Olympic Council of Asia v Novans Jets LLP & Ors

The committal jurisdiction over a company’s directors or officers was not removed by the October 2020 version of Civil Procedure Rules 1998. The preserved rule applies to an LLP and is interpreted functionally. It reaches the individual who has the responsibilities and primary control of a corporate respondent, including a de facto officer, but not merely a shadow director or other outsider. A standard disclosure order made for the court’s adjudicative process is not ordinarily coercive contempt machinery. A clearly coercive order is required. A defective penal notice may be waived only where the court is satisfied that no injustice has resulted. Non-party criminal contempt requires knowing assistance through positive acts; omission alone is insufficient. Committal remains an exceptional remedy where other mechanisms can achieve the order’s purpose.

Olympic Council of Asia v Novans Jets LLP & Ors concerned an application by the claimant to commit Novans Investment Ltd and July Gringuz for contempt. The application arose from orders made after the claimant obtained a substantial judgment against Novans Jets LLP. The orders required disclosure concerning the aircraft, its chartering, profits, ownership and assets.

The issues included whether the post-October 2020 version of Civil Procedure Rules 1998 preserved the rule permitting committal proceedings against directors or officers for a corporate respondent’s breach; whether that rule applied to an LLP and to a de facto officer; whether the relevant penal notices were adequate or could be waived; whether Mr Gringuz could be liable as a non-party for knowingly assisting breaches; and whether the application against Investments could properly be determined on the disputed evidence.

1. Preservation of the corporate-liability rule. The omission of the former CPR 81.4(3) from the October 2020 version did not abolish the substantive Body Corporate Provision. CPR 81.1(2), CPR 81.1(3), the definition of penal notice in CPR 81.2 and the related sequestration provision showed a sufficient intention to preserve it.
2. LLPs and functional officers. An LLP is a body corporate. The expression “director or other officer” is functional rather than purely technical. It includes a de facto individual who has the responsibilities and primary control of the corporate respondent. Mr Gringuz was beyond reasonable doubt the functional equivalent of a director or officer of Jets. The rule does not, however, convert a shadow director or other outsider into an insider.
3. Nature of the disclosure order. A standard disclosure order made to assist the court’s adjudicative function is ordinarily enforced through case-management sanctions and adverse inferences. It is not automatically capable of supporting committal merely because a penal notice is sought retrospectively. A separate order, clearly conceived and badged as coercive, is required. Disclosure in aid of freezing, tracing or enforcement may engage committal because the court cannot otherwise remedy the loss of information.
4. Penal notices. The applicable waiver test was whether the court was satisfied that no injustice had been caused by the defect. The April and May Orders could not be waived for the Body Corporate Provision because the surrounding circumstances reasonably suggested that the court had excluded Mr Gringuz from that route. A technical defect affecting the Seaward jurisdiction caused no prejudice and was waived.
5. Non-party contempt and evidence. The Seaward jurisdiction requires a non-party, with knowledge of the injunction or order, knowingly to assist another in acts constituting a breach. Positive assistance is required; merely failing to cause a corporate respondent to comply is insufficient. In civil contempt proceedings an appropriate adverse inference may be drawn from silence, but the burden remains on the applicant and silence alone cannot prove guilt. The suggested application of criminal right-to-silence principles was not determinative.
6. Applications. No committal finding was made against Mr Gringuz. The evidence did not establish the necessary positive assistance under the Seaward jurisdiction. The court would not have treated the ordinary profit-share disclosure order as requiring committal where the claim could be assessed by other means. The application against Investments was not determined because the pleaded case was inadequate, depended on a disputed transfer of the aircraft, and risked conflicting with the liquidators’ and claimant’s enforcement interests. No committal order was made.

After circulation of the draft judgment, Mr Gringuz supplied invoices identifying the account into which charter hire was paid. The relevant factual observations were to be read subject to that post-script.

This was a first-instance Commercial Court judgment. It records interlocutory orders made by Moulder J and refusal of permission to appeal by Carr LJ, but no appellate history of this judgment.