Suspended Jail Term for Contempt of Court – Rare but Effective Sanction?

Introduction

In the recent decision of Exterian Capital Pte Ltd v Wong Jun Jie Adrian and another [2024] SGHC 254, the General Division of the High Court (“Court“) found the First Defendant in contempt of court and imposed: (i) a fine of S$30,000 to be paid within two weeks, with a one-week jail term in default; and (ii) a four-week jail term, but suspended for four weeks (i.e. if the First Defendant complied with the court orders within the four weeks, he would not need to serve his jail term).

The decision is noteworthy: (i) because it sets out how principles of committal are applied to an individual who has continuously and flagrantly disregarded court orders; and (ii) given the rare judicial imposition of a temporary suspension of the jail term to ensure compliance. This serves as a practical lever to “incentivise” a contemnor to comply with court orders contravened.

The Claimant was successfully represented by Gregory Vijayendran, SC and Meher Malhotra from Rajah & Tann Singapore LLP.

Brief Facts

Exterian Capital Pte Ltd (“Claimant“), a company incorporated in Singapore and a part of a group of companies under FM Global Logistics Holdings Bhd (“FM“), alleged that: (i) Adrian Wong Jun Jie (“First Defendant“) represented himself as a lawyer admitted to the Singapore Bar and the managing partner of a Thai law firm; (ii) the First Defendant had advised FM’s subsidiary in Thailand since 2008 and had since been advising FM as well; (iii) the First Defendant had advised a shipyard in Thailand in which FM had a shareholding (“Shipyard“), to apply for a rehabilitation plan; (iv) under this rehabilitation plan, an investor, Unicorn Asset Management Co Ltd (“Unicorn“), would be incorporated, with 49% and 51% of its shareholding held by a Seychelles company and the Claimant, respectively; (v) the Seychelles company appeared to be the second defendant, Josephine Louise Richardson Limited; (vi) the Claimant made four payments (“Four Payments“) totalling US$1,316,400 to the second defendant, based on the First Defendant’s representations that the money was required for the rehabilitation plan; and (vii) however, the money was not used for the rehabilitation plan, and the Claimant subsequently discovered the dilution of its shareholding in Unicorn without its knowledge.

In October 2023, after commencing proceedings against the First Defendant for fraud and negligence, the Claimant obtained a Mareva injunction and a proprietary injunction (collectively, “Injunctions“) requiring the First Defendant to disclose: (i) information about his assets, to be confirmed on affidavit; and (ii) details relating to the Four Payments (e.g. the bank accounts in which the Four Payments are held and the assets purchased using the payments) and all relevant documents in respect of these.

The First Defendant was notified of the Injunctions, and a substituted service order was obtained against him, but he failed to respond. This led to the Claimant’s committal application against the First Defendant for contempt, due to his breaches of his disclosure obligations under the Injunctions. The First Defendant then filed affidavits without fully answering the questions posed in the Injunctions.

Court’s Holdings

A person commits contempt if he intentionally disobeys or breaches a court order. It must be shown that: (i) the relevant conduct of that person is intentional, which is a low threshold; and (ii) he knew of all the facts that made such conduct a breach of the order. The complainant need not show that the alleged contemnor appreciated that he was breaching the order, and the alleged contemnor’s reasons for disobedience are irrelevant to establishing liability.

Whether the First Defendant breached the Injunctions by failing to disclose the required information within seven days of receiving notice

The First Defendant admitted to not disclosing the information within the seven days. The Court rejected his excuses (e.g. the historical nature of the matter, the voluminous documents involved, and that he intended to set aside the Injunctions). The purpose of the seven-day duration was to: (i) provide the Claimant with the necessary information to decide, soon after the Injunctions were granted, on further steps to prevent the First Defendant from acting contrary to the Injunctions; and (ii) ensure that he had no time to dissipate his assets. By only beginning to disclose information five months after he was notified of the Injunctions, the First Defendant delayed disclosure in blatant disregard of the Injunctions, which stultified the purpose of the seven-day deadline imposed by the court, amounting to contempt.

Whether the First Defendant purged his contempt through his belated disclosures

The Court disagreed with the First Defendant’s claim that he had purged his contempt by way of his affidavit disclosures. It found that even if the First Defendant had fully disclosed the required information, his extremely belated disclosures did not remove the prejudice suffered by the Claimant, nor did they cure his flagrant disregard for the court’s orders.

The Court further held that the First Defendant’s disclosures were extremely belated and failed to meet the standard required by the disclosure obligations under the Injunctions, e.g. (i) he made only bare assertions bereft of the required supporting documents; and (ii) his disclosures were full of material inconsistencies in important areas, even though he had the ability to provide an account in these areas. Consequently, these belated disclosures demonstrated his continuing unwillingness to cooperate and to obey the court’s orders.

Appropriate sentence

The Court imposed: (i) a fine of S$30,000 to be paid within two weeks, with a one-week jail term in default; and (ii) a four-week jail term, but suspended for four weeks (i.e. if the First Defendant disclosed the remaining information required under the Injunctions within the four weeks, he would not need to serve his jail term).

The Court placed especial weight on the conduct of the First Defendant. It considered the following in determining the sentence: (i) the First Defendant’s continuing contempt, failures to disclose information and documents as required under the Injunctions, and patently contrived and unmeritorious excuses for non-disclosure; (ii) his deliberate delay in complying with the disclosure requirements under the Injunctions (by dragging out the proceedings by ignoring reminders and not attending court, and withholding crucial information when he finally made the affidavit disclosures), with such effluxion of time giving the persons concerned time enough to dissipate the money; and (iii) his undisputed status as a practising lawyer in Thailand, such that he should have known better than to engage in delay tactics and peddle untenable excuses for non-disclosure.

Concluding Observations

Two concluding observations:

1. For parties who require more time to comply with court orders, as the Court noted in this decision, they should apply for an extension of time so that the court can then determine a reasonable time period for compliance. Creative excuses for non-compliance such as intending to apply to set aside the court orders will be given short shrift by the court. In this case, the Court’s riposte was simply that an order of court must be obeyed until revoked or rescinded. It is no defence to contempt proceedings to allege that the order should not have been made.

2. For parties seeking to ensure compliance with court orders, this case provides a useful illustration of the Court’s astute exercise of a power of meting out a suspended jail term as a committal sanction. While past breaches could be mulcted by a fine as was the case here, continuing breaches are a different proposition altogether. The potential sting of a jail term could be an effective judicial lever to “incentivise” a contemnor’s compliance with a court order. This is precisely what a party driven to apply for committal proceedings wants to procure.