Sage v Hewlett Packard Enterprise Company & Ors

Committal proceedings for breach of a court order are quasi-criminal. The application notice must identify separately and precisely every alleged act of contempt. A person cannot be found guilty of breaching provisions which were not charged, even where the evidence might have supported those different breaches.

A procedural defect may be waived only where no injustice has resulted. A late attempt to substitute new charges should be refused where it is uncertain whether amendment would have changed the evidence, required an adjournment or affected the defence.

Deliberate dissipation of assets in breach of a freezing order will usually justify an immediate and substantial term of imprisonment. The sentence must nevertheless reflect the gravity and duration of the proven contempts and any demonstrated need to encourage future compliance.

The appellant was found guilty in the Queen’s Bench Division of nine contempts arising from failures to comply with a worldwide freezing order and a search order obtained by companies in the Hewlett Packard group. Jay J imposed an immediate term of 18 months’ imprisonment: [2017] EWHC 66 (QB).

The appeal challenged findings concerning an engagement ring, the appellant’s beneficial ownership and control of a company, and the dissipation of funds shortly after service of the orders. It also challenged the sentence. The central procedural issue was whether the appellant could be convicted of breaches concerning the ring when the judge relied upon provisions of the search order which had not been alleged in the amended grounds of committal.

1. Appeal allowed in part, unanimously. The findings of contempt relating to the engagement ring were set aside. The other findings were upheld, and the term of imprisonment was reduced from 18 months to 12 months.

2. Committal proceedings for disobedience to court orders are quasi-criminal. Full notice of each charge is of cardinal importance. Rule 81.10(3) of the Civil Procedure Rules 1998 requires the application notice to state the grounds in full and to identify separately and numerically each alleged act of contempt. A judge must confine the decision to the contempts charged. If another contempt requires consideration, the proper course is amendment followed by any adjournment needed for the respondent to prepare: Inplayer Ltd v Thorogood [2014] EWCA Civ 1511 endorsed.

3. The alleged ring breaches depended upon the appellant owning, possessing or controlling the ring. Jay J found that it belonged unconditionally to a third party and was not controlled by the appellant. He nevertheless convicted the appellant under different provisions of the search order which had not been pleaded. Those convictions could not stand.

4. The Court refused a late application to amend the grounds or waive the defect under paragraph 16.2 of Practice Direction 81. The application should have been made below. It was uncertain whether amendment would have required an adjournment or changed the conduct of the defence, and reasonable doubt had to be resolved in the appellant’s favour.

5. A beneficial interest in the company could properly be determined in committal proceedings on the criminal standard of proof. The findings that the appellant retained beneficial ownership and control, and instructed the disputed payments after service of the freezing order, disclosed no error permitting appellate interference.

6. Immediate imprisonment was justified because deliberate dissipation in breach of a freezing order ordinarily constitutes a serious attack upon the administration of justice. The sentence nevertheless required reconsideration after the ring findings were set aside. The remaining misconduct was flagrant but occurred over a short period, was not repeated and fell well below the most serious cases. There was also no evidence justifying a significant coercive element to encourage future compliance.

1. Court of Appeal (Civil Division): The appeal was allowed in part in [2017] EWCA Civ 973. The engagement-ring findings were set aside, the remaining findings were upheld, and the sentence was reduced from 18 months to 12 months.

2. High Court, Queen’s Bench Division: Jay J found the appellant guilty of nine contempts and imposed an immediate term of 18 months’ imprisonment in [2017] EWHC 66 (QB).