation 2 are set out in the following terms, in the Table:

The Defendant provided an affidavit in response to this order which was sworn on 3^rd August 2020. In paragraph 18 of that affidavit, the Defendant said this:

The will itself (“the Will”) is described as the last will and testament of Gideon Wojakovski and Miriam Wojakovski, the late parents of the Defendant. The Will is dated 20^th March 2008 and was made by the Defendant’s parents, I assume in Israel. The Will is written in Hebrew, but there is an English translation of the Will available. It seems clear to me that the Will is governed by Israeli law. I am referring to the Will in the singular because, as I understand the position, the Defendant’s late parents made one will, namely the Will. I have seen reference to wills, in the plural, in some documents. I have also seen reference to a mutual will. I proceed on the basis that the Will is a single will, and not two wills in the same form.

It will be noted that the Will is not specifically mentioned in the relevant paragraphs of the July 2020 Order. Indeed, the language of paragraphs 12(4) and 12(5) assumes separate wills. The reason for this is that the Claimants were not aware of the Will or of the precise testamentary arrangements made by the Defendant’s parents, when the July 2020 Order was made.

Clause 12 of the Will describes the purpose of the trust created by the Will (“the Trust”) in the following terms:

In its material part, clause 11 of the Will describes the trusteeship of the Will in the following terms:

Clause 13 of the Will instructs the trustees “to handle the assets in accordance with the principle rules as follows:”. There then follow sub-clauses which set out the entitlements of the children. In view of their importance to Allegation 2, I set out these sub-clauses in full, and the following clause 14:

The trustee of the Will is Mr Gil Wojakovski, who is one of the Defendant’s brothers. Amongst the evidence filed for the Trial there is the affidavit of Mr Martini. As I have noted, the Claimants did not object to this affidavit being admitted as part of the evidence for the Trial. The affidavit collates correspondence which has taken place with Mr Gil Wojakovski in his capacity as trustee of the Will. Mr Gil Wojakovski is a qualified Israeli lawyer. In summary, and in its material part, this correspondence is to the following effect:

With this explanation of the Will in place, I return to the question of whether the Defendant breached any of paragraphs 12(4), 12(5) or 13 of the July 2020 Order. By way of reminder, in his affidavit of 3^rd August 2020, the Defendant did no more than exhibit a copy (in the original Hebrew) of the Will, identify Mr Gil Wojakovski as sole executor, and identify any entitlement he might have under the Will as discretionary.

So far as paragraph 12(5) is concerned, the Defendant produced a copy of the Will, which was the will of his late parents. I have not seen any evidence that the Defendant had actually inherited anything under the Will, as at 3^rd August 2020. Accordingly, it seems to me that there was compliance with paragraph 12(5) so far as it applied to the Defendant. I do not think that the Claimants have established any breach of paragraph 12(5).

Equally, I cannot see that paragraph 13 of the July 2020 Order applied. The Defendant did not claim any lack of personal knowledge in his affidavit of 3^rd August 2020. The Defendant disclosed the Will, and took his stand on the basis that there were no assets which he was due to inherit under the Will, because his entitlement was discretionary only. It seems to me that paragraph 13 would only have been engaged if there was some information which the Defendant, by reason of his lack of personal knowledge, should have sought from the trustee of the Will. There is however no evidence that the Defendant was in this position. Accordingly, it seems to me that the Claimants have not established any breach of paragraph 13.

This leaves paragraph 12(4), keeping in mind that the word “assets” in paragraph 12(4) has the extended meaning given in paragraph 15 of the July 2020 Order.

The key feature of paragraph 12(4) seems to me to be that the assets which were caught by its wording were those which the Defendant was “due to inherit pursuant to” the Will. I use the past tense because, as I construe paragraph 12 of the July 2020 Order and specifically paragraph 12(4), this wording has to be considered as at the time when the Defendant swore and served the affidavit required by paragraph 12. I note that the Defendant had 21 days to swear and serve this affidavit. It appears that the affidavit of 3^rd August 2020 was sworn and served outside this time limit, but I did not understand this apparent non-compliance to be part of Allegation 2. I will refer to the time when the Defendant swore his affidavit of 3^rd August 2020 as “the Relevant Time”.

It seems to me that the Defendant was obliged to make the disclosure required by section (iv) of paragraph 12(4) if two conditions were satisfied. First, there had to be an asset, subject to the point that the definition of asset extended to an asset over which the Defendant had control and/or to an interest under a trust. Second, the asset had to be one which the Defendant was due to inherit under the Will. In relation to this second condition, the word “due” has to be given some meaning. In my view the word “due” was wide enough to be capable of encompassing two situations. The first situation was that the Defendant had a right to inherit the relevant asset under the Will. The second situation was that the Defendant could expect to inherit the relevant asset, with a sufficient degree of certainty for it to be possible to say that the Defendant was “due” to inherit the relevant asset.

It seems to me that there are two difficulties which confront the Claimants, in demonstrating a breach of paragraph 12(4).

The first difficulty is as follows. If one reads the Will as if it was a will governed by the law of England and Wales, it is less than clear to me that the provisions of the Will gave the Defendant either a right or a sufficiently certain expectation of inheriting any particular asset. It is true that clause 13(a) of the Will refers to the four children having an equal fourth share in their parents’ residuary estate, but this residue was uncertain and appears to me to have depended upon how the assets of the trust were managed and employed. In terms of specific assets, it seems to me that the composition of this share, if it would exist at all, was unknown. I find it difficult to see how this right to a quarter share, if right it was, corresponded to a specific asset which the Defendant was “due” to inherit under the Will, within the meaning of paragraph 12(4). I can see the argument that the Defendant was due to inherit a quarter share of his parents’ residuary estate, and should so have declared in his affidavit. I am not however persuaded by this argument. It seems to me to beg the question of what, if anything, that quarter share might amount to, in terms of assets.

It is also true that clause 13(b) of the Will gave each child an entitlement to a monthly allowance for living expenses if the relevant child should not have alternative income sources. Once again, I find it difficult to see how this right to a monthly allowance, if right it was, corresponded to an asset which the Defendant was “due” to inherit under the Will, within the meaning of paragraph 12(4). Rather, it seems to me that clause 13(b) established a right to an income, which might or might not arise according to the Defendant’s circumstances, pursuant to the trust established by the Will. To my mind, the reference to an asset in paragraph 12(4) means a specific asset, not an income stream which, depending upon circumstances, might at some point be paid out of the assets in the estate of the Defendant’s late parents.

Mr Fulton drew my attention to the Defendant’s evidence, in paragraph 14 of his fifth witness statement dated 23^rd April 2020, concerning a company called Maxima Corporate Holdings Limited (“Maxima”). According to the Defendant’s witness statement this company was incorporated in 1997, upon the suggestion of the Fourth Claimant, to enable the Defendant’s parents to invest in the Tonstate Group and, through this company, gain exposure to valuable property investments. Both the Defendant’s parents were said to have had a beneficial interest in Maxima. Mr Fulton’s point was that, by reference to the Defendant’s evidence the beneficial interest of his parents in Maxima should have formed part of their estate and part of the assets subject to the trust created by the Will. Indeed, as Mr Fulton explained, it was the Claimants’ concern that the Defendant was hiding assets in his parents’ estate which caused them to include specific provisions for the disclosure of assets in the estate of the Defendant’s parents within paragraph 12 of the July 2020 Order.

References to Maxima however do no more than explain to me how the disclosure provisions in paragraph 12 of the July 2020 Order came about. The same applies to the remainder of the Claimants’ submissions to the effect that the Defendant had been hiding assets within his parents’ estate. None of this answers the question of what assets had to be disclosed, pursuant to the disclosure obligation in paragraph 12(4). The question for me is not whether a beneficial interest in Maxima formed part of the assets subject to the trust established by the Will (the Trust), but whether the Defendant was due to inherit that beneficial interest or any part of it at the Relevant Time.

Mr Fulton also argued that paragraph 15(2) of the July 2020 Order operated to engage paragraph 12(4). His argument was that the Will created an interest, in favour of the Defendant, under a trust, which was an asset within the meaning of paragraph 15(2). It seems to me however that this particular argument confuses two separate concepts. First, it can be argued that the Will, on its face, created some kind of interest under a trust which was vested in the Defendant. If however this argument is correct, the relevant interest was an interest created by the Will. Specifically, this was an interest created by the trust established by the Will, which I am referring to as the Trust. Second, there is the question, which I am concerned with, of what assets the Defendant was due to inherit pursuant to the Will. If the Defendant had an interest under the Trust, he was not due to inherit that interest pursuant to the Will. The interest under the Trust was created by the Will. Paragraph 15(2) was only relevant if the Defendant was due to inherit an interest under a trust pursuant to the Will. There is however no evidence that the Defendant was due, in any sense of this word, to inherit an interest under a trust pursuant to the terms of the Will.

Turning to the second difficulty to which I have referred to above, it is a more fundamental difficulty. Even if I am wrong in my analysis of the provisions of the Will, as set out above, the Will is not a will governed by the law of England and Wales. It is a will governed by Israeli law. The same applies to the trust established by the Will, which I am referring to as the Trust. The trustee of the Will is Mr Gil Wojakovski. By reference to the correspondence from Mr Gil Wojakovski which I have seen, his position is that the Defendant has no right to any asset in the estate. According to the letter of 10^th February 2021 the Defendant is not a beneficiary of the Will, and Mr Gil Wojakovski has an exclusive discretion regarding any distribution of the assets of the Trust. The recent email of 18^th September 2023 describes the Defendant as no more than a potential beneficiary, who cannot expect to receive anything from the estate because he owes the Trust more money than his potential share.

I am not an expert in Israeli law, let alone in the manner to which it applies to the Will. I have received no admissible evidence as to how Israeli law applies to the Will and, specifically, what effect Israeli law has on the ability or right of the Defendant to receive anything under the Will. I do not know to what extent clauses 13(a) and 13(b) of the Will can be said to have created, at the Relevant Time, any right or expectation of the inheritance of assets under the Will. The same applies to the remaining provisions of the Will, so far as relevant. In those circumstances I am in no position to disagree with or reject what has been said by Mr Gil Wojakovski, in the correspondence exhibited by Mr Martini, as to the Defendant’s rights or, more accurately, absence of rights under the Will. Beyond that, I am also unclear as to what dealings have taken place between the Defendant and Mr Gil Wojakovski which have resulted in a position where, according to Mr Gil Wojakovski, the Defendant is not entitled to anything under the Will. If this is the true position, as a matter of fact, I do not know whether the position was the same or different at the Relevant Time.

In all these circumstances and independent of my reading of the Will as if it was a will governed by the law of England and Wales, I cannot see how I can be satisfied to the required standard of proof, in relation to an Israeli will and by reference to the evidence before me, that the Defendant was, at the Relevant Time, “due to inherit” any assets under the Will.

There are two further arguments advanced by the Claimants in relation to Allegation 2 with which I should deal.

The first argument is that if the true position was that the Defendant was not due to inherit anything under the Will, and had not previously inherited anything under the Will, the Defendant was required to provide a nil return answer in his affidavit of 3^rd August 2023. I do not accept this. It seems to me that section (iv) of paragraph 12(4) required the Defendant to provide the required information about assets if there were any assets caught by the terms of section (iv). I do not see that an express nil return was required. The same reasoning seems to me to apply to the information required by section (iii) of paragraph 12(5). In any event, and if I am wrong in this analysis, it seems to me that the Defendant did provide what was, in reality, an effective set of nil returns by paragraph 18 of his affidavit of 3^rd August 2020.

The second argument related to a judgment given by District Judge Duddridge on 18^th June 2021 in the Central Family Court, in relation to financial relief proceedings between the Defendant and his former wife. The judgment is a lengthy one, but I was referred specifically to the section of the judgment where the District Judge considered the provisions of the Will, and noted the absence of information as to the assets in the estate of the Defendant’s parents. In particular, I was referred to paragraph 86 of the judgment, where the District Judge concluded that the Trust was a resource against which the Defendant had legitimate claims for support.

The Claimants argued that the Defendant’s claim to have only a discretionary entitlement under the Will was plainly false, for the reasons identified by District Judge Duddridge. I do not accept this argument. The District Judge was not concerned with Allegation 2, but with the question of financial relief as between the Defendant and his former wife. I do not think that the findings or the reasoning of the District Judge in his judgment can be relied upon in the Contempt Application as establishing that the Defendant failed to comply with his disclosure obligations and associated obligations in the July 2020 Order.

Drawing together all of my analysis of Allegation 2, I reach the following overall conclusion. It is for the Claimants to prove, to the required standard of proof, that the Defendant breached one or more of paragraphs 12(4), 12(5) and 13 of the July 2020 Order. In my judgment, and for the reasons which I have given, the Claimants have failed to prove any such breach to the required standard. I am not satisfied, to the required standard, that any such breach occurred.

Allegations 3-5 are related. All of these Allegations are concerned with a sum of £50,000 (“the Sum”) which was paid by the Defendant to a company called Intelligent Legal Solutions Limited (“Intelligent Legal”) on 10^th July 2023. Intelligent Legal was a company under the control or apparent control of a Mr Rugova, an associate of the Defendant.

It is convenient to deal with the issues which are common to Allegations 3-5 in my analysis and determination of Allegation 3. Given the complexity of some of these issues, and the amount of material which has to be covered, it is necessary to break down my analysis and determination of Allegation 3 into a number of separate sections.

Paragraph 12(1) of the July 2020 Order required the following information to be provided by the Defendant:

The allegation of breach is in the following terms, in the Table:

As I have already noted, the Defendant responded to the disclosure requirements in paragraph 12 of the July 2020 Order by his affidavit of 3^rd August 2020. The affidavit made no mention of the Sum. The Claimants’ case is that the Sum should have been mentioned, because the Defendant retained an interest in, or control over the Sum after it was paid over to Intelligent Legal.

There is one other point to add at this stage. Applying my construction of paragraph 12 of the July 2020 Order, it seems to me that paragraph 12(1) of the July 2020 Order required the Defendant to state the position, in terms of his assets, as at 3^rd August 2020; being the date of his affidavit. I will, as with Allegation 2, continue to refer to this date as the Relevant Time.

The starting point for Allegation 3 is to identify the evidence for the payment of the Sum; that is to say the sum of £50,000 which is at the heart of Allegations 3-5. For that purpose, it is necessary to go to the exhibit to Mr Rechtschaffen’s first affidavit, which exhibits the statements for the Defendant’s account with Lloyds Bank between December 2019 and July 2020. These are the same bank statements to which I have already made reference in relation to Allegation 1. There are two entries in these statements for 10^th July 2020. The first shows the sum of £10,000 paid out to “INTELLIGENT FINANC”. The second shows the sum of £40,000 paid out to “INTELLIGENT LEGAL”.

So far as bank accounts are concerned, the Defendant said this, at paragraph 17 of his affidavit of 3^rd August 2020:

The Lloyds Bank account was therefore disclosed but, as I have said, the Sum was not disclosed. If it was an asset of the Defendant when the affidavit of 3^rd August 2020 was made, that is to say at the Relevant Time, disclosure of the Sum was required.

The recipient of the Sum, as paid on 10^th July 2023, can be identified from Santander bank statements which were obtained by the Claimants by what I understand to have been a without notice application which was heard by Trower J. I have seen a copy of Trower J’s judgment, which was delivered at what is recorded as having been a private hearing on 15^th June 2021. The Santander statements are at item 13 in the core bundle for the Trial. The relevant statements, which I understand to be the statements for an account in the name of Intelligent Legal, show the sums of £40,000 and £10,000 coming into the Santander account from the Defendant on 10^th July 2023. These two payments must represent the Sum. The same statements also show the sum of £15,000 being transferred out of the account to the Santander account of Intelligent Languages Limited (“Intelligent Languages”), another company under the control or apparent control of Mr Rugova, on 11^th August 2020.

The Santander statements also show the following movements of monies out of the following accounts:

I am satisfied, and find that the monies referred to in this section of this judgment did move as recorded above, and that Raydens and Keidan Harrison were paid, as recorded above, for work done for the Defendant.

The Claimants’ case is that the Defendant retained an interest in the Sum or at least retained control of the Sum after it was paid to Intelligent Legal on 10^th July 2020. What happened, so the Claimants allege, was that in the wake of the July 2020 Order, the Defendant paid over the Sum to Intelligent Legal, in order to avoid having to disclose the Sum as part of his assets, and then made use of the Sum, with the assistance of Mr Rugova and his companies, to pay the legal expenses referred to above.

The skeleton arguments for the Trial were prepared by reference to the evidence, which is not now before the court for the reasons which I have explained, of the Defendant and Mr Marx. Substantially (but not entirely) by reference to this evidence, the Defendant’s skeleton argument for the Trial provided the following explanation for the payment of the Sum to Intelligent Legal:

Mr Marx also exhibited to his witness statement a letter dated 31^st January 2019 from Intelligent Legal to the Defendant, which set out the basis on which Intelligent Legal would be providing what was described as litigation support to the Defendant. I will use the same expression as the Claimants to refer to this document; namely “the Agreement”.

The Claimants’ case, as set out in their skeleton argument for the Trial, and as previously pursued by their solicitors, both in the evidence of Mr Rechtschaffen and in correspondence with the Defendant’s solicitors, is that the Invoice and the Agreement are both backdated forgeries, created as part of a dishonest scheme by the Defendant and Mr Rugova to conceal the use of the Sum by the Defendant, through Mr Rugova’s companies, to pay his legal bills. In this context the Claimants’ solicitors sent an email to the Defendant’s solicitors on 18^th February 2023, giving formal notice to the Defendant pursuant to CPR 32.19 that they required the Defendant to prove the authenticity of the Invoice, the Agreement and certain email communications.

Pursuant to this position, the bulk of the Claimants’ skeleton argument was devoted to the task of explaining why the evidence of the Defendant and Mr Marx, and their explanation for the payment of the Sum should not be accepted.

As I have explained, the evidential landscape has now changed. The evidence of the Defendant and Mr Marx is not relied upon and is not admissible evidence before the court. The Invoice and the Agreement are not relied upon and are not put forward as explanation for the payment of the Sum to Intelligent Legal. There was a dispute between the parties as to whether the Claimants could require the Defendant to serve a notice under CPR 32.19 requiring the Defendant to prove the Agreement and the Invoice, in the context of a contempt application. It seems to me that I do not need to resolve this particular procedural issue. The position is that the Invoice and the Agreement are no longer relied upon and are not put forward by way of evidence from the Defendant. As such, it seems to me that the notice to prove these documents falls away. Effectively, the Defendant has chosen to remain silent as to why the Sum was paid to Intelligent Legal and has chosen to remain silent in response to the allegation that the Sum was used, at least in part, to pay his legal bills. The Defendant has also chosen not to call Mr Marx as a witness or, for that matter, Mr Rugova.

It was in these circumstances that the issue arose as to what inferences I could draw from (i) the silence of the Defendant and/or (ii) the absence of evidence from Mr Marx and/or Mr Rugova. I deferred consideration of this issue earlier in this judgment. For reasons which I shall explain, I have come to the conclusion that the issue is not in fact material to the matters which I have to decide. The issue was however the subject of a good deal of argument, and extensive citation of authority, at the Trial and subsequent to the Trial, particularly from the Defendant’s counsel who filed a supplemental Note on the issue, with accompanying authorities. In deference to the arguments of counsel on this issue I provide the following analysis.

The Claimants’ case was that I was entitled to and should draw adverse inferences from the failure to the Defendant to give any evidence in explanation of the payment of the Sum, and from the failure of the Defendant to adduce any evidence from Mr Marx or Mr Rugova to provide or support an explanation of the payment of the Sum. Mr Rugova in particular, so it was submitted, was the person who might have been expected to give evidence to explain or confirm an explanation of why the Sum was paid to Intelligent Legal and to confirm that the payments to Raydens and Keidan Harrison were made from the resources of Intelligent Legal and Intelligent Languages and were not funded, either directly or indirectly, from the Sum.

In support of this case, and subsequent to the Trial itself, counsel for the Claimants referred me to the decisions of Whipple J (as she then was) in VIS Trading Co Ltd v Nazarov [2015] EWHC 3327 (QB) and Henry Carr J in Discovery Land Company v Jirehouse [2019] EWHC 1633 (Ch).

Counsel for the Defendant also made further submissions on this question. As I have mentioned above, Counsel submitted a written Note of their further submissions, which cited a good deal of further authority. On the question of drawing adverse inferences, the Defendant’s counsel pointed out that three different questions arose; namely (i) whether adverse inferences could be drawn from the failure of the Defendant to give evidence (despite filing written evidence), (ii) the failure of the Defendant to call a witness who had provided affidavit evidence (Mr Marx), and (iii) the failure (if failure it was) to call a witness who might have been expected to give evidence (Mr Rugova).

In relation to Mr Marx, the Defendant’s counsel contended that no issue of adverse inference arose. In relation to Mr Rugova it was contended that I should not speculate on what evidence Mr Rugova might have given, and that I should not draw any adverse inferences from the absence of evidence from Mr Rugova. In relation to the Defendant himself, it was contended that it was not open to me to draw any adverse inferences from the failure of the Defendant to give evidence. The Defendant’s right to silence, so it was submitted, was absolute and would be undermined if adverse inferences could be drawn from this silence.

The first, and important point to make in relation to this debate is that I do not think that these questions matter in the present case. For reasons which I shall explain, I reach the same conclusions on the evidence in this case whether or not adverse inferences can or should be drawn from the absence of evidence from the Defendant and/or Mr Marx and/or Mr Rugova. In these circumstances I do not think that the present case provides the appropriate forum to arrive at a definitive conclusion on whether a defendant’s right to silence in response to a contempt application is unqualified, as the Defendant contends, or on whether adverse inferences can or should be drawn from the absence of evidence from persons in an equivalent position to Mr Marx and/or Mr Rugova. As however these questions were the subject of argument at the Trial, which continued into the further submissions I have mentioned, I offer the following conclusions on these questions, subject to the important caveat that it seems to me that the present case is not a suitable case for attempting a definitive statement of the law in this area.

I start with the position of the Defendant himself. CPR 81.4(2) requires a contempt application to include statements of a number of matters, including the following, at sub-paragraphs (m) and (n):

This is confirmed by CPR 81.7, which deals with the power of the court to give directions in contempt applications. CPR 81.7(3) states that the court may not give any direction compelling the defendant to give evidence either orally or in writing.

Under the heading of “Right to remain silent” , note 81.4.8 (page 2328 of the White Book 2023) says as follows:

In VIS Trading this issue arose in the context of a dispute over whether there was continuing non-compliance with a disclosure order made by the court. Counsel for the defendant to the contempt application argued that because no application had been made to cross examine the defendant, no evidence could be adduced from the defendant and the court could not hold the defendant’s silence against him. Whipple J did not accept this argument. As she explained, at [31], after citing from a previous version of what is now note 81.4.8 in the White Book:

This was followed by Henry Carr J in Jirehouse. In Jirehouse the judge had to consider the question of whether to make an order for cross examination of a defendant to a contempt application who had filed a considerable quantity of affidavit evidence in response to the application. The judge decided, following VIS Trading, that the defendant could not be compelled to give oral evidence, nor could he be compelled to be cross examined on his affidavit evidence. The judge also added, again following VIS Trading, that this might result in the court drawing adverse inferences from the silence of the respondent. As the judge explained, at [30]:

The authority cited in note 81.4.8 in the White Book, for the ability to draw adverse inferences, is the decision of the Court of Appeal in Invideous Ltd v Thorogood [2014] EWCA Civ 1511. The same authority was relied upon by Whipple J in VIS Trading and by Henry Carr J in Jirehouse. I should mention that the correct title of the case, as recorded in VIS Trading, is Inplayer Limited (formerly Invideous Limited) v Thorogood. In his judgment in Inplayer (with which Lewison and Treacey LJJ both agreed), Jackson LJ said this at [40]:

In order to put this statement into its proper context, I also quote the immediately following paragraphs of Jackson LJ’s judgment:

In their Note the Defendant’s counsel contend that the statement at [40] in Inplayer was not supported by the citation of any authority, was obviously wrong, and should not be followed. Jackson LJ did make reference to the decision of the Court of Appeal in the Comet case, but I have looked at this case and I note that the decision was concerned with the question of whether cross examination of the defendant in that case should have been ordered. So far as I can see, the question of drawing adverse inferences from the defendant’s silence was not addressed in Comet.

At the Trial the Claimants also relied upon the decision of Christopher Clarke J in Masri at [146], which was cited with approval by Nugee LJ in Kea. I have already set out the relevant part of [146] earlier in this judgment, as cited by Nugee LJ, but I repeat the quotation for ease of reference:

The Defendant’s counsel pointed out in their Note that in Masri the court proceeded on the basis of a concession by counsel which, so it was submitted, was wrongly made. The same concession is not made in the present case. As the Defendant’s counsel explained, Sections 34 and 39 of the Criminal Justice Act 2003 have no apparent relevance to the issue of adverse inferences arising from a defendant’s failure to give evidence in criminal proceedings. The relevant provision in criminal proceedings is Section 35 of the Criminal Justice and Public Order Act 1994, which relates to adverse inferences which may be drawn by a jury, upon direction, from a defendant’s failure to give evidence at trial. Section 35, so it was submitted, changed fundamentally the position at common law, pursuant to which no judicial comment was permissible which implied that the jury might draw an inference adverse to the accused from the exercise of the right to silence.

The essential point made by the Defendant’s counsel was that there is no equivalent of Section 35 relating to contempt applications. A defendant to a contempt application is not compellable to give evidence. If therefore the defendant chooses to give no evidence as in the present case, the defendant’s right to remain silent cannot and should not be undermined by the court having the ability to draw adverse inferences from the silence of the defendant. What is submitted by the Defendant’s counsel to have been the common law position in criminal proceedings continues to apply to contempt proceedings.

The difficulty which confronts the Defendant in this argument is that there is the clear authority of the Court of Appeal, in Inplayer, that adverse inferences may be drawn from the exercise by the defendant of their right to remain silent. I have been shown at least two cases at first instance in which Inplayer has been followed (VIS Trading and Jirehouse). I do not think that I am able to say that the Court of Appeal were obviously wrong in what was said as to the drawing of adverse inferences in the judgment of Jackson LJ. I have also quoted a sufficient extract from the judgment of Jackson LJ to demonstrate that Jackson LJ’s reference to the drawing of adverse inferences was not an isolated reference, and was not confined to a passing reference to a principle of law assumed to be uncontroversial. In these circumstances I regard myself as bound to accept the Claimants’ argument that adverse inferences can, if appropriate, be drawn from the failure of the Defendant to give evidence; being a failure to give evidence notwithstanding the affidavit evidence of the Defendant previously filed with the court. Put simply, the Claimants’ argument has the support of the Court of Appeal.

The Defendant’s argument does strike me as one which justifies further and more full investigation by an appropriate court in the future. If the Defendant’s counsel are right in their characterisation of the common law position in criminal proceedings, and given that contempt proceedings are analogous to criminal proceedings, there is an apparent logic in the argument that adverse inferences cannot be drawn from the silence of a defendant to a contempt application. As I have however already indicated, I do not think that this case is the appropriate case in which to conduct an exercise of this kind. It may also be said, given the existence of Court of Appeal authority which I do not feel able to characterise as obviously wrong, that this is not the appropriate court in which the exercise should be conducted.

I therefore conclude, for what it is worth on the evidence in this case, that adverse inferences can, if appropriate, be drawn from the failure of the Defendant to give evidence; being a failure to give such evidence notwithstanding the previous filing of his affidavit evidence for the Trial.

This leaves Mr Marx and Mr Rugova. So far as Mr Marx is concerned, the Defendant’s counsel have, so far as I can see, confined their argument to the proposition that if a witness is not called whom the opposing party has indicated they wish to cross-examine then, without the leave of the court, that evidence will not be considered. It is submitted that that is the position in the present case, and that no issue of adverse inferences arises. I do not follow this argument. Mr Marx is not the defendant to the Contempt Application. He is a third party in respect of whom an affidavit has been filed for the Trial. Mr Marx has not been called to give evidence. In those circumstances I have accepted that his affidavit is not evidence in the Trial. I do not see why it follows from this that I cannot take account of the fact that there was, apparently, an intention to adduce evidence from Mr Marx and of the fact that Mr Marx has not been called to give evidence. In my judgment, and for what it is worth, I am entitled to draw adverse inferences, if appropriate, from the failure of the Defendant to call evidence from a witness in respect of whom an affidavit was filed for the Trial.

This leaves Mr Rugova. In the case of Mr Rugova the Defendant’s counsel cite, in their Note, the decision of Rajah J in Brittain v Raja [2023] EWHC 2273 (Ch), at [11]:

As I understand the Defendant’s argument in this context, it is not that adverse inferences cannot be drawn where there is a failure to call a witness in respect of whom evidence has not been filed, but who might have been expected to give material evidence. Rather, the position in the present case is that no such inferences are justified because there is no other evidence before the court which would justify the drawing of such inferences. I should not speculate on what evidence might or might not have been which was not before me in the Trial.

In evidential terms, I do not accept that the earth is as scorched as the Defendant’s counsel contend in their Note. There is admissible evidence that the Sum was paid to Intelligent Legal. There is admissible evidence that Intelligent Legal and Intelligent Language paid the legal fees of Raydens and Keidan Harrison which were incurred in acting for the Defendant. For reasons which I shall explain, later in my analysis of Allegation 3, I consider that I am entitled to take account of the fact that an explanation was previously put forward on behalf of the Defendant for the payment of the Sum, in respect of which no evidence was presented at the Trial. In these circumstances it seems to that I am entitled, if I think it appropriate and for what it is worth, to draw adverse inferences from the failure to call Mr Rugova as a witness.

In summary therefore, I do not accept the Defendant’s argument that I am not entitled to draw adverse inferences from the failure of the Defendant to give evidence and/or from the failure of the Defendant to adduce evidence from Mr Marx and/or Mr Rugova. I conclude, for what it is worth, that I am entitled to draw such adverse inferences, if I consider it appropriate to do so.

Finally, and for the sake of completeness, I should mention that the Defendant’s counsel have, quite properly, referred to me to what was said by Lord Leggatt JSC in Royal Mail Group Ltd v Efobi [2021] UKSC 33, at [41], in relation to the drawing of adverse inferences from the absence of a witness. I accept the point made by Defendant’s counsel that the guidance provided by Lord Leggatt was provided in the context of an employment case, and does not bear upon the question of whether I am actually entitled to draw such adverse inferences in contempt proceedings. That said, it seems to me that the guidance provided by Lord Leggatt is applicable and relevant if, as I have concluded, I am entitled to draw such adverse inferences.

Mr Bowers took the preliminary objection to Allegation 3 that it was unparticularised in two respects. First, the Claimants had not specified, in the Table, the nature of the interest which the Defendant was said to retain in the Sum. Second, the Claimants had not specified, in the Table, their reliance upon paragraph 15 of the July 2020 Order which, it will be recalled, specified that the Defendant’s assets, for the purposes of the July 2020 Order, included the categories of assets in paragraphs 15(1) and 15(2).

I accept the need for particularity in contempt applications. CPR 81 sets out what is required by way of particulars of a contempt application at 81.4(2)(a), (b) and (h). The need for particularity has been stressed in a number of cases. I refer, in particular, to the discussion of this requirement by Cockerill J in Deutsche Bank, at [68]-[141], in particular at [74]-[84].

The essential point here, as Woolf LJ explained in Attorney-General for Tuvalu v. Philatelic Distribution Corporation Ltd [1990] 1 WLR 926 (at 935B-C), is that the alleged contemnor should be told, with sufficient particularity to enable them to defend themselves, what exactly they are said to have done or omitted to do which constitutes contempt of court. The cases make clear that compliance with this rule will be strictly insisted upon, since the liberty of the subject is at stake, but the cases also show that the nature or background of the case is important.

Applying this guidance in the present case I cannot see that the Claimants were required to specify either of the matters specified by Mr Bowers. In relation to Allegation 3 the Table makes it quite clear that the relevant failure of the Defendant was a failure “to disclose his interest in the sum of £50,000 which he had paid to Intelligent Legal Solutions Limited on 10.7.2020”. The allegation is that the Defendant retained “an interest” in the Sum. It seems to me that it would be unreasonable and unrealistic to have expected the Claimants to specify the precise nature of the interest. The Defendant was made aware, by the terms of Allegation 3, of what he needed to know; namely that he faced an allegation that he had retained an interest in the Sum. Turning to the Claimants’ reliance upon paragraph 15 of the July 2020 Order, I cannot see why paragraph 15 had to be specified. Allegation 3 specifies the provision of the July 2020 Order which is said to have been breached, which is paragraph 12(1). Paragraph 15 is not specified because it is not alleged to have been breached. Paragraph 15 is a definition or interpretation provision, which operates to identify certain categories of property which are included in the definition of the Defendant’s assets for the purposes of the July 2020 Order. As such, and when the question of whether paragraph 12(1) has been breached is being considered, it seems to me that it is open to the Claimants and, for that matter, the Defendant to rely upon all and any terms of the July 2020 Order which are relevant to the question of what qualifies as an asset for the purposes of paragraph 12(1). I cannot see that paragraph 15 required to be specified in the Table, any more than the nature of the interest in the Sum alleged to have been retained by the Defendant.

I do not therefore accept the preliminary objection taken by Mr Bowers to Allegation 3.

It has taken some time to clear the ground for my substantive analysis of Allegation 3. I can take the substantive analysis more shortly.

The starting point is that by the time the Defendant came to make the affidavit of 3^rd August 2020, that is to say at the Relevant Time, he had paid the Sum to Intelligent Legal. As I have already explained, my interpretation of paragraph 12(1) of the July 2020 Order is that it required disclosure of the Defendant’s assets worldwide, exceeding £5,000 in value, at the Relevant Time. Paragraph 12(1) did not require, as I read the same, information to be given about assets which the Defendant had previously disposed of, assuming no retention of any interest in or control over the relevant asset.

On first analysis therefore, the Defendant was not required to disclose the Sum. The Sum was in the Santander account of Intelligent Legal. It is possible that the £15,000 which was paid by Intelligent Legal to Intelligent Languages on 11^th August 2020 came out of the Sum, but this is not relevant as this latter payment postdated the Relevant Time and was not, at least on the face of it, a payment in which the Defendant was involved.

The burden is therefore upon the Claimants to establish that the Defendant retained some form of interest in or control over the Sum in the hands of Intelligent Legal. The Claimants seek to do this by identifying a series of reasons why the only possible explanation for the payment of the Sum was the desire of the Defendant to put the Sum out of reach of the Claimants and the scope of the July 2020 Order. In this context it is convenient to repeat what is said in paragraphs 26 and 27 of the Claimants’ skeleton argument (omitting footnotes):

The position has now changed. The position now is there is no evidence from the Defendant putting forward the “preposterous explanation”. I agree with Mr Bowers that the court needs to be clinical in its approach to the evidence. I have already accepted that the Defendant’s affidavits sworn for the Trial and the witness statement of Mr Marx are not to be considered.

I do not however accept that I can now take no account of the explanation for the payment of the Sum previously tendered by or on behalf of the Defendant. I say this for at least two reasons.

First, I do not think that I can or should ignore the fact that the Defendant’s skeleton argument for the Trial contained that explanation. It seems to me, in this context, that I can take account of the fact that this explanation was tendered on behalf of the Defendant, for the purpose of the Trial. Equally, it seems to me that I can also take account of the fact that this explanation was not the subject of any evidence from the Defendant at the Trial.

Second, a substantial quantity of correspondence between solicitors has been included in the bundles for the Trial. This includes a chain of correspondence between the solicitors, commencing in February 2023, concerning the explanation which had been put forward, in Mr Marx’s witness statement, for the payment of the Sum. Mr Marx’s evidence is now out, but I do not accept that this means that I am prevented from taking account of the content of the correspondence between the solicitors. Nor do I accept that it would be absurd, as Mr Bowers put it, to consider this correspondence, notwithstanding that the evidence which was under discussion is not admissible. This correspondence was, in broad terms, concerned with the attempts of the Claimants’ solicitors to verify the authenticity of the documents produced by Mr Marx, including the Invoice and the Agreement. This correspondence proceeded on the footing that the explanation for the payment of the Sum to Intelligent Legal, then being advanced on behalf of the Defendant, was that the Sum was paid for legal services provided to the Defendant by Intelligent Legal and invoiced by the Invoice. As with the Defendant’s skeleton argument for the Trial, I consider that I am entitled to take account of the fact that the Defendant’s solicitors conducted this correspondence on the basis of the explanation referred to above. I consider that I am also entitled to take account of the fact that this explanation was not the subject of any evidence from the Defendant at the Trial.

The Claimants’ skeleton argument for the Trial sets out a series of reasons why there is no credible explanation for the payment of the Sum to Intelligent Legal other than that the Defendant was seeking to put the Sum out of reach of the Claimants, and later used the Sum, at least in part, to pay his own legal expenses. These reasons were supplemented and developed by Mr Fulton in his oral submissions at the Trial. I set out the following summary, which is not intended to be comprehensive, of the principal points made by Mr Fulton:

I stress that this summary is not intended to be comprehensive and is not comprehensive. I have taken all of the written and oral submissions made on behalf of the Claimants into account, both in this context and in all other contexts, but the principal purpose of the above summary is to explain, in outline, how the Claimants put their case on the evidence.

The difficulty with this case seems to me to be this. The burden is upon the Claimants to prove that when the Defendant paid the Sum to Intelligent Legal on 10^th July 2020 he did so on terms, however informal, that he retained some interest in the Sum or retained some form of power or control over the Sum, sufficient for the Sum to continue to qualify as his asset within the terms of the July 2020 Order. I have to be satisfied, so that I am sure, that this is what occurred. It will have been noted, from my summary of the Claimants’ case, that there is an important difference between (i) the Claimants’ case in relation to Allegations 1 and 2 and (ii) the Claimants’ case in relation to Allegation 3. In relation to Allegation 1 the relevant bank statements are now available. They show the rental income coming into the Defendant’s account from Quastus, and they show the same income being used by the Defendant for personal expenditure. Given that it is common ground that the Quastus rental income was caught by the proprietary injunction in the January 2020 Order, the evidential position is clear. In relation to Allegation 2 there is the July 2020 Order, and there is the Will. The two can be compared to see whether Allegation 2 is established. In the case of Allegation 3, the evidential position is rather different. There is no direct evidence of an agreement or arrangement between the Defendant and Intelligent Legal, implied or express, pursuant to which the Defendant retained some interest in or control over the Sum following payment of the Sum to Intelligent Legal. The existence of such an agreement or arrangement has to be inferred from the available evidence. This is a high bar, where the criminal standard of proof applies.

There are plenty of reasons for finding it decidedly odd that the Defendant should pay a sum of £50,000 to Intelligent Legal. No explanation is now advanced for this payment, and the explanation which was previously maintained, in the Defendant’s skeleton argument and in the correspondence between solicitors, is not supported by any evidence and has not been pursued at the Trial. There are plenty of circumstances, which Mr Fulton has explained and advanced in much better terms than I can, to suggest that the payment of the Sum was not a bona fide payment to Intelligent Legal but was money over which the Defendant retained at least some form of control. One would not expect the Claimants necessarily to be able to pin down the precise nature of such interest or control. The matter is necessarily one for the drawing of inferences.

In these circumstances I have found it helpful to go back to the guidance provided by the case law on dealing with circumstantial evidence, drawing inferences and the cumulative effect of evidence. In this context I refer, in particular, to what was said by Rix LJ in Ablyazov and by Christopher Clarke J in Masri, as quoted by Nugee LJ in Kea at [16]-[18]. The relevant extracts from the judgment of Nugee LJ are set out earlier in this judgment. As Rix LJ explained, the essence of a successful case of circumstantial evidence is that the whole is stronger than the individual parts. The whole becomes a net from which there is no escape. As Christopher Clarke J explained, the court must be satisfied that the facts are inconsistent with any conclusion other than that the contempt in question has been committed. Equally, and as Rix LJ explained, the court is entitled to look at the evidence on a cumulative basis. The court does not have to suspend its belief in reality in favour of duplicating unrealities.

Undertaking these exercises in the present case, I am not left in a position where the only conclusion consistent with the evidence is the conclusion that the Defendant retained some interest in or control over the Sum when he paid the Sum to Intelligent Legal. The reality seems to me to be that I do not know why the payment was made. If I was considering Allegation 3 on the basis of an evidential test of the balance of probabilities, it seems to me the position would be different. On that hypothesis I would be able to draw inferences and reach conclusions more easily. As it is, I am confined to the criminal standard of proof. So confined, I do not think that the Claimants’ case will bear the evidential burden which this standard of proof imposes. Ultimately, I am persuaded by Mr Bowers that the Claimants’ case on Allegation 3 falls short of where it needs to be, in order for me to be satisfied, so that I am sure, that the Defendant did breach paragraph 12(1) of the July 2020 Order by a failure to disclose an interest in or control over the Sum.

I can illustrate in two ways, which I stress are examples, the difficulties which seem to me to confront the Claimants in relation to Allegation 3.

First, and although this anticipates the later Allegations, it is part of the Claimants’ case that the Sum, after it had been paid to Intelligent Legal, was used, at least in part, to pay the Defendant’s legal bills with Raydens and Keidan Harrison. This requires the Claimants to demonstrate, to the required standard of proof, that the monies used to pay the legal bills were the same monies as represented the Sum. Mr Fulton took me to starting balances in the Santander statements which demonstrated, so he submitted, that the funds paid out by Intelligent Legal and Intelligent Languages must have derived from the payment of the Sum. I am not however persuaded that I can safely make a finding, to the required standard of proof, that the monies representing the Sum were the same monies as were used to pay the legal bills.

I accept that a tracing exercise is not necessarily required in this context. It would be sufficient if it could be demonstrated that Intelligent Legal and Intelligent Languages paid the legal fees because they had been put in funds to do so by the payment of the Sum by the Defendant. In other words I can see that it is not necessary to demonstrate that the monies paid to Raydens and Keidan Harrison were the same monies as those comprising the Sum itself. If however one approaches the source of the funding on this wider basis, it becomes more difficult to conclude that the Sum was the source of the funding which was used to pay the legal bills. Again, I am not persuaded that I can safely make a finding, to the required standard of proof, that the Sum was the source of the funding used to pay the legal bills.

It is odd that the two companies should, apparently gratuitously, choose to use their own funds to pay the legal fees of a third party. There is no explanation as to why the companies should do this. The question is however whether, looking at all the relevant evidence, the only conclusion I am left with is that the companies were acting under the ultimate direction of the Defendant, and were paying the Defendant’s legal bills using the Sum, directly or indirectly, to fund these payments. I do not think that this is the position. In this context it is useful to consider the Defendant’s third affidavit in the Actions, sworn on 20^th May 2021, which is part of the subject matter of Allegation 4(2) and was made in response to the May 2021 Order. In this third affidavit the Defendant detailed remarkable amounts of funding provided by third parties towards his legal expenses, which were substantial. A possible explanation of the payments made by Intelligent Legal and Intelligent Language, which I do not think can be ruled out in a context where the criminal standard of proof applies, is that Mr Rugova, by these companies, lent his assistance to the Defendant, along with other third parties. As Mr Bowers pointed out, there might have been reasons why Mr Rugova was reluctant to explain these payments, other than concealment of the fact, if fact it was, that the Defendant was providing the funding for these payments.

If I am not able to find that the payments of the legal fees by the two companies were funded, directly or indirectly, by the Sum this also seems to me to undermine the case that the Sum was paid to Intelligent Legal for the purpose of keeping the Sum out of the Claimants’ reach. The two are not necessarily linked. In theory, the Claimants’ case in relation to Allegation 3 can be established without the finding that the payment of the legal fees was funded by the Sum. It seems to me however that if this latter finding cannot be made, the absence of the finding weakens the Claimants’ case in relation to Allegation 3, in a context where the criminal standard of proof applies.

The second difficulty arises out of the 21^st witness statement of Mr Rechtschaffen, which I mentioned earlier in this judgment and said I would come back to. The Claimants did not have permission to serve this witness statement, pursuant to the terms of the Directions Order, but the order which I made at the July 2023 Hearing extended the time for the service of further evidence for the Trial, and the witness statement of Mr Rechtschaffen appears, by its date, to have been served within this extended time limit. I do not think that this witness statement falls away as evidence in reply to evidence no longer relied upon by the Defendant. The evidence in the witness statement seems to me to be free-standing. I therefore take the view that I can take this evidence into account.

The principal purpose, or at least a principal purpose of the 21^st witness statement of Mr Rechtschaffen is to demonstrate the close relationship between the Defendant and Mr Rugova. To this end Mr Rechtschaffen exhibits correspondence concerning 5 Hertford Street, a Mayfair club of which the Defendant was a member. The correspondence from the club shows that the Defendant’s membership of the club was not renewed when he was made bankrupt, but that he was allowed to continue to use the club, without paying a fee, as a “plus one” to the membership of Mr Dashi. I understand that Mr Rugova is also known as or operates as Mr Dashi. The payments for Mr Dashi’s membership were apparently paid by his companies. An inference which can be drawn, with which I was pressed by Mr Fulton in his submissions, is that the Defendant’s continuing membership of the club was being fronted by Mr Rugova/Mr Dashi, whose own membership was being paid for by funds concealed from the Claimants by the Defendant. The drawing of this inference might be said to derive support from the fact that, in relation to Allegation 1, the Defendant’s unlawful use of the rental funds from Quastus included expenditure at 5 Hertford Street.

I agree that the inference can be drawn that Mr Rugova was fronting the Defendant’s continuing membership of the club. If I was deciding matters on the balance of probabilities it is an inference I might be prepared to draw, particularly bearing in mind all the other evidence relied upon by the Claimants. It seems to me however that there is another feasible explanation for what occurred, which is the explanation which was in fact given to the club. That explanation is that Mr Rugova, it appears by the companies he controlled, rendered assistance to the Defendant by allowing the Defendant to come on to his, Mr Rugova’s membership. This arrangement was agreed by the club, and the Defendant was able to continue to use the club without himself having to pay anything. This explanation may be said to confirm Mr Rugova’s position as one of various third parties who have rendered assistance to the Defendant, on an apparently voluntary basis, in the Actions and in the various other legal proceedings in which the Defendant has been embroiled.

My point on Mr Rechtschaffen’s 21^st witness statement is this. The evidence in the witness statement only assists the Claimants, given the application of the criminal standard of proof, if it goes to support the case that the only explanation for Mr Rugova’s various acts of assistance to the Defendant is that he has been acting as a front for the Defendant and for expenditure by the Defendant using funds which the Defendant has concealed from the Claimants. The witness statement does not seem to me to demonstrate this. Rather, the evidence of the correspondence exhibited to the witness statement demonstrates the high level of assistance rendered to the Defendant by Mr Rugova. In the context of the criminal standard of proof this evidence seems to me to leave the position uncertain, in terms of whether Mr Rugova was genuinely rendering assistance to the Defendant, using the funds of Mr Rugova or the companies he controls, or whether Mr Rugova was simply acting as a front for the Defendant. Putting the matter another way, and given that the criminal standard of proof applies, this evidence actually supports the existence of viable alternative explanations for the assistance rendered by Mr Rugova.

Returning to the overall position on the evidence, I do not think that the gap between what the Claimants have to prove and what, in my judgment, the Claimants have proved can be made up by resort to what has been established in relation to Allegation 1 or by resort generally to the conduct of the Defendant in the Actions. So far as Allegation 1 is concerned it is true, and I so find, that the Defendant showed a serious disregard of his obligations to comply with the January 2020 Order, but I do not think that I can safely infer from this that the Defendant breached the July 2020 Order in the manner alleged by Allegation 3. Nor do I think that the Defendant’s disregard of the January 2020 Order provides the missing piece or the missing pieces of the evidential jigsaw which the Claimants have sought to assemble in relation to Allegation 3. The same reasoning applies to the general conduct of the Defendant in the Actions. It is true that the Defendant’s conduct has attracted judicial criticism, in particular in relation to the Defendant’s attitude to court orders; see, by way of notable example, the criticisms made of the Defendant by Zacaroli J (“Mr Wojakovski’s compliance with the order of 16 January 2020 was woefully inadequate”) in his judgment, dated 28^th April 2020, on the application for a debarring order. As however I have already observed in relation to Allegation 1, I do not think that the past conduct of the Defendant can provide the missing piece or pieces of the evidential jigsaw.

Finally, I should return to the vexed issue of what, if any adverse inferences I should draw from the absence of any evidence from, respectively, the Defendant, Mr Marx and Mr Rugova. In my view this issue is simply not critical to the outcome of this case. While I am proceeding on the basis, contrary to the Defendant’s arguments, that I am entitled to draw adverse inferences from the silence of the Defendant and/or Mr Marx and/or Mr Rugova, this does not cause me to reach a different conclusion in relation to Allegation 3. The absence of evidence from the Defendant, Mr Marx and Mr Rugova, whether taken into account collectively or individually, does not cause me to alter my overall conclusion that the Claimants have failed to prove Allegation 3 to the required standard of proof.

In this context I find it helpful to remind myself of what was said by Lord Leggatt in Royal Mail Group Ltd v Efobi, at [41]:

I have already accepted that the guidance given by Lord Leggatt, which was given in the context of an employment case, is not directly applicable to the question of whether I can, in the Contempt Application, draw adverse inferences from the absence of evidence from the Defendant and/or Mr Marx and/or Mr Rugova. If however, as I have decided, I can draw such adverse inferences, the question remains as to whether I should draw adverse inferences and, if so, of what kind from the absence of evidence from the Defendant and/or Mr Marx and/or Mr Rugova. In answering this question, the guidance given by Lord Leggatt is very helpful. In particular, and as Lord Leggatt explains, the drawing of adverse inferences is an acutely fact sensitive exercise.

On the facts of the present case, and for the reasons which I have explained, the problem which confronts the Claimants, in a nutshell, is their failure to demonstrate that the only available explanation for the payment of the Sum to Intelligent Legal is that the Defendant was seeking to conceal the Sum from the Claimants and keep it out of their reach.

I can see merit in the argument that, in a situation where the payment of the Sum is unexplained and looks (at the least) odd, the Defendant might have been expected to provide an explanation of the payment and/or to call Mr Marx to help explain the payment and/or to call Mr Rugova to confirm whatever explanation the Defendant might have for the payment of the Sum. The Defendant and Mr Marx were clearly available to give evidence. I know of no reason why Mr Rugova could not have been called by the Defendant to give evidence. The solicitors’ correspondence demonstrates that the Defendant’s solicitors were in contact with Mr Rugova. I have also seen an order of the Bournemouth County Court, by which the Defendant was ordered to give up possession of a flat in Bournemouth, made on 7^th June 2023. The order records that Mr Marx attended the possession hearing as a McKenzie Friend of the Defendant, “with Mr Dashi as support”. I take the reference to Mr Dashi to be a reference to Mr Rugova. The order is exhibited to Mr Rechtschaffen’s third affidavit, which I have decided is not part of the admissible evidence, but I consider that I am entitled to take into account an order of a court.

Ultimately however, and accepting the argument, contrary to the submissions of Mr Bowers, that I can draw adverse inferences from the absence of evidence from the Defendant and/or Mr Marx and/or Mr Rugova, I remain unpersuaded that the Claimants have discharged the evidential burden of proving Allegation 3. The absence of explanation or evidence from the Defendant and/or Mr Marx and/or Mr Rugova does not, on the facts of the present case, seem to me to be decisive. If I take into account the absence of this evidence, in circumstances where it could have been expected to be available, I remain in a position where I cannot be satisfied, so that I am sure, that the Claimants’ explanation for the payment of the Sum to Intelligent Legal is the correct one.

Drawing together all of the analysis in this section of this judgment, I reach the overall conclusion that the Claimants have failed to discharge the burden of proving Allegation 3 to the required standard of proof. I am not satisfied, to the required standard, that the Defendant breached paragraph 12(1) of the July 2020 Order in the manner alleged by Allegation 3.

I add one final point, in case it should be relevant. In my consideration of Allegation 3 I have, for the reasons explained earlier in this judgment, disregarded the evidence of Mr Rechtschaffen in his second and third affidavits. I should however make it clear that even if I had been taking this evidence into account, this would not have caused me to alter the overall conclusion which I have reached in relation to Allegation 3. The essential problem with the Claimants’ case in relation to Allegation 3, which I have identified above, seems to me to remain in place whether or not one takes into account all the evidence of Mr Rechtschaffen which has been filed for the Trial.

The August 2020 Order is a worldwide freezing order made, by consent, against the Defendant. The basic restriction imposed by the freezing order is in paragraph 2, in the following terms:

Paragraphs 3 and 4 of the August 2020 Order set out provisions defining the scope of the assets caught by the freezing order. Paragraph 3 effectively corresponds to paragraph 15 of the July 2020 Order:

Paragraph 6 of the August 2020 Order lists a series of exceptions to the prohibitions imposed upon the Defendant’s dealings with his assets. The exception in paragraph 6(a) is in the following terms:

The allegation of breach is in the following terms, in the Table:

As I construe paragraph 6(a) of the August 2020 Order, and I did not understand Mr Fulton to argue to the contrary, paragraph 6(a) applies where the money being spent is money which is within the scope of the freezing order. Paragraph 6(a) does not apply to money spent by third parties, assuming the money spent by third parties does not comprise part of the assets of the Defendant, within the terms of the August 2020 Order. This analysis is consistent with the Claimant’s previous approach to this question, as recorded by Zacaroli J in a judgment dated 30^th April 2021. The judgment was concerned with a disclosure application made by the Claimants, and certain other applications. In dealing with the disclosure application Zacaroli J recorded the position of the Claimants in the following terms, at [79]:

What follows from this is that if Allegation 4(1) is to succeed, the Claimants must demonstrate that the payments made to Raydens and Keidan Harrison were made using the funds deposited by the Defendant with Intelligent Legal on 10^th July 2020; namely the Sum. This in turn depends upon establishing that the Sum remained an asset of the Defendant, within the terms of the August 2020 Order, following the payment of the Sum to Intelligent Legal.

In these circumstances it seems to me that the question of whether Allegation 4(1) succeeds depends upon the outcome of Allegation 3. I refer to and repeat my analysis of Allegation 3. I have already concluded that the Claimants have failed to prove, to the required standard of proof, that the Defendant retained any interest in or control over the Sum following its payment to Intelligent Legal. I have also concluded that the Claimants have failed to prove, to the required standard, that the Sum was used, directly or indirectly, to pay Raydens and Keidan Harrison. It follows that the Claimants have failed to prove, to the required standard, that the payments to Raydens and Keidan Harrison were caught by paragraph 6(a) of the August 2020 Order. I therefore conclude that the Claimants have failed to discharge the burden of proving Allegation 4(1) to the required standard of proof. I am not satisfied, to the required standard, that the Defendant breached paragraph 6(a) of the August 2020 Order in the manner alleged by Allegation 4(1).

Allegation 4(b) does not allege breach of any court order. Instead, the allegation is that the Defendant made knowingly false statements. Allegation 4(b) is made with the permission of Trower J, granted by paragraph 1 of the Directions Order.

The alleged knowingly false statements are set out in the following terms in the Table:

Once again, it seems to me that Allegation 4(2) depends upon the outcome of Allegation 3. I again refer to and repeat my analysis of Allegation 3. I have already concluded that the Claimants have failed to prove, to the required standard, that the Defendant retained any interest in or control over the Sum following its payment to Intelligent Legal. I have also concluded that the Claimants have failed to prove, to the required standard, that the Sum was used, directly or indirectly, to pay Raydens and Keidan Harrison. In these circumstances I do not see that I can be satisfied, so that I am sure, that any of the statements which are the subject matter of Allegation 4(2) were either false or knowingly false. I therefore conclude that the Claimants have failed to discharge the burden of proving Allegation 4(2) to the required standard of proof. I am not satisfied, to the required standard, that the Defendant made false statements or knowingly false statements in the manner alleged by Allegation 4(2).

For what it is worth, I am doubtful that Allegation 4(2) could have been sustained in any event, so far as it relies upon paragraph 9 of the third affidavit of the Defendant, sworn on 20^th May 2021. Although this is not apparent from the extract from paragraph 9 which is quoted in the Table, the full sentence in paragraph 9 reads as follows:

The letter referred to by the Defendant, which is a letter dated 19^th February 2021 written by Mr Rugova, on behalf of Intelligent Legal, to Raydens, does indeed contain the explanation recorded by the Defendant. In these circumstances I have difficulty in seeing how this sentence contained a false statement or a knowingly false statement. What the Defendant said was true. The letter did contain this explanation. What was not true, on the Claimants’ case, was the explanation itself. If the Defendant knew that the explanation was false, it might be said that the Defendant was impliedly stating that the explanation given in the letter was true. This would however be a different allegation, and the question would have arisen as to whether this different allegation could be substituted for what is alleged in the Table. In the event none of this arises. The Claimants have failed to prove, to the required standard of proof, either that the explanation was false or that the Defendant knew the explanation to be false.

The May 2021 Order was made on the application of the Claimants for disclosure of information and documents relating to the funding of solicitors acting for the Defendant in other proceedings. As mentioned in my analysis of Allegation 4(1), Zacaroli J dealt with this and two other applications in his judgment dated 30^th April 2021. For the reasons set out in this judgment Zacaroli J decided that such an order should be made. The result was the May 2021 Order.

Paragraph 1 of the May 2021 Order required the Defendant to do the following things:

It is alleged in the Table that the Defendant breached paragraph 1(2) of the May 2021 Order in the following manner:

The Defendant responded to paragraph 1(1) of the May 2021 Order by his affidavit sworn on 20^th May 2021. I assume that this affidavit was filed and served on the same day, in compliance with the time limit in paragraph 1 of the May 2021 Order. No point is taken, so far as I am aware, that the affidavit was filed and served out of time.

In this affidavit, as I have identified earlier in this judgment, the Defendant disclosed the payments to Keidan Harrison and Raydens by Intelligent Legal and Intelligent Languages, and exhibited bank statements showing the payments to Keidan Harrison. The Defendant did not, either by exhibit to this affidavit or by other means, disclose the statement from his own Lloyds bank account which showed the payment of the Sum to Intelligent Legal on 10^th July 2023.

A preliminary point which arises in relation to Allegation 5 is that there was no personal service of the May 2021 Order on the Defendant. I was asked by the Claimants to dispense with the requirement for personal service of the May 2021 Order on the Defendant. Although the jurisdiction to dispense with personal service is only to be exercised in exceptional circumstances, it seems to me that it is appropriate to grant this dispensation in the circumstances of the present case. It is clear that the Defendant was well aware of the terms of the May 2021 Order, to which he responded by his affidavit of 20^th May 2021. It would, in my view, be somewhat unreal to insist on the requirement of personal service in relation to the May 2021 Order. The Claimants’ application to dispense with the requirement for personal service was, sensibly, not opposed by Mr Bowers. I therefore dispense with the requirement for personal service of the May 2021 Order.

This leaves the substantive question of whether the Defendant did breach paragraph 1(2) of the May 2021 Order by his failure to disclose the relevant statement for his Lloyds bank account, showing the payment of the Sum on 10^th July 2020. This depends upon whether the bank statement was caught by the terms of the Schedule to the May 2021 Order. The Claimant’s case is that the bank statement fell within the terms of paragraphs 2 and/or 3 of this Schedule. These paragraphs provided as follows:

As can be seen, the relevant bank statement was only caught by these paragraphs or either of them if the Sum was, directly or indirectly, used to fund the payments made to Keidan Harrison and Raydens by Intelligent Legal and Intelligent Languages. In this context I again refer to and repeat my analysis of Allegation 3. I have however already concluded that the Claimants have failed to prove, to the required standard of proof, that the Sum was so used. As such, I am bound to conclude that the Claimants have failed to prove, to the required standard of proof, that disclosure of the relevant bank statement was required by paragraph 1(2) of the May 2021 Order.

I therefore conclude that the Claimants have failed to discharge the burden of proving Allegation 5 to the required standard of proof. I am not satisfied, to the required standard, that the Defendant was required, by paragraph 1(2) of the May 2021 Order, to make disclosure of the relevant bank statement.

For the reasons set out in this judgment, I find that the Defendant has committed breaches of paragraph 5 of the January 2020 Order, and is thereby in contempt of court, as follows:

For the reasons set out in this judgment, I find that the Claimants have failed to prove, to the required standard, the alleged breaches of court orders comprising Allegations 2, 3, 4(1), and 5. Also for the reasons set out in this judgment, I find that the Claimants have failed to prove, to the required standard, that the Defendant knowingly made false statements in the manner alleged by Allegation 4(2).

The outcome of the Contempt Application is as follows:

The Contempt Application therefore succeeds in part.

I will consider the question of what sanction to apply, in relation to the Defendant’s admitted breaches in respect of Allegation 1, at a separate hearing. It seems to me that the sanction hearing should not be delayed. I will therefore give directions for the early listing and hearing of the sanction hearing, in the terms of the draft order which the parties have agreed consequential upon this judgment.