Zi Wang v Graham Darby

Contempt of court must be proved beyond reasonable doubt. In relation to disputed evidence, the court may reach findings on the balance of probabilities and use those findings, cumulatively, to determine whether the essential elements of contempt are proved to the criminal standard. A breach of an asset-disclosure obligation requires proof that the respondent knew the order, breached it, and knew the facts making the conduct a breach. Contempt by false statement requires proof of falsity, material interference or likely interference with the course of justice, and absence of an honest belief in the statement’s truth, together with knowledge of that likely interference. A respondent’s silence may support an adverse inference where appropriate. Asset disclosure is central to the efficacy of a freezing order.

The claimant applied to commit the defendant for contempt arising from alleged breaches of asset-disclosure obligations in a freezing injunction. The allegations were that the defendant failed to disclose approximately 100 Bitcoin, failed to verify that information in a witness statement, and knowingly verified false statements concerning his cryptocurrency holdings and inability to access them. The defendant did not participate in the contempt hearing, although his earlier witness statements in the substantive proceedings were admitted. The court considered expert blockchain evidence, the earlier substantive proceedings, and the legal ingredients of contempt.

1. All three allegations proved. The court found beyond reasonable doubt that the defendant owned approximately 100 Bitcoin when he supplied his disclosure and first witness statement, knew that he owned them, and deliberately failed to disclose them.
2. The court accepted the claimant’s expert blockchain analysis. The absence of responsive expert evidence left that analysis unchallenged. It was also open in principle to draw an adverse inference from the defendant’s silence, although it was unnecessary to rely on that inference. Findings on disputed evidential matters could be made on the balance of probabilities and then combined to determine whether the essential ingredients were proved beyond reasonable doubt, following Therium (UK) Holdings Limited v Brooke [2016] EWHC 2421 (Comm).
3. For contempt by breach of an order, the claimant had to prove that the defendant knew the order, acted or failed to act in breach of it, and knew the facts making the conduct a breach, following Masri v Consolidated Contractors International Company SAL [2011] EWHC 1024 (Comm) and Marketmaker Technology (Beijing) Co Ltd v Obair Group International Corporation [2009] EWHC 1445 (QB). Those requirements were met for the disclosure and verification obligations.
4. For contempt by a false statement, the claimant had to prove falsity, material interference or likely material interference with the course of justice, and that the maker had no honest belief in the statement and knew of its likely interference, applying AXA Insurance UK Plc v Rossiter [2013] EWHC 3805 (QB). The defendant’s verification statement was false both because it verified incomplete asset disclosure and because it verified the false account that he could not access his cryptocurrency holdings.
5. The false disclosure and alleged inability to access the assets materially threatened the efficacy of the freezing order as a means of enforcing a judgment. The court relied on the approach in Navig8 Chemical Pools Inc v Nu Tek (HK) Pvt Ltd [2016] EWHC 1790 (Comm). The court also used the defendant’s earlier witness statements in the contempt proceedings, applying Super Max Offshore Holdings v Malhotra [2018] EWHC 2979 (Comm).
6. A further hearing was directed for sentence. The defendant was required to attend, with the possibility of an arrest warrant if he failed to do so.