Mukhtar Ablyazov v JSC BTA Bank (28 November 2011)
A judge had been entitled to allow a claimant to proceed against a defendant in respect of a limited number of allegations of contempt of court arising out of compliance with a freezing order and other ancillary orders, without requiring it to abandon other allegations of contempt which it had raised, and to have approved the claimant's selection of the allegations to form the subject of the hearing notwithstanding a degree of overlap between them and forthcoming trials. The importance of ensuring the efficacy of the freezing order provided the essential rationale for that case management decision.
The appellant (X) appealed against a decision of the judge ((2011) EWHC 1522 (Comm)) giving directions for the hearing of a contempt of court application brought by the bank against him. The bank had issued a number of claims against X and obtained a freezing order against him. Concerns about X's disclosure led to the consequent making of disclosure and receivership orders. The bank subsequently complained that X had routinely flouted the court's orders and it applied for X's committal to prison for contempt. The judge granted the bank permission to proceed against X in respect of a limited number of allegations of contempt of court, but it was not required to abandon the others. The bank's subsequent selection of allegations was approved, notwithstanding a degree of overlap between them and the substantive trials fixed or anticipated for late 2012 or 2013, the judge having found that, in order to make the freezing order effective, it was not necessary to delay the contempt application until after the main trial. X contended that the decision to permit the bank to reserve a purported right to bring forward for future determination other allegations of contempt exposed him to the risk of consecutive prison sentences totalling in excess of the maximum two-year sentence which could be imposed under the Contempt of Court Act 1981 s.14(1), and thus fell foul of Villiers v Villiers (1994) 1 WLR 493 CA (Civ Div). He submitted that the court should have exercised its power to require the bank to abandon those allegations not part of the contempt application in accordance with Phillips v Symes (A Bankrupt) (2005) EWCA Civ 533, (2005) 1 WLR 2986. X contended that the decision to permit the bank to select allegations of contempt which overlapped with issues in dispute in the substantive proceedings gave rise to a risk that the trial judge would be placed in an invidious position, in the event that a finding made on the contempt application would bind X but not other parties to the trial, and was counter to authority cautioning against satellite litigation.
(1) The authorities cited did not bear the weight X sought to place on them. Villiers was not authority for the proposition that all extant contempt allegations had either to be dealt with on the same occasion or, insofar as they were not, abandoned; it espoused a desirable aim rather than a fixed rule, Villiers explained. Whilst in Phillips the court had determined that it would be wrong to leave matters over by not activating an earlier suspended sentence for contempt, it had also indicated that there might be circumstances in which it would be appropriate to leave over consideration of some contempt allegations, Phillips considered. The decision whether or not to leave over extant allegations of contempt was a case management decision of the judge, with which the Court of Appeal should be slow to interfere, save on well-recognised grounds. Where alleged contempts arose in the context of a worldwide freezing order (coupled with a variety of ancillary and related provisions), there was likely to be a strong public interest in ensuring that the freezing order was appropriately policed, enforced and thus made effective; in that regard, the bringing of contempt proceedings might encourage improved compliance with its terms, Dadourian Group International Inc v Simms (2006) EWCA Civ 1745, (2007) 1 WLR 2967 followed. Against that background, the judge had exercised his case management discretion impeccably. The importance of ensuring the efficacy of the freezing order provided the essential rationale for his decision (see paras 24, 29-36 of judgment). (2) The dangers in satellite litigation and of carving out issues ahead of a trial required careful consideration, Honda Motor Co Ltd v Neesam (2008) EWCA Civ 1280, (2009) 1 WLR 2406 followed. However, whether allegations of contempt should be determined before, during, or after the main trial had to be very much a case management decision for the judge on the facts of the individual case. Moreover, where the alleged contempt was said to relate to the breach of a freezing order, the public interest in ensuring the efficacy of such orders was likely to weigh heavily in the balance, Dadourian followed. An overlap of issues did not of itself necessitate postponing the determination of a contempt application until after the trial: it was, instead, a factor to be taken into account, and the weight to be given depended on the facts of the individual case. It was of paramount importance in the instant case for the court to do and to be seen to be doing all it could to ensure the efficacy of the freezing order. In those circumstances, the judge had been amply entitled to reach the conclusion he had (paras 40-42, 48).