Mohamed Saleem Khawaja v Stela Stefanova & Ors

On an appeal against a committal sentence, the appellate court should intervene only for an error of principle, a material omission or inclusion, or a sentence plainly outside the reasonable range. Seriousness depends on whether non-compliance was deliberate rather than pardonable and on the resulting prejudice or risk of prejudice. Disclosure failures may be prejudicial because delay impedes litigation, increases suspicion and costs, and may prevent protective steps. A sentencing judge may consider the wider litigation context insofar as it informs seriousness and harm, but must sentence only the proven contempts. Related contempts may be grouped and sentences made consecutive where the overall sentence remains just and proportionate. Comparisons with other cases are secondary to assessing the conduct in the instant case.

The appeal concerned the sentence imposed on Ms Stefanova after the High Court found 30 contempts consisting of failures to provide information and documents required by County Court and High Court orders. The underlying County Court proceedings concerned an oral joint venture agreement and the appellant’s alleged obligation to give Mr Khawaja an interest in Dermamed Solutions Ltd. Subsequent High Court proceedings involved an unfair prejudice petition and freezing injunctions.

Richard Smith J imposed eight months’ imprisonment, comprising two consecutive four-month periods, suspended for 18 months on conditions including compliance with outstanding disclosure obligations: [2023] EWHC 1224 (Ch). The appellant challenged the length of sentence, reliance on wider misconduct and the consecutive structure. The central issue was whether the overall sentence was excessive or imposed on an erroneous basis.

Appeal dismissed. The Court of Appeal upheld the eight-month custodial sentence, suspended for 18 months.

1. On appellate review, the court is reluctant to interfere with a committal sentence. Intervention is generally justified only for an error of principle, reliance on immaterial factors or failure to consider material factors, or a decision plainly outside the range reasonably open to the judge. That approach was summarised in Financial Conduct Authority v McKendrick at [2019] EWCA Civ 524 and applied to the challenge.
2. The seriousness of the contempts depended on whether the failures were pardonable lapses despite best efforts or deliberate withholding of information, and on the prejudice or risk of prejudice to Mr Khawaja. Richard Smith J was entitled to find deliberate breaches, thin and uncredible excuses, and real prejudice. Non-disclosure may itself impede progress, increase suspicion and expense, and prevent protective steps.
3. The judge was entitled to consider the wider conduct and context of the litigation when assessing the seriousness and harm arising from the proven contempts. He did not thereby sentence Ms Stefanova for separate misconduct.
4. Comparisons with other contempt cases are seldom useful. The sentencing task is to assess the seriousness of the conduct in its own context. The cases relied on by the appellant, including JSC BTA Bank v Solodchenko (No 2) and Otkritie International Investment Management Ltd v Gersamia, involved worse conduct but did not provide a useful sentencing template. The Court also referred to Thursfield v Thursfield.
5. Under the totality principle, the contempts could sensibly be grouped by the orders and proceedings concerned. Consecutive sentences were permissible because the two groups involved distinct orders, courts and purposes, provided the aggregate sentence remained just, proportionate and within the reasonable range. The eight-month sentence was not manifestly excessive, applying the approach described in Business Mortgage Finance 4 plc v Hussain at [2022] EWCA Civ 1264.
6. Snowden LJ added that a structured approach is preferable when sentencing multiple contempts: assess each offence or group, decide between concurrent and consecutive sentences, test the overall result for justice and proportionality, and explain the structure. The judge’s reasoning could have been clearer, but the sentence remained valid and proportionate.

1. Court of Appeal (Civil Division): Appeal against sentence dismissed in [2023] EWCA Civ 1201.
2. High Court of Justice, Business and Property Courts, Insolvency and Companies List (ChD): Richard Smith J found 30 contempts and imposed eight months’ imprisonment, suspended for 18 months, in [2023] EWHC 1224 (Ch).