IC Mutual Ltd & Ors v Raven & Ors

In civil contempt proceedings, the applicant must make the court sure of each alleged breach. The court may assess individual allegations against the overall picture, but the broad picture cannot replace proof of each distinct contempt. The court is confined to the grounds stated in the application notice. Serious, deliberate non-compliance with disclosure orders, including false evidence and failures to provide documents needed to trace assets, may justify imprisonment. The court may take subsequent disclosure into account when determining penalty.

The claimants sought the committal of the first defendant for breaches of a disclosure order made by Rimer J in proceedings concerning assets allegedly received from companies in the Imperial Consolidated Group. The order required disclosure of worldwide assets, the circumstances and whereabouts of specified assets, and supporting documentation and authorities.

The defendant supplied affidavits and other explanations, but failed to provide information and documents which the claimants said were necessary to trace assets. The committal application alleged multiple breaches, including non-disclosure of bank accounts, failure to explain expenditure, false statements about post-collapse income, and failures concerning funds connected with Sidera and other entities. The central issues were whether the specified breaches were proved to the criminal standard and, if so, what penalty should follow.

1. Applicable standard. The court applied [2001] EWCA Civ 21. The applicant had to make the court sure of the facts constituting each contempt. The allegations could be viewed against the broad canvas of the defendant’s conduct, but each head still required proof beyond reasonable doubt.
2. Scope of the application. The court was confined to the grounds set out in the application notice. It therefore considered the allegations as formulated there, rather than materially different versions advanced in closing submissions.
3. Findings. Contempt was established in relation to the failure to disclose and explain the Abbey National Gibraltar account; the failure to provide documentation supporting approximately £1 million of alleged overhead expenditure; false statements and non-disclosure concerning post-collapse income, in particular the Select Design and Brewin Dolphin matters; false evidence and non-disclosure concerning the Sidera transactions; and the admitted failure to account for approximately £45,000 withdrawn in cash. The evidence concerning the Coutts account did not establish a separate contempt. The broader allegation concerning lifestyle funding was not pleaded clearly enough in the application notice to justify a finding of contempt.
4. The defendant’s evidence was materially false and evasive. The failures were culpable and amounted to serious, contumacious flouting of court orders. The court considered that the conduct was of the kind which could merit a custodial sentence.
5. Under section 14 of the Contempt of Court Act 1981, the court could impose up to two years’ imprisonment. Execution could be suspended under RSC Ord 52, r 7, identified as corresponding to CPR Schedule 1. The committal hearing was adjourned to January 2006 for determination of the appropriate penalty. Further disclosures leading to the tracing of assets could be considered in mitigation.