4VVV Limited & Ors v Nicholas Spence & Ors
[2023] EWHC 1 (Comm)
Lee Chu v Kin Ming Je & Anor
23 January 2024
[2024] EWHC 90 (Ch)
High Court
Someone was scammed out of a lot of money in a big fraud. They sued the people they think are responsible. The judge said the case can continue and froze one scammer's assets to make sure the money could be recovered if the scammer loses the case. The judge didn't freeze the other person's assets because they didn't think that person was as directly involved.
Key Facts
- •Lee Chu (Ms Chu) claims equitable compensation and a proprietary claim against Kin Ming Je (Mr Je) and Sin Ting Rong (Ms Rong) for losses stemming from fraudulent investment schemes orchestrated by Miles Kwok.
- •Mr Je is accused of involvement in a US$1 billion fraud, acting as the financial architect and key money launderer.
- •Ms Chu invested approximately US$7.2 million in various schemes, recovering some funds from US authorities.
- •Interim applications included worldwide freezing and asset disclosure orders, strike-out applications, and jurisdiction challenges.
- •Mr Je and Ms Rong contested the court's jurisdiction, arguing that the case should be heard in New York.
- •The court considered applications to strike out the Particulars of Claim and to grant freezing orders under both conventional and Chabra jurisdictions.
- •The claim against Ms Rong was based on a proprietary claim through tracing.
Legal Principles
Principles for striking out a statement of case under CPR 3.4(2)(a) and (b)
CPR 3.4(2)(a) & (b); Siemens Mobility Ltd v High Speed Two (HS2) Ltd [2023] EWHC 2768 (TCC); Soriano v Societe D’Exploitation [2022] EWHC 1763 (QB); McDonald v Excalibur & Keswick Groundworks Ltd [2023] EWCA Civ 18
Requirements for pleading fraud or dishonesty
Kasem v University College London Hospitals NHS Foundation Trust [2021] EWHC 136 (QB); Three Rivers District Council v Governor and Company of the Bank of England (No 3) [2003] 2 AC 1(HL); CPR PD 16 8.2(1)
Test for freezing orders, including risk of dissipation
Lakatamia Shipping Company Ltd v Morimoto [2019] EWCA Civ 2203; Thane Investments Ltd v Tomlinson [2003] EWCA Civ 1272; Fundo Soberano De Angola v Santos [2018] EWHC 2199 (Comm)
Chabra jurisdiction for freezing orders
TSB Private Bank International SA v Chabra [1992] 1 WLR 231; Convoy Collateral Ltd v Broad Idea International Ltd [2021] UKPC 24; Mercantile Group (Europe) AG v Aiyela [1994] QB 366
Principles for staying proceedings pending foreign proceedings
Athena Capital v Secretariat of State for the Holy See [2022] EWCA Civ 1051
Outcomes
Mr Je's application to strike out the Particulars of Claim dismissed.
While the Particulars of Claim were not perfect, the claim was not bound to fail, and the imperfections were not so serious as to warrant strike-out, particularly given the complexity of the alleged fraud and the lack of disclosure.
Ms Rong's application to strike out the Particulars of Claim dismissed.
The claim against Ms Rong, while potentially overstated, had reasonable grounds, and striking it out would be unjust.
Worldwide freezing and asset disclosure order granted against Mr Je.
A good arguable case was established, and a real risk of dissipation was shown due to the nature of the alleged fraud and Mr Je's absence from the jurisdiction.
Ms Chu's application for a freezing order against Ms Rong dismissed.
A good arguable case was not established against Ms Rong, and no real risk of dissipation was shown. The Chabra jurisdiction was also not applicable due to lack of evidence of dissipation.
Jurisdiction applications dismissed; no stay of proceedings granted.
It was not in the interests of justice to grant a stay, and Ms Chu's election to pursue remedies in a bankruptcy proceeding did not bar her from bringing this case.
Application to amend allowed.
The amendments did not justify a different outcome on the existing applications, and could be dealt with separately.
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