The High Court has imposed custodial sentences on two Defendants who had been found to be in contempt of Court after breaching a Freezing Injunction over a company’s assets.  The shareholder and company director were sentenced to nine months and six months imprisonment respectively; “the shortest possible sentences’ in the circumstances.

The Defendants were found to have taken steps to transfer the company’s entire business to their new company. They knew that these steps were in breach of the injunction and they were done with the intention of interfering with it.

The decision to impose custodial sentences demonstrates the severity of breaching orders imposed by the Court. The case also highlights the importance for businesses of obtaining legal advice in relation to court orders and the risks of non-compliance.

The courts have a wide range of powers at their disposal to assist in the enforcement of their judgments, including freezing injunctions. A freezing injunction prohibits a party from disposing of, or dealing with, their assets. Many types of assets can be frozen, including shares, bank accounts, motor vehicles and land.  If individuals deliberately breach a court order, they may be in contempt of court.  Sanctions include imprisonment, fines or seizure of assets.

If you require any advice on an order imposed by the Court, or if you require advice on how to obtain an injunction , please do not hesitate to get in contact with one of our specialist commercial litigation lawyers.

By Kieran O’Connor, Commercial Litigation Solicitor