Home Information Cases Islamic Investment Co Of The Gulf (Bahamas) Ltd v Symphony Gems (2009)

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Islamic Investment Co Of The Gulf (Bahamas) Ltd v Symphony Gems (2009)

Summary

In the circumstances it was appropriate to impose a suspended committal order in respect of a contempt consisting of a large scale failure to produce documents in response to a court order.

Facts

The applicant bank (B) applied for the committal of the respondent (M) for failure to comply with an order to produce documents and for failure to furnish proper particulars of the funding of his legal expenses. B had loaned money to the first defendant diamond trader. The loan was guaranteed by M. Both the loan agreement and the guarantee contained an English law and jurisdiction clause. Following an event of default, B issued proceedings against M and obtained a worldwide freezing order in the sum of over $10 million. M's defence to B's underlying claim was struck out. Pursuant to the freezing order M had produced a statement of his assets. They were mainly said to be situated in India. B took steps to enforce its judgment in India but made little progress. B then obtained an order for the examination of M as a judgment debtor to give information about his means under CPR Pt 71. The order required M to produce at court all documents in his control relating to his means of paying the amount due under the judgment including the documents shown in an attached list. There were numerous adjournments of the oral examination. An order was subsequently made for M to disclose how his legal expenses were being funded. M did produce a few documents during the course of his examination. M submitted that the failure to produce documents on the effective date of the examination was not a contempt because the original order for production had been superseded by subsequent orders of the court and was no longer in effect.

Held

The argument to the effect that the requirement to produce the documents had been superseded was misconceived, and characteristic of M's determination to take any point which might impede the enforcement process. That part of the original order had never been varied or set aside. M failed to comply with the order at or before the effective hearing. The order with the relisted hearing date had been properly served on M. It followed that the court had jurisdiction to make a committal order under CPR r.71.8(2). (2) The court was satisfied that the failure to comply was contumacious in the sense that M wilfully disobeyed the order, Islamic Investment Co of the Gulf (Bahamas) Ltd v Symphony Gems NV (2008) EWCA Civ 389, Times, April 4, 2008 followed. Throughout the relevant period M's stance was only consistent with a refusal to comply with the order to produce documents. No suggestion was made that any material attempt to obey the order had been undertaken. The suggestion that the order had been superseded was a late and misconceived proposition. There had not been compliance or substantial compliance with the order since the effective date thereby in effect purging the contempt. It was not credible for M to claim that the limited disclosure he had made represented even a minor part let alone the entirety of the relevant material available for disclosure. There had been large scale non-disclosure in wilful disobedience to the order. Nothing that had happened made it inappropriate to impose a suspended committal order in respect of that contempt. Only the coercive threat of the imposition of such a penalty had the prospect of ensuring obedience on the part of M. (3) The information eventually furnished about the sources of funding for M's legal expenses, although possibly unreliable, constituted an adequate response to the order for disclosure for the purposes of committal proceedings.

Applications granted in part

Queen's Bench Division
David Steel J
Judgment date
1 October 2009
References

LTL 8/10/2009