Kimyani & Ors v Sandhu

Deliberate breaches of disclosure obligations imposed by a freezing order are serious contempts. They ordinarily warrant a custodial sentence, particularly where the contemnor gives false, incomplete or conflicting explanations and continues to disregard the order.

When imposing imprisonment, the court should identify, where appropriate, the punitive element and the reduction that may be available for prompt and complete compliance. Medical difficulties may affect sentence, but only where they materially explain the breach or otherwise justify a different approach.

The applicants sought the committal of the respondent for breaching disclosure and information obligations contained in a freezing injunction order made in related proceedings concerning their late father’s estate.

The respondent failed to comply by the specified dates. She later provided affidavits which the court found materially incomplete, false and inconsistent, including in relation to the proceeds of a property sale and the location of money. The central issue was the appropriate sanction for the breaches, including the relevance of alleged medical difficulties and the possibility of mitigation through later compliance.

1. The respondent had breached the freezing order. The breaches were proved beyond reasonable doubt. Her late affidavit did not remedy the position and was false in important respects. She continued to give conflicting accounts and had not supplied information still required by the order.

2. Deliberate breaches of freezing-order disclosure obligations are serious. The court relied on the review of the law in Otkritie International Investment Management Ltd & Ors v Gersamia and Anor [2015] EWHC 821 (Comm) and on the explanation in JSC BTA Bank v Solodchenko & Ors (No. 2) [2011] EWCA Civ 1241; [2012] 1 WLR 350 that breaches of disclosure orders in freezing-injunction proceedings merit condign punishment, normally imprisonment.

3. It was good practice, when imposing imprisonment, to indicate what part was punishment alone and what part might be remitted for subsequent prompt and full compliance. The respondent’s conduct, including the misleading affidavits and continuing non-compliance, made an immediate custodial sentence appropriate.

4. The medical evidence did not establish a good medical reason for the earlier failures or the false evidence. The possibility of depression and suicidal thoughts was not sufficiently weighty, on the evidence then available, to justify a substantially different sentence. The decision in Templeton Insurance Ltd v Thomas & Anor [2013] EWCA Civ 35, where serious medical difficulties contributed to a suspended sentence, did not require that result here.

5. A sentence of 12 months’ imprisonment was imposed. The court indicated that it might reduce the sentence by up to six months if the respondent promptly and fully complied with the outstanding obligations and adequately co-operated in safeguarding the property-sale proceeds. She was also entitled to unconditional release under the Criminal Justice Act 2003 after serving half the sentence.

Not stated in the judgment.