Thomas & Anor (Joint Liquidators of GBI Investments Ltd) v Jakes & Anor

An order requiring delivery of property also restrains the respondent from dealing with that property in a way which puts compliance out of his or her power. Contempt requires an intentional act or omission, involving a choice whether to comply. A later failure to deliver is not contempt where the respondent had already lost possession and control before the order imposing the fresh deadline. Deliberately disposing of the property in breach of the restraint is itself contempt. Deliberately presenting, or permitting representatives to present, a false case to the court about the property’s location and control is also contempt where the respondent appreciates its relevance to the court’s decision.

The applicants were the joint liquidators of GBI Investments Limited. They sought committal of Boris Jakes and Juraj Nestarec for contempt arising from non-compliance with an order requiring delivery of 43 bearer shares and money to the company’s liquidator.

A previous committal application had failed because the order had not been personally served and the required notice had not been proved by the relevant deadlines. The court later set a fresh deadline for delivery of the shares. Before that hearing, the respondents had delivered the shares to a Slovak liquidator, but this was not disclosed to the court or their English legal representatives. The issues were whether the fresh non-delivery, the earlier disposal, and the presentation of the false case constituted contempt.

1. Failure to comply with the Second Order. The allegation was not made out. Before the Second Order was made, the respondents had transferred the shares to the Slovak liquidator and had thereby abandoned possession and control. Their subsequent inability to deliver the shares was involuntary. Contempt requires at least an intentional act or omission and presupposes that the respondent retains a choice whether to comply.
2. Disposal in breach of the First Order. The First Order was not confined to the positive obligation to deliver the shares by the specified date. It also required the respondents to abstain from dealing with them in any way which would put delivery to the English liquidators out of their power. This was an order within RSC Ord. 45 r. 7(6). The respondents had notice of its terms long before the disposal, so the absence of personal service did not prevent committal for the prohibited act.
3. The earlier refusal to commit for failure to deliver by the original deadline did not determine the later allegation. The disposal on 28 July 2011 was a fresh, deliberate act which ended the real possibility of late compliance. It was therefore a breach of the First Order by both respondents.
4. Deception of the court. The respondents’ evidence and submissions conveyed that the shares remained in their possession or control, although they had already been transferred. The court was deliberately led to consider a fresh deadline on that false basis. Both respondents appreciated the relevance of the disposal to the enforcement application and deliberately failed to correct the false case. That conduct amounted to contempt.
5. The allegations concerning the disposal of the shares and the deliberate deception were proved beyond reasonable doubt. The court adjourned the matter for submissions on penalty. The issue concerning best endeavours to transfer the money was not decided.

First instance decision. No prior appellate decision is stated in the judgment.