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

Cresta Overseas was a company of which Mr Su was a director until 13^th May 2013 when he appointed his 18 year old daughter, Ms Airi Morimoto, to replace him. The judge found that Mr Su was the beneficial owner of the company, which owned two villas in Monaco which were mortgaged to Barclays Bank. The mortgage loan agreement had been signed by Mr Su on behalf of Cresta Overseas, and was guaranteed by Mr Su personally.

By 2015 Cresta Overseas had defaulted on the loan from Barclays, and Barclays sought to enforce its security. On 16^th March 2015, it issued proceedings in the Monaco court against Cresta Overseas, seeking the auction of the villas in order to recoup its loans. Maître Zabaldano was retained by Cresta Overseas. On 9^th April 2015 Mr Chang replaced Ms Morimoto as the sole director of Cresta Overseas. On 18^th June 2015 a Mr James Garrett became a director of the company.

On 30^th September 2015 Lakatamia’s Monaco lawyer wrote to the lawyers acting for Barclays, giving notice of the worldwide freezing order, stating that Mr Su appeared to have an interest in Cresta Overseas, and drawing attention to the penal notice on the first page of the freezing order. The letter was copied to Maître Zabaldano. Maître Zabaldano’s evidence in his challenge to the jurisdiction of the English court was that he took note of the letter and its attachments, but found it irrelevant ‘to what we were doing for Cresta in Monaco as against Barclays, which was to prevent the Villas from being sold’. He said that he thought the freezing order was of no consequence because the letter was merely copied to his firm and because Lakatamia’s lawyers never set out how he should act as a result of the English decisions ‘or how we could legitimately act in defiance of our instructions from Cresta’.

On 20^th October 2015 Lakatamia applied to intervene in the proceedings between Barclays and Cresta Overseas in Monaco. Its application recited the liability judgments, the failure of Mr Su’s appeal, and the freezing order, and submitted that Cresta Overseas appeared to be controlled by Mr Su. It submitted that Lakatamia could be prejudiced if the auction went ahead resulting in money being paid to Cresta Overseas which could ultimately benefit Mr Su, contrary to the English freezing order. The application to intervene was rejected the next day, on the basis that the materials relied on by Lakatamia had not been translated into French, and were therefore excluded from the proceedings, leaving Lakatamia with nothing to support its claims.

The villas were sold on 21^st October 2015 for a total price of €65.1 million. The sale price was transferred in November 2015 to the account of the Caisse de Dépôts et Consignations in Monaco. This was usual procedure for a court-ordered sale to ensure that all creditors received their share of the sale proceeds. Most of the proceeds were distributed in February 2017. Some €34.6 million was paid to Barclays and €27,127,855.01 was paid to Maître Zabaldano as the lawyer for Cresta Overseas, into his client account.

On 21^st February 2017, on Mr Su’s instruction, Mr Chang instructed Maître Zabaldano to transfer all the remaining cash proceeds from the sale of the villas from his client account to the account of UP Shipping, save for about €200,000 which Maître Zabaldano was instructed to keep as a retainer to continue acting on behalf of Cresta Overseas in its dispute with Barclays. Maître Zabaldano replied the same day to Mr Garrett, asking him to sign the instruction in addition to Mr Chang, but was told that Mr Garrett was no longer a director. Accordingly Maître Zabaldano accepted the instruction signed by Mr Chang alone and, on 23^rd February 2017, directed his bank to transfer the money held in his client account for Cresta Overseas to UP Shipping. Converted into US dollars, the amount transferred was US $26,712,911.68.

UP Shipping was another of the3 companies of which Mr Chang was a director. It is the transfer to UP Shipping of the money held by Maître Zabaldano which has given rise to the present claims against the defendants.

Some months after the transfer, on 6^th July 2017, the Monaco courts recognised the liability judgments. By then, however, the money had gone.

On 17^th April 2018 Maître Zabaldano sent an email to Mr Su in which he stated his understanding that ‘you no longer are the UBO’ of Cresta Overseas, thus indicating an understanding that Mr Su had previously been the ultimate beneficial owner of that company.

On 27^th and 28^th February 2019, Mr Su was cross-examined as to his assets before Sir Michael Burton GBE. He was asked about the €27 million paid to Maître Zabaldano in February 2017. He said that he believed that the money had gone back to his family, although he claimed that this was on his mother’s instruction. This cross-examination was followed by an application to commit Mr Su to prison for contempt of court for dissipating the proceeds of sale of the villas. On 29^th March 2019 Sir Michael Burton committed Mr Su to prison for 21 months.