Business Mortgage Finance 4 Plc v Rizwan Hussain
| Jurisdiction | England & Wales |
| Judge | Lord Justice Nugee,Lord Justice Stuart-Smith,Lord Justice Arnold |
| Judgment Date | 04 October 2022 |
| Neutral Citation | [2022] EWCA Civ 1264 |
| Docket Number | Case Nos: CA-2022-000281 CA-2022-000537 |
| Court | Court of Appeal (Civil Division) |
[2022] EWCA Civ 1264
Lord Justice Arnold
Lord Justice Stuart-Smith
and
Lord Justice Nugee
Case Nos: CA-2022-000281
CA-2022-000454
CA-2022-000537
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
FINANCIAL LIST (ChD)
Mr Justice Miles
[2022] EWHC 302 (Ch), [2022] EWHC 449 (Ch) and [2022] EWHC 661 (Ch)
Royal Courts of Justice
Strand, London, WC2A 2LL
James Counsell QC and Alex Haines (instructed by Janes Solicitors) for the Appellant
Anna Dilnot QC and Alexander Riddiford (instructed by Simmons & Simmons LLP) for the Respondents
Hearing dates: 6 and 7 July 2022
Approved Judgment
Remote hand-down: This judgment was handed down remotely at 10.30am on 4 October 2022 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
Introduction
This judgment deals with a series of appeals (or proposed appeals) by the Defendant, Mr Rizwan Hussain, against decisions of Miles J in relation to an application by the Claimants to commit Mr Hussain for contempt of court. The Claimants are four companies which have each issued notes by way of securitisation of portfolios of commercial mortgages and I will refer to them as “the Issuers”.
On 8 February 2021 Miles J made an Order in which among other things he granted a wide-ranging injunction against Mr Hussain ( “the Injunction”) for the reasons given by him in a judgment dated 3 February 2021 at [2021] EWHC 171 (Ch) ( “the Injunction Judgment”). On 28 June 2021 the Issuers issued a contempt application against Mr Hussain. It ultimately came on for hearing before Miles J in February 2022 and on 2 March 2022 he handed down a judgment at [2022] EWHC 449 (Ch) ( “the Liability Judgment”) in which he found Mr Hussain guilty of a number of counts of contempt in breaking the terms of the Injunction. After a further hearing to determine sanction, he gave a judgment on 11 March 2022 at [2022] EWHC 661 (Ch) ( “the Sentencing Judgment”) in which he sentenced Mr Hussain to an immediate term of 24 months in prison for all the contempts. Mr Hussain did not attend the hearing, and has neither been apprehended nor surrendered to custody, so he has not yet served any part of this sentence.
The matters before the Court can be summarised as follows:
(1) In appeal CA-2022-000281 Mr Hussain sought to appeal a number of ancillary rulings made by Miles J ( “the Interlocutory Appeal”).
(2) In appeal CA-2022-000537 Mr Hussain appealed the findings of contempt in the Liability Judgment ( “the Liability Appeal”).
(3) In appeal CA-2022-000454 Mr Hussain appealed the sentence imposed in the Sentencing Judgment ( “the Sentencing Appeal”).
It was accepted that Mr Hussain needed permission to pursue the Interlocutory Appeal. Having considered the written submissions of Mr Hussain on one aspect of the proposed appeal, and heard from Mr James Counsell QC (as he then was), who appeared together with Mr Alex Haines for Mr Hussain, on the remaining aspects, we dismissed the application for permission to appeal for reasons to be given later.
It was not suggested that Mr Hussain needed permission for the Sentencing Appeal. Although the parties seem to have assumed that Mr Hussain did need permission for the Liability Appeal, we expressed the view at the outset of the hearing that he did not need permission for that either. That was undoubtedly the view taken by Miles J who at the end of the Liability Judgment said that Mr Hussain had the right to appeal without permission (at [397]), and who made an Order dated 2 March 2022 on the handing down of that judgment which extended time for Mr Hussain “to appeal against the finding of contempt … and any sanction” and (by way of contrast) for him “to seek permission to appeal any other part of this order”. He repeated this view at the end of the Sentencing Judgment (at [74]) where he said that Mr Hussain was entitled to appeal “the findings of contempt and the sentence” without permission.
We did not hear any argument on the point but that seems to me to be right. By CPR r 52.3(1)(a)(i) a person committed to prison can appeal the committal order without permission and where, as must happen in a large number of cases, a judge makes findings of contempt and proceeds to commit the contemnor to prison on the same occasion, I consider that that entitles the contemnor to appeal, without needing permission, either the findings of contempt or the sentence or both. If that is right, it cannot make any difference that in a complex case like the present the findings of contempt are made first, and the sentencing is dealt with in a separate and subsequent hearing.
We therefore proceeded to hear the Liability and Sentencing Appeals. At the conclusion of the hearing we announced our decision that both would be dismissed, again for reasons to be given later.
In this judgment I therefore give my reasons for concurring in the decisions to dismiss the application for permission in the Interlocutory Appeal and to dismiss the Liability Appeal. So far as the Sentencing Appeal is concerned, I have had the opportunity to read the judgment of Arnold LJ below and I entirely agree with it.
Background
There is a long background to the contempt application. It can be found detailed in a series of judgments that are publicly available, including Business Mortgage Finance 6 plc v Greencoat Investments Ltd [2019] EWHC 2128 (Ch) (Zacaroli J), Business Mortgage Finance 6 plc v Roundstone Technologies Ltd [2019] EWHC 2917 (Ch) (myself), Oyekoya v Business Mortgage Finance 4 plc [2020] EWHC 1910 (Ch) (Birss J) and Business Mortgage Finance 4 plc v Hussain [2021] EWHC 171 (Ch) (Miles J). The last of these is the Injunction Judgment and contains a detailed procedural history up to that point.
The Injunction Judgment also contains a convenient introduction as follows:
“1. I have heard the trial of two closely related Part 8 claims: FL-2020-000023 (“the Injunctions Claim”) and CR-2020-003605 (“the BMFH Claim”). In very broad terms the Claimants say that there has been a sustained and determined assault by the principal Defendants on a group of securitisation structures in which the Claimants are the issuers of publicly traded notes. They say that the Defendants have purported since early 2019 to assume various roles and offices in relation to those structures (as directors, trustees, receivers and otherwise) and have usurped the existing office holders. The Defendants have used those assumed positions to interfere with the business of the Claimants: they have purported to change the registered offices, sell the underlying securitised assets, sought to change bank account mandates, forfeit and sell the Issuers' shareholdings, make filings at Companies House, and make regulatory news service announcements to the capital markets. The Claimants say that the Defendants have done all this without any right or basis – they say indeed that the Defendants are strangers to the securitisation structures. They say that the Defendants have done this in the teeth of the Claimants' protests and repeated legal proceedings designed to halt the Defendants' conduct.
2. The Claimants have sought and obtained numerous earlier rulings and orders of other judges (including Zacaroli J, Nugee J and Birss J) each of whom have found that the Defendants or parties associated with them had none of the rights or offices they had assumed. Some of those courts have granted final injunctive relief. The Claimants have been successful in all of the litigation to date and have been awarded their costs (mostly on the indemnity basis). But they are some £2.4 million out of pocket, a loss which will ultimately fall on the noteholders under the securitisations. The Claimants hoped that these rulings would halt the Defendants' campaign against the structures and their assets. But that did not happen. The Claimants have therefore brought the Injunctions Claim to seek declarations and wide-ranging injunctions with a view to creating a more effective protective barrier. In the BMFH Claim they seek orders to rectify filings made by the Defendants at Companies House which they say were made falsely and without authority.
…
4. The four Claimants in the Injunctions Claim (“BMF4”, “BMF5”, “BMF6,” and “BMF7”; together “the Issuers”) are the issuers of notes issued as securitisations of various portfolios of commercial mortgages relating to property in the UK which are owned by the Issuers (the “BMFH Securitisations”).
5. The structure of the BMFH Securitisations is in broad terms that the noteholders, as a class, are represented by, and act through a note trustee, which in the case of each Issuer is BNY Mellon Corporate Trustee Services Limited (“BNY” or “the Trustee”). The notes are constituted by Trust Deeds entered into by each of the Issuers and the Trustee dated 12 April 2006, 18 October 2006, 18 May 2007 and 23 November 2007 respectively. The terms and conditions of the notes are appended to the Trust Deed.
6. The notes are currently held in global form entrusted to a common depository on behalf of Clearstream and Euroclear and the interests of noteholders are recorded electronically in the books and records of Clearstream and Euroclear.
7. The Issuers' obligations under the notes are secured in favour of the Trustee (for itself and on trust for the other secured creditors) by security granted under the terms of Deeds of Charge between, amongst others, each of the Issuers and the Trustee. The income stream to fund the Issuers' obligations under the notes is derived from the...
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