Noose tightens on ultra high worth debtor
Posted: 10th September 2018
Judgment debtors sadly often try to wriggle out of payment – but judges will leave no stone unturned in ensuring that court orders are obeyed. The Court of Appeal made that clear in tightening the noose on a businessman who was determined to avoid honouring a bank debt of over $300 million.
The businessman, domiciled in Monaco and described as an ultra-high-net-worth individual, traded in equities and foreign exchange through a company that was his creature, in that he was its sole shareholder and director. The bank launched proceedings after the company failed to meet margin calls and obtained judgment against it for $243 million. With interest and over $36 million in legal costs added, the total judgment debt came to more than $320 million.
During the course of the ensuing enforcement proceedings, a judge had observed that the businessman was someone who was prepared to do what was necessary to avoid paying the debt. The bank claimed that he had failed to comply with a court order requiring him to disclose documents relating to the company’s financial position and sought his committal to prison for contempt. A judge accepted jurisdiction to consider that application.
In dismissing the businessman’s appeal against that decision, the Court noted the powerful public interest in upholding the authority of the courts and the effective enforcement of court orders. The inherent judicial power to commit those in contempt to prison derives from the common law and has never been fully regulated by statute or rules of court. The power is extra-territorial and the businessman’s procedural complaints about the judge’s impeccable ruling were implausible.