Lakatamia Shipping Company Ltd v Tseng Yu Hsia

Hearing date: 16 November 2023

Draft Judgment Circulated: 22 November 2023

Approved Judgment

I direct that no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

THE HONOURABLE Mr Justice Foxton

This judgment was handed down by the judge remotely by circulation to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be Monday 27 November 2023 at 2:00pm.

The Honourable

INTRODUCTION

This is the latest set of proceedings in a long-running dispute between the Claimant ( “Lakatamia”) and Mr Nobu Su ( “Mr Su”) in respect of breaches of contract by Mr Su and the Today Makes Tomorrow ( “TMT”) group of companies. The present proceedings are brought by Lakatamia against Ms Tseng Yu Hsia ( “Ms Tseng”) and Ms Chiharu Morimoto ( “Ms Morimoto”), Lakatamia alleging that they were parties to unlawful means conspiracies and unlawfully induced or procured violation of Lakatamia's rights under an earlier court judgment ( “the Marex tort”, see Marex Financial Limited v Sevilleja [2017] EWHC 918 (Comm)). Lakatamia seeks a judgment on the merits against Ms Tseng and default judgment under CPR Part 12 against Ms Morimoto.

Ms Tseng is an associate of Mr Su's mother, Mrs Toshiko Morimoto ( “Madam Su”). Ms Morimoto is Mr Su's eldest sister.

THE BACKGROUND

The long history of the matter was summarised by Bryan J in his judgment at Lakatamia Shipping Co Ltd v Su & Ors [2021] EWHC 1907 (Comm), [5]–[38] ( “the 2021 Judgment”). I gratefully adopt his summary and will not repeat it here. It suffices to say that Lakatamia obtained a worldwide freezing order against Mr Su ( “the Blair Freezing Order”), followed by judgment for amounts due undr forward freight ransactions ( Lakatamia Shipping Co Ltd v. Su [2014] EWHC 3611 (Comm); [2015] 1 Lloyd's Rep 216), but recovering that judgment debt ( “the Cooke Judgment Debt”) has proved extremely difficult, not least because Mr Su has attempted to dissipate his assets or otherwise move them beyond Lakatamia's reach.

A Bombardier Global Express aircraft ( “the Aeroplane”) alleged to be owned by Mr Su was sold pursuant to an agreement entered into on 19 July 2014. The sale proceeds amounted to at least US$857,328.73 ( “the Aeroplane Sale Proceeds”). That amount was paid into the bank account of a company called UP Shipping Corp ( “UP Shipping”) on 4 May 2015, from which onwards payments were made by UP Shipping to various payees. On 28 May 2015, Mr Su asked Madam Su to return US$800,000 from the Aeroplane Sale Proceeds, in circumstances in which Mr Su faced a deadline of 29 May 2015 to meet a security order which was a condition of his right to appeal the Cooke Judgment Debt. Following that request, on 28 May 2015, Ms Tseng transferred US$800,000 into an account in the name of a BVI company called Terraceview Holdings Limited ( “Terraceview”), although the money was not, in the event, used to provide security, and the security condition was never fulfilled.

Mr Su was also linked with two villas in the Principality of Monaco, Villa Royan and Villa Rignon ( “the Villas”). Documents show that Mr Su had interest in a company called Portview Holdings Limited, which owned another company called Cresta Overseas Limited ( “Cresta Overseas”), which held legal title to the Villas.

When Cresta Overseas defaulted on a loan, Barclays Bank ( “the Bank”) applied to attach the Villas, which were the subject of a distressed sale on 21 October 2015. After the Bank was repaid, the balance of the sale proceeds was paid to a Monégasque lawyer, Maître Zabaldano, who transferred €26,712,866.68 ( “the Monaco Sale Proceeds”) to UP Shipping's account on 23 February 2017.

In 2019, proceedings ( “the 2019 Proceedings”) were brought against Madam Su (but not Ms Tseng nor Ms Morimoto) in relation to dealings with the Aeroplane Sale Proceeds and the Monaco Sale Proceeds (together “the Sale Proceeds”) which were alleged to amount to breaches of the Blair Freezing Order and violations of Lakatamia's right to recover the Cooke Judgment Debt. A freezing order was made against Madam Su ( “the Burton Freezing Order”) on 27 February 2019, which was discharged on 2 May 2019 but restored by the Court of Appeal on 11 December 2019. Between the discharge and restoration of the Burton Freezing Order, Madam Su sold a residential property in Tokyo which was in her name and transferred the sale proceeds ( “the Tokyo Sale Proceeds”) to Ms Morimoto.

Following a trial in which Madam Su gave evidence, Bryan J held in the 2021 Judgment ([810]–[822], [830]–[839], [864]–[875]) that Madam Su was liable for unlawful means conspiracy and the Marex tort in respect of her involvement in concealing and dissipating the Sale Proceeds.

Lakatamia now contends that Ms Tseng committed the same torts as Madam Su by acting in accordance with Madam Su's instructions in relation to the Sale Proceeds. Lakatamia applied for a worldwide freezing order against Ms Tseng and permission to serve the claim form on Ms Tseng in Taiwan at two different addresses ( “the Nangang Address” and “the Zhongshan Address”). The orders were granted by Butcher J on 25 January 2022 ( “the Butcher Freezing Order” and “the Butcher Service Out Order”). I continued the Butcher Freezing Order on 11 February 2022.

As against Ms Morimoto, Lakatamia argues that her conduct concerning the Tokyo Sale Proceeds also amounts to committing the Marex tort and unlawful means conspiracy albeit, as I have said, Lakatamia does not seek judgment on the merits against Ms Morimoto.

THE CONDUCT OF THE HEARING

Ms Tseng has not engaged with the litigation in any way or complied with the court's orders made for the management of the litigation. In these circumstances, a number of issues arise as to how the court should approach the hearing.

A trial on documents

I accept that it is open to Lakatamia to seek to prove its case by reference to witness statements and documents, and without calling oral evidence. In Lighting and Lamps UK Ltd v Clarke [2016] EWCA Civ 5, [41]–[42], Vos LJ said:

“As a matter of principle, the court is perfectly entitled to dispense with the calling of oral evidence under CPR Parts 32.2(2)(b) and 32.5(1)(b) where witness statements have been served. The court does not have to follow a pointless procedure in an undefended claim. If it were otherwise, undefended cases up and down the country would be delayed and subjected to inappropriate scrutiny when there was no defence raised and no substantive argument about the claimants' entitlement.

In this case the claimants had to prove their case. They did so by presenting both their statement of case verified by a statement of truth, and also their witness statements. There was no need for the judge to require the witnesses to be called.”

The conduct of the trial in Ms Tseng's absence

In CMOC Sales & Marketing Ltd v. Persons Unknown [2018] EWHC 2230 (Comm) (“ CMOC”), [12] HHJ Waksman QC held that where proceedings are undefended the Court “still ha[s] to be satisfied on the balance of probabilities that the claim is made out …”. At [13], he added that “where the trial is not attended by one of the parties, there is still an obligation of fair presentation which is less extensive than the duty of full and frank disclosure on a without notice application.” Mr Justice Cresswell in Braspetro Oil Services v FPSO Construction Inc [2007] EWHC 1359 (Comm) observed that where the defendant had not engaged, the claimant was obliged to draw to the attention of the court “points, factual or legal, that might be to the benefit of [the defendant]”.

The significance of the 2021 Judgment

It was accepted before me that the findings of liability in the 2021 Judgment do not bind Ms Tseng ( Hollington v Hewthorn [1943] KB 587). However, that does not mean that the contents of the judgment are without significance. The relevant principles were set out in a judgment of Laurence Rabinowitz KC in JSC BTA Bank v Ablyazov [2016] EWHC 3071 (Comm), [24] (which was approved by Henshaw J in Kazakhstan Kagazy Plc v Zhunus [2021] EWHC 3462 (Comm), [115]):

“The application of the principle in Hollington has in recent years become substantially diluted. In particular:

(1) Whilst a court cannot rely upon a bare finding of a prior court for example that a party has been negligent, it can rely upon the substance of the evidence which is referred to in the judgment of the prior court, including for example the contents of a document, the evidence given by a witness and the like: Rogers v Hotle [2015] QB 265, [40], [55] (Christopher Clarke LJ).

(2) Whilst the bare finding of a prior court is opinion evidence which a subsequent court cannot rely upon because the later court must make its own findings of fact, a reference in a judgment to the substance of evidence is itself evidence which the judge in a later case can take into account “in like manner as he would any other factual evidence, giving to it such weight as he thinks fit”: Rogers (supra).

(3) Moreover, if the judge in a later case concludes that the matters of primary fact recorded in an earlier judgment justify the conclusions reached in that judgment, he is entitled to reach the same conclusion: Otkritie International v Gersamia [2015] EWHC 821 (Comm), [25] (Eder...