On the defendants’ appeal—

Held, allowing the appeal in part, (1) in a well-drawn disclosure order what might properly be required expressly was both gross value of the relevant assets and any encumbrances or beneficial interests of others which were said to reduce that value to a lesser one in which the defendant had a beneficial interest, which was the target of enforcement (subject to care being taken to ensure that what was required by way of disclosure was proportionate and not oppressive). But where only one was asked for, as in the present case, it was the market value, not unencumbered value, which provided the claimant with most assistance in the first instance, because it identified all substantial assets which might ultimately be available for enforcement; and any encumbrances or beneficial interests of others could be investigated and monitored thereafter, if necessary through further orders. It followed that, on the true construction of the asset disclosure order there was no obligation to identify more than market value and therefore no breach in failing to disclose encumbrances and accordingly the defendants succeeded on that part of the appeal (paras 71–72).

(2) The responsible persons liability principle was a matter of substantive, not procedural law, which was not dependent upon the Common Law Procedure Act 1860, the Rules of the Supreme Court prior to 2012, or the Civil Procedure Rules prior to 2020, and remained unaffected by the 2020 Revision to the Civil Procedure Rules. First, the power to punish disobedience to orders of the court as contempt derived from the inherent jurisdiction of the court to secure the effective administration of justice. It was a matter of substantive law fashioned by the courts for that end, and was therefore not something which one would expect to be created or confined by procedural legislation; it was not something which could be changed by rules of court. Secondly, there was already a responsible persons liability principle governing the liability of directors and officers (and others) for contempt of civil orders, which was enforced prior to the 1860 Act. The responsible persons liability principle arose so as to render effective orders against corporate bodies which had legal personality but could only act through natural persons. They were for that reason treated as a special case. Thirdly, the rules of court in their various iterations did not purport to define the content of the responsible persons liability principle. They did not address the substantive question of what degree of involvement, knowledge or culpability amounted to responsibility so as to render directors and officers liable for the company’s contempt. The content of the responsible persons liability principle was not to be found in the rules, which recognised its existence but did not seek to define it. Fourthly, and relatedly, the development of the law in that area since 1883 had proceeded not by way of construction of the rules, but by way of principles which gave effect to the court’s inherent powers governing contempt. Fifthly, it was clear that the 2020 Revision did not intend to effect any change to that aspect of the law of contempt. That conclusion could be derived objectively from the terms of the 2020 Revision, and in particular rule 81.1(2) and (3). It followed that the court’s jurisdiction to make orders against directors and other officers in respect of breaches of the court’s orders addressed to corporate bodies was inherent; and it was based on law independent of the former CPR r 81.4 and indeed of its predecessors in rules of court and the 1860 Act (paras 138–145, 149).

Per curiam. Where the court decides what the order means, and upon that construction the defendant’s conduct breaches the order, the defendant is in contempt. That is the principled consequence of the relevant ingredients of civil contempt, and in particular that the defendant need not intend to breach the order; all that need be established is that the defendant intended to carry out the conduct in question and that such conduct amounts to a breach of the order, objectively construed. Subjective understanding or intention in relation to the meaning of the order is logically irrelevant to the existence of a civil contempt because there is no requirement of an intention to breach it. However, subjective understanding is relevant to the sentence to be imposed for any contempt. Where a defendant acts in accordance with an erroneous understanding of the order, that is less culpable than a deliberate breach. And where the understanding is a reasonable one because it is one of two reasonable constructions of an ambiguous order, the usual position is that he should not be punished for contempt. That may also mean that in an appropriate case he should not be held to be in contempt. Where the claimant has no prospect of making a court sure that the defendant acted otherwise than in accordance with a subjective interpretation of the order which is a reasonable one in the face of an ambiguity, it will usually be an abuse to pursue the allegation of contempt, notwithstanding that the contempt exists upon what the claimant contends is the true construction of the order (paras 79, 82–83).