Deutsche Bank AG v Sebastian Holdings Inc

The power to commit for contempt is a common-law power. Parts 71 and 81 of the Civil Procedure Rules provide procedures for exercising it. A party alleging breach of an order made under CPR 71.2 may use the streamlined procedure in CPR 71.8 where appropriate, or the fuller procedure in Part 81 where the allegation requires a more detailed process.

A validly made order under CPR 71.2 is not rendered unenforceable merely because the officer later leaves the jurisdiction. However, the jurisdictional gateway in PD6B para. 3.1(10), permitting service out for a claim to enforce a judgment or arbitral award, does not extend to an order made under CPR 71.2.

Deutsche Bank sought to enforce a substantial judgment debt owed by Sebastian Holdings Inc. The court had previously ordered Alexander Vik, the company’s former director and shareholder, to provide information about the company’s means and to attend for cross-examination. He later left the jurisdiction.

Deutsche Bank alleged that Mr Vik had failed to disclose documents and had lied under oath. It sought permission to serve a committal application out of the jurisdiction, together with orders concerning personal service.

The issues were whether committal had to proceed exclusively under CPR 71.8, whether CPR 71.8 had extra-territorial effect, and whether PD6B para. 3.1(10) supplied a jurisdictional gateway for service out.

1. The court’s power to commit for contempt derives from the common law. CPR 81.2 confirms that Part 81 regulates procedure and does not itself confer the power. Parts 71 and 81 likewise prescribe procedures for exercising that power.

2. CPR 71.8 provides a summary and streamlined procedure for suitable cases, particularly simple failures to attend or comply. It is not the exclusive route where the alleged contempt arises from breach of a CPR 71 order. Where the allegation is more difficult to establish, such as alleged dishonesty in answering questions, the fuller procedure under Part 81 may be used. The application could therefore proceed under Part 81 as well as, where appropriate, CPR 71.8.

3. The question whether CPR 71.8 itself had extra-territorial effect did not arise because the court had held that Part 81 was available. The judge nevertheless stated that, where an order under CPR 71.2 had been validly made and served while the officer was within the jurisdiction, the officer’s subsequent departure would not prevent committal proceedings under CPR 71.8. The strong public interest in enforcing court orders justified that conclusion.

4. PD6B para. 3.1(10) permits service out where a claim is made to enforce a judgment or arbitral award. A committal application is a claim to enforce an order, but an order made under CPR 71.2 is not a “judgment” within that gateway. The ordinary meaning, the distinction drawn elsewhere in the CPR between judgments and orders, the legislative purpose of the gateway, and the reference to arbitral awards all supported that construction.

5. Permission to serve the committal application out of the jurisdiction was refused. The applications to dispense with personal service, and to dispense with service of related documents, also failed because they were premised on permission to serve out being available.