Barclays Bank PLC v Dylan & Ors

Factual and Procedural Background

On 31 July 2024, a judge found that two directors of Company A were in contempt of court for breaching three freezing orders, referred to as the FTG Freezing Order, the ITG Freezing Order, and the Mason Freezing Order. One of these directors, the Defendant, was found in contempt on four counts and sentenced to concurrent immediate imprisonment terms totaling 22 months for counts 1, 2, and 3, and 12 months for count 4.

The findings followed a nine-day trial involving extensive documentary evidence and witness testimony, including two days of evidence from the Defendant. The Defendant appealed as of right, challenging factual findings and procedural fairness relating to amendments in the committal application.

Company A and its subsidiaries, including Company B and others, formed a complex corporate structure with interconnected companies and shareholdings. The Defendant was CEO of the holding group and a director of several subsidiaries until resignations in March 2022. Barclays Bank plc ("the Applicant") alleged unlawful conspiracies involving unauthorized borrowings and obtained freezing orders to prevent disposal or dealing with assets up to a specified value.

In March 2022, a series of transactions occurred ("the March transactions"), including transfers of shareholdings and release of security interests to two British Virgin Islands (BVI) companies. The Applicant alleged these transactions breached the freezing orders. The Defendant resigned as a director of one subsidiary the day before the transfers and denied involvement in the asset sales.

Subsequent investigations revealed involvement of a Delaware-incorporated entity ("GIMH") as principal funder replacing Company A's prior role, with connections to the Defendant and others. The Applicant issued committal applications alleging contempt of court by the Defendant and others. The Defendant also took a high-interest loan from GIMH to pay an unpaid costs order.

Despite administration appointments for Company A and Company B, anonymous filings continued at Companies House without cooperation from the Respondents. The trial judge found the Defendant's evidence not credible and upheld all four counts of contempt to the criminal standard.

Legal Issues Presented

1. Whether the Defendant breached the FTG and ITG Freezing Orders by knowingly assisting or permitting the March transactions.
2. Whether the Defendant breached the FTG Freezing Order by permitting the release of the FTG/Baldwins debenture.
3. Whether the Defendant breached the Mason Freezing Order by transferring, attempting, or permitting the purported transfer of his shares in ICGL.
4. Whether it was procedurally fair to allow the Applicant to amend the committal application after the trial and judgment.
5. Whether the facts found by the judge constitute a breach of the Mason Freezing Order.

Arguments of the Parties

Appellant's Arguments

• The Defendant challenged the judge’s findings of fact on counts 1, 2, and 3, asserting errors in the assessment of evidence and credibility.
• On count 4, the Defendant argued procedural unfairness due to the late amendment of the committal application without a formal application or formulated amendment before the judge.
• The Defendant contended that the facts found did not amount to a breach of the Mason Freezing Order, particularly denying that a "purported" or attempted transfer could constitute "dealing" under the order.
• The Defendant disputed the credibility of the Applicant’s documentary evidence, including Citibank documents linking the Defendant to GIMH and the BVI companies.
• The Defendant asserted that resignations and subsequent transactions were legitimate and unconnected to breaches of the freezing orders.

Appellee's Arguments

• The Applicant maintained that the Defendant knowingly breached the freezing orders by permitting or facilitating the March transactions, including transfers of shares and release of security interests.
• The Applicant argued that the Defendant’s resignations were timed to facilitate the transactions and conceal involvement.
• The Applicant contended that the Defendant permitted the filing of false or misleading documents at Companies House indicating share transfers, amounting to contempt.
• The Applicant submitted that the late amendment to the committal application was justified by the false impression created by the Respondents and should be allowed.
• The Applicant relied on circumstantial evidence and inferences drawn from documentary and testimonial evidence to establish breaches beyond reasonable doubt.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Masri v Consolidated Contractors Co SAL [2011] EWHC 1024	Standard for drawing inferences in contempt proceedings; burden of proof beyond reasonable doubt.	The judge applied the principle that inferences must be compelling and consistent with guilt, citing this case for guidance on circumstantial evidence.
Kwan Ping Bong v R [1979] AC 609	Requirement that inferences in criminal cases must be compelling.	Quoted to emphasize the high standard for inferring essential facts from circumstantial evidence.
R v Exall (1866) 4 F & F 922	Value and nature of circumstantial evidence as cumulative and potentially sufficient for conviction.	Used to illustrate how multiple strands of circumstantial evidence can collectively establish guilt.
R v Peart [2005] EWCA Crim 528	Approach to circumstantial evidence and jury directions.	Referenced to caution against overly legalistic approaches and to stress the jury’s role in weighing evidence.
R v Jabber [2006] EWCA Crim 2694	Test for adverse inferences from circumstantial evidence.	The court adopted the test of whether a reasonable jury could convict, not requiring certainty beyond all reasonable doubt for each inference.
DPP v Varlack [2008] UKPC 56	Standard for submission of no case to answer based on circumstantial evidence.	Confirmed that the trial judge was correct to leave the case to the jury where reasonable inferences could be drawn.
McGreevy v DPP [1973] 1 WLR 276	No special direction required for circumstantial evidence beyond standard burden of proof.	Supported the judge’s self-direction emphasizing the standard of proof beyond reasonable doubt without special instructions.
Kelly v R [2015] EWCA Crim 817	Clarification on jury directions regarding circumstantial evidence.	Applied to reinforce that no special direction is required and the jury should consider all evidence fairly.
Smith New Court Securities Ltd v Citibank [1997] AC 254	Appellate court’s approach to findings of fact by trial judge.	Presumption that trial judge’s findings are correct unless clearly wrong; applied to uphold factual findings.
Fage UK Ltd v Chobani UK Ltd [2014] EWCA Civ 5	Standard for appellate review of trial judge’s findings of fact.	Applied to confirm high hurdle for overturning findings of fact, especially where credibility is involved.
Cook v Thomas [2010] EWCA Civ 227	Deference to trial judge’s credibility findings.	Referenced to support the principle that appellate courts should not reweigh evidence or reassess credibility.
Business Mortgage Finance 4 plc v Hussain [2022] EWCA Civ 1264	Approach to appeals on inferences drawn from circumstantial evidence.	Applied to emphasize that errors in individual aspects do not necessarily vitiate overall conclusions.
Swain-Mason v Mills & Reeve LLP [2011] EWCA Civ 14	Reluctance to allow late amendments to pleadings; heavy onus on party seeking amendment.	Used to assess procedural fairness regarding late amendment of committal application.
Nesbit Law Group LLP v Acasta European Insurance Co Ltd [2018] EWCA Civ 268	Balancing injustice in late amendments with finality and fairness.	Supported the view that late amendments require strong justification and consideration of impact on other parties.
Inplayer Ltd v Thorogood [2014] EWCA Civ 1511	Requirement for formal amendment and opportunity to respond in committal proceedings.	Applied to hold that amendments to committal applications must be properly made and adjournments granted if necessary.
Hewlett Packard Enterprise Co v Sage [2017] EWCA Civ 973	Necessity to confine contempt proceedings to pleaded particulars unless formally amended.	Reinforced procedural fairness in contempt proceedings.
Kea Investments Ltd v Watson [2020] EWHC 2599 (Ch)	Requirement for formal amendment of particulars of contempt.	Applied to stress the importance of clear pleading in committal applications.
Navigator Equities Ltd v Deripaska [2024] EWCA Civ 268	Heightened standard of procedural fairness in committal applications.	Held that amendments require formal applications and must meet a merits test.
Magdeev v Gaynulin [2019] EWCA Civ 1802	Requirement for formal, coherent, and properly particularised pleadings.	Supported the necessity for a formulated amendment in committal proceedings.
Zu Sayn-Wittgenstein-Sayn v HM Juan Carlos de Borbón y Borbón [2022] EWCA Civ 1595	Requirement for formal, clear amendments and merits test in committal proceedings.	Held that proceeding on unformulated amendments is improper and unfair.
Thursfield v Thursfield [2013] EWCA Civ 840	Concerns about contemnors absconding and the need for reform in appeal rights.	Referenced in discussion of procedural anomalies and appeals as of right in contempt cases.
Al-Rawas v Hassan Khan & Co [2022] EWCA Civ 671	Support for reform of appeal rights in contempt cases.	Used to illustrate ongoing calls for reform of procedural rules in contempt appeals.

Court's Reasoning and Analysis

The court undertook a detailed analysis of the evidence and legal principles applicable to contempt of court and freezing orders. It emphasized the high standard of proof required—beyond reasonable doubt—and the proper approach to circumstantial evidence, relying on established case law that permits drawing compelling inferences from a combination of evidence strands.

The judge’s credibility findings were given significant deference, particularly given the Defendant’s disavowal of sworn affidavits, inconsistent testimony, and failure to provide credible explanations for key events such as the timing of resignations and involvement with anonymous communications.

The court rejected the Defendant’s attempts to isolate favorable evidence ("island hopping") and noted the trial judge’s comprehensive consideration of the entire evidential matrix. It found no error in the judge’s conclusions that the Defendant had breached the freezing orders by permitting or acquiescing to the March transactions, the release of the FTG/Baldwins debenture, and dealings with the Defendant’s shares in ICGL.

Regarding count 4, the court found procedural unfairness in the late amendment of the committal application, which expanded the allegation from an actual transfer in March 2022 to permitting or attempting a purported transfer in September and October 2022 without a formal application or adequate opportunity for the Defendant to respond. The court held that such amendments should have been subject to formal application and adjournment, and that proceeding without these protections was unfair.

The court acknowledged the judge’s factual findings about the Defendant’s knowledge and permission of filings at Companies House but concluded that the amendment of the allegation after trial was procedurally improper.

The court also addressed the broader issue of appeals in contempt cases, observing the anomaly that contemnors can appeal as of right even when they abscond, and suggested that a permission filter would be appropriate to prevent abuse of process.

Holding and Implications

The court ALLOWED the appeal on the grounds relating to procedural unfairness in count 4 (grounds 1 and 2), and DISMISSED the appeal on the grounds challenging the factual findings (ground 3) related to counts 1, 2, and 3.

The court discharged the contempt findings related to count 4 as framed in the judge’s order but upheld the immediate custodial sentence of 22 months imposed on counts 1, 2, and 3, which were to run concurrently. The procedural irregularity in count 4 did not affect the sentences for the other counts.

The decision reinforces the importance of procedural fairness in contempt proceedings, particularly regarding amendments to committal applications. It confirms the high threshold for appellate interference with findings of fact and credibility made by trial judges after full hearings.

No new legal precedent was established beyond the application of established principles, but the judgment highlights ongoing concerns about appeal rights in contempt cases where contemnors abscond, suggesting a need for law reform to introduce a permission filter for appeals in such circumstances.