Yuzu Hair And Beauty Ltd & Anor v Thiraviam

A flagrant and prolonged failure to comply with an asset-disclosure obligation in a freezing order may constitute contempt at the upper end of seriousness and justify imprisonment. The disclosure obligation is an essential part of the freezing-order mechanism because it enables the order to be policed. A custodial sentence may be suspended to provide an opportunity to comply and seek to purge the contempt, but compliance does not necessarily avoid the sentence. The court may modify the form of required verification where procedural circumstances make an affidavit unnecessarily difficult, including by permitting a statement of truth.

The claimants brought a committal application against the defendant for failing to comply with an order requiring disclosure of assets made as part of a freezing order. The court had previously found the defendant guilty of contempt and adjourned sentence.

The defendant did not attend the sentencing hearing. He made last-minute applications for adjournments based on his wife’s alleged COVID-19 symptoms. The court rejected those applications, finding the asserted basis lacking credibility, and proceeded to determine the appropriate sanction.

1. Adjournment applications. The applications were refused. The alleged basis for self-isolation lacked credibility, no adequate new material had been provided, and the applications formed part of a continuing pattern of last-minute attempts to avoid the proceedings. A video hearing was not appropriate for the final disposition of this serious committal matter.
2. Seriousness of the contempt. The defendant had failed, within the required periods or at all, to disclose worldwide assets exceeding £1,000 and to provide the required verified account. The disclosure obligation was an essential part of the freezing-order mechanism because the court required the information to police the order. Its importance had been emphasised in JSC BTA Bank v Solodchenko (No 2) [2012] 1 WLR 350 at [55]. The prolonged and apparently complete disregard of the order, without explanation, apology, assurance or attempted compliance, made the breach contumacious, flagrant and very serious.
3. Sanction. Imprisonment was appropriate. The court imposed 18 months’ imprisonment, being below the two-year maximum available, and suspended execution for 21 days. The suspension was intended to give the defendant an opportunity to comply and to seek to purge his contempt. It was not conditional upon compliance, and compliance would not necessarily eliminate the sentence, although it could support an application for its removal or reduction.
4. Form of compliance. The court varied the earlier order so that, instead of an affidavit, the defendant could provide a statement of truth in accordance with Practice Direction 22, paragraph 2.1. Sequestration and a fine would not adequately reflect the seriousness of the conduct.