Dadourian Group International Inc & Ors v Simms & Ors

A court may permit information obtained under a freezing order to be used in contempt proceedings where that use is just and convenient in all the circumstances. Exceptional circumstances are not required.

The court should examine the alleged non-compliance, its seriousness, the proposed proceedings’ purpose, possible alternatives, materiality, available objections and any unfairness. Permission may be limited or made subject to terms. An informed failure to invoke the privilege against self-incrimination does not automatically make later use unfair.

Contempt proceedings enforcing or policing an order form an integral part of the original action and are not a collateral use of documents obtained in that action.

The claimants obtained worldwide freezing and disclosure orders against Mr and Mrs Dadourian. A subsequent order required further affidavits and cross-examination, subject to an undertaking that the resulting information would not be used at trial or in criminal or committal proceedings without permission.

Warren J, in [2006] EWHC 699 (Ch), released the claimants from the undertaking so that the material could be used at trial and in later committal proceedings. The defendants appealed only against permission concerning committal proceedings. They argued that release should require exceptional circumstances and that later use would undermine their privilege against self-incrimination.

The central issue was the proper exercise of the discretion to permit information obtained under a freezing order to be used in contempt proceedings.

1. Appeal dismissed. The court unanimously held that Warren J had made no error in releasing the claimants from their undertaking. There was no rule requiring exceptional circumstances. The discretion depended upon what was just in all the circumstances.

2. Per Arden LJ, the governing principle was whether it was just and convenient to permit use of the information for enforcing or policing the freezing order. The application should be made on notice and supported by evidence placing all relevant circumstances before the court. Longmore LJ emphasised that the formal inquiry should primarily be whether use was appropriate for establishing the alleged contempt. The Chancellor agreed that the exercise depended upon what was just in all the circumstances.

3. The court should consider the basis and seriousness of the alleged non-compliance, the applicant’s purpose, whether a less severe and sufficiently effective means of obtaining information exists, whether committal proceedings would inevitably fail, whether the information would be material, and the proposed contemnor’s objections or defences. It should also examine whether the manner in which the information was obtained makes its later use unfair. Permission may be confined to part of the evidence or made subject to terms.

4. The privilege against self-incrimination and the fair-hearing guarantee under article 6 of the European Convention on Human Rights provide significant protection. Here, however, the defendants had been advised of the privilege and had answered without generally invoking it. Their informed choice did not automatically make later use unfair. There was no evidence of improper compulsion, misleading conduct or unfair cross-examination.

5. The evidence suggested deficiencies in asset disclosure, the proposed proceedings could encourage fuller compliance, and no realistic alternative had been identified. The judge was therefore entitled to grant permission.

6. Arden LJ added that an application concerning possible contempt should not generally be heard at the start of a trial by a judge who may have to assess the proposed contemnor’s credibility. It may be preferable to defer or separate that part of the application.

• Court of Appeal (Civil Division): The appeal was dismissed unanimously. The court upheld permission to use the cross-examination material in subsequent committal proceedings: [2006] EWCA Civ 1745.
• High Court, Chancery Division: Warren J released the claimants from their undertaking, including for the purpose of subsequent committal proceedings: [2006] EWHC 699 (Ch).