JSC BTA Bank v Ereshchenko

In criminal contempt proceedings based on allegedly false evidence, the applicant must prove beyond reasonable doubt both that the statement was untrue when made and that the maker knew it was untrue or lacked an honest belief in its truth. An objectively inadequate response to a disclosure order does not alone establish dishonest contempt.

An appellate court should not substitute a finding of dishonesty for a trial judge’s refusal to make one after hearing oral evidence unless the inference is so compelling that no judge could reasonably decline to draw it.

The Bank applied to commit Mr Ereshchenko for criminal contempt, alleging that he had dishonestly made five false statements while responding to a disclosure order concerning transactions said to form part of a substantial fraud on the Bank.

Vos J dismissed the application, holding that the Bank had not proved dishonesty beyond reasonable doubt: [2012] EWHC 1891 (Ch). The Bank appealed, arguing that the judge’s findings about Mr Ereshchenko’s failure properly to engage with the disclosure process required findings of knowing falsehood.

The central issues were the subjective requirement for criminal contempt and the extent to which an appellate court could overturn a trial judge’s refusal to find dishonesty.

1. Appeal dismissed. The Bank had not shown that Vos J erred in refusing to find, beyond reasonable doubt, that Mr Ereshchenko had dishonestly made any of the five statements charged as contempts.

2. For a contempt founded on a false statement, the applicant had to prove both falsity and that, when making it, the respondent knew it was false or did not honestly believe it true. The inquiry was therefore directed to the respondent’s subjective state of mind at each relevant date. An objectively insufficient response to the disclosure order, including a failure to make all reasonable enquiries, could justify further procedural relief but did not itself prove dishonest contempt.

3. Vos J was entitled to distinguish between Mr Ereshchenko’s recognition of the names of relevant companies and his recollection of the detailed transactions about which the disclosure order asked. The affidavit had to be read in the context of the accompanying witness statement. The judge was also entitled to treat the general descriptions of his involvement and recollection as unsuitable bases, on the evidence available, for a finding of deliberate falsehood to the criminal standard.

4. The Court of Appeal would not reweigh the detailed documentary and oral evidence in order to substitute a finding of dishonesty for the trial judge’s contrary assessment. In this setting, the inference of dishonesty had to be so compelling that no judge could reasonably fail to draw it. The Bank did not meet that demanding standard.

5. Elias and Beatson LJJ additionally observed that, where the claimant in substantive proceedings initiates criminal committal proceedings against the same defendant, a pre-trial committal hearing should ordinarily be exceptional. The public character of contempt, the risk of satellite litigation, and the prospect that full disclosure at trial will better illuminate the evidence all required caution. No conclusion was reached on the Bank’s substantive claims.

• Court of Appeal (Civil Division) — dismissed the Bank’s appeal and upheld the refusal to commit Mr Ereshchenko for contempt.
• High Court of Justice, Chancery Division — Vos J dismissed the Bank’s committal application: [2012] EWHC 1891 (Ch).