Nobu SU (aka SU Hsin Chi aka Nobu Morimoto) v Lakatamia Shipping Company Ltd
| Jurisdiction | England & Wales |
| Judge | Lady Justice Carr,Lord Justice Arnold |
| Judgment Date | 15 September 2021 |
| Neutral Citation | [2021] EWCA Civ 1355 |
| Docket Number | Case No: A4/2021/1187 |
| Court | Court of Appeal (Civil Division) |
[2021] EWCA Civ 1355
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
OF ENGLAND AND WALES
COMMERCIAL COURT (QBD)
SIR MICHAEL BURTON GBE (sitting as a High Court Judge)
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Arnold
and
Lady Justice Carr
Case No: A4/2021/1187
Ashley Underwood QC and Adam Tear (instructed by Scott Moncrieff & Associates) for the Appellant
S.J. Phillips QC, N.G. Casey and James Goudkamp (instructed by Hill Dickinson LLP) for the Respondent
Hearing date: 8 September 2021
Approved Judgment
Introduction
The Appellant (“Mr Su”) is a serial contemnor well known to the judges of the English Commercial Court and Court of Appeal. This is now a short appeal brought by him (as of right) against the sentence of two years' immediate custody imposed on him on 7 July 2021 by Sir Michael Burton GBE (sitting as a High Court Judge) (“the Judge”) for 20 contempts of court. This was the third occasion on which the Judge had to sentence Mr Su for contempt; he described Mr Su as having mounted what was perhaps “the most serious campaign of contempt in the English courts”. In the course of dismissing another recent appeal by Mr Su, Sir Nicholas Patten described the facts of the case as “by any standards extraordinary” (see [2021] EWCA Civ 1187 at [7]), referring (at [43]) to “Mr Su's extraordinary resistance to any order which the court makes”.
Two years' custody was the maximum sentence available under s. 14(1) of the Contempt of Court Act 1981. The gravamen of this appeal is that the Judge erred in principle by adopting a starting point above two years before allowing for mitigation, alternatively that he failed to pay any or any adequate heed to the mitigation available to Mr Su and imposed a sentence that was manifestly excessive and outside the range of decisions reasonably open to him.
At the end of the appeal hearing, the appeal was dismissed, with reasons to follow. These are those reasons.
The context
Mr Su's engagement with the English courts has a long and sorry history. For present purposes, the briefest outline will suffice. In November 2014 the Respondent (“Lakatamia”) obtained judgment against Mr Su following trial before Cooke J in the Commercial Court for over US$37 million (see [2014] EWHC 3611 (Comm); [2015] 1 Lloyd's Rep 216). The judgment remains wholly unsatisfied (apart from some US$7 million held in the Court Funds Office which was applied in partial discharge and other minor recoveries through third party debt orders). The current value of the debt stands in excess of US$70 million.
Since November 2014 Mr Su has disobeyed and acted in flagrant breach of numerous court orders. Those orders include those described in the committal order the subject of this appeal as the Freezing order, the Waksman Order, the Popplewell Order, the Bryan Order, the Teare Order, the Foxton Order, and the Search Order; those descriptions are adopted here.
As already indicated, the Judge had already sentenced Mr Su for contempt on two previous occasions. In March 2019 the Judge had sentenced Mr Su to 21 months' imprisonment in respect of 15 contempts ( [2019] EWHC 898 (Comm)). On 11 February 2020 the Judge had sentenced Mr Su to a further four months for a further five contempts ( [2020] EWHC 314 (Comm)). Upon his unconditional release in April 2020 (by reason of s. 258 of the Criminal Justice Act 2003), Mr Su was compelled to remain in the jurisdiction and under a duty to report daily to police as a result of the Waksman Order.
Lakatamia had by this stage already issued its third application for committal against Mr Su (on 27 March 2020). That application was subsequently amended (in June and December 2020) to introduce further allegations. Mr Su originally denied but ultimately (in a witness statement dated 25 June 2021) admitted the contempts. This was just before the hearing which took place before the Judge on 6 July 2021. That date had been fixed as a sentencing hearing in the light of an indication from Mr Su's solicitors on 9 June 2021 that Mr Su intended to admit the contempts.
The contempts
The index contempts are summarised at [8] to [18] of the judgment below ( [2021] EWHC 1929 (Comm)) (“the Judgment”). They are described as “specimen” counts of Mr Su's non-compliance with and contravention of the orders referred to in [5] above. The breaches included non-disclosures, presentation of false affidavits of assets to purge, failure to provide access to email and social media accounts, non-compliance with a search order, and dissipation of an interest in a vessel and cash and funds. They spanned a period between 2011 and 2020.
The Judgment
Having introduced the application and hearing, the Judge said at the outset:
“4. Mr Su vigorously but hopelessly denied the first 15 contempts and did not admit the second set of five, but on this occasion he has very recently admitted all the contempts….
5. I have read and carefully considered the Defendant's Statement of Mitigation, which, apart from the fact that he thereby admits the 20 contempts, adds little. He relies on having been in prison for some part of the time, although a number of the contempts were prior to his being in custody…; and some post-dated his custody.
6. In any event i) he had the opportunity to respond to the orders while in custody and in part did so, although wholly inadequately; ii) he has remained determinedly non-complaint during the 15 months since his release.”
The Judge described the contempts as:
“….very serious breaches indeed and, on top of the previous contempts for which the defendant was committed to prison, have shown a continuing blatant disregard of court orders, non-cooperation…, non-compliance, non-disclosure and blatant contravention and dissipation…He has been determined to find some way, notwithstanding the continuing court orders, to avoid payment and to hide and dissipate assets.”
He went on to consider the relevant principles (by reference to the authorities) as follows:
i) It is important for the court to uphold the law and court orders. This was “perhaps both in quantum of the liability evaded and in the duration and extent of the contemptuous conduct, the most serious campaign of contempt in the English courts”;
ii) It plainly can be appropriate to impose further sentences for further contempts;
iii) The question can arise whether the time has come when any coercive element has evaporated. This is however less relevant where the court orders are not simply requiring positive action but are directed towards unlocking missing assets;
iv) In serious cases, to impose the statutory maximum of two years is appropriate. There is a broad range of conduct which can justify such a sentence: see FCA v McKendrick [2019] EWCA Civ 524; [2019] 4 WLR 65 at [40] (“ McKendrick”).
Referring to his judgment in 2019 ( [2019] EWHC 898 (Comm)), the Judge stated that the factors that he there identified (at [47] — by reference in particular to Crystal Mews Ltd v Metterick [2006] EWHC 3087 (Ch) at [13] and Asia Islamic Trade Finance Fund Ltd v Drum Risk Management Ltd [2015] EWHC 3748 (Comm) at [7(6)]) were still present, “only more so”:
i) Lakatamia had been prejudiced by the contempt and the prejudice was incapable of remedy;
ii) Mr Su had not acted under pressure;
iii) The breach was deliberate;
iv) There was high culpability;
v) Mr Su had not been placed in breach by reason of the conduct of others;
vi) Mr Su had not yet appreciated the seriousness of the deliberate breach;
vii) Mr Su had “far from” co-operated;
viii) As for acceptance of responsibility, apology and remorse:
“Meaningless apologies have been given in the past and are still repeated, but he is simply paying lip service to the orders”.
The Judge stated that the submissions for Mr Su were “quite unrealistic”:
i) Although Mr Su had, this time, admitted the allegations in the round, he had not explained them and made no attempt to remedy them. The time and costs saved were “minimal”;
ii) Whilst Mr Su's failure to satisfy the judgment had had its own penalty, it had its own consolation, in that he could still avoid his obligations and plan to evade them completely;
iii) He was not satisfied of Mr Su's insolvency;
iv) However high the price paid for the earlier contempts, Mr Su obviously thought that it was worth it, “at any rate, so far”;
v) He was not satisfied as to the harsh consequences of an immediate term of imprisonment. It would be an opportunity for him to reconsider and avoid further cross-examination on and tracing of his assets in due course.
As for the coercive element, the Judge was satisfied that there was still a chance of compliance “if [Mr Su] knows that the court means business, particularly now that the bankruptcy, which was his latest strategy, has failed. He needs to realise that no amount of clever advice is going to help him to avoid compliance with court orders.”
The Judge dismissed the possibility of a...
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