The claimant, the Financial Conduct Authority (“FCA”), brought proceedings against the defendant in relation to the operation and promotion of a number of investment schemes, in respect of which investors suffered losses. The defendant was found to have acted in contravention of the provisions of section 397 of the Financial Services and Markets Act 2000 and was ordered to pay several million pounds to the FCA, for distribution to the investors. The defendant’s assets were then subjected to two worldwide freezing orders (“WFOs”), each requiring him to give details of all his assets, including any bank account whether in his own name or not. The defendant had at all material times owned a number of buy-to-let properties from which he derived a rental income. Each of the WFOs allowed the defendant a sufficient sum to enable him to meet his liabilities and living expenses each month. They also contained undertakings that the defendant would not spend more than a certain fixed sum from his account and would provide the FCA with statements so as to enable the FCA to monitor his income and expenditure. The defendant failed to provide this information and upon inquiry, subsequently revealed that the rental payments from his buy-to-let business had been paid into his wife’s bank account. The FCA brought an application to commit the defendant for contempt of court on the grounds that the he had acted in breach of both WFOs in failing to make disclosure, directing that rental payments be made to the wife and to accounts other than the his own account and by spending money paid to his wife. After the committal application had been made, the defendant for the first time admitted and apologised for his breaches of the order. The judge held that an appropriate starting point for sentence was 12 months, but that, due to the admissions, this would be reduced to six months. The defendant appealed, on the ground that the starting point of 12 months was too high.
On the defendant’s appeal—
Held, appeal dismissed. When a court was sentencing for contempt of court of the kind which involved one or more breaches of an order of the court, the court first had to consider (as a criminal court would do) the culpability of the contemnor and the harm caused, intended or likely to be caused by the breach of the order. Having determined the seriousness of the case, the court then had to consider whether a fine would be a sufficient penalty. If it would, committal to prison could not be justified, even if the contemnor’s means were so limited that the amount of the fine had to be modest. Breach of a court order was always serious, because it undermined the administration of justice and normally nothing other than a prison sentence would suffice to punish such a serious contempt of court. The decision as to the length of sentence appropriate in a particular case had to take into account the fact that the maximum sentence was committal to prison for two years. However, because the maximum term was comparatively short, the maximum could not be reserved for the very worst sort of contempt which could be imagined. Rather, there would be a comparatively broad range of conduct which could fairly be regarded as falling within the most serious category and as therefore justifying a sentence at or near the maximum. In the present case, the judge had directed himself correctly and carefully considered all relevant factors. The real issue was whether the judge’s decision as to sentence was wrong because it fell outside the range of sentences which the judge, applying his mind to all the relevant factors, could reasonably have considered appropriate. In the present case, there had been repeated and deliberate acts in breach of the clear requirements of the WFOs in a variety of ways, over a significant period of time. The defendant’s conduct was plainly so serious that no sanction other than a significant term of imprisonment could be justified. The fact that he had made admissions was an important point in his favour, but admissions had not been made at the earliest opportunity and there was a limit to how much weight could be given to them. While the starting point of 12 months was high, the reduction to six months was generous and it was the sentence actually imposed which had to be outside the range reasonably open to the judge if an appeal was to succeed. On that basis, it could not be said that a term of six months was outside the range reasonably open to the judge (paras 39–42, 44, 46, 47, 49, 50).
Ashley Underwood QC and Adam Tear (instructed by Howe & Co) for the defendant.
Adam Temple (instructed by The Financial Conduct Authority) for the claimant Financial Conduct Authority.