Nokia France SA v Interstone Trading Ltd & Ors

A respondent subject to a worldwide freezing injunction must provide the best information reasonably available about assets and transactions within the order. The obligation is defined by the wording of the order and does not extend to general background information which the order does not require.

Where an order permits dealings in the ordinary and proper course of business, such dealings fall outside the prohibition. The applicant retains the burden of proving every essential element of an alleged contempt, although credible evidence may require the respondent to provide an explanation supported by appropriate evidence. Contempt requires deliberate disobedience established to the applicable criminal standard of proof.

Nokia sought the committal of the eighth defendant, Jin Yan, for alleged breaches of worldwide freezing and search orders made in proceedings concerning mobile telephones sold subject to retention of title.

The alleged breaches included failures to disclose assets and information, destruction and concealment of documents during searches, unauthorised transfers of funds, and failure to disclose documents covered by the search order. Mr Yan contended that some omissions were inadvertent, that relevant payments were made in the ordinary course of business, and that he no longer possessed undisclosed documents.

The central issues were whether the orders had been breached deliberately, the scope of the disclosure obligations, the burden of proof concerning the business-course exception, and whether the evidence established continuing non-disclosure.

1. The application established that Mr Yan was in contempt of court. The breaches varied in seriousness, and the court assessed each allegation separately.

2. The freezing injunction required Mr Yan to disclose, immediately and to the best of his ability, information about his worldwide assets and specified matters concerning the Ibericatel transaction. His deliberate failure to disclose substantial Hong Kong bank accounts, interests in foreign companies, and the shares and entitlements connected with Interstone Trading Incentives Ltd breached the order. The order required disclosure of the matters specified in it; it did not require disclosure of every item of general background concerning the transaction.

3. The destruction of a relevant document and the attempt to conceal documents concerning Mr Yan’s interests in China and Cambodia were deliberate attempts to frustrate the search order and constituted serious contempts. The evidence did not establish that 14A Montpelier Road was Mr Yan’s residence or that he had an interest in it, and those allegations failed.

4. The ordinary-course-of-business provision in the freezing order was unqualified. Payments made in that course fell outside the prohibition rather than constituting an exception which the respondent had to prove. Nokia therefore bore the burden of establishing every essential element of the alleged breach. Once credible evidence suggested that a payment was not made in the ordinary course, however, the court could draw an adverse conclusion if the respondent failed to provide a satisfactory, appropriately supported explanation.

5. The four challenged transfers were, on the evidence, made in the ordinary course of business. They did not therefore establish contempt, notwithstanding Mr Yan’s unsatisfactory evidence about the dates on payment instructions.

6. The evidence did not establish that Mr Yan retained undisclosed documents falling within the search order. His late and substantial compliance did not remove the fact of his wilful disobedience or the expense caused to Nokia.