4VVV Ltd and Others v Nicholas Spence

This is the hearing on 24 June 2024, of a contempt application, brought by the claimant against the second defendant, Mr Kewley (“second defendant”), issued and sealed on 28 July 2023. Until the making by me of a consent order on 19 June last, this application had been, apparently, fully contested and listed for a hearing over a period of four days.

On 19 June 2024, I approved a consent order, by which the second defendant consented to a declaration that he was in contempt on each of the four grounds set out in annex 1 of the order, and that he should pay in an agreed sum of £55,000 for the period down to 3 June 2024, and the remainder of the costs of the application to be summarily assessed at this hearing. In the result, this hearing is primarily concerned with, and this judgment is exclusively concerned with sentencing the second defendant for his admitted contempt.

The second defendant has, by his leading counsel, Mr Collings KC, apologised for his admitted contempt and, indeed, has apologised personally at the conclusion of Mr Collings' submissions. Mr Collings submits on behalf of the second defendant that it is appropriate in the circumstances that any custodial sentence I impose should be suspended. Mr Saol KC rightly accepts on behalf of the claimant that sentence is a matter for me and not the claimant, but nonetheless implicitly accepts that suspension of any custodial sentence would be appropriate — see, in particular, paragraphs 103 to 104 of the claimant's written opening submissions.

The application is concerned with the admitted failure by the second defendant to comply with the information provision obligations imposed on him as an ancillary to freezing orders made against him in these proceedings. It is not alleged that any assets have been dissipated nor, ultimately, dealt with in a manner not permitted by the freezing order. It is not necessary that I set out in this judgment in any great detail the background to the claims made in these proceedings. They are set out in paragraphs 8 to 47 of my judgment in these proceedings at [2023] EWHC (Comm) by which I dismissed applications by the first and third defendants for orders discharging the freezing orders made on 4 February 2021 by Calver J on a without notice basis, and continued inter partes by Cockerill J on 12 March 2021.

Following issue of the contempt application on 19 October 2023, Jacobs J ordered the second defendant to file and serve evidence in answer, if so advised, by 26 January 2024. The second defendant did not comply with that direction but, instead, served an affidavit containing material relevant to mitigation, including a GP medical report only on 21 June 2024. That is some three days after the consent order was approved and three days before this hearing.

I read the material exhibited to that affidavit de bene esse, and came to the conclusion that the medical evidence, in particular, was likely to be significant to the sentencing exercise. Given the circumstances, I gave the claimant the opportunity to apply for an adjournment of the hearing, given the late service of the affidavit, and that it had been served in breach of the directions given by Jacob J. The claimants elected to proceed without seeking an adjournment. The evidence is, therefore, admitted unchallenged.

Before turning to the issues that arise, I should recall that the claim is a group claim. Ten lead cases were selected to be taken to rial, and those cases were tried by Foxton J over ten weeks from 15 April to 13 June 2024. Judgment has been reserved and as things stand currently, it is expected to be handed down sometime in October of this year. The claimant's primary concern is to ensure that the second defendant complies with the freezing orders in the period between the end of the trial and the hand down of judgment by Foxton J. It is this that is the focus of the claimant's submission that it may be appropriate for any custodial sentence to be suspended on terms which include compliance with the freezing orders.

I now turn to the orders which the second defendant admits having breached. On 4 February 2021, Calver J made an initial freezing order against the first to third defendants on a without-notice application by the claimants. By paragraph 9 of the order, the first to third defendants, including therefore the second defendant, were ordered,

“…within seven days of service of this order, and to the best of his ability, inform the applicant's solicitors of all his assets worldwide exceeding £10,000 in value, whether in his own name or not, and whether solely or jointly owned, giving the value, location and details of all such assets…”

The second defendant provided disclosure in accordance with the order. The second defendant did not disclose various substantial debts due to him from various companies and individuals, which it is now accepted had a combined value of in excess of £5 million, or the existence of a holding of premium bonds worth in excess of £41,000.

On 12 March 2021, Cockerill J determined an application by the claimants to continue the freezing order until trial or further order. There was a dispute on that occasion as to whether or not the defendants or all of them had complied strictly with the information disclosure provisions of Calver J's order. Rather than enter into a debate for which there was little or no time available, Cockerill J continued the order made by Calver J, and made further disclosure orders as follows,

“Provision of information and documents.

8. Save to the extent the respondent has done so in compliance with paragraphs 6 and 10 of the order of Calver J dated 4 February 2021 –

(1) …the first and second respondent must, forthwith, and to the best of their ability, inform the applicant solicitors of all their assets worldwide, exceeding £10,000 in value, whether in their own names or not, and whether solely or jointly owned, giving the value, location and details of all such assets.

(2) This is to include, to the extent not already provided, and if it is the respondent's position that this information has already been provided, the respondent is to identify by letter to the claimant's solicitors, the communication in which it was so provided –

(a) full details of bank account numbers and sort codes held by the first and second respondents …

(c) in the case of the second respondent, information as to where the second respondent's pension fund is held, to include full details of trustees and all relevant management companies, and the amount held in that fund…”

On 29 April 2021, the solicitors acting for the claimants wrote to the solicitors acting for the second defendants, asking them to confirm whether the second defendant held any stocks, shares, ISA's or other investment fund accounts, or whether he had advanced any loans to an entity called Bond Gate Holdings Ltd, or to other named companies, or had made loans to any other companies or individuals, with a value of in excess of £10,000. It is submitted by the claimants, and not disputed by the second defendant, that it was necessarily implicit in such requests that such loans were assets. Indeed, in the course of oral submissions at this hearing, Mr Collings accepted as close to obvious that the loans were, indeed, assets coming within the scope of the freezing order.

The second defendant's solicitor responded on 6 May 2021. It is not necessary that I set out the letter in detail, other than to say it is suggested that the inquiries being made by the claimants constituted a fishing expedition and/or were impermissibly intrusive. The letter added that the second defendant did not have any stocks, shares or investment funds other than as disclosed already. In relation to loans, the second...