Artem Podstreshnyy v Pericles Properties Ltd
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Falk |
| Judgment Date | 14 February 2019 |
| Neutral Citation | [2019] EWHC 469 (Ch) |
| Docket Number | Case No: BL-2018-000275 |
| Court | Chancery Division |
| Date | 14 February 2019 |
[2019] EWHC 469 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mrs Justice Falk
Case No: BL-2018-000275
Stephen Fidler (Solicitor) (of Fidler & Co) appeared on behalf of the Second Defendant/Second respondent
Sarah Bousfield (instructed by Devonshires) appeared on behalf of the Claimant/Applicant
This is an application by the claimant, Mr Podstreshnyy, for a committal of Ms Sellers, the second defendant, pursuant to an application made on 14 June 2018. The application was first listed for hearing in December 2018 but was adjourned. I heard the evidence and submissions on 8 February but, due to lack of time, adjourned the hearing to 14 February for the decision and submissions on costs.
Background
Ms Sellers ran an estate agency business through the first defendant, Pericles Properties Limited. That company acted as a letting agent for the claimant. The claimant made a proprietary claim against the defendants for rent received by the first defendant and said to be held on trust for the claimant. It seems that the rent had been paid on to Ms Sellers from the company.
A freezing injunction was granted by Nugee J on 7 February 2018. That injunction materially provided that neither Ms Sellers nor Pericles Properties were permitted to remove from England and Wales or in any way dispose of, deal with or diminish the value of any of their assets in England and Wales to the value of £100,000 (paragraph 6). Paragraph 9 permitted a disposal of assets in excess of that value. Paragraph 10 provided that the respondents (that is both defendants) “must immediately and to the best of their ability, inform the applicant's solicitors of all of their assets in England and Wales, whether they are in their own name or not and whether solely or jointly owned, giving the value, location and details of all such assets.”
Paragraph 12 provided that the order did not prohibit the respondents from spending a reasonable sum towards ordinary living expenses or on legal advice, but before spending any money they were required to tell the applicant's legal representatives where the money was to come from.
On the return date for the injunction on 21 February 2018, Barling J continued the order, subject to some amendment to paragraph 6. In particular, he repeated the requirement at paragraph 10 of the earlier order to provide information about all of the respondents' assets. Paragraph 2 of Barling J's order states, relevantly, that the freezing order remains in place, including the requirement at paragraph 10 that the respondents must immediately and to the best of their ability inform the applicant's solicitors of all of their assets in England and Wales, whether they are in their own name or not, whether solely or jointly owned, giving the value, location and details of all the assets.
The note of the hearing before Nugee J indicated that the judge considered that Ms Sellers understood that the claimant's monies were held on trust and should have been segregated in client account. The note of the hearing before Barling J referred to a very clear admission by Ms Sellers, who was present at the hearing, that the monies were owed.
On 20 April 2018, Master Price gave summary judgment against the first defendant for about £90,000 but granted stays of execution and required the filing of an amended defence and counterclaim by 4 May. At a hearing before Morgan J on 15 June, attended by Ms Sellers and by Ms Seller's legal adviser, a Mr Stockinger, Morgan J was satisfied that there had been breaches of both of the freezing orders and that the first defendant had not filed the amended defence and counterclaim as required by Master Price. The judge accepted an undertaking by Mr Stockinger that Ms Sellers would immediately sign defences and admissions forms, including means statements, which had previously been filed. He made an unless order which provided, among other things, that unless the defendants disclosed all of their assets within the jurisdiction in an affidavit by 4 pm on 22 June, the defences would be struck out.
Morgan J also gave permission to serve Ms Sellers personally with the first committal application, which had by then been filed on 14 June. He made comments at the hearing, in Ms Sellers' presence, asking why Ms Sellers was not in prison and saying, “These orders are not made as some sort of polite request that can be ignored. They are the most serious order that can be made, and there is now very well-established precedent for someone who breaks the order being put into prison for up to two years.”
The defendants failed to comply with the unless order. There was a further hearing before Daniel Alexander QC, sitting as a Deputy High Court judge, on 25 July. Ms Sellers appeared in person. The judge considered an application for relief from sanctions and a last-minute application for an adjournment to obtain legal aid. Both were refused. The defences were struck out and judgment was entered against Ms Sellers in the sum pleaded within the Particulars of Claim, which was £112,452.40. The stays of execution were removed.
The committal application came before Fancourt J on 12 December 2018. Ms Sellers appeared late, as indeed she did this morning. Her previous adviser, Stockinger Advocates and Solicitors, was still on the record but Ms Sellers said she had recently instructed her current advisers, Fidlers, who had told her of the need to make a legal aid application. An adjournment was granted to a date between 6 and 8 February to give Ms Sellers an opportunity to obtain legal representation and for solicitors and counsel to attend. Fancourt J noted that this was an extremely serious application and also expressed considerable regret that the application for legal aid was only made on the day before the hearing. He noted the length of time that had elapsed since Ms Sellers had been served with the committal application in June and that Ms Sellers had done nothing until very late in the day. He made an order for costs thrown away by the adjournment to be paid by Ms Sellers, with the summary assessment to be adjourned to this hearing.
I understand that legal aid has now been in place for some weeks. However, Ms Sellers' representative, Mr Fidler, explained to the court that he had to chase repeatedly for instructions, only starting to receive them very shortly before the 8 February hearing.
Adjournment applications
At the start of that hearing on 8 February, Mr Fidler requested that the allegations be put directly to Ms Sellers and that following that, there should be a further 14 day adjournment. The reasons given were, first, that this would allow Mr Fidler to go through and take instructions on a short note just received from the claimant's counsel, analysing entries in bank statements exhibited to an affidavit produced by Ms Sellers on 31 January, so that the points made could be replied to. Secondly, Mr Fidler raised issues in relation to Ms Sellers' 13 year old son who lives with her. He said that it might prove relevant to refer to Family Court proceedings, and documents in those proceedings could not be disclosed without leave from the District Judge, which had not been sought.
I decided not to grant the adjournment requested, but did grant a short adjournment during the morning which proved sufficient, in my view, to enable Mr Fidler to go through the note provided by the claimant's counsel with Ms Sellers. In reaching the decision not to grant a longer adjournment, I took account of the fact that the note essentially did no more than raise queries on the documentary evidence supplied by Ms Sellers at the end of January. That evidence was also provided far later than it should have been, leaving the claimant's advisers very little time to respond.
I will refer to the issues relating to Ms Sellers' son again, but the court was able to proceed without specific reference to the family proceedings which I understand concluded, at least as far as the son was concerned, by 2017. The court did this by focusing on the current position and the situation during 2018. I also took account of the significant length of time that had already elapsed since the freezing orders were made and the comments made by Morgan J in June last year, when Ms...
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Courts In England And Hong Kong Order Immediate Prison Sentence And Restate Serious Consequences Of Disobeying Disclosure Orders
...of last resort, it is nonetheless appropriate in the case of serious non-compliance. England In Podstreshnyy v Pericles Properties Ltd [2019] EWHC 469 (Ch), Mrs Justice Falk considered the appropriate sentence for a contemnor for breaches of two freezing orders granted in aid of a proprieta......
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Courts in England and Hong Kong order immediate prison sentence and restate serious consequences of disobeying disclosure orders
...of last resort, it is nonetheless appropriate in the case of serious non-compliance. England In Podstreshnyy v Pericles Properties Ltd [2019] EWHC 469 (Ch), Mrs Justice Falk considered the appropriate sentence for a contemnor for breaches of two freezing orders granted in aid of a proprieta......