Public Joint Stock Company Vseukrainskyi Aktsionernyi Bank v Maksimov & Ors

A respondent who substantially defeats committal proceedings may recover costs notwithstanding the establishment of a technical contempt. The court must consider the parties’ overall success, conduct, responsibility for adjournments and the practical significance of any contempt proved.

Committal proceedings should pursue legitimate aims, such as securing compliance or addressing serious breaches. Proportionality is especially important because such proceedings consume substantial private and public resources. Where extensive proceedings establish only a technical contempt insufficient to justify a serious penalty, the applicant may be ordered to pay the respondent’s costs.

Following an earlier judgment on a bank’s application to commit Mr Maksimov for breaches of worldwide freezing orders, the court determined the appropriate consequential costs order. Most alleged contempts had been rejected. One previously admitted disclosure breach and one further contempt of a technical nature had been established.

Mr Maksimov sought 90% of his costs incurred since January 2014. The court considered his substantial success, the bank’s pursuit of unsuccessful dishonesty and dealing allegations, the procedural history, the proportionality of the committal proceedings and the limited significance of the contempt proved.

1. The bank was ordered to pay 80% of Mr Maksimov’s costs incurred since January 2014, with an interim payment of £175,000. Mr Maksimov was the substantially successful party at the contempt hearing. The principal dealing allegations and the allegation that his admitted disclosure breach was dishonest had failed.

2. The bank bore some responsibility for adjournments caused by its attempts to proceed without Mr Maksimov’s effective participation. It was legitimate for him to insist on participating and giving oral evidence. Those adjournments did not justify departing from the general approach that costs should follow the event of the contempt hearing.

3. The bank had pursued wide-ranging allegations of dishonesty and contempt aggressively, although ordinary procedures were available for seeking clarification or further asset disclosure. The proceedings disclosed no meaningful concealment of assets or substantial prejudice to the bank. Their principal additional result was a technical contempt concerning separate corporate disclosure where the relevant asset information had already been provided through Mr Maksimov’s personal disclosure.

4. The court endorsed the guidance in Sectorguard plc v Dienne plc [2009] EWHC 2693 (Ch). Committal proceedings require particular attention to proportionality and should serve legitimate purposes, including obtaining compliance or addressing serious breaches. Proceedings which establish only a technical contempt may result in the applicant paying the respondent’s costs.

5. The award was reduced from the 90% sought because relevant information had emerged in stages, the bank had succeeded on one ground of contempt, and Mr Maksimov had been responsible for the adjournment of the September 2014 hearing. Taking those matters together, 80% fairly reflected the court’s costs discretion.

This was a consequential costs judgment following the court’s judgment of 17 November 2014 on the claimant’s committal application. The citation of that earlier judgment is not stated.