BG International v Umali, McPine, Sinclair & Others
| Jurisdiction | England & Wales |
| Judge | Mr Justice Spencer |
| Judgment Date | 24 April 2015 |
| Neutral Citation | [2015] EWHC 1702 (QB) |
| Docket Number | Case No: ATC/15/0156 |
| Court | Queen's Bench Division |
| Date | 24 April 2015 |
[2015] EWHC 1702 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand,
London WC2A 2LL
Mr Justice Spencer
Case No: ATC/15/0156
Miss E Neil (Instructed by Olswang) appeared on behalf of the Claimant.
(As Approved)
Friday, 24 April 2015
The claimant in these proceedings, BG International Limited, applies for the committal for contempt of court of the fourth defendant in the proceedings, Mr Nalbert Sinclair. He is, and was at all material times, the sole director and sole shareholder of the third defendant, a company called McPine Construction Limited ("McPine").
The factual background
The short factual background is as follows. The claimant is part of the BG Group plc, a multinational oil and gas company. In mid-July 2014 it was discovered that a substantial fraud had been perpetrated against the company, which involved large unauthorised payments being made from the company into two different bank accounts. The identity of the holders of those bank accounts was not known at first, but it turned out that one was the bank account of a man called Peeke, who is the second defendant in these proceedings, and the other was the bank account of Mr Sinclair's company McPine. It was discovered at that stage that a total of some £143,000, had been stolen in this way, £89,000 being transferred to the account of Mr Peeke, and some £54,000 being transferred to the account of McPine, a Lloyds account. The evidence suggested that the first defendant in these proceedings, a man called Umali, was involved in the fraud on the inside, he being an agency worker employed in quite a senior capacity by the claimant company.
Having discovered those basic facts, the claimant company sought appropriate relief without notice on 24 July 2014 from Haddon-Cave J, who granted a freezing order and a Norwich Pharmacal order to ascertain from the two banks in question who the accountholders were. The order was made against the first defendant, Mr Umali, whose identity of course was known, and against the unnamed, and, at that stage, unknown accountholders of those two accounts. By means of the order made by Haddon-Cave J, it was soon discovered that Mr Sinclair's company was the holder of the Lloyds account into which that sum of £54,000 or so had been paid. Accordingly, the following day, 25 July 2014, a freezing order was sought and obtained against Mr Sinclair. That was granted by Warby J. I shall refer to that hereafter as "the Sinclair Freezing Order", as opposed to the order made by Haddon-Cave J, which I will refer to as "the Freezing Order".
Both those orders imposed the usual disclosure requirements. It is Mr Sinclair's failure to comply with those requirements, both personally and as director of his company, McPine, which constitutes the various contempts which are the principal subject of the application to commit. Both those orders had been granted on a without notice basis. The return date was 13 August 2014. Mr Sinclair did not attend the hearing on 13 August. Bean J continued the orders and set a further deadline for compliance with the disclosure obligations, namely 20 August. He ordered that, in default, the defendants would be debarred from defending.
The next step in the chronology is that Mr Sinclair was ordered to attend a hearing on 15 September 2014 to be cross-examined. He did not attend. On 18 September 2014 judgment was duly granted by Stuart-Smith J in default. Mr Sinclair did not attend that hearing. The judge continued the Freezing Order until further order, with the same disclosure obligations continuing. In addition, Mr Sinclair and his company McPine were ordered to pay the sum of £30,000 on account of costs by 29 September. The judgment order made on 18 September by Stuart-Smith J contained a provision that he was to attend for cross-examination on a date to be fixed. That hearing was in due course listed for 4 November 2014 before His Honour Judge Seymour QC (sitting as a Judge of the High Court). Mr Sinclair did not attend on that occasion.
Going back a stage, it was a term of the order granted by Warby J on 25 July that by 4 p.m on 30 July Mr Sinclair and his company McPine were to provide to the claimant's solicitors information about the monies that had been extracted from the claimant company and what had become of them, and details of documents relating to those monies. Those requirements included, in the usual way, the swearing of an affidavit. None of those requirements were complied with. The only purported compliance there has ever been with those requirements came in a telephone conversation on 30 July 20–14 between Mr Sinclair and the claimant's solicitors.
The details of that telephone conversation are set out at paragraphs 37 and 38 of the second affidavit of Catherine Hopkins, sworn on 25 March 2015 in support of this committal application. In summary, Mr Sinclair said in that conversation that he would comply with the order. He was seeking legal advice, but could not get solicitors until tomorrow, i.e. 31 July. He said he was shocked that he was implicated in all this. He said he had been the victim of a fraud. He said he could not give any dates. He told Miss Hopkins that he had been having difficulties applying for a bank loan, and then had been contacted by phone by someone who identified himself as George or Jess, who said he could help Mr Sinclair obtain a loan. That person, he assumed, was the person who had then transferred monies into his account, wanting to see whether or not his bank account was good enough to do his business (as it was put). In the telephone conversation, Mr Sinclair claimed that he had only withdrawn £2,000 from the Lloyds account, and that had been withdrawn to make a payment to a loan shark to whom Mr Sinclair owed money. He asserted in the course of the conversation that he had no documents concerning the loans or any of the monies.
These assertions are totally inconsistent with the information provided by Lloyds Bank to the claimant's solicitors pursuant to the orders which the court has made, which confirms that Mr Sinclair was in fact the sole signatory and cardholder on that account. In the documents that have been filed is the relevant extract from the bank statements for that account (pages 48 and 49 of tab 20 of the bundles filed for today's application). It appears that, prior to the deposit of some £54,000 of the claimant company's money into that Lloyds Bank account controlled by Mr Sinclair, there was only some £6.10 in the account. In the space of just a few days, all but £2.50 of the monies paid in from the claimant's bank account has been withdrawn by cashpoint withdrawals (as far as one can see), the largest individual sum being £35,000. It seems from the information provided by the bank that the identification documents which have been used for other withdrawals are documents which are consistent with Mr Sinclair being the person who had withdrawn the money. His driving licence, in particular, has been identified as one of the documents that must have been used.
It was in the light of this continued non-compliance arising from that telephone conversation on 30 July, and the assertions that were made in that telephone conversation, that Bean J ordered on the return date in August 2014 that the company and Mr Sinclair should comply with their obligations by no later than 4 p.m on Wednesday 20 August. No further steps of any kind were taken by Mr Sinclair or his company to comply with those obligations. It follows that there has been no compliance whatsoever by Mr Sinclair or his company with the obligations imposed upon him and his company and, as a result, the claimant company has been quite unable to discover what has become of the monies paid into that Lloyds account.
To complete the narrative, the claimant has sought to enforce the judgment order against Mr Sinclair and the company. On 8 December 2014 he was personally served with a statutory demand. He did not respond. On 3 February 2015 the claimant presented a bankruptcy petition against Mr Sinclair. No response was ever received to that. The latest position is that that bankruptcy hearing took place on 21 April, i.e. 2 days ago, at Luton County Court. Mr Sinclair failed to attend that hearing, and an order was made for his bankruptcy. Also on that occasion an order was made winding up the company McPine.
It is against that background that this application to commit has been brought. On 17 March 2015 the defendant Mr Sinclair was informed by letter that this application would be brought. The application notice was issued on 25 March and served personally on Mr Sinclair on 26 March. In the covering letter written by the claimant's solicitors dated 25 March, which was served at the same time as the application (tab 14), Miss Hopkins wrote as follows:
"We have listed a hearing on Friday 24 April 2015 so as to provide you with sufficient time to seek legal advice in relation to this matter, if you have not already done so, and to ensure that you have a sufficient period of time to seek legal representation at the hearing. The time and location will be confirmed by the court the day before the hearing. We will provide you with this information in due course. This is a very serious matter. During the hearing we will be seeking to have you committed for contempt of court, and it is possible that you will be imprisoned. It is therefore important that you attend the...
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