JSC BTA Bank v Solodchenko & Ors

Committal for contempt is available only where the court is sure that an alleged contemnor breached a clear and unambiguous order. The claimant bears the criminal burden of proof. A deliberate act calculated to frustrate an order may constitute a breach even without an intention to flout it, although intention remains relevant to sentence.

The court’s powers serve both punitive and coercive purposes. Where the contemnor admits an intentional breach but offers to comply, sentence should not be fixed prematurely if subsequent compliance may materially affect both the appropriate sentence and whether custody is necessary. A short adjournment may therefore be appropriate.

The claimant bank applied to commit Paul Kythreotis for contempt. He had failed to comply with disclosure and information obligations contained in a worldwide freezing order made in proceedings concerning alleged fraudulent transfers of bonds and their proceeds.

The order had been personally served and contained a penal notice. Kythreotis admitted service, knowledge of the order, intentional non-compliance and contempt. Shortly before the hearing, he apologised and offered to provide the required information. The issues were whether contempt was established and whether the court should sentence immediately or adjourn to allow an opportunity to purge the contempt.

1. Contempt established. The court was sure that the order had been served, its terms were clear and understood, and the procedural requirements were met. Kythreotis deliberately failed to comply. His admission confirmed intentional disregard. The contempt was in principle serious.
2. The claimant bears the criminal burden of proof. A breach includes conduct calculated to frustrate the purpose of an order. The conduct must be deliberate rather than inadvertent, but an intention specifically to breach the order is unnecessary. Intention remains relevant to penalty.
3. The committal jurisdiction has punitive and coercive purposes. It may punish defiance, secure compliance with an existing order, and deter future breaches. Here disclosure was needed to make the freezing injunction effective and to trace the alleged misappropriated funds. Continuing non-compliance caused serious and potentially irremediable prejudice.
4. The court declined to fix sentence immediately. It could not fairly determine whether custody was necessary, the length of any custodial term, or whether a sentence should be suspended until it knew whether the promised compliance was genuine and complete. Untested affidavit evidence could be given little weight without cross-examination.
5. The application was adjourned for sentence for one week, conditional on compliance with all information provisions by 4.00 pm on 28 September 2010.