Tonstate Group Limited (In Liquidation) & Anor v Edward Wojakovski [2023] EWHC 3119 (Ch)

“43. It is fundamental that the criminal standard of proof applies for a finding of contempt. As recently observed by Cockerill J in ADM International SARL v Grain House International SA [2023] EWHC 135 (Comm) at [37], the modern way of expressing that in a criminal case is to direct that the jury “must be satisfied so that they are sure”

"once knowledge of the order is proved, and once it is proved that the contemnor knew that he was doing or omitting to do certain things, then it is not necessary for the contemnor to know that his actions put him in breach of the order; it is enough that as a matter of fact and law, they do so put him in breach." i) know of the relevant order; ii) have acted, or failed to act, in a manner prohibited or required by the order, as the case may be; iii) intended to do the act, or to fail to do the act, as the case may be: mere inadvertent conduct will not suffice. "once knowledge of the order is proved, and once it is proved that the contemnor knew that he was doing or omitting to do certain things, then it is not necessary for the contemnor to know that his actions put him in breach of the order; it is enough that as a matter of fact and law, they do so put him in breach."

“13. It is well established that the burden of proof lies on the applicant and that the standard of proof is the criminal standard (now specifically referred to in PD 81 para 9 as set out above). In JSC Mezhdunarodniy Promyshelnniy Bank v Pugachev [2016] EWHC 192 (Ch) (“Pugachev”) Rose J summarised the principles at [41] as follows: “i) the burden of proving the contempt that it alleges lies on the Bank. Insofar as Mr Pugachev raises a positive defence he carries an evidential burden which he must discharge before the burden is returned to the Bank. ii) the criminal standard of proof applies, so that the Bank’s case must be proved beyond reasonable doubt – or so that the court is sure. In case the meaning of this formulation were unclear, Phipson on Evidence (17th edition, 2009 at paragraph 6.51) cites the Privy Council in Walters v. R [1969] 2 A.C. 26 as indicating that “[a] reasonable doubt is that quality or kind of doubt which when you are dealing with matters of importance in your own affairs you allow to influence you one way or another”. iii) The court needs to exercise care when it is asked to draw inferences in order to prove contempt. The law in this respect is summarised in a passage in the judgment of Teare J in JSC BTA Bank v. Ablyazov [2012] EWHC 237 (Comm). Circumstantial evidence can be relied on to establish guilt. It is however important to examine the evidence with care to see whether it reveals any other circumstances which are or may be of sufficient reliability and strength to weaken or destroy the Bank’s case. If, after considering the evidence, the court concludes that there is more than one reasonable inference to be drawn and at least one of them is inconsistent with a finding of contempt, the claimants fail. Where a contempt application is brought on the basis of almost entirely secondary evidence, the court should be particularly careful to ensure that any conclusion that a respondent is guilty is based upon cogent and reliable evidence from which a single inference of guilt, and only that inference, can be drawn.” “i) the burden of proving the contempt that it alleges lies on the Bank. Insofar as Mr Pugachev raises a positive defence he carries an evidential burden which he must discharge before the burden is returned to the Bank. ii) the criminal standard of proof applies, so that the Bank’s case must be proved beyond reasonable doubt – or so that the court is sure. In case the meaning of this formulation were unclear, Phipson on Evidence (17th edition, 2009 at paragraph 6.51) cites the Privy Council in Walters v. R [1969] 2 A.C. 26 as indicating that “[a] reasonable doubt is that quality or kind of doubt which when you are dealing with matters of importance in your own affairs you allow to influence you one way or another”. iii) The court needs to exercise care when it is asked to draw inferences in order to prove contempt. The law in this respect is summarised in a passage in the judgment of Teare J in JSC BTA Bank v. Ablyazov [2012] EWHC 237 (Comm). Circumstantial evidence can be relied on to establish guilt. It is however important to examine the evidence with care to see whether it reveals any other circumstances which are or may be of sufficient reliability and strength to weaken or destroy the Bank’s case. If, after considering the evidence, the court concludes that there is more than one reasonable inference to be drawn and at least one of them is inconsistent with a finding of contempt, the claimants fail. Where a contempt application is brought on the basis of almost entirely secondary evidence, the court should be particularly careful to ensure that any conclusion that a respondent is guilty is based upon cogent and reliable evidence from which a single inference of guilt, and only that inference, can be drawn.”

“15. Ms Jones drew my attention to some other points relevant to the proof of contempt mentioned in the authorities. First, where a number of contempts are charged, it is appropriate to have regard to the overall picture: see Gulf Azov Shipping Co Ltd v Chief Idisi [2001] EWCA Civ 21 (“Gulf Azov”) per Lord Phillips MR at [16]-[18], especially at [18] where he said: “It is not right to consider individual heads of contempt in isolation. They are details on a broad canvas. An important question when that canvas is considered is whether it portrays the picture of a Defendant seeking to comply with the orders of the Court or a Defendant bent on flouting them. It is right that the individual details of the canvas should be informed by the overall picture. But, having said that, each head of contempt that has been held proved must be established beyond reasonable doubt.” “It is not right to consider individual heads of contempt in isolation. They are details on a broad canvas. An important question when that canvas is considered is whether it portrays the picture of a Defendant seeking to comply with the orders of the Court or a Defendant bent on flouting them. It is right that the individual details of the canvas should be informed by the overall picture. But, having said that, each head of contempt that has been held proved must be established beyond reasonable doubt.”

“16. Second, although each essential element of a charge of contempt must be proved to the criminal standard, it is not necessary that every fact relied on in support of the charge must itself be proved beyond reasonable doubt: see Ablyazov (CA) per Rix LJ at [51]-[52] where he said: “51. The error of law alleged is that the judge failed to apply the correct criminal standard of proof because he sometimes adopted the language of a civil trial, saying that something was “improbable”, or “likely”, or words to that effect. It is true that the judge so expressed himself on occasions. However, the judge overwhelmingly used the language of the criminal standard (of being sure, or of rejecting the possibility that something may be as suggested), and he uniformly did so when reaching his conclusions on any essential plank of the bank’s case. Examples of that are so numerous as to be unnecessary to exemplify. Moreover, it is not true that every single aspect of a criminal case has to be proved to the criminal standard, although of course the elements of the offence must be. “51. The error of law alleged is that the judge failed to apply the correct criminal standard of proof because he sometimes adopted the language of a civil trial, saying that something was “improbable”, or “likely”, or words to that effect. It is true that the judge so expressed himself on occasions. However, the judge overwhelmingly used the language of the criminal standard (of being sure, or of rejecting the possibility that something may be as suggested), and he uniformly did so when reaching his conclusions on any essential plank of the bank’s case. Examples of that are so numerous as to be unnecessary to exemplify. Moreover, it is not true that every single aspect of a criminal case has to be proved to the criminal standard, although of course the elements of the offence must be. 52. It is, however, the essence of a successful case of circumstantial evidence that the whole is stronger than individual parts. It becomes a net from which there is no escape. That is why a jury is often directed to avoid piecemeal consideration of a circumstantial case: R v. Hillier (2007) 233 ALR 63 (HCA), cited in Archbold 2012 at para 10-3. Or, as Lord Simon of Glaisdale put it in R v. Kilbourne [1973] AC 729 at 758, “Circumstantial evidence…works by cumulatively, in geometrical progression, eliminating other possibilities”

“…the prosecution bears the burden of proving all the elements of the crime beyond reasonable doubt. That means that the essential ingredients of each element must be so proved. It does not mean that every fact – every piece of evidence – relied upon to prove an element by inference must itself be proved beyond reasonable doubt. Intent, for example, is, save for statutory exceptions, an element of every crime. It is something which, apart from admissions, must be proved by inference. But the jury may quite properly draw the necessary inference having regard to the whole of the evidence, whether or not each individual piece of evidence relied upon is proved beyond reasonable doubt, provided they reach their conclusion upon the criminal standard of proof. Indeed, the probative force of a mass of evidence may be cumulative, making it pointless to consider the degree of probability of each item of evidence separately.” ”

“17. Third, as to proof by inference and circumstantial evidence, see Masri v Consolidated Contractors International Company SAL [2011] EWHC 1024 (Comm) (“Masri”) per Christopher Clarke J at [145]-[146]: “Inferences “Inferences 145. In reaching its conclusions it is open to the court to draw inferences from primary facts which it finds established by evidence. A court may not, however, infer the existence of some fact which constitutes an essential element of the case unless the inference is compelling i.e. such that no reasonable man would fail to draw it: Kwan Ping Bong v R [1979] AC 609. Circumstantial evidence 146. Where the evidence relied on is entirely circumstantial the court must be satisfied that the facts are inconsistent with any conclusion other than that the contempt in question has been committed: Hodge’s Case [1838] 2 Lewin 227; and that there are “no other co-existing circumstances which would weaken or destroy the inference” of guilt: Teper v The Queen [1952] AC 480, 489. See also R v Blom [1939] AD 188, 202 (Bloemfontein Court of Appeal); Martin v Osborne [1936] 55 CLR 367 , 375. It is not, however, necessary for the court to be sure on every item of evidence which it takes into account in concluding that a contempt has been established. It must, however, be sure of any intermediate fact which is either an essential element of, or a necessary step on the way towards, such a conclusion: Shepherd v The Queen 170 CLR 573 (High Court of Australia). Adverse inferences Mr James Lewis QC on behalf of the judgment debtors accepted that, although (i) an application for contempt is criminal in character, (ii) an alleged contemnor may claim a right to silence, and (iii) the provisions of sections 34 and 39 of the Criminal Justice Act 2003 do not apply, it was open to the Court to draw adverse inferences against the judgment debtors to the extent that it would be open it to do so in comparable circumstances in a criminal case. Thus it may be legitimate to take into account against the judgement debtors the fact (if it be such) that, when charged with contempt, as they have been in these proceedings, they have given no evidence or explanation of something of which they would have had knowledge and of which they could be expected to give evidence if it was true.”

“18. Fourth, in an appropriate case the Court can have regard to the cumulative effect of purported explanations given by the alleged contemnor which together can lead to the conclusion that the evidence is deceitful: see Ablyazov (CA) per Rix LJ at [96], [100]. At [96] he said: “96. I would end this section of my judgment by saying this. It is noticeable from the facts of this case, both as found by the judge, but also in the nature of the structure of the arguments as they have developed, how time and time again, as some aspect of Mr Ablyazov’s conduct has come under question, so the evidence deployed has become remarkable for the way in which it has taken tortuous turnings which have asked the court to suspend its belief in reality in favour of reduplicating unrealities….”

“100. As this series of coincidences, misfortunes, errors, misunderstandings and inexplicable developments multiply, the court is entitled to stand back and ask whether there is in truth a defence or defences as alleged, even if no burden rests on Mr Ablyazov, and the burden remains on the bank, or whether there is at any rate the realistic possibility of such, or on the other hand whether the court is being deceived. The trial judge decided that it was being deceived by witnesses without credibility. It is not for this court to say that he was wrong without strong grounds for doing so, grounds which have simply not been formulated.” “96. I would end this section of my judgment by saying this. It is noticeable from the facts of this case, both as found by the judge, but also in the nature of the structure of the arguments as they have developed, how time and time again, as some aspect of Mr Ablyazov’s conduct has come under question, so the evidence deployed has become remarkable for the way in which it has taken tortuous turnings which have asked the court to suspend its belief in reality in favour of reduplicating unrealities….”

“100. As this series of coincidences, misfortunes, errors, misunderstandings and inexplicable developments multiply, the court is entitled to stand back and ask whether there is in truth a defence or defences as alleged, even if no burden rests on Mr Ablyazov, and the burden remains on the bank, or whether there is at any rate the realistic possibility of such, or on the other hand whether the court is being deceived. The trial judge decided that it was being deceived by witnesses without credibility. It is not for this court to say that he was wrong without strong grounds for doing so, grounds which have simply not been formulated.”

“53. In this regard I should perhaps clarify at this point that the basis upon which Mr Vik is entitled to take this position, is that: i) The defendant to a committal application is, it is well-established, entitled to remain silent and is not a compellable witness. This is set out in Re L (A Child) [2016] EWCA Civ 173, [2017] 1 FLR 1135 at [31]-[32] where the court referred to: “the absolute right of a person accused of contempt to remain silent, which carries with it the absolute right not to go into the witness box”; ii) The correlate of that right is that the Court is required to manage committal proceedings so as to safeguard that right and a failure to do so will justify the setting aside of an order for committal, even where the failure might not have changed the outcome: see Hammerton v Hammerton [2007] 2 FLR 1133 at [14]-[19]; iii) That means that if a respondent serves evidence in advance of the committal hearing that evidence is not taken as having been deployed. The respondent may, right until the last moment, choose not to deploy it. And until it has been so deployed, it is inadmissible: Templeton Insurance v Motorcare Warranties [2012] EWHC 795 (Comm) at [(second) 24] (Eder J); iv) The evidence may, however, be used by the applicant for the purpose of “gathering preparatory evidence in reply” (Re B (A Minor) [1996] 1 WLR 627 at 635-636B, 638B-G, per Wall J). Pending the deployment of the respondent's evidence both his affidavit and any evidence in reply remain “in limbo”

“the absolute right of a person accused of contempt to remain silent, which carries with it the absolute right not to go into the witness box”; ii) The correlate of that right is that the Court is required to manage committal proceedings so as to safeguard that right and a failure to do so will justify the setting aside of an order for committal, even where the failure might not have changed the outcome: see Hammerton v Hammerton [2007] 2 FLR 1133 at [14]-[19]; iii) That means that if a respondent serves evidence in advance of the committal hearing that evidence is not taken as having been deployed. The respondent may, right until the last moment, choose not to deploy it. And until it has been so deployed, it is inadmissible: Templeton Insurance v Motorcare Warranties [2012] EWHC 795 (Comm) at [(second) 24] (Eder J); iv) The evidence may, however, be used by the applicant for the purpose of “gathering preparatory evidence in reply” (Re B (A Minor) [1996] 1 WLR 627 at 635-636B, 638B-G, per Wall J). Pending the deployment of the respondent's evidence both his affidavit and any evidence in reply remain “in limbo”

“24. Third, I should mention that at the close of Templeton’s case, Mr Quiney made an application that I should, in effect, reject the application for committal on the basis of “no case to answer”

“5. Mr Wojakovski shall not, without the leave of the Court or the corporate Claimants’ prior written permission, deal with, dispose of or diminish the value of any of the following cash or assets: a. the sum of £13,594,642.43 (referred to at paragraph 4) or its traceable proceeds and any profits generated thereon; and b. any other sums received by Mr Wojakovski for similar purposes and in respect of which there was no valid authorisation from the relevant company.” a. the sum of £13,594,642.43 (referred to at paragraph 4) or its traceable proceeds and any profits generated thereon; and b. any other sums received by Mr Wojakovski for similar purposes and in respect of which there was no valid authorisation from the relevant company.”

“4. The sum of £13,594,642.43 (in respect of which Judgment was entered on 20 November 2019, but without regard for Mr Wojakovski’s set-off), any other sum for which Mr Wojakovsk is required to account pursuant to paragraph 6 below, and in each case their traceable proceeds, are, insofar as they remain in his ownership or control, held on trust by Mr Wojakovski for the relevant companies.”

“10. But before anything further it is with deep regret that Mr Wojakovski apologises to the Court because, as the Court will have read in Mr Wojakovski’s statement dated 23 April 20120, after the 16 January Order (imposing a penal sanction) was made Mr Wojakovski has used has rental monies from properties purchased through an offshore trust, Quastus, for his living expenses. As he explains, he has no other source of income. He did not have untainted money and the submission made on his instructions, that Mr Wojakovski did, was not true. He appreciates there may well be consequences. Had he appreciated that the Empire loan had matured last November, then he would not have been in this position. He will be able to purge any contempt by using the monies due to him via Empire.”

“MR HAQUE: Thank you. My Lord then dealing first as I absolutely must do with the apology which is given in full serious and openness by Mr Wojakovski. It was maybe suggested, and I think suggested is probably as high as it can go by Mr Fulton, that it was not a serious apology in the sense that Mr Wojakovski continued to spend the money that he had extracted from Quaestus - the £70,000. Your Lordship, it is a serious apology because behind the extraction is the very human problem which is that as he says he has no money, he had no money. And so, it was desperation in a way which has meant that the only money that he had to spend to live, which included as you will have seen the maintenance orders and everything else, was to use the money from Quaestus. He does regret it and he does apologise, and he understands the significance and the seriousness of what he has done. MR JUSTICE ZACAROLI: Can I just stop you there a moment? MR HAQUE: Yes. MR JUSTICE ZACAROLI: So are you saying that, to understand this apology correctly --- MR HAQUE: Yes. MR JUSTICE ZACAROLI: --- are you saying he did know that it was the company’s money but had to use it out of desperation or are you saying that he did not know it was the company’s money? MR HAQUE: No, it is I think he knew it was the company’s money. MR JUSTICE ZACAROLI: Right. MR HAQUE: I cannot go beyond what he says in his statement but certainly beyond 16 January, the date that the order was placed, sorry, the order was made, then yes, he would know it was extracted money that he was using.”

“(4) The following in relation to his mother's will: (i) a copy of the will, (ii) the identity of the executor/s of that will, (iii) an update as to the current status of probate; and (iv) the estimated value and location of any assets which Mr Wojakovski is due to inherit pursuant to the will. (5) The following in relation to father's will: (i) a copy of the will; (ii) the identity of the executor/s of that will; and (iii) details of how any assets inherited by Mr Wojakovski pursuant to the will have been spent and/or dissipated.”

“15. For the purpose of this Order the Respondent's assets include: (l) Any asset which he has the power, directly or indirectly, to dispose of or deal with as if it were his own. The Respondent is to be regarded as having such power if a third party holds or controls the asset in accordance with his direct or indirect instructions. (2) Any interest under any trust or similar entity including any interest which can arise by virtue of the exercise of any power of appointment, discretion or otherwise howsoever.” (l) Any asset which he has the power, directly or indirectly, to dispose of or deal with as if it were his own. The Respondent is to be regarded as having such power if a third party holds or controls the asset in accordance with his direct or indirect instructions. (2) Any interest under any trust or similar entity including any interest which can arise by virtue of the exercise of any power of appointment, discretion or otherwise howsoever.”

“18. In accordance with paragraphs 12 (4) and 12 (5) of the 6 July order, I exhibit at pages 17 to 21 a copy of the Will of my mother and father. The sole executor of the Will is Gil Wojakovski, my brother. Any entitlement I may have under the Will is purely discretionary.”

“12. The purpose of the Trust The Trust will take care of the financial shortage of the surviving spouse and Our Descendants, and the Trust will also take care of their health. In addition, the Trust will take care out of the share of every descendant to help with the education of the descendant’s kids and the building of their future, and will assist, if required, in accordance with the rules set by the trustee.”

“11. The Trustee (a) The trustee of the Trust will be the surviving spouse, and if god forbid he/she will not be among the living or will not be capable of performing his/her duties as trustee, we appoint our son, Gil Wojakovski, as trustee. We ask him for his consent to serve as trustee. (b) As long as the surviving spouse will be alive and serve as trustee, we instruct him/her to consult in all legal decisions with our son Gil Wojakovski, and in all financial decisions with our son, Oded Wojakovski. After the death of both of us, when Gil Wojakovski will serve as trustee, he must consult in all financial decisions with our son Oded Wojakovski and with our son Shai Wojakovski. (C) The trustee will make decisions according to his discretion. After the death of both of us or when our son Gil Wojakovski will serve alone as trustee, even though he will make the decisions on his own, he will not be entitled to make a decision if there is a written objection by our sons Oded Wojakovski and Shai Wojakovski together, and in case that the decision is for distribution of funds to him only, when identical funds are not distributed for the rest of the children, this decisions requires the consent of Shai and Oded together for distribution for the benefit of Gil.”

“(a) The Trust Assets will be managed in a manner that it will do internal accounting so that in terms of calculation, as long as any of us is still alive, half will serve for his/her shortage if he/her will not have enough means from the share left in his/her possession and the residue will serve for each of our children in four equal shares. (b) Every one of my children will be entitled for his share as long as he will not have alternative income sources, of a monthly allowance for living expenses in the amount of 100% of the average wage in the market at that time. (c) Other than that, the trustees of the Trust will be entitled to give and provide different amounts to my children or take out money for expenses for my children and their descendants as they see fit (out of the share of the same descendant) to fulfill the purpose of the Trust as described in Section 13 above, and this for the purpose of a particular matter and/or by giving a monthly allowance, all in accordance with their absolute discretion and this, and/or nursing costs will be required for any child of mu children, such costs will be funded out of all the endowment assets in equal parts. (d) In the event that any of my children will wish not to use his share in the Trust (i.e., to waiver his share), he will be entitled to do so only after he arrives at the age of 60 years old, or after all of his children are married, whichever is later.” “14. In the event that god forbid, any of my children will pass away, his descendants will be the beneficiaries of his share in the Trust, all in accordance with the rules of the Trust.”

“3. The late parents of GW and EW and their other brothers, Oron and Shai, decided that after they (the parents) will pass away all their estate shall be transferred to a trust that is founded by virtue of their will (these kinds of trusts are recognized by Israeli law). The reason for the above was mainly due to special life circumstances, in which their first-born son was born with cognitive disabilities (mental disability). The deceased parents wanted to look after all their sons but mainly after their elder son and his daughter who was also born with mental disabilities. In their will, dated 20 March 2008, the late parents appointed GW as the trustee of the trust. I will not get in to all the instructions of the will, but I will say that GW has the full discretion regarding the management, control and distribution of the trust assets (except in specific and special circumstances which are not relevant). 4. It is important to note, that according to Israeli law the Trust and the trustee (i.e. GW) are the owners of the assets of the estate while according to the will the sons of the deceased are only potential beneficiaries of the Trust. I emphasize the word “Potential” for a few reasons: (1) As stated above, the beneficiaries are not the owners of the trust; (2) GW has full discretion regarding the distribution of the assets of the Trust, the portion of distribution, the time of distribution and to which beneficiary a portion of the trust should be distributed to. In other words, there might be certain circumstances that a potential beneficiary shall not receive any portion of the assets of the Trust; (3) According to the will, in certain circumstances the potential beneficiaries have the right to waive their potential rights in the Trust. The important point that should be understood is that the potential beneficiaries have no specific right in a specific asset of the Trust, and in certain circumstances such potential rights may not be realized. In any case, the realization of such potential right remains at the trustee’s full discretion. 5. The abovementioned is particularly relevant to EW. As was brought to my attention, GW has no intention to distribute to EW any money of the Trust not least since the latter owes considerable sums of money to the Trust. It should be noted that a proof of debt was submitted by GW, as a trustee of The “Wojakovski Brothers”

“1. As noted in your email, I am the sole trustee of the Wojakovski family Trust in which certain family members are and may be counted as potential beneficiaries from the Trust. 2. I noted above “potential” because the relevant family members, including Eduard, are not entitled to inherit anything from the will, nor they are considered to be the owners of the estate/Trust. The potential beneficiaries have only a potential right which may or may not materialize. 3. Not only does Eduard not own any of the Trust’s assets, he owes to the family Trust more money than his “potential share”, hence he is not due to receive any further distributions from the Trust. 4. In light of the above, it is my view that Eduard and certainly not his debtors have the right to receive any information regarding assets that Eduard is not entitled to receive. The information of the family trust is private and confidential. 5. Without derogating from the above, I should further note that the purpose of the family Trust is not to pay the debts of potential beneficiaries. Hence, even if Eduard was intitled to receive something from the Trust, I would not give him money to pay his debts. Furthermore, Israeli law does not allow debtors to foreclose on trust assets or be redeemed from them. Therefore, Eduard’s debtors are not entitled to receive any information about the trust’s assets. 6. Regarding s13(b) of the will which stipulates that any one of the children is entitled to receive, out of his potential share, an “allowance” for the purposes of paying his living expenses if he does not have any other income sources, I will say the following - (1) this section is not mandatory and is under my discretion; (2) the purpose of the allowance is not for paying debts but only for living expenses; (3) the allowance is to be paid if there are no other sources of income; (4), as stated above the allowance source is from the potential share of the relevant beneficiary and in Eduard’s case he has already exhausted his potential share of the Trust (if not more) since he owes considerable sums of money to the Trust.. 7. In light of all the above I respectfully decline to provide any information about the Trust’s assets 8. If you have any further questions, do not hesitate to contact me.”

“(l) All of his assets worldwide exceeding £5,000 in value whether in his own name or not and whether solely or jointly owned and whether the Respondent is interested in them legally, beneficially or otherwise, giving the value, location and details of all such assets.”

“17. Schedule C to this affidavit sets out a list of all bank accounts in accordance with paragraph 12(2) of the 6 July Order. I have provided the most up to date balances where possible. I note that shortly before finalising this affidavit I was informed that third party debt orders had been secured against six accounts and the funds effectively frozen. I, therefore, do not have access to the following accounts: (i) 46963768 (Lloyds); (ii) 1/302058026/1 (Britannia Building Society); (iii) 70300268 (Barclays); (iv) 40946265 (Barclays); (v) 80015385 (Barclays); and (vi) 3691174320 (Yorkshire Building Society).”

“(m) that the defendant is entitled but not obliged to give written and oral evidence in their defence; (n) that the defendant has the right to remain silent and to decline to answer any question the answer to which may incriminate the defendant;”

“A person accused of contempt, like the defendant in a criminal trial, has the right to remain silent (Comet Products UK Ltd v Hawkex Plastics Ltd [1971] 2 Q.B. 67, CA). It is the duty of the court to ensure that the defendant is made aware of that right and also of the risk that adverse inferences may be drawn from his silence (Invideous Ltd v Thorogood [2014] EWCA Civ 1511, CA, at [41]. This rule codifies the requirement to ensure that the defendant in contempt proceedings is made aware of that right.”

“31 I agree with the claimant’s submissions on this point. The fact that the first defendant has produced some documents, in purported compliance with the 21 May 2015 Order, does not determine the compliance issue in the first defendant’s favour; nor does it require the claimant to make any application for cross-examination. Rather, the first defendant is on notice of the claimant’s case that the defendants have failed to comply with the 21 May 2015 Order, and the claimant is entitled to continue to advance that case, even in the face of purported compliance by the first defendant since the date of the application. The burden of proof remains on the claimant throughout, to the criminal standard, and the claimant can invite the court to conclude, on the basis of all the evidence in the case, that the defendants have not yet complied with the 21 May 2015 Order. If the contemnor chooses to remain silent in the face of that dispute, the court can draw an adverse inference against him, if the court considers that to be appropriate and fair, and recalling that silence alone cannot prove guilt. This is not to put the burden of proof on the first defendant; far from it, the burden remains on the claimant. Proudman J was dealing with a different situation in Solodchenko (No 2), where she had already held a fact finding hearing and found Mr Kythreotis to be in contempt, before he subsequently purported to comply with the order; and did not concern the application of rules now clearly now set out in CPR Pt 81.”

“30. In conclusion, I do not consider that Mr Jones can be compelled to be cross-examined or can be put to an election as to whether to rely upon his affidavit evidence or to submit to cross-examination. However, given that very serious allegations of dishonesty, both in respect of attempts to deceive the claimants and attempts to deceive the court, are advanced with some particularity against Mr Jones, if he chooses not to be cross-examined, having received appropriate legal advice, then it may be (and I reach no conclusion on this at the moment) that there is at the very least a risk that the court will draw adverse inferences against him. That is a matter that Mr Jones will need to consider with his legal advisers.”

“40. A person accused of contempt, like the defendant in a criminal trial, has the right to remain silent: see Comet Products UK Ltd v Hawkex Plastics Ltd [1971] 2 QB 67. It is the duty of the court to ensure that the accused person is made aware of that right and also of the risk that adverse inferences may be drawn from his silence.”

“41. If the committal application is heard at the same time as other issues about which the alleged contemnor needs to give evidence, he is placed in the position where he is effectively deprived of the right of silence. That is a serious procedural error: see Hammerton v Hammerton [2007] EWCA Civ 248. This is precisely what happened in the present case. Furthermore no-one told Mr Thorogood that an alleged contemnor has the right not to give evidence. 42. If the contempt application had been the subject of a separate hearing and Mr Thorogood had been informed of his right not to give evidence, he might have exercised that right. He could then have dealt with the contempt allegations by way of submissions. In that regard it should be noted that the judge based her two findings of contempt upon answers which Mr Thorogood had given under skilful cross-examination. 43. Mr Milford points out that Mr Thorogood was reminded of his right not to incriminate himself. That is true, but it is not sufficient. Mr Thorogood should have been told that he was not obliged to give evidence. Furthermore the litigation should not have been managed in a way that forced Mr Thorogood into the witness box. 44. Mr Milford submits that even if there had been a separate hearing of the contempt application, the result would have been the same. If Mr Thorogood gave evidence, he would have been caught out in cross-examination. If he had declined to give evidence, the court would have drawn adverse inferences. 45. What Mr Milford says may well be true. Indeed, as things have turned out, Mr Thorogood may be a very lucky man. Nevertheless there can be no question of upholding findings of contempt against a person who has been deprived of valuable safeguards in the circumstances of this case.”

“Adverse inferences Mr James Lewis QC on behalf of the judgment debtors accepted that, although (i) an application for contempt is criminal in character, (ii) an alleged contemnor may claim a right to silence, and (iii) the provisions of sections 34 and 39 of the Criminal Justice Act 2003 do not apply, it was open to the Court to draw adverse inferences against the judgment debtors to the extent that it would be open it to do so in comparable circumstances in a criminal case. Thus it may be legitimate to take into account against the judgement debtors the fact (if it be such) that, when charged with contempt, as they have been in these proceedings, they have given no evidence or explanation of something of which they would have had knowledge and of which they could be expected to give evidence if it was true.”

“11. In this case I am being asked to draw specific inferences from the failure of the defendant to call particular witnesses. In Ahuja Investments Ltd v Victorygame Ltd [2021] EWHC 2382 (Ch) at paragraphs 23 to 25 this was said: ‘’In my judgment, before the discretion to draw an adverse inference or inferences can arise at all, the party inviting the court to exercise that discretion must first: (1) establish (a) that the counter-party might have called a particular person as a witness and (b) that that person had material evidence to give on that issue; (2) identify the particular inference which the court is invited to draw; and (3) explain why such inference is justified on the basis of other evidence that is before the court. Where those pre-conditions are satisfied, a party who has failed to call a witness whom it might reasonably have called, and who clearly has material evidence to give, may have no good reason to complain if the court decides to exercise its discretion to draw appropriate adverse inferences from such failure.” ‘’In my judgment, before the discretion to draw an adverse inference or inferences can arise at all, the party inviting the court to exercise that discretion must first: (1) establish (a) that the counter-party might have called a particular person as a witness and (b) that that person had material evidence to give on that issue; (2) identify the particular inference which the court is invited to draw; and (3) explain why such inference is justified on the basis of other evidence that is before the court. Where those pre-conditions are satisfied, a party who has failed to call a witness whom it might reasonably have called, and who clearly has material evidence to give, may have no good reason to complain if the court decides to exercise its discretion to draw appropriate adverse inferences from such failure.”

“26. The Court is now asked to accept, via the evidence of Mr Marx rather than either of the more immediate protagonists, the preposterous explanation that Intelligent Legal first did work for Mr Wojakovski worth exactly £41,666.67, invoiced and paid in July 2020, before then choosing just a few months later to make “gratuitous” payments of £22,000 for Mr Wojakovski’s legal advice (£15,000 to Raydens and £7,000 to Keidan Harrison). No less surprisingly, it is said that another of of Mr Rugova’s companies, Intelligent Languages, made a separate £4,800 gift to Mr Wojakovski’s solicitors. There is no evidence of how these supposed “gifts” have been recorded in either company’s accounts, nor any explanation of how Mr Rugova as their director could possibly have thought it was in the company’s best interests to give away their money to meet the legal costs of a judgment debtor who by this point was bankrupt and who had already spent millions on spectacularly unsuccessful litigation. The oddity of such corporate gifts was relied upon before Trower J more than 2 years ago. The sudden generosity of Mr Rugova’s companies is all the more surprising in the context of Mr Wojakovski’s evidence from April 2020 of having exhausted all available sources of funding or borrowing. 27. The overwhelmingly more likely explanation is that as soon as Zacaroli J had ordered the disclosure of his worldwide assets, Mr Wojakovski immediately sought to put £50,000 out of the Claimants’ reach by depositing it with Intelligent Legal, later drawing upon those funds to meet his legal costs.”

“41. The question whether an adverse inference may be drawn from the absence of a witness is sometimes treated as a matter governed by legal criteria, for which the decision of the Court of Appeal in Wisniewski v Central Manchester Health Authority [1998] PIQR P324 is often cited as authority. Without intending to disparage the sensible statements made in that case, I think there is a risk of making overly legal and technical what really is or ought to be just a matter of ordinary rationality. So far as possible, tribunals should be free to draw, or to decline to draw, inferences from the facts of the case before them using their common sense without the need to consult law books when doing so. Whether any positive significance should be attached to the fact that a person has not given evidence depends entirely on the context and particular circumstances. Relevant considerations will naturally include such matters as whether the witness was available to give evidence, what relevant evidence it is reasonable to expect that the witness would have been able to give, what other relevant evidence there was bearing on the point(s) on which the witness could potentially have given relevant evidence, and the significance of those points in the context of the case as a whole. All these matters are inter-related and how these and any other relevant considerations should be assessed cannot be encapsulated in a set of legal rules.”

“2. Until further order of the court, the Respondent must not— (a) remove from England and Wales any of his assets which are in England and Wales up to the value of £15,678,975.88; or (b) in any way dispose of, deal with or diminish the value of any of his assets whether they are in or outside England and Wales up to the same value.” (a) remove from England and Wales any of his assets which are in England and Wales up to the value of £15,678,975.88; or (b) in any way dispose of, deal with or diminish the value of any of his assets whether they are in or outside England and Wales up to the same value.”

“(a) This order does not prohibit the Respondent from spending £1,000 a week towards his ordinary living expenses and also a reasonable sum on legal advice and representation. But before spending any money the Respondent must tell the Applicants’ legal representatives where the money is to come from.”

“79. The applicants accept that the obligation under paragraph 6(a) of the WFO to inform the applicants where “the money” is to come from relates only to “money” that is within the scope of the WFO. They contend, however, that the money held on account by KH and Raydens is caught by paragraph 3 of the WFO.”

“Knowingly false statements: In order to deny and conceal these breaches, EW knowingly made the following false statements: i. In paragraph 8 of his Seventh Witness Statement dated 19 April 2021, where EW said “none of the monies were at any time mine” and “at no time did I have control over the monies”. ii. In paragraph 9 of his Third Affidavit dated 20 May 2021, where EW said that “the funding came from Intelligent Legal’s financial resources and did not derive from my personal funds or any entity which I am alleged to have extracted funds from”. iii. In paragraph 17 of his Third Affidavit dated 20 May 2021, where EW said that “the funds were provided from Intelligent Legal’s own finances and not from my personal funds”

“The letter, which my solicitors have now shown me, explains that the funding came from Intelligent Legal’s financial resources and did not derive from my personal funds or any entity which I am alleged to have extracted funds from.”

“1. Mr Wojakovski shall by 4pm on 20 May 2021: (1) file and serve an affidavit which sets out all sums paid by way of legal expenses since 27 August 2020 (whether to lawyers in England & Wales or elsewhere) (“the relevant legal expenditure”), the sources of payment of such sums, the dates of receipt by his solicitors of such sums, the dates on which such sums were applied against invoices, and the terms of any arrangements with third parties in respect of them; (2) disclose to the Claimants and to the Trustees in Bankruptcy copies of the documents set out in the attached Schedule insofar as such documents are within his possession and control and relate to the relevant legal expenditure; and (3) provide to Keidan Harrison LLP a list of all documents disclosed pursuant to sub-paragraph (2) above (“the Disclosed List”).” (1) file and serve an affidavit which sets out all sums paid by way of legal expenses since 27 August 2020 (whether to lawyers in England & Wales or elsewhere) (“the relevant legal expenditure”), the sources of payment of such sums, the dates of receipt by his solicitors of such sums, the dates on which such sums were applied against invoices, and the terms of any arrangements with third parties in respect of them; (2) disclose to the Claimants and to the Trustees in Bankruptcy copies of the documents set out in the attached Schedule insofar as such documents are within his possession and control and relate to the relevant legal expenditure; and (3) provide to Keidan Harrison LLP a list of all documents disclosed pursuant to sub-paragraph (2) above (“the Disclosed List”).”

“2. Bank statements evidencing the ultimate source of relevant legal expenditure. 3. Bank statements evidencing any intermediate transfers.”