Scope of disclosure orders and contempt of court

Introduction
Facts
Decision
Comment

Introduction

In Donna Union Foundation v Svoboda Corporation, the BVI court recently considered:

• a contempt application seeking further disclosure by way of an 'unless' order; and
• whether cross-examination of the respondents should be ordered to determine the issue of contempt.

Facts

Between 7 February 2018 and 19 July 2018, the claimant obtained freezing and receivership orders which included the usual ancillary disclosure orders to police them. The respondents made no disclosure until 4 February 2019 – almost one year after the first injunction requiring disclosure and the day before the contempt application hearing.

Decision

First, the court declined to order cross-examination. Justice Green noted the exceptional nature of such an order and the pointlessness of cross-examination without an order for further disclosure (which he was not going to make) against which the truth could be tested. The court was aware of the difficulties in respect of ordering cross-examination in such circumstances as the affiants were foreign-based and not themselves parties.

Second, the court was not satisfied beyond a reasonable doubt that the respondents remained in contempt. Instead, it declared that they had been in contempt before the affidavits had been filed on 4 February 2019.

Lastly, the court declined to grant the further disclosure, which the claimant had sought as either:

• part of its contempt application to test compliance with the existing orders; or
• a self-standing application to police the freezing orders.

As to the first basis, following the court's decision not to order cross-examination or find that the respondents remained in contempt, it could not order the further disclosure to test compliance with the ancillary disclosure orders.

Regarding the second basis, the court distinguished between an ordinary freezing order – designed to prevent dissipation of assets which would otherwise be available to meet a judgment – and a proprietary freezing order – designed to protect the applicant's property and generally include orders to allow tracing. This case involved an ordinary freezing order, which meant that the disclosure of the respondents' dealings with their assets before 7 February 2018 was unnecessary to police the freezing order. Notably, however, the court did express its displeasure at the respondents' conduct by penalising them in costs.

Comment

This decision highlights the exceptional nature of cross-examination orders and the high standard of proof required for contempt orders. It is also a good reminder of the court's unwillingness to make orders that will be difficult to enforce, especially against respondents that are out of the jurisdiction.

For further information on this topic please contact Jacqueline Moody, Laura de Heer or Andrew Johnstone at Harneys' Hong Kong office by telephone (+852 5806 7800) or email (jackie.moody@harneys.com, laura.deheer@harneys.com or andrew.johnstone@harneys.com). Alternatively, contact Andrew Thorp at Harneys' Tortola office by telephone (+1 284 494 2233) or email (andrew.thorp@harneys.com). The Harneys website can be accessed at www.harneys.com.