Business Mortgage Finance 4 Plc & Ors v Rizwan Hussain

The court may dispense retrospectively with personal service of an injunction when determining a contempt application, where the defendant had actual knowledge of its terms before the alleged breaches. The revised contempt rules preserve that power. Contempt particulars must leave the defendant in no doubt about the substance of the alleged breaches, but need not reproduce all supporting evidence.

Circumstantial evidence must be assessed cumulatively. An appeal against factual findings requires an identifiable error rather than a fresh assessment of the evidence. A sentence for past breaches of a prohibitory injunction may be wholly punitive. Identifying separate punitive and coercive elements is good practice where both purposes are served, rather than a mandatory requirement. A committal applicant may suggest a particular penalty. The maximum custodial term is available for extremely serious contempts without being reserved for the worst imaginable case.

The four claimant companies issued notes secured on portfolios of commercial mortgages. Rizwan Hussain and associated persons had repeatedly purported to assume offices within the securitisation structures and interfere with the companies and their assets. Following earlier successful proceedings, Miles J granted declarations and a wide-ranging prohibitory injunction in [2021] EWHC 171 (Ch).

The companies subsequently applied to commit Hussain for breaches committed through communications and documents issued in other persons’ names. Hussain neither attended the substantive hearing nor served admissible evidence in response. Miles J found several contempts proved in [2022] EWHC 449 (Ch) and imposed an immediate sentence of 24 months’ imprisonment in [2022] EWHC 661 (Ch). Hussain remained at large.

Hussain sought permission to challenge rulings concerning purported discontinuance, recusal and late evidence, including the recusal decision at [2022] EWHC 302 (Ch). He also appealed the contempt findings and sentence. The principal issues concerned retrospective dispensation with personal service, adequate particularisation, circumstantial proof and the proper approach to sanction.

Permission to appeal the interlocutory rulings was refused, and the liability and sentencing appeals were dismissed unanimously.

1. The purported discontinuances depended on share forfeitures and transfers undertaken by persons without authority. Articles protecting purchasers against irregularities in forfeiture proceedings did not authorise strangers to confer title. Earlier adverse decisions and robust, justified descriptions of the defendant’s conduct created no real possibility of apparent bias (paras [26]–[40]).
2. Refusing the late witness statement fell within the judge’s case management discretion. His reasoning also satisfied the three stages in Denton v TH White Ltd: the breach was serious and significant, no explanation was offered, and admission would prejudice the claimants and disrupt the trial. Committal proceedings remained subject to compliance with court orders despite their consequences for liberty (paras [44]–[52]).
3. The revised contempt rules permitted retrospective dispensation with personal service, including at the hearing of the contempt application. Rules 81.4(2)(c) and (d) prescribed information requirements and assumed an existing dispensing power. They did not require its exercise before either breach or commencement of proceedings. Personal service remained the general safeguard, but actual knowledge could justify dispensation. The precise source of the power was left unresolved. The finding that Hussain knew the injunction’s terms was properly supported (paras [57]–[84]).
4. The required brief summary of alleged contempt had to identify its substance, rather than provide a fully particularised pleading or all supporting material. Identifying the relevant injunction provisions and the documents for which Hussain was allegedly responsible sufficiently informed him of the charges (paras [86]–[94]).
5. Each contempt required proof beyond reasonable doubt. Circumstantial evidence had to be considered cumulatively, excluding realistic innocent explanations. The ordinary limits on factual appeals applied despite the criminal standard and absence of oral evidence. No substantial error of reasoning or factual understanding was shown. Hussain’s silence could strengthen an already sufficient case calling for an explanation (paras [96]–[113]).
6. A sentence for past breaches of a prohibitory injunction could be wholly punitive. Specifying punitive and coercive elements was good practice where both purposes were served, but was not mandatory. The absence of a specified coercive element did not prevent a later remission application based on responsibility, remorse and apology (paras [127]–[130]).
7. A committal applicant had a legitimate private interest and could suggest the maximum penalty. Sentencing intervention required an error of principle, a material error concerning relevant factors, or a sentence outside the reasonable range. The maximum term was not confined to the worst imaginable contempt. The serious, repeated and concealed breaches, wider harm and absence of mitigation justified immediate imprisonment. The arguments concerning Covid-19 and suspension disclosed no error (paras [124]–[126]; [131]–[132]).

• Court of Appeal (Civil Division): [2022] EWCA Civ 1264 . Refused permission to appeal the interlocutory rulings and dismissed the appeals against liability and sentence.
• High Court, Financial List (Chancery Division): Miles J refused recusal in [2022] EWHC 302 (Ch). He also rejected purported notices of discontinuance and refused late witness evidence in rulings without neutral citations. He found several contempts proved in [2022] EWHC 449 (Ch) and imposed immediate imprisonment for 24 months in [2022] EWHC 661 (Ch) .
• High Court, Financial List (Chancery Division): Miles J granted declarations and a prohibitory injunction following [2021] EWHC 171 (Ch) . The injunction was ordered on 8 February 2021.