Northamber Plc v Genee World Ltd & Ors

For contempt arising from breach of an order against a company, the company’s director is liable only if aware of the order and either aids or abets the breach or wilfully fails to take reasonable steps to secure compliance. In a sole-director company, where the director knew of the order, failure to ensure compliance will ordinarily be wilful because there is no other officer on whom the director can reasonably rely.

The company’s liability is quasi-strict: intention to breach the order or to undermine the administration of justice need not be proved. A committal application is confined to the grounds and evidence identified in the application notice. Ambiguous orders cannot found committal. The court found two contempts concerning non-production of accounting data and failure to provide an independently examined and verified audited account, and imposed a fine of £25,000.

Northamber sought to commit Mr Ranjit Singh for contempt arising from breaches by Genee World Ltd of injunctions made during Northamber’s contractual proceedings concerning an exclusivity agreement. Mr Singh was Genee World’s sole director and had represented the company at one of the hearings. The orders required Genee World to provide accounting data, an audited account of sales, facilities for an audit, and certain enquiries and supplies to be passed to Northamber.

Genee World entered creditors’ voluntary liquidation during the relevant period. The central issues were whether Genee World had breached the orders, whether Mr Singh was personally liable as director, whether the order was sufficiently clear, and whether the alleged contempts had been proved beyond reasonable doubt.

1. Applicable principles. Under CPR Part 81, a judgment or order may be enforced by committal where a required act is not done or a prohibited act is done. A company director may be committed for the company’s breach. The company’s liability is quasi-strict, but a director must know the order and either aid or abet the breach or wilfully fail to take reasonable steps to secure compliance. Wilful conduct does not require an intention to breach the order. In a sole-director company, the director cannot reasonably rely on another officer to ensure compliance.
2. The allegations had to be proved beyond reasonable doubt, and the court was confined to the grounds particularised in the committal application. Ambiguity in the order prevented committal on the basis of one possible construction. The court therefore rejected allegations concerning supplies by G-Tech, audit access, and enquiries because the pleaded breaches were not established to the required standard or did not concern Genee World’s acts.
3. Mr Singh admitted that Genee World failed to provide the Sage accounting data by the deadline in the order of Deputy Judge Charles Bourne QC. The failure continued until Genee World entered liquidation. Mr Singh deliberately withheld the data while retaining it for the phoenix operation through G-Tech. His personal responsibility was established beyond reasonable doubt.
4. The order requiring an audited account of Genee World’s sales required an account independently examined and verified by a third party. A spreadsheet extracted from Sage, without independent examination and verification against underlying records such as bank statements and invoices, was insufficient. Genee World therefore breached the order, and Mr Singh’s failure to ensure compliance was wilful.
5. The court found two contempts. The breaches were serious, particularly the deliberate withholding of accounting data, but were short-lived and no longer continuing. Applying the sentencing principles considered in the authorities, imprisonment was narrowly avoided. Mr Singh was fined £25,000 for the accounting-data breach, with no separate penalty for the audited-account breach, payable within 56 days.

First-instance committal application. The judgment records earlier injunction and variation orders made by Garnham J and Deputy Judge Charles Bourne QC, but no appeal.