Mex Group Worldwide Limited v Stewart Owen Ford & Ors

A contempt order must be obeyed until set aside. Its alleged invalidity or improper service is no defence, although those matters may substantially mitigate penalty. When a freezing order has fallen away, its coercive purpose ends and punishment may be limited to costs. An inquiry under a cross-undertaking will ordinarily be ordered where there is credible evidence of loss arguably caused by the order. Detailed causation and quantum are normally matters for the inquiry. This threshold is lower than that for fortification. Interlocutory costs orders ordinarily remain effective despite later discontinuance.

MGWL obtained a worldwide freezing order in England under section 25 of the Civil Jurisdiction and Judgments Act 1982 in support of proceedings in Scotland. The order was discharged against other defendants for material non-disclosure and lack of jurisdictional connection, and the Court of Appeal dismissed MGWL’s appeal: [2024] EWCA Civ 959. Mr Smith and CSM were later found in contempt for failing to provide information required by the order.

MGWL discontinued the Scottish proceedings and the English order was discharged against Mr Smith and CSM. The court determined penalty for contempt, enforcement of the cross-undertaking as to damages, and the incidence of costs, including whether earlier interlocutory costs orders survived the effective abandonment of the proceedings.

1. Contempt. The WFO had to be obeyed until set aside. Its alleged invalidity, improper service, or possible misuse of information did not provide a defence. The proper course was to seek discharge and, where appropriate, a stay. Those matters could substantially mitigate penalty. Once the Scottish proceedings were discontinued and the WFO fell away, coercion was no longer required. No custodial or financial penalty was imposed; the relevant costs liability was sufficient punishment.
2. Cross-undertaking. The WFO should not have been obtained or maintained, having regard to serious non-disclosure, the likely section 25 jurisdictional result, and the unexplained abandonment of the underlying claim. There was credible evidence that notification of the WFO to stock exchanges was followed almost immediately by delisting and loss of CSM’s bond business. That established an arguable or prima facie causal case. Detailed challenges to assumptions, causation and quantum were matters for the inquiry.
3. Fortification is subject to a higher threshold. It requires a realistic estimate of likely loss, a good arguable case that the risk requires security, and a good arguable causal link.
4. Costs. The ordinary presumption under CPR 38.6 was modified. Earlier costs orders remained effective because interim costs orders are not ordinarily undone by later discontinuance, and reflected unreasonable adjournment conduct. Subject to exceptions, MGWL was ordered to pay Mr Smith and CSM’s costs of the action. MGWL recovered 50% of its contempt costs up to 13 December 2024, but no further contempt costs thereafter.

Mr Tinkler, sitting as a Deputy High Court Judge, discharged the WFO against three other respondents for material non-disclosure and lack of jurisdictional connection: [2023] EWHC 3394 (KB). The Court of Appeal dismissed MGWL’s appeal, while differing on some findings but affirming the result: [2024] EWCA Civ 959.

The present judgment was a first-instance determination of the remaining contempt, cross-undertaking and costs issues concerning Mr Smith and CSM.