Tonstate Group Limited (In Liquidation) & Anor v Edward Wojakovski

In contempt proceedings, the applicant bears the burden of proving every essential element to the criminal standard, so that the court is sure. Circumstantial evidence may establish contempt, but the court must consider whether any reasonable alternative explanation remains.

A defendant’s right to remain silent does not necessarily prevent adverse inferences, although their use is fact-sensitive and silence alone cannot prove contempt. Disclosure obligations concerning assets are construed by reference to the order’s wording and the relevant date. A payment made to a third party is not an asset of the defendant unless a retained interest or control is proved to the criminal standard.

The claimants sought the committal of the defendant for alleged breaches of four court orders and for knowingly making false statements. The allegations concerned, respectively, use of rental income subject to a proprietary injunction, disclosure of interests under his parents’ will, disclosure of a £50,000 payment to Intelligent Legal Solutions Limited, related payments of legal expenses, alleged false statements about those payments, and failure to disclose a bank statement.

The defendant admitted the breaches concerning the rental income. The remaining allegations were disputed. The central issues were whether the alleged breaches and false statements had been proved to the criminal standard, and what inferences could properly be drawn from the defendant’s silence and the absence of evidence from other witnesses.

1. Allegation 1. The defendant’s admitted breaches of the January 2020 Order were established. He caused £70,000 of rental income, representing traceable proceeds of earlier extractions, to be paid into his personal account and used it for personal expenditure despite the proprietary injunction.
2. Burden and standard. The claimants bore the burden of proving each essential element of the disputed contempts so that the court was sure. Circumstantial evidence could be considered cumulatively, but the court had to be satisfied that the evidence was inconsistent with any reasonable alternative explanation.
3. Allegation 2. The obligation to disclose assets which the defendant was “due to inherit” required disclosure of a specific asset which he either had a right to inherit or could expect to inherit with sufficient certainty. It did not necessarily include an uncertain income stream or a merely discretionary potential benefit. The claimants had not proved any breach concerning the will.
4. Allegation 3. The claimants had to prove that, after paying £50,000 to Intelligent Legal, the defendant retained an interest in or control over the money. The surrounding circumstances were suspicious, but viable alternative explanations remained. The criminal standard was not met.
5. Adverse inferences. The court considered itself bound by Inplayer Limited (formerly Invideous Limited) v Thorogood to accept that adverse inferences could, where appropriate, be drawn from the defendant’s silence. Similar inferences could be considered concerning the absence of evidence from other witnesses. The issue was fact-sensitive and did not determine the outcome.
6. Allegations 4(1), 4(2) and 5. The related allegations concerning payments of legal expenses, knowingly false statements and non-disclosure of a bank statement depended upon proof that the £50,000 had remained the defendant’s asset or had funded the legal payments. That had not been proved. The Contempt Application therefore succeeded only in relation to Allegation 1. Sanction for those breaches was reserved for a separate hearing.