Say Chong Lim (by his litigation friend Tekquinn Lim) v Chee Kong Ong
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Bacon |
| Judgment Date | 16 February 2023 |
| Neutral Citation | [2023] EWHC 321 (Ch) |
| Docket Number | Claim No: BL-2020-000735 |
| Court | Chancery Division |
[2023] EWHC 321 (Ch)
Mrs Justice Bacon
Claim No: BL-2020-000735
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS LIST (ChD)
Rolls Building
Fetter Lane
London, EC4A 1NL
James Bailey KC and James Goodwin (instructed by Withers LLP) for the Claimants
The First Defendant appeared in person and on behalf of the Second, Fourth and Fifth Defendants
The Third and Sixth Defendants did not appear and were not represented
Hearing dates: 15–17, 21 November, 2 December 2022
Approved Judgment
This judgment was handed down remotely at 1pm on 16 February 2023 by circulation to the parties or their representatives by email and by release to the National Archives.
INTRODUCTION
This is the trial of fraud and other claims brought by Mr Say Chong Lim (“ Mr Lim”) and companies associated with him, against Mr Chee Kong Ong (“ Mr Ong”) (who is referred to in many of the contemporaneous documents by his Anglicised name of “ Francis”) and companies under Mr Ong's control. The claims relate to various investments that Mr Lim made in property projects identified and managed by Mr Ong and his companies between August 2012 and April 2019. In essence, the claimants' case is that Mr Ong did not apply Mr Lim's funds for the various purposes intended, has not given the claimants the ownership interests in projects to which they were entitled, and has failed to account and/or provide information in relation to projects in which Mr Lim invested.
The claimants were represented throughout these proceedings by Mr Bailey KC and Mr Goodwin, instructed by Withers. Mr Ong was initially represented by Cardium Law, as well as by both leading and junior counsel. For around a month in April–May 2021 that legal team was replaced by Chan Neil & Co. Thereafter and until October 2022 the defendants were represented by Ince & Co, with leading counsel appearing for the defendants at hearings in October and November 2021. On 7 October 2022 Ince & Co came off the record and were not replaced.
At the trial, therefore, Mr Ong appeared as a litigant in person. It was, moreover, quickly apparent that he was not able to follow much of what was going on. At the outset of the trial he indicated that he would be using the electronic bundles that had been sent to him, which he proposed to read on his iPad. By the end of the first day of the trial it had become clear that he was not in fact able to do so. The claimants therefore provided him with a hard copy set of the most important of the trial bundles. Mr Ong was not, however, able to navigate those either. One of the claimants' solicitors therefore sat with Mr Ong at the trial to find the relevant documents for him from the bundles, where they were available in the hard copy set. While Mr Ong made both written and oral opening and closing submissions to the court, those submissions were very brief and of very little assistance to the court.
The trial was originally set down for three weeks. In the event, however, it occupied less than four days of court time (with a hearing of less than an hour on Day 4, and half a day on Day 5). That was partly a result of the brevity of Mr Ong's submissions. More importantly, however, Mr Ong and the second and fourth defendants were debarred from defending the claim at the outset of the trial, as a result of a succession of unless orders made between July and October 2022. For this and other reasons (which are discussed below) no witnesses were called to give evidence for either the claimants or the defendants.
The claimants nevertheless relied, with the court's permission, on affidavit and witness evidence from Mr Lim and two other factual witnesses, Mr Parimal Patel, an accountant who assisted Mr Lim, and Mr Henry Gould, a former employee of the fourth defendant. The claimants also relied on an expert report provided by Mr Gavin Pearson of Quantuma Advisory Limited (“ the Quantuma report”).
The defendants had adduced witness evidence from Mr Ong, as well as from Mr Arnold Hersheson, a director of or consultant to various of Mr Ong's companies, and Mr Naynesh Desai, a solicitor who assisted Mr Ong at various times with some of the transactions that are the subject of these proceedings. Mr Ong was invited to call evidence on the points on which the defendants were not debarred, but chose not to do so. The defendants' witness evidence was therefore strictly speaking not in evidence before me. I have, however, referred to it to a limited extent to set out the ambit of the dispute between the parties, and to explain – where relevant – what the defendants' position was prior to the debarring order. For completeness I should note that by the time the trial commenced, Mr Hersheson was seriously ill in hospital, and he very sadly died on or around 23 November 2022.
THE PARTIES
The Claimants
Mr Lim is a Malaysian businessman, who at the time of the trial was 82 years old. For the reasons explained further below, he acts in these proceedings by his litigation friend, his son Tekquinn Lim. He invested into the projects managed by Mr Ong through various corporate vehicles, including in particular the second claimant (“ CSI”) and another company that is not a claimant, Brilliant Vanguard Limited (“ BVL”). Both of those companies are incorporated in the British Virgin Islands and are controlled by Mr Lim.
The third claimant (“ Hyson House”) is an SPV which was incorporated to purchase and let out student accommodation in Nottingham. Its original shareholder was the second defendant, and until February 2020 Mr Ong acted as the de facto and then de jure director of the company. Shortly after incorporation of the company, however, 80% of the shares were transferred to BVL, and in February 2020 Mr Lim appointed Tekquinn Lim and a professional director Mr Murphy of Andco Corporate Services to the board of directors, alongside Mr Ong, such that Mr Lim now (effectively) controls Hyson House.
The fourth claimant (“ Lapland”) is an Isle of Man SPV incorporated to purchase and develop two residential blocks of flats in Derby, referred to as the “ Lapland project”. Its sole shareholder is CSI, and its directors are Mr Murphy and other employees of Andco.
The Defendants
Mr Ong is also a Malaysian businessman, who was 67 years old at the time of the trial. He is a director of all of the other defendants, which are all companies within the Greenacre group.
The second defendant (“ GCL”) operates as the holding company of the Greenacre group. Mr Ong is the chairman of GCL, and owns 50% of its shareholding, with his wife owning the remaining 50%. Since incorporation GCL has had various directors, but since April 2021 Mr Ong has been its sole director.
The third defendant (“ GCPL”) is a company set up to provide funding to property development projects in Kent, Bath and London, referred to as the “ GCPL projects”. The projects were set up as four SPVs: Greenacre (Thanet) Limited (“ Thanet”), Greenacre (Twerton Park) Limited (“ Twerton Park”), Greenacre (Twerton High Street) Limited (“ Twerton High Street”) and Imperial Lords View Limited (“ Lords View”).
GCPL is and has at all material times been wholly owned by GCL, but it is common ground that Mr Lim's company CSI is entitled to 50% of its shares. The original directors of GCPL were Mr Ong and a Greenacre employee, but from March 2019 to January 2020 Mr Ong was the sole director. Since January 2020 Mr Murphy has been added as an additional director, to represent Mr Lim's interest in the company.
Twerton Park and Twerton High Street are also wholly owned by GCL; and Thanet is owned 50% by GCL and 50% by a third party, Project Ten. Lords View was owned 50% by GCL and 50% by another third party, but was put into liquidation and was then dissolved in December 2020. Mr Lim does not have any representation on the boards of directors of any of these SPVs, and as discussed below their beneficial ownership is in issue in these proceedings.
The fourth defendant (“ GPL”) is a wholly owned subsidiary of GCL, and carried out development work in relation to various projects including the Lapland project. Various Greenacre employees have in the past been directors, but since March 2020 Mr Ong has been its sole director.
The fifth defendant (“ GC180”) is the SPV for the development of properties in Bermondsey (the “ Bermondsey project”). It is a wholly owned subsidiary of GCL. Various Greenacre employees have in the past been directors, but since January 2020 Mr Ong has been its sole director.
The sixth defendant (“ CGW”) is the SPV for the development and letting of student accommodation in Cheltenham, Gloucester and Worcester. Again, it is a wholly owned subsidiary of GCL. Various Greenacre employees have in the past been directors, but since March 2020 Mr Ong has been its sole director. CGW is now, however, in compulsory liquidation pursuant to a winding-up order made in August 2022, with the Official Receiver as the liquidator. The Official Receiver reported to the court on 9 November 2022 indicating that Mr Ong had not responded to attempts to contact him, had failed to surrender to the liquidation, and that it currently held no books or records for the company. By an order made on 7 November 2022, the claimants were given leave to continue their claims against CGW. The Official Receiver...
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