HM Revenue and Customs v Malde

A court may order further disclosure ancillary to a freezing injunction where the disclosure has practical utility in policing the injunction and is just and convenient to ensure its effectiveness. The applicant must generally show grounds to believe that there is a real risk of continuing breach or that further assets fall within the order.

The court should consider the strength of the grounds, delay, proportionality and the purpose for which disclosure is sought. Disclosure cannot be ordered merely to investigate past breaches or obtain evidence for contempt proceedings. The privilege against self-incrimination does not ordinarily protect pre-existing documents. It may apply only where the compulsion to produce them involves the kind of oppressive conduct engaging Article 3 of the Convention.

HMRC sought an order under CPR 25.1(1)(g) requiring the defendant to produce bank statements for 23 accounts from 17 July 2015 onwards. The statements were sought in support of a worldwide freezing order made in 2015, which preserved assets pending complex tax proceedings in the First-tier Tribunal.

HMRC relied principally on unexplained changes in balances, the defendant’s admitted earlier breaches of the freezing order, and his explanations for not producing statements for an Emirates account. The defendant opposed the application on grounds including delay, disproportionality, abuse of process and privilege against self-incrimination.

1. Applicable jurisdiction. The court has jurisdiction under CPR 25.1(1)(g) to order disclosure ancillary to a freezing injunction where the order is necessary, or just and convenient, to ensure that the injunction is effective. The jurisdiction is protective and is directed to policing the injunction, rather than investigating past breaches.
2. Threshold and discretion. Where further disclosure is sought because of suspected continuing breach, there must generally be grounds to believe that there is a real risk that the injunction may be being broken. The court must assess the strength of those grounds and the competing considerations, including delay, utility and proportionality. A substantial delay makes the demonstrated need for disclosure more compelling.
3. Application. The prior admitted breaches did not, without more, establish a real risk of continuing breaches. The disclosed Pictet statements adequately explained the reduction in investments, and HMRC’s delay and withdrawn contempt allegations weighed strongly against further disclosure for that account. Disclosure concerning 23 accounts over five and a half years would be disproportionate.
4. The unexplained increase in the Emirates account, together with the defendant’s unsatisfactory explanation and failure to obtain statements, gave sufficient utility for statements from 17 July 2015 to date to be disclosed. A more modest unexplained increase justified equivalent disclosure for the Canada Life account, although the case was weaker because HMRC had not previously sought an explanation.
5. Privilege. The Court of Appeal authorities established that the privilege against self-incrimination does not extend to pre-existing documents having an existence independent of the order compelling production. Volaw Trust and Corporate Services Ltd v The Office of the Comptroller of Taxes [2019] UKPC 29 did not justify departure from those binding authorities. The defendant was not exposed to the type of oppressive compulsion engaging Article 3, and Article 6 safeguards could be considered if later contempt proceedings were brought.
6. The defendant was ordered to disclose bank statements for the Emirates and Canada Life accounts for the period from 17 July 2015 to the date of the order. Disclosure was refused in relation to the other accounts.

First-instance application in the High Court (Chancery Division). The judgment does not state any appeal from the order.