The concept of contempt was established at common law as "an act or omission calculated to interfere with the administration of justice". Whilst courts still take statute (such as the Contempt of Court Act 1981) as the basis for ascertaining what constitutes contempt, case law has established how the courts handle it. The case of Heathcliffe Properties LTD v (1) Rasmikant Premchand Dodhia (2) Vanita Rasmikant Dodhia (2016) exemplifies how parties may become the subject of a committal application, if they intentionally breach a court order. Whilst the Defendants were found to have behaved throughout the proceedings in an obstructive and uncooperative manner, given that they were first-time offenders and had promised to comply with future orders, the court held that any immediate custodial sentence would be unjustified. Instead, fines of £25,000 were imposed on each Defendant for their contempt of court.
Background to the committal application
Following the dissolution of a partnership at will between the parties in 2006, Heathcliffe Properties Limited brought proceedings against Mr and Mrs Dodhia in 2007. The dispute was settled between the parties after mediation in 2012. It was agreed that various partnership properties were to be sold and the net proceeds of sale divided. However, the Dodhias sought to hinder and prevent the agreed sales.
In the ensuing litigation, Master Marsh considered that the Dodhias had behaved in an "extremely unsatisfactory" manner, showing an inability or unwillingness to deal with the matter from the onset of the litigation and throughout 2016. When the Dodhias ceased to be legally represented, they also stopped attending court hearings. On 10 May 2016, Master Marsh ordered the Dodhias to attend a further hearing before him, to give them a final opportunity to assist the court with the agreed sale of properties. When they did not attend, the Claimant applied for an order that the Dodhias be committed to prison for contempt of court.
Contempt: the rules
The purpose of a sentence for contempt of court is twofold: to punish the offender for his offence; and to attempt to secure compliance with a court order (Crystal Mews Ltd v Metterick (2006)). Therefore, the court should consider the questions of culpability and harm. The following factors should be taken into account:
- whether the other party to the litigation had been prejudiced by virtue of the contempt;
- whether that prejudice was capable of remedy;
- the extent to which the accused party had acted under duress;
- whether the breach of the order was deliberate;
- whether the accused party had been placed in breach of the order by reason of the conduct of others;
- whether the accused party appreciated the seriousness of the breach;
- whether the accused party had cooperated with the court; and
- whether there had been any apology, remorse, reasonable excuse or acceptance of responsibility.
Whilst there is no rule against imprisonment for a first offence (HMRC v Munir (2015)), the court should bear in mind the desirability of keeping offenders, in particular first-time offenders, out of prison. Further, sentences should not be manifestly discrepant from those of criminal court cases based on similar facts. However, if the breaches are deliberate and serious, and committed without any mitigation or apology, a custodial sentence may be imposed. For example, in the case of Asia Islamic Trade Finance Fund Ltd v Drum Risk Management Ltd (2015)), the Commercial Court imposed a sentence of 18 months' imprisonment, where the accused party was found in contempt of court for failure to comply with the disclosure provisions of a freezing injunction. The Defendant could not have doubted the seriousness of its deliberate breach; and there had been no attempt to comply with the injunction.
Applying the authorities to the facts
It was clear that Mr and Mrs Dodhia's behaviour had been calculated to disrupt and delay the sale process. It was a matter of very grave concern that they had continuously and deliberately refused to accept that they were bound by the orders of the court. However, they were first-time offenders, and the gravity of their breach was considered to be much less than in many other cases which have attracted custodial sentences. Further, in response to the committal application the Defendants did file affidavits apologising for, and attempting to explain, their non-attendance at the hearing, and agreeing to comply with any future court orders unless they ought to be set aside or varied (on which point they would take responsible and accurate legal advice). Whilst the Claimant suffered prejudice by reason of the breach of the order, that prejudice could be remedied by an appropriate order for costs. In addition, the Dodhias were able to pay a substantial fine, and ordering them to do so would not have an adverse effect on the Claimant's recovery of sums due to it in the underlying dispute. The court held this combination of circumstances did not justify an immediate custodial sentence.
Comment and practical points
Whilst the courts may be hesitant to impose custodial sentences for contempt, there is plentiful precedent for the imposition of other penalties. The factors listed in the judgment of Crystal Mews, which could convince the court to treat the contempt more or less seriously, are important to note. Evidently, breaches of court orders will be penalised by the court, at least by a fine if not imprisonment; but for a penalty to be imposed, a clear and serious and/or persistent breach must be established as the court will not exercise its powers lightly. Applications for contempt of court can be a powerful tool in litigation, but careful consideration of the circumstances is required before launching an application.