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30 May 2019
In Donna Union Foundation v Svoboda Corporation, the BVI court recently considered:
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.
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:
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.
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.
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