Lakatamia Shipping Company Ltd v Nobu Su / Hsin Chi Su (aka Su Hsin Chi; aka Nobu Morimoto)
Jurisdiction | England & Wales |
Judge | Mr Simon Colton |
Judgment Date | 12 July 2024 |
Neutral Citation | [2024] EWHC 1749 (Comm) |
Court | King's Bench Division (Commercial Court) |
Docket Number | Case No: CL-2022-00351 |
[2024] EWHC 1749 (Comm)
Simon Colton KC
SITTING AS A DEPUTY HIGH COURT JUDGE
Case No: CL-2022-00351
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
COMMERCIAL COURT (KBD)
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
S.J. Phillips KC and James Goudkamp (instructed by Hill Dickinson LLP) for the Claimant
The First Defendant in person
The Second and Third Defendants did not appear and were not represented
Hearing date: 13 June 2024
Further written submissions received: 5 July 2024
Draft judgment circulated: 8 July 2024
Approved Judgment
This judgment was handed down remotely at 10.30am on 12 July 2024 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
Mr Simon Colton KC:
Introduction
This is the latest instalment in the long-running saga arising out of a breach of contract claim brought by Lakatamia Shipping Co Ltd ( Lakatamia or the Claimant) against the First Defendant ( Mr Su). Judgments were entered in that claim in November 2014 and January 2015. In the 9 1/2 years since, the judgment sum is largely unsatisfied. Indeed, with interest and costs which have accrued in the meantime, I am told that, after some recoveries, more than US$ 60 million is now owed.
The hearing before me was the largely undefended trial of a claim against Mr Su, the Second Defendant ( Mr Chang), and the Third Defendant ( Maître Zabaldano) arising out of Mr Su's breach of a freezing order (the Freezing Order) which was intended to prevent the dissipation of his assets prior to judgment. Mr Su cannot dispute such breach: Sir Michael Burton GBE previously committed Mr Su to 21 months' custody for numerous breaches of the freezing order: see Lakatamia Shipping Co Ltd v Su [2019] EWHC 898 (Comm). Those breaches included failing to disclose Mr Su's interests in two Monaco properties – Villa Rignon and Villa Royan (the Villas) – and the dissipation of the proceeds of sale of the Villas, which were held for the company which owned them, Cresta Overseas Ltd ( Cresta Overseas). The proceeds (the Cresta Overseas Monies) were, as the evidence in the present case demonstrates, paid away to a company named UP Shipping Corporation ( UP Shipping). In the present trial, the central issue is whether Mr Chang and Maître Zabaldano have any liability arising out of the events in question.
In previous proceedings, after a trial to which none of the current Defendants were party, Bryan J decided that a number of individuals and companies had unlawfully conspired with each other to breach the Freezing Order by concealing the Cresta Overseas Monies from Lakatamia. The Claimant describes this conspiracy as the ‘ Principal Conspiracy’. In the present proceedings, the Claimant alleges it has been the victim of a further unlawful conspiracy, essentially parasitic on the Principal Conspiracy, between Mr Su, Mr Chang and Maître Zabaldano, to dissipate the Cresta Overseas Monies and thereby injure Lakatamia (the Subsidiary Conspiracy). The Claimant brings claims against all three Defendants for unlawful means conspiracy; and against Mr Chang and Maître Zabaldano for the so-called Marex tort (named after the decision of Knowles J in Marex Financial Ltd v Sevilleja [2017] EWHC 918 (Comm), [2017] 4 WLR 105).
Preliminary matters: the conduct of the trial
The proceedings were served on the various defendants in July 2022. None of the defendants ever served an Acknowledgment of Service indicating an intention to defend the case on the merits, but nonetheless Lakatimia did not seek default judgment. Rather, as was its right, Lakatimia decided to pursue the claims to trial.
The position of Mr Su
Although Mr Su never formally acknowledged service, he did appear remotely, representing himself, at various pre-trial hearings, including the Case Management Conference before Bright J in January 2024. On 26 April 2024, Cockerill J ordered that unless Mr Su were to file a CPR-compliant defence by 13 May 2024, Mr Su would be debarred from defending the proceedings. A document was filed, but on 23 May 2024 Foxton J decided that this did not comply with the requirements of the CPR, and struck it out. Nonetheless, Foxton J decided that it would be open to Mr Su at trial to advance a case that Maître Zabaldano believed that the Villas were not affected by the Freezing Order, and that Mr Chang believed the Villas were family owned, save that Mr Su would not be permitted to adduce witness oral evidence in respect of such a case, without the prior permission of the court. For the purpose of seeking such permission Mr Su was to comply with the order for disclosure made at the CMC, and provide the court with a copy of any witness statement he sought permission to adduce. Any application for such permission was to be made on paper by 4pm on 4 June 2024.
On 4 June 2024, an application was made by Mr Su, accompanied by his third witness statement, but Foxton J decided that Mr Su had not complied with the order for disclosure, and so Foxton J would not give permission for Mr Su to adduce witness evidence. Nonetheless, Foxton J decided it would be a matter for the trial judge to decide the extent of Mr Su's participation in the trial.
In the event, I decided at the outset of the trial that I would permit Mr Su to argue that the evidence adduced by Lakatamia did not meet the burden of proving that Maître Zabaldano and Mr Chang had the necessary states of mind to be liable for the torts alleged. In making this decision, I bore in mind the observations of Fancourt J in Byers v Samba Financial Group [2020] EWHC 853 (Ch) at [121]–[124] that there is no ‘standard’ or ‘usual’ response of the court where a defence has been struck out, but the court “ must have regard to the circumstances of the individual case and do what is necessary and proportionate to mark the seriousness of the breach of its order in a way that is consistent with the interests of justice and the overriding objective”. I decided that allowing Mr Su to make arguments on this narrow issue, but not to adduce evidence of his own, was most consistent with the interests of justice and the overriding objective.
At the outset of the trial, Mr Su also sought to adjourn the trial. For reasons I gave orally, I refused that application.
The position of Mr Chang
Mr Chang never acknowledged service of the proceedings, nor played any part in them. Nonetheless, I have received a certificate of service showing that Mr Chang was served at his last known residence in Taiwan. He may not have received further materials relating to the case, but, according to evidence from the Claimant's solicitor, Mr Conor O'Brien ( Mr O'Brien), that appears to be because Mr Chang has refused delivery of materials sent to his address, and not made arrangements with the courier to accept such materials elsewhere.
The position of Maître Zabaldano
Maître Zabaldano acknowledged service on 27 September 2022, declaring an intention to contest jurisdiction. That jurisdiction challenge was rejected by Bryan J on 21 July 2023: Lakatamia Shipping Co Ltd v Su [2023] EWHC 1874 (Comm) (the Jurisdiction Judgment). Thereafter, Maître Zabaldano decided he did not wish to take any further part in the proceedings, setting out reasons for this in a letter from his solicitors, Mishcon de Reya LLP, on 25 October 2023. Nonetheless, I was told by Mr O'Brien that materials for the case continued to be sent to Maître Zabaldano, although couriers were apparently turned away when they attempted to make deliveries, and Maître Zabaldano's email server was apparently configured to refuse emails from the Claimant's solicitors concerning these proceedings.
The evidence relied on by the Claimant
The Claimant submitted that the court should proceed with trial in the absence of Mr Chang and Maître Zabaldano pursuant to CPR 39.3(1). In circumstances where I was satisfied that the Claimant has made proper efforts to correspond with these Defendants and to inform them of the trial date, I was satisfied that this was the right course for me to take.
As the Claimant accepts, even where proceedings are undefended, the court “ still ha[s] to be satisfied on the balance of probabilities that the claim is made out”: CMOC Sales & Marketing Ltd [2018] EWHC 2230 (Comm) ( CMOC) at [12] (HHJ Waksman QC). Here, the allegations are serious. As such, although the standard of proof remains the balance of probabilities, cogent evidence is required in order to meet that standard. (The Claimant submitted the evidence had to be “ compelling”, which may go further than is warranted.)
The Claimant told me it relied on “ the documentary evidence in the trial bundles, on the witness statements that have been made on its behalf, and on the averments made in its statements of case (duly certified by statements of truth)”. As to this:
(a) At the CMC, Bright J ordered that “ Documents included within the trial bundle shall be adduced in evidence and shall hence form part of the evidence in the trial of the action”. There was, therefore, no doubt that the Claimant could rely on materials in the trial bundle. But the trial bundle was, in my judgment, of a grossly excessive size: for a hearing with a time estimate of one day, I was presented with a ‘trial bundle’ consisting of 33 volumes, together with a 109-page ‘consolidated index’, in addition to an 8-volume ‘core bundle’. In the course of my pre-reading (using a reading list prepared by Counsel for the Claimant, together with a lengthy skeleton argument) and oral submissions by Mr Phillips KC on behalf of the Claimant, I was taken to, or asked to read, only a...
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