Absolute Living Developments Ltd v DS7 Ltd & Ors

A committal application may be struck out as an abuse where pursuing a merely technical contempt would be pointless and disproportionate. The public interest in obedience to personally served orders bearing penal notices nevertheless makes that conclusion difficult while a material breach remains unremedied.

Contempt requires proof beyond reasonable doubt that the respondent knew of the order and deliberately performed the conduct constituting the breach. An intention or appreciation that the conduct breached the order is unnecessary. Material failures to provide information required by a freezing order are serious. Where compliance has ultimately occurred, the breaches are not contumelious and punishment need not secure future compliance, a substantial fine may be appropriate instead of imprisonment.

The claimant property development company, acting by its liquidator, obtained an inter partes freezing order against the second defendant, Mr Camilleri. The order required him to disclose assets and financial information and to deliver specified documents. It bore a penal notice and was personally served.

The claimant applied to commit Mr Camilleri for seven alleged breaches. Breaches 3 and 6 were adjourned because their determination could overlap with issues for trial. Breach 5 was confined to past non-compliance after the relevant obligation was prospectively replaced by a fresh unless order. Mr Camilleri admitted the facts underlying Breaches 1, 2, 4, 5 and 7, but argued that some were too trivial to justify committal and that none warranted material punishment.

The court had to determine whether Breaches 1, 2 and 4 should be struck out as abuses of process and what punishment should follow for the breaches that remained.

1. Disposition. Breach 1 was struck out as an abuse of process. Breaches 2, 4, 5 and 7 were established and justified committal proceedings. Breaches 3 and 6 were adjourned. Mr Camilleri was fined £100,000 for the four established contempts, payable by 4 pm on 31 July 2018.

2. An order supporting committal must ordinarily bear a penal notice, have been personally served and have been served before the time fixed for compliance. It must also be clear and unambiguous. The breach must be proved beyond reasonable doubt. Deliberateness concerns the respondent's conduct: knowledge of the order and intentional conduct amounting to breach suffice, even without an intention or appreciation that the order was being disobeyed.

3. Under the Civil Procedure Rules 1998, a committal application may be struck out as an abuse of process. Disproportionate pursuit of a purely technical contempt may be abusive, particularly where the respondent has complied belatedly, regularised the position and apologised. The court must nevertheless give substantial weight to the public interest in obedience to court orders. Relevant considerations include deliberateness, the importance of the order and the number of breaches.

4. Breach 1 concerned a tight deadline followed by a prompt request for an extension, the claimant's consent and compliance within the extended period. Pursuing that allegation was abusive. Breaches 2 and 4 involved material failures to comply fully with the freezing order's information requirements and could not plausibly be characterised as abusive. Breaches 5 and 7 were likewise sufficiently serious to justify the application.

5. The contempt jurisdiction serves punishment and coercion. Since the freezing-order obligations relating to Breaches 2, 4 and 7 had ultimately been performed, and the obligation underlying Breach 5 had been prospectively replaced, the sentence was directed only to punishment for past breaches.

6. Strict compliance with a freezing order is important. The breaches were material and more than technical, but they did not amount to wholesale or contumelious defiance. There was no continuing breach, no prejudice was properly inferred, and there was some evidence concerning health. Imprisonment, being a last resort, was therefore unnecessary; a substantial fine was proportionate.

7. When sentencing for multiple contempts, the court may consider the breaches collectively. The principle of totality requires a total sentence which reflects all the offending behaviour and remains just and proportionate.

• High Court, present committal application: Breach 1 was struck out; Breaches 2, 4, 5 and 7 were established; Breaches 3 and 6 were adjourned; and a £100,000 fine was imposed.
• High Court, 9 October 2017: Marcus Smith J made the inter partes freezing order whose alleged breaches formed the subject of the application.
• High Court, 20 September 2017: Morgan J granted an ex parte proprietary and/or freezing order.