THE SUPREME COURT
APPEAL RECORD No: 372/2012
IRISH BANK RESOLUTION CORPORATION LIMITED, QUINN INVESTMENTS SWEDEN AB and LEIF BAECKLUND
SEAN QUINN, CIARA QUINN, COLETTE QUINN, SEAN QUINN JUNIOR, BRENDA QUINN, AOIFE QUINN, STEPHEN KELLY, PETER DARRAGH QUINN, NIALL MCPARTLAND, INDIAN TRUST AB, FORFAR OVERSEAS SA, LOCKERBIE INVESTMENTS SA, CLONMORE INVESTMENTS SA, MARFINE INVESTMENTS LIMITED, BLANDUN ENTERPRISES LIMITED, MECON FZE, CJSC VNESHKONSULT, OOO STROITELNYE TECKNOLOGII, OOO RLC-DEVELOPMENTS and KAREN WOODS
Judgment of Mr. Justice Fennelly delivered the 24th day of October 2012
1. This appeal takes place against the backdrop of hugely extensive litigation, not only in Ireland but in several other countries around the world, between the Irish Bank Resolution Corporation, formerly Anglo Irish Bank Corporation, and various members of the Quinn family and their companies.
2. This appeal, however, is brought only by the fourth-named defendant, Sean Quinn Jr., against orders of the High Court (Dunne J.) and concerns a comparatively narrow issue. Firstly, he says that there was no sufficient evidence before the High Court to justify the finding made, namely that he had been involved in August 2011 in paying US $500,000 out of the account of a Ukrainian company, QPU, to a certain Ms. Larissa Puga so as to amount to a contempt of a restraining order made by Clarke J. on 20th July 2011. For that, he was committed to prison by way of punishment for contempt of court for three months. Secondly, he says that the High Court, having found him to be in contempt by participating in that transaction, in any event, exceeded its powers by requiring him to reverse or undo a large number of separate transactions in respect of which there was no contempt finding or even allegation against him.
Factual background and history
3. The First named plaintiff, Irish Bank Resolution Corporation Ltd (hereinafter “the Bank” or “Anglo” when referring to its former business) has commenced this action under the name under which it was best known, when it traded as a Bank, Anglo Irish Bank Corporation.
4. The background to the issues on the present appeal is explained in the judgment of Clarke J. of 13th September 2011. (Anglo Irish Bank Corporation PLC v Quinn Investments Sweden AB & Ors  IEHC 356). In that judgment Clarke J. rejected a challenge by the defendants to the jurisdiction to maintain the action in this jurisdiction pursuant to Council Regulation (EC) No. 44/2001 of 22nd December, 2000, on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (OJ L 12, 16.1.2001, P.1) (the “Brussels Regulation”). It is worth quoting the opening paragraph of that judgment:
5. Anglo lent very large sums of money to members of the Quinn family or to companies in the Quinn group. It is not disputed that there is a sum of some €450 million owing. However, there is a dispute about a claim by the Bank to recover a sum of some €2.8 billion advanced to a Quinn Finance, a private unlimited Irish registered company within the Quinn Group, said to be related to certain obligations under various contracts for difference or margin calls which had been entered into relating to shares in Anglo. There is litigation in being in which various Quinn interests challenge the validity of that loan and of security granted by a number of Quinn companies in relation to it.
“Both the plaintiff (“Anglo”) and the group of companies (the “Quinn Group”) associated with many of the defendants were apparent stars of the Celtic Tiger years. However, the situation facing both has dramatically altered. As is widely known Anglo is now in state ownership, would be hopelessly insolvent but for state assistance, is no longer involved in ordinary banking but is seeking to recover such loans as it can so as to minimise the ultimate exposure of the taxpayer. Likewise, the Quinn Group in its various component parts has been the subject of significant financial difficulty with the appointment of administrators and receivers to many companies within the Group.”
6. Clarke J. summarised the object of the present action as follows:
7. The underlying action alleges conspiracy against the defendants, members of the Quinn family, consisting of the entering into and putting into effect a scheme or coordinated plan designed to strip assets from various companies or other legal entities, described as the International Property Group (“IPG”), over which Anglo had security.
“In the present proceedings, Anglo seeks to prevent the Quinns, acting individually or in a conspiracy or in concert with one another, from inducing breaches of contract and intentionally causing loss to Anglo by unlawful means, including taking actions which, it is alleged, will result in transferring assets of companies within the IPG to companies in another corporate structure for the purposes of denuding the IPG of its assets. The reliefs sought by Anglo include orders restraining the Quinns from inducing, procuring or facilitating breaches of Share Pledges or from taking steps to transfer assets or purporting to exercise rights attaching to pledged shares or to establish an alternative corporate structure. Orders are also sought declaring that the Quinns hold certain assets as constructive trustees for Anglo and directing an accounting to Anglo of any such property or assets transferred.”
8. On the 27th June, 2011, Anglo applied to the High Court ex parte for an interim injunction against the defendants designed to restrain them from taking further steps in furtherance of that alleged plan. The matter was then made returnable for an interlocutory hearing before the High Court. At an interlocutory hearing on the 20th July, 2011, counsel for the defendants, including the appellant, agreed to give a number of undertakings which were in identical terms to the interim relief which had been granted. This was without prejudice to the contention that Anglo was and is not entitled to the reliefs sought and that Anglo’s concerns were unwarranted.
9. The more specific subject-matter of the present contempt proceedings relates to a part of the Quinn family empire which derived from the acquisition of a significant property portfolio largely based outside Ireland and held through a complex network of company structures in a number of countries. Quinn Investments Sweden AB (“QIS”), a Swedish company, was the vehicle through which that property portfolio was owned. To quote Clarke J. again:
10. On 20th July 2011, Clarke J. made the order (which I will call “the Clarke J. order”) to which the contempt hearing before Dunne J. was referable. It was made pending the determination of the issue of jurisdiction and, if that issue was determined in favour of the plaintiffs, pending the hearing of the action. The terms of that order were that:
“QIS in turn had many ultimate subsidiaries including a number of Cypriot companies, which in turn held the shareholding in companies in countries such as Russia, Ukraine and India which latter companies directly owned the properties which formed part of the portfolio.”
11. The act of contempt alleged against the appellant, in effect the payment of a sum of $500,000 out of a Ukrainian company was held by Dunne J. to be a breach of the order. I will call that “the Quinn Junior contempt.” It will not be necessary to consider the detailed terms of the Clarke J. order.
"The Defendants be restrained forthwith whether by themselves or by their respective employees, servants, officers or agents or otherwise howsoever from:
1. inducing or procuring or otherwise facilitating any person or corporate entity to breach share pledges entered into by the International Property Group of Quinn companies as referred to in the Affidavit of Richard Woodhouse with the Plaintiff or any guarantees given to or for the benefit of the Plaintiff in respect of the indebtedness of the International Property Group of Quinn companies as referred to in the affidavit of Richard Woodhouse;
2. taking any step directly or indirectly that may have the effect of transferring any of the assets of Quinn Holdings Sweden AB, Quinn Park Sweden AB, Quinn Buildings Sweden AB, Quinn Logistics Sweden AB, Quinn Way Sweden AB, Quinn Assets Sweden AB, Quinn Management Sweden AB, Quinn Interests Sweden AB, Quinn Services Sweden AB, Quinn Voyage Sweden AB, Quinn Investments Sweden AB, Kompania Finansstroy Investments LLC to any third party save to the extent that same may be done in the ordinary course of business;
3. Directly or indirectly exercising or purporting to exercise any rights that attach to any shares that have been pledged to the Plaintiff save to the extent that such actions are consistent with the interests of the Plaintiff;
12. The Clarke J. order was served duly endorsed on the appellant’s solicitors on 21st July 2011. The appellant accepted in evidence that the solicitors brought it to his attention.
13. In September 2011, McCann Fitzgerald, solicitors for the Bank commenced correspondence with Eversheds, solicitors for the defendants, including the appellant. In September they expressed serious concern that steps had been taken by two of the defendants which had the effect of stripping certain named Russian companies, Finanstroy and Red Sector, of their assets. These alleged, inter alia, that shareholdings of Cypriot companies were withdrawn, that contrived debts were created by claimed arbitrations resulting in the “self insolvency” of well-resourced subsidiaries. I will not take up time and space to describe these matters at this point for two reasons. Firstly, allegations that these acts amounted to a contempt of the Clarke J. order were made against other named members of the Quinn family, but were not made against the appellant. Secondly, insofar as they relate to other members of the family, it is preferable not to comment on them, since they are not the subject of the present appeal.
14. Those remarks need to be qualified in one respect only. On 7th September 2011, McCann Fitzgerald inquired whether the appellant had been a General Director of one Russian company, Logistica. Eversheds wrote on 13th September 2011 confirming that he had been, but that he had resigned on 4th July 2011, “on account of the within proceedings.” The letter also denied any further involvement by their clients with Logistica after that date.
15. On 2nd December 2011, McCann Fitzgerald wrote making the allegation which formed the subject-matter of the Quinn Junior contempt allegation. That letter contains the essence of the case with which this appeal is concern and the relevant part warrants being quoted in full:
16. QPU, Quinn Properties Ukraine is a company incorporated in the Ukraine, the owner of a valuable office block, the Leonardo building.
“Payment to former QPU General Director
It has emerged that Sean Quinn Jr. and Peter Quinn, ………… travelled to Kiev in late August 2011. While in Kiev they caused US$500,000 of the cash at bank of Quinn Properties Ukraine (“ QPU”) to be transferred to the personal bank account of the then General Director of QPU. Quinn Investments Sweden (“QIS”) is a 15% shareholder in QPU. QPU is thus protected by the Order of Clarke J………… This dissipation of QPU’s assets was in breach of the Order.
This arose in the following circumstances. On 30 August 2011 Sean Quinn Jr and Peter Quinn attended at the Lenardo Business Centre in Kiev. The Lenardo Business Centre is a valuable asset owned by QPU. A resolution has been produced (copy enclosed) which purports to constitute a resolution of a shareholders' meeting of QPU in GF on that day......The resolution is, however, signed by Sean Quinn Sr and Peter Quinn as, alternatively, Chairman of Quinn Properties Sweden AB (“QPS” a 0.5% shareholder in QPU) and an alternative director of Quinn Office Sweden AB (the 99.5% shareholder in QPU).
The Resolution, which bears the company seal of QPU, provides that Peter Quinn acted as chairman of the meeting and ‘Sean Quinn’ as secretary, and that Peter Quinn proposed the dismissal of the General Director of QPU, Mrs Yanez Puga Larissa Nikolaevna, “in connection with commitment by [her] of guilty actions that provide grounds of losing confidence by the owner,” and the appointment of an alternative General Director. Both voted for this unanimously. According to the Resolution, both also voted unanimously to "conduct all payments to her in accordance with the legislation and to labor contract.”
The labour contract provides that Mrs. Yanez Puga was entitled to a payment of "$500,000" and other generous benefits on termination of her contract.
Sean Quinn Sr. and Peter Quinn had been notified, as chairman and deputy director respectively of QPS, that a shareholders' meeting of QPS had been convened for 31st August for the purpose of considering a resolution to remove Sean Quinn Sr. and Peter Quinn from the Board of QPS. That resolution was passed on 31st August, and they were so removed.
On 2nd September, without the knowledge of the QPS Board, the new General Director of QPU appointed by your clients on 30th August wrote to QPU’s bank requesting the release of UAH 3,985,350 (approximately US $500,000) from the short term deposit account of QPU. On 5th September these funds were transferred to the account of the former General Director Mrs. Yanez Puga described as ‘payment of salary.’ in that regard we enclose a copy of QPU’s bank statement showing the payments made.
We understand that QPU, which is no longer under the defendants’ control, has lodged a criminal complaint with the Ukrainian prosecutor in respect of the misappropriation of these funds and we have been informed that the funds are frozen in Mrs. Yanez Puga’s account pending the criminal investigation.
We also enclose a copy of the purported labour contract to which the Resolution Refers. Signed by Dara O'Reilly and Sean Quinn Sr., it provides that Mrs. Yanez Puga’s salary was US$563 per month up to 1 June 2011 which then suddenly increased to US $7000 per month. The document purports to give Mrs. Yanez Puga an entitlement in the event of termination of her contract to “a compensation amounting to 500,000.00 $ and all possible compensation as well is to provide the medical insurance for the Director for three years.” On foot of this document your clients approved a payment of US $500,000 to the now sacked General Director of QPU and gave directions to the payment of this very substantial sum to her, while considering it appropriate to dismiss her for “guilty actions that provide grounds for losing confidence by the owner."
The payment of US $500,000 to a sacked General Director, who until June 2011 was earning less than US $10,000 Per annum, on the basis of the labour contract which at the very least raises questions as to its authenticity, could in no way be presented as being in the ordinary course of business and this must have been clear to your clients at the time of directing the payment to her. Your clients also knew that the cash at bank of QPU is protected by the Order and they knew that in divesting the company of these assets they were in breach of the Order….”
17. In a letter of 13th December 2011, Eversheds denied that Sean Quinn senior, Sean Quinn Jr. or Peter Quinn had had been involved in any way or had any knowledge of the transfer of US $500,000 to Ms. Puga. They denied that Sean Quinn Sr. or Peter Quinn had signed the minutes of a meeting of 30 August 2011, described as "Minute No 21,” or that they had ever seen that document. It was denied that any such meeting had taken place as was recorded or that they had been parties to the alleged proposals or resolutions. The letter explicitly stated: “These are not our client’s signatures.” The letter went on to deplore the payment to Ms.Puga, saying that they shared the Bank’s concern as to its appropriateness. On the other hand, they defended the increase in salary provided for Ms.Puga in June 2011 saying that the management contract was not unusual and had been negotiated with the benefit of legal/professional advice. The letter did not say that the appellant and Peter Quinn had, in fact, been in Kiev on 30th August.
18. In a letter of 6th January 2012, McCann Fitzgerald expressed surprise at the contention that the appellant had never had any role in QPU and that no such meeting had taken place as had been described in their letter of 2nd December. They went on to assert that both the appellant and Peter Quinn were present on the QPU premises in Kiev on 30th August and that this was in the context of dismissing Ms.Puga.
19. Eversheds replied on 12th January 2012 stating that the attendance of the appellant and Peter Quinn at the QPU premises in Kiev on 30th August was not denied. They denied, however, attending "the alleged meeting." They said that both persons in question had "ongoing business interests in the Ukraine and on that date attended numerous meetings in Kiev."”
20. The Bank issued a notice of motion for 17th February 2012 seeking orders pursuant to Order 44 of the Rules of the Superior Courts (S.I. No. 15 of 1986) directing the attachment and if necessary the committal of the first named defendant (Sean Quinn Sr.), the ninth named defendant (Peter Quinn) and the fifth named defendant (who is the appellant). In respect of the first and ninth named defendants, the Bank complained of breaches of the Clarke J. orders effectively in three respects: firstly, directing the assignment of some US $130 million worth of loans to a Belize Corporation for nominal consideration so as to justify placing three named Russian subsidiaries of the Quinn group into self-insolvency; secondly, directing the assignment of a loan of €45.2 million due to a Northern Irish entity with the object that the debt of the new Creditor should take priority over at the claims of the Bank; thirdly, directing or participating in the process which is also alleged against the appellant. That allegation, effectively the one made in the McCann Fitzgerald letter of 2nd December 2011 is expressed in the notice of motion as follows:
21. The notice of motion was grounded on the affidavit of Mr. Richard Woodhouse, the Group Head of Specialised Asset Management at the Bank. He said that the Bank had reason to believe that breaches of the Clarke J. orders had occurred, amounting to contempt of court. He said that they "demonstrated a continuation of a co-ordinated strategy before and after the Order to place the assets within the Quinn International Property Group ("IPG") beyond the reach of the plaintiff, to undermine its validly handled security in respect of those assets and to damage the Plaintiff's interests."
“directing or participating in a process whereby on 30 August 2011, US $500,000 cash at bank of an IPG subsidiary company was paid into the personal bank account of the General Director of that company, contrary to the interests of the Plaintiff and other than in the ordinary course of business, immediately prior to the Defendants losing control of the subsidiary company on 31 August 2011."
22. Mr. Woodhouse essentially repeated the complaint made in the McCann Fitzgerald letter of 2nd December 2011, quoted above. He said that the Leonardo Office Building in Kiev, owned by QPU, was a valuable IPG asset which he valued at some US$71 million. He continued:
23. Mr. Woodhouse referred to the document recording the resolution, Minute No. 21 of QPU, to the employment contract of Ms. Puga, which provided that her salary was increased on 1 June 2011 from US $563 per month to US $7,000 per month. He said:
“Sean Quinn Jr. and Peter Quinn……………... travelled to Kiev in late August 2011. While there on 30 August 2011 they caused US $500,000 of the cash at bank of QPU to be paid to the General Director, Larissa Yanez Puga. This substantial cash at bank was an asset of QPU and thus I am advised and believe protected by the Order.”
24. Mr. Woodhouse referred to the instructions and banking documents which led to the payment out of US$500,000 from the account of QPU on 5th September 2011. The payment was not, he said, "in the ordinary course of business" having regard to the stated reason for which Ms. Puga’s employment was terminated, namely "commitment of guilty actions."
“I do not know whether Sean Quinn Sr. was in Kiev on 30 August 2011. I am advised and believe that [Sean Quinn Sr.] likely signed the Resolution in Ireland and that [the appellant and Peter Quinn] then travelled to Kiev with the Resolution to put it into effect. I say that at the time of the passing of the Resolution, Sean Quinn Sr had been notified, as chairman of QPS, that a shareholders’ meeting had been convened for 31st August 2011 for the purposes of considering a resolution to remove Sean Quinn Sr from the board of QPS, which would have also affected Peter Quinn's position as an alternate director of Quinn Office Sweden………………. Accordingly at the time of passing the Resolution the Defendants were aware that they would lose control of the company the following day. I am also advised and believe that [the appellant] was in Kiev on 30 August 2011 and attended meetings with Peter Quinn in the QPU building that day.”
25. Replying affidavits were sworn by Sean Quinn Sr., the appellant and Peter Quinn. Each of them denied in the strongest terms that they participated in or even knew of the US $500,000 payment. They explicitly denied that any of them had attended at such a meeting as Minute No. 21 purports to record. Sean Quinn Sr. expressed his belief that no such meeting took place and that no such resolution was ever passed. The appellant believed that the Minute was not a genuine document.
26. The hearing of the contempt motion took place before Ms. Justice Dunne in the High Court over 15 days. Each of the three respondents to the motion gave evidence and was cross-examined. Each maintained his denial of having any knowledge of or role in the US $500,000 payment.
27. Peter Quinn accepted that the signature on the minute looked like his. Thus he did not claim that it was forged. He did, however claim that the minute itself was a forgery, in effect a fabrication. In cross-examination, he was reminded that his solicitors in their letter in reply to McCann Fitzgerald had stated that the signatures on the minute were not those of Sean Quinn Sr. or of Peter Quinn.
28. He said that there were a couple of reasons for the visit to Kiev. He knew that, on the next day, he would be removed from any involvement in QPU. He had been working with the QPU people for five years and did not want to be "in a position where I disappeared off the face of the earth.” He wanted “to thank them for all their efforts over the years because they worked very hard for me.” he said that the meeting between himself and the appellant had taken place in the Leonardo building and lasted an hour or an hour and a half. He said that everyone was concerned about their own future and that he tried to reassure them. He said:
29. He was challenged in cross-examination on his statement that he had never denied the meeting of 30th August 2011 because his solicitors had not mentioned it. He said that this was a "play on words."
“I tried to reassure Ms. Puga that her position wouldn't be affected………….. because she had done a very good job, so I assumed, incorrectly as the case was, that she'd be kept on. It would have been my wish that she was kept on because I feel that she would have had a benefit to the business."
30. The appellant, in evidence, repeated his denial of any knowledge of the resolution or the payment of US $500,000. He was examined and, in particular cross-examined about his explanations for travelling to Kiev. He said:
31. His account of the meeting in the Leonardo building was similar to that of Peter Quinn. His explanation of the reason for that was however, at least so it was suggested in cross-examination, quite different from that of Peter Quinn. When he learned from Peter Quinn about his intended trip to Kiev on 30thAugust he made the decision to travel with him. He said that Peter Quinn had told him that his contact with Ms. Puga was diminishing, that he was sceptical of what she was doing and that his relationship with her was deteriorating. It was pointed out to him that Peter Quinn had said nothing about Ms. Puga’s bona fides. Nonetheless, he insisted, in several answers, that Peter Quinn had spoken in these terms to him. He is said that the shares in QPU were owned by his extended family, former work colleagues and friends and that if anything happened to QPU they would be affected. Thus he went to Kiev not only on his own behalf but in the Quinn family interests.
“ I suppose since the injunction was got on 27 June Peter would have, Peter Quinn, would have spoke to me on a number of occasions and explained that he was becoming concerned with Ms. Puga’s bona fides. On hearing that -- also he told me that he was travelling to the Ukraine on 30 August and I suggested I would attend with him, I suppose, more or less for a second opinion to have a view of what Ms. Puga was or was not actually doing.”
32. The Bank attaches particular significance to what it describes as a number of admissions made by the appellant of his knowledge of the existence of a co-ordinated plan or scheme put into effect largely by Peter Quinn to extract cash or other assets from companies in the Quinn Property Group with the object of putting them beyond the reach of the Bank. In this context, the appellant accepted that Peter Quinn was not only his cousin but also his friend and that he regularly spoke to him. The appellant was aware of a plan from late April 2011 to get unsecured assets into the control of the Quinn family. He was aware "at an overall level….. that there was things being done in from April 2011 to try and take assets out of the QIS structure and put them beyond the reach of Anglo.”
The High Court judgment
33. Dunne J. delivered a judgment on 26th June 2012 in which she found all three respondents to the notice of motion guilty of contempt of court. More specifically, she found all three in contempt in respect of the €500,000 payment from the account of QPU. This was, of course, the sole allegation made against the appellant.
34. She emphasised that the appellant was not alleged to be in contempt of court in respect of any breach of the Orders of Clarke J. of the 27th June, 2011 and the 20th July, 2011 in any other respect.
35. She made it clear that she had considered the lengthy submissions made on behalf of the respondents. She had also considered all the evidence: although she made reference to the evidence on the principal issues before her, she did not find it necessary to rehearse it all. She noted that she had to be satisfied beyond reasonable doubt in respect of each of the allegations of contempt and that the criminal standard of proof applied to each and every allegation.
36. In the result, she expressed herself satisfied that the Bank had “produced compelling evidence to establish beyond reasonable doubt that the attempted payment to Ms. Puga was brought about by the respondents.” She conducted a comprehensive and detailed analysis of the evidence upon which the Bank had relied. Furthermore, she found that both Peter Quinn and the appellant had been untruthful in the evidence they had given.
37. I will discuss the main points in the evidence and the learned judge’s findings at a later point. At this point, I will present a short summary of the essence of her findings and her reasoning. It is as follows.
38. At the beginning of September 2011, US€500,000 was paid out of the account of QPU apparently for the benefit of Ms. Puga, a transaction clearly not in the ordinary course of business. Ms. Puga’s employment contract had been backdated and essentially fabricated in such a way as to justify that payment. Minute No. 21 of the purported meeting of directors of QPU appeared to authorise the payment. It appeared to bear the signatures of Sean Quinn Sr. and Peter Quinn. Each accepted that the signature appeared to be his, while denying any participation in or knowledge of the transaction. The date of the meeting coincided with the arrival in Kiev on 30th of August 2011 of Peter Quinn and the appellant. Each of them knew that, on the following day, the Quinn family would be deprived of any control of QPU. Sean Quinn had no previous involvement in QPU and no apparent reason for visiting Kiev. Peter Quinn and the appellant gave inconsistent and contradictory accounts of their reasons for being in Kiev on that day. They both attended a meeting in the Leonardo building with Ms Puga. The learned judge did not believe either of them.
The coercive orders
39. Having delivered her judgment in which she had made findings of contempt of court on 26th June, the learned judge adjourned the matter to enable the parties to consider her judgment further until 29th June. In particular, insofar as the Bank was concerned this provided time for it to propose coercive orders arising out of the findings of contempt. Counsel for the appellant invited counsel for the Bank to indicate what coercive measures would be sought. It was agreed that these would be notified by close of business on the following day, 27th June. The learned trial judge said that it would be very difficult to persuade her that there should not be a punitive element in her order.
40. By a letter dated 27th June, McCann Fitzgerald informed the appellant’s solicitors of the very extensive “coercive orders” it proposed to seek. The orders sought were set out over sixteen pages and several schedules. They made no distinction, and gave no reason for failing to make any distinction, between the three respondents to the notice of motion of 13th February. Notably, it took no account of the fact that the Bank had alleged contempt of court against the appellant in respect of one transaction only. For example, it proposed to require the appellant to cause various named entities in the Russian Federation to enter into “unconditional and irrevocable agreements” terminating some thirty purported assignments dated 26th November 2011 connected with Galfis. That was an entity or company in Belize in respect of which allegations of contempt had been made against the other two respondents to the motion, but not the appellant.
41. No notice of motion was served. However, one schedule to the letter listed “Mareva Type Reliefs sought by IRBC under Notice of Motion dated 14 June 2012.”
42. The order made on 29th June gave effect very largely to the “coercive orders” sought in the letter of 27th June. It suffices at this point to note three points: Firstly, the orders sought did not differentiate between the three respondents to the contempt motion; in particular, so far as the appellant was concerned, he was treated as if he had also participated the matters in respect of which contempt finding as had been made against Sean Quinn Sr. and Peter Quinn; secondly, the appellant was to be required to reverse or undo transactions in which it had not been alleged in the contempt motion that he had taken part; thirdly, as was conceded, some of the reliefs did not flow from any finding of contempt against any party, but were justified by the general need to police the order of Clarke J.
43. At the same time, it does not appear that objection was taken, on behalf of the appellant at least, to a procedure whereby the Bank would give notice of the sort of coercive orders it would seek arising out of the findings of contempt.
44. At the hearing on the 29th June counsel for the Bank argued that the coercive orders were necessary for the purpose of remedying the specific contempt which had been found. Counsel for the Bank said that some of the reliefs sought were such as a court could grant “irrespective of any finding of contempt.” He further submitted that: the court was not confined to making orders specifically relating or confined to the particular findings and that the orders could be broader and could be made to protect the terms of the order which had been made by Clarke J. in their entirety; that, in circumstances where a number of breaches of the order had been established beyond reasonable doubt, the coercive orders sought were appropriate to protect the remaining parts of the order, rather than have a situation where each individual contempt must be alleged, proved and brought back before the court for that purpose and a further order sought.
45. Counsel for the appellant (who also appeared for the other two respondents to the contempt motion) made a fundamental objection, which was applicable to the great majority of the orders sought by the Bank. He argued strenuously that any coercive measures which the court could impose must be directed towards the purging of the contempt which the court had found and be confined to the specific and particularised allegation made in the notice of motion. To act otherwise would be to condemn a person without being heard.
46. It was said that the Bank was moving for these orders without bringing any application by way of notice of motion or amendment of the existing notice of motion and without putting its complaints of further acts of contempt on affidavit.
47. Counsel submitted that no authority had been cited for this procedure so as to justify depriving a person of his liberty for breach of a court order going beyond the allegations which had been made. Counsel referred to a number of specific examples. In particular, he referred to the allegations that had been made in the notice of motion against Sean Quinn Sr. and Peter Quinn, but not against the appellant, of responsibility for assignments from Demesne (a Northern Ireland company) to Galfis (a Belize company) but that coercive measures were now being sought against him in respect of matters in which he had not been alleged to be involved.
48. The learned trial judge responded to the submission that the appellant had been the subject of only one allegation of contempt by saying that all three of the respondents to the motion “were involved in a conspiracy…to deprive Anglo of access to assets.” Although the appellant was involved in one aspect only, he “was involved in the overall strategy.” Therefore she held that he was somebody against whom such orders should be made. On the other hand, she expressed herself as reluctant to grant injunctive relief. She was mindful of the fact that there was a separate application pending before the Commercial Court. She thought that matter should be dealt with at that venue. The learned judge referred to the inherent jurisdiction of the court and held that she was not confined to dealing with the orders solely on the basis of the relief that had been sought in the notice of motion (for contempt). She stated that the Quinn family were acting in a way to put matters beyond the reach of the Bank “in circumstances where there would be a breach of the orders of the court.”
49. The order of 29th June 2012 gave effect to the application for coercive measures in the Bank’s letter of 27th June. It was made without distinction against Sean Quinn Sr., the appellant and Peter Quinn. The order runs, with its schedules, to some thirty pages. It includes 33 paragraphs and many subparagraphs. Only paragraph 31 relates to the payment of US$500,000 by QPU to Ms. Puga. The order provides for: disclosure of all assets worldwide, the appointment of a receiver, with extensive powers, over all properties. It directs the appellant to issue instructions to take all steps necessary to terminate and withdraw legal proceedings in Russia, Ukraine, India, BVI, Belize and Panama; to take steps in relation to companies in various countries; to resign from boards of directors; to transfer shareholdings; to assign or reassign loans; to cause various companies (particularly in Russia) to withdraw claims; to cancel powers of attorney and very many other things. In general terms, all the requirements of the order are designed to secure the return to the Bank or protection of the interests of the Bank in assets in various jurisdictions.
Orders of 20th July 2012: imprisonment
50. The appellant swore an affidavit dated 20th July 2012 outlining the extent of his compliance with the coercive measures made on 29th June. Counsel for the Bank expressed the view that there had been a very significant failure to comply with the orders and that nothing material had been done in terms of the return of the assets. He suggested that, while it was a matter for the court, the matter might be dealt with in the following week. The learned judge, however, expressed a preference to have the matter dealt with on that day, which was also the preference of counsel for the appellant. In the result, there was no further affidavit from the Bank before the court, although the Bank expressed concern at certain matter that had been disclosed in the affidavits of disclosure of the appellant and of Peter Quinn.
51. The appellant, in his affidavit of 20th July said that he wished to outline for the court the steps that he had taken or which he had caused to be taken since the judgement of 26th June to comply with the order of the court. He referred to a separate affidavit of disclosure sworn on the same date and said that he had cooperated with the receiver appointed pursuant to that order.
52. His affidavit contained the following striking paragraph:
53. The appellant outlined in some detail the manner in which the Quinn family had acted so as to, as he put it, "protect the assets from recovery by the Bank." For reasons which will appear later, it is, in my view, unnecessary to relate the matter is detailed in that very lengthy affidavit. It is right to note, however, that the Bank claimed at the hearing in this court, firstly, that the affidavit itself discloses further very serious breaches of the order of Clarke J. and, secondly, that it did not disclose that the appellant had taken any sufficient steps to comply with the order of 29th June.
“As is clear from the evidence adduced in the hearing of this application, I, along with certain other of the Defendants herein took steps to remove assets from the IPG in order to frustrate [the Bank’s] efforts to enforce its security against those assets in circumstances where we disputed the validity of the Bank’s security….”
54. The learned trial judge held, on 20th July, that there had been contempt of court of the most serious kind in relation to a scheme to put assets beyond the reach of the Bank. She explained the background to the orders of 29th June as follows:
55. Throughout her remarks, the learned judge expressed herself as being unconvinced that the appellant and other members of the Quinn family had taken effective steps to fulfil the requirements of the coercive measures and what she saw as a lack of co-operation. She was “not impressed by the suggestion that what the Quinns have done to date is a satisfactory way of dealing with matters.” While she accepted that a great number of letters had been written, she was not “sure to what extent that is, in practical terms, dealing with matters efficiently and effectively.” Her conclusion was as follows:
“…the matter was adjourned to the 29th June and at that stage a list of proposed coercive orders were put before the Court in relation to how the Bank…...would see matters moving on with a view to undoing the scheme or conspiracy or whatever word one wants to use to put the assets beyond reach of the Bank and for that reason, a series of orders were made by the Court.
The purpose of that was to facilitate the Plaintiff in getting information which would allow the policing, effectively, of what was going on and would also effectively set in train the undoing or unravelling of the scheme that had been put in place.”
56. Thus, the appellant had imposed upon him a fixed period of three months imprisonment by way of punishment for his contempt of Court in committing a breach of the order of Clarke J. In addition he was imprisoned indefinitely until he should satisfy the court that he had purged his contempt by complying with all the coercive orders of 29th June.
“So in effect the position of the Court is that this a case where it seems to me that (a) the contempt that has occurred to date is a contempt that could be described as outrageous, to use the type of language that is used in some of the judgements, such that it is a contempt of court that gives rise to the possibility of a punitive order being made. But, there is a very strong and important and desirable element in this case having regard to the nature of the case and what is at stake for the parties as a general observation, and that is also there should be a strong coercive element. And as I have indicated imprisonment with a view to a coercive element is generally intended to be indefinite in nature.
Given the fact that I am of the view that matters should be dealt with for the purpose of coercion in the first instance, what I propose to do is make an order today imprisoning Peter Quinn and Sean Quinn Junior for a period of time until they come before the Court and purge their contempt. In that regard, I am also minded to build into that period of time a period which recognises the punitive element in relation to the matter. And to that extent it seems to me that what I should do at this stage is to indicate, for the purpose of clarity, what that period should be. And in that regard the period I have in mind is a period of three months.”
57. When pressed by counsel to indicate the precise ground for the imposition of the term of three months imprisonment, particularly in the light of the single allegation of his involvement in the payment of US$500,000, the learned judge added:
58. This statement made it clear that the sentence of three months imprisonment was imposed only in respect of the finding of contempt made on 26th June, i.e., taking part in the payment of US$500,000 to Ms. Puga.
“The only thing I will say……in regard to that is that, yes, there was one allegation made against him, I made various findings in the course of the decision in relation to the way in which he gave evidence and I am taking that into account.”
59. Counsel for the appellant applied for a stay in respect of the order of imprisonment, which was refused, following opposition on behalf of the Bank on the basis that a stay would not have the effect of giving support for the objective of the Court’s order.
60. There are three aspects of the appeal:
61. Clearly, the second and third points are each respectively dependent in turn on the outcome of the preceding issue. If the appellant succeeds on the first point, there was no basis for either the coercive measures or the imposition of imprisonment. Similarly, if the coercive measures were not properly imposed, there could be no basis for punishing the appellant for breach of them.
• Firstly, the appellant submits that there was no sufficient evidence before the High Court to justify the finding of contempt made against him in respect of the payment of US$500,000 from the account of QPU in favour of Ms. Puga;
• Secondly, he submits that, even if the finding of contempt was justified, it was not permissible to make the coercive orders insofar as they went beyond the subject-matter of that finding so as to encompass matters in respect of which no allegation of contempt had been made against him;
• Thirdly, he submits that, even if he is incorrect in making each of those submissions, the High Court was not justified in making the order for his indefinite imprisonment, because there was no sufficient evidence that he failed in his efforts to purge his contempt.
62. Before proceeding, it should be noted that the order of 20th July 2012 records that the appellant was found guilty of contempt of the orders of Clarke J as well as of the order of 29th June 2012, although it would not appear that the learned trial judge intended, at least, to impose the sentence of three months’ imprisonment for breach of the latter order.
Conclusion on the finding of contempt
63. The appellant contends that there was no sufficient evidence before the High Court to enable it to make a finding that the appellant had participated in any way in the payment of US$500,000 at the end of August or beginning of September 2011 from the account of QPU in Kiev to Ms. Puga. The learned trial judge did not identify any act on the part of the Appellant which did, or was necessary to, effect the transfer of US$500,000 to Ms. Puga and there was no finding of fact sufficient to provide a basis for finding the appellant guilty of contempt of court. The appellant points out that the appellant had no role in the company, QPU, that he had no power in that company and that there was no evidence that he had ever taken any action in relation to that company.
64. It is accepted on the part of the Bank that the evidence of the appellant’s involvement in the transaction was entirely circumstantial. It is submitted, nonetheless, that there was more than adequate evidence to sustain the finding. Circumstantial evidence can lead to clear findings of guilt even of criminal offences.
65. The correct approach to resolution of this issue is to ask whether there was sufficient evidence before the High Court to enable it, as the forum with the exclusive role of determining the facts, to decide beyond reasonable doubt that the appellant was guilty of contempt. The first stage is whether there was sufficient prima facie evidence which, if taken at its highest, was accepted by the court, to permit the court to go to the second stage and consider whether the case is proved beyond reasonable doubt. It was a matter for the learned trial judge to decide whether or not she believed the witnesses. Likewise, only she could determine whether the case had been proved to the criminal standard. This Court performs the appellate function of deciding whether there was sufficient prima facie evidence.
66. It is true, and was accepted by the Bank, that the appellant had no formal role on the board or in the management of QPU. He claimed in evidence that he had “no involvement whatsoever in the Ukraine.” Nonetheless, it is clear from his own evidence that he was interested in the affairs and business of QPU. Although the Quinn family had only a 15% share in QPU, he said that the “asset” was owned by former work colleagues, friends and extended family, and that he “wanted to see nothing happen to that.” He was aware of discussions involving QPU and/or Anglo regarding management of that asset. It was he who decided, at his own initiative, to travel to Kiev in the company of Peter Quinn at the end of August 2011. On his own admission, the trip was clearly related to QPU.
67. The appellant said that he had had discussions with Peter Quinn or with his father about QPU and the Leonardo building. He was aware of the impending changes to the board of QPU which would take place on 31st August, which would remove the Quinns from any control of the company. That was to happen the day after his own planned visit to Kiev in the company of Peter Quinn. Indeed, in that respect he said that “we,” meaning the Quinns had suggested to Anglo that they were better capable of managing the asset. He went to Kiev, he said, on his own behalf but also in the Quinn family interests.
68. He mentioned several times in evidence that Peter Quinn had expressed concern to him about his deteriorating relationship with Ms. Puga: his contact with her was diminishing; she was becoming more distant; he was losing his relationship with her. He said that he had gone to Kiev “with the express intention of trying to understand what Ms. Puga may or may not be doing” or, as he said at another point, to provide “a second opinion to have a view of what” she was doing. Although this account differed sharply from that of Peter Quinn, a fact which may have its own significance, it does not suggest that the appellant was entirely uninvolved with or unconcerned about QPU.
69. Against this background, the learned trial judge had regard to the two significant documents in the case. Firstly, there was the employment contract. Strikingly, that document, though dated 25 February 2009, appeared to provide for a payment of US$500,000 to Ms Puga in the event of the termination of her employment as from June 2011. The learned judge found this document, at least in that respect, to have been fabricated. Although there was no direct evidence of who did so, that finding does not seem open to doubt. The second document is, of course, Minute No. 21. While there is no direct evidence of the events it purports to record, it was found in the files of QPU, appears to bear the signatures of Sean Quinn Sr. and of Peter Quinn and the seal of the company.
70. The learned trial judge had regard to these facts, to the fact that the appellant and Peter Quinn travelled to Kiev the day before the Quinn interests would be removed from the board of QPU and that the sum of US$500,000 was in fact removed from the account of QPU on or about 5th September pursuant apparently to the resolution recorded in the minute.
71. Two further points were that, in response to the initial letter from McCann Fitzgerald of 2nd December 2011, which alleged that the meeting recorded in the Minute had taken place at the Leonardo building on 30th August, the appellant’s solicitors did not admit, as was the fact, in their letter in reply of 13th December, that the appellant and Peter Quinn had attended a meeting in the Leonardo building on that day. They limited themselves to denying that they had attended such a meeting. While that might be considered correct if they were referring to the shareholders’ meeting, it was not, in the circumstances a complete answer to the inquiries from McCann Fitzgerald. Furthermore, the solicitors denied, in the same letter, that the signatures on the Minute were those of their clients. In evidence, however, neither Sean Quinn Sr. nor Peter Quinn denied the authenticity of the actual signatures.
72. The learned trial judge had the advantage of hearing the evidence of the appellant and of Peter Quinn. There was significant inconsistency between their accounts of their reasons for traveling to Kiev. The appellant repeatedly quoted Peter Quinn as having expressed concern regarding the behaviour and attitude of Ms. Puga. Peter Quinn expressed no such concern. On the contrary, according to his version, the trip was more in the nature of a good will mission. The judge did not believe either of them. Nor did she believe that the appellant and Peter Quinn had not discussed between themselves on the long flight to the Ukraine their reasons for going there.
73. Finally, the learned judge was not satisfied with the appellant’s explanation of the meeting, in the presence of Ms. Puga at the Radisson Hotel of unknown Ukrainian businessmen.
74. At the end of the day, the learned judge had before her the two documents. If authentic, they purported to provide justification for the payment by QPU to Ms. Puga. The two Quinns travelled to Kiev the day before, as they knew, the Quinns would be ousted from any position or control in the company. The money was, in fact, paid out of the company account within days. The situation called for an explanation. Two inconsistent explanations were provided. The learned judge disbelieved both. She was entitled to do so. That left the trip unexplained. As she said, there was “no apparent reason” for the appellant to be in Kiev.
75. In addition to all these points, the appellant admitted in evidence that he was aware of the scheme or plan to place assets beyond the reach of the Bank. While the learned judge did not include this in her analysis of the evidence regarding this transaction so far as the appellant was concerned, she did emphasise that she had considered all the evidence. She must be taken to have borne this evidence in mind.
76. In my view, the learned judge had ample evidence before her from which she could make the finding beyond reasonable doubt that the appellant was party to the payment out of the US$500,000 from the account of QPU.
77. In all of the circumstances, she was also entitled to reach the conclusion that the contempt of court was outrageous. The learned judge had before her on 20th July, when she imposed that sentence, the affidavit of the appellant sworn on that day in which he expressly admitted that he, along with certain other defendants had taken “steps to remove assets from the IPG in order to frustrate the [Bank’s] efforts to enforce its security against those assets in circumstances where we disputed the validity and enforceability of the Bank’s security.” This, combined with his acceptance during the contempt hearing of his knowledge of that plan was confirmation that the appellant was knowingly engaged in the patently unlawful activity of interfering with the secured assets of the Quinn group of companies for the avowed purpose of defeating the Bank’s claim. However, I think it is clear that the sentence of three months’ imprisonment related only to the US$500,000 transaction.
78. The sentence of three month’ imprisonment was, in these circumstances amply justified. I would dismiss the appeal on this point.
Conclusion on the coercive orders
79. The respective contending submissions regarding the making of the coercive orders are well expressed in the summary already given of the arguments before the learned trial judge on 29th June.
80. The appellant submits that it is axiomatic that the purpose of a coercive order must be to persuade the contemnor to purge his contempt or to remedy the breach of a Court Order. In the present case, the purpose of inviting the Bank, following delivery of judgment on 29th June, was to enable it to formulate orders or directions which the learned judge might make in order to reverse the breaches of the orders of which they had been found guilty.
81. As can be seen from the summary of the arguments advanced on behalf of the Bank, it appears that the Bank contends that the court is not limited to the making of coercive orders related to the purging of the contempt actually found or the reversal of the particular transaction with which that finding was concerned, but that the court had power, in the context of the contempt proceedings, to make orders designed to protect the terms of the orders which had been made by Clarke J in their entirety and “irrespective of any finding of contempt.”
82. There was a separate strand of the Bank’s argument which emerged also at the hearing of the appeal. Counsel argued that, quite apart from the contempt jurisdiction, the court had power to grant injunctions, in particular Mareva-type orders, intended to protect the assets which, in the action, the Bank maintains, have been systematically stripped from companies in the Quinn group, particularly the International Property Group, in pursuance of a conspiracy in that behalf which has effectively been admitted on the part of one or all of the defendants.
83. I do not accept that the order of Dunne J of 29th June 2012 is susceptible to that interpretation for several fundamental procedural reasons.
84. Firstly, the Bank did not serve any notice of motion seeking such relief. It is true that there was included, as schedule 3 to the letter of 27th June, a “list of Mareva type Reliefs” sought under a notice of motion of 14th June, but no such motion was returnable for 29th June. The only matter before the court on that day was the adjourned consideration of the contempt motion. On 26th June, the Bank was invited both by the learned judge and by counsel for the appellant to propose coercive measures and to give notice of them to the solicitors for the appellant. The appellant must be taken to have consented to that procedure. However, consent to be notified by letter of proposed coercive orders flowing from the contempt finding cannot, on any basis, be extended beyond the scope of that finding. Frankly, it is surprising to hear a submission which so conspicuously departs from the minimum requirements of fair procedures.
85. Secondly, the Bank had contemporaneously before the Commercial Court an application for extensive Mareva-type relief. As I understand that matter, that application stood adjourned before Kelly J at the time of the hearing on 29th June.
86. Thirdly, Dunne J, in her decision of 29th June, declared that she was reluctant to grant injunctive relief. In the first instance, she said that she proposed to see how the respondents to the motion dealt with the disclosure which was to be provided. She also bore in mind that there was a motion being dealt with before the court and that it might be appropriate to deal with that matter in that venue.
87. Fourthly, the order made by the High Court on 29th June is not capable of being interpreted as granting an interlocutory injunction. It recites the notice of motion of 13th February 2012 (the contempt motion), the findings of contempt of court made by the court in its judgment of 26th June and the fact that the court had adjourned the matter to that day (29th June) “to enable the parties to consider its judgment.” It then recites that the court proposed to “deal with Directions in respect of the coercive element of its judgment.” Nowhere is it recited that the court was considering a separate application for relief by way of injunction. Nor is any undertaking for damages made, as one would expect. Finally, all this is confirmed by the inclusion, at paragraph B of the order, headed “Injunction,” of provision granting liberty to the Bank to “apply in relation to orders being made pending the full trial of the proceedings in terms of the paragraphs of the notice of motion dated 14 June 2012, and currently pending before this Honourable Court (the Mareva injunction) as set out in Schedule 3.” (emphasis added). Schedule 3 to the order reproduces Schedule 3 to the McCann Fitzgerald letter of 27th June.
88. I turn then to consider the central issue, which is whether it was open to the Bank to apply for and to the court to grant, in the context of considering coercive orders for the enforcement of its findings of contempt, orders generally designed to protect the intent of the orders of Clarke J.
89. The cases draw a distinction between civil and criminal contempt, the object of the first being coercive and the latter being punitive. O’Dálaigh C.J. in Keegan v. de Burca  1 I.R. 223, saw the matter as follows:
“Criminal contempt is a common-law misdemeanour and, as such, is punishable by both imprisonment and fine at discretion, that is to say, without statutory limit, its object is punitive: see the judgment of this Court in Re Haughey. Civil contempt, on the other hand, is not punitive in its object but coercive in its purpose of compelling the party committed to comply with the order of the court, and the period of committal would be until such time as the order is complied with or until it is waived by the party for whose benefit the order was made.”
90. It has become clear, in more recent cases, that this passage may present an over-simplification and that, on occasion, there may be a punitive element in cases of civil contempt.
91. The following passage from the judgment of Finnegan P. in Shell E & P Ltd v. McGrath & Others  1 I.R. 671 has been approved in later cases:
92. Counsel for the Bank cited a wide range of convincing authority for the proposition that the inherent jurisdiction of the court to act in protection of its own orders is as ample as the occasion may require. In Nicholls v Nicholls  1 W.L.R., a number of quite significant procedural defects were found in an order committing a husband for contempt of court. Lord Woolf M.R. thought it “would be unjust to set aside the order in the absence of any prejudice.” He added:
“Committal by way of punishment likewise should be the last resort. It should only be engaged where there has been serious misconduct. In such circumstances it can be engaged in order to vindicate the authority of the Court. In litigation concerning exclusively private rights this will usually occur only at the request of the Plaintiff. Circumstances may exist which cause the Court to act on its own motion: Jennison v Baker, Seaward v Patterson (1897) 1 Ch 545. However where the interest of the public in general is engaged or where there is a gross affront to the Court it would be appropriate for the Court to proceed of its own motion to ensure that its orders are not put at naught. I am satisfied that such a power must be inherent in the Court. In the words of Judge Curtis-Raleigh:
“The law should not be seen to sit by limply, while those who defy it go free, and those who seek its protection lose hope.”…”
Finnegan P continued in a passage which I quoted in my own judgment earlier this year in Dublin City Council v. McFeely  I.E.S.C. 45:
“More accurate is the proposition in Flood v Lawlor  3 IR 67 which left open the question as to whether civil contempt is exclusively as distinct from primarily coercive in nature. In Ross Company Ltd & Anor v Patrick Swan & Ors  ILRM 417 O’Hanlon J. was of the view that in an appropriate case the Court must exercise its jurisdiction to commit for contempt not merely for the primary coercive purpose but in order to vindicate the authority of the Court and in which case the Court has jurisdiction to make a punitive order. His approach is supported by the cases which he mentions Yager v Musa  2 ALL ER 561, 562 and Danchevsky v Danchevsky  3 ALL ER 934. It is also supported by Jennison v Baker  1 ALL ER 997, Phonographic Performance Ltd v Amusement Caterers (Peckham) Ltd.  Ch. 195 and by the passage which I quote from Halsbury.”
93. In Mercantile Group (EUROPE) A.G. v Aiyela, an order had been made at first instance against a person described as a third party against whom no cause of action lay. Various members of the Court of Appeal upheld the order. Steyn L.J. thought that it was “just and convenient that the court should have jurisdiction to make such orders.” Sir Thomas Bingham M.R. argued for a jurisdiction such that the “armoury of powers available to the court to ensure the effective enforcement of its orders…” I am in full agreement that it is of the first importance that the courts have all such powers as are necessary for the purpose of enforcing its orders. The question here, however, is not whether the court would have had the power to make the coercive orders proposed in the letter of 27th June. If properly framed, notified and justified by evidence they might well have been appropriate orders.
“Today it is no longer appropriate to regard an order for committal as being no more than a form of execution available to another party against an alleged contemnor. The court itself has a very substantial interest in seeing that its orders are upheld. If committal orders are to be set aside on purely technical grounds which have nothing to do with the justice of the case, then this has the effect of undermining the system of justice and the credibility of the court orders. While the procedural requirements in relation to applications to commit and committal orders are there to be obeyed and to protect the contemnor, if there is non-compliance with the requirements which do not prejudice the contemnor, to set aside the order purely on the grounds of technicality is contrary to the interests of justice.”
94. Insofar as we are concerned at this point in the present case with coercive measures, we must decide whether the court can order a person to take positive steps to reverse transactions alleged by the plaintiff to be wrongful by reason of a finding of a particular but different finding of contempt.
95. The position seems to me to be clear. A person, who has been found guilty of contempt of court, may be required by an order of a court to purge his contempt. Where, following a finding of contempt, a person refuses to obey the court order, he may be imprisoned by order of the court until he undertakes to obey the order, i.e., purges his contempt. Imprisonment is not the only remedy. In certain types of case, a court has been known to impose a daily or other periodic fine. In the case of a corporation, assets may be sequestered.
96. The point is, however, that the contemnor is required to cease and desist from doing the act which he has committed and which has been held to be a contempt or, where appropriate, to act positively so as to remedy the wrong. In either event, it is the contempt which must be purged. I have not come across any case where a contemnor has been required, pursuant to the contempt jurisdiction, to undo an act in respect of which he has not been found to be in contempt. Counsel for the appellant repeatedly submitted that there was no authority for the proposition advanced on behalf of the Bank that coercive orders could be made on 29th June and arising from the finding of contempt made on 26th June, as it was put “irrespective of any finding of contempt” and for the purpose generally of protecting the order of Clarke J. No such authority has been produced.
97. The Bank submitted that, in circumstances where a number of breaches of the order had been established beyond reasonable doubt, the coercive orders sought were appropriate to protect the remaining parts of the order, rather, as it was submitted, than have a situation where each individual contempt must be alleged, proved and brought back before the court for that purpose and a further order sought.
98. The Bank also relied, in support of its proposition, on two aspects of the evidence. Firstly, it said that the evidence established that the appellant was party to a plan or scheme, amounting to a conspiracy, with other members of the Quinn family to put assets out of the reach of the Bank. Secondly, it was said that certain particular pieces of evidence had emerged in the course of the contempt hearing before Dunne J and, at a later point, in the disclosure affidavit sworn by the appellant.
99. It would not be right for this Court at this point and on this appeal to comment on the strength of the evidence available to the Bank in respect of the alleged participation by the appellant in the plan or scheme to put assets beyond the reach of the Bank. There is striking evidence in the appellant’s own affidavit of 20th July 2012.
100. The central point is, as counsel for the appellant repeatedly emphasised before the High Court, that the Bank never sought to amend its notice of motion so as to allege a broader range of acts of contempt against the appellant. Counsel for the Bank, in the course of the appeal correctly and properly explained that, at the time of issue of the notice of motion, the Bank did not have sufficient evidence to allege any act of contempt of court against the appellant other than in respect of the single matter of the US$500,000 transaction. The logic of that perfectly correct position is that, in the event that the Bank wished to allege other acts of contempt against the appellant, they should have taken steps either to apply to the High Court to amend the existing notice of motion or to issue a new one.
101. I cannot accept the argument of convenience advanced by the Bank that it should not be necessary have a situation where each individual contempt must be alleged, proved and brought back before the court for that purpose and a further order sought. Those are simply the demands of respect for justice and the rule of law.
102. I said in my judgment in McFeely v Dublin City Council, cited above:
103. Having referred to the provisions of Order 44 of the Rules of the Superior Courts, I also said:
104. The procedural defect in the McFeely case was that the High Court heard an inquiry into whether the respondent had committed contempt of the court order, before any notice of motion for attachment and committal was issued. At the subsequent attachment hearing, the court held that it had already found the respondent to be in contempt. In that case, the party had been found guilty before he had received notice of the complaint against him.
“The object of these rules is to comply with the obvious need to respect fair procedures where a person is at risk of being imprisoned, that is to respect the rule of audi alteram partem. It is inherent in this system that the person be put on notice of the nature of the contempt alleged against him. In a case where the charge is that he is in breach of a court order, he should be told what the order is and how he is alleged to be in breach. It seems to me axiomatic that these procedures must be observed before the court makes a finding that the person is in breach of the order. That is what the contempt consists of.”
105. The procedural problems in the present case arose in a different way. There was, in the first instance, a perfectly fair and proper hearing on foot of a notice of motion alleging specific acts of contempt against three respondents, but only one against the appellant. The appellant was charged with a breach of the order of Clarke J. He was, in effect, and as I have said correctly, guilty as charged. In that respect, the appellants can make no complaint.
106. What then occurred was that, in the guise of further consideration of the contempt finding, a wide range of new orders were sought against the appellant. While described as coercive orders, they went far beyond the subject-matter of the single finding of contempt. They could not truly be regarded as coercive measures. In their content, they could conceivably have formed the subject-matter of an application for interlocutory injunctions. For the reasons already given, the order of 29th June cannot be regarded as and did not purport to be an order by way of interlocutory injunction. If such an application had been made, the Bank would have had to apply by way of notice of motion grounded on affidavit. It would have had to justify the grant of what would have amounted, in the main, to a large number of mandatory injunctions. The appellant would have had the right to file a replying affidavit. None of that was done.
107. Finally, and of crucial relevance to the order made on 20th July imprisoning the appellant indefinitely until he purges his contempt, the Bank would have been obliged to comply with the requirements of Order 44 of the Rules if they were to apply for attachment and committal for breach of the new orders. That was not done.
108. The Bank relies, in its written submissions on the appeal, on a large number of matters which they say were disclosed by the appellant in his disclosure affidavit of 20th July, which, it is said amount to further serious breaches of the order of Clarke J. The Bank may well have justifiable grounds of complaint. Nobody could doubt the seriousness of the matters alleged. The problem is that no notice of motion had been served seeking attachment or committal on foot of those allegations. The appellants faced the risk of being imprisoned for his failure to comply with a large number of requirements of the order of 29th June with no notice.
109. Furthermore, the Bank cites a large number of acts of alleged failure by the appellant with the coercive orders. Again, none of these were the subject-matter of the contempt motion served in February.
110. The Bank seeks to answer any concerns regarding procedural fairness by saying that counsel for the appellant expressed themselves anxious to proceed with the matter on that day. Counsel could not conceivably be taken on that basis to have consented to a procedure whereby their client was to be sentenced for acts of contempt of court going beyond the finding of 26th June.
111. Regrettably, the procedures followed by the Bank in respect of the appellant, after 26th June fell far short of what is required and should be expected. The Bank was entitled to seek appropriate orders flowing from the finding of contempt of court made by Dunne J. on 26th June but not otherwise. In the result, its actions were procedurally and substantively flawed: procedurally, because of absence of notice; substantively because of the assumption that coercive orders could be granted without connection to the finding of contempt.
112. None of this is to say that the Bank does not have strong grounds for pursuing the appellant in respect of all or any of the matters the subject-matter of the coercive orders of 29th June. But the Bank must follow appropriate procedures. It is right and necessary that the Bank take steps to protect the integrity of the orders of the court. That is to pursue the interests of justice, respect for the courts and the rule of law. However, it is equally of the essence of the administration of justice that any person whose imprisonment is to be sought be given clear, adequate and fair notice of the order he is alleged to have infringed and the manner in which he is alleged to have done so. Nothing less can satisfy the requirements of law and justice.
113. In the light of the foregoing reasons, I propose the following orders. I would dismiss the appeal against the finding of contempt made by the High Court on 26th June 2012 by reference to paragraph 3 of the notice of motion dated 13th February 2012 and affirm that part of the order. I would also dismiss the appeal against the imposition of three months’ imprisonment imposed by the order of 20th July 2012 and affirm that decision.
114. I would order that that the coercive orders of 29th June be set aside insofar as it relates to the appellant, save in respect of paragraph A, ordering disclosure, paragraph B granting liberty to apply for certain injunctions, paragraph C providing for the appointment of receivers and paragraph J. 31 a and b. Each of these orders was capable of being justified by reference to the original finding of contempt. Furthermore, the appellant claimed on 20th July that he had complied with or was complying with those requirements. Neither the disclosure order nor the appointment of the receiver figured significantly in argument on the appeal.
115. There was no distinct consideration in the High Court on 20th July 2012 of the question of whether the appellant should be committed to prison until such time as he should purge his contempt in respect of his participation in the payment of US$500,000, the subject of paragraph 3 of the notice of motion, considered on its own. Thus, the order now made does not prevent the Bank from making a further application to the High Court in that respect.