The Court of Appeal has ruled that a person who claims ownership of a property that is the subject of enforcement proceedings has a right to have that claim decided in those proceedings, not in satellite proceedings in which he is merely a witness.
In Shalabayev v JSC BTA Bank  EWCA Civ 987, the bank had successfully sued its former chairman, Mr Ablyazov, and then brought contempt of court proceedings against him for allegedly lying on oath about his assets. Mr Shalabayev gave evidence in the contempt of court proceedings to the effect that he, not Mr Ablyazov, owned a property known as Alberts Court. However, the court found that Alberts Court did belong to Mr Ablyazov. The bank then applied for a charging order over the property. Mr Shalabayev applied to intervene. The bank argued that this was an abuse of process, since it amounted to an attack on the earlier finding. The judge at first instance refused to allow Mr Shalabayev to intervene.
The Court of Appeal allowed Mr Shalabayev’s appeal. It held that the contempt proceedings did not give Mr Shalabayev a proper opportunity to establish his ownership of the property. His status as a witness did not allow him to address the court on the conclusions which it should draw from the evidence. The focus of the proceedings had been on whether or not Mr Ablyazov was in contempt of court rather than on the ownership of the property, and therefore Mr Shalabayev had a limited interest in spending time or money on putting evidence before the court. Mr Shalabayev had a right to have the issue decided in proceedings to which he was a party, not just a witness. By applying to intervene, he was not abusing the process of the court, but using it in exactly the way the Civil Procedure Rules and the Charging Orders Act 1979 contemplated he should.
Contempt of court proceedings cannot be used to obtain a binding decision on any issue or right other than the question whether a contempt has taken place. Even if a court finds in a party’s favour on a collateral issue in those contempt proceedings, that issue may be re-argued at a later stage, such as in enforcement proceedings.