XL Insurance Company SE v Ipors Underwriting Ltd & Ors

In committal proceedings for breach of freezing and disclosure orders, the court may proceed in the defendant’s absence only in exceptional circumstances. The decision requires a fact-sensitive assessment of service, notice, waiver, the likely value of an adjournment, prejudice, and the overriding objective.

Contempt requires proof, to the criminal standard, that the defendant knew the order, breached it, and knew the facts constituting the breach. Knowledge that the conduct was legally contemptuous is unnecessary. Persistent and deliberate dissipation and non-disclosure ordinarily warrant immediate custody, although sentencing remains fact-specific and must reflect culpability, harm and totality.

XL sought the committal of Mr Paul Alan Corcoran for contempt arising from alleged breaches of freezing, proprietary and disclosure orders made in XL’s underlying claim for the return of approximately £10 million. The alleged breaches involved expenditure, dissipation of assets and failures to provide asset and proprietary-fund disclosure.

Mr Corcoran was absent and unrepresented at the hearing and sought an adjournment. The court therefore had to decide whether to proceed in his absence, whether the alleged contempts were proved, and the appropriate sentence.

Application granted. Mr Corcoran was found guilty of contempt of court and sentenced to 24 months’ imprisonment.

1. Proceeding in absence. Committal proceedings seeking imprisonment are criminal proceedings for the purposes of Article 6. The court may proceed without the defendant only in exceptional circumstances. Applying the checklist drawn from Sanchez v Oboz and ICBC Standard Bank Plc v Erdenet Mining Corp LLC, the judge found that service and notice were sufficient, the defendant had waived attendance, an adjournment was unlikely to secure attendance or representation, and delay would prejudice XL. The overriding objective supported proceeding.
2. Funding representation. The three-stage test in The Danish Customs and Tax Administration v Barac & Ors and GFH Capital Limited v Haigh required an arguable case against the proprietary claim, proof that no other assets were available, and consideration of the balance of justice. Mr Corcoran’s failure to provide disclosure meant that he could not satisfy the relevant requirements.
3. Contempt. The requirements identified in Masri v Khoury were knowledge of the order, conduct amounting to breach, and knowledge of the facts making the conduct a breach. Each element had to be proved to the criminal standard. Following Varma v Atkinson & Another, knowledge that the conduct was legally in breach was unnecessary. The judge found that the disclosure failures and expenditure breaches were proved.
4. Sentence. The breaches were serious, persistent and deliberate. Applying the fact-specific approach to culpability and harm, and the principles concerning freezing-order breaches in Templeton Insurance v Thomas, JSC BTA Bank v Solodchenko & others (No.2) and JSC Mezhdunarodniy Promyshelenniy Bank & Another v Sergei Pugachev, immediate custody was appropriate. Concurrent terms were imposed, with an overall sentence of 24 months. A warrant was issued for arrest. On apprehension, the defendant could apply under CPR 81.10 to purge the contempt and seek reduction of sentence.