Court disapproves of contempt of court application following breach of a freezing order

http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWHC/  Comm/2014/4370.html&query=vseukrainskyi&method=boolean

The claimant applied to commit the defendant to prison for contempt of court in breaching earlier  worldwide freezing orders. Hamblen J rejected all the alleged grounds of contempt (bar one  “technical” contempt ie where the claimant had had disclosure of the assets in question but there  had not been any separate asset disclosure statement). The total costs for both sides were in  excess of GBP 1 million. Hamblen decided in this case to order the claimant to pay 80% of the  defendant’s costs.

The judge said that the claimant could have pursued various options in place of an “immediate”  application to commit for contempt when it believed the defendant had failed to comply with the  asset disclosure requirement of the order. For example, It could have raised any queries in  inter-solicitor correspondence or it could have applied for permission to cross-examine the defendant. Furthermore, there was no evidence that the claimant had been prejudiced by the  defendant’s actions or that “meaningful assets” had been concealed.

Referring to the decision in Sectorguard v Dienne plc [2009], he approved the comments there that  the court should be astute to the use of committal proceedings for non-legitimate ends (ie not to  enforce compliance with court orders). Applications which have no real prospect of success or  relate to only technical, or involuntary. contempt should properly be regarded as an abuse of process. Hamblen J said:” An  increasing amount of this court’s time is being taken up with contempt applications. Claimants should give careful consideration to proportionality   in relation to the bringing and  continuance of such proceedings. In appropriate cases respondents should give consideration to  applying to strike out such applications for abuse of process. The court should be astute to detect  when contempt proceedings   are not being pursued for legitimate aims. Adverse costs orders may  follow where claimants bring disproportionate contempt applications”.