Lakatamia Shipping Company Limited v Tseng Yu Hsia & Anor

An undefended claim may be tried on witness statements and documents, but the claimant must still prove the case on the balance of probabilities. Fraud allegations require cogent evidence, and an inference of dishonesty should be drawn only where it is the only reasonable inference. A prior judgment does not bind a party who was not involved, although the evidence recorded in it may be considered and may support the same factual conclusion. The court applied established elements of unlawful means conspiracy and the Marex tort to the concealment of assets subject to enforcement. It left open whether general participation in obstructing creditor enforcement is sufficient without proof of knowledge of the particular creditor. Default judgment was entered for quantified loss, but refused for an unquantified litigation-conspiracy claim.

Lakatamia brought merits claims against Tseng Yu Hsia for unlawful means conspiracy and the Marex tort concerning the concealment of proceeds from the sale of an aircraft and Monaco villas. The defendants did not participate. The court considered documentary proof, the evidential significance of an earlier judgment in related proceedings, applicable law, knowledge of the freezing order and judgment debt, limitation, and the elements of the torts.

Lakatamia also sought default judgment against Chiharu Morimoto concerning Japanese property-sale proceeds and alleged assistance with a litigation conspiracy involving forged documents. The central issues were whether the claims were established and quantified, and what relief should be granted in default.

1. Proceeding in the defendants’ absence. The court could determine Tseng’s claim on witness statements and documents without oral evidence, following Lighting and Lamps UK Ltd v Clarke [2016] EWCA Civ 5. It nevertheless had to be satisfied on the balance of probabilities and maintain a fair presentation of the case. Given the seriousness of the allegations, compelling evidence was required.
2. Earlier judgment and applicable law. The factual findings in the earlier related judgment did not bind Tseng. However, the substance of evidence recorded in that judgment could be considered as evidence, with such weight as appropriate. The court applied the default rule in FS Cairo (Nile Plaza) LLC v Brownlie [2021] UKSC 45: where foreign law was not pleaded or proved, English law applied.
3. Tseng’s liability. The court applied the elements of unlawful means conspiracy and the Marex tort. It found that the sale proceeds were assets amenable to enforcement and within the freezing order. Tseng acted as a trusted conduit for the Su family, knew of the freezing order and judgment debt, participated in concealing both sets of proceeds, and caused loss to Lakatamia. Judgment was entered against her for US$857,329.73 and €27,127,855.01, with interest of US$8,296,393.94 to 16 November 2023.
4. Unresolved issue. The court identified but did not finally decide whether knowing participation in a general scheme to obstruct creditors would suffice for unlawful means conspiracy or the Marex tort without knowledge of the particular creditor. It also expressed doubts about a proposed litigation conspiracy based on forged evidence, including whether such conduct gives rise to a private tort.
5. Morimoto and costs. Service and notice were sufficient. Default judgment was entered for JPY 240 million concerning the Tokyo sale proceeds, effective subject to an application to set it aside within 23 days, with interest. Default judgment was refused for the unquantified Litigation Conspiracy claim. Costs were summarily assessed at £386,383.16, payable 65% by Tseng and 35% by Morimoto.