BBMB FINANCE (HONG KONG) LTD. and Others v. LORRAIN ESME OSMAN and Others

IN THE COURT OF APPEAL

1994, No. 194
(Civil)

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J U D G M E N T

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Mayo, J.A.:

1. This is an appeal from the decision of Godfrey JA who was sitting as an additional High Court Judge.

2. He declined to order that the claims being made against the 5th, 6th and 7th defendant should be struck out from the amended Consolidated Statement of Claim.

3. In this judgment I will refer to the appellants as being the defendants and the respondents as the plaintiffs.

4. The application made by these defendants was based upon a contention that the plaintiffs should not be permitted to prosecute their claims against them as the same issue had been the subject of adjudication by the Swiss courts and this constituted issue estoppel.

5. So far as the claim against these defendants is concerned in Hong Kong it is confined to a tracing action.

6. There is a considerable measure of agreement between the parties concerning the payments made into and out of the various Swiss Bank accounts which were referred to.

7. It is agreed that the US$3,529,412 which was transferred from the 8th defendant's account at Swiss Bank Corporation to 7th defendant's account with the same bank on 19 October 1983 did derive from the US$40 million which was advanced by the plaintiffs to the Carrian Group of companies. It is also accepted that part of the US$3,519,412 can be traced to the 5th defendant's account with the American Express (Switzerland). It is the plaintiffs present case that the three defendants were all in effect constructive trustees and that there was no consideration for the said transfer of the moneys. It was only necessary for them to establish the latter for them to succeed in a tracing claim.

8. It is the defendants' case that there was consideration for the transfer of the moneys. The 5th defendant claims that the moneys were transferred to her to repay the loans she had made to Mr George Tan the 4th Defendant on 7th and 10th October 1983 enabling him to comply with the terms of an order granting him bail.

9. The litigation in Switzerland concerned two "Arrest Orders" made against accounts operated by the 5th and 7th defendant. Initially an ex parte order was obtained by the plaintiff the effect of which was to freeze the accounts. The defendants filed an opposition to the orders and issues were then framed in writing.

10. The plaintiffs' claim was divided into two parts. The first was in tort where it was alleged that the 5th defendant was guilty of complicity in secreting funds and the 2nd was based upon her unjust enrichment. One of the matters canvassed was an allegation that the 5th defendant was simply a nominee or stooge of the 4th defendant.

11. The actual Articles of the Swiss Code of Obligations which were the subject matter of the claims against the 5th defendant read as follows:

Article 41:

"Whoever unlawfully causes damage to another, whether willfully or negligently, shall be liable for damages (Art. 43 et seq.).

Equally liable for damages is any person who willfully causes damage to another in violation of boni mores."

Article 62:

"Whoever has been unjustly enriched out of another person's property shall make restitution of such enrichment.

In particular, this obligation shall arise if a person has received something without any valid reason, or for a reason which did not materialise, or which subsequently ceased to exist."

12. The Zurich District Court did not consider that the plaintiffs had made out a prima facie case on the documents and ordered that there should not be a trial or hearing where oral evidence would be given. This decision was the subject of an appeal which was dismissed.

13. Sir John Swaine for the defendants submitted that the matters which had been considered by the Swiss courts were the same as those being ventilated in the present litigation although he accepted that some of the labels adopted did differ. He argued that it would be unjust to subject the defendant to the double jeopardy of having to in effect defend themselves twice in respect of the same allegations.

14. He contended that he could rely upon issue estoppel in support of the application which was being made and the scope of this could be enlarged to also embrace the doctrine of Res Judicata. If any issue could have been raised in the Swiss proceedings it should have been.

15. He referred to the usual authorities in support of these propositions. I do not think that there can be any doubt that Sir John is correct in his analysis of the law. The problem however is in considering whether the issues which were ventilated before the Swiss courts were indeed the same as the issues pleaded in the present litigation.

16. In the context of the present appeal the important matters to consider are the nature of the legal proceedings in Switzerland and the extent to which they resemble the claims being made by the plaintiffs against the defendants in the present proceedings.

17. It is evident from a perusal of the Swiss judgment that the main factors which were weighed by the Court were the extent of the 5th defendant's complicity or involvement in Mr Tam's alleged activities and of her knowledge of the source of the funds in the relevant accounts. There was also reference to the fact that at the time of the transfers there was no formal offence of "money laundering". They did however consider whether the plaintiffs had adduced sufficient evidence of the 5th defendant's complicity in "hiding the flow of money".

18. Not surprisingly the focus of the judgment was directed towards whether on the evidence adduced by the plaintiffs it could be established that there had been any violation or breach of the laws of Switzerland. The court was not concerned whether the claims formulated in the present amended consolidated statement of claim had been proved.

19. Mr Harris for the plaintiffs submitted that in the context of a tracing claim the important issue to determine was whether the defendants could demonstrate that they were bona fide purchasers for value without notice. It was necessary for them to prove this in accordance with the defence which had been filed.

20. The matters which would have to be weighed by the court would be entirely different to the matters which were canvassed before the Swiss courts. This was largely on account of the fact that the law in Switzerland is very different to English law.

21. There is a useful summary upon what will determine whether a party is a bona fide purchaser in chapter 41 of the 4th Edition of the Law of Restitution by Lord Goff and Gareth Jones, London Sweet and Maxwell 1993.

22. One important matter which has to be borne in mind is that a defendant's lack of knowledge of certain matters is by no means to be equated with their good faith. A good illustration of this can be seen from a passage from the speech of Lord Wilberforce at 528 of Midland Bank Trust Co. Ltd. and Another v. Green [1981] AC 513:

"My Lords, the character in the law known as the bona fide (good faith) purchaser for value without notice was the creation of equity. In order to affect a purchaser for value of a legal estate with some equity or equitable interest, equity fastened upon his conscience and the composite expression was used to epitomise the circumstances in which equity would or rather would not do so. I think that it would generally be true to say that the words 'in good faith' related to the existence of notice. Equity, in other words, required not only absence of notice, but genuine and honest absence of notice. As the law developed, this requirement became crystallised in the doctrine of constructive notice which assumed a statutory form in the Conveyancing Act 1882, section 3. But, and so far I would be willing to accompany the respondents, it would be a mistake to suppose that the requirement of good faith extended only to the matter of notice, or that when notice came to be regulated by statute, the requirement of good faith became obsolete. Equity still retained its interest in and power over the purchaser's conscience. The classic judgment of James L.J. in Pilcher v. Rawlins (1872) L.R. 7 Ch.App. 259, 269 is clear authority that it did: good faith there is stated as a separate test which may have to be passed even though absence of notice is proved. And there are references in cases subsequent to 1882 which confirm the proposition that honesty or bona fides remained something which might be inquired into (see Berwick & Co. v. Price [1905]1 Ch. 632, 639; Taylor v. London and County Banking Co. [1901]2 Ch. 231, 256, Oliver v. Hinton [1899]2 Ch. 264, 273)."

23. It is not possible to consider the question of consideration without also determining whether it can be shown that a defendant was a purchaser for value without notice. Clearly the issues which were weighed by the Swiss courts were entirely different to those which will have to be considered here on a tracing claim.

24. One of the difficulties which is encountered is that consideration is not a requirement of a contract under Swiss law.

25. A further difficulty is that there is no equivalent in Switzerland to the English law relating to the tracing of assets. Certainly the concept of unjust enrichment is a very different idea and the ingredients for establishing that there has been unjust enrichment bear little resemblance to the requirements which have to be adhered to in a tracing exercise.

26. In this connection one of the main reasons for the plaintiffs' lack of success in Switzerland was the fact that the plaintiffs may still have an outstanding claim to the moneys in Hong Kong.

27. I have endeavoured to indicate the main conceptional differences between Swiss and English law so far as they relate to the main issues between the plaintiffs and these defendants.

28. This may perhaps be the wrong way of approaching this matter as it is clear from the speech of Lord Brandon at p449 of the Sennar (No. 2) that a party seeking to establish issue estoppel must show the issues earlier ventilated were indeed the same as those subsequently being raised. He had this to say:

"Looking at the matter positively a decision on the merits is a decision which establishes certain facts as proved or not in dispute; states what are the relevant principles of law applicable to such facts; and expresses a conclusion with regard to the effect of applying those principles to the factual situation concerned."

29. It is clear to me that the defendants have fallen far short of demonstrating that there has been issue estoppel in the present case. I would with respect find myself in agreement with the conclusion reached by Godfrey JA when he considered the application and I would dismiss this appeal. In my opinion costs should follow the event.

Liu, J.A.:

30. The 5th, 6th and 7th defendants are sisters. They applied by summons to strike out or dismiss the plaintiffs' claims against them on the grounds of issue estoppel. Criticism was specifically levelled at paragraphs 182, 183 and 184 of the consolidated statement of claim. On 30 September 1994, their application came to be heard and was dismissed with costs in Chambers by Godfrey JA sitting as an additional judge of the High Court.

31. George Tan, the 3rd defendant, is said to have fraudulently obtained a loan of US$40m from the 1st plaintiff in 1983 for rescuing the Carrian Group. The Carrian Group collapsed and the US$40m loan was allegedly dissipated. The 1st plaintiff's claim has been assigned to the 3rd plaintiff. The plaintiffs are able to trace over US$3.5m, being part of the US$40m loan, finally into two Swiss bank accounts.

32. In March 1988, Criminal Blocking Orders were caused to be issued for seizing the funds in Swiss bank accounts. In December 1988, a mareva injunction was obtained against these sister-defendants. Later, Civil Attachment Orders known as "Sequestration Orders" were additionally applied for against these bank funds. Similar actions to feed these Civil Attachment Orders were thereafter duly instituted on 24 April 1989 and 13 August 1990 against the 5th defendant and the 7th defendant respectively. The 5th defendant is the real target in all these proceedings. The 7th defendant is her sister whose account had been used to accommodate transfers to the 5th defendant. The 6th defendant had been the 5th defendant's Power of Attorney.

33. The plaintiffs' claims here were made through the 3rd plaintiff in these Swiss actions and they were dismissed by the Zurich District Court. Before Godfrey JA, the sisters defendants called in aid matters, they say, decided or should have been put forward for determination in these Swiss actions as issues estoppel. Godfrey JA dismissed their application founded on such alleged issues estoppel; hence this appeal. In the instant appeal, these defendants no longer rely on cause of action estoppel but confine themselves to issue estoppel.

34. The nature of the 3rd plaintiff's claims in the Swiss actions before the Zurich District Court was identical and they were founded first, in tort and secondly unjust enrichment. These claims were based on Articles 41 and 62 of the Swiss Code. The Zurich District Court's decisions were affirmed by the High Court of the Canton of Zurich. The translation of the decisions of the Swiss courts appears to be somewhat stilted and is difficult to follow. From Mr Scott's understanding of a summary prepared by Dr Desax, the 3rd plaintiff's Swiss lawyer, (vol. 2 p.73), Dr Desax's confirmation (vol. 2 p.126), the 3rd plaintiff's pleaded reply prepared by Dr Desax (vol. 2 pp.145-154) and passages of the Zurich decisions (vol. 2 pp.207-209; vol. 3 p.213), it would appear that the 3rd plaintiff's claim in tort was rejected by the Swiss courts on the ground that even upon the 3rd plaintiff making good all the pleaded or submitted facts, "unlawfulness" or "violation of a general legal obligation" under Swiss law as a constituent of its cause of action had still not been established and that therefore "there was no need for the hearing of evidence". Sir John Swaine, leading counsel for these defendants on appeal, argues that since the 5th defendant was exculpated from a charge of conspiracy with George Tan in his fraudulent activities surrounding the US$40m loan, she was expressly or impliedly cleared by the Swiss courts of her alleged involvement as his nominee or stooge and that both her good faith and her lack of notice of the plaintiffs' equity were thus upheld in her favour.

35. As for the 3rd plaintiff's claim in unjust enrichment, the Swiss courts dismissed the 3rd plaintiff's claim by reason of the 3rd plaintiff's inability or lack of standing to sue (vol. 2 pp.213-217; vol. 3 p.211) on the ground that "the plaintiffs had not been disenriched because they still had their contractual remedies against Carrian Nominees Limited" (vol. 2 p.78 paragraph 21). In other words, "unjust enrichment could not exist if the plaintiffs had some other claim" (vol. 2 p.80 paragraph 32).

36. It is not the stance of Mr Harris, counsel for the plaintiffs/respondents, that the judgment of the Zurich District Court is in anyway obscure. In fact, the 3rd plaintiff seemed to have experienced no difficulty in presenting its appeal to the High Court of the Canton of Zurich. What Mr Harris submits is that by the way in which the Swiss actions were disposed of, no factual determination was attempted or made but that the proceedings in Switzerland were brought to an end as a matter of law, not on the merits. That is arguably what was said in the judgment of the Zurich District Court. Sir John, counsel for the appellants/sister-defendants, maintains that there was nevertheless a determination made in these Zurich actions in which it was held that even accepting on its face value everything that had been presented in the formal case, the 3rd plaintiff had still not come up to proof with respect to a legal ingredient in each of its two causes of action, tort and unjust enrichment. In that sense, a determination was made by the Zurich District Court, which was affirmed by the High Court of the Canton of Zurich. What was or must have been decided on the material before the Zurich District Court was that the sisters were not, through the 5th defendant, serving George Tan as his nominees or stooges in conspiracy. The plaintiffs through the 3rd plaintiff had chosen to submit to the Swiss jurisdiction, and they must accept any issue so decided as having been competently and properly adjudicated under the Zurich procedure. Further, it is not suggested before us that the 3rd plaintiff ever sought to adduce oral or further evidence in the Zurich District Court or that the issues of and in the 5th defendant's un-involvement would have been differently decided with oral or further evidence. The 3rd plaintiff took the matter no further in Switzerland. Clearly, the sisters' good faith and lack of notice of the plaintiffs' equity were decided, but they were so decided by reference only to the 5th defendant's alleged complicity with George Tan.

37. Consequently, it cannot be denied that there was indeed a determination in both these Zurich actions. But for an issue estoppel to arise, what would be crucial is the nature of the determination made by the Swiss courts. This court must not allow itself to be confused by various matters sought to be canvassed but should only address itself to the joined issues ultimately determined. In adopting that approach, one would hopefully be able to identify what were decided by the Swiss courts and what, in terms of a wider concept of issue estoppel, can be said to be "point(s) which properly belonged to the subject of litigation". See Henderson v. Henderson (1843)3 Hare 100 at p.115 per Wigram V-C;Yat Tung Co. v. Dao Heng Bank (PC) [1975] AC 581 at p.590. I say "hopefully" because the stilted translation of the Swiss decisions is, to me, quite difficult to read or understand. Consideration or rather the absence of it is the kernel of the plaintiffs' tracing claim, and it is to be borne in mind that "consideration" is wholly foreign to Swiss law on contract formation. However, we have the assistance of the Swiss lawyers who had no difficulties and whose explanations do not seem to have been rejected. In my view, the Swiss courts dwelt on the sisters' un-involvement with George Tan and had dealt with their good faith and ignorance of the plaintiffs' equity but exclusively with reference to that alleged complicity. The plaintiffs in these proceedings could not be precluded from challenging the sisters' bona fides or lack of notice of the plaintiffs' equity in the context of absence of consideration, on a somewhat different plane with respect to the 5th defendant's own conduct in her then aligning and restructuring funds for George Tan's bail money. In opposition to the plaintiffs' tracing claims, these defendants advance the plea of a bona fide purchaser for value in paragraph 26 of their defence (vol. 1 p.252), on which it would be open to the plaintiffs to inquire into the questions of both bona fides and absence of notice in the course of an investigation as to what valuable consideration had been given. See Pilcher v. Rawlins [1987]1 Ch App 259 at pp.268 and 269 per James LJ. Good faith is expressly pleaded in paragraph 26(7). See vol. 1 p.254. The question of notice itself would likely call for an investigation in depth. It has been said that absence of notice must be genuine and honest and that one must not be shutting his "eyes to the obvious or wilfully and recklessly refraining from making" reasonable inquiries. Thus, notice would include constructive as well as imputed notice. SeeMidland Bank Trust Co. v. Green [1981] AC 513 at p.528E per Lord Wilberforce; Baden v. Societe Generale S.A. [1993]1 WLR570 paragraph 287 at p.587D-E, per Peter Gibson, J; Eagle Trust Plc v. S.B.C. Securities Ltd [1993]1 WLR paragraph 484 at p.504C to 506D-E, per Vinelott, J. See also The Law of Restitution, Lord Goff and Professor Jones, 4th edn. pp.760-762.

38. Further, it is these defendants who in their defence in this case rely on the status of a bona fide purchaser to resist the plaintiffs' tracing claims. These defendants could hardly claim that they themselves have been estopped from canvassing these issues if only for the fact that the plaintiffs have not pleaded any issue estoppel against them. Also, they have not claimed an estoppel against themselves. These defendants are put to proof that the 5th defendant had provided consideration for the funds transferred into her accounts in repayment of money laid out for George Tan's bail. In that process, they would be obliged to show their bona fides and lack of notice in support of their plea of a bona fide purchaser. Indeed, a finding of detachment from George Tan would not preclude the plaintiffs from putting these defendants to proof that the bail money put up by the 5th defendant was her own money, not in truth money provided by some one else.

39. In dealing with interlocutory proceedings of the nature of the striking out application before Godfrey JA on the grounds of issue estoppel, it would not be desirable for this court to say more than what is necessary for disposing of this appeal.

40. In conclusion, as for paragraph 183 of the consolidated statement of claim at vol. 1 p.175, "absence of consideration" moving from the 5th defendant for the reimbursement of George Tan's bail money is not manifestly unsustainable. I refuse these defendants' application to strike out paragraph 183. For the reasons I have given, the questions of good faith and lack of notice of plaintiffs' equity in the context of a bona fide purchaser plea are not matters which cannot be canvassed in these proceedings by reason of any issue estoppel.

41. Paragraph 184(i) of the consolidated statement of claim at vol. 1 p.175 asserts another conspiracy directed at persons other than the 5th defendant. The 5th defendant is featured as a co-conspirator in the particulars given for that alleged conspiracy, but no claim is made against her personally in these proceedings. Paragraph 184(i) does not seek to make any case against the 5th defendant, which these defendants need answer and it is not therefore a paragraph which the sisters may themselves challenge as a pleading. These defendants' application to strike out paragraph 184(i) fails.

42. Paragraph 182 of the consolidated statement of claim at vol. 1 p.174 clearly raises an allegation against these defendants in their alleged capacity of nominees of George Tan. The plaintiffs, as has been demonstrated by Sir John, are bound by an issue estoppel arising from the decisions of the Swiss courts not to re-ventilate it. I would accede to these defendants' application to strike out paragraph 182 of the consolidated statement of claim.

43. Clearly, there was no concession made by Mr Scott on behalf of the plaintiffs by his use of the term "innocent volunteers", particularly in anticipation of a tracing remedy. The term was used in Mr Scott's affidavit at a time when guilt or innocence of these defendants was a live issue. No such concession could reasonably be expected to have been made in those circumstances. It seems now to be common-ground that in the context of a tracing action, innocence or lack of knowledge on the part of a volunteer would not defeat an equitable owner's rights to trace. See Snell's Equity 29th edn. p.302. In addition, the plaintiffs were then unaware of precisely how the 5th defendant managed to finance George Tan's bail. The relevant cashier orders were not known to the plaintiffs. I am unable to find any other issue estoppel binding on the plaintiffs in these proceedings.

44. Save for the defendant's application to strike out paragraph 182 of the consolidated statement of claim, to which I propose to accede, I would dismiss this appeal. To that extent, I would vary the order of Godfrey JA.

45. As for costs, I would make an order nisi that four-fifths of the costs in this appeal and in the court below be to the plaintiffs and one-fifth to these defendants.

Nazareth, V.-P.:

46. The 5th defendant's case before Godfrey JA, and on appeal before this Court, was primarily that the issue of her good faith was determined by the Swiss courts, and that therefore the plaintiff is estopped from, and should not be permitted to litigate it in the courts of Hong Kong.

47. It is common ground that the law in point is to be found in the speech of Lord Brandon in The Sennar (No. 2) [1985] 1 WLR 490. It resolves itself in the present context into the question whether the third requirement that Lord Brandon identified is met, i.e. whether the issue now before the Hong Kong courts is the same as one already decided by the Swiss courts.

48. It has not been disputed by the 5th defendant that about US$3.5m of the US$40m rescue loan to the Carrian Group of Companies found its way into an account in the name of her sister, the 7th defendant, on her behalf, and into two Swiss accounts of the 5th defendant herself. Her defence has been that she had earlier advanced a like sum to George Tan, who controlled the Carrian Group, to meet his bail requirements, and received the sums paid into the bank accounts mentioned as repayment in good faith. Their receipt being admitted, Sir John Swaine Q.C., for the 5th defendant, submitted that the central issue in the Hong Kong action is that of consideration, in effect, whether the 5th defendant received the money in good faith without notice.

49. The plaintiff had sought to sustain the arrest orders made in Switzerland against the three bank accounts mentioned upon causes of action in tort under Article 41 and unjust enrichment under Article 62 of the relevant Swiss code, the text of both of which Articles Mayo JA has set out in his judgment. But as Sir John pointed out from the Swiss District Court judgment, the plaintiff's case was pursued there on the basis that the 5th defendant was given the money by George Tan's brothers-in-law in advance to pay the bail money (an allegation since demonstrated to be unfounded and no longer pursued), that she collaborated in the fraudulent procurement of the US$40m loan, and actively participated in the misappropriation and in hiding and laundering the money; in short that the 5th defendant was alleged to be guilty of bad faith, in the words of the Swiss District Court. These allegations, it is contended by Sir John, were held by the Swiss courts, to be unfounded.

50. The question then that has to be addressed is whether the issue of bad faith in the Swiss proceedings is the same issue as that of good faith in the Hong Kong proceedings, i.e. the plaintiff's tracing action.

51. The issues in the Swiss proceedings were analysed and identified in particular by Dr Desax, the plaintiff's expert in Swiss law. As to the claim in tort, of four elements identified, it is only unlawfulness that is pertinent. The Swiss court found that there was no rule of law that was violated as money loan laundering was at the time not yet a criminal offence. Therefore it rejected the claim without taking evidence or determining the facts. Clearly that did not involve the determination of any issue that arises in the Hong Kong tracing action, nor did I understand that to be contended.

52. As to the claim of unjust enrichment, the court found that the 3rd plaintiff (which is also the assignee of the claims of the 1st and 2nd plaintiffs) had no standing to sue as it still had a contractual claim against George Tan and the Carrian Group). The claims would lie against the Carrian Group (which received the money from the 3rd plaintiff) and not against the 5th defendant.

53. However, the Swiss courts do appear to have gone on to make the observations or findings upon which Sir John relies. Thus, it was observed in the District Court judgment that the plaintiff did not prove bad faith on the part of the 5th defendant, and, with reference to the claim in tort, that the plaintiff failed to assert facts that would establish the claim. However, the English translation of the judgments leaves much to be desired and it seems to me far from clear particularly whether those were actual findings or even intended to be such.

54. Turning then to the issues in the plaintiff's Hong Kong action, it being conceded that the US$3.5m in the three bank accounts came from the US$40m loan, Sir John submits that the only issue in this tracing action is what came to be known as the consideration point. This was run in the following way as already indicated. While conceding the source of the funds in the three bank accounts, the 5th defendant claimed that she had earlier loaned George Tan out of her own funds a similar aggregate amount to meet his bail requirement, and that the funds received were repayment accepted in good faith without notice.

55. I turn then to the question whether any of the issues decided in the Swiss proceedings are the same as any issue in the Hong Kong action. Those of "unlawfulness" and "enrichment" quite simply are not, a fortiori given that the grounds upon which they were disposed of in the Swiss courts are wholly irrelevant to the Hong Kong issues. Understandably, therefore, Sir John focused in the present context upon the issue of good faith, i.e. the consideration point. It must first of all be pointed out that the expression "good faith" was used by the Swiss courts as a convenient designation for the plaintiff's various allegations showing that the 5th defendant's activities were those of an accomplice and a participant, and therefore unlawful and unjust. There has been no suggestion whatever that consideration exists or operates in Swiss law as it does in the law of contracts in Hong Kong. Plainly, what the Swiss courts addressed was an issue quite different from that in the Hong Kong action. That conclusion disposes of this main ground of the 5th defendant's appeal.

56. It may be added that it is reinforced by the following considerations. The burden on the plaintiff to establish its causes of action in tort and in unjust enrichment in the Swiss proceedings was far higher than it will be in contesting the 5th defendant's contention in the Hong Kong action that she was in the position of a bona fide purchaser for value without notice.

57. It seems also that the bad faith allegation against the 5th defendant in the Swiss action was unnecessary and in the event not determined, at any rate, upon actual evidence received.

58. Sir John sought to meet the latter consideration upon a wider principle of res judicata founded upon Henderson v Henderson (1843) 3 Hare 100 and Yat Tung Investment Co v Dao Heng Bank (Pc) [1975] AC 581 that the plaintiff should have deployed its case in full in the Swiss proceedings and must therefore be regarded as having done so. However, such evidence, as there is, suggests that there is nothing in Swiss law in the nature of a tracing action which, therefore, the plaintiff could not have pursued in the Swiss proceedings. This, it seems to me, constitutes "special circumstances" which in justice require non-application of the wider principle of res judicata referred to (see p. 590E of Yat Tung). Alternatively, it could not be right to hold against the plaintiff the non-inclusion of a cause of action which was not open to him, and in the absence of authority requiring me so to do, I would decline to apply the principle in the Henderson and Yat Tung cases in that way.

59. Finally, it remains to refer to the lack of clarity in the English translation of the Swiss courts' judgments. In that regard, Godfrey JA was quite right to emphasise the necessity for extreme caution in scrutinising both a foreign judgment and the procedure by which it was obtained, in founding issue estoppel upon it.

60. It remains to mention Sir John's fall-back submission in pursuance of the third relief sought in the 5th defendant's Notice of Appeal, i.e. that in the alternative to dismissal of the plaintiffs' entire claim, "such parts of paragraphs 182, 183 and/or 184 of the Consolidated Statement of Claim" as this Court deems fit be struck out. Sir John submitted that s.182 in particular, which inter alia pleads that the 5th defendant and her sisters acted on the instructions of or were George Tan's nominees, should be struck out as estopped by a specific finding by the Swiss courts. However, it seems to me that such relief must also be denied for the same reasons that the 5th defendant's primary case fails, in particular, the difficulty in identifying the precise nature of the issues concerned arising as they do in the context of different causes of action, and whether any and what issue that properly belonged to that litigation was determined, given that no evidence was taken. Here also, as in respect of the 5th defendant's primary case, it seems to me that she has not discharged the onus that lies on her to establish that paragraphs 182, 183 and 184 should be struck out.

61. I do not find it necessary to refer to the other points urged on behalf of the 5th defendant. For the foregoing reasons, I would also dismiss the appeal. As to the costs of this appeal, there does not appear to me to be any reason why they should not follow the event, and I would make an order nisi to that effect.

62. Accordingly the appeal is dismissed with an order nisi that the plaintiffs are to have their costs of the appeal.