CA-2024-001802 - [2025] EWCA Civ 1389

The Deputy Judge rejected the claim against Mr Chang because he was not satisfied that Mr Chang knew, at the time he ordered the transfer of the proceeds of sale to UP Shipping, (1) that Mr Su was bound by the freezing order or (2) that Mr Su still owed the judgment debt at the relevant time, although (3) the Deputy Judge was satisfied that Mr Chang knew that Mr Su was the ultimate beneficial owner of Cresta Overseas. He took the view that the evidence showed no more than that Mr Chang did whatever he was told to do by Mr Su, without necessarily having any understanding of what he was doing or why he was doing it.

Mr S. J. Phillips KC for Lakatamia submitted that this finding was plainly wrong, being one which no reasonable judge could have reached (Volpi v Volpi [2022] EWCA Civ 464, [2022] 4 WLR 48, para 2). He pointed out that Mr Chang was a director of at least three of the companies who were respondents to the freezing order; that he swore an affidavit of assets on behalf of one of those companies, Iron Monger I Ltd; that there was no reason for Mr Chang to have thought that the freezing order was no longer in force by the time of the sale of the villas; that Mr Chang was a long-standing employee of Mr Su charged with the management of numerous of his companies and, as such, must have been aware of the disruption which the freezing order would inevitably have caused; that he must have discussed this with his co-director of Cresta Overseas, Mr Garrett; that he must have known that Mr Garrett had resigned abruptly when instructed to transfer the proceeds of sale to UP Shipping; and that he must have known that the existence of the freezing order was among the reasons why Cresta Overseas had been unable (as the Deputy Judge found) to refinance its obligations to Barclays Bank, resulting in the villas having to be forcibly sold.

As to Mr Chang’s knowledge of the judgment debt, Mr Phillips relied in addition on the facts that Mr Chang was a director of at least three of the defendants against whom the liability judgments were entered; that he must have known that those companies had joined in the application for permission to appeal against the liability judgments, and that the appeal lapsed when security was not provided; that there was no reason for him to think that the judgment debt had been paid by the time of the sale of the villas; and that he must have been aware of Lakatamia’s unsuccessful attempt to intervene in the proceedings in Monaco to prevent the sale of the villas, not least because he must have discussed this with Maître Zabaldano.

Despite the high bar which faces an appellant seeking to disturb a judge’s findings of fact, I would accept these submissions. It beggars belief that Mr Chang did not know of the judgment debt or the freezing order when the villas were sold and the proceeds of sale dissipated. If he did not know, that can only be because he deliberately turned a blind eye and did not want to know. But even if that were so, it would be sufficient to fix him with the relevant knowledge for the purpose of liability.