WHEN WECHAT MESSAGES ARE LOST OR DESTROYED – BY A TWO YEAR OLD: THE ADVERSE INFERENCES A COURT CAN DRAW

February 16, 2022 · by · in Conduct, Disclosure

In ED & F Man Capital Markets Ltd v Come Harvest Holdings Ltd & Ors [2022] EWHC 229 (Comm) Mr Justice Calver considered a case where Wechat messages had been “lost”. The judge concluded that the “loss” was deliberate and that adverse inferences could properly be drawn against the witness and the party involved.

“if the destruction of the WeChat messages was deliberate the Court is entitled to draw inferences as to what those documents would have shown had they been disclosed…“

THE CASE

The claimant brought an action against the defendants claiming that it had been the victim of a high value metals fraud.  It was the claimant’s case that the defendants were implicated in the fraud.  The issue of the defendants’ knowledge of, and involvement in, certain aspects of the transactions, was of crucial importance.

 

DOCUMENTARY AND WITNESS EVIDENCE

The judge observed that this was a case where documents were important.  Some of the defendants had not given full disclosure.  The judge found that some of the defendants had given inaccurate disclosure and that some records had been deliberately destroyed.

(iv) Documentary evidence and the witnesses’ “recollections”

    1. In a case such as this, it is important to keep firmly in mind the approach of Leggatt J (as he then was) in Gestmin SGPS SA v Credit Suisse (UK) Ltd [2013] EWHC 3560 (Comm), which was approved by Lord Kerr (in a dissenting judgment) in R (on the application of Bancoult No 3) v Secretary of State for Foreign and Commonwealth Affairs [2018] UKSC 3 at [103] as follows:

“Although said in relation to commercial litigation, I consider that the observations of Leggatt J in Gestmin SGPS SA v Credit Suisse (UK) Ltd [2013] EWHC 3560 (Comm), paras 15-22 have much to commend them. In particular, his statement at para 22 appears to me to be especially apt:

“… the best approach for a judge to adopt … is, in my view, to place little if any reliance at all on witnesses’ recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts. This does not mean that oral testimony serves no useful purpose – though its utility is often disproportionate to its length. But its value lies largely, as I see it, in the opportunity which cross-examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth.”

    1. I apply this approach, which is apposite to this case. The oral testimony which I heard over several days, particularly from Straits’ witnesses, was helpful in forming my findings of fact in this case in that it did indeed enable me to subject the documentary record to critical scrutiny and to assess the motivations of those witnesses. I found the frequent attempts by the Straits’ witnesses to explain away the contemporaneous documentary record unconvincing but also revealing as to where the truth lay.

    1. This is subject to one important proviso concerning a particular aspect of the state of the documentary record in this case which needs to be borne in mind at the outset, namely Straits’ disclosure of Ms He’s instant messaging record.

    1. Straits’ initial disclosure search proposal was only to search documents held on email servers.[31] With regard to instant messaging, Straits’ position in section 2 of its Disclosure Review Document (DRD) dated 22 June 2020 was:

“[Straits’] employees are allowed to use personal mobile phones, tablets and other handheld devices to access the company emails. However, the documents accessed or held in this way will be the same as stored on the email and/or archiving servers discussed above. [Straits’] employees do not use messaging systems for the purposes of any commercial discussions which could relate to issues 6, 9, 11, 15, 16 and/or 17.” (emphasis added)

    1. These statements were false.

    1. So far as personal WeChat accounts are concerned, Straits addressed this in Part 2 of the same DRD which also noted that MCM sought confirmation whether Straits’ employees ever used WeChat or similar for the purposes of any commercial discussions and whether the relevant accounts would be included in the disclosure review. The answer in the email from Reed Smith LLP, Straits’ solicitors, dated 26 June 2020 was as follows:

“Our client’s employees do have personal WeChat accounts, but these were not the established mode of communication used by our clients for commercial discussions, and the WeChat contents may have been lost with the passage of time. Any commercial discussions with, and/or instructions from D1/D2/D3, would have been recorded by way of email. Therefore, our client reasonably believes that any personal WeChat accounts used by its employees will not contain any relevant information for the purposes of the issues identified by the parties for disclosure…”

    1. It followed that Straits was telling MCM that there were no separate relevant exchanges (by way of commercial discussions) by WeChat or similar instant messaging at all. This was subsequently shown to be false after Straits gave further disclosure on 23 November 2020 and 18 June 2021 (by disclosing a large number of exchanges on WhatsApp and WeChat after repeated enquiries in correspondence from MCM).

    1. In answer to a question from the Court, Ms He eventually accepted that she had given these instructions to Straits’ solicitors (she said she in fact gave them to Rajah & Tann, Straits’ Singaporean solicitors, who passed the answers on to Reed Smith). Her explanation for this in cross-examination was not convincing:

“Q. And so you were telling them that you did not use WeChat or any similar messaging service for any commercial discussions with Mr Kao; is that correct?

A. I do not mean to say they did not use, but WeChat was a personal mode of communication. We could link that to have casual conversations with customers but anything that is formal would then go on to an email to be confirmed there.

Q. Well, that’s rather misleading, isn’t it, Ms He, this answer? It is saying that you don’t — you did not use WeChat or similar for any commercial discussions between yourselves and Come Harvest, Mega Wealth and Mr Kao. And we know for a fact that you did use WeChat and other similar modes of communication with Mr Kao, didn’t you, for commercial discussions?

A. Those were informal chats we had, but anything that is commercial and will therefore go on to an email. So I regard the email as the formal communication mode between us and Mr Kao.

Q. So although there would be communications by way of WeChat or similar, you took the view that you would only disclose emails; is that right?

A. Yes.“

    1. In fact, as was subsequently put to Ms He in cross-examination, it is apparent that this evidence was false and that she did indeed conduct separate commercial discussions with Mr Kao by way of WeChat:

“Q. […] this is the 9 July 2015. Just a very short point, Ms He. This is an email from you to Steven Kao; correct?

A. Yes.

Q. And you say: “Hi Steven, as per our wechat, there is USD[3.4 million] accrual as at end Jun.” So this is, I think on your evidence, before you had an office iPhone but you’re referring to your WeChat with Mr Kao. So you’re in a WeChat with Mr Kao at this time; correct?

A. If I mentioned that like he did(?) I would have a WeChat account.

Q. And so you would have been discussing with him commercial matters, by the looks of it, over WeChat. That is correct, isn’t it?

A. It could have been more general and that’s why I’m putting it on email.“

    1. However, in subsequent cross-examination when Ms He was shown another contemporaneous email exchange dated 8 March 2016 which referred to Mr Kao asking her to “WeChat” him if she had any questions about Mr Springer’s requests to close a trade early, she gave the following evidence:

“Q. So you are conducting, it would seem, with Mr Kao commercial discussions on WeChat, correct?

A. Yes, WeChat could be in the form of a call.

Q. It could be a call or it could be in a document, correct? But you’re using WeChat with Mr Kao, yes?

A. Yes.

Q. For commercial discussions, correct?

A. Yes, yes.”

    1. Ms He agreed in cross examination that she had two phones at the relevant time, a personal mobile phone and an office mobile phone. Both of her phones were connected to the Straits Trade Services Team’s WhatsApp group (comprising Ms He, Ms Lindy Li, Ms Tan and Mr Wu) and it can be seen that messages were sent to and from both of her mobile phones in relation to Straits’ business with Mr Kao and his companies.

    1. The other members of this WhatsApp group also each had two phones connected to the group, namely a personal and an office mobile phone. Between 21 December 2016 and 3 February 2017 when the fraud was close to being exposed this group exchanged 1,186 relevant messages and these were only disclosed by Straits by way of supplementary disclosure on 23 November 2020.

    1. The group was clearly accustomed to using this form of communication. Ms He admitted in cross examination, however, that there would also have been other WhatsApp messages between the Trade Services team before 21 December 2016, relating to trade matters between Straits and its counterparties (indeed, relevant WhatsApp messages between Ms He and Mr Ang were disclosed in that respect between June and December 2016 from Mr Ang’s phone). She further admitted that messages between her team and Mr Kao and Mr Wong would have “possibly started in 2016“. Those messages have not been disclosed. Reed Smith informed MCM by letter dated 12 October 2021 that this was because Rajah & Tan, Straits’ Singaporean lawyers, had determined that they were not relevant or privileged.

    1. So far as instant messaging on the “WeChat” app is concerned, Ms He gave firm evidence that her two-year-old son had accidentally deleted her WeChat app on her company phone in February 2020. In answer to questions from the Court, she confirmed that she did not tell her solicitors about this straight away. She only informed them “a few months later”, despite the fact that Straits were joined to this action on 26 November 2018.

    1. However, in Reed Smith’s letter to Clyde & Co of 8 July 2020 (some 5 months after the alleged date of deletion) they stated as follows in relation to the deleted WeChat app on Ms He’s mobile telephone:

“No steps had been taken by [Straits] to harvest the data from Ms He’s mobile telephone before February 2020. As explained, the mobile device in question is Ms He’s personal phone and [Straits] does not expect it to contain data relevant to any issue in these proceedings that are not otherwise captured by its email servers.

We are instructed that Ms He nonetheless undertook a review of her WeChat messages after [Straits] became involved in the dispute and ascertained, as expected, that her WeChat account did not include any relevant messages.” (emphasis added)

    1. This was repeating the account which Ms He agreed (and Reed Smith confirmed in correspondence) that she had told her solicitors in her instructions to them. This is, of course, entirely inconsistent with the account which Ms He gave in evidence. She said in cross-examination that it was her company phone not her personal phone which contained the deleted app and when she was pressed on this she said “I’m very sure it was deleted on my work phone“. And she unequivocally stated later “No, this was a company phone.” Aside from this inconsistency, it might perhaps be observed that it seems rather unlikely that Ms He would let her 2 year old son play with her company phone (she said he was playing on “YouTube”), rather than her personal phone.

    1. Moreover, we now know as a result of the disclosure from other custodians as well as further disclosure from Straits itself on 23 November 2020 and 18 June 2021 of numerous commercial discussions between in particular Ms He and Mr Kao, including discussions relevant to the issues in this action, such that she cannot have undertaken a review of her WeChat messages after Straits became involved in the dispute and before the WeChat app was deleted, and have ascertained that her WeChat account did not include any relevant messages. Indeed, it is significant that when the fraud is first discovered, Ms He, Mr Jeremy Ang and Mr Kao conduct their discussion about it on private messaging platforms, namely WeChat and WhatsApp, avoiding email contact. Ms He had no convincing explanation for this inconsistency in cross-examination.

    1. Furthermore, in section 2 of the DRD of 30 June 2020, Straits had unequivocally stated: “[Straits] does not expect any relevant documents to be irretrievable and expects to disclose and produce all disclosable documents, which are not covered by an appropriate exception (e.g. privilege).” No mention was made of any deletion of the WeChat app.

    1. It was only after the specific questioning of Straits by MCM in correspondence that Straits revealed that Ms He’s WeChat account had allegedly been deleted in February 2020 by her 2 year old son (being 3 months after dismissal by the Court of Appeal of Straits’ jurisdiction challenge in relation to these proceedings).

    1. Unless Ms He deleted the WeChat app deliberately, it would be very surprising that her work phone had not already been imaged or at least kept safe by either her Singaporean or London solicitors before the deletion took place, so as to preserve the WeChat messages, not least because other relevant custodians did exactly that. Reed Smith state in their letter to Clyde & Co of 12 October 2021 that:

“We are informed that this [failure to preserve] was because the disclosure issues and directions on devices to be harvested had not been finalised at that point in time[32], and Ms He believed that all the relevant communications would have existed on other platforms (e.g. would have been confirmed by email)“.

    1. That is a poor excuse. Other witnesses were under no doubt about the importance of preserving relevant instant messaging correspondence. Reed Smith themselves pointed out in their letter of 2 November 2021, for example, that “after the discovery of the fraud in January 2017, Ms Lindy Li performed a complete back-up of the entirety of her QQ chat communications with Jessie Li,” although it is very unsatisfactory that Rajah & Tan, Straits’ Singaporean lawyers, failed to disclose the existence of this chat log to Reed Smith until it was raised by MCM: see Reed Smith’s letter to Clyde & Co dated 12 October 2021 (sent whilst this trial was nearing its conclusion).

    1. Moreover, if Ms He had carried out a review of her WeChat messages (after Straits became joined to the action in November 2018), in view of the number of relevant WeChat messages which are known to have existed (in the light of the belated disclosure by Straits in November 2020 and June 2021 of WeChat messages involving Ms He) she could not honestly have believed that all the relevant communications would have existed on other platforms. Instead, Ms He told her solicitors that her company and personal phones contained no relevant instant messaging information to the issues in dispute because she did not conduct commercial discussions by instant messaging, when she knew that that was untrue or, at least, that it was not a genuine explanation for her failure to preserve and deletion of her WeChat messages.

    1. The importance of this episode is that (i) it shows Ms He being less than candid with both her own solicitors and the court and (ii) it matters, because any messages passing between Ms He and Mr Kao on WeChat have not survived (inferring, as I do, that Mr Kao will have attempted to delete anything relevant to the fraud).

    1. As to this, Reed Smith accepted in their letter of 2 November 2021 that there was indeed “a potential gap” in the disclosure of WeChat communications between Mr Kao and Ms He. They further stated as follows:

“However, we note that S2DRD confirms that some of Mr Kao’s WeChat records from the relevant period have been deleted because “[his] practice is to delete WeChat conversations to the extent that the matters to which they relate have been resolved” {A2/11/36}. We further note that there are only very limited examples of messages between Mr Kao and Ms He (other than those exchanged on wider group chats including other custodians) in the parties’ overall disclosure. Those limited examples further appear to have resulted from disclosure of Mr Kao’s chats with other individuals (i.e. not Ms He), which involved Ms Kao pasting extracts of his exchanges with Ms He. This suggests that either: (i) Mr Kao deleted nearly all of his direct messages with Ms He before his phone was imaged; or (ii) upon reviewing those messages as part of their disclosure exercise Gibson Dunn & Crutcher (who represented D3-D8 at the relevant time) took the view that they did not respond to the disclosure issues, and hence were not disclosed.”

    1. In fact, as MCM state in their closing submissions, it is evident that the gap in disclosure of one-to-one WeChat communications between Ms He and Mr Kao is more than “potential”. The Third to Eighth Defendants disclosed WeChat messages which evidence direct messages taking place between Mr Kao and Ms He which were sent as screenshots to the Genesis group chat and where messages have been copied and pasted into the Genesis group chat.

    1. Straits themselves mention in their closing submissions that there are examples of direct messages between Mr Kao and Ms He in the trial bundles, referring to their WeChat messages concerning Transcendent and Ms He’s request to invest in Mr Kao’s “13 mile” venture (as those few messages between Mr Kao and Ms He which had not been deleted by Mr Kao were caught by the imaging of Mr Kao’s phone). These undeleted messages, of course, do not directly concern the repo business being conducted by Straits and Mr Kao.

    1. However, others do. For example, on 9 July 2015 Ms He emailed Mr Kao and stated “Hi Steven, As per our WeChat, there is USD 3,485,626.20 accrual as at end of June …“. And on 8 March 2016, Mr Kao emailed Ms He in relation to problems concerning OWRs pledged by Straits to Vermillion Asset Management (“VAM“) meaning that Straits could not close off its trade with Straits and Mr Kao stated “Sherraine, pls WeChat me if you have any questions.” Such WeChat messages, if any, which then followed between them have not been disclosed. But this shows that in 2016 Ms He and Mr Kao were accustomed to using WeChat between themselves in order to resolve issues concerning the CSCs and OWRs which formed the subject matter of the Type 5 trades.

    1. The Third to Eighth Defendants’ solicitors have also confirmed that although Mr Kao’s mobile phone was imaged in November 2017, certain of his WeChat data from the relevant period had been deleted.

    1. The fact that the Court has the full conversations between Mr Jeremy Ang and Mr Kao is not an answer to this point, as it was Ms He who was liaising with Mr Kao on a day-to-day basis, not Mr Ang, and it is clear that Mr Kao and Ms He would separately message each other by WeChat. Nor do I agree with Straits’ submission that it is unrealistic to suggest that there exist messages between Mr Kao and Ms He that would show actual knowledge and/or contain direct evidence of the fraud where none exists elsewhere in the entirety of Straits’ and/or the Third to Eighth Defendants’ extended disclosure. In particular, as is explained below, I consider it likely that there would have been direct contact between Ms He and Mr Kao when the concocted “potential purchaser” cover story was first developed as well as at the time when the fraud was exposed.

    1. Reed Smith also admitted in their letter of 26 May 2021 that Ms He also believes that she used QQ chat to communicate with Ms Jessie Li, but access to Ms He’s QQ chat was lost before any message records were collected. Reed Smith suggested that her communications over that platform “would have been very sporadic and unlikely to be of relevance to the matters in dispute in these proceedings“. In the light of Ms He initially asserting the same about her WeChat messages – which assertion was shown to be false – this assertion provides little comfort in the context of her deleted QQ chat.

    1. In view of all of the foregoing, and in particular the many inconsistencies in Ms He’s account concerning her use and deletion of the WeChat app as well as the fact that the deletion (and the purported excuse for it) only came to light as a result of specific questioning by MCM’s solicitors and not voluntarily from Ms He, I consider it far more likely that and I find as a fact that, as MCM put to her in cross-examination, she herself deliberately deleted the app in order to ensure that incriminating or unhelpful messages passing between her and Mr Kao were deleted for all time and that she knew that that would be so. This episode leads me to be very cautious in accepting Ms He’s witness evidence; indeed, I consider that I should not do so unless it is corroborated by reliable contemporaneous documentary evidence.

    1. Moreover, if the destruction of the WeChat messages was deliberate the Court is entitled to draw inferences as to what those documents would have shown had they been disclosed, and I turn to this topic next.

THE JUDGMENT ON DELIBERATE DESTRUCTION OF DOCUMENTS

The judge then considered the impact that the deliberate destruction of documents has on the assessment of evidence in a case.

(v) Deliberate destruction of documents
    1. The starting point in a case of deliberate destruction of documents is that if a fair trial of the action cannot then take place, the destroying party’s case should be struck out. And of course, the later that the destruction takes place, the worse the position; it may make a fair trial of the action less likely.
    1. A litigant who has pursued proceedings with the object of preventing a fair trial “has forfeited his right to take part in a trial”, Hollander on Documentary Evidence, (13th Ed), at 11-15 and 11-16.
    1. As the Vice-Chancellor stated in Douglas v Hello! [2003] EWHC 55 at [90]:

“The issues are whether the rules have been transgressed, if so whether a fair trial is achievable and if not what to do about it. See Logicrose Ltd v Southend United Football Club Ltd (The Times 5th March 1988) and Arrow Nominees Inc v Blackledge [2001] BCC 591 para 54 where Chadwick LJ, with whom Roch LJ agreed, said: “I adopt, as a general principle, the observations of Mr. Justice Millett in Logicrose Ltd v Southend United football Club Limited (The Times, 5 March 1988) that the object of the rules as to discovery is to secure the fair trial of the action in accordance with the due process of the Court; and that, accordingly, a party is not to be deprived of his right to a proper trial as a penalty for disobedience of those rules – even if such disobedience amounts to contempt for or defiance of the court – if that object is ultimately secured by (for example) the late production of a document which has been withheld. But where a litigant’s conduct puts the fairness of the trial in jeopardy, where it is such that any judgment in favour of the litigant would have to be regarded as unsafe, or where it amounts to such an abuse of the process of the court as to render further proceedings unsatisfactory and to prevent the court from doing justice, the court is entitled – indeed, I would hold bound – to refuse to allow that litigant to take further part in the proceedings and (where appropriate) to determine the proceedings against him. The reason, as it seems to me, is that it is no part of the court’s function to proceed to trial if to do so would give rise to a substantial risk of injustice. The function of the court is to do justice between the parties; not to allow its process to be used as a means of achieving injustice. A litigant who has demonstrated that he is determined to pursue proceedings with the object of preventing a fair trial has forfeited his right to take part in a trial. His object is inimical to the process which he purports to invoke.”

    1. As is stated in Hollander, Documentary Evidence (13th Edn), there are only a limited number of cases where applications have been made to strike out proceedings for concealment or destruction of documents. In Logicrose v Southend United Football Club [1988] 132 S.J. 1591, the responsible director of the claimants was alleged to have deliberately suppressed a crucial document and for a time successfully concealed its existence from the court. Millett J did not find the allegation proved, but said that if it had been, it might have given rise to a contempt sanction but should not lead to the action being struck out unless the failure rendered it impossible to conduct a fair trial.
    1. In Dadourian Group v Simms [2009] EWCA Civ 169 Arden LJ stated at [233]:

” …[A] litigant who has demonstrated that he is determined to pursue proceedings with the object of preventing a fair trial is [not] to be taken to have forfeited his right to a fair trial in every case. …[if] the litigant’s conduct ha[s] put the fairness of the trial in jeopardy … the court’s power to strike out the proceedings was not a penalty for disobedience with the rules.”

    1. The Court must always consider, therefore, whether a fair trial is possible and to this end have regard to the defaulting party’s ECHR art.6 rights of access to the Court, and whether the remedy of a strike out would be proportionate and fair in all the circumstances of the case (which is much less likely in a case where the trial has concluded and the Court is in a position to assess the effect of the destruction of the documents and/or failure to call relevant witnesses), or whether some other remedy will safeguard the position of the innocent party.
    1. Hollander suggests in paragraph 11-16 that “where the defaulting party has been less than candid about the destruction exercise, the court may consider it cannot be sure exactly how widespread the destruction has been, and what its effect will be, and thus may find it more difficult to reach a conclusion that a fair trial is still possible.“
    1. I respectfully agree with that general sentiment but in a case (such as this) where the trial has concluded the position is somewhat different. Indeed, it is for this reason no doubt that as Hollander goes on to state: “it would be a very rare case in which, at the end of a trial, it would be appropriate for a judge to strike out a case rather than dismiss it in a judgment on the merits in the usual way“. I agree.
    1. Accordingly, if a fair trial is still possible, or if (as here) the trial has concluded, the next question is how should the Court approach the issue of the deliberate destruction of documents and a deliberate void of evidence.
    1. As was stated in The Ophelia [1916] 2 AC 206, PC at 229-230, “the strongest possible presumption arises that if it had been produced [the documents] would have told against [the destroyer]”. Deliberate destruction, creating an evidential void, is “wholly inexcusable”; the Court should refuse to give the destroyer the benefit of any doubt or draw any inference in its favour: Hollander on Documentary Evidence (13th ed.), 11-23 to 11-27.
    1. I agree with the approach adopted in Earles v Barclays Bank [2009] EWHC 2500, which also deals with the failure to call relevant witnesses, where HHJ Simon Brown QC stated that:

“28… in this jurisdiction as in Australia, there is no duty to preserve documents prior to the commencement of proceedings: British American Tobacco Australia Services Limited v. Cowell [2002] V.S.C.A. 197, a decision approved in this country by Morritt V.C. in Douglas v. Hello [2003] EWHC 55 at [86]…

29. After the commencement of proceedings the situation is radically different. In Woods v. Martins Bank Ltd [1959] 1 Q.B. 55 at 60, Salmon J. said “It cannot be too clearly understood that solicitors owe a duty to the court, as officers of the court to make sure, as far as possible, that no relevant documents have been omitted from their client’s list”.

30. In the case of documents not preserved after the commencement of proceedings then the defaulting party risk “adverse inferences” being drawn for such “spoliation”: Infabricks Ltd v. Jaytex Ltd [1985] FSR 75.

31. In cases where there is a deliberate void of evidence, such negativity can be used as a weapon in adversarial litigation to fill the evidential gap and so establish a positive case. In British Railways Board v. Herrington [1972] 1 AER 786, Lord Diplock stated:

“The appellants, who are a public corporation, elected to call no witnesses, thus depriving the court of any positive evidence as to whether the condition of the fence and the adjacent terrain had been noticed by any particular servant of theirs or as to what he or any other of their servants either thought or did about it. This is a legitimate tactical move under our adversarial system of litigation. But a defendant who adopts it cannot complain if the court draws from the facts which have been disclosed all reasonable inferences as to what are the facts which the defendant has chosen to withhold.”“

    1. It follows that if there is no evidence on a particular point, the Court can rely on the inferences drawn from the destruction of documents or the failure to call relevant witnesses to provide evidence which is otherwise absent.
  1. I return below to the inference which I consider that the Court should draw in the present case as a result of Ms He’s deliberate deletion of her instant messaging app. I turn now to the course of events between the end of 2013 and 2017 when the fraud was discovered.

THE RESULT

The judge found for the claimant on most, but not all, the major issues. With judgement for a substantial sum.

i) That MCM rescinded its Purchase Contracts with Come Harvest and Mega Wealth and the corresponding Sale Contracts by its notices dated 21 June 2017;
ii) That D1, D2, D3 and D4 are liable to MCM in the tort of deceit for damages of USD 282,736,139.22.
iii) That D3 and D4 are liable for the tort of procuring breach of contract by CH/MW for the same sum as that recoverable under the deceit claim;
iv) That D1, D2, D3, D4 and D10 committed the tort of unlawful means conspiracy to injure MCM and are liable for the same sum as that recoverable under the deceit claim;
v) That the knowing receipt claims are not made out against any of the defendants;
vi) That MCM’s net payments under the Purchase Contracts and/or the traceable proceeds of the same are held for MCM by D1, D2, D3, D4, D9 and D10 on constructive trust. The approach in Ashton-1 applies and the quantum of such claims is to be determined at a subsequent hearing.

 

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