Taylor v Van Dutch Marine Holding Ltd & Ors

In civil contempt proceedings, the applicant must satisfy the court to the criminal standard that the respondent intentionally committed an act amounting to breach of the order. Separate proof of contumaciousness is unnecessary. A director may be liable where the company breaches an injunction and the director wilfully fails to take reasonable steps to prevent it. Serious and continuing breaches of disclosure obligations supporting a freezing order ordinarily warrant imprisonment, although the sentence may be suspended to allow final compliance.

The claimant obtained default judgment for repayment of a bridging loan against four defendants. Earlier orders required disclosure of assets and financial information, imposed freezing and proprietary injunctions, and required undertakings. The first and second defendants were companies controlled by the third and fourth defendants, who were their sole shareholders, directors and controlling minds.

The claimant applied to commit the third and fourth defendants for failing to comply with those requirements. They did not attend. The issues were whether the breaches were proved, whether the directors were personally liable for the companies’ failures, whether the application could proceed in their absence, and what sentence was appropriate.

1. The third and fourth defendants were found in contempt for failing to provide proper disclosure, the affidavit required by paragraph 9.a of the Disclosure Order, and the undertaking required by paragraph 9.b. The breaches concerned, among other matters, boats, assets, moulds and tools, bank statements and profit and loss accounts. Late and limited disclosure had not purged the contempt.
2. Applying JSC BTA Bank v Mukhtar Ablyazov [2012] EWHC 237 and Masri v Consolidated Contractors International Company SAL [2011] EWHC 1024 (Comm), the claimant had to prove contempt to the criminal standard. An intentional act amounting to breach of an order sufficed.
3. Applying PPL v Nightclub (London) Ltd [2016] EWHC 892 (Ch), a director’s wilful failure to take reasonable steps to prevent a company’s breach of an injunction could constitute contempt. The defendants were the only directors and controlling minds of the companies.
4. The application was fairly heard in the defendants’ absence. They had proper service, adequate notice and opportunities to comply, while an adjournment was unlikely to secure attendance. The court applied the checklist in Sanchez v Oboz [2015] EWHC 235 (Fam).
5. Applying the sentencing principles in JSC BTA Bank v Solodchenko [2011] EWCA Civ 1241, imprisonment was appropriate. A single sentence of six months was imposed for the connected breaches, suspended for one month, with liberty to apply for remission upon compliance.

First-instance committal application. No appellate history is stated in the judgment.