Lexi Holdings Plc v Luqman

A custodial sentence for contempt may reflect both the deliberate character of the breach and its practical obstruction of a court order. Concealing company documents and electronic records in breach of freezing and disclosure orders is exceptionally serious where it frustrates administrators’ attempts to trace and recover substantial missing assets.

A late admission does not necessarily require a lower sentence than that imposed on a person who contested similar allegations. The court may consider differences in conduct, including earlier attempts to evade the contempt proceedings. An appellate court need not adjust concurrent sentences where the effective total sentence remains fully justified.

The appellant was a de facto director of a company in administration following alleged frauds involving about £40 million. A freezing order required him to disclose information concerning the company and its assets. He committed several contempts by frustrating that order, concealing documents and a company server, supporting false claims about a bank account, and breaching a passport order.

Briggs J imposed concurrent sentences of up to 12 months for the freezing-order contempts and a consecutive six-month sentence for the passport-order contempt, producing an effective term of 18 months. The appellant challenged three component sentences. He argued that his late admissions had not received proper credit and that the 12-month sentence for concealing and withholding documents was excessive.

1. Appeal dismissed unanimously. The effective sentence of 18 months’ imprisonment was fully justified and would not be reduced.

2. The judge had taken all relevant matters into account. These included the scale of the missing funds, the continued absence of information about the company’s assets and affairs, and the appellant’s late admissions to all but one contempt. Although the judge did not identify a specific discount for those admissions, the appellant’s position could not be equated precisely with that of his brother, who had contested the allegations. The appellant had previously avoided the hearing by failing to appear and by relying on apparently unreliable medical evidence.

3. The concealment and withholding of the company’s documents and server were contempts of the most serious kind. They obstructed the administrators’ performance of their duty to identify and recover assets removed from the company. Without those materials, that task became substantially more difficult and might have become impossible. The gravity of the conduct was reinforced by the very large amount of money involved.

4. The 12-month sentence for failing to disclose and deliver up the documents and server was amply deserved. A longer sentence could have been justified. The concurrent sentences challenged on the basis of the late admissions did not warrant interference because any reduction would have had no effect on the justified total term. The uncontested six-month sentence for breach of the passport order properly ran consecutively.

1. Court of Appeal (Civil Division): The appellant’s appeal against three component sentences for contempt was dismissed unanimously. The effective sentence of 18 months’ imprisonment was left undisturbed.

2. High Court of Justice, Chancery Division: Briggs J imposed concurrent sentences of up to 12 months for serious breaches of freezing and disclosure orders, together with a consecutive six-month sentence for breach of a passport order. The resulting total sentence was 18 months’ imprisonment.