Lloyds TSB Commercial Finance Ltd. v Melia & Ors

Contempt of court requires proof to the criminal standard that the order was properly served and deliberately breached. A party cannot choose which information to disclose or rely on partial, inaccurate or misleading compliance with an order requiring disclosure. The court’s principal aim in committal proceedings is securing compliance, but deliberate and serious non-compliance, aggravated by deliberately untruthful affidavits and continuing concealment, may justify immediate imprisonment. Belated compliance and a technical outstanding breach may reduce the length of the sentence but do not necessarily avoid committal.

The claimant had obtained judgment against Rapid Recruitment Limited after alleged invoice fraud and brought proceedings seeking, among other things, to trace the proceeds. An order required the first, second and sixth defendants to disclose specified banking and payment information by witness statement. The order was personally served, but none of the defendants complied by the prescribed date.

The first defendant later filed affidavits and gave oral evidence. The claimant contended that the disclosure remained incomplete and inaccurate, particularly concerning bank accounts and transfers involving the sixth defendant. The application concerned whether the defendants were in contempt and, if so, the appropriate sanctions.

1. Contempt established. The court applied the criminal standard of proof. It was sure that the order and committal application had been validly served and that each of the first, second and sixth defendants had failed to provide the required witness statement by 13 February 2009.
2. The first defendant’s breach was deliberate rather than accidental. His later affidavits did not provide full disclosure. The court rejected his explanations concerning two bank accounts and found that he had deliberately disclosed as little as possible, withheld relevant matters and given deliberately untruthful evidence in material respects.
3. The first defendant remained in breach of the order requiring disclosure of facts known to the sixth defendant about the whereabouts of money transferred from the second defendant. He was also in breach of the requirement to provide that information by witness statement. The application did not concern the separate requirement relating to account balances.
4. The second and sixth defendants were also in contempt, but they had no known assets and fines would be fruitless.
5. Although the purpose of committal is principally to secure compliance, the seriousness and deliberate nature of the first defendant’s contempt, together with the inadequacy of his belated and misleading compliance, meant that even a suspended sentence would be insufficient. He was committed to prison for 56 days. No further order was made against the second and sixth defendants, save as to costs. The provisional view was that all three defendants should pay the claimant’s costs on the indemnity basis.