AGRITRADE RESOURCES LIMITED THROUGH THE JOINT PROVISIONAL LIQUIDATORS NG KIAN KIAT, OON SU SUN AND E. ALEXANDER WHITTAKER AND ANOTHER v. ASHOK KUMAR SAHOO

CAMP 224/2021

[2022] HKCA 280

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 224 OF 2021

(ON AN INTENDED APPEAL FROM HCA NO. 1660 OF 2020)

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D E C I S I O N

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Hon Cheung JA (giving the Decision of the Court) :

I. Introduction

1.  This is the renewed application by the defendant for leave to appeal against the decision of Deputy High Court Judge To (the ‘Judge’) dated 23 March 2021 (‘the Decision’).  The Judge ordered, inter alia, the continuation of a worldwide Mareva injunction against the defendant.  The injunction was first granted by G Lam J (as he then was) on 28 September 2020. The Judge had earlier refused to grant leave to appeal (‘the Leave Decision’). We will deal with the application on paper.  The defendant was formerly legally represented and counsel had prepared written submissions for this application.

II.     Background

2.  We will use the same abbreviation of the names of the companies as used by the Judge. 

3.  The defendant was the chief financial officer of ARL (‘the 1^st plaintiff’) and an executive director of part of ARL’s Executive Board Committee, a director of more than 25 companies within the ARL group, including Fair Thermal (‘the 2^nd plaintiff’), Entwickeln, SKS Agritrade India; and a trusted member of the ARL group’s senior management.

4.  The defendant resigned towards the end of February 2020, prior to the plaintiffs becoming aware of any impropriety committed by him.  At that time, there was a raid by the Singapore Commercial Affairs Department of the office of Agritrade International Pte Limited which controls ARL, following which a new board of ARL was put in place. 

5.  In around 2016, ARL was exploring investment opportunities in India.   At the defendant’s suggestion, Agritrade India was incorporated for the purpose of initiating businesses in India.  Later, ARL accepted the defendant’s recommendation to acquire SKS, including its power plant, which was then in financial difficulties.  ARL incorporated Entwickeln as the group’s investment vehicle to acquire SKS by paying off its creditors.  ARL accepted the defendant’s recommendation to appoint his brother Abhaya and their childhood friend Abhijeet as director of SKS in March 2019. Ng Xin Wei was the only other director of SKS.  ARL also accepted the defendant’s recommendation to appoint himself, Abhijeet and Abhaya as directors of Entwickeln.  Thus, the boards of SKS and Entwickeln were under the effective control of the defendant.  As a result, ARL has two investment vehicles in India: Entwickeln to specifically acquire SKS and its power plant; and Agritrade India for other Indian businesses.

6.  By April 2020, ARL and its subsidiaries had invested US$123.1 million in the power plant.  The board of ARL came to learn that the power plant had been shut down on 26 March 2020 apparently due to a lack of funds.  This provoked a series of enquiries which led the plaintiffs to believe that the defendant had (i) misappropriated SKS’s compulsory convertible debentures (‘CCDs’) in a self-dealing at gross undervalue; and (ii) misappropriated substantial funds destined for operation of the power plant by SKS, including as later discovered a sum of about US$1,800,000 for buying a property for himself from Gupta Steel Corporation Pvt Ltd (‘Gupta Steel’) (the ‘Gupta Steel Transaction’).

1)     CCDs

7.  In respect of the CCDs, on 10 May 2020, the plaintiffs discovered that the CCDs had been sold by Entwickeln to Berrio Mauritius for US$100,000 under a securities purchase agreement dated 22 August 2019. 

8.  Berrio Mauritius is beneficially owned by the defendant and his wife.  The US$100,000 used for the purchase was arranged by the defendant to be transferred from the bank account of Agritrade Mauritius (part of the ARL group) to SKS for the operation of the power plant.  Instead, the money was transferred to Berrio Global which was also owned by the defendant and his wife.

9.  When the transfer was questioned, the defendant repaid it on 29 May 2020 claiming it was a repayment of a loan, but no such loan was documented.  The Judge observed that the inescapable and irresistible inference is that the sale was at a gross undervalue and orchestrated by the defendant. 

10.  The defendant later claimed that he received the CCDs as ‘sweat equity’ for his hard work and contribution for ARL’s expansion into India.   He relied on approval of the sale given at SKS’s board meeting in June 2019 attended by Ng the other director.  The Judge observed that what is missing from the defendant’s ‘sweat equity’ claim is the paper showing agreement between him and ARL to give him this ‘sweat equity’.   At the highest, he could only produce the disputed minutes of meeting approving the sale all out of the blue and without any mention of ‘sweat equity’.   It is incredible that the defendant would receive such a significant reward representing 330 years of his highest Hong Kong salary, particularly as SKS was only acquired in March 2019 and the ARL group was on its way to financial collapse.

2)     The Gupta Steel Transaction

11.  The plaintiffs discovered some unexplained payments effected by the defendant relating to the Gupta Steel Transaction.  In a letter dated 10 August 2020 issued by Abhaya (the defendant’s brother who was also a director of Agritrade India, the other directors were the defendant and Ng) on behalf of Agritrade India to Gupta Steel, it is stated that the funds were paid for the purchase of a property in Juhu, Mumbai, India as a guest house for SKS.  It is also stated that the funds were transferred to Gupta Steel on the basis of a ‘mutual understanding in good faith’, without ‘any written agreement as it was verbally agreed by both parties and as [Agritrade India] trusted [Gupta Steel]’.  It is also alleged in the letter that Gupta Steel failed to complete the transaction and Agritrade India demanded a full refund of the money paid of approximately US$1,847,815.

12.  Gupta Steel on the other hand denied that it had any property in Juhu.  It said it had sold a property in Prabhadevi to the defendant personally and not to Agritrade India for US$5,100,000.  It acknowledged it had received US$2,521,141 (made up of US$673,326 and US$1,847,815) from the defendant.

13.  The Judge observed that the Gupta Steel Transaction is highly suspicious.   First, there is the receipt by Gupta Steel of the payment of US$2,450,000.   Second, there is no board minutes or documentary evidence whatever within SKS in support of the purchase of the guest house for SKS, whether in Juhu or Mumbai, from Gupta Steel.   Third, the purchase was made orally on the basis of good faith without any written document.   This is remarkable for a property transaction of that magnitude in India.   Fourth, Gupta Steel asserted that the purchase was made by the defendant in his personal capacity and not for and on behalf of Agritrade India or the ARL group.   Fifth, there is no response from the defendant to ARL’s evidence about the Gupta Steel Transaction as asserted by Gupta Steel.

3)     Unexplained misappropriation by the defendant

14.  After ARL learned that the SKS power plant had been shut down in around 26 March 2020, the plaintiffs discovered that between 19 March and 4 October 2019, ARL and Fair Thermal respectively provided US$9,375,000 and US$3,300,000, totalling US$12,675,000 via Agritrade Mauritius and Agritrade Singapore for the purpose of funding the power plant.   These two companies are also of the ARL group.  Rather than transferring the funds directly to Entwickeln, the defendant arranged for the funds to be paid to Agritrade India, which was incorporated for other businesses and had no role in the operation of the SKS power plant.   The Judge observed that the routing of the funds via Agritrade India over which the defendant had control aroused suspicion.   Even though the majority of the funds had been applied for the purpose of the power plant, a substantial amount had not been accounted for and the defendant who was responsible for the funds did not respond despite serious allegations of misappropriation had been made against him.  At the ex parte hearing on 28 September 2020, the plaintiffs claimed that the defendant had misappropriated US$12,675,000. 

15.  At the inter partes hearing before the Judge, the plaintiffs accepted that the unexplained misappropriation of funds was US$5.252 million.  The Judge further accepted the defendant had accounted for two sums of US$125,000 and US$67,000 reducing the unaccounted sum to US$5,060,000.

III.     The Judge’s decision

16.  The Judge held that the plaintiffs have proved a good arguable case of unexplained misappropriation of funds in the amount of US$5,060,000, there is clear evidence of the defendant misapplying funds in the amount of US$2,450,000 for purchasing a property for himself in the Gupta Steel Transaction and there is also clear evidence of self‑dealing in SKS’s CCDs and misappropriating US$100,000 from Agritrade Mauritius for paying the CCDs which involved double dishonesty in that the defendant used funds of his employer to pay for the CCDs sold to a company beneficially owned by him and his wife.  The Judge held that the evidence of dishonesty gives rise to a strong inference of risk of dissipation of misappropriated assets in the defendant’s hands. 

17.  The Judge held :

‘ 113. ... The Plaintiffs have presented a strong case of misappropriation based on credible evidence. The defence is basically one of denial and bald assertions. The relevant exculpatory evidence, if there is any, was within the Defendant’s reach. He could have easily provided the supporting documentation for the various transactions paid out from Agritrade India’s account. He knew this is the key issue since the end of September 2020. He chose not to provide such documents to support his argument. In the circumstances, the balance tilts in favour of continuing the injunction on the same terms.’

18.  The Judge further granted a disclosure order to the plaintiffs.  He also allowed the plaintiffs to vary part of their undertaking so that the plaintiffs may seek to enforce the injunction in Singapore where the defendant resides.

IV.     Principles

19.  For leave to appeal to be granted, the Court must be satisfied that the intended appeal has a reasonable prospect of success or that there is some other reason in the interests of justice the appeal should be heard. 

20.  The grant or continuation of an interlocutory injunction is an exercise of discretion of the Court.  The well‑established principle is that the appeal court is not to exercise an independent discretion of its own.  Its initial function is one of review only.  It may set aside the Judge’s exercise of discretion if it can be shown that the Judge was plainly wrong in the sense that, for example, he had acted on wrong principles, taken into consideration irrelevant factors, ignored relevant factors or the decision is outside the generous ambit within which reasonable disagreement is possible.

V.     Intended grounds of appeal

21.  The intended grounds of appeal are in essence those grounds that had been advanced by the defendant to the Judge against the continuation of the Mareva injunction and in his application for leave to appeal.

1)     Reflective loss

22.  The defendant’s contention is that the Judge should have held that the plaintiffs’ claim is barred by the ‘no reflective loss’ rule, as the focus of the rule is not on whether a wrong had been done to the plaintiff personally, but whether the loss he is seeking to recover can be made good if the company enforces its rights against the defendant (Landune International Ltd v Cheung Chung Leung Richard [2006] 1 HKLRD 39 at [24]).  The defendant submitted that this rule applies to the present case because the loss claimed to be suffered by the plaintiffs can be made good if Agritrade India enforces its rights against the defendant.

23.  The Judge has considered and distinguished Landune International Ltd.  As the Judge pointed out at [78] of the Decision, the funds in question in Landune International Ltd were the subsidiary’s funds, being shareholder’s loan advanced by the holding company, and the loss was suffered by the subsidiary.  In the present case, as found by the Judge, the funds in question belonged to the plaintiffs, and the funds were only caused to be paid to Agritrade India by the defendant.  The Judge observed in the Decision :

‘ 79. The Defendant’s stance is that as the funds were diverted to Agritrade India, they were properties of Agritrade India. Agritrade India should be the proper plaintiff and the party to suffer loss. Hence, the Plaintiffs have no locus standi to institute action and any loss if suffered by the Plaintiffs is reflective loss. This is a novel argument which is only to be rejected. Agritrade India was just part of the conduit used by the Defendant to misappropriate funds belonging to the Plaintiffs while flowing through the conduit. It cannot be right to argue that the loss was suffered by the conduit and not the Plaintiffs which were the source of the funds. This novel but unarguable defence may not be readily apparent to the Plaintiffs. The Plaintiffs should be excused for failing to advise the court of the availability of such a possible defence. This defence is one which is doomed to fail. Even if this possible defence had been drawn to the attention of the ex parte judge, the injunction would still have been granted.’

24.  Given such finding, any loss was suffered by the plaintiffs, as opposed to Agritrade India (which only served as a conduit in the defendant’s scheme).  It is also unclear what rights could be enforced by Agritrade India against the defendant in respect of the funds misappropriated from the plaintiffs.  In these circumstances, the ‘no reflective loss’ rule does not apply.

25.  The defendant also sought to challenge the Judge’s finding that the funds did not belong to Agritrade India.  He referred to Agritrade India’s books and bank records, which showed that at least US$12,675,000 of the funds in question was injected into Agritrade India as equity investment.  Some of the bank records bore the signature of one Mr. Loo Choon Leong (the then Financial Controller of Agritrade Mauritius).

26.  In the light of the Judge’s provisional finding that the defendant devised a scheme to divert the funds, we do not see the relevance of this point.  It has to be borne in mind that at this stage, the Judge only had to be satisfied that the plaintiff had a good arguable case in the sense of a case which is ‘more than barely capable of serious argument, and yet not necessarily one which the judge believes to have a better than 50% chance of success’ (Grupo Pacifica Incorporada v Worldwide Marine Product Ltd & Ors CACV 217/2015 (unreported, 28 January 2016) at [5.1].  Further, a good arguable defence does not necessarily negate a good arguable case (Pacific Rainbow International Inc  v Shenzhen Wolverine Tech Ltd HCA 3023/2016 (unreported, 2 May 2017) at [42]).

27.  Given the Judge’s views as to the facts of the case as set out above, it cannot be said that Judge erred in finding that the plaintiffs had a good arguable case.  Further, as the Judge stated, any contested evidence ‘should be left to trial rather than appeal against an interlocutory decision’(Leave Decision [8]).

28.  The defendant also contended that the plaintiffs failed to bring this possible defence to the attention of the ex parte judge and that the Judge erred in failing to discharge the injunction for material non-disclosure on this ground.  We disagree.  As this is the exercise of discretion of the Judge, and his reasons having been set out in [79] of the Decision, there is no basis for this Court to interfere.

29.  Further, we do not agree with the defendant that it is in the interests of justice that the precise scope of Landune International Ltd should be ventilated at an appellate level.  As the Judge said at [9] of the Leave Decision, the law on reflective loss is well established, and what the defendant disputes is the provisional finding of the Judge on how the law is to be applied.  This is a matter to be resolved at the trial.

30.  Accordingly, no leave to appeal should be granted in respect of Ground 1.

2)     The transfer of US$13,088,740 from Agritrade India to Entwickeln/SKS      

31.  Under ground 2, the defendant contended that the Judge at [87] of the Decision misunderstood the fund flow table annexed to the defendant’s skeleton submissions lodged for the purpose of the inter partes hearing (the ‘Annexed Table’) as showing sums injected into Agritrade India, as opposed to sums transferred by Agritrade India into Entwickeln and/or SKS.  As a result, the Judge failed to give proper regard to the fact that more than US$12,675,000 (namely, US$13,088,740) had been injected by Agritrade India into Entwickeln and/or SKS.

32.  The Judge at [87] of the Decision held :

‘ 87. In his 3^rd Affirmation, the Defendant exhibited a table showing various transfers from Agritrade Mauritius, Agritrade Singapore and Fair Thermal in the total amount of US$12,650,000 to Agritrade India. These transfers were recorded as “investment in equity shares” in the ledger accounts of these companies with Agritrade India and reflected in the balance sheet of Agritrade India. According to Ms Cheung, the amount was actually US$13,088,740 which was higher than the amount allegedly unexplained. Ms Cheung submitted that these entries show there was no misappropriation. Whatever the amount, there is no dispute about receipt of the funds by Agritrade India. In fact, it is also the Plaintiffs’ case that the funds were diverted to Agritrade India instead of to Entwickeln or SKS where they were destined. The dispute is what happened to these funds. The Plaintiffs’ complaint is the Defendant’s failure to account for the funds thereafter. The table serves no purpose but to mislead.’

33.  The Judge in the Leave Decision held :

‘ 7. ... As pointed out in that paragraph, this court has no misunderstanding about the evidence. The dispute is what happened to these funds. As the analysis show, an amount of US$5,060,000 from the funds was unaccounted for.’

34.  We agree with the Judge.

3)     Good arguable case on quantum

35.  The defendant seized on a statement made by the Judge at [67] of the Decision, where he held ‘I accept that the proof of quantum is not satisfactory’, and submitted that on that basis the plaintiffs failed to make out a good arguable case on quantum, which was held to be a requirement in Universal Entertainment Corporation & Another v Kazuo Okada [2020] HKCFI 1406 at [68]‑[79] and [2020] HKCA 995 at [23]‑[25]. In that case this Court at [23] stated that ‘the duty of an applicant seeking Mareva injunction includes the proper formulation of his claim for such injunction and the justification of the monetary limit set out in the draft order.  The failure of an applicant in the fulfilment of such duty cannot be the justification for Mareva injunction to be granted without any monetary limit’.

36.  In our view, the whole of [67] of the Decision should be read :

‘ 67. I accept that the proof of quantum is not satisfactory. However, the Defendant, being a director of ARL, Fair Thermal, Agritrade Singapore, and Agritrade Mauritius at the material time, had a duty in respect of the Plaintiffs’ funds generally and under his employment contract as executive director of ARL. Yet, despite substantial funds had been provided, the power plant was closed down being underfunded. And despite repeated demands for information relating to the suspected missing funds, the Defendant chose not to respond but to remain in control of the relevant companies. The Defendant should not be permitted to take advantage of his own wrong to prevent the Plaintiffs from seeking an injunction against him to remedy the wrong he had committed against the Plaintiffs. Despite some failing on the part of the Plaintiffs, having regard to the state of the evidence, in particular strong evidence of misappropriation of the Plaintiffs’ funds, strong evidence of self-dealing in SKS’s CCDs (albeit a different matter involving a different plaintiff), the suspicious circumstances, and the Defendant’s silence; I accept that the Plaintiffs had done what they could in the circumstances in assessing and proving their loss and that they had not failed their duties in informing the court the nature and limitation of their case on quantum. Viewed as a whole, on the peculiar factual circumstances of this case, I consider the Plaintiffs have shown a sufficient proof of a good arguable case that the allegedly missing fund had been misappropriated by the Defendant.’

37.  We agree with the Judge’s view.  Further Universal Entertainment Corporation is clearly distinguishable.  The plaintiff in that case applied for injunction based on an arbitrary sum and made no effort after a lapse of three years to develop its case on quantum despite it was able to do so with expert evidence.  As the Judge observed at [12] of the Leave Decision :

‘ 12. ...This issue is a question of fact which is to be determined qualitatively and not quantitatively. Taken to the extreme, Ms Cheung’s submission would mean that a plaintiff would fail if its proof is just short of a dollar. That cannot be right. At the ex parte stage, because of the need for urgency, the applicant has to proceed even though the evidence may be inchoate. Any order made by the court is provisional and subject to review at the inter parte stage. Taking the very quantitative approach as Ms Cheung suggests under such pressing circumstances could not work. In my view, an arguable case on quantum is shown, if a quantum which is not fanciful and which justifies the injunction is proved. If the quantum claimed is shown to be excessive at the inter parte stage, it may be reduced. If the defendant restrained suffers loss in the interim period, the plaintiff is liable to make good the loss under its undertaking for damages.’

38.  The defendant also said that the Judge erred in considering the defendant’s alleged duty to account to the plaintiffs when the defendant’s employment with ARL had ended.  In our view, the defendant has missed the point that he was responsible for the funds at the time when they were transferred.  Further and in any event, this only formed part of the Judge’s consideration in finding what the plaintiffs could have done in the circumstances in assessing and proving their loss.

39.  The defendant submitted that the Judge failed to appreciate that the plaintiffs’ ex parte application for the injunction was not premised on urgency.  In our view, the Judge had fully considered and accepted the problems faced by the plaintiffs when the application for injunction was brought.

40.  The defendant further submitted that the injunction ought to have been discharged on the ground of material non‑disclosure and should not be continued even in a reduced amount as a plaintiff who fails to present a proper case at the ex parte stage should not be allowed to try to patch it up by coming up with an essentially new case only in reply.  Further, it is in the interests of justice that the question of whether a plaintiff’s duty to prove a good arguable case on quantum is modified in circumstances where it is alleged that the defendant has a duty to account to the plaintiff should be ventilated at an appellate level.  In our view, the Judge had addressed the matter properly.  The issue is a question of fact depending on the circumstances of each case.  It is not an issue which required ventilation at an appellate level.

41.  For the above reasons, no leave to appeal should be granted in respect of ground 3.

4)     Non-disclosure of the spreadsheets

42.  The defendant complained that the plaintiffs were guilty of material non‑disclosure in producing only seven out of 400 pages of spreadsheets before the ex parte judge.

43.  The Judge correctly set out the legal principles applicable to material non‑disclosure at [61] of the Decision, and he considered the issue in detail at [68]‑[75] of the Decision.  In particular, the Judge found that the failure to produce the spreadsheets reflected adversely on the plaintiffs.  But he held that the plaintiffs did not attempt to mislead the Court.  Further, the Judge found that ‘Viewing the spreadsheets in the absence of the defendant’s explanation could not untangle what had been done by the defendant in relation to the funds transferred’ ([71] of the Decision).

44.  The defendant sought to challenge the Judge’s decision in this regard, contending that there was nothing before the ex parte judge to suggest that there were other spreadsheets.  Moreover, the mere fact that the name of the file containing the bank statements could be seen from one of the pages in the exhibits did not discharge the plaintiffs’ duty of full and frank disclosure : Rever (AMA) Salon v Kung [2001] 1 HKC 241 at 246F, 248A‑B.  

45.  In our view, these arguments have been considered and addressed by the Judge in [16]‑[17] of the Leave Decision.  As to the defendant’s argument that the spreadsheets were relevant because they showed the fund flows referred to in the Annexed Table, it should be dismissed for the reasons set out under ground 2 above.

46.  The defendant further argued that the plaintiffs were guilty of material non‑disclosure in presenting their case that the ‘Excel spreadsheets’were not authentic bank statements and in failing to draw to the ex parte Judge’s attention the words ‘**This is a computer generated statement and does not require a signature’ on the spreadsheets.

47.  These arguments had also been considered by the Judge.  The Judge found that the plaintiffs all along misunderstood that the spreadsheets were converted from hard copies of bank documents and such misunderstanding was created by Abhijeet and was reasonable and not reflective of any intention to mislead.  In such circumstances, their failure to draw those words to the attention of the ex parte judge is understandable ([74] of the Decision).

48.  The defendant submitted that the question of whether the non-disclosure is deliberate is irrelevant in determining materiality (New Asia Energy Ltd v Concord Oil (Hong Kong) Ltd [2000] 2 HKC 681 at 685G‑I and the Judge’s decision in [74] of the Decision) was erroneous.  This, however, is beside the point as the issue of materiality was discussed at [71] of the Decision.  There is no basis to suggest that the Judge failed to apply an objective test as to materiality.

49.  For the above reasons, no leave to appeal should be granted in respect of ground 4.

5)     Failure to take into account relevant factors in
        assessing risk of dissipation __________      

50.  The gist of the defendant’s complaint is that the Judge ought not to have taken into account the defendant’s transfer of his property to his wife in assessing the risk of dissipation.  He claimed the transfer was completed on 28 July 2020 before the injunction was obtained on 28 September 2020.  The defendant had also explained that the reason for the transfer was for succession and tax planning. 

51.  This ground has no merits.  The Judge did not take the transfer into account in assessing the risk of dissipation.  The transfer issue was dealt with by the Judge in the context of the application by the defendant for payment of living expenses and mortgage payments of the property held by his wife for variation of the terms of the injunction.  By that stage, the Judge had already concluded there was risk of dissipation.  Ground 5 is, therefore, premised on a misunderstanding of the Judge’s decision and is not reasonably arguable.

52.  Accordingly, no leave to appeal should be granted in respect of ground 5.

6)     Error in allowing the 2^nd plaintiff’s application     

53.  Under ground 6, the defendant submitted that as it was accepted that the 2^nd plaintiff would not be proceeding with its claim in Hong Kong, the Judge should not have allowed it to continue the injunction and obtain ancillary orders.

54.  In this regard, Mr. Toby Brown, counsel for the 1^st plaintiff, conceded that the orders made by the Judge should have referred to the ‘1^st plaintiff’ rather than the ‘plaintiffs’.  We agree that nothing turns on this and this is not an appeal point.

55.  The more substantive point raised by the defendant is that the Judge should have reduced the quantum of the injunction by at least US$9,575,000.  This is because [40] of the statement of claim states that at least US$9,575,000 was transferred from or via the 2^nd plaintiff, and there is no evidence that the 1^st plaintiff has standing to sue in respect of such sum.

56.  In our view, the point is not reasonably arguable.  First, as recorded at [23] of the Leave Decision, the point was not raised at the inter partes hearing but only in the defendant’s reply submission in the leave application before the Judge.

57.  Second, the defendant’s argument is factually incorrect.  In [40]‑[43] of the statement of claim, the plaintiffs claim that the defendant caused US$12,675,000 to be transferred to Agritrade India, out of which US$9,375,000 originated from the 1^st plaintiff and US$3,300,000 (not US$9,575,000 as suggested by the defendant) originated from the 2^nd plaintiff.

58.  Third, instead of whether the 1^st plaintiff has standing to sue, the more pertinent issue is whether or not the 1^st plaintiff has a good arguable case in respect of US$5,060,000 which the Judge found to be unaccounted for.  Given the 1^st plaintiff transferred US$9,375,000, there is no basis to suggest that it has no good arguable case in respect of US$5,060,000.  Any dispute as to the quantum of the loss suffered by it should be left to trial.

59.  For these reasons, no leave to appeal should be granted in respect of ground 6.

VI.     Conclusion

60.  For the above reasons, the defendant’s application is dismissed.  As the defendants’ application is totally without merit, pursuant to Order 59, rule 2A(8) of the Rules of the High Court, we will make an order that no party may request our determination to be reconsidered at an oral hearing inter partes.

61.  We will make an order nisi that the 1^st plaintiff is to have the costs of the application.  The order will become absolute if no application to vary is made by the defendant within 21 days.  We will assess the costs summarily.  The 1^st plaintiff is to file and serve an updated statement of costs within seven days.  The defendant is to file and serve his objection to the amount claimed within 21 days.