EASTERN CARIBBEAN SUPREME COURT TERRITORY OF THE VIRGIN ISLANDS IN THE HIGH COURT OF JUSTICE COMMERCIAL DIVISION CLAIM NO. BVIHC (COM) 2015/0117 IN THE MATTER OF SECTION 43 OF THE ARBITRATION ACT 2013 BETWEEN: PT VENTURES SGPS SA Applicant and VIDATEL LTD. Respondent Appearances: David Welford and Simon Hall of Maples and Calder for the Applicant Jerry Samuel and Luke Petith of Conyers Dill & Pearman for the Respondent (on 23 October 2015) Alain Choo Choy, QC (by telephone), and Luke Petith of Conyers Dill & Pearman, for the Respondent (on 26 October 2015) …………….………………….… 2015: October 23 and 26 2016: June 24 ................................................
Transcript
EASTERN CARIBBEAN SUPREME COURT TERRITORY OF THE VIRGIN ISLANDS IN THE HIGH COURT OF JUSTICE COMMERCIAL DIVISION CLAIM NO. BVIHC (COM) 2015/0117 IN THE MATTER OF SECTION 43 OF THE ARBITRATION ACT 2013
BETWEEN:
PT VENTURES SGPS SA
Applicant
and
VIDATEL LTD.
Respondent Appearances: David Welford and Simon Hall of Maples and Calder for the Applicant Jerry Samuel and Luke Petith of Conyers Dill & Pearman for the Respondent (on 23 October 2015) Alain Choo Choy, QC (by telephone), and Luke Petith of Conyers Dill & Pearman, for the Respondent (on 26 October 2015)
…………….………………….… 2015: October 23 and 26 2016: June 24
................................................
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JUDGMENT
Contempt of court – Applicant applied to have respondent found in contempt of court for breaching court orders restraining disposition of its assets and failing to file sworn evidence regarding such dispositions. Court must decide the asset transfer issues on full record which includes the evidence that came piecemeal from respondent before and after application brought – Interests of justice require that court consider all available evidence of whether assets were transferred in breach of the court’s orders. Court satisfied on evidence that respondent did not “in any way dispose of, deal with or diminish the value of any of its assets” in breach of court’s orders – Evidence established that transfers in issue were effected by respondent’s bank, pursuant to prior instructions, seven hours before court’s order made. Respondent had become aware of ex parte injunction application and appeared – No evidence that respondent did anything in relation to transfers after it became aware of injunction application (that is, either to expedite or to delay (countermand) transfers) – Given how events unfolded, no opportunity to countermand because transfers completed before orders made. Left as open question whether person, upon learning of freezing injunction, has positive obligation to investigate status of pending funds transfers and attempt to countermand instructions if transactions not completed. Lack of precision of words “in detail” in disclosure orders (“setting out in detail any sale, disposition or transfer of its assets, or confirming that no such sale, disposition or transfer of its assets has taken place”) – Orders could have, and did not, require documents to be produced and/or require specific “details of how much, to whom and for what purpose its transfers were made” – Penal consequences of breaching freezing orders, and disclosure orders in relation to a freezing orders means respondent need to know where it stands in relation to the court’s order – For finding of contempt, order need to be clear and unequivocal, and need to be strictly construed. Regarding other non-compliances with court’s orders, namely respondent not providing affidavits and information by court’s deadlines, having regard to applicable test and “beyond a reasonable doubt” burden of proof that applicant required to meet on contempt application, not sufficient evidence to come to finding of contempt. Contempt not made out
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to required burden of proof even if “a line is drawn” in evidence just before time that contempt application launched. Court not satisfied beyond reasonable doubt that respondent intended not do acts required by its orders – Possible that serial non-compliance was due to insufficient attention, diligence, focus and organization, and exacerbated by distance, time differences and less familiarity with legal system and legal culture of this jurisdiction – More than one inference to be drawn from facts (from failures to provide affidavits and information as ordered by times ordered). While respondent not guilty of contempt, manner in which it dealt with affidavit and information provision requirements of orders provides “text book lesson” in how not to deal with court orders requiring information. While application was unsuccessful, applicant was not unjustified or precipitous in bringing it – Even though conduct not constituting contempt, respondent “dragged its heals” on compliance with information disclosure requirements by not making timely, clear, complete and accurate disclosure, by obfuscating, by being less candid than necessary, and by not treating court’s orders with the respect, urgency and seriousness which they called for – Led to applicant needing to bring application after application to secure compliance with initial orders – Applicant undoubtedly incurred considerable expenses for no reason other than how respondent dealt with, or did not deal, with court’s orders. [1] LEON J [Ag.]: The Applicant applied to have the Respondent found in contempt
of court for breaching orders made by this Court restraining disposition of its
assets and failing to file sworn evidence regarding such dispositions as required
by orders of this Court (“Contempt Application”).
Ex Parte Injunction (Interim Relief) Application and Underlying Dispute
[2] The Applicant filed an application on 30 September 2015 for an urgent ex parte
worldwide freezing injunction pursuant to the Arbitration Act, 2013 (“Act”), section
43. The ex parte injunction sought was in support of an international arbitration of
a shareholders’ dispute intended to be commenced by the Applicant against the
Respondent and others in the International Court of Arbitration of the International
Chamber of Commerce (“ICC”), with a seat outside the Territory of the Virgin
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Islands. Section 43 of the Act permits this Court to grant interim measures “in
relation to any arbitral proceedings which have been or are about to be
commenced in or outside the Virgin Islands”.1
[3] Each of the Applicant and the Respondent were 25% shareholders Unitel S.A.
(“Unitel”), an Angolan company that was the largest mobile phone and
telecommunications operator in Angola. The Respondent was incorporated in the
Virgin Islands.
[4] The Applicant alleged in the ex parte injunction application, and intended to assert
in the intended arbitration, that the Respondent, whether for its own account or as
a vehicle for its ultimate beneficial owner, Mrs. Isabel dos Santos (“Mrs. dos
Santos”), “is responsible for and/or intimately involved with a series of unlawful
transactions aimed at improperly diverting funds away from Unitel.” 2 Mrs. dos
Santos was the Respondent’s director and controller.
[5] The Applicant further alleged, on evidence filed on the ex parte injunction
application, that it “believes that the nature of the conduct of Mrs. dos Santos and
[the Respondent] to date, which gives rise to the claims made in the ICC
Arbitration, similarly gives rise to the serious risk of (i) the dissipation of assets
held by [the Respondent] in the British Virgin Islands, and/or (ii) [the Respondent]
disposing of or otherwise dealing with those assets (whether inside or outside the
British Virgin Islands) in a manner designed to frustrate any award or judgment
against it.”3
1 Section 43 of the Act was substituted for Article 17J of the UNCITRAL Model Law, as stated in Article 43 (1). 2 First Affidavit of Charles George Stewart Balmain sworn 29 September 2015 (“Balmain 1”), para. 7. Mr. Balmain is a partner of White & Case in London, lawyers for the Applicant in the intended arbitration. 3 Balmain 1, para. 8.
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Inadvertent Disclosure of Ex Parte Injunction Application
[6] The events leading to the Contempt Application have an unusual and unfortunate
beginning.
[7] In accordance with the practice of this Court and section 14 of the Act4, the fact
and contents of the ex parte injunction application were not intended to be made
public, nor in particular made know to the Respondent, prior to the hearing of the
application. Inadvertently, the Court Registry published the Court’s List for the
ensuing week on Sunday 4 October 2015, showing the ex parte injunction
application listed for the afternoon of Friday 9 October 2015. The List was
distributed widely in electronic format and unfortunately in a manner such that it
could not be recalled.5
[8] A representative of the Respondent became aware of the ex parte injunction
application at some point between the publication of the Court List on 4 October
and 8 October 20156. The representative instructed legal practitioners in the Virgin
4 Proceedings under the Act are to be heard otherwise than in open Court (defined in the Act as “closed Court proceedings”) unless otherwise ordered by the Court. The Court may permit publication of information in the closed Court proceedings only in limited circumstances. Judgments in relation to closed Court proceedings also are subject to confidentiality provisions in the Act. 5 When the Court learned of the inadvertent disclosure it made an order on its own motion on the morning of Monday 5 October 2015 sealing the Court’s file. As the List was widely distributed, including beyond legal practitioners and other officers of the Court in the Territory, it was decided not to advise all recipients of the List of the inadvertent error or request that the information not be communicated or used. At the time that appeared to be the best way to deal with the situation. 6 It appears that a law firm in the Virgin Islands, not being the firm representing the Respondent in these proceedings, saw the List and, presumably as a well-intentioned business development effort, contacted a trust company in the Virgin Islands which in turn contacted lawyers or a trust company in Switzerland who in turn contacted lawyers in Switzerland for the Respondent who in turn contacted Ms. dos Santos. Unfortunately, the legal practitioner who got the ball rolling (and who may or may not have done so at the direction of someone else in the firm) may not have paused to consider whether the listing was intended to be public information before forwarding
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Islands to request copies of the ex parte injunction application documents from the
Applicant’s legal practitioners so that the Respondent’s legal practitioners could
attend the ex parte hearing on behalf of the Respondent. The legal practitioners
for the Applicant received an initial letter in that regard from the legal practitioners
for the Respondent on 8 October at 5:14 pm (BVI time), the day prior to the listed
hearing.
[9] The exact time of when the Respondent, and in particular Mrs. dos Santos,
learned of the ex parte injunction application, and their actions and non-actions
thereafter, became critical facts on this Contempt Application.
[10] The ex parte injunction application, applications to secure compliance by the
Respondent with this Court’s orders, and the Contempt Application, involved five
hearings in just over a two-week period7, and the filing of multiple affidavits and
written submissions by the Applicant and the Respondent during that period and
even following the Contempt Application hearing.
9 October 2015 Ex Parte Injunction Application Hearing and 9 October 2015
Temporary Worldwide Freezing Order
[11] At the scheduled hearing of the ex parte injunction application on Friday 9 October
2015, counsel for the Respondent attended and applied for an adjournment of the
application to Monday 12 October 2015 to permit counsel for the Respondent to
prepare and make submissions.
it. Ex parte applications for freezing orders are not made public by the Court. Probably many legal practitioners in the same or comparable situations would have done something similar so the Court does not intend to be critical of the legal practitioner or the firm. However, it is a cautionary note to all legal practitioners that as officers of the Court, and absent obligations to a client or former client that would require information to be passed along, it would make sense to pause, confer and reflect before acting. In other circumstances, the consequences may have been even more serious. 7 On 9, 12, 14, 23 and 26 October 2015.
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[12] This Court, having regard to the respective interests of the parties and the
administration of justice, issued an order (“9 October 2015 Temporary
Worldwide Freezing Order”) at the end of the afternoon (approximately 5 pm
(BVI time), which time took on importance on the Contempt Application) that
principally did the following:
a) granted the adjournment;
b) provided that the Respondent could make submissions on the ex parte
injunction application without prejudice to the Respondent’s rights to
respond fully at the inter partes hearing on the “return date”, if an ex parte
injunction were to be granted8;
c) temporarily (until the conclusion of the ex parte hearing or further order of
the Court) froze the Respondent’s assets worldwide (effective
immediately) by restraining the Respondent from removing assets from
the British Virgin Islands; or disposing of, dealing with or diminishing the
value of any of its assets anywhere, up to the value of US $2.449 billion9;
and
d) required the Respondent to file and serve an affidavit by 9 am on Monday
12 October 2015:
setting out in detail any sale, disposition or transfer of its
assets, or confirming that no such sale, disposition or
transfer of its assets had taken place, since Sunday 4
October 2015 that would have been caught by [the order
sought by the applicant].10
8 The 9 October 2015 Temporary Worldwide Freezing Order, paragraph 2 provides (in part): “Notwithstanding hearing Counsel for the Respondent and granting his application for an adjournment on the terms set out herein, the Respondent has not waived and the Court preserves the Respondent’s rights for an inter partes hearing within 28 days.” 9 9 October 2015 Temporary Worldwide Freezing Order, paragraph 4 in particular. 10 9 October 2015 Temporary Worldwide Freezing Order, paragraph 8 (1) in particular.
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The words “in detail” ultimately came to be argued by the Respondent as
not being sufficiently precise to found a contempt order in respect of the
insufficiency of affidavits, information and documents provided by the
Respondent.
Respondent’s First Affidavit – dos Santos 1, and Orders of 12 October 2015
[13] On Monday 12 October 2015, somewhat later than the time specified, the
Respondent filed an unsworn signed affidavit of Mrs. dos Santos11 (“dos Santos
1”) stating in one lone substantive paragraph that “since 9th October 2015 there
has been no disposition by the Respondent of any assets whatsoever ….”.
[14] Mrs. dos Santos merely referred to the period “since 9 October 2015” – she did not
deal with the period between 4 and 9 October 2015, as ordered by the 9 October
2015 Temporary Worldwide Freezing Order, and she did not offer any explanation
why she did not. This Court later found, as set out below, that dos Santos 1 was
not compliant with the requirements of the 9 October 2015 Temporary Worldwide
Freezing Order (“Non-Compliance 1”).
[15] Later on Monday 12 October 2015, at the adjourned ex parte injunction application
hearing, counsel for the Respondent submitted with respect to the unexplained
Non-Compliance 1, without evidence, that it had been difficult to get instructions,
there was a time difference, the Respondent had only a short time to deal with the
matter, and checks needed to be made.
11 Filed as an exhibit to the Affidavit of Murray Laing (of the legal practitioners for the Respondent) sworn 12 October 2015 with the explanation that “[t]he evidence is unsworn due to the inability to obtain sworn evidence before a Notary Public in the Republic of Angola prior to the filing deadline” and stating that a sworn version in precisely the same form will be filed as soon as possible.
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[16] This Court did not find those explanations compelling. At that hearing, this Court
made two orders.
[17] The first order of that day was a worldwide freezing order (“12 October 2015
Worldwide Freezing Order”) in comparable terms in this regard to the 9 October
2015 Temporary Worldwide Freezing Order (particularly paragraph 4 of both
Orders) until a mutually convenient hearing date within 28 days (the limit for an ex
parte order under EC CPR) or further order of the Court. This Order included a
provision that the Respondent within 10 working days of service of the order “to
the best of its ability inform the Applicant’s legal representative of each of its
assets worldwide exceeding US$75,000 in value” and provide an affidavit setting
out that information.
[18] The second order of that day recited Non-Compliance 1 (“the Respondent’s non-
compliance with the 9 October 2015 Temporary Worldwide Freezing Order”) and
required the Respondent (a) to file and serve a “a sworn affidavit in compliance
with the 9 October 2015 Temporary Worldwide Freezing Order” by 4:30 pm on
Tuesday 13 October 2015 and, if it were not able to do so, to file and serve an
affidavit explaining “why a fully compliant affidavit could not be filed and served by
that time and when the Respondent estimates that a fully complaint affidavit will be
filed and served”12, and (b) to file an updating affidavit every 24 hours “setting out
so much as the required information as possible, or additional (since the prior
affidavit) required information as possible, until a fully compliant affidavit is filed
and served”13 (“12 October 2015 Asset Dissipation Affidavit Order”).
[19] At the hearing this Court said the following:
12 12 October 2015 Asset Dissipation Affidavit Order, paragraph 1. 13 12 October 2015 Asset Dissipation Affidavit Order, paragraph 2.
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I don’t want to pull a time out of the air [for compliance] … but I
think it should be impressed upon Mrs. dos Santos that while
ordinarily I don’t expect the world to stop because there is a Court
proceeding in BVI, when there is a Court order in BVI of this
significance, I think the Court can expect that full efforts will be
made to comply or compelling explanation provided if there can’t be
compliance that hasn’t occurred but should occur in the report at
the end of tomorrow [13 October 2015] unless by the end of
tomorrow there is a compliant affidavit.14
Non-Compliance with 12 October 2015 Asset Dissipation Affidavit Order
[20] No affidavit was served and filed on 13 October 2015 (“Non-Compliance 2”).
[21] Instead, the Respondent’s legal practitioners sent a letter to the Applicant’s legal
practitioners purporting to explain why a compliant affidavit could not be filed and
served, including that the Respondent continued to carry on investigations “in
order to accurately and reliably ascertain the important information necessary to
comply fully”.
14 October Asset Dissipation Affidavit (Variation) Order
[22] The Respondent applied urgently to this Court on Wednesday 14 October 2015 to
vary the 12 October Asset Dissipation Affidavit Order.
[23] At a hearing late in the afternoon that day, the Court heard submissions, without
evidence, that the Respondent needed more time to comply.
14 Transcript, Monday October 12th 2015, page 15, lines 2 – 15 inclusive. While this Court thinks it may have been somewhat more articulate in the latter half of what it is reported as stating, even if it was not, the intent should have been clear, and certainly counsel for the Respondent did not seek clarification, on the record or thereafter.
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[24] The Court made a further order (“14 October Asset Dissipation Affidavit
(Variation) Order”) requiring the Respondent to file and serve (a) by 4:30 pm on
Thursday 15 October 2015 an affidavit containing certain information (including
partial compliance with the outstanding orders, namely when the ex parte
injunction application came to its attention; and certain information about disposals
of, dealings with or diminution of the value of certain assets)15, and (b) by 4:30 pm
on Tuesday 20 October 2015 an affidavit that would be fully compliant with the 12
October Asset Dissipation Affidavit Order16.
Respondent’s Second Affidavit – dos Santos 2
[25] On Thursday 15 October 2015 at 4:01 pm the Respondent filed, and at 4:43 pm
served the Applicant (through its legal practitioners)17, with a second affidavit of
Mrs. dos Santos (“dos Santos 2”) in which Mrs. dos Santos deposed in part as
follows:
8) I was made aware for the very first time of the listing of the
Applicant’s ex parte application for a freezing order by way of an
email from my office in Portugal sent to me on 8 October 2015.
That email was sent at 12.11 pm Angolan time (I was in Angola at
the time), but I did not read it until around 5.30 pm Angolan time as
I was giving a presentation that afternoon and not monitoring my
emails …
9) I confirm that since 4 October 2015 (inclusive), the Respondent
has not disposed of, dealt with or diminished the value of its 25%
shareholding in Unitel S.A.
15 14 October Asset Dissipation Affidavit (Variation) Order, paragraph 1. 16 14 October Asset Dissipation Affidavit (Variation) Order, paragraph 2. 17 While strictly the timing of service of dos Santos 2 was not in compliance with the 14 October Asset Dissipation Affidavit (Variation) Order, the Court will treat it as de minimus for the purposes of the Contempt Application.
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10) I confirm that the only disposal, dealing or diminution of value of
any of the Respondent’s assets above US$75,000 since 4 October
2015 (inclusive) are explained below:
11) On various dates through September 2015, the latest being 29
September 2015, I asked the Respondent’s bank to make
payments from the Respondent’s account.
12) I do not know when the payments left the Respondent’s account.
However I understand from the Respondent’s bank that payment
were received for value in the recipients’ accounts after 4 October
2015, namely on both 8 October 2015 and 9 October 2015.18
[26] As the evidence emerged in a subsequent affidavit of Mrs. dos Santos, described
below, Mrs dos Santos demonstrated a lack of candor in her reference to the
“recipients’ accounts” – in fact the accounts were Mrs. dos Santos’ personal
accounts.
[27] The Applicant later submitted to the Court, among other things, that dos Santos 2:
a. did not set out the details of the disposition or transfer referenced in
paragraphs 11 and 12 of dos Santos 2, the requirement of the previous
orders being that it set out “in detail any sale, disposition or transfer of its
assets” since Sunday 4 October 2015;
b. in particular, did not disclose the amounts transferred, where they were
transferred from (other than saying “the Respondent’s bank”) or where
they were transferred to (other than saying “the recipients’ accounts”); and
18 Later affidavits of Mrs. dos Santos use the words “transfer” or “transfers” rather than “payment” or “payments”. The words appear to have been used interchangeably by Mrs. dos Santos. The Court has used those terms interchangeably too, often using the term that was used in the evidence being discussed.
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c. disclosed (in paragraph 12) transactions that appear to have been made
after it had notice of the worldwide freezing order application or in breach
of the 9 October 2015 Temporary Freezing Order.
[28] This Court also noted on the hearing of the contempt application that the wording
of paragraph 12 of dos Santos 2 was confusing – if not misleading – on the facts
that later emerged about the dispositions. Those words may be taken to imply, or
may imply, that the Respondent “received value” in return of the payments, which
was not the case. The Respondent had the opportunity to be clearer and did not
avail itself of that opportunity. That becomes evident from the clearer way, after
much “pulling of teeth”, that the information was presented in the middle of the
Contempt Application hearing in a further affidavit of Mrs. dos Santos, dos Santos
4, paragraph 17, as pointed out by the Respondent’s Skeleton Argument For 26
October 2015 Telephone Hearing dated 26 October 2015 (“Respondent’s 26
October Skeleton”)19. (Collectively, these failings (non-compliances) are referred
to as “Non-Compliance 3”, except for the point (in paragraph 12 of dos Santos 2)
about transactions that appear to have been made after the Respondent had
notice of the worldwide freezing order, which turned out not to be the case.)
No Further Affidavit on 20 October 2015
[29] As set out above, the 14 October Asset Dissipation Affidavit (Variation) Order
required the Respondent to file and serve by 4:30 pm on Tuesday 20 October
2015 an affidavit that would be fully compliant with the 12 October Asset
Dissipation Affidavit Order.
19 Paragraphs 10 and 11.
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[30] The Respondent did not file or serve a further affidavit by 4:30 pm on 20 October
2015 and neither explained why it could not nor sought, before that deadline, a
further extension of time to comply (“Non-Compliance 4”).
This Contempt Application
[31] On 21 October 2015 the Applicant issued the Contempt Application asking this
Court to find the Respondent in contempt and seeking, more specifically:
1. A declaration that the Respondent is in contempt by virtue of
having transferred a sum or sums of money from its bank accounts
to third parties (“Transactions”) in breach of and/or in the
knowledge of the terms of the [9 October 2015 Temporary
Worldwide Freezing Order].
2. An order requiring the Respondent to purge its contempt in respect
of the Transactions within 7 days by reconstituting the funds
transferred by the Transactions.
3. Further and/or alternatively a declaration that the Respondent is in
contempt of Court by virtue of having failed to file and serve a
sworn affidavit in full compliance with the [12 October Asset
Dissipation Affidavit Order], in breach of the [14 October Asset
Dissipation Affidavit (Variation) Order].
4. An order requiring the Respondent to provide an affidavit and
supporting exhibit evidence within 7 days identifying full details of
the Transactions, including but not limited to the amounts, timing,
reasons for and destination(s) of the funds in question, and stating
the identity of all persons who directed or facilitated the making of
the transactions.
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5. Pending the purging of the Respondent’s contempt and further
order of the Court, an order appointing Marcus Wide and Mark
McDonald of Grant Thornton and such other insolvency
practitioners or officers as the Court may direct:
6. To enter upon and take possession of all the real and personal
estate and property of the Respondent;
7. To collect, receive and take into his/their hands all books, records,
rents and profits of real estate and all personal estate of the
Respondent;
8. To keep and hold the same under sequestration in their hands
until the Respondent, shall comply with the Orders and clear its
contempt and the Court makes other Order to the contrary; or
9. Such other terms as to the order of sequestration as the Court may
direct.
10. An order that the Court shall refuse to hear the Respondent on any
new application until the contempt is purged.
11. Such further or other relief as the Court may think fit.
12. The costs of and incidental to this application to be paid by the
Respondent to the Applicant on an indemnity basis or such other
basis as the Court deems fit.
[32] The Applicant’s case was that the Respondent had shown a total and blatant
disregard for this Court’s Orders, had repeatedly not complied with them and was
in contempt.
Respondent’s Third Affidavit – dos Santos 3, and Respondent’s Skeleton for 23
October 2015 Hearing
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[33] A Third Affidavit of Mrs. dos Santos (“dos Santos 3”), and a skeleton argument for
the Contempt Application20, which addressed only a request for an adjournment,
were filed by the Respondent on Friday 23 October 2015, just before the
commencement of the hearing of this Contempt Application. The Respondent
submitted that dos Santos 3 was in compliance with paragraph 8(1) of the 9
October 2015 Temporary Worldwide Freezing Order (i.e. “setting out in detail any
sale, disposition or transfer of its assets … since Sunday 4 October 2015”) and
that it responded to the Contempt Application.
[34] This third attempt at compliance still lacked clarity and particularity.
[35] For example, in paragraph 4 of dos Santos 3, there is a statement that “the
Respondent does not have any assets severally exceeding US$75,000” but it does
not say as of what date. A reader is left wondering if that statement speaks from
the date of the affidavit – 23 October 2015 – in which case it is not responsive to
what was being sought, or if it speaks from a prior date and if so, which date.
[36] Another troublesome statement in dos Santos 3 is where Mrs. dos Santos said “…
it did not occur to me, nor was I (or the Respondent) advised, to make enquiries as
to whether the payment instructions of 29 September 2015 had already been
actioned.”21
[37] It is almost incredible, particularly given the size of the payments in question
(which emerged later), and the possibility that they might not have been
20 Respondent’s Skeleton Argument For 23 October 2015 hearing (“Respondent’s 23 October Skeleton”). 21 dos Santos 3, paragraph 10.
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immediately completed, that in the face of a prohibition on disposing of or dealing
with assets it would not have crossed someone’s mind on the Respondent’s side
that if the transactions were still “in progress”, continuing with them might
contravene the Court’s Orders and that it should be considered whether the
instructions to the Respondent’s bank could have been countermanded. Earlier
affidavits did not adequately address and disclose what had occurred. It would
have saved much time and expense had Mrs. dos Santos, on behalf of the
Respondent, set out what transpired clearly and completely in one telling.
[38] The Applicant submitted that even with dos Santos 3, the Respondent was not
compliant – the information provided by the Respondent was incomplete and
contradictory. The Respondent had failed to provide the information that it had
been ordered to provide. It had not made a serious effort to comply with the
Court’s orders, its conduct had been frustrating the Court’s purpose and the
administration of justice, and it had breached the freezing order in that funds had
been transferred by the Respondent in the face of the Court’s orders.
[39] On the latter point, the Applicant submitted – before the subsequent evidence from
the Respondent was filed – that it was not sufficient to say that instructions for a
transfer were in place when the Court’s order was made; that either the
Respondent could have countermanded the transfer order or explained to the
Court why it could not have done so. The request for the transfer had been on 29
September 2015 and did not occur until 8 – 9 October 2015 (on the subsequent
evidence it turned out, 9 October 2015 only).
[40] Further, the previous statement that the transfer was “for value” had been
misleading. Even if the failure to comply was not deliberate, the Applicant
submitted that a lack of deliberateness is only a mitigating factor.
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23 October 2015 Contempt Application Hearing
[41] The hearing of the Contempt Application began after a half-hour adjournment so
that the Applicant could obtain instructions on dos Santos 3 and the Respondent’s
23 October Skeleton.
[42] The Respondent sought to adjourn the Contempt Application to be heard at the
same hearing as the inter partes return date of the underlying freezing order. The
Respondent noted that it had not received seven days’ notice although noting the
Court’s discretion to accept shorter notice. 22 It submitted there would be no
prejudice from an adjournment and no urgency but going ahead meant the
Respondent would not be afforded a reasonable and fair opportunity to respond.
The Respondent also submitted that it will seek to demonstrate that the freezing
order should never had been granted as the evidence in support was “seriously
misleading.”
[43] The Respondent submitted initially that it would be inappropriate and unfair for the
Court to consider questions of breach and sanctions for breach, without first
addressing the logically prior question of whether the relevant Orders should have
been made in those terms in the first place.23
[44] The Court had trouble with that initial position, particularly the submission that “it
would be inappropriate and unfair for the Court to consider questions of breach.”
Ex parte orders count. It matters not that the ex parte injunction had not yet had
an inter partes hearing. An order of this Court made ex parte is a valid and serious
22 CPR 53.8(1) and (2). 23 Respondent’s 23 October Skeleton Argument, paragraph 11. As a matter of good order, it should be recorded in this Judgment, even though it does not affect the matters decided in it, that the Honourable Justice Gerard St.C Farara QC continued the ex parte injunction following an inter partes hearing, by Judgment dated 8 February 2016.
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as is any order. In the Respondent’s 26 October Skeleton, the Respondent
accepted that there can be contempt for breaching an order which is later set
aside.24
[45] Having said that, it might be that the Court would want to take account in dealing
with sanctions whether an order breached was found subsequently to have been
procured with seriously misleading evidence.
[46] The Respondent also submitted that contempt is a serious remedy that should be
used sparingly and that the contempt burden is “beyond a reasonable doubt”,
which is a correct statement of the law. Put slightly differently, it must be proven
“consistent with such standard as the court, with its responsibility, regards as
consistent with the gravity of the charge.”25
[47] In any event, in all of the circumstances, the Court was not prepared to adjourn the
Contempt Application to the inter partes hearing of the injunction, although in the
result it made an accommodation in relation to the Contempt Application hearing
that permitted that Respondent the ensuing weekend to prepare, to engage
leading counsel from London (which it told the Court it desired to do for the
continuation of the hearing), and to submit a further skeleton, and as it turned out,
further evidence. The hearing was adjourned to Monday 26 October 2015.
[48] As is evident from the unusual procedural history, the Court endeavored to extend
every opportunity to the Respondent to comply with the Court’s orders and to
respond to the Contempt Application.
24 Respondent’s 26 October Skeleton, paragraph 2(a), footnote 2. 25 Re Bramblevale Ltd [1970] Ch. 128 (Court of Appeal) at page 137 lines A – B (per Lord Denning M.R.) and lines F – G (per Winn L.J.).
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[49] Before turning to the Applicant’s substantive submissions, which were made on 23
October 2015 after the Respondent’s adjournment application was denied, the
evidentiary picture needs to be concluded.
Respondent’s Fourth Affidavit: dos Santos 4
[50] On 26 October 2015, after the Applicant’s submissions on the Contempt
Application had been completed on 23 October 2015, the Respondent filed the
fourth affidavit of Mrs dos Santos (“dos Santos 4”) together with Exhibit “IDS-4”.
[51] To deal with the timing of the funds transfer, at paragraph 7 of dos Santos 4, Mrs
dos Santos referred to a letter of instruction dated 29 September 201526 which she
signed on behalf of the Respondent “requesting that the Respondent’s bank
account in Portugal make three separate transfers, in GBP, EUR and USD ….”
These were said to be distributions to her of dividends in her capacity as sole
shareholder of the Respondent, pursuant to a resolution of the Respondent signed
by her a sole shareholder on 1 September 2015. At paragraph 9, Mrs dos Santos
stated:
The letter of instruction dated 29 September 2015 was a hard copy
addressed to the respondent’s bank, Banco BPI, S.A. (the “Bank”)
in Portugal. I arranged for it to be taken physically on my behalf to
Portugal. (I frequently ask associates and friends of mine who
travel frequently to take important documents on my behalf.) I do
not know exactly when it will have reached the Bank but there will
inevitably have been a slight delay.
[52] Mrs. dos Santos went on in dos Santos 4 to explain that the funds were dividend
distributions to her as a sole shareholder of the Respondent which had been
26 Exhibit IDS-4, page 2.
21
approved on 1 September 2015. The funds were for two business purposes: first,
to acquire an interest in a company for EUR 175 million, and second, in
connection with an attempted acquisition of on-shore oil blocks for a minimum of
US$75 million.
[53] Mrs. dos Santos also corrected a prior statement on the timing of the transfers,
saying that they were effected only on 9 October, and not in part on 8 October,
and added that the transfers were to her personal accounts.27
[54] In dos Santos 3 28, before the amounts were disclosed, and in dos Santos 4 29,
Mrs. dos Santos swore that these distributions were “in the ordinary course of the
Respondent’s business”. Whether that was an appropriate description cannot be
determined on the limited information available to this Court but more importantly
in the context of the Contempt Application, the timing and purposes would indicate
that the transfers were not to avoid this Court’s orders. For the purposes of this
Contempt Application only, the Court finds that to be the case.30
[55] Mrs. dos Santos repeated in dos Santos 4 her statement in dos Santos 3,
described above and characterized by this Court as almost incredible, that the
thought never entered her head that the instructions should be countermanded
and that she did not receive any suggestion from her lawyers that she should take
such a step.31
27 dos Santos 4 paragraphs 12 and 13(d). 28 dos Santos 3, paragraphs 8. 29 dos Santos 4, paragraphs 8. 30 As noted, the Applicant had no opportunity to investigate, as advised, this evidence or to test it, and no opportunity to file responding evidence. 31 dos Santos 4, paragraph 16.
22
[56] A separate matter raised in dos Santos 4 was an alleged settlement initiative that
came to Mrs. dos Santos indirectly from the Applicant’s ultimate majority
shareholder, which she swore led her, based on its substance and timing, to be
convinced that the Contempt Application was pursued to try to secure an
advantageous settlement by applying maximum commercial pressure and not out
of a genuine interest in securing compliance with this Court’s orders.32
[57] Of course it would be improper for a contempt application to be used as a tactic to
try to extort a settlement from the respondent to the application. However given
the timing of the events alleged, consequently the timing of when they were raised,
and the lack of opportunity for the Applicant to respond to or test the allegations,
there is nothing that the Court can do with the expressed concern on this
Contempt Application. The result of this Contempt Application has been reached
without regard to these allegations.
Respondent’s Fifth Affidavit: dos Santos 5
[58] A fifth affidavit of Mrs dos Santos was filed by the Respondent on 26 October 2015
(“dos Santos 5”). With it she exhibited a letter from the Respondent’s bank,
Banco BPI, S.A., (with an English translation) dated 26 October 2015, which
confirmed that the Respondent’s letter of instruction to the Bank dated 29
September 2015 was the last letter of instruction received by Banco BPI, S.A. in
relation to the Respondent’s account.
[59] Subsequent to the conclusion of the Contempt Application hearing, there were
further submissions made by way of correspondence to the Court 33 and the
32 dos Santos 4, paragraphs 19 – 32; Respondent’s 26 October Skeleton, paragraphs 18 and 19. 33 Conyers Dill & Pearman (“Conyers”), legal practitioners for the Respondent, to Maples and Calder (“Maples”), legal practitioners for the Applicant dated 30 October 2015; Maples to
23
Respondent filed a witness statement of Jorge De Brito Pereira, a Portuguese
lawyer with Sociedad de Advogados, RL, on 5 November 2015 in which he gave
evidence about his telephone conversation with an officer of Banco BPI, S.A.
concerning the meaning of the 24 digits at the bottom of each of the bank transfer
confirmations. This explanation was to the effect that certain digits referenced the
date and precise second in time the transaction took place.34
[60] The Respondent submitted35 that the Banco BPI, S.A.’s documents unequivocally
demonstrated that three transfers of funds were carried out on 9 October 2015 just
after 3 pm Portuguese time, being some seven hours before the 9 October 2015
Temporary Worldwide Freezing Order was made by this Court.
26 October 2015 Contempt Application Hearing (Continuation from 23 October 2015)
[61] By the time the Contempt Application hearing recommenced on Monday 26
October 2015, it appears that however seriously or not the Respondent, and for
these purposes its directing mind Mrs. dos Santos, had been taking this entire
matter until then, she and in turn it had realized, or been made to realize by their
advisors, that the Respondent, and indirectly she, was facing a serious situation.
[62] Mrs. do Santos was present “in court” for the second day of the hearing with the
Respondent’s counsel, Alain Choo Choy, QC, her husband, three lawyers from the
law firm Quinn Emmanuel Urquhart & Sullivan UK LLP, and others assisting Mr.
Choo Choy (all via telephone from London).
Conyers dated 2 November 2015; Conyers to Maples dated 5 November 2015 with witness statement of Jorge De Brito Pereira; Maples to Conyers dated 5 November 2015; and Conyers to the Court dated 6 November 2015 providing all of this correspondence to the Court. 34 Paragraph 6, page 3. 35 Conyers to the Court dated 6 November 2015.
24
[63] While the Court lacked the ability to observe Mrs. dos Santos at the hearing on 26
October 2015, it took from her presence a desire to demonstrate to this Court that
the Respondent, and she, were taking seriously this Contempt Application, and the
concerns about non-compliance with this Court’s orders.
[64] The Court also notes the unreserved apology from Mrs. dos Santos for any
insufficiency of detail in dos Santos 2 or dos Santos 3 and “for having given any
impression of discourtesy or disrespect toward the BVI Commercial Court or its
Orders.”36
[65] It was submitted by the Applicant that an apology goes to purging contempt; that it
is not a response to a contempt allegation. This is discussed below.
Overview of Contempt Application Issues
[66] As is evident from the history of the orders giving rise to the Contempt Application,
and the proceedings in the Contempt Application, the Applicant faced a moving
target both in respect of the Court’s orders and in due course the Contempt
Application, as the Respondent kept adding evidence and providing new, modified,
clarified and/or more detailed evidence.
Two Categories of Obligations and Issues
[67] The Court’s orders gave rise to two categories of obligations on the Respondent,
and two categories of issues on the Contempt Application: first, asset transfer
obligations and issues, and second, disclosure of information obligations and
issues.
36 Dos Santos 4, paragraph 18(c); Respondent’s 26 October Skeleton, paragraph 1.
25
Asset Transfer Obligations and Issues
[68] This Court must decide the asset transfer issues on this Contempt Application on
the full record which includes the evidence that came piecemeal from the
Respondent in six affidavits and in correspondence submitted to the Court. The
interests of justice require that the Court consider all the available evidence of
whether assets were transferred in breach of the Court’s Orders. It would be
artificial to deprive the Respondent of the opportunity to defend the Contempt
Application by supplementing its pre-Contempt Application evidence on the asset
transfer issues.
[69] The Court is satisfied on the evidence, taken as a whole, that for the purposes of
this Contempt Applicant, the Respondent did not “in any way dispose of, deal with
or diminish the value of any of its assets” in breach of this Court’s orders, and in
particular paragraph 4 of this Court’s 9 October 2015 Temporary Worldwide
Freezing Order and paragraph 4 of this Court’s 12 October 2015 Worldwide
Freezing Order.
[70] The full record of evidence establishes that the Respondent, in the person of Mrs.
dos Santos, became aware of the listing of the Applicant’s ex parte injunction
application on 8 October 2015 around 5.30 pm Angolan time, and that the
transfers of the Respondent’s dividends to Mrs. dos Santos were effected by the
Banco BPI, S.A. just after 3 pm Portuguese time on 9 October 2015, pursuant to
the instructions given to the Bank on 29 September 2015.
[71] Therefore the transfers were completed some seven hours before the 9 October
2015 Temporary Worldwide Freezing Order was made by this Court (which was
26
the time the Respondent had notice of it because it’s legal practitioners were
present before this Court and represented at the hearing)37.
[72] The Respondent made the valid and telling point that had the Respondent really
intended to dissipate assets, engagement with the Applicant’s legal practitioners
prior to the ex parte injunction hearing “would have been the last thing to
undertake”.38
[73] Further, there is no evidence that the Respondent did anything (one way or the
other) in relation to the transfers to Mrs. dos Santos after Mrs. dos Santos became
aware of the ex parte injunction application. That is, there is no evidence that
steps were taken either to expedite or to delay (countermand) the transfers.
[74] Given the way events unfolded, there was no opportunity to countermand based
on the making of the 9 October 2015 Temporary Worldwide Freezing Order
because, on the evidence before this Court, the transfers were completed before
the Order was made.
[75] It is left as an open question whether a person in the Respondent’s position, upon
learning of the injunction, would have a positive obligation in the circumstances to
investigate the status of the pending funds transfers and to attempt to
countermand instructions if the transactions had not been completed. The Court
leaves this question open because it is moot in this case; it does not do so
because it necessarily would accept the Respondent’s contention that the 9
October 2015 Temporary Worldwide Freezing Order should not be construed to
impose obligations to investigate and countermand if possible39.
37 The Respondent accepts this in the Respondent’s 26 October Skeleton, paragraph 6. 38 Respondent’s 26 October Skeleton, paragraph 5. 39 Respondent’s 26 October Skeleton, paragraph 7.
27
[76] A person in such a position will want to carefully consider the acceptability of not
making at least reasonable enquiries, and if the transaction that transfers assets
has not been completed, at least making reasonable efforts to countermand (that
is, stop the completion of the transaction/transfer).
[77] The Applicant also submitted that actions taken by a person in the face of a
pending injunction application to frustrate the relief sought could amount to
contempt.
[78] This Court raised whether the concept of "obstruction of justice" could apply to
enable a court to conclude, at least on egregious facts, that at some point a
respondent crosses the line in its conduct to frustrate an order being sought before
the order is made. But authority for that proposition could not be found.
[79] The Applicant referred to Attorney-General v Times Newspapers Ltd40 in which the
House of Lords held that conduct “which tends to undermine the due
administration of justice” may constitute criminal contempt (“a real risk, as
opposed to a mere possibility, of interference with the due administration of
justice”). However it does not appear to go so far as to support the concept that a
person taking an action which a pending application seeks to enjoin may be found
to be in civil contempt.
[80] The Respondent pointed out some of the problems with imposing contempt liability
for pre-order conduct that runs contrary to the relief being sought, such as
ascertaining the point in time at which such potential liability might commence in
respect of an intended application for an injunction (for example, suspicion;
knowledge that papers being prepared; notification from intended applicant); and
40 [1973] 3 All ER 54, at 71, lines h – j.
28
the absence of the protection of an intended applicant’s undertaking as to
damages of the intended respondent. Also it was noted that the absence of such
liability may be why there are ex parte applications, and increasingly broad and
flexible remedies such as Norwich Pharmacal orders.
[81] In any event, as this Court has not found that the Respondent acted in breach of
the asset transfer prohibition in its Orders, this is not the case in which further
canvassing of the possibility of pre-order contempt liability is necessary or
appropriate.
Disclosure of Information Obligations and Issues
[82] The parties differed on whether the disclosure of information obligations and
issues also must be determined on the full record, or only on the affidavits and
information provided prior to the bringing of the Contempt Application (with the
latter disclosure simply going towards purging a contempt that occurred already).
At the end of the day, this Court would reach the same conclusion either way.
[83] The Respondent submitted that the “[c]omplaints about inadequacy of information
are obviously secondary to the Applicant’s principle concern about dissipation of
funds.”41 This Court does not see it quite that way.
[84] This Court had a significant concern about information that was directly and clearly
ordered to be provided not being provided by the time it was to be provided, either
at all or in a clear and comprehensive manner, and sometimes without prior or any
meaningful explanation for the noncompliance.
41 Respondent’s 26 October Skeleton, paragraph 13.
29
[85] The record of the Respondent’s conduct in this regard has been recited above,
and the principle points on which the Respondent failed to comply with this Court’s
orders defined as Non-Compliance 1, Non-Compliance 2, Non-Compliance 3 and
Non-Compliance 4. This serial non-compliance may be summarized as including:
a. not providing any information on a matter by the deadline set by the court
(e.g.: Non-Compliance 1 – did not deal with the period between 4 and 9
October 2015);
b. not providing affidavits by the deadline set by the court (Non-Compliance
2 and Non-Compliance 4);
c. not providing information ‘sufficiently clearly’ (e.g.: Non-Compliance 3);
and
d. not providing information “in detail” (e.g.: Non-Compliance 3).
[86] It need to be determined, applying the high burden of proof applicable to contempt
of court, whether in respect of the disclosure of information obligations the
Respondent skated close to the line or whether it crossed the line into contempt.
[87] Elements of Civil Contempt. The elements of civil contempt in this jurisdiction
were summarized in Liao Hwang Hsaing v Liao Chen Toh and Liao Wen Toh
(“Liao”), BVIHCV 2011/0222, 6 May 2013, by the Honourable Justice Ellis,
referring to the judgment of Justice Christopher Clarke in Masri v Consolidated
Contractors Intl. SARL42. It is necessary to show that the person sought to be held
in contempt:
1. knew the terms of the order;
2. acted or failed to act in a manner which involved a breach of the order;
and
42 [2011] EWHC 1024 (Comm) paras 150 – 155.
30
3. knew the facts which made his conduct a breach of the order.
[88] Justice Ellis summarized that the authorities show that it is not necessary to show
that the person sought to be held in contempt “appreciated that what he was doing
was a breach of the order and intended to breach the court order.” Rather, the
intent must be to do the prohibited act or to not do the required act. Justice Ellis
continued that “if after considering all of the evidence [the Court] concludes that
there is more than one inference to be drawn from the facts and at least one of
such inference is inconsistent with a finding of contempt then the application must
fail.”43
[89] “In Detail” Provision of Orders. Perhaps the strongest response of the
Respondent respecting whether its non-compliance with the disclosure of
information obligations constitutes contempt is the lack of precision of the words
“in detail” in the Court’s order (“setting out in detail any sale, disposition or transfer
of its assets, or confirming that no such sale, disposition or transfer of its assets
has taken place”44). This relates only to Non-Compliance 3.
[90] The Respondent submitted that an order which is alleged to have been breached
needs to tell the target of the order what needs to be done, and that in respect of
the “in detail” requirement the orders of this Court were “far from clear”.
[91] The Court accepts that its orders could have, and did not, require specific
documents or types of documents to be produced and/or set out more specifically
43 Liao, paragraphs 65 – 70, specially paragraphs 68 and 70. See also: Stancomb v Trowbridge Urban District Council [1910] 2 Ch. 190 at 194 and Masri v Consolidated Contractors [2011] EWHC 1024 (Comm) at [150]. 44 9 October 2015 Temporary Worldwide Freezing Order, paragraph 8(1).
31
the details that it wanted from the Respondent. It could have required “details of
how much, to whom and for what purpose its transfers were made.”45
[92] The reasoning behind the use of the more generic “in detail” was that in the
absence of knowing what occurred and what the situation was, it seemed to be to
the Respondent’s benefit for it to be able to provide details that fit with the
situation, rather than having to deal with requirements for specific details that may
have been difficult or impossible to make fit with the situation.
[93] The Applicant also pointed out that even if the “outer limit” of “in detail” was
arguably unclear, the “inner limit” was clear. A legal or commercial person should
have understood it to include details such as amount, date, to whom, and purpose.
The later improved compliance by the Respondent illustrates this point.
[94] However, because of the penal consequences of breaching a freezing order, and
by logical extension, a disclosure order in relation to a freezing order, a defendant
needs to know where he, she or it stands in relation to the order. Therefore orders
such as the ones relating to Non-Compliance 3 need to be clear and unequivocal,
and need to be strictly construed.46
[95] Repeated Orders. It was suggested by the Respondent that the Court making
similar orders more than once made the requirements less clear. One might say
that it hardly lies in the Respondent’s mouth to complain when it was only its non-
compliance that necessitated any further order to the same effect. In essence the
Court re-made the same order, albeit trying to make it fit to the extent possible with
the circumstances of the non-compliance, with what went before, and with the
circumstances as gleaned from the information that was provided.
45 Respondent’s 26 October Skeleton, paragraph 14. 46 JSC BTA Bank v Ablyazov [2015] UKSC 64 at [19].
32
[96] While Non-Compliance 3 does not constitute contempt, it demonstrates at a lack
of candour with the Court, and at best, an unacceptable level of sloppiness or lack
of attention to detail.
[97] Other Three Categories on Non-Compliance. With respect to the other three
categories on Non-Compliance, the Respondent did not give the Court’s orders
the priority they deserved and required.
[98] The Court was left with a concern that the Respondent, at the direction of Mrs. dos
Santos, may have intentionally “dragged its heels” on compliance with the affidavit
and information disclosure requirements by not making timely, clear, complete and
accurate disclosure, by obfuscating, by being less candid than necessary, and by
intentionally not treating this Court's orders with the respect, urgency and
seriousness which they called for.
[99] The motivation for such conduct may have been to avoid having to disclose to the
Applicant before Mrs. dos Santos’ two transactions were completed or sufficiently
progressed as a means of avoiding or at least reducing the risk of the Applicant
somehow trying to interfere (using that term neutrally) in them. In dos Santos 4,
she stated “At the time of swearing my Second Affidavit, I was also uncomfortable
about providing personal information about my bank accounts, amounts involved
or the particular uses … because of the Applicant’s aggressive tactics.”47 By the
Respondent’s admission, it was concerned about limiting the information available
to the Applicant when considering its disclosure obligations under this Court’s
orders.
47 dos Santos 4, paragraph 18(b).
33
[100] Mrs. dos Santos may have taken the view that “it is often easier to ask for
forgiveness than to get permission.”48
[101] However, having regard to the applicable test and the burden of proof that the
Applicant was required to meet on this Contempt Application, this Court does not
have sufficient evidence to come to those conclusions on the “beyond a
reasonable doubt” burden of proof necessary to establish contempt (as above).
[102] The Court is not satisfied beyond a reasonable doubt that the Respondent
intended not to do the acts required by its orders – that is, that it intended not to
provide the required affidavits or information by the deadlines set by the Court or
not to provide information that it did provide sufficiently clearly and in the required
detail (noting the “in detail” difficultly already stated in this Judgment). It is possible
that the Respondent’s serial non-compliance was due to insufficient attention,
diligence, focus and organization, and exacerbated by distance, time differences
and less familiarity with the legal system and legal culture of this jurisdiction.
[103] Adapting the words of Justice Ellis in Liao, having considered all of the evidence,
this Court concludes that there is more than one inference to be drawn from the
facts – from the failures to provide the affidavits and information as ordered and by
the times ordered. One such inference is that there was insufficient attention,
diligence, focus and organization of the Respondent and its directing mind, Ms.
dos Santos.
[104] Respondent’s Apology. In coming to these conclusions with respect to the
disclosure of information obligations, this Court has not needed to have regard to
the Respondent’s apology (discussed above). The contempt was not made out to
48 Attributed to U.S Rear Admiral Grace Murray Hopper, as quoted in the U.S. Navy's Chips Ahoy magazine, July 1986.
34
the required burden of proof even if the apology is not considered. The alternative
inference still would exist.
[105] As noted above, it was submitted by the Applicant that an apology (as opposed to
an explanation of what occurred) goes to purging contempt; that it is not a
response to a contempt allegation. It is not necessary to decide that issue, on
which the submissions were limited, to reach the above conclusion.
[106] Post-Contempt Application Compliance. Also, in coming to these conclusions
with respect to the disclosure of information obligations, this Court has not needed
to have regard to the Respondent’s post-Contempt Application compliance. As
noted above, the parties differed on whether such compliance goes to the
contempt issue or to purging an established contempt only.
[107] The contempt was not made out to the required burden of proof even if “a line is
drawn” in the evidence just before the time that the Contempt Application was
launched.
[108] There were limited submissions on the legal effect of post-Contempt Application
compliance. In this case, it could cut two ways.
[109] On the one hand, the Respondent achieved further compliance with this Court’s
Orders after the Contempt Application was launched.
[110] On the other hand, as noted above, the post-Contempt Applications efforts at
compliance by the Respondent demonstrated the information that could have been
provided earlier, before the Contempt Application was launched, that would have
made the Respondent more compliant with this Court’s orders. The piecemeal
35
evidence itself showed, in certain respects, what was not disclosed initially that
could have been disclosed.
[111] Even if the post-Contempt Application compliance were considered only for the
latter purpose, namely to demonstrate the information could have been provided
earlier, before the Contempt Application was launched, the contempt was not
made out to the required burden of proof. The alternative inference still would
exist.
Text Book Lesson in How Not to Deal with Court Order Requiring Information
[112] While this Court has found that the Respondent is not guilty of contempt, the
manner in which it dealt with the information provision requirements of this Court’s
Orders provides a “text book lesson” in how not to deal with court orders requiring
information.
[113] If the Respondent, and Mrs. dos Santos and their advisors, had been frank, clear
and timely in responding to this Court’s orders, even when they may have not
been in a position to provide complete responses, the need for multiple
applications, multiple hearings and the Contempt Application would not have come
to pass.
[114] This Court’s orders took account of the Respondent’s needs for time, and took
account for the possibility that the substance of the information sought could not
be provided by the times fixed by the Court, and/or would be easier to provide in a
manner that fit with the Respondent’s recordkeeping and so forth, rather than
being dictated by the Court blindly.49 To put it colloquially, the Court “cut the
49 For example, see (1) the 12 October 2015 Asset Dissipation Affidavit Order, paragraph 1, which permitted the Respondent, if unable to comply with the order made therein, to provide “an
36
Respondent a lot of slack.” The Respondent merely needed to reciprocate with
frankness and clarity as it went down the road to full substantive compliance with
the Court’s orders. Instead it was sometimes “too cute by a half” in some of its
responses.
[115] Even if the Respondent was concerned about giving too much sensitive
information to the Applicant at this early stage of this dispute, as discussed above,
it could have sought additional and enhanced protections, or a mechanism to try to
satisfy the Court without complete disclosure to the Applicant at-large.
Assessment of Responsibility for Contempt Application and Events Leading to It
[116] While the Contempt Application was unsuccessful, the Applicant was not
unjustified or precipitous in bringing it.
[117] While not constituting contempt, as held above, because the high burden was not
met, de facto the Respondent “dragged its heels” on compliance with the
information disclosure requirements by not making timely, clear, complete and
accurate disclosure, by obfuscating, by being less candid than necessary, and by
not treating this Court's orders with the respect, urgency and seriousness which
they called for, led to the Applicant needing to bring application after application in
order to secure compliance with this Court’s initial Orders.
[118] The Respondent caused a disproportionate amount of this Court's resources to be
expended on obtaining compliance with reasonable and sufficiently flexible (on
explanation … as to why a fully compliant affidavit could not be filed and served” by the time specified, with a provision in paragraph 2 for providing the information in daily tranches; and (2) the 14 October Asset Dissipation Affidavit (Variation) Order, paragraph 1, which provide at the end “If the Respondent is unable to provide all of this information, then it shall give reasons why.”
37
mode of compliance) orders. It caused suspicions on the part of the Applicant and
the Court.
[119] The Applicant undoubtedly incurred considerable expenses for no reason other
than how the Respondent dealt with, or did not deal with this Court's orders.
[120] The Court hopes that the Respondent, and Mrs. dos Santos, now appreciate the
importance of taking orders of courts (and, it should be added, arbitral tribunals)
with seriousness, and making good faith, diligent efforts (best efforts) to comply
fully and clearly in a timely manner, or if that is not realistic, to taking appropriate
steps to explain clearly, fully and frankly the reasons and to seek, in advance and
in accordance with the processes of the court (or tribunal), appropriate
modifications that will meet the objectives of the order, as seen by the maker of
the order.
ORDERS
[121] Accordingly, for the reasons set out above in this Judgment, this Court orders as
follows:
1. The Contempt Application is dismissed.
2. The costs of the Contempt Application shall be reserved pending
