In The Matter of Palmier Plc (In Liquidation) Sub Nom Kalvinder Singh Sandhu v Sukhvender Kaur (2012)

Facts

The applicant (S) applied for committal of the respondent (K) for contempt of court.

S, and K's husband (X), had been company directors. The company went into liquidation and S brought proceedings against X in February 2009. S was successful and X was required to pay S. Following a worldwide freezing order being made against X, he declared that his assets included a substantial number of shares in Wimpy International Ltd, an Indian company, and that he had sold shares that he held in Kewal Investments Ltd to K. S was granted an interim charging order over those assets, but K notified S that she claimed an interest in the Kewal shares. S disputed K's interest and sought relief. In a witness statement, K stated that the Kewal shares had been transferred to her on November 21, 2008, and that she forgotten to pay stamp duty. X swore that the shares he held in Wimpy were transferred into joint ownership between him and K, with 98 per cent to be held on trust for K and 2 per cent for himself. S successfully applied for the specific disclosure of documents by which the shares in Wimpy and Kewal were transferred. In a second witness statement, K stated that the first Wimpy share transfer had taken place in 2001, that the relevant returns had been filed with the Registrar of Companies, and detailed the documents evidencing the share transfer. K undertook to use reasonable endeavours to procure those documents from Wimpy and disclose copies, and to make available originals of the relevant documents. K provided certified copies, but told S to contact Wimpy directly for the originals.

 

S submitted that K (1) was knowingly untruthful in her first witness statement, as the form effecting the transfer of the Kewal shares was backdated and most likely executed after the trial in February 2009; (2) was knowingly untruthful in her second witness statement as the documents evidencing the share transfer were backdated and the relevant returns had not been filed with the Registrar of Companies; (3) failed to comply with the undertaking given as the original documents were not made available for inspection.

 

Held

(1) The allegations relating to the Kewal shares had not been proved to the criminal standard; S relied on hearsay evidence regarding, K's accountant's version of events supported K's. The accountant, who had conducted company searches prior to the purported execution of the share transfer, had adhered to his account in cross-examination and was not shown to be an untruthful witness (see para.34 of judgment). (2) The allegations made in relation to the witness statement had not been proved to the relevant standard. Serious misconduct had been alleged, namely the concoction of documents, but the evidence relied upon was not strong enough to prove such misconduct beyond reasonable doubt (paras 43-44). (3) The undertaking was unambiguous and there was an absolute requirement upon K to make the original documents available. On the evidence, K had not used reasonable endeavours to make the relevant documents available for inspection. When asked if S could attend the Indian Wimpy offices to obtain the documents, K refused, her main concern being that S was seeking to gain advantage in the ongoing Indian proceedings, and not that she was unable to access the documents. There was no compelling reason why K, as a director who had a controlling interest Wimpy, did not have the power produce the documents, especially since at that time two of the other three directors were her relatives. K had breached the undertaking given to the court and was in contempt (paras 54-57).

Application granted

Comment

A director who had failed to comply with a court undertaking by failing to use reasonable endeavours to disclose documents relating to share transfers was held in contempt of court.

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