Barclays Bank Plc v Scott Dylan
| Jurisdiction | England & Wales |
| Judge | Mr Justice Rajah |
| Judgment Date | 31 July 2024 |
| Neutral Citation | [2024] EWHC 1994 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: BL-2021-001939 |
[2024] EWHC 1994 (Ch)
Mr Justice Rajah
Case No: BL-2021-001939
BL-2021-002082
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Anthony Peto KC and James Knott (instructed by Eversheds Sutherland (International) LLP) for the Applicant
Ian Bridge and Gurprit Mattu (instructed by Lewis Nedas Law) for the First Respondent
John McKendrick KC and Anson Cheung (instructed by Janes Solicitors) for the Second Respondent
James Counsell KC and Michael Uberoi (instructed by Janes Solicitors) for the Third Respondent
Hearing dates: 25, 26, 27, 28 June, 1, 2, 3, 4, 15 July 2024
Approved Judgment
This is the official judgment of the court and I direct that no further note or transcript be made.
Introduction
This judgment arises from a trial, over nine days, of applications made by Barclays Bank Plc (“ Barclays”) to commit each of Scott Dylan (“ Mr Dylan”), David Antrobus (“ Mr Antrobus”) and Jack Mason (“ Mr Mason”) (together “ the Respondents”) for breaching three freezing orders.
On the fifth day Mr Dylan accepted that he was in contempt of court in respect of two of the four charges levelled against him. Barclays did not pursue the remaining two charges and Mr Dylan ceased to attend the hearing. One or both of his counsel attended for the remainder of the hearing to deal with consequential matters arising from his change of position and by way of watching brief. Mr Dylan will be sentenced at a hearing to be listed after 1 October 2024.
This is the judgment on liability in respect of Mr Antrobus and Mr Mason. I have already made clear that if there is to be any sentencing which flows from this judgment it will happen at the sentencing hearing for Mr Dylan.
Summary of the dispute
On 23 March 2022, an entire group of companies ultimately owned and controlled by the Respondents (with Mr Dylan's partner) through two English holding companies, was transferred to two companies in the British Virgin Islands. Although not all of the companies were the subject of freezing orders, certain companies clearly were, and their transfer abroad is an apparent breach of at least three freezing orders.
On 2 July 2024 Mr Dylan produced an affidavit accepting that he was in contempt but stating that his role was limited. He said that while he had advised on the steps which should be taken, they were carried out by unnamed “others”. I have made clear that I am not bound in any way by Mr Dylan's statements as to his role in the findings I may make in this judgment.
Both Mr Antrobus and Mr Mason deny that they had any involvement in these transactions. They say they had no prior knowledge that these transfers were to happen and they discovered them after the event. An important issue in this case is whether the transactions were arm's length sales carried out by a director based in the Seychelles called Rea Barreau (“Rea Barreau”).
Barclays' primary case is that this was a joint enterprise by all three Respondents to move the companies out of the jurisdiction. Whether this was a joint enterprise or not Barclays must prove each of the elements of each charge of contempt against each of Mr Mason and Mr Antrobus to the criminal standard. In respect of one charge relating to the discharge of a debenture there is an issue as to whether there was any debt secured by it when the debenture was released. In respect of a movement of shares belonging to Mr Mason personally there are issues as to why these were moved and when, whether this was beyond his control, and whether Mr Antrobus was involved in it.
Law
There was no disagreement on the applicable principles, although the parties placed emphasis on different aspects.
Civil contempt proceedings are quasi-criminal in nature and the Court applies a high standard of procedural fairness; Navigator Equities Ltd and another v Deripaksa [2021] EWCA Civ 1799 at [79] and [132].
Where the alleged contempt consists of a breach of an order by the respondent to the order, the Claimant must prove: (i) that the respondent knew of the terms of the order; (ii) that he acted (or failed to act) in a manner which involved a breach of the order; and (iii) that he knew of the facts which made his conduct a breach: Kea Investments Ltd v Watson [2020] EWHC 2599 (Ch) at [19], per Nugee LJ. In this regard, the Claimant need not prove that the respondent knew or believed that his acts amounted to a breach of the order; notice of the order and proof that the respondent's conduct has breached the order is enough to give rise to a contempt: Varma v Atkinson [2020] EWCA Civ 1602, [2021] Ch 180 at [54], per Rose LJ. It is irrelevant whether the respondent is a party to the proceedings in which the order is made or named in the order.
. A director of a company subject to a court order “is under a duty to take reasonable steps to ensure that the order or undertaking is obeyed, and if he wilfully fails to take those steps and the order or undertaking is breached he can be punished for contempt. We use the word “wilful” to distinguish the situation where the director can reasonably believe some other director or officer is taking those steps. [….] There must however be some culpable conduct on the part of the director before he will be liable to be subject to an order of committal…; mere inactivity is not sufficient”.
( Attorney General for Tuvalu v. Philatelic Distribution Corp Limited [1990] 1 WLR 926 per Woolf LJ (as he then was) at 936E-F and 938A)
The Court of Appeal in Templeton Insurance Ltd v Thomas [2013] EWCA Civ 35 at [23] considered when a person “ knowingly permitted” a breach of an order:
“ I accept the submission made on behalf of Templeton that “permit” denotes a party standing by while a breach of injunction takes place in circumstances where the relevant act can only take place with his wilful forbearance”.
The burden is on the applicant to prove the contempt to the criminal standard – beyond reasonable doubt. In this judgment, unless I indicate otherwise, my findings are made to the criminal standard. If I say I am satisfied, or that I am sure, of a fact or conclusion, I am satisfied, or sure, beyond reasonable doubt.
In finding a contempt proved, the Court can draw inferences. Vice Chancellor Scott in Masri v Consolidated Contractors [2011] EWHC 1024 explained the position.
“Inferences
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
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.”
Finally, I remind myself of the well know words of Robert Goff LJ (as he then was) in The Ocean Frost [1985] 1 Lloyd's Reports 1 at p.57 when he said:
“It is frequently very difficult to tell whether a witness is telling the truth or not; and where there is a conflict of evidence such as there was in the present case, reference to the objective facts and documents, to the witnesses' motives, and to the overall probabilities, can be of very great assistance to a Judge in ascertaining the truth.”
This passage has been cited with approval in the highest courts; see for example Bancoult, R (on the application of) (no3) v Secretary of State for Foreign and Commonwealth Affairs [2018] UKSC 3 at paragraphs 100–101.
The background
Mr Dylan, Mr Antrobus and Mr Mason are entrepreneurs.
Mr Dylan and Mr Antrobus co-founded Fresh Thinking Group Limited ( “FTG”) which was incorporated on 25 January 2018. The shareholders of FTG are Mr Dylan, Mr Antrobus and Gareth Dylan (Mr Dylan's partner) in equal shares. Mr Antrobus was FTG's sole director until his resignation on 22 March 2022.
FTG is an independent capital investment group which invests in distressed companies and...
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