Mr Mark Cooper v Ignite International Brands (UK) Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Coulson,Lord Justice Warby,Lord Justice Peter Jackson |
| Judgment Date | 12 July 2024 |
| Neutral Citation | [2024] EWCA Civ 807 |
| Year | 2024 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: CA-2023-001257 |
[2024] EWCA Civ 807
Lord Justice Peter Jackson
Lord Justice Coulson
and
Lord Justice Warby
Case No: CA-2023-001257
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
KINGS BENCH DIVISION
Mr Justice Sweeting
[2024] EWHC 1595 (KB)
Royal Courts of Justice
Strand, London, WC2A 2LL
Jeremy Scott-Joynt (instructed by Janes Solicitors) for the Appellant
Joshua Hitchens (instructed by Mackrell Solicitors) for the Respondents
Hearing date: 12 July 2024
Approved Judgment
Introduction
On 13 May 2024, Sweeting J imposed an immediate custodial sentence of 9 months on the appellant, Mark Cooper. This was in respect of two separate findings of contempt of court. Mr Cooper appealed as of right. The single issue on appeal was whether or not the judge should have suspended the sentence. At the end of the oral hearing, we indicated that the appeal would be dismissed. These are my reasons for joining in that decision.
The Background Facts
The background facts are complex, but it is necessary to set out some of them in order to give an idea of the nature, scope and extent of Mr Cooper's contempt of court.
Pursuant to a contract dated 14 December 2021, Mr Cooper and his company, Inpero, provided warehousing services to the Ignite Group of companies. Ignite's business is the production, promotion and sale of nicotine, alcohol, CBD, energy drinks and apparel products. In early 2022, Ignite's auditors became concerned that there were significant discrepancies between the physical stock held at the Inpero warehouse, and Ignite's own inventory reports, produced using SAGE accountancy software. The updates requested from and provided by Mr Cooper only increased those concerns and, on 1 June 2022, the contract between the parties was terminated. Thereafter, Ignite had problems recovering its stock.
In consequence, Ignite commenced proceedings against Mr Cooper and Inpero alleging a substantial fraud, resulting in losses of well over £2m. Amongst other things, they alleged that Mr Cooper had fabricated customer orders, sold Ignite products after the contract had been terminated, retained the entire proceeds of various sales, and made unauthorised sales at heavily discounted prices. Ignite also alleged that some of their products had been unlawfully retained and moved to other storage facilities to which they had no access.
The goods in question were perishable, so Ignite sought speedy relief. On 25 October 2022, Mr Healey-Pratt KC, sitting as a Deputy High Court Judge, ordered Mr Cooper and Inpero to deliver up to Ignite the entirety of the Ignite product inventory that they still had, and (to the extent that the Ignite products which were delivered up fell short of the closing inventory account provided by Ignite) to provide them with detailed information as to all the dispositions and/or sales of any Ignite product inventory. In addition, where any of the Ignite products were no longer within the possession of Mr Cooper and Inpero, they had to provide written information, by 28 October 2022, about where the product had gone, including full details of any relevant transfer or disposal, the current location of the product, details of the price received, and so on. In essence, Mr Cooper and Inpero either had to hand back the Ignite stock or explain what had become of it. In addition, they were ordered to pay £25,000 on account of Ignite's costs.
Following the order of 25 October 2022, stock valued at £647,263 was recovered from Mr Cooper/Inpero. On the basis of Ignite's records, that left a shortfall of missing stock with a market value of £2.9m.
By an email dated 28 October, Mr Cooper provided some limited information as to certain units of Ignite's V600 vapes (the most valuable element of the missing stock) which had been sold to a third party purchaser at a reduced price. The invoice relating to that sale was dated after Ignite's termination of the contract. The information in relation to the V600 vapes fell far short of what had been ordered. So too did the other information Mr Cooper provided as to what had happened to numerous other items of missing stock. For example, one entry in the email of 28 October read: “Gummies — All: Water damage to storage container”. Perhaps generously, the judge described this level of detail as “sparse”.
On 30 March 2023, Ignite made an application to have Mr Cooper committed to prison for non-compliance with the delivery-up order of 25 October 2022. That has been referred to as Contempt 1. There was a three day hearing of that application in July 2023. In his subsequent judgment dated 7 February 2024 ( [2024] EWHC 220 (KB)), the judge dealt in detail with Contempt 1 from [33]–[57]. He found to the criminal standard that Mr Cooper was in breach of the delivery up order, and that the application in respect of Contempt 1 had been made out.
On 26 April 2023 Ignite were granted a freezing order by O'Farrell J, who ordered Mr Cooper to provide an affidavit of his assets within the jurisdiction exceeding £1,000 by 3 May 2023. No such affidavit was provided. On 12 May 2023, before Mr Dexter Dias KC, sitting as a Deputy High Court Judge, Mr Cooper claimed that he had provided a list of assets by way of an email dated 3 May 2023. Ignite said that the email had never been received and was patently fabricated because (amongst other things) Mr Cooper's email address was incorrect and incomplete. Mr Cooper accepted that he had not complied with the order of O'Farrell J, and Mr Dias KC made a further order requiring an affidavit by 19 May. The importance of providing a sworn affidavit was explained to Mr Cooper.
No affidavit was served in compliance with the order of Mr Dias KC. In consequence, on 2 June 2023, Ignite brought a second contempt application in relation to that order, known as Contempt 2. That was also addressed at the hearing of July 2023, and was the subject of the judge's judgment of February 2023 at [58]–[62]. Amongst other things, the judge noted that Mr Cooper had ignored that order “just as he had ignored the earlier order [(i.e., the freezing order of O'Farrell J]. His assertion that he mistakenly thought he had complied in relation to both orders is unconvincing.” Contempt 2 was therefore also proved.
Having found that Mr Cooper was in contempt in respect of both alleged contempts, there was then the question of sanction. The judge noted in his February judgment that it would be wise for Mr Cooper to take steps to purge his contempt. Other than the provision of a psychiatric report from Dr Pilgrim, Mr Cooper did nothing until 10 May 2024, the last working day before the sanction hearing on 13 May, when he provided an affidavit which purported to purge Contempt 2. Ignite say that that, too, is incomplete.
At the contested sanctions hearing on 13 May 2024, the judge considered the submissions put forward by both parties and imposed on Mr Cooper two terms of immediate imprisonment, each of 9 months, to be served concurrently. I shall refer to particular parts of that second judgement of May 2024 ( [2024] 1595 (KB)) when dealing with the Grounds of Appeal.
On 2 November 2023, Ignite were granted default judgment against Mr Cooper and Inpero in the sum of £3,520,121.65. Mr Cooper now says that he and Inpero are entirely impecunious. On 20 June 2024, Master Armstrong made an interim order in respect of the property disclosed by Mr Cooper, non-party disclosure orders against Mr Cooper's family members and companies, and an order that, on his release from custody, Mr Cooper attend the court for questioning as to his means.
I summarise the principles of law that are relevant to this appeal in Section 3 below. I identify the two Grounds of Appeal, and the issues that arise under each, in Section 4. Thereafter I deal with those various grounds of appeal, and set out my conclusion, in Sections 5 to 8.
The Law
General
The general principles applicable to sentencing in contempt cases are set out in Liverpool Victoria Insurance Co Ltd v Khan and Others [2019] EWCA Civ 392. It is unnecessary to set out any part of the judgment in that case because no issue arises here on the general principles to be applied.
The Seriousness of the Contempt.
In his sanctions judgment, the judge at [15] had regard to the decision in Crystal Mews Limited v Metterick & Ors [2006] EWHC 3087 (Ch) as to the factors to be considered when assessing the seriousness of the contempt. Those are:
“First, whether the claimant has been prejudiced by virtue of the contempt and whether the prejudice is capable of remedy. Second, the extent to which the contemnor has acted under pressure. Third, whether the breach of the order was deliberate or unintentional. Fourth, the degree of culpability. Fifth, whether the contemn or has been placed in breach of the order by reason of the conduct of others. Sixth, whether the contemnor appreciates the seriousness of the deliberate breach. Seventh, whether the contemnor has co-operated.”
There are numerous authorities which support the proposition that a breach of the information requirements of a freezing order is a very serious form of contempt. In Templeton Insurance v Thomas [2023] EWCA Civ 35, Rix LJ described breaches of freezing orders as “an attack on the administration of justice” which usually warranted an immediate sentence of imprisonment of a not insubstantial length. More recently, in Asia Islamic Trade Financing Fund Ltd v Drum Risk Management Ltd [2015] EWHC 3748 (Com), Popplewell J (as he then was) reiterated that same observation.
Suspended Sentences
In some cases of contempt, the...
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