National Bank Trust v Elena Pishchulina

A private applicant may have a legitimate interest in bringing civil contempt proceedings, including to uphold an order and deter future breaches. That interest does not require the court to continue proceedings where their further conduct would be disproportionate. The court must consider the gravity and circumstances of the alleged breach, the likely utility of punishment or coercion, deterrence, and the appropriate use of court resources. A committal application may be halted after the alleged breach and its circumstances have been brought to the court’s attention, even where issuing it was not an abuse of process.

The Bank sought to commit Ms Pishchulina for contempt for allegedly breaching a worldwide freezing order by authorising the sale of a Bali villa before the order was discharged against her. The order had originally applied to the villa, although the Bank had not pursued its underlying claim concerning that asset at trial. After judgment, the Bank circulated a draft order providing for dismissal of the claim concerning the villa, and the freezing order was subsequently replaced without applying to Ms Pishchulina in respect of it.

Ms Pishchulina applied to strike out the committal application as an abuse of process. The court considered both applications, including whether the committal proceedings should continue after the alleged breach had been brought to its attention.

1. The committal application was not to proceed further. It was not an abuse of process for the Bank to issue the application and draw the alleged breach to the court’s attention. However, continuation would be disproportionate and would require an inappropriate allocation of court resources.
2. A private applicant may have a proper private interest in civil contempt proceedings, including an interest in upholding rights protected by an order and deterring future breaches. That interest does not entitle the applicant to continuation where the circumstances make further proceedings unjust or disproportionate. The court retains responsibility for the sound administration of justice. [2021] EWCA Civ 1799 was applied.
3. Proportionality must be assessed by reference to the gravity and circumstances of the alleged conduct. The distinction between a serious breach and a technical breach lies on a spectrum, and the court must decide what the circumstances require. The application may be stopped where it would not promote compliance, punishment or coercion was not realistically in prospect, and continuation would not achieve meaningful deterrence. The approach in [2009] EWHC 2693 (Ch) was explained and the guidance in [2014] EWHC 4370 (Comm) applied.
4. The relevant circumstances included that the Bank no longer had an underlying basis to retain the villa within the freezing order; the Bank had circulated a draft order dismissing the claim concerning it; the Bank accepted that completion could not have occurred before the order ceased to apply; permission to sell would certainly have been granted; and the sale substituted frozen money and rights to receive money for the villa. The transaction therefore did not dissipate assets subject to the order.