Islamic Investment Co of the Gulf (Bahamas) Ltd v Symphony Gems & Ors [2009] EWHC 2378 (Comm)

[2009] EWHC 2378 (Comm)Case No 2001 FOLIO 1226
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 01/10/2009
Before
MR JUSTICE DAVID STEEL
Between
ISLAMIC INVESTMENT COMPANY OF THE GULF (BAHAMAS) LTDClaimant(1) SYMPHONY GEMSDefendants(2) RAJESH KISHOR MEHTADefendant(3) VJAY KUMAQR KIRTLLAL MEHTADefendant
Anthony Trace Q.C. and Andrew Ayres (instructed by Norton Rose LLP) for ClaimantJames Hines (instructed by Byrne & Partners) for Second DefendantHearing Hearing dates: 23 July 2009
Judgment

Introduction

[1]The court is faced with two committal applications brought by the Claimant:- i) The first arises pursuant to CPR 71.8 and is based on the alleged failure of the Second Defendant (“RM”) to comply with an order of Master Miller dated 16 January 2007 to produce the documents prescribed in the order at or before a hearing on 11 March 2008. ii) The second arises under RSC Ord. 52 and is based on RM’s alleged failure to furnish proper particulars of the funding of his legal expenses as required by the Order of David Steel J dated 8 September 2008.

Background

[2]In order to put these applications into context it is necessary to record the extended background over the last seven years which has led to them. In particular many of the events throw light on the motives and intentions of RM in response to the court orders underlying these applications.[3]The claim arises out of a loan or Morabaha agreement between the Claimants and the First Defendants. The First Defendants were diamond traders. The loan was guaranteed by RM. Both the loan agreement and the guarantee contained an English law and jurisdiction clause.[4]Following an event of default, the Claimants (“the Bank”) issued these proceedings in 2001 against RM and in October obtained a worldwide freezing order from Thomas J (as he then was) in the sum of over $10million. The underlying claim came on for hearing before Tomlinson J in February 2002. In a detailed judgment, he held that all the defences that had been advanced by RM were unarguable and, accordingly, he struck out the defence.[5]RM sought leave to appeal. Mance LJ (as he then was) refused leave observing:
“Despite all the material in the witness statements and the notice of appeal, it is, in my view clear that the position is as simple in all aspects as the judge thought and explained in his reasons with which I find myself wholly in agreement.”
[6]Pursuant to paragraph 5 of the freezing order RM had produced a statement of his assets. They were mainly said to be situate in India. They included simply by way of example the following: Fixed AssetsLocationEstimated Value (INR) Agricultural land at Kharivili Village, India 7,500,000 INR Wada Taluka, Dist. Than (Wholly Owned on Ownership Basis) Shares and DebenturesLocationQuantityEstimated Value (INR) Beautiful Diamonds Ltd India 2,360,000 232,800,000 Beautiful Securities Ltd India 247,600 1,912,000 Beautiful Jewellers Pvt Ltd India 19,400 1,931,000 LoansLocationValue Loan to Symphony Gems NV Belgium Approx. BEF 153,280,667 Fixed AssetsLocationEstimated Value (INR) Agricultural land at Kharivili Village, India 7,500,000 INR Wada Taluka, Dist. Than Shares and DebenturesLocationQuantityEstimated Value (INR) Beautiful Diamonds Ltd India 2,360,000 232,800,000 Beautiful Securities Ltd India 247,600 1,912,000 Beautiful Jewellers Pvt Ltd India 19,400 1,931,000 LoansLocationValue

Loan to Symphony Gems NV Belgium Approx. BEF 153,280,667

[7]Following the rejection of the appeal, the Bank took steps to enforce the judgment in India. This process eventually ground to a halt in about 2004. This was as a result of a contention advanced by RM before the Indian courts that the judgment was a “summary” judgment and thus should not be recognised. The issue was referred by the Indian judge to the “Full Bench”. Unfortunately no progress was made towards the resolution of this issue over the ensuing five years.[8]In the meantime, the Bank changed tack and sought to pursue matters in London. On 16 January 2007 the Bank obtained an order for the examination of RM as a judgment debtor to give information about his means under CPR Part 71. The order, so far as material, reads as follows:
“1. the judgment debtor attend the Court at [] on 20th February 2007 before [] at 10.30 am/pm to provide information about his means and any other information needed to enforce the judgment or order. The questioning will take place before a Court Officer. 2. The judgment debtor at that time and place produce at Court all documents in the judgment debtor’s control which relate to each of the judgment debtor’s means of paying the amount due under the judgment or Order and which relate to those matters mentioned in paragraph 1. The documents produced must include those shown in the attached list of documents in Appendix 1 below. 3. The judgment debtor at that time and place answer on oath all the questions which the court asks and which the Court allows the judgment creditor to ask.”
[9]It is paragraph 2 of this order which forms the basis of the first application for committal. The original date for the oral examination was 20 February 2007. In the result there were numerous adjournments. In due course the effective date became 11 March 2008.[10]Despite the time thus available, it is common ground that in March 2008 RM produced no documents whatsoever pursuant to Paragraph 2 of the order. That failure, it is asserted by the Bank, justifies the finding of contempt. The primary contention of RM is (or has become) that the obligation to produce the documents had been superseded by intervening orders of the court.[11]I will revert to this topic in due course. For the moment it is convenient to set out the remarkable lead up to the present application. RM was originally required to attend Court on 20 February 2007 but the oral examination hearing was relisted for 1 May 2007 following difficulties experienced by the Bank in attempting to effect personal service on RM. The Bank was subsequently able to effect personal service on RM by a process server during a visit by RM to London on 25 March 2007, despite the fact that RM sought to evade service by denying his true identity.[12]RM was arrested and placed in custody in Antwerp on 11 April 2007 pending possible extradition to India. The oral examination hearing was adjourned until such time as RM was no longer in custody and would again be able to travel to London to attend a hearing. RM was released from custody on 25 May 2007. The Bank consequently obtained a relisting of the oral examination hearing for 3 July 2007. In light of the difficulties previously faced in effecting personal service on RM, the Bank obtained an order permitting service by an alternative method, namely by service on RM’s lawyers, Withers LLP in London.[13]Given the uncertainty regarding RM’s possible further detention or extradition which might again have prevented his attendance at a relisted hearing, the Bank obtained an order on 5 June 2007 that, in the event that RM was unable to attend the hearing on 3 July 2007, he should be required nonetheless to provide the documents listed in the appendix to the order to the Bank by 3 July 2007, together with an affidavit confirming their accuracy as regards the assets he held.[14]RM instructed his current solicitors Byrne & Partners on or around 28 June 2007. On the same date he applied for an order postponing the time for provision of the documents and the affidavit mentioned in the above paragraph until 17 July 2007 as a consequence of his change in solicitors. It was his further contention that he had received medical advice that he should not travel until the end of July due to a medical condition relating to two slipped discs in his neck, and sought to have the date of the hearing for oral examination postponed until such time as he was fit to attend Court.[15]Master Miller granted an order by consent postponing the date of the oral examination hearing until 9 October 2007, and requiring RM to provide the documents and the affidavit to the Bank’s solicitors by 10 July 2007. RM also consented to pay the Bank’s costs in the sum of £937.20 (although they remain unpaid).[16]On 10 July 2007, the date by which RM was required to provide the documents and the affidavit to the Bank’s solicitors, RM made a further application requesting that the previously agreed date for the production of the documents and the affidavit be extended until 31 August 2007. It was his contention such an extension was necessary as a result of his neck injury.[17]On 17 July 2007 Master Miller made a final order requiring RM to provide the documents and the affidavit by 4 pm on 31 August 2007. At the hearing Master Miller stated that this would be the RM’s “last chance” for compliance, and this order was consequently indorsed with a penal notice. RM was also ordered to pay costs in the sum of £1,500 (although these likewise remain unpaid).[18]On 3 September 2007, i.e. three days after the deadline, RM issued an application challenging the jurisdiction of the Court to make an order for the production of documents in advance of an oral examination. On 14 September 2007, the Bank issued an application to commit RM for failing to produce the documents and affidavit.[19]The above applications came on before Andrew Smith J on 4 October 2007. Andrew Smith J agreed with RM that the orders for the provision of documents and an affidavit prior to the oral examination could not stand as a matter of jurisdiction. Andrew Smith J made no order on the Bank’s committal application.[20]On 8 October 2007, Andrew Smith J dealt with RM’s application for an adjournment of the oral examination due to take place on the next day, 9 October 2007. On 8 October 2007, RM was in fact travelling from Belgium to India, apparently pursuant to his “voluntary” agreement to go there in order to avoid Belgian extradition proceedings. RM’s adjournment application was granted and the oral examination ordered to take place on the first available date after 12 November 2007. After consideration of written submissions on costs, on 23 October 2007, Andrew Smith J ordered RM to pay costs of £22,000 (although they, like all others, remain unpaid).[21]The oral examination was relisted for 27 November 2007. On 26 November 2007, RM made a further application for an adjournment, put on the basis that the end of December 2007 was the earliest date upon which RM could leave India. The application was heard by Master Miller on 6 December 2007 who granted the adjournment until 31 January 2008 and ordered RM to produce written answers to a list of questions by 14 February 2008 in the event that the oral examination did not proceed on 31 January 2008.[22]Nothing further was heard from RM and no indication was given that there would be any problem in him attending on 31 January 2008 but RM did not attend on 31 January 2008. In the result Bean J made a suspended committal order. This was set aside by the Court of Appeal, who decided on 11 March 2008 that, in the light of an apparent requirement on RM to remain in India until the end of 31 January 2008, RM’s failure to attend before the English Court was not contumacious. Nonetheless the Court of Appeal ordered RM to pay all the costs. Like all the others, these costs remain unpaid.[23]RM finally attended the examination on 11 March 2008 concurrently with the appeal. For this purpose RM produced a witness statement claiming in respect of the vast majority of questions ordered on 6 December 2007 to be answered by Master Miller by 14 February 2008 the privilege against self incrimination.[24]At the oral hearing in March, RM likewise claimed privilege against self incrimination in respect of the vast majority of the questions posed to him. This was for example in response to such questions as:
“Do you have any sources of income other than cash furnished by your mother? Do you have any business interests? Do you own any shares? Do you have any bank accounts? Do you own any personal possessions in excess of £100 in value?”
Nevertheless, during the examination, RM promised to produce some documentation in any event within 21 days but characteristically did not do so.[25]On 24 April 2008 there was an application by the Bank to the effect that RM should spell out specifically what the basis was for him claiming privilege against self-incrimination. By an order dated 16 May, Master Miller ordered that a written explanation be furnished by 20 June, and a hearing was listed for 14 July. By 20 June no written explanation had been furnished as to the nature of the claim for privilege despite the fact that any suggestion that there was a legitimate claim to privilege under English law was not in the event suggested. Nor was any reason furnished to the court as to why the explanation had not been provided in response to the order.[26]RM flew to England on 21 June. It appears that he went to see a doctor on 22 June. On 23 June, RM’s solicitors told the Bank that the witness statement of RM was "still being prepared" and would be served in the course of that week and, in response to a request to extend time, the Bank’s solicitors extended time for the provision of the statement to 27 June.[27]Despite this, on 26 June, RM’s solicitors wrote to say that RM was unable to prepare a statement because of his medical condition. A report from the general practitioner was furnished dated 24 June. This followed a scan and a discussion with a consultant at the West London Spine Clinic, who was proposing possible surgery. RM’s general practitioner, in a short medical report, confirmed that the patient had lumbar disc lesion and was undergoing active treatment which might include surgery. He went on to say: "He will not be fit to undertake any work or travel for at least the next four weeks and I shall issue a further statement in due course".[28]It would appear that early in July RM may have received one or more injections from a consultant to ease the pain. On 3 July the general practitioner reported again to the effect that the patient was making some progress but was "unable to attend to any business matters for at least another four weeks from this date". The following day RM’s solicitors were instructed to make an application to adjourn the hearing.[29]In my judgment on the adjournment application (which I refused), I stated that it was somewhat surprising, to put it no higher, that the medical condition of RM was such as to inhibit his ability to give instructions to his solicitors with regard to the question of self-incrimination. It should be noted in passing that at this time RM was under observation from a corporate investigations company. Their report on RM’s activities and the premises that he had visited was put before the court and relied on by the Bank.[30]The following day, 15 July, the hearing on the privilege issue took place and, after hearing leading counsel for both sides, I decided that issue against the defendant, namely that it was not open to him, either as of right nor even as a matter of discretion, to claim any privilege against self-incrimination.[31]18 July was the date appointed for the resumption of the examination. That was met on that morning by an application by RM to adjourn. By way of summary of the medical opinion at that stage, there was no question that RM had significant problems in his back which were occasioning pain. It was clear that surgical intervention might be appropriate, although RM made it plain that that was not what he wished to happen. However his own doctor, having explained in his earlier reports that RM was unfit to travel, unfit to work and unfit to come to court, stated that in his opinion the condition would be likely to improve within three or four weeks so long as there was good rest and recuperation.[32]Against that background, I did adjourn the hearing and, having in mind the need for rest and a further period to take further instructions and to prepare documents and statements, I fixed a resumed hearing for the examination before me on 8 September when I was due to be sitting as the vacation commercial judge. I made it plain that the hearing (in order to satisfy RM about any conceivable risks with regard to incrimination in Belgium and India about which he had expressed concern) would be in private and I also made it plain that the hearing would be conducted in short sessions in order to ensure that RM’s back condition was not exacerbated.[33]However, I also ordered that prior to the hearing he should produce the documents which he had promised for over a year, he should supplement the statement in which the claim to privilege had been maintained, and he must provide an explanation of the source of funds for engaging his solicitors and counsel.[34]It was one of the striking features of the situation that the freezing order, made some eight years ago, required him, as I saw it, to disclose the source of such funds, albeit he was entitled to retain reasonable legal representation. No intimation of the source of funds had ever been forthcoming yet throughout he had retained solicitors, leading counsel and junior counsel, and, for that matter, legal representation in Belgium and in India. This is a topic to which I must return when considering the second application.[35]At the same hearing there was also an application for delivery up of RM’s passport. I refused that application, primarily because it had been raised very late. In any event, given the fact that RM had been told that he was unfit to travel as well as unfit to do any business, it did not seem to me that either he or the Bank would be prejudiced if the matter was left in limbo. What I did require was that RM gave 48 hours' notice of any intention to travel.[36]There matters rested for only a few days until 21 July, when Messrs. Byrne and Partners wrote to Norton Rose saying that RM had been in discussion with his family and medical adviser and wanted to rest and recuperate with his family in India. The consequence of receiving that letter was that Messrs. Norton Rose on behalf of the Bank notified Messrs. Byrne and Partners of an intention to apply to this court for a Bayer v. Winter order, whereby he would be required to surrender his passports. I duly made such an order with a view to his remaining in England until 8 September. An important ingredient of that decision was the information not challenged by RM then or later that he had been living, as is his custom on visits to London, at 10 Limerston Street, Chelsea, at which his partner and some or all of his children are also resident. That appeared to afford an adequate opportunity for rest. As regards any wish to travel to India to obtain medical advice there was no evidence why it was necessary to seek additional medical advice when he had three or four doctors already giving him advice in England and had been specifically advised not to travel or even attend court in London.[37]In short I regarded RM as constituting a flight risk in circumstances where he was well able to stay and recuperate in England. It was true that he had attended in March but that seemed to me to be the consequence of the committal order which was going to be heard in the Court of Appeal. This was the only reason why he was here and why he was minded to attend the examination during which he claimed privilege throughout.[38]On 24 July 2008, RM made his first of numerous applications to have the Passport Order set aside. After a further (second) application to Blair J on 2 September 2008 (which was dismissed), on 8 September 2008 (his third application), I took the view that, whilst RM might have some medical grounds for declining to attend for his oral examination, there was no excuse for having failed to comply with all the obligations to provide documents and information. I continued the order requiring RM’s presence in the jurisdiction but imposed four conditions in the order allowing RM to leave the jurisdiction upon compliance, namely: i) Condition (a):provision by RM to the Bank’s solicitors of all documents ordered to be provided pursuant to paragraph 2 of the order of Master Miller dated 16 January 2007; ii) Condition (b):provision by RM to the Bank’s solicitors of an updated witness statement pursuant to the order of Master Miller dated 6 December 2007 to include full answers to each question to which RM wrongfully invoked the privilege against self incrimination in his witness statement of 11 March 2008; iii) Condition (c): provision by RM to the Bank’s solicitors of the documentation and information (by way of signed witness statement) that RM agreed to provide to the Bank during the oral examination on 11 March 2008; and iv) Condition (d): provision by RM to the Bank’s solicitors of a full explanation of how his legal advisers in this action are funded, as required pursuant to paragraph l (v) of the Order of 18 July 2008.[39]These conditions were upheld on 13 November 2008 (the fourth application by RM for the return of his passport) when R again sought to travel to India for rest and recuperation. This was on the basis that there was no justification for RM’s failure to instruct his London lawyers to collate all the documents, information and evidence required to comply with the conditions set out above.[40]On 5 December 2008, RM made a further application to be able to travel to India on the grounds of wanting to comfort the injured and bereaved in India after the Mumbai massacre. This was in marked contrast to his supposed need for complete rest, as expressed to the Court on 13 November 2008. This application was also dismissed.[41]At the hearing on 15 January 2009, I yet again adjourned RM’s oral examination but ordered that RM be cross-examined on his affidavit produced on 12 January 2009 purportedly in compliance with the obligation to give details of his legal expenses funding. I also made an order requiring RM to sign bank authorities directed to various foreign banks or banks with foreign branches in order to disclose details of the accounts from which RM has been receiving his considerable legal expenses funding. RM failed to comply with his obligation but he filed an application for permission to appeal this order with the Court of Appeal, which application has been subsequently abandoned.[42]In the meantime RM had issued an application seeking an oral hearing for leave to appeal against the orders of 18, 22 and 24 July 2008 and 13 November 2008 (leave having been refused by the single Lord Justice). This was due to come on for hearing before the Court of Appeal on 30 January 2009 but was adjourned due to the illness of RM’s counsel.[43]The Court of Appeal gave RM permission to appeal on the issues of privilege and against the passport order as continued on 13 November provided he complied with three stringent conditions by 23 March 2009, being the payment of security for costs (£80,000), the payment of all outstanding costs orders (£204,517.48) and the payment of US$10 million (effectively the judgment sum) into Court.[44]On 12 March 2009, RM made an application to me for permission to return to India on the grounds of needing to be there by 18 March 2009 to deal with various Indian Orders. This application was refused, but was renewed on 19 March 2009 after RM had made an application in Mumbai for variation of his permission to be outside India (which was refused in India). This again was refused. Immediately afterwards on 20 March 2009, RM issued yet another application for permission to travel (his eighth no less) but this in the event was not pursued.[45]R failed to comply with any of the Court of Appeal’s conditions but made an application for an extension of time to pay. This came on for hearing before the Court of Appeal on 30 March 2009 together with his urgent application for permission to appeal the order made on 19 March 2009. The Court of Appeal varied the timing of the conditions from the order of 20 February 2009 to give RM more time to comply with each of the 3 conditions but dismissed the application for permission to appeal the order.[46]The oral examination and cross-examination on the affidavit were re-listed on 26 March 2009 (adjourned from 15 January 2009) but these were further adjourned by consent in the light of the application to the Court of Appeal for an extension of time for compliance with their conditions.[47]By virtue of the order varying the times for compliance, the first condition (payment of £80,000 security) fell due at 4pm on 8 April 2009. RM did not meet this time limit then or since. The appeals in respect of privilege against self-incrimination and in respect of the Order of 13 November 2008 fell away automatically by virtue of the order of the Court of Appeal of 30 March 2009 as a result of the non-compliance with that condition.[48]On 8 April 2009, a further hearing of RM’s oral examination and of his cross-examination in relation to his affidavit of 12 January 2009 was fixed for 24 April 2009. This at last duly took place on 24 April 2009 and was continued on 27 April 2009. Nonetheless a number of matters remain unanswered or unresolved and RM undertook to take steps to provide a considerable amount of further documentation. Following the hearing RM’s passport was restored to him.[49]The undertaking in regard to documents was duly made the subject of an order of the court dated 6 May 2009. This was based on a list of further documents specified in a letter from the Bank’s solicitors dated 29 April 2009. The order required production of the documents by 20 May 2009 failing which a witness statement was to be filed explaining why they were not available. In the event RM provided neither documents nor any explanation by the due date.[50]RM’s examination resumed on 22 July 2009. It was preceded by presentation of an unsworn affidavit of RM attached to which were a few documents referred to below. On the following day this committal application was heard.[51]It is common ground that RM has the resources to meet the judgment debt. But in my judgment this history demonstrates a determination on the part of RM to devote his time and money to avoid payment and to obstruct the enforcement process. The impression is fortified by the content of the oral examination as so far completed. I regret to say that my reaction is that few witnesses have instilled less confidence in their testimony whether from the perspective of reliability or completeness. Throughout he was evasive and unconvincing. Save where unchallenged, I would be hesitant to accept any of his evidence absent corroborative material.

Order 16 January 2007

[52]It is common ground that no documents were produced by RM on the eventual effective date of 11 March 2008, either within the general scope of paragraph 2 of the order or within the specific scope of Appendix 1 of the order which were required to be included.[53]In accordance with CPR Rule 71.8(1) the issue of RM’s failure to comply with paragraph 2 was referred to a judge of the Commercial Court on 16 May 2008. This was to be the same judge who was to rule on the claim to privilege against self-incrimination advanced in RM’s witness statement dated 11 March 2008 and in his oral evidence the same day.[54]It is a matter of note that no express claim to privilege was advanced at any stage with regard to any documents. In the event such a claim could not, in my judgment, have been advanced bona fide in respect of all documents. Indeed, the whole claim to privilege was without merit for the reasons set out in my judgment of 16 July 2008.[55]It is true that the Court of Appeal gave conditional leave to appeal against that decision in February 2009. But it is clear that the prospects of success were at best very limited: i) The position under Section 14 of the Civil Evidence Act was clear. Thus RM could only succeed as a matter of discretion. ii) There had been no challenge to the CPR Part 71 order and thus it is doubtful whether there was any discretion to exercise. iii) Whilst a different view of the discretionary factors might be reached, it is clear that the court viewed the prospects as poor. Indeed leave was granted with “reluctance”. iv) More to the point a clear perspective of the Court of Appeal’s view of the merits can be derived from the stringent conditions imposed. In the event none of these conditions were met despite the resources available to RM, thus demonstrating his own lack of confidence in the outcome. That lack of confidence was in my judgment well founded.[56]Be that as it may, the primary defence now advanced to the claim that the failure to provide documents on 11 March 2008 was a contempt is the contention that paragraph 2 of the original order of January 2007 had been superseded by subsequent orders of the court and was no longer in effect. I say “now” because there has been no inkling of any such contention until this application despite, for instance, the form of order of 16 May 2008 whereby Master Miller referred the issue of failure to comply with paragraph 2 to a judge.[57]The argument constructed on behalf of RM was to the effect that the requirement to produce the documents had been replaced by a requirement to provide responses to the questionnaire scheduled to the order of Master Miller dated 6 December 2007.[58]In my judgment it is not surprising that this argument has not seen the light of day until now as it is misconceived (although the fact that it is advanced is in a piece with the characteristic determination of RM to take any point which might impede the enforcement process).[59]The position is as follows. In June 2007 the Bank obtained an ex parte order requiring RM in the event that he could not attend the relisted hearing on 3 July 2007 to produce nonetheless the documents listed in the Appendix on that date. This two stage process was extended by a further order in July but was set aside in October by Andrew Smith J.[60]The Bank, faced with the regular adjournments of the examination, sought to change tack. Instead of seeking documents in place of any adjourned hearing, the Bank obtained an order for responses to a questionnaire in the event the January 2008 hearing was adjourned (as indeed it was). There was no variation of paragraph 2.[61]The survival of paragraph 2 of the January 2007 order was further confirmed by the Court’s order of 18 July 2008. This was not, as contended by RM, a fresh order as is apparent from its terms:
“i. The Second Defendant shall provide to the Claimant’s solicitors 10 days prior to the Re-Listed Hearing all documents ordered to be provided pursuant to paragraph 2 of the Order of Master Miller dated 16 January 2007.”
[62]As a secondary line of defence RM also contended that there had been no personal service of the order of January 2007 with the relisted hearing date of 11 March 2008. This is a surprising submission given his attendance on that date. In any event, it is clear that due service was effected on 1 February 2008 on Messrs Byrne and Partners in accord with an agreed form of service and further in accord with the terms of an order of Teare J dated 21 February 2008.[63]It follows that I accept that RM failed to comply with the Order of Master Miller at or before the hearing on 11 March 2008. It follows that I have jurisdiction to make a committal order under CPR 71.8(2).[64]Before exercising any such discretion I must be satisfied to the criminal standard that the failure to comply was contumacious in the sense that RM wilfully disobeyed the[65]In that regard, I have no hesitation in concluding that RM’s contempt was contumacious. Throughout the period from March 2007 to March 2008 RM’s stance is only consistent with a refusal to comply with the order to produce documents. Indeed, no suggestion was made that any material attempt to obey the order had been undertaken. The suggestion that the order had been superseded was, as already noted, a late and misconceived proposition.[66]This leads on to the question whether since March 2008, there has been compliance or substantial compliance with the order albeit delayed thereby in effect purging the contempt. Any compliance in turn has a bearing on the terms of any suspended order and the nature of any sanction that could be imposed, which are separate considerations.[67]By way of example Appendix 1 of the January 2007 order calls for “any documents or agreements which record any interest in real property and any documents relating to any shareholding.” The original freezing order made in October 2001 and amended in November 2001 required RM to inform the Bank of his world-wide assets. As already recorded in his affidavit (sworn in December 2001) RM identified various items of real estate, bank accounts, shares and other funds owned by himself (and by his uncle the Third Defendant). Despite the order of January 2007 and Appendix 1 thereto no relevant documentation relating to those assets has been produced to this day.[68]Appendix 1 also refers to all tax returns over the last five years, documents relating to any trust or settlement, documents relating to personal property, documents relating to life insurance and so on. There remains the broader requirement under paragraph 2. In the result little has been produced. It is right that in the run up to the resumed examination in April 2009 a clip of documents was produced by RM which purported to comply with that obligation under cover of a letter dated 23 April 2009.[69]In regard to this material, the Bank commented as follows:
“Of the 230 of pages of material disclosed by the Second Defendant, 189 of these comprise copies of Court documents relating to Indian legal proceedings which provide minimal useful information of relevance or value. A further 20 pages of the disclosure relates to Belgian legal documents, which have not been translated and which in any event are highly unlikely to provide the Claimant with any relevant information. The remainder of the disclosure comprises a handful of copy bank statements relating to accounts held in India with minimal credit balances, various Indian and Belgian tax forms and a single page which the Defendant has included relating to the accounts of a company called Iris Trading Co.”
[70]I accept the Bank’s submission that it is simply not credible for an international diamond trader of the Second Defendant’s means to claim that this disclosure represented even a minor part let alone the entirety of the relevant material available for disclosure pursuant to the January 2007 order.[71]As already recorded, in the ensuing examination, RM agreed to provide additional documentation. This undertaking was incorporated into an order of the court dated 6 May 2009 to the effect that the documentation be provided by 20 May 2009 failing which a witness statement explaining the reasons for the default be produced. In the event the deadline passed without any compliance.[72]On the eve of the resumed hearing of the examination in July 2009, RM produced an unsworn affidavit which contained an apology for failure to comply with the latest order timeously. This was said to be attributable to his poor health and the need to cope with the proceedings in India. Both explanations lack conviction. The small number of attached documents were largely made up of very recent requests for documents from third parties to which no response has been received.[73]It was the Bank’s position that there had been large scale non-disclosure of documents, a proposition supported by the production of a number of documents by the Bank which were copies of documents manifestly within RM’s control. Some of these were put to RM in the course of the examination. Even then a complete documentary picture of a number of RM’s interests remains wholly unrevealed.[74]In particular, as emerged from his oral examination there are a number of matters involving RM which cry out for further documentary disclosure: i) Relationship with UBS, Barclays and Mashreqbank. ii) Relationship with various BVI companies. iii) Relationship with Valuable Resources Ltd and the dissipation of substantial proceeds of settlement of litigation relating to Jet airways. iv) Relationship with Group Beautiful. RM’s responses to questions on these topics and his reaction to various documents put to him revealed RM at his most obscure and unconvincing.[75]In my judgment RM wilfully disobeyed the order of January 2007 in March 2008 and nothing that has happened since makes it inappropriate to impose a suspended committal order in respect of that contempt. I am satisfied that it is proper to impose a penalty. Only the coercive threat of the imposition of such a penalty has the prospect of ensuring obedience on the part of RM. As regards the conditions to any suspension, I accept in broad terms the terms suggested by the Bank in a draft order but subject to further comment on behalf of RM. The process of specifying the nature of the sanction and the period of suspension during which compliance be achieved must also involve furnishing an opportunity of RM to make further submissions in this worryingly protracted litigation.

Order of September 2008

[76]The terms of the Court’s order of 8 September included the following requirement:
“The Second Defendant file and serve upon the Claimant’s solicitors an affidavit by 4pm on 15 September setting out the source of funding for all his legal expenses from 1 January 2007 to date and give full particulars thereof (including the provision of documentary evidence in relation thereto).”
[77]In the event the time limit was extended by further order to 26 November. Both orders, each containing a penal notice, were personally served on RM on 17 November 2008. In the meantime Messrs Byrne &Partners had responded to a related order revealing payments from two Dubai based companies named Douglas Corporation and International Luxury Distributors amounting to £271,000 “on instructions from” Mashreqbank PSC or Barclays Bank. RM did not respond by the deadline. Only on 12 January 2009 did RM seek to comply. This was purportedly achieved primarily by serving an affidavit exhibiting Messrs Byrne & Partners letter.[78]His affidavit explained that any requirements for payment of legal costs were being met by one or other of his parents making payment direct to his solicitors. That apart he claimed that he knew no more than his solicitors and his parents had refused to give him any details of the companies concerned. This refusal and RM’s inability to gain further information reflected, it was contended, the impact of the order obtained by his father and other members of his family in the High Court of Bombay restraining the disclosure of financial information “in breach of confidence”.[79]The situation thus described is unquestionably odd if not suspicious: i) RM is a middle aged man with children. Yet it is claimed that he has no cash resources or credit cards and is dependent in his parents not just for his legal and medical costs but for all his living expenses. ii) Despite this, the legal expenses incurred by RM are handsome by any standards. He has incurred £270,000 in the form of his own legal expenses in England (together with an undischarged debt of £200,000 for legal expenses incurred by the Bank) together with other legal costs incurred in Belgium, India and elsewhere. iii) There is no evidence to corroborate the suggestion that his parents have been asked for information about the companies involved but have refused. Nor is it obvious why disclosure of such information should involve a breach of confidence by RM. iv) It is surprising that the payments and associated emails relating to the payments do not appear to identify any natural person. Indeed anonymous email addresses are used.[80]It follows that it is possible that the information furnished by RM is untrue. But that is not the complaint. The Bank asserts that RM has failed to give “full and proper particulars”.[81]Again it is necessary to take things in stages. First was the failure to comply with the order by 26 November wilful disobedience? It was RM’s submission that the failure was not contumacious given his medical advice at the time. In particular reliance is placed on the fact that RM underwent surgery on 14 October and remained in hospital until 23 October 2006.[82]His surgeon reported on 15 October to the effect that he should avoid court matters and engagement with lawyers. This advice was repeated on 17 November. This advice does not seem to have prevented RM from giving instructions to his lawyers. On 13 November he sought the return of his passport to travel to India for rest and recuperation. On 5 December he made a further such application so as to travel to India in the aftermath of the Mumbai killings. The applications were rejected for the reasons given in my judgment.[83]But the important point from the present perspective is whether it is arguable that the failure to furnish the information contained in his affidavit of 12 January 2009 was not the consequence of a wilful refusal to obey the order in November. I think not. There is nothing in the affidavit which called for more than the telephone call to his solicitors. Indeed it is notable that the medical advice in January when he did respond remained precisely the same.[84]More difficult is the question whether the information eventually furnished in January falls short of the information required. For this purpose it is not to the point that the information may be unreliable. The question must be this: if compliance with the order is made a basis for a suspended committal (and I am not persuaded that immediate committal could be appropriate) what further particulars would be required to avoid the sanction? It is manifestly important that the person in contempt must understand the scope of his obligation of avoid the imposition of the sanction. I confess (albeit with some reluctance) that I am driven to the position that the information provided in January (assuming it to be true) constitutes an adequate response to the order and any finding of contempt would be largely redundant.

order

Islamic Investment of the Gulf (Bahamas) Ltd v Symphony Gems [2008] EWCA Civ. 389.