[2025] EWHC 2648 (Comm)

In my judgment, even though there has been a good cause for allowing the Defendants to pursue the Discharge Application, it does not follow that there is no longer a seriously arguable claim to support the proprietary and/or freezing injunctions.

Although the way that Wenda gets there is somewhat different under the Amended Particulars of Claim, it remains Wenda’s case that Syner and Effs are each obliged to account to them as trustees for monies received. The monies have been received not from buyers (and paragraph 10.2(2) of the Amended Particulars of Claim would seem to be wrong) but from HIF in the case of Syner. Wenda continue to plead that it was the beneficial owner of such sums and Syner was a trustee of the monies received. Whether or not what Ms Wang and Mr Xiong agreed was that the receipts from HIF would be held on trust for Wenda or was that there was to be a purely contractual relationship between Wenda and Syner turns upon the Court’s assessment at trial of what the parties said as well as a detailed review of any contemporaneous documentation and an assessment of the background facts. These would include that it would be unusual (but not impossible) for Syner as a wholly owned subsidiary of Wenda to have a purely contractual relationship which allowed Syner to retain profit which would otherwise have accrued to Wenda. These are matters for the trial and not the sorts of issues that can be determined on an application of this nature, where the Court is deploying the same test as that for summary judgment. Accordingly, there remains a serious issue to be tried as between Syner and Effs on the one hand and Wenda on the other as to how the arrangements were to work, if not exactly the same serious issue as the one that Jacobs J was addressed on in November 2021.

Even if there was a purely contractual relationship between Syner/Effs and Wenda, that would not mean that there is not still a serious issue to be tried as to whether Syner/Effs were contractually obliged to account to Wenda for the sums received from HIF and whether they have done so. If it was a purely contractual obligation, that would not give rise to an entitlement to seek a proprietary injunction, but would still be sufficient for the freezing order, assuming it was otherwise appropriate to grant such an order.

The other changes made in the Amended Particulars of Claim in the claim against Effs, which acknowledged an entitlement to charge interest at 10% per annum on monies advanced, do not in my judgment cause the claim against Effs to be one that does not raise a serious issue to be tried. These are relatively minor amendments of a clarificatory nature and do not cause what otherwise gives rise to a serious issue to be tried no longer to be such. And to be fair to Mr Jones, he effectively accepted this in the course of his oral submissions.

As far as the position of Ms Wang is concerned, Mr Jones did not submit that if there remained a serious issue to be tried on the case against Syner or Effs as trustees, there could not be a serious issue to be tried as to Ms Wang’s liability in equity to Wenda. Given that there is no attack on the decision of Jacobs J in this regard, I do not need to consider whether Wenda is correct on its analysis set out in the Amended Particulars of Claim as to her potential liability, such as to be the basis for a proprietary injunction. Whether Wenda is entitled to proprietary relief against her will be a matter for trial and I say no more on that topic.

I reject the suggestion that the change in case should lead to the conclusion that the case is as weak as the case had been against Mr Petit in respect of whom Jacobs J held that there was not a good arguable case or serious issue to be tried. His reasoning for not making an order against Mr Petit was set out at paragraph 39 of his judgment, namely that Mr Petit’s involvement in the matters giving rise to the claim was not established; he had become a director of Effs but only after the relevant monies had been taken. That reasoning, even on the amended case, does not apply to any of the other Defendants.

In passing, it is right to note that while Mr Jones did make it clear that Ms Wang denied “in strong terms” that she was dishonest in connection with the double invoicing scheme that I am going to address shortly, he did not submit that Jacobs J was wrong to find that there was a real risk of dissipation of assets by the Defendants, nor that the Court should now grant the Discharge Application on the basis that no such risk had been made out.