WWRT Limited v Serhiy Tyshchenko & Anor.

An immediate order debarring a defendant from defending, or an unless order carrying that sanction, is a sanction of last resort. It requires a serious and deliberate breach and must be proportionate and justified in all the circumstances. Where the alleged purpose is to protect enforcement after trial, the court must identify a substantial risk that the claimant will be unable to enforce a judgment. Plausible explanations for disputed breaches should not ordinarily be rejected summarily without cross-examination. A litigant in person is subject to the same procedural standards, but that status may be relevant when assessing whether a breach was deliberate or excusable.

WWRT applied to debar Mrs Tyshchenko from defending its claim concerning alleged breaches of worldwide freezing and disclosure orders. In the alternative, it sought an unless order requiring compliance with an extensive schedule of defaults, backed by the same sanction. The alleged breaches included dealings with company interests, removal of vehicles and personal items from the jurisdiction, inadequate disclosure of assets and bank statements, excessive spending, non-payment of an interim costs order and discussion of evidence during cross-examination.

The application followed earlier freezing-order, disclosure and cross-examination proceedings. The central issue was whether the alleged breaches justified immediate debarring or an unless order.

1. The application was dismissed. Neither an immediate debarring order nor an unless order with a debarring sanction was justified.
2. The court had power under Civil Procedure Rules 1998 rr. 3.4(2) and 3.1(3), and under its inherent jurisdiction, to strike out a defence and debar a defendant. Ordinarily, because of the severity of the sanction, an unless order should precede debarring. Immediate debarring may be appropriate where the fairness of the trial is jeopardised or the conduct creates a substantial risk of injustice.
3. The relevant assessment was fact-sensitive and proportionate. The court considered the seriousness of each breach, whether it was deliberate or excusable, and its consequences. Where the asserted consequence was impaired enforcement after trial, WWRT had to show a substantial enforcement risk. Historic, technical or rectified breaches involving assets of little or no value did not meet that threshold.
4. A freezing order must be strictly construed. The court accepted plausible explanations for disputed breaches where the witnesses had not been cross-examined. It was not appropriate summarily to reject those explanations merely because some evidence was inconsistent or unclear.
5. Several breaches were established, including incomplete bank-statement disclosure, a technical issue concerning Factor Capital, removal of the Range Rover from the jurisdiction and discussion of evidence during cross-examination. They were not shown to be deliberate in the relevant respects, and none created a material risk to enforcement. The failure to pay the interim costs order could not justify debarring where it was a bankruptcy debt and the evidence did not show that Mrs Tyshchenko had the means to pay it.
6. Being unrepresented did not lower the required standard of compliance. It was, however, relevant to whether breaches were deliberate or excusable, particularly given the volume and complexity of the material served. The court criticised WWRT’s enforcement approach as oppressive and disproportionate and invited further submissions on clarifying and varying the orders.

The judgment describes earlier freezing-order, disclosure, cross-examination and bankruptcy proceedings. It is a first-instance decision on WWRT’s application to debar Mrs Tyshchenko or make an unless order.