Barclays Bank PLC v Scott Dylan & Ors

In civil contempt proceedings, the applicant must prove beyond reasonable doubt that the respondent knew the order, breached it, and knew the facts making the conduct a breach. A director may be liable where he wilfully fails to take reasonable steps to ensure compliance; mere inactivity is insufficient. A person may knowingly permit a breach by standing by when the relevant act can occur only through his wilful forbearance.

The court may draw compelling inferences from primary facts and, where the evidence is wholly circumstantial, must be sure that the facts are inconsistent with any conclusion other than contempt. Adverse inferences may be drawn from unexplained failures to provide evidence or documents where comparable inferences would be permissible in a criminal case.

Barclays applied to commit Scott Dylan, David Antrobus and Jack Mason for alleged breaches of three freezing orders. The allegations concerned transfers of companies and shares to British Virgin Islands entities, the release of a debenture securing a debt owed to Fresh Thinking Group Ltd, and related Companies House filings.

Mr Dylan admitted two charges during the trial. The judgment determined liability in respect of Mr Antrobus and Mr Mason. The central issues were whether the transactions were part of a coordinated plan, whether purported resignations and the alleged involvement of an independent director were genuine, and whether each respondent knowingly assisted or permitted breaches of the orders.

1. Applicable standard. Civil contempt proceedings are quasi-criminal and require a high standard of procedural fairness. The applicant bears the burden of proving each charge beyond reasonable doubt. For breach by a respondent to an order, the applicant must prove knowledge of the order, conduct involving a breach, and knowledge of the facts making the conduct a breach. Knowledge that the conduct amounted to contempt is unnecessary.
2. Directors and knowing permission. A director of a company subject to an order must take reasonable steps to secure compliance. Wilful failure to do so, accompanied by culpable conduct, may justify committal; mere inactivity is insufficient. Knowingly permitting a breach includes standing by where the relevant act can occur only through the respondent’s wilful forbearance.
3. Inference and evidence. The court may draw compelling inferences from established primary facts. On wholly circumstantial evidence, it must be sure that the facts are inconsistent with any conclusion other than that the contempt was committed. It need not be sure of every evidential item, but must be sure of any essential intermediate fact. Unexplained failures to produce relevant documents may support adverse inferences.
4. Findings. The purported independent-director account was false, the transactions were not arm’s-length sales, and the respondents were connected with the transferee entities. The resignations were made in anticipation of the transfers and formed part of a joint enterprise. Mr Antrobus and Mr Mason therefore knowingly assisted or permitted breaches of the FTG and ITG freezing orders.
5. The release of the FTG/Baldwins debenture discharged at least £350,000 owed to FTG and was also a breach of the FTG freezing order. Mr Mason breached his personal freezing order by making, attempting or permitting the purported transfer of his ICGL shares and related Companies House filings. Mr Antrobus knowingly assisted or permitted that breach. Mr Dylan’s admitted charges were left for sentencing at a later hearing.