BANK OF INDIA v. BHAGWANDAS KEWALRAM AND OTHERS

Headnote

Standard of Proof in proceedings under Order 49B rule 1B of The Rules of the Supreme Court.

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JUDGMENT

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Sir Derek Cons, V.P., delivered the judgment of the court:

1. This is an appeal from the refusal of Master O'Donnell to make any order following the examination of the judgment debtor, Mr. Bhagwandas Kewalram Murjani, unde O. 49B of The Rules of the Supreme Court. In view of the radical changes made to that order in 1984 it may be convenient immediately to remind ourselves, in particular by reference to r. 1B, of the orders which the master could have made:

"(1)    Where the Court is satisfied, following the examination conducted under rule 1A or following an exaination conducted under Order 48, that the judgment debtor -

 

it may, in its discretion, order the imprisonment of the judgment debtor for a period not exceeding 3 months.

 

2. The order for the examination of Mr. Murjani was made by Sears, J. on 16th May 1989, shortly after the entry of judgment against Mr. Murjani, and other defendants, in Action 1404 of 1989 in the sum of approximately US$10.8 million.  (To-date the judgment creditor, the Bank of India, has recovered only something less than US$20,000.)

3. The start of the examination was delayed, and we understand the course of the examination as well, oy reason of Mr. Murjani's ill health. Instead of the one day originally estimated it took five separate days, spread over a period from August to December 1990.

4. It was indicated to the master that the Bank did not seek an order for committal under subrule (1).  He accordingly gave no consideration to whether Mr. Murjani had disposed of assets with a view to avoiding satisfaction of he judgment or to whether he had failed to make full disclosure. The master limited' his consideration of the evidence to whether Mr. Murjani was, or would be, able to satisfy the judgment in whole or in part. In giving his decision as to that, on 7th December, he. accepted:

"the submission that any order for payment of the judgment sum with the penal sanction which follows such an order does require the Court to be satisfied beyond a reasonable doubt before invoking same."

Then, after reciting Mr: Murjani's evidence that he had divested himself of all assets and income to various family trusts in 1970 and referring to his claim that since prior to the judgment in question he had no real assets and limited income, the master observed:

"While this claim may be difficult to believe or accept, there are no readily identifiable assets in his name."

and finally concluded:

"The state of the evidence adduced at this examination is such that the Court has not been satisfied beyond a reasonable doubt that the Judgment Debtor is able or will be able to satisfy the judgment debt, wholly or partly, to make any order for payment by instalments or otherwise to pay off or reduce the judgment sum due to the Judgment Creditor."

5. The gravamen of the appeal is that the master mis-directed himself that the penal sanctions which, by reason of subrule(3) (a)might eventually follow a non-compliance with an order made under subrule (2) (a), required the court to be satisfied beyond reasonable doubt of the debtor's ability to pay before making such an order.

6. It is conceded by Mrs. Kaplan for the judgment creditor that the court must be so satisfied before making an order under subrule (l), whether by reason of paragraphs (a), (b) or (c), being analogous to proceedings for contempt which have long been recognised to be of a criminal nature and must be proved to the criminal standard of proof: per Dillon, L.J. in Dean v. Dean [1987] 1 FLR at 521B. But she argues that subrule (2) merely establishes a further form of execution which naturally attracts only the civil burden of proof; furthermore there is no need to import a higher standard of proof because subrule (2) (b) provides the opportunity subsequent discharge, variation or suspension of the order, and subrule (3)(a) for the debtor to show "good cause" why he should not be imprisoned.

7. We are unable to draw the distinction suggested. The possibility that the order under subrule (2) (a) might be discharged, varied or suspended, or that a subsequent term of imprisonment be withheld for good cause, has no relevance to the jurisdiction of the court to make the original order which, exactly the same as under subrule (1), depends upon a finding of fact by the court that the judgment debtor is able to satisfy the judgment, at least to some extent. That finding is essential in both instances. It makes no difference that subrule (2) (a) in addition looks to the future or that an additional finding of breach of the original order is necessary before imprisonment under, subrule 3(a) can be imposed. Tne relevant words in subrules (1) and (2) (a) are identical and we see no reason to depart from the normal canon of construction that words and phrases retain the same meaning throughout a statute, a fortiori in a particular section of a statute, unless there is good reason to think otherwise. We find none in this instance.

8. What then is the appropriate standard of proof with regard to both subrules? In our view it may conveniently be found, although it appears elsewhere as well, in the judgments in In re Bramblevale Ltd [1970] 1 Ch 128, where at p. 137 Lord Denning said:

"A contempt of court is an offence of a criminal character. A man may be sent to prison for it. It must be satisfactorily proved. To use the time-honoured phrase, it must be proved beyond reasonable doubt."

and Winn, L.J. :

"I agree, and rest my decision on the simple ground, very properly adopted by Mr. Stamler in his helpful submission to the court, that unless the guilt of the appellant was proved with such strictness of proof as is consistent with the test "beyond reasonable doubt"; or, as my Lord has more than once put it, consistent with such standard as the court, with its responsibility, regards as consistent with the gravity of the charge - a test which I personally prefer..." 

9. If refinement is necessary, we too would respectfully adopt the preference of Winn, L.J. for the formulation last mentioned.

10. Although an examination under O. 49B may perhaps not normally be regarded as a proceeding for contempt, ,the common factor is the possibility of imprisonment as a result. For that reason the same standard should be applied.

11. That conclusion in effect disposes of the appeal, for Mrs. Kaplan concedes that the evidence before the master was not capable of establishing Mr. Murjani's ability to pay beyond reasonable doubt. But in accepting that concession we do not wish to be taken as endorsing the master's view  that is, as we read his judgment - that the establishment of "readily identifiable assets in his name" was a pre-condition to the making of any order.

12. It is necessary then only to deal with the question of costs below. The master ordered that all be added to the judgment debt. As we indicated earlier, the examination before the master occupied five days. A further day, or rather a morning, was taken in submissions by counsel. for and against the making of an order. It is contended by way of cross-appeal that the judgment creditor, having failed to obtain any order at all, should be responsible for the costs of that final day on the general principle that costs follow the event. No argument has been addressed to us to the contrary and we agree that that should be so as a matter of general principle.

13. For these reasons the appeal is dismissed, the cross-appeal allowed and the order below varied accordingly.