Schwartz v VGV (UK) Ltd & Ors

In contempt proceedings, the applicant must prove each alleged breach to the criminal standard. A failure to comply with an order may constitute a breach without amounting to contempt where compliance was genuinely impossible and the respondent had no choice in the matter. Court orders must nevertheless be obeyed even where compliance is burdensome, inconvenient or expensive.

The court must interpret an order in context. An obvious typographical mistake may be corrected or overlooked where its intended meaning would have been clear to a reasonable recipient, but genuine ambiguity will not support punishment for contempt. Inferences from absent witnesses require particular caution in contempt proceedings because the criminal standard applies. A person is not liable for a company’s contempt merely because the relationship between them is opaque; personal de facto control must be proved to that standard.

The claimant sought committal orders against VGV (UK) Ltd, trustee of the Consov Trust, and Mr Vivanco, its protector, for alleged breaches of January and February 2020 orders made in support of related British Virgin Islands proceedings.

The alleged breaches concerned failures to provide asset information, affidavits, electronic copies of trust documents and inspection dates. Mr Vivanco also disputed that compliance with some requirements was possible and denied exercising de facto control over VGV UK. The court determined which breaches were proved, whether impossibility or ambiguity prevented contempt, and whether Mr Vivanco was personally responsible for VGV UK’s defaults.

1. Contempt standard. The claimant bore the burden of proving each alleged contempt beyond reasonable doubt. The relevant mental element required an intentional act or omission and knowledge of the facts making it a breach. Where compliance was truly impossible, the respondent lacked the necessary choice and the failure, though potentially a breach, was not contempt. Impossibility did not include mere inconvenience, expense or difficulty.
2. Construction of the February Order. The reference to supplying inspection dates to the defendants’ solicitors was an obvious typographical error. In context, the order plainly required dates to be supplied to the claimant’s solicitors. The error caused no real confusion and did not prevent enforcement. The court also interpreted “electronic copy” as requiring digital copies, having regard to the known challenge to the authenticity of the documents and the earlier requests for metadata.
3. Witness evidence and inferences. The guidance in Wisniewski v Central Manchester HA [1998] PIQR 324 could not be applied without qualification in contempt proceedings. It was necessary to ask Mr Vivanco specifically about particular absent witnesses before drawing adverse inferences, and the court declined to draw such inferences.
4. Applications to the facts. VGV UK was in contempt for failing to provide the required witness statement and current valuation of trust real estate, and for failing entirely to comply with the February Order’s information and document requirements. The alleged omissions concerning the TV Cable shares were not proved beyond reasonable doubt. Mr Vivanco was in contempt for his initial failure to provide the information required by paragraph 4 of the February Order; that contempt was purged by later witness statements. He was also in contempt for failing to provide an electronic copy of the second Letter of Wishes. The alleged breaches concerning the Deed of Amendment, inspection dates, and VGV UK’s defaults were not proved against him.
5. Personal responsibility. Despite substantial evidence of connections between Mr Vivanco, his law firm and VGV, the court was not satisfied beyond reasonable doubt that he exercised de facto control over VGV UK when the orders were made. Breaches by VGV UK therefore did not establish personal contempt by Mr Vivanco.
6. Sentence was adjourned to a further hearing.

Not an appeal. The judgment determined an application to commit for contempt arising from orders made in the same proceedings.