Atkinson & Anor v Varma & Ors

The court may retain a passport to support the effective enforcement of court orders, but the power restricts liberty and must be exercised cautiously. The applicant must show a good cause of action, probable grounds for believing that the respondent is about to leave the jurisdiction, and material prejudice to the proceedings if the respondent does so. The restraint should be short-term and proportionate. Where serious non-compliance with disclosure obligations and alleged contempt make continued retention necessary, the court should address the resulting restriction by ensuring that the contempt hearing is listed expeditiously.

Joint liquidators applied for the return of the first defendant’s passport. It had been retained under orders connected with a freezing injunction, disclosure obligations, a private examination under section 236 of the Insolvency Act 1986, and subsequent cross-examination. The defendant argued that he had complied with the relevant orders and needed to travel for medical treatment, to raise funds, and to obtain evidence.

By the hearing, the liquidators had issued an application for committal alleging numerous breaches of court orders and false statements. The central issue was whether the passport should now be returned or retained pending the contempt proceedings.

1. Application refused. The passport was not returned. The court instead ordered that the committal hearing be expedited.
2. The power to impound a passport in aid of court procedures exists, but it restricts liberty and must be exercised with caution. The restraint should ordinarily be short-term. Applying the guidance in Young v Young [2012] Fam 198, the applicant had to establish a good cause of action, probable cause to believe that the respondent was about to leave the jurisdiction, and material prejudice to the prosecution of the proceedings if he did so.
3. Those requirements were satisfied. There had been serious and significant deficiencies in the defendant’s disclosure, substantial allegations of fraud, indications of asset dissipation, and an important public interest in enforcing court orders. Contempt proceedings required the defendant’s presence in the jurisdiction and were an important means of protecting the effectiveness of freezing orders.
4. The defendant’s medical evidence was not sufficiently current or persuasive to justify release of the passport. His claimed need to travel to raise funds or obtain evidence did not outweigh the enforcement considerations, particularly as he had legal representation through legal aid and could raise difficulties concerning evidence in the committal proceedings.
5. The court was concerned about the continuing length of the restraint. Expedition of the committal hearing was therefore the appropriate balancing measure, with further acceleration possible if the evidence timetable were brought forward.

The judgment was given at first instance on an interim application. It records earlier interlocutory orders made by Birss J, ICC Judge Jones, ICC Judge Mullen, Mr Johnson QC and Mr Hochhauser QC, but no appellate decision is stated.