Court of Appeal hands down judgment in Wang v Darby

The Court of Appeal has handed down judgment in a decision which likely brings an end to this long running and significant litigation, in which Daniel Scott has acted for Mr Wang from the outset.

Background

In August 2021, Mr Wang obtained a without notice freezing order against Mr Darby which contained standard provisions relating to asset disclosure. Shortly thereafter, proceedings were commenced alleging that Mr Darby had breached the terms of cryptocurrency swap agreements made between the parties concerning Bitcoin and Tezos.

Mr Darby failed to disclose his ownership of 100 Bitcoin, which had a value of approximately $US 4m at the time the freezing order was made and is now valued at almost $US 10m. Mr Wang’s solicitors put Mr Darby on notice that they intended to commence proceedings for contempt of court if he did not purge his contempt and disclose his ownership of the 100 Bitcoin.

In the meantime, Mr Darby failed to pay an interim costs order and his Defence to the claim was struck out. Mr Darby’s solicitors came off the record. In January 2023, judgment was entered for Mr Wang and damages and interest of approximately $US 2m were assessed in his favour.

Following judgment, Mr Wang commenced contempt proceedings in respect of the failure to disclose the existence of the 100 Bitcoin. Mr Darby failed to engage with the contempt proceedings. The Court decided to proceed in his absence and found him in contempt of court in his absence on 10 June 2024 ([2024] EWHC 1394 (Comm)).

The Court adjourned the sanction hearing until 24 July 2024, in order to give Mr Darby time to reflect on the judgment, consider taking legal advice and seeking representation, and prepare evidence in mitigation.

Mr Darby attended the sanction hearing and indicated that he had been unable to secure legal representation. The Court proceeded to commit Mr Darby to 18 months immediate imprisonment. The Judge said that 6 months was the punitive aspect of the sentence and 12 months represented the part that might be set aside if the contempt was purged.

The Appeal

Whilst in prison, Mr Darby secured publicly funded legal representation. He appealed against his sentence and successfully applied for bail pending the appeal. He had served 146 days in prison (in excess of 4 months), a sentence equivalent to 292 days.

Very shortly before the appeal was due to be heard, Mr Darby admitted his contempt and apologised to Mr Wang and the Court. In light of this, the only real question that was live by the time of the hearing was whether the Court could (and should) reduce his sentence to take account of the purging of his contempt. In a judgment handed down on 4 February 2025, the Court of Appeal reduced Mr Darby’s sentence to time served, namely 292 days.

The decision is a helpful illustration of the wide-ranging powers available to the Court of Appeal under section 13 of the Administration of Justice Act 1960. Indeed, the appeal was essentially decided on the basis of fresh evidence. It is well known that in cases which do not concern committal of a person to imprisonment, it can be extremely difficult to obtain permission to adduce fresh evidence on appeal.

Lord Justice Dingemans’ obiter comments in the decision are also enlightening. Whilst it was unnecessary to decide whether the Court below should have granted a further adjournment to Mr Darby at the sanction hearing so that he could obtain legal representation, Dingemans LJ stated at [21] that there are many reasons to grant a person in Mr Darby’s position a short adjournment where they belatedly comply with the court process at the sanction stage of contempt proceedings. In particular:

“This ensures fairness to that person, in circumstances where many contemnors only come to their senses at the 11th hour and 59th minute, see generally Haringey London Borough Council v Brown [2015] EWCA Civ 483; [2017] 1 WLR 542 at paragraphs 41 to 44. In many cases this will also be to the advantage of the side seeking the order for committal. This is because the contemnor’s legal representatives are likely to have more success in persuading the contemnor to purge his contempt and comply with court orders. That will also assist the court in ensuring that there is compliance (albeit on a belated basis) with its orders.”

Daniel Scott was instructed by Rob Green of Curzon Green Solicitors and acted for Mr Wang as sole counsel in the Court of Appeal.

Read the full judgment