Wintermute Trading Limited v Terraform Labs Pte Limited

A court may deal with an urgent application without a hearing, but procedural safeguards apply where affected parties have had no opportunity to make representations. An order carrying contempt consequences must identify clearly what the respondent must do. Where compliance with an earlier order is disputed, the proper course is ordinarily to determine the meaning and scope of that order, whether it has been breached, and what further steps are required. A penal notice is discretionary. It may be added to an order, but it cannot be used to compel compliance with an obligation which remains undefined.

The applicant obtained an order under the Evidence (Proceedings in Other Jurisdictions) Act 1975 requiring the respondent to produce documents for use in proceedings in the United States. The respondent produced documents and asserted full compliance. The applicant disputed that assertion and sought a further order requiring compliance by a specified date, with a penal notice.

The Senior Master made that order without a hearing. The respondent appealed. At the hearing, the court treated the matter as an application to set aside the order, focusing on what order should properly have been made rather than solely on the procedural complaints. The central issue was whether a penal-notice order was appropriate while the scope of the original order and the respondent’s compliance remained unresolved.

1. Procedure. CPR 23.8(1)(c) gave the Senior Master power to deal with the application without a hearing. However, CPR 23.8(3) and (4), together with Practice Direction 23A, required safeguards where the affected party had not been given an opportunity to make representations. The order omitted the required statement explaining the right to apply to set it aside. The court therefore treated the hearing as an application to set aside the order under CPR 23.8(3)(a), applying the rehearing approach identified in Al-Zahra (Pvt) Hospital v DDM [2019] EWCA Civ 1103.
2. Penal notices. The court has a discretion whether to include a penal notice. A final order may be amended to add one or to extend time for compliance, provided that the amendment does not determine disputed issues afresh. The applicant was not entitled to a penal notice as of right. Re Taray Brokering Ltd [2022] EWHC 2958 (Ch) was applied: a party cannot add a penal notice of its own motion, but may warn the respondent of the possible penal consequences of breach.
3. Clarity and unresolved compliance. The second order was inappropriate because it required the respondent, on pain of contempt, to do something which might be nothing and which had not been identified. The dispute concerned whether the original order required further documents, and if so which documents or inspection arrangements. The court applied the principle that an order carrying contempt consequences must state clearly what is required.
4. Future enforcement. A penal notice principally demonstrates prior knowledge of the consequences of disobedience. The court may dispense with the notice where the alleged contemnor already knew those consequences, as recognised in Serious Organised Crime Agency v Hymans [2011] EWHC 3599 (QB) and Business Mortgage Finance 4 Plc v Hussain [2022] EWHC 449 (Ch). The appropriate course was to set aside the second order and give directions for determining the meaning of the first order, compliance with it, and any remaining production or inspection obligations.

• High Court (King's Bench Division): the respondent appealed against the Senior Master’s order of 11 January 2024. Permission to appeal was granted by Jay J on 12 January 2024. The hearing was treated as an application to set aside the order, which was set aside.