Lakatamia Shipping Company Ltd v Toshiko Morimoto
| Jurisdiction | England & Wales |
| Judge | Lord Justice Haddon-Cave,Sir Stephen Richards,Lord Justice McCombe |
| Judgment Date | 11 December 2019 |
| Neutral Citation | [2019] EWCA Civ 2203 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A4/2019/1259 |
| Date | 11 December 2019 |
[2019] EWCA Civ 2203
Lord Justice McCombe
Lord Justice Haddon-Cave
and
Sir Stephen Richards
Case No: A4/2019/1259
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION
SIR MICHAEL BURTON
[2019] EWHC 1145 (CH)
Royal Courts of Justice
Strand, London, WC2A 2LL
Stephen Phillips QC, Noel Casey and James Goudkamp (instructed by Hill Dickinson LLP) for the Appellant
David Head QC and Georges Chalfoun (instructed by Baker & McKenzie LLP) for the Respondent
Hearing date: Tuesday 19th November, 2019
Approved Judgment
The issue in this appeal is whether the Judge was wrong to discharge a freezing order.
This is an expedited appeal by Lakatamia Shipping Co Ltd (‘Lakatamia’) against the order of Sir Michael Burton, dated 2 nd May 2019, sitting as a Deputy High Court Judge in the Business and Property Courts, whereby he discharged a world-wide freezing order (‘WFO’) against the Respondent, Mrs Toshiko Morimoto (‘Madam Su’). Mr Justice Males granted Lakatamia permission to appeal on 19 th July 2019, but refused Madam Su permission to appeal on jurisdictional issues.
BACKGROUND
Madam Su, aged 86, is the mother of Mr Nobu Su (‘Mr Su’). Her late husband, Mr Su Ching-Wun, established the Taiwan Shipping Company in 1958, initially for the export of bananas. As she explained in her first Affidavit, the business became successful and lucrative and the family accumulated substantial wealth. She worked alongside her husband in the business and also made her own investments. On his death in 2001, responsibility for the shipping business largely passed to their only son, Mr Su. The business has run into problems in recent years.
Substantive proceedings
On 6 th July 2008, Lakatamia, a shipping company operated by Mr Haji-Ioannou, entered into a freight forwarding agreement with Mr Su and various companies that were owned by him. Subsequently, Mr Su breached the agreement causing Lakatamia substantial losses. Lakatamia subsequently brought a claim for damages against Mr Su.
On 22 nd August 2011, Lakatamia applied for, and was granted, a WFO against Mr Su by Mr Justice Blair which prohibited Mr Su from dealing with, or dissipating, his assets anywhere in the world, up to the value of US$48,842,440.24 (‘the First WFO’).
On 5 th November 2014, following a trial, Mr Justice Cooke granted judgment in favour of Lakatamia against Mr Su in the sum of US$37,854,310.24 ( Lakatamia Shipping Co Ltd v. Su [2014] EWHC 3611 (Comm); [2015] 1 Lloyd's Rep 216). On 16 th January 2015, Mr Justice Cooke granted judgment in the further sum of US$9,852,200.50. Mr Su has not discharged these judgment debts voluntarily. His liability to Lakatamia to date currently stands at around US$57m (‘the Judgment Debt’).
Committal Proceedings
On 26 th January 2018, Mr Justice Popplewell granted an order requiring Mr Su to surrender his passports and remain in the jurisdiction pending a hearing at which he was to be cross-examined as to his assets.
On 10 th January 2019, Mr Su entered the United Kingdom and was met by the police at Heathrow and served with the order of Popplewell J. On 15 th January 2019, Mr Su was arrested in Liverpool in the course of attempting to flee the jurisdiction by ferry. He was arrested and brought before the Business and Property Courts in London, whereupon Lakatamia served him with a committal application notice (‘the Committal Proceedings’).
Lakatamia made three main allegations in the Committal Proceedings. First, that Mr Su owned two villas in Monaco (‘the Villas’) through two companies, namely, Portview Holdings Limited (‘Portview’) and Cresta Overseas Limited (‘Cresta’). Second, that on 21 st October 2015, the Villas were sold for a combined sum of €65.1m yielding, after the redemption of mortgages, proceeds of €27,127,855.01 (‘the Net Sale Proceeds’). Third, that Mr Su then dissipated the Net Sale Proceeds in breach of the First WFO.
Mr Su implicates his mother
On 27 th February 2019, at a hearing before Sir Michael Burton, in the course of being cross-examined by Mr Phillips QC on behalf of Lakatamia as to his assets, Mr Su gave evidence to the effect that (i) his mother, Madam Su, had received the Net Sale Proceeds via her lawyers, (ii) she knew about the First WFO and (iii) she performed a “treasury” function for the Su family.
The following are extracts from the transcript of Mr Su's evidence during the Committal Proceedings:
“Q: Where is the money now, Mr Su?
A: I believe it went to family's [sic].
JUDGE: Went to?
A: Family's money.
JUDGE: Back to your family?
A: Yes. ….
JUDGE: Where did it go?
A: It went to Zabaldano, the lawyer in Monaco.
JUDGE: Yes?
A: And it went to instruction of my mother's [sic] to go to the mother's lawyers.
JUDGE: To the mother's?
A: The family's lawyers, I think”.
JUDGE: Where does she keep the money?
A: I have to ask my mother because I have problem with my mother last one month, to try and ask her to give me money back so I can settle with Mr Polys Haji-Ioannou.
JUDGE: Right. That's good news. ….
JUDGE: 29 million has gone to your mother. You haven't asked her where it is?
A: I asked my mum to give back and want to settle discussion with Mr Polys Haji-Ioannou to reconcile the debt, so that we can finish this case.” …
“Q: She knows that these orders have been made, freezing your assets and the orders of those companies, doesn't she?
A: Yes”.
…
“Q: You referred to your mother a moment ago as having a treasury function in relation to Excel. What did you mean by that?
A: In my family business my mother controlled the treasury side of the money and she give the final approval. ….
Q: You give money to your mother so that the Lakatamia in this case can't get their hands on it; that's right, isn't it?
JUDGE: Yes?
A: My mother controlled money and I don't have signatures on many account. So such a big amount, I travel and we move to make a deal outside. My mum took money or not. I have trust her. If she took the money, as a son I never doubt my mother, but maybe my mother took some money.”
In the course of cross-examination, Mr Su also gave evidence about a company called Great Vision Management Limited (‘Great Vision’). He said: “It's the company owned by my mother, run by my mother, let me put it this way”. Lakatamia submitted that this evidence was significant because, prior to the Net Sale Proceeds being dissipated, Great Vision had: (i) funded substantial legal costs of applications made by Mr Su to deal with his assets in spite of the First WFO; and (ii) written to the Court of Appeal in the context of Mr Su's application for permission to appeal against the judgments of Mr Justice Cooke. This meant, Lakatamia submitted, that if Madam Su owned Great Vision, she must have, or was likely to have, known about the First WFO and the Judgment Debt prior to the Net Sale Proceeds being dissipated.
Current proceedings
Mr Su's revelations during his cross-examination about his mother's role prompted Lakatamia's application for a further WFO and the current proceedings.
On 27 th February 2019, Lakatamia applied ex parte on an urgent basis for a WFO against Madam Su, Portview and Cresta which was granted by Sir Michael Burton (‘the Second WFO’). A return date was subsequently fixed for 10 th April 2019.
On 6 th March 2019, Lakatamia issued the current substantive proceedings against the four named defendants. As against Mr Su, Lakatamia alleges that he unlawfully conspired with Madam Su to breach the First WFO by transferring the Net Sale Proceeds to her. As against Madam Su (and Portview and Cresta), Lakatamia advances two claims in tort. First, that Madam Su committed the tort of unlawful means conspiracy by combining with the other defendants to assist Mr Su to breach the First WFO by dissipating the Net Sale Proceeds (‘the unlawful means conspiracy claim’). Second, that Madam Su knowingly and intentionally facilitated the violation of Lakatamia's rights under the Judgment Debt by assisting Mr Su to dissipate the Net Sale Proceeds. Lakatamia contends that this conduct is actionable in view of the decision in Marex Financial Ltd v Sevilleja [2017] EWHC 918 (Comm); [2017] 4 WLR 105 (‘the Marex claim’).
On 6 th March 2019, Lakatamia also issued an application notice seeking inter alia orders that (i) the Second WFO be continued against Madam Su; (ii) Lakatamia be permitted to serve Madam Su with the claim form out of the jurisdiction on the basis that: (a) she was a necessary or proper party to the unlawful means conspiracy against Mr Su, who had been served within the jurisdiction; (b) because damage had been suffered in the jurisdiction; and (iii) Madam Su disclose her worldwide assets with a value exceeding US$100,000 and swear and serve an Affidavit confirming that disclosure.
In support of its application, Lakatamia relied upon a first affidavit of Mr Russell Gardner, a solicitor of the Senior Courts and a partner of the firm Hill Dickinson LLP (the firm on the record for Lakatamia). Mr Gardner highlighted inter alia: (i) Mr Su's evidence that the Net Sale Proceeds had been transferred to Madam Su; (ii) evidence that Madam Su owned Great Vision and hence knew about both the First WFO and Judgment Debt at the time that the Net Sale Proceeds were transferred; and (iii) evidence that Madam Su funded Mr Su's extravagant lifestyle.
Committal hearing and decision
The Committal Proceedings were heard by Sir Michael Burton over four days, 25 th, 27 th, 28 th and 29 th March 2019. In the course of the hearing, Mr Su gave further evidence implicating his mother in handling the Net Sale Proceeds.
In a written judgment handed down on 29 th March 2019, the Judge held that he was satisfied Lakatamia had proven to the...
To continue reading
Request your trial
-
Motorola Solutions, Inc. v Hytera Communications Corporation Ltd
...it requires a “plausible evidential basis” for the factual assertion relied upon: see e.g. Lakatamia Shipping Co. Ltd. v Morimoto [2019] EWCA Civ 2203 para [38]. In Tata Consultancy Services Ltd. v Sengar [2014] EWHC 2304 (QB), Mr. Simon Picken QC applied the test of whether there was an ......
-
Harrington v Mehta
...of the Supreme Court in Brownlie and Goldman Sachs were also concerned with jurisdiction. In Lakatamia Shipping Co Ltd v Morimoto [2019] EWCA Civ 2203 Haddon-Cave LJ, in the context of a dispute over whether a risk of dissipation had been shown in an application for a freezing order, addre......
-
Lakatamia Shipping Company Ltd v Nobu SU (aka SU HSIN CHI; aka Nobu Morimoto)
...of lack of risk of dissipation. ( Lakatamia Shipping Co Ltd v. Su [2019] EWHC 1145 (CH)) That judgment was overturned on appeal ( [2019] EWCA Civ 2203) albeit that the Court expressed some doubt about the case referring to the “tenuous” nature of the evidence and the Morimoto WFO therefore......
-
National Crime Agency v Javanshir Feyziyev
...Fordham J held that the threshold for making a PFO was “relatively low” [8]. I note that in Lakatamia Shipping Co Ltd v Morimoto [2019] EWCA Civ 2203, Haddon-Cave LJ observed at [38]: The ‘good arguable case’ test was the subject of a comprehensive review by the Court of Appeal recently in......
-
What Is The Test For "A Good Arguable Case" In A Freezing Order Application? An Issue Crying Out For Clarification
...test) The trigger for the current uncertainty was the Court of Appeal's 2019 decision in Lakatamia Shipping Co Ltd v Toshiko Morimoto [2019] EWCA Civ 2203. In briefly discussing the good arguable case requirement in freezing order applications, Haddon-Cave LJ cited the Niedersachsen test bu......
-
Asset Preservation Orders - Mareva Injunctions
...judgment proof. It is that concept which is referred to by the label “risk of dissipation.” 121 See Lakatamia Shipping Co v Morimoto , [2019] EWCA Civ 2203 at para 33, Haddon-Cave LJ: “What must be threatened is unjustiied dissipation. The purpose of a WFO is not to provide the claimant wit......
-
Table of cases
...Lakatamia Shipping Co Ltd v Su, [2021] EWCA Civ 1187 ................................ 206 Lakatamia Shipping Co v Morimoto, [2019] EWCA Civ 2203 .......................... 190 Lake St Martin First Nation v Canada (Attorney General), 2020 FC 165 ........... 94 Lake v Moose Jaw (City) (1981),......