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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Huang & Ors v Credit Suisse (UK) Ltd [2025] EWHC 1159 (Ch) (12 May 2025) URL: https://www.bailii.org/ew/cases/EWHC/Ch/2025/1159.html Cite as: [2025] EWHC 1159 (Ch) |
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BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
PROPERTY TRUSTS AND PROBATE LIST (ChD)
Fetter Lane, London, EC4A 1NL |
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B e f o r e :
sitting as a Deputy Judge of the High Court
____________________
(1) ZHIMING HUANG | ||
(2) XIAOXING WANG | ||
(3) MUER HUANG | Claimants | |
-and- | ||
CREDIT SUISSE (UK) LIMITED | Defendant |
____________________
John McGhee KC and Daniel Gatty (instructed by Ashurst LLP) for the Defendant
Hearing dates : 9 and 10 December 2024
____________________
Crown Copyright ©
Deputy High Court Judge Caroline Shea KC:
Introduction
The factual background
The Claim
The Defence
Basis for the application
Basis for opposing the application
Non-party disclosure
Evidence
The law
Summary Judgment
"i) The court must consider whether the claimant has a "realistic" as opposed to a "fanciful" prospect of success.
ii) A "realistic" claim is one that carries some degree of conviction. This means a claim that is more than merely arguable.
iii) In reaching its conclusion the court must not conduct a "mini-trial".
iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents.
v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial.
vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case.
vii) On the other hand it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant's case is bad in law, the sooner that is determined, the better. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction."
"that the defence sought to be argued must carry some degree of conviction" (at [8]).
And at [10], Potter LJ after observing that where there are significant differences between the parties as far as the factual issues are concerned the court is in no position to conduct a mini-trial, went on
"However, that does not mean that the court has to accept without analysis everything said by a party in statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporary documents. If so, issues which are dependent upon those factual assertions may be susceptible of disposal at an early stage so as to save the cost and delay of trying an issue the outcome of which is inevitable."
"… In a case where, with knowledge of the material facts, clear admissions and writing are unambiguously made by a sophisticated businessman who has ample opportunity to advance his defence prior to document, a judge is in my view entitled to look at a case "in the round", in the sense that, if satisfied with the genuineness of the admissions, issues of fact which might otherwise require to be resolved at trial may fall away."
"[94] For the reasons which I have just given, I think that the question is whether the claim has no real prospect of succeeding at trial and that has to be answered having regard to the overriding objective of dealing with the case justly. But the point which is of crucial importance lies in the answer to the further question that then needs to be asked, which is what is to be the scope of that inquiry?
[95] I would approach that further question in this way. The method by which issues of fact are tried in our courts is well settled. After the normal processes of discovery and interrogatories have been completed, the parties are allowed to lead their evidence so that the trial judge can determine where the truth lies in the light of that evidence. To that rule there are some well-recognised exceptions. For example, it may be clear as a matter of law at the outset that even if a party were to succeed in proving all the facts that he offers to prove he will not be entitled to the remedy that he seeks. In that event a trial of the facts would be a waste of time and money, and it is proper that the action should be taken out of court as soon as possible. In other cases it may be possible to say with confidence before trial that the factual basis for the claim is fanciful because it is entirely without substance. It may be clear beyond question that the statement of facts is contradicted by all the documents or other material on which it is based. The simpler the case the easier it is likely to be to take that view and resort to what is properly called summary judgment. But more complex cases are unlikely to be capable of being resolved in that way without conducting a mini-trial on the documents without discovery and without oral evidence. As Lord Woolf said in Swain v Hillman, at p 95, that is not the object of the rule. It is designed to deal with cases that are not fit for trial at all."
"This summary jurisdiction of the court was never intended to be exercised by a minute and protracted examination of the documents and facts of the case, in order to see whether the plaintiff really has a cause of action. To do that is to usurp the position of the trial judge, and to produce a trial of the case in chambers, on affidavits only, without discovery and without oral evidence tested by cross-examination in the ordinary way. This seems to me to be an abuse of the inherent power of the court and not a proper exercise of that power."
"troubled about entering summary judgment in a case in which the success of the Claimants case involves, as this one does, establishing allegations of dishonesty and fraud, which are strongly denied, which cannot be conclusively proved by, for example, a conviction before a criminal court",
and on similar dicta in Wrexham FC Ltd v Crucialmove [2006] EWCA Civ 237, CA at [56-58]; and Allied Fort Insurance Services v Ahmed [2015] EWCA Civ 841 at [81], [89 - 90].
Standard of proof
"Mr Lord also relied on paras 51–58 in Bryan J's judgment as to the inherent improbability of fraudulent conduct. He cited Andrew Smith J in Fiona Trust at para 1438, where he said that "[it] is well established that 'cogent evidence is required to justify a finding of fraud or other discreditable conduct': per Moore-Bick LJ in Jafari-Fini v Skillglass Ltd [2007] EWCA Civ 261 at [73]. This principle reflects the court's conventional perception that it is generally not likely that people will engage in such conduct: 'where a claimant seeks to prove a case of dishonesty, its inherent improbability means that, even on the civil burden of proof, the evidence needed to prove it must be all the stronger', per Rix LJ in Markel International Insurance Company Ltd v Higgins [2009] EWCA Civ 790 at [50]. The question remains one of the balance of probability, although typically, as Ungoed-Thomas J put it in In re Dellow's Will Trusts [1964] 1 WLR 451, 455 (cited by Lord Nicholls in In re H [1996] AC 563, 586H), 'The more serious the allegation the more cogent the evidence required to overcome the unlikelihood of what is alleged and thus to prove it'. Associated with the seriousness of the allegation is the seriousness of the consequences, or potential consequences, of the proof of the allegation because of the improbability that a person will risk such consequences: see R (N) v Mental Health Review Tribunal (Northern Region) [2005] EWCA Civ 1605; [2006] QB 468, para 62, cited in In re D (Secretary of State for Northern Ireland intervening) [2008] UKHL 33; [2008] 1 WLR 1499, para 27, per Lord Carswell."
"whether anything should be said about the cogency of the evidence needed to "tip the balance". For my part I do not find those words helpful since they are little more than a statement of the obvious; and there is a danger that the repeated use of the words will harden into a formula, which … may lead to misunderstanding."
Lady Hale went on to decry the grip that the nostrum "the more serious the allegation, the more cogent the evidence needed to prove it" had taken and said "it is time for us to loosen its grip and give it its quietus".
"I am prepared to accept that in a very broad general sense, it may well be true to say that it is inherently improbable that a particular defendant will commit a fraud. But it all depends on a wide range of factors. For example, if the court is satisfied (or it has been admitted) that a defendant has acted fraudulently or reprehensibly on one occasion, it cannot necessarily be considered inherently improbable that such defendant would have done so on another; or if, for example, the court is satisfied (or it has been admitted) that a defendant has created or deployed sham or false documents, the court cannot assume that it is inherently unlikely that such defendant did so on other occasions."
Rectification of the register
"[66] …. Thus, in a case within para. 6(3), the court must ask itself two questions: (1) are there exceptional circumstances in this case? and (2) do those exceptional circumstances justify not making the alteration? The first of these questions requires one to know what is meant by "exceptional circumstances" and then to establish whether such circumstances exist as a matter of fact.….
[67] "Exceptional" is an ordinary, familiar English adjective. It describes a circumstance which is such as to form an exception, which is out of the ordinary course, or unusual or special, or uncommon; to be exceptional a circumstance need not be unique or unprecedented, or very rare but it cannot be one that is regularly, or routinely, or normally encountered: … Further, the search is not for exceptional circumstances in the abstract but those which have a bearing on the ultimate question whether such circumstances justify not rectifying the register."
Subrogation
Approach to the test for summary judgment
The case for summary judgment
(1) the confessions/admissions of Mr Zhang;
(2) the absence of any paperwork connecting the Claimants to the Charges;
(3) the missing £1.737 million, which by inference must have been misappropriated by Mr Zhang, abetted by Mr Ho;
(4) the lack of any obvious or even potential reason why, if the Claimants had originally signed the Charges, they should now be denying that they did so;
(5) the evidence showing that the Loans were intended for investment in Made in UK Limited, a company of Mr Zhang in which the Claimants had no interest;
(6) the evident forgeries of identity documents provided by Mr Ho to CSUK prior to entering into the Charges;
(7) other fraudulent or suspect behaviour by Mr Ho;
(8) the travel records said to show that the First Claimant had not come to the UK at a time when Mr Ho intimated to solicitors representing lenders involved in the Former Charges that the First Claimant had travelled to the UK for the purpose of signing the Former Charges.
Mr Zhang confessions/admissions
"Regarding [the Claimants'] properties in London, they were never authorised or entrusted to me … All loans mortgages and selling of their apartments are my personal actions without their knowledge. I will take all responsibilities for my behaviours. I seek to be forgiven. I did not tell my wife… about what I did, nor did she know it."
The statement went on to identify the properties that he said had been mortgaged or sold by him. They included the Six Properties, and also Flat 503 (which it is accepted was never in fact purchased).
No evidence of the Claimants' involvement in Charges
£1.737 million
"For example, if the court is satisfied (or it has been admitted) that a defendant has acted fraudulently or reprehensibly on one occasion, it cannot necessarily be considered inherently improbable that such defendant would have done so on another; or if, for example, the court is satisfied (or it has been admitted) that a defendant has created or deployed sham or false documents, the court cannot assume that it is inherently unlikely that such defendant did so on other occasions." (my emphasis)
Why would the Claimants deny they signed the Charges if they did sign them?
71. It was also suggested that there was no reason for an individual of the First Claimant's wealth to raise loans secured against exiting assets. However, CSUK submits that it is not unusual for wealthy individuals to borrow against assets for the purposes of further investment and wealth creation. Moreover, in the witness statement of Ms FitzGerald she states: "Whilst it is true that rich people often borrow money and the First Claimant does …" (my emphasis). She then goes on to say why the Loans would have been a bad commercial deal for the First Claimant, given the high bridging finance interest rates. Even if that is the case (and it remains to be established that the First Claimant could borrow in the United Kingdom at lower interest rates) nonetheless I agree with Mr McGhee that the admission is significant, and is on its face inconsistent with the submission that the Claimants would never seek to raise money secured on the Six Properties.
Incorporation of XCapital
Funds obtained for investment into Made in London Media Limited
"My uncle and I are taking this bridging loan in order to provide a cash injection into the business "MADE IN LONDON MEDIA LTD". … The bridging loan will be repaid by the sale of the Property which has now been listed on the market."
Forged identity documents
Mr Ho's fraudulent conduct
Travel Records
94. The further point was taken that the documents may have been sent to the First Claimant in Hong Kong to sign, so that the fact that he was not in the United Kingdom on the date of their signing may not necessarily entail that he did not sign them himself, in Hong Kong, as indeed was intended to happen (and may have happened) in relation to the completion of certain documents in March 2021, as set out in an email from Ms Katharine Lewis of Trowers dated 30 March 2021 to Marc Glancy at Farrer's in which it was said that upon receipt of various documents "we will forward those to solicitors in Hong Kong … to arrange for execution." That appears to be a reference to Mr Ho who was understood to be in Hong Kong for at least part of 2021.
Exceptional circumstances
Conclusion