Nextam Partners Ltd v Mughal & Ors

Contempt of court must be proved by the applicant to the criminal standard. The alleged contemnor bears no persuasive burden of disproving the allegation. Circumstantial evidence may establish contempt, but the court must examine whether competing reasonable inferences weaken the case. In allegations of false evidence, the applicant must prove that the statement was untrue when made and that the maker lacked an honest belief in its truth. A later disclosure does not necessarily prove earlier dishonesty. An injunction requiring disclosure of a party’s assets extends to beneficial interests. Deliberately false documents concerning ownership may themselves constitute contempt. The court must distinguish historic breaches from continuing breaches when considering sentence.

The claimant sought to commit the first defendant for contempt of freezing and proprietary injunctions made in June 2015 and later extended. The injunction required disclosure of assets and information concerning the proceeds of unauthorised transfers, and prohibited dealings with those proceeds and the defendants’ assets.

The claimant alleged failures to disclose properties and debts, false statements concerning beneficial ownership and the transfer proceeds, and diversion of rental income. The defendant relied on documents purporting to declare that family members owned the beneficial interests in several properties, and claimed that he had been deceived in relation to the transferred money. The central issues were whether the alleged breaches were proved beyond reasonable doubt and whether the breaches were continuing.

1. Standard and burden. The claimant bore the burden of proving each contempt beyond reasonable doubt. The defendant had no obligation to disprove the allegations. The court adopted the principles summarised in JSC Mezhdunarodniy Promyshlenniy Bank and Another v Sergei Viktorovich Pugachev [2016] EWHC 192 (Ch), including the need for care when drawing inferences from circumstantial evidence.
2. Where more than one reasonable inference could be drawn, and at least one was inconsistent with contempt, the application failed. The court was not sure that the defendant’s account of being scammed was false, nor that he retained or knew the location of the transfer proceeds. The allegations concerning disclosure or repatriation of those proceeds therefore failed.
3. Following JSC BTA Bank v Ereshchenko [2013] EWCA Civ 829, false-evidence contempt required proof that the statement was untrue when made and that the defendant did not honestly believe it to be true at that time. The claimant did not establish the alleged false statements about the transfer proceeds.
4. The documents concerning the properties were shams. The defendant had a beneficial interest in the properties and was required to disclose it. His deliberate false statements and use of fabricated documents established contempt. His diversion of rental proceeds also breached the injunction, which prohibited dealing with the assets. A failure to disclose debts was established but was of limited importance.
5. The breaches concerning the properties were treated as historic for sentencing purposes because the relevant information had ultimately been disclosed and the issue had been determined. The failure to disclose beneficial ownership and the diversion of rents were, in the relevant respects, continuing breaches. Sentence and consequential matters were reserved to a later hearing.
6. Permission was not required for allegations that false statements had been made in affidavits. International Sports Tours Ltd T/A Inspire Sports v Shorey and Others [2015] EWHC 2040 (QB) clarified that CPR 81.18 concerned false statements of truth or disclosure statements, not the affidavits in issue.