Aspect Capital Ltd v Christensen

In civil contempt proceedings, disputed facts must be proved beyond reasonable doubt by the applicant. A respondent’s explanation must be accepted if it might be true. A search-and-seizure order requiring disclosure of documents and storage devices can extend to cloud storage where data were stored, even briefly. Deliberate concealment, perjury in an affidavit required by the order and destruction of evidence are grave contempts. Sentencing is both punitive and coercive. Relevant factors include prejudice, intention, culpability, co-operation, admissions, apology, frankness and character. A civil court may impose imprisonment and suspend it to encourage future compliance. A false affidavit may amount to perjury without itself breaching the order if it was not the affidavit required by the order.

The claimant sought committal proceedings against a former employee following execution of a search-and-seizure order made without notice. The order required disclosure of confidential information, storage devices, electronic accounts, passwords and related data, and prohibited interference with or destruction of evidence.

The defendant admitted several breaches but disputed their extent and offered explanations for his conduct. The court therefore held an equivalent Newton hearing to determine the disputed facts and the gravity of the contempts. The central issues were whether the alleged concealment, interference, deletion, overwriting and false affidavit evidence were deliberate breaches of the order and, if so, what sentence was appropriate.

Disposition. Six contempts were proved beyond reasonable doubt. The defendant was sentenced to three months’ imprisonment, suspended for 18 months.

1. The burden of proving the disputed facts lay on the claimant, and the criminal standard of proof applied. If the defendant’s explanations were or might be true, the court was required to accept them.

2. The court found that the defendant had dishonestly denied removing confidential information, deliberately triggered encryption and then lied about the pass phrase, concealed a hard drive and thumb drives, withheld the password to a gmail account while arranging for emails to be deleted, swore a false affidavit required by the order, and later overwrote two thumb drives. A cloud service was a storage facility within the order where files had been stored on it, even for only a few days. Deleting emails to conceal evidence was not a merely technical breach.

3. A deliberately false affidavit could amount to perjury, but the first false affidavit was not itself a breach of the order because it was not the affidavit the order required. It remained relevant to the defendant’s credibility and the gravity of his conduct.

4. Sentencing for contempt serves punitive and coercive purposes. The available sanctions include immediate or suspended imprisonment, an unlimited fine and sequestration. Any custodial sentence must be no longer than necessary. The guidance in Heidleberg Graphic Equipment Limited v Hogan [2004] EWHC 3090 (Ch) and Crystalmews Limited v Metterick [2006] EWHC 3087 (Ch) was applied.

5. The court considered prejudice and its remediability, pressure, deliberateness, culpability, the conduct of others, appreciation of seriousness, co-operation, admissions, the effect of a contested Newton hearing, apology, frankness, character and antecedents. The contempts were deliberate, serious and highly culpable. Perjury and attempted destruction of evidence struck at the administration of justice. The sentence was also assessed against the requirement that civil contempt sentences should not be manifestly discrepant from criminal sentences for the same facts, drawing on Lomas v Parle [2004] 1 FLR 812 and R v Hall (1982) 4 Cr App R (S) 153.

6. Although imprisonment was justified, suspension was appropriate. The civil court had greater flexibility than a criminal court, and a suspended sentence could encourage compliance with further orders in ongoing litigation. The defendant’s previous good character, admissions, apologies, some co-operation and the serious effect on his mental health justified suspension.