Contempt or Overreach?

How a technical breach was turned into a prison sentence!

The recent sentencing of Karel Christian Manasco for contempt of court has brought Gibraltar’s judicial culture under intense scrutiny. What began as an administrative dispute involving undertakings and asset disclosure has evolved into an extraordinary case study in judicial overreach, raising urgent questions about proportionality, due process and the limits of civil contempt powers.

The official justification offered in the 14 May 2025 judgment rested on five findings of contempt, framed as deliberate and serious breaches of a freezing order and associated undertakings.

But when those breaches are examined carefully in light of applicable law, precedent and procedural context, the conclusion is inescapable: this was not a grave matter of wilful defiance but a set of minor, technical missteps, none of which justified a custodial outcome.

A Question of Scale: Material vs Technical Contempt

Two of the contempt’s (labelled 1 and 3) related to Manasco’s spending exceeding a weekly limit of £10,000 set under a freezing order and the inclusion of incorrect figures in a sworn statement. The sum spent during the 24-week period was found to be £335,490, later adjusted by the court itself to £305,906. When further evidentiary considerations were accounted for, including legitimate pre-undertaking transactions and demonstrably lawful legal expense payments, the amount in question was reduced again to £225,902.92. The final figure remains squarely within the realm of technical, not malicious, breach.

Even assuming arguendo that the overspend occurred, the real legal question should have been whether it resulted in any improper diminution of the frozen funds. It did not.

Not one pound was shown to be misappropriated or concealed.

The payments were traceable, disclosed in varying forms and overwhelmingly accounted for as either ordinary living expenses or legal fees, both categories explicitly allowed under the terms of the freezing order itself.

The Judicial Misapplication of Authority

Perhaps more concerning than the outcome itself is the method by which it was reached. On three separate occasions, before 11 March 2025, again on that day and then on 9 April 2025, the learned Chief Justice purported to “order” the defendant to attend court. Yet, at no point was a bench warrant issued contemporaneously to compel such attendance, as would be required by law.

The legal position on this matter is unambiguous. In In Re B [1994] 2 Fam CR 1142 and JSC BTA Bank v Ablyazov (No. 8) [2012] EWCA Civ 1411, it was made clear that civil courts cannot compel attendance at hearings through mere judicial pronouncement. Such powers only exist where necessary to give effect to a lawful court order. No such necessity was established.

Moreover, CPR Rule 81.7(2) does not, on its own, create a power to issue a bench warrant. As established in English and Gibraltarian practice, procedural rules cannot confer substantive powers to deprive a person of liberty, such powers must derive from primary law, which in this case they did not.

The assertion that failure to attend constituted an actionable disobedience misstates the boundaries of judicial authority and flouts long-standing jurisprudence about liberty rights in civil cases. The consequence was not only legally unsound, it was procedurally improper.

Statutory Contradictions and Due Process Failings

The foundation of the contempt proceedings itself appears questionable under s.483(4) of the Crimes Act 2011, which states that contempt proceedings “may not be instituted except by or with the consent of the Attorney-General or on the motion of a court having jurisdiction to deal with it.”

This application was made not by the court, but by the private claimants. No indication has been made that the Attorney-General’s consent was obtained.

Given the seriousness of contempt proceedings, especially those potentially resulting in loss of liberty, any ambiguity must be resolved in favour of the defendant.

If this provision applies, as it plainly appears to, then the entire contempt process was procedurally flawed at inception and potentially unlawful.

Furthermore, Gibraltar has not adopted s.34 of the UK’s Criminal Justice and Public Order Act 1994, meaning that a defendant’s silence cannot be used to infer guilt. Yet, in multiple places within the March 2025 judgment, the learned Chief Justice drew adverse inferences from Manasco’s silence.

That approach is flatly inconsistent with the common law and the procedural guarantees expected in civil contempt proceedings with quasi-criminal consequences.

Technical Breach, Punitive Outcome

Three further contempt’s (4, 5 and 7) involved the movement of funds from a closed Jyske Bank account to an account in Spain held by the defendant’s wife. These funds were spent exclusively on permitted living expenses and legal costs, over £290,000 of which was paid directly to legal counsel to respond to the very proceedings in question.

The freezing order did not prohibit these types of expenditures, nor did it explicitly prohibit use of non-nominated accounts in the event of bank closure.

Once again, the court found no evidence that the assets were improperly depleted. Yet these transactions were still characterised as “serious” breaches. One is left to wonder: if complying with the spirit and purpose of a court order is not sufficient, what is?

Conclusion: A Dangerous Precedent

What transpired in this case reflects not only a mischaracterisation of the nature and seriousness of the alleged contempt’s, but a judicial posture that undermines public confidence in the independence and proportionality of Gibraltar’s legal system.

The rule of law demands rigour, especially in protecting liberty. It demands that contempt powers be exercised only where strictly necessary and with respect to legal boundaries.

When a litigant is imprisoned over minor breaches of a freezing order, despite a lack of demonstrable harm, procedural irregularities and arguable illegality in the conduct of the proceedings themselves, the question must be asked:

Was this about justice or control?

FAQs

Who is Karel Christian Manasco?
Karel Christian Manasco is a defendant recently sentenced in Gibraltar for contempt of court, which stemmed from breaches of a freezing order in a civil case.

What was the nature of the breaches Manasco was accused of?
Manasco was found in contempt for overspending against a weekly limit, inaccuracies in a sworn statement, and transferring funds between accounts for permitted legal and living expenses.

Were the breaches considered material or technical?
They were largely technical. The court found no evidence of intentional misappropriation or concealment of funds, and most payments were lawful under the freezing order.

Why is this case controversial?
The case is seen as controversial due to procedural irregularities, questionable use of civil contempt powers, and concerns over disproportionate punishment.

Was there any misuse of the freezing order funds?
No. The court acknowledged that the funds were mostly traceable and used for legitimate legal fees and living expenses, not hidden or depleted unlawfully.

Did the court follow proper legal procedures in summoning Manasco?
Critics argue it did not. The court issued orders for appearance without a legally required bench warrant, raising concerns about improper use of judicial authority.

Was the Attorney-General’s consent obtained for contempt proceedings?
There is no evidence that the Attorney-General consented, as required under Gibraltar’s Crimes Act 2011 for such proceedings, calling their validity into question.

Can silence be used against a defendant in Gibraltar civil contempt cases?
No. Unlike in the UK, Gibraltar has not adopted laws allowing adverse inferences from silence. Yet, such inferences were made in this case, contrary to legal standards.

What does this case suggest about judicial behavior in Gibraltar?
It suggests a troubling overreach of judicial powers, potentially undermining public trust in the impartiality and legality of court decisions.

What are the wider implications of this sentencing?
The case sets a concerning precedent for civil liberty and due process in Gibraltar, highlighting the need for careful checks on the use of contempt powers in civil litigation.