Cooper v Ignite International Brands (UK) Ltd & Ors

Factual and Procedural Background

On 13 May 2024, Judge Sweeting imposed an immediate custodial sentence of nine months on the Appellant in respect of two separate findings of contempt of court. The Appellant appealed as of right, with the sole issue on appeal being whether the sentence should have been suspended. The background involves a contract dated 14 December 2021 between the Appellant and his company, Company A, providing warehousing services to Company B. In early 2022, Company B’s auditors found discrepancies between physical stock held by Company A and Company B’s inventory reports, leading to the termination of the contract on 1 June 2022. Company B then experienced difficulties recovering its stock.

Company B commenced proceedings alleging substantial fraud by the Appellant and Company A, including fabricated customer orders, unauthorised sales, and unlawful retention and movement of products, resulting in losses exceeding £2 million. Due to the perishable nature of the goods, Company B sought expedited relief. On 25 October 2022, a Deputy High Court Judge ordered the Appellant and Company A to deliver up all remaining stock or provide detailed information about its disposition, as well as pay £25,000 towards Company B’s costs.

Following this order, stock worth £647,263 was recovered, leaving a shortfall valued at £2.9 million. The Appellant provided limited and inadequate information regarding missing stock, described by the judge as "sparse". In March 2023, Company B applied for the Appellant’s committal to prison for non-compliance with the delivery-up order (Contempt 1), which was proven after a three-day hearing. Subsequently, the Appellant failed to comply with a freezing order requiring an affidavit of assets, leading to a second contempt application (Contempt 2), also proven.

The Appellant provided minimal steps to purge his contempt, including a psychiatric report and a late affidavit purporting to purge Contempt 2, which Company B contended was incomplete. At the sanctions hearing on 13 May 2024, the judge imposed two concurrent nine-month immediate custodial sentences. Company B was granted default judgment for over £3.5 million against the Appellant and Company A. An interim order was made for disclosure of property and questioning of the Appellant’s means upon release from custody.

Legal Issues Presented

1. Whether the sentencing judge erred in not suspending the immediate custodial sentence imposed for contempt of court.

Arguments of the Parties

Appellant's Arguments

• The judge failed to give adequate consideration to the Appellant’s mitigating circumstances, particularly his health and extensive childcare and family responsibilities (Ground 1A).
• The mitigating factors should have led to suspension of the sentence (Ground 1B).
• The judge failed to take proper account of the Court of Appeal’s decision in Isbilen v Turk, which considered suspension of immediate custodial sentences in similar circumstances (Ground 2).

Respondent's Arguments

• The judge properly considered all mitigating factors, including the Appellant’s mental health and family responsibilities.
• The seriousness of the contempts outweighed mitigation, justifying immediate custody.
• The Turk decision was fact-specific and did not establish a principle applicable here, especially given the significant prejudice suffered by Company B and the irreparable loss of stock.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Liverpool Victoria Insurance Co Ltd v Khan [2019] EWCA Civ 392	General principles applicable to sentencing in contempt cases; appellate approach to sentencing discretion.	The court confirmed no issue arose on general principles and applied the standard of appellate restraint in sentencing decisions.
Crystal Mews Limited v Metterick & Ors [2006] EWHC 3087 (Ch)	Factors to assess the seriousness of contempt.	The judge applied these factors to find the contempts deliberate, prejudicial, and serious.
Templeton Insurance v Thomas [2023] EWCA Civ 35	Breaches of freezing orders are serious contempts often warranting immediate imprisonment; suspension may be merciful in limited cases.	The court distinguished the present case as more serious, with actual prejudice, unlike Templeton.
Asia Islamic Trade Financing Fund Ltd v Drum Risk Management Ltd [2015] EWHC 3748 (Com)	Breaches of freezing orders as serious contempts.	Supported the seriousness of the second contempt (breach of freezing order) in this case.
Venables and Thompson v News Group Newspapers Ltd [2019] EWHC 241 (QB); Breen and Others v Esso Petroleum Co Ltd [2022] EWCA Civ 1405; Bruce v Wychavon Council [2023] EWCA Civ 1389	Sentencing Council guideline factors for suspension of custodial sentences in contempt cases.	The court considered these factors and concluded suspension was not appropriate due to seriousness and history of non-compliance.
Isbilen v Turk [2024] EWCA Civ 568	Consideration of suspension of immediate custodial sentences in contempt cases based on mercy and mitigating factors.	The court found this case distinguishable due to ongoing proceedings, lack of legal representation issues, and significant prejudice.
Financial Conduct Authority v McKendrick [2019] EWCA Civ 524	Appellate court’s approach to reviewing sentencing decisions in contempt cases.	The court applied the standard of review and found no error in the sentencing judge’s decision.
R v Price [2023] EWCA Crim 1060	Difficulty of decisions to suspend custodial sentences; appellate deference to sentencing judges.	The court emphasized the sentencing judge’s judgment and declined to interfere absent manifest error.

Court's Reasoning and Analysis

The court carefully examined the mitigating factors presented by the Appellant, including his mental health history, substance dependency, and extensive childcare responsibilities. The sentencing judge had expressly considered these factors and acknowledged the significant impact a custodial sentence would have on the Appellant’s family. However, the court found that the seriousness of the contempts—deliberate breaches of court orders causing substantial and irreparable prejudice to Company B—outweighed the mitigation.

The court applied the factors set out in Crystal Mews to assess seriousness, concluding that the Appellant was deliberately evasive, abused a position of trust, and showed little remorse. The breach of the freezing order was also considered a grave contempt with clear public interest implications. The court noted the history of non-compliance with multiple court orders, including failure to pay costs and provide asset disclosures.

Regarding the possibility of suspension, the court acknowledged the sentencing judge’s awareness of the Sentencing Council guideline factors and found that the mitigating factors favorable to suspension were outweighed by the seriousness of the breaches and the Appellant’s poor compliance history. The court distinguished the Turk decision on its facts, noting that the present case involved significant actual prejudice and irreparable loss, unlike Turk where no detriment had been suffered and ongoing proceedings justified a merciful approach.

The appellate court applied the standard of review from Financial Conduct Authority v McKendrick, finding no error of principle, failure to consider material factors, or manifestly wrong decision in the sentencing judge’s refusal to suspend the sentence.

Holding and Implications

The appeal is DISMISSED.

The court upheld the immediate custodial sentence of nine months imposed for two findings of contempt of court. The decision confirms that serious, deliberate breaches causing substantial prejudice and involving a history of non-compliance will generally warrant immediate custody rather than suspension, even where significant personal mitigation exists. No new precedent was established; the ruling reaffirms established principles of sentencing discretion and appellate restraint in contempt cases.