JTrust Asia Pte Ltd v Group Lease Holdings Pte Ltd and others

JudgeSteven Chong JA
Judgment Date01 June 2020
Neutral Citation[2020] SGCA 54
Citation[2020] SGCA 54
Defendant Counseland Daniel Tan Shi Min and Abhinav Ratan Mohan (Shook Lin & Bok LLP),Teh Kee Wee Lawrence, Pan Xingzheng Edric, Chia Huai Yuan and Elias Benyamin Arun (Dentons Rodyk & Davidson LLP)
Published date04 June 2020
Hearing Date21 May 2020
Plaintiff CounselChan Leng Sun SC (instructed counsel), Shirleen Low, Danitza Hon Cai Xia, Lee Zhe Xu and Yiu Kai Tai (Wong & Leow LLC)
Docket NumberCivil Appeal No 21 of 2020 (Summons No 21 of 2020)
CourtCourt of Appeal (Singapore)
Date01 June 2020
Subject MatterFraud and deceit,Mareva injunctions,Misrepresentation,Tort,Conspiracy,Civil Procedure
Steven Chong JA (delivering the judgment of the court): Introduction

The law is clear that an applicant for a Mareva injunction would need to satisfy the court that it has a good arguable case and that there is a real risk of dissipation of the defendant’s assets to defeat any judgment which might be made in the applicant’s favour. By its interlocutory nature, evidence in support of such an application need not be strictly proved at this stage.

What happens to the Mareva injunction if the trial is resolved against the applicant? The dismissal of the claim would typically result in the discharge of the injunction. In the event of an appeal, what is the applicable threshold for the unsuccessful applicant to satisfy in order to continue the injunction pending the appeal? The authorities rightly suggest that the threshold should no longer be a good arguable case since a trial has already been concluded against the applicant. Instead the cases suggest that the threshold should be that of a good arguable appeal. In practical terms, what is the true difference between these two thresholds? This judgment will thus examine what the threshold to establish a good arguable appeal actually entails and how it is, in substance, different from the threshold of a good arguable case.

Procedural history

In HC/S 1212/2017 (the “Suit”), the appellant, JTrust Asia Pte Ltd (“JTA”), brought (a) an action in the tort of deceit against the first respondent, Group Lease Holdings Pte Ltd (“GLH”), and the second respondent, Mr Mitsuji Konoshita (“MK”); and (b) an action against the first to seventh respondents in the tort of conspiracy, alleging that they had conspired to defraud JTA of its investment in the parent company of GLH.

Pursuant to this action, JTA successfully obtained ex parte Mareva injunctions against GLH, MK and the third respondent, Cougar Pacific Pte Ltd (“Cougar”) on 26 December 2017. These Mareva injunctions were subsequently set aside by the High Court judge (“the Judge”) on 23 February 2018 in the decision of JTrust Asia Pte Ltd v Group Lease Holdings Pte Ltd and others [2018] SGHC 38 (at [16]).

In the appeal against the Judge’s decision to set aside the Mareva injunctions in CA/CA 46/2018, this court reinstated the domestic Mareva injunctions ordered against MK, GLH and Cougar and expanded the Mareva injunctions against GLH and Cougar to worldwide Mareva injunctions (collectively referred to as the “Injunctions”), in the decision of JTrust Asia Pte Ltd v Group Lease Holdings Pte Ltd and others [2018] 2 SLR 159 ("JTrust CA") (at [3] and [122]).

Following the trial of the Suit, the Judge dismissed JTA’s claims in deceit and conspiracy against the first to seventh respondents on 12 February 2020 (see JTrust Asia Pte Ltd v Group Lease Holdings Pte Ltd and others [2020] SGHC 29 (the “Judgment”)). The extinction by judgment of JTA’s claims discharged the Injunctions and JTA’s application to renew the Injunctions pending its appeal was refused by the Judge. The Judge however, ordered a temporary stay of the discharge to allow JTA the opportunity to make an application to this court. On 13 February 2020, JTA filed an appeal against the Judgment in CA/CA 21/2020 (“CA 21”).

The present application by JTA under CA/SUM 21/2020 (“SUM 21”) is for an order that the Injunctions be continued or renewed pending the determination of CA 21.

Given the context under which SUM 21 came to be filed, the following issues arise for our determination: what are the relevant legal principles governing the grant of Mareva relief pending an appeal against the dismissal of the applicant’s claim; whether JTA has a good arguable appeal; and whether there continues to be a real risk of dissipation of assets with respect to MK, GLH and Cougar.

Before we address the above issues, it would be useful to refer to a brief summary of the material facts in order to properly appreciate the evidence which was before the Judge when he made the decision to dismiss JTA’s claims.

Material background facts

JTA is a Singapore-incorporated investment company and is wholly owned by J Trust Co, Ltd ("J Trust Japan"), a company listed on the Tokyo Stock Exchange.

GLH is a wholly owned subsidiary of Group Lease Public Company Ltd (“GL Thailand”), a Thai public company. GLH has four directors, including MK and Mr Tatsuya Konoshita (“TK”), who is MK’s brother and is also a director of GL Thailand. MK is a Japanese national and a Singapore Permanent Resident. He was the chairman of GL Thailand until October 2017, when he relinquished his office after the publication of an incriminating news release by the Securities and Exchange Commission of Thailand (“the Commission”), the regulatory body in Thailand that oversees listed companies. After MK stepped down, TK assumed his office.

The third respondent, Cougar, is a Singapore incorporated company which has the same registered address as GLH. Its sole shareholder is a company incorporated in Luxembourg called Pacific Opportunities Holdings SARL (“Pacific”), which was owned by Mr Tep Rithivit, a Cambodian businessman, until 12 June 2018. Mr Rithivit was a director of Cougar from August 2015 to end 2017. Pacific was acquired by Saronic Holdings Ltd (“Saronic”) on 12 June 2018, after the Suit was filed but prior to the commencement of the trial.

On 9 March 2017, the Stock Exchange of Thailand (“the Exchange”) issued a public notice to GL Thailand, requiring it to provide to its investors information on loans that it had extended to two sets of borrowers (“the GLH Loans”). The first set is known as the “Singapore Borrowers”, who comprise Cougar, Pacific, Mr Rithivit and a Brazilian company called Kuga Reflorestamento Ltda (“Kuga”), which was also wholly owned by Pacific (and, ultimately, by Mr Rithivit). The second set is referred to as the “Cyprus Borrowers”. They comprise the fourth to seventh respondents, which are companies incorporated in Cyprus.

Yoichi Kuga (“YK”), who claimed to be the beneficial owner of Cougar, joined the action on 8 May 2019 and affiliates himself with the first to seventh respondents (Judgment at [4]).

APF Group is a corporate group of companies with a complex structure which includes APF Group Co Ltd (“APF BVI”), APF Holdings Co Ltd (“APF Thailand”), Showa Holdings Co Ltd (“Showa”), Wedge Holdings Co Ltd (“Wedge”) and a wholly-owned subsidiary of Wedge, Engine Holdings Pte Ltd (“Engine”). JTA alleges that the APF Group is controlled by MK through APF BVI which was MK’s “personal asset management and investment vehicle”.

Between March 2015 and September 2017, JTA made a number of investments in GL Thailand. During this time, MK was the chairman of GL Thailand. The investments were as follows: On 20 March 2015, JTA invested US$30m in GL Thailand under the first investment agreement (“1st IA”) which provided that JTA would subscribe to US$30m worth of GL Thailand’s convertible debentures. JTA completed the subscription on 22 May 2015. In December 2015, JTA exercised its right to convert the debentures into shares at 10 Thai Baht per share. This gave JTA 98.1m shares in GL Thailand, which was 6.43% of the company’s shareholding. In June 2016, JTA entered into a second similar investment agreement (“2nd IA”) with GL Thailand, under which JTA subscribed for US$130m of GL Thailand’s convertible debentures. The subscription for the convertible debentures was completed on 1 August 2016. JTA has yet to convert the debentures into shares. If JTA elects not to do so, it is entitled to be repaid its investment in 2021. On 1 December 2016, JTA entered into a third similar investment agreement (“3rd IA”) with GL Thailand, under which JTA subscribed for a further US$50m of GL Thailand’s convertible debentures and has likewise not converted the debentures into shares. The subscription of the convertible debentures was completed on 20 March 2017. If JTA chooses not to do so, it is entitled to be repaid its investment in 2020. Although it is not precisely clear which month in 2020 this debenture is due for repayment, during the hearing, counsel for JTA, Mr Chan Leng Sun SC, informed the court that the debentures are indeed already due for repayment but GL Thailand has denied liability and has brought a counterclaim in the Thai proceedings. Nothing turns on this development. A fourth set of investments consisted of purchases of GL Thailand’s shares and warrants on the open market. These purchases were made between March and September 2017.

Each of the three investment agreements contained an express warranty in respect of the accuracy of GL Thailand’s consolidated financial statements.

It is not disputed that GL Thailand’s financial statements were prepared on a consolidated basis (meaning, that GL Thailand’s financial statements incorporated the financial information of its subsidiaries, including GLH) (Judgment at [9]). GL Thailand filed its accounts on a quarterly and annual basis and GLH’s revenue, assets and profits were duly reflected in GL Thailand’s quarterly and annual financial statements. In particular, over a period of just over two years which corresponded to the period of the alleged fraud, (ie, from 1Q2015 to 2Q2017), GL Thailand’s reported quarterly net profits increased approximately 300% from 110,238,000 to 336,852,000 Thai Baht. The chronology of JTA’s respective investments in GL Thailand and the dates in which GL Thailand’s financial statements were released is summarised below at Annex B.

Further, prior to each of JTA’s investments in GL Thailand, representations were made as to GL Thailand’s financial health and profitability by MK to Mr Nobuyoshi Fujisawa (“Fujisawa”), the managing director and Chief Executive Officer of JTA, and Mr Shigeyoshi Asano (“Asano”), a director of JTA and J Trust Japan. On 9 March 2017, the Exchange required information from GL Thailand on the loans that it had extended to (a)...

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5 cases
  • ED&F Man Capital Markets Ltd v Straits (Singapore) Pte Ltd
    • Singapore
    • Court of Appeal (Singapore)
    • 6 July 2020
    ...plaintiff may find it difficult to prove its case as a matter of evidence (JTrust Asia Pte Ltd v Group Lease Holdings Pte Ltd and others [2020] SGCA 54 at [88]). It was not disputed that the Companies would be the main wrongdoers in any action for fraud or conspiracy,43 and so the exclusion......
  • JTrust Asia Pte Ltd v Group Lease Holdings Pte Ltd and others
    • Singapore
    • Court of Appeal (Singapore)
    • 6 October 2020
    ...Injunctions be continued or renewed, pending the determination of CA 21 in JTrust Asia Pte Ltd v Group Lease Holdings Pte Ltd and others [2020] SGCA 54 (“JTrust (SUM 21)”). We reinstated the domestic Mareva injunction against MK and the worldwide Mareva injunction against GLH, but dismissed......
  • JTrust Asia Pte. Ltd v Mitsuji Konoshita
    • British Virgin Islands
    • High Court (British Virgin Islands)
    • 19 August 2020
    ...AC 396 at 405 E – F (Diplock LJ). 19 Unreported EWCA 1st February 1999. 20 JTrust Asia Pte Ltd v Group Lease Holdings Pte Ltd and others [2020] SGCA 54 on Summons No. 21 of 21 JTrust Asia Pte Ltd v Group Lease Holdings Pte Ltd and others [2020] SGCA 54 on Summons No. 21 of 2020 at paragraph......
  • JTrust Asia Pte Ltd v Group Lease Holdings Pte Ltd and others
    • Singapore
    • Court of Appeal (Singapore)
    • 26 March 2021
    ...to be met before the court will grant a Mareva injunction pending appeal (JTrust Asia Pte Ltd v Group Lease Holdings Pte Ltd and others [2020] 2 SLR 490 (“JTrust (pending appeal)”) at [39] to [40]). The English Court of Appeal in Emmott v Michael Wilson & Partners Ltd [2019] 4 WLR 53 (“Emmo......
  • Request a trial to view additional results
1 books & journal articles
  • Civil Procedure
    • Singapore
    • Singapore Academy of Law Annual Review No. 2020, December 2020
    • 1 December 2020
    ...SA [2020] 1 SLR 950 at [63]. 108 Ernest Ferdinand Perez De La Sala v Compañía De Navegación Palomar SA [2020] 1 SLR 950 at [61]. 109 [2020] 2 SLR 490. 110 JTrust Asia Pte Ltd v Group Lease Holdings Pte Ltd [2020] 2 SLR 490 at [3]–[5]. 111 JTrust Asia Pte Ltd v Group Lease Holdings Pte Ltd [......

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