Business Mortgage Finance 4 Plc & Ors v Rizwan Hussain

A court may retrospectively dispense with personal service of a prohibitory injunction in committal proceedings where the alleged contemnor had actual knowledge of the order and its terms before the alleged breaches. Civil Procedure Rules 1998 Part 81 preserves that established power and does not permit a person knowingly to disobey an injunction during any interval before formal service.

A committal application need give a brief, clear statement of the substance of each alleged breach. It need not be a fully particularised pleading. On an appeal against findings based on circumstantial evidence, the appellate court reviews for a material legal, factual or logical error; it does not repeat the trial judge’s cumulative assessment of the evidence.

The respondent issuers obtained a wide prohibitory injunction against Mr Hussain, restraining him and others from purporting to act in relation to commercial-mortgage securitisation structures. They later applied to commit him for contempt, alleging that he had caused or procured documents, communications and proceedings in others’ names which breached that injunction.

Miles J refused recusal and other interlocutory applications, found substantial counts of contempt proved beyond reasonable doubt, and imposed an immediate 24-month sentence. His relevant judgments were [2022] EWHC 302 (Ch), [2022] EWHC 449 (Ch) and [2022] EWHC 661 (Ch).

Mr Hussain sought permission to challenge the interlocutory rulings and appealed the liability findings and sentence. The central issues included retrospective dispensation with personal service, the adequacy of the committal particulars, the appellate treatment of circumstantial findings, and the proper sanction for repeated deliberate contempts.

1. The application for permission to appeal was refused, and the liability and sentencing appeals were dismissed. There was no real prospect of success in the challenges to the discontinuance ruling, recusal, or refusal to admit very late evidence.

2. The apparent-bias ground failed under Porter v Magill [2001] UKHL 67. Earlier adverse findings and robust but apt language about legally baseless attempts to take control of the structures would not cause the fair-minded and informed observer to perceive a real possibility of bias.

3. The Court held that personal service is ordinarily a safeguard of due process before committal. It is not absolute. Civil Procedure Rules 1998 Part 81 did not remove the established power to dispense with personal service where the respondent had actual knowledge of a prohibitory injunction. That power may be exercised retrospectively, including at the committal hearing. The judge was entitled to find beyond reasonable doubt that Mr Hussain knew the injunction and its terms before the alleged breaches.

4. The particulars complied with CPR r 81.4(2)(h). They identified the injunction provisions, the documents relied on, and the allegation that Mr Hussain was responsible for them. A committal application must leave the defendant in no doubt about the substance of the charge, but it need not plead every item of supporting material.

5. The liability findings disclosed no reviewable error. Circumstantial evidence must be assessed cumulatively and each contempt proved beyond reasonable doubt. An appellate court cannot undertake a fresh reconstruction of the factual case without identifying a material error in the judge’s reasoning, logic, or understanding of the evidence. None was shown.

6. Arnold LJ, with whom Nugee LJ agreed and Stuart-Smith LJ agreed subject to a minor gloss, upheld the 24-month immediate sentence. The breaches were deliberate, planned, repeated and concealed; they caused serious prejudice and interfered with the administration of justice. The sentence was wholly punitive for past breaches of a prohibitory injunction, so no coercive component had to be identified. There was no error in the issuers inviting the maximum sentence, and no basis for appellate intervention.

• Court of Appeal (Civil Division): permission to appeal interlocutory rulings was refused; the appeals against contempt liability and the 24-month sentence were dismissed in [2022] EWCA Civ 1264.
• High Court, Financial List (Chancery Division): Miles J refused recusal in [2022] EWHC 302 (Ch), found contempt proved in [2022] EWHC 449 (Ch), and imposed an immediate 24-month sentence in [2022] EWHC 661 (Ch).