Factual and Procedural Background
This appeal concerns orders made by Dame Clare Moulder DBE committing the appellants to prison for nine months each for contempt of court arising from breaches of worldwide freezing orders related to a property in Madrid. The appellants admitted liability before the committal hearing, so the appeal challenges only the sentences imposed, contending that they should have been suspended or were too long.
The underlying proceedings involve a claim in debt and fraud for over €25 million brought by the respondent claimant, with a counterclaim by the first appellant for an account of sums advanced for investment and the return of the resulting investment portfolio.
The appellants, a married couple previously residing at the Madrid property but now in Portugal, were subject to worldwide freezing orders made in March 2022, which prohibited dealing with assets including the Madrid property. The contempts found were:
- The transfer of Mr. Ouajjou's interest in the Madrid property to Ms. Perez, knowingly breaching the freezing orders;
- The sale of the Madrid property by Ms. Perez in breach of the freezing order;
- Ms. Perez's overspending on living expenses beyond the permitted weekly limit under the freezing order.
The judge sentenced Mr. Ouajjou for the first contempt and Ms. Perez for all three, imposing concurrent prison sentences totaling nine months on Ms. Perez and nine months on Mr. Ouajjou, declining to suspend the sentences.
The property transfers and sale were initially part of legitimate tax planning advised in 2021, but once the freezing orders were in place, these actions breached the court's orders.
Legal Issues Presented
- Whether the sentences of imprisonment for contempt of court were appropriate and not excessive.
- Whether the sentences should have been suspended.
- The extent to which mitigating factors such as admissions, cooperation, apologies, and impact on children should influence sentencing.
- The proper assessment of the seriousness of breaches of freezing orders and the applicability of custodial sentences.
Arguments of the Parties
Appellants' Arguments
- The sentences imposed were excessive and should have been suspended.
- The judge gave undue weight to the appellants’ non-attendance at the sentencing hearing and discounted their evidence unfairly.
- The appellants had admitted the contempts early, cooperated fully, disclosed the breaches themselves, and sincerely apologized.
- The breaches caused no material prejudice to the respondent, and the appellants were unable to purge the contempt.
- The judge failed to properly consider the impact of prison overcrowding and government policy on sentencing.
- The judge gave insufficient weight to the impact of imprisonment on the appellants’ young children.
- The judge rejected Mr. Ouajjou’s explanation for the breach without principled reasons.
- The sentences were inconsistent and failed to differentiate adequately between the appellants.
- The sentence for the overspending contempt was disproportionate given the modest overspend and full accounting.
- The judge erred in refusing to suspend the sentences.
Respondent's Arguments
The opinion does not contain a detailed account of the respondent's legal arguments.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Attorney General v Crosland [2021] UKSC 15 |
Guidance on sentencing for contempt of court including assessment of seriousness, consideration of fines, custody, mitigation, and suspension. |
The court applied the guidance to assess seriousness, find custodial sentences appropriate, and consider but ultimately reject suspension. |
| Liverpool Victoria Insurance Co Ltd v Khan [2019] EWCA Civ 392 |
Framework for sentencing in criminal contempt, assessing culpability and harm, and approach to mitigation and suspension. |
The court used this framework to evaluate the appellants’ conduct and sentencing appropriateness. |
| JSC BTA Bank v Solodchenko [2011] EWCA Civ 1241 |
Breach of court orders is always serious and usually requires custodial sentences for deliberate substantial breaches. |
The court relied on this authority to affirm the seriousness of breaches of freezing orders and the appropriateness of imprisonment. |
| McKendrick v Financial Conduct Authority [2019] EWCA Civ 524 |
Affirmation of the serious nature of breaches of court orders and custodial sentencing. |
Supported the principle that deliberate breaches of freezing orders attract immediate custodial sentences. |
| Kea Investments v Watson [2020] EWHC 2796 (Ch) |
Consideration of culpability and harm in contempt cases involving freezing orders. |
Used to assess seriousness and sentencing proportionality. |
| Tonstate Group Ltd v Wojakovki [2023] EWHC 3447 (Ch) |
Consideration of prison overcrowding as a factor in sentencing. |
The court acknowledged but did not find overcrowding sufficient to justify suspension. |
| Advantage Insurance Co Ltd v Harris [2024] EWHC 626 (KB) |
Consideration of prison overcrowding and sentencing policy. |
Applied to reject overcrowding as a reason to avoid immediate custody in this case. |
| R v Ali [2023] EWCA Crim 232 |
Prison overcrowding as a sentencing factor in criminal cases. |
Referenced to support the principle that overcrowding may justify modest reductions but not avoidance of custody if warranted. |
| R v Petherick [2012] EWCA Crim 2214 |
Impact of custodial sentences on dependent children as a mitigating factor in sentencing. |
The court applied this reasoning to balance the impact on children against the need for punishment and deterrence. |
Court's Reasoning and Analysis
The court carefully applied established legal principles for sentencing contempt of court, particularly breaches of freezing orders. It emphasized that breaches of court orders are inherently serious as they undermine the administration of justice, often necessitating custodial sentences. The court relied on authoritative guidance from the Supreme Court and Court of Appeal on assessing culpability, harm, mitigation, and the appropriateness of fines versus imprisonment.
The judge found the appellants’ breaches deliberate and substantial, involving the transfer and sale of a major asset contrary to freezing orders, and overspending beyond permitted limits. The appellants’ non-attendance at the sentencing hearing and failure to provide credible explanations reduced the weight of their mitigating evidence. Admissions and apologies were considered but found to have limited mitigating effect due to their timing and context.
The court rejected arguments that the breaches caused no prejudice, emphasizing that the appellants circumvented proper court processes for controlled asset disposal. Considerations of prison overcrowding and government policy were acknowledged but deemed insufficient to justify suspension. The impact on the appellants’ children was taken into account, leading to a reduction in Ms. Perez’s sentence but not suspension.
Regarding the overspend contempt, the court concluded that while it passed the custody threshold, the sentence should run concurrently and was ultimately quashed given the overall sentencing context. The court affirmed that the sentences imposed were relatively lenient given the seriousness of the breaches and the need to uphold the integrity of court orders.
Holding and Implications
The court DISMISSED the appeal except to quash the three-month sentence imposed on Ms. Perez for the overspending contempt, which was ordered to run concurrently without a separate penalty.
The direct effect is that the custodial sentences of nine months imposed on both appellants for contempt of court remain in force, with no suspension granted. This decision reinforces the principle that deliberate and substantial breaches of freezing orders are serious contempts warranting immediate custody, and that mitigating factors must be compelling to justify suspension. No new legal precedent was established beyond affirming existing principles and their application to the facts of this case.