Yuzu Hair And Beauty Ltd & Anor v Selvathiraviam

The claimants brought a committal application for contempt based on the defendant's failure to comply with the disclosure provisions of a freezing order made by Falk J. The court found that the freezing order had been validly served (personal service dispensed with), that it contained an appropriate penal notice and that the defendant had not provided the required asset information or sworn affidavit.

The judge applied the criminal standard of proof and found the breaches to be deliberate, flagrant and continuing. The court refused the defendant's last-minute application to adjourn on medical grounds because of a long pattern of evasive conduct and inadequate medical evidence. The committal application succeeded on liability, and sentencing was adjourned for determination at a subsequent hearing.

Background and parties: The company claimant Yuzu Hair and Beauty Ltd (restored to the register during these proceedings) and a director/shareholder were the claimants. The defendant, Mr Akilan Selvathiraviam, was subject to freezing relief obtained in the context of allegations of serious dishonest conduct while previously providing accounting services. The freezing order froze assets in excess of approximately £300,000 and contained disclosure obligations (including provision of details of worldwide assets within 48 hours and a sworn affidavit within five working days) and a penal notice. The order also required delivery up of passports.

Nature of the application: A committal application for contempt was issued alleging non-compliance with the disclosure provisions of the Falk J freezing order and non-delivery of the passport. The hearing considered (i) whether the defendant should be granted an adjournment on medical grounds, (ii) service and procedural compliance, (iii) whether, on the criminal standard, the defendant had been in contempt for failing to provide the requisite disclosure, and (iv) the legal effect of the company having been dissolved and subsequently restored.

Procedural posture: Multiple earlier hearings and adjournments are recorded. The defendant repeatedly failed to attend hearings or provided inadequate medical evidence when seeking adjournments. The passport was ultimately delivered up only when arrest was imminent. The company claimant was restored to the register during the proceedings.

Issues framed:

• whether to adjourn the committal hearing on the defendant's asserted medical grounds;
• whether service of the freezing order and the committal application was valid (and whether personal service should be dispensed with);
• whether the disclosure obligations were breached and, if so, whether breaches were proved beyond reasonable doubt and were deliberate;
• whether the dissolution of the company at the time of the original order affected the validity or enforceability of the freezing order;
• what sanction, if any, should be imposed.

Court's reasoning and conclusions: The court refused the defendant's adjournment application. The refusal rested on a detailed chronology evidencing a pattern of evasive conduct, repeated inadequate medical evidence despite express directions, and the judge's assessment that the latest claimed emergency was not credibly established. The court was satisfied that service in the form authorised by the freezing order (email, service on the defendant's wife and first class post) was effective and that personal service could be dispensed with for both the freezing order and the committal application. The penal notice requirement was met. On the merits, the claimant's affidavits established non-provision of the asset information and affidavit within the prescribed times. The court was satisfied beyond reasonable doubt that the defendant had deliberately, flagrantly and continuously failed to comply. The dissolution of the claimant company did not undermine the enforceability of the original order because the company was subsequently restored and, in any event, section 1032 of the Companies Act 2006 operates to treat the company as continuing in existence for the period in question. The court therefore found contempt established. The sentencing phase was adjourned to allow consideration of an appropriate sanction, with the judge warning the defendant of the real prospect of immediate imprisonment if he failed to attend the next hearing.

The court found the defendant guilty of contempt of court for deliberate, flagrant and continuing breach of the disclosure provisions of the freezing order. The defendant's application to adjourn on medical grounds was refused because of repeated inadequate medical evidence and an established pattern of evasive conduct. The committal (liability) element of the application succeeded; the court adjourned the sentencing phase to permit consideration of penalty (the judge warned that a substantial prison sentence was a real prospect). The court also held that the prior dissolution of the claimant company did not defeat enforcement, the effect of restoration being addressed by Companies Act 2006 section 1032 and the order remaining effective until set aside.