Hewlett Packard Enterprise Company & Ors v Sage & Anor

Contempt of court requires proof, to the criminal standard, that the respondent knew the terms of the order, breached it, and knew the facts making the conduct a breach. Motive and a belief that the conduct was permissible are irrelevant. The court assesses the evidence holistically, including documents, oral testimony and necessary inferences. Deliberate, repeated and extensive breaches of freezing and search orders, compounded by dishonesty and a failure to comply, may readily cross the custody threshold. Committal is reserved for serious and contumacious breaches, but late promises of future compliance and the need to prepare for related civil proceedings do not necessarily justify suspension.

The claimants applied to commit the first defendant, Peter Sage, for contempt of a freezing order and a search order made by Coulson J on 2 December 2015. The underlying proceedings alleged that Mr Sage and the second defendant had fraudulently represented that they owned substantial solar-energy facilities. The orders required, among other things, non-dissipation, disclosure of assets and accounts, delivery-up of documents and access to electronic records.

The alleged contempts concerned concealment of an engagement ring, the ownership and control of Sage International, dissipation of money from bank and PayPal accounts, non-disclosure of accounts and email addresses, and interference with access to a Dropbox account. The central issues were whether the breaches were proved to the criminal standard and, if so, the appropriate sanction.

1. Contempt established. The court applied the criminal standard. Each element had to be proved so that the court was sure. The evidence was assessed holistically, including documentary and oral evidence and inferences. Under [2011] EWHC 1024 (Comm), the necessary ingredients were knowledge of the order, conduct involving breach, and knowledge of the fact making the conduct a breach. Motive and a belief that the conduct was not wrongful were immaterial.
2. The engagement ring fell within the search order. Mr Sage falsely denied its existence, failed to give the required information and failed to disclose it by affidavit. The contempts were proved, although the ring belonged to Ms Thorpe rather than Mr Sage.
3. The apparent transfer of Sage International to Ms Thorpe was a sham. Mr Sage retained beneficial ownership and control, while Ms Thorpe held the company as his nominee. The company therefore remained an asset within the freezing order. Mr Sage was in contempt for failing to disclose it and for related false affidavits.
4. The payments from Mr Sage’s Guernsey bank account and UK PayPal account were made under his control and were not shown to have been made in the ordinary, lawful and proper course of business. The court inferred that he had instructed Ms Bromige to make them after service of the order. Dissipation of £25,000, $75,000 and a further £25,000 was proved.
5. Further contempts were proved concerning undisclosed bank accounts and email accounts, and temporary denial of access to the Dropbox account.
6. The breaches were deliberate, extensive, flagrant and aggravated by repeated lies, collusion and lack of remorse. Having regard to the principles in [2001] EWCA Civ 21 and the guidelines in [2015] EWHC 821 (Comm), the custody threshold was easily crossed. The court declined to suspend committal and committed Mr Sage to prison for 18 months.