Nam Tai Property Inc v West Ridge Investment Limited

THE EASTERN CARIBBEAN SUPREME COURT IN THE COURT OF APPEAL TERRITORY OF THE VIRGIN ISLANDS BVIHCMAP2022/0046 BETWEEN: NAM TAI PROPERTY INC (a company incorporated in the British Virgin Islands) Applicant/Appellant and WEST RIDGE INVESTMENT LIMITED (a company incorporated in Hong Kong) Respondent Before: The Hon. Mr. Mario Michel Justice of Appeal The Hon. Mr. Eddy D. Ventose Justice of Appeal The Hon. Mde. Vivian Georgis Taylor-Alexander Justice of Appeal [Ag.] Appearances: Mr. Jack Rivett with him Ms. Arabella di Iorio and Ms. Misha Walters for the Applicant Mr. John Machell KC with him Ms. Kimberley Crabbe-Adams and Ms. Jhneil Stewart for the Respondent __________________________________ 2024: February 16; August 20. ___________________________________ Application for conditional leave to His Majesty in Council – Section 3(2)(a) of the Virgin Islands (Appeals to Privy Council) Order 1967 – Great general or public importance limb of section 3(2)(a) - Whether question of great general or public importance raised in proposed appeal – ‘Or otherwise’ limb of section 3(2)(a) – Whether appeal ought to be submitted to His Majesty in Council – Whether Court erred in finding that Nam Tai had no realistic prospect of succeeding in its claims of unlawful means conspiracy and dishonest assistance against West Ridge – Whether Court erred in finding that Nam Tai had no realistic prospect of demonstrating that the Deed of Indemnity was ineffective or void or not binding on it The genesis of these proceedings is rooted in shareholder dissatisfaction with the manner in which the then directors of Nam Tai were conducting its business. At that time, the majority of Nam Tai’s directors were also directors of Kaisa Group Holdings Limited (“Kaisa”). The dissatisfaction led to IsZo Capital LP (“IsZo”), a shareholder of Nam Tai, along with other shareholders serving a requisition on Nam Tai in September 2020 to hold a special shareholder meeting to replace most of the directors. This meeting, however, never happened and instead, in October 2020, the majority directors in Nam Tai approved an allotment of shares under a private investment in public equity (“PIPE”). Under the PIPE, West Ridge Investment Limited (“West Ridge”) received over 2 million issued shares and Greater Sail Ltd. (“Greater Sail”), a subsidiary of Kaisa, received over 16 million issued shares. The consequence of the allotment was that Kaisa’s beneficial ownership over Nam Tai moved from 23.9% to 43.9%. The allotment ensured that Nam Tai remained under the de facto control of Kaisa, so much so that Kaisa gained sufficient voting power to block the resolutions proposed in the said requisition. Moreover, West Ridge now owned 4.5% of Nam Tai’s shares. Although Kaisa did not control West Ridge, West Ridge was a subsidiary of Haitong International Securities Co Ltd (“Haitong”) a company which had friendly relations with Kaisa. After the allotment, IsZo issued proceedings against Nam Tai (the “Main claim”), with West Ridge and Greater Sail named as additional defendants, challenging the validity of the PIPE. The Main claim alleged that the PIPE was made for an improper purpose and was in breach of sections 120(1) and 121 of the BVI Business Companies Act (the “BC Act”). West Ridge thereafter issued an ancillary claim against Nam Tai (the “Ancillary claim”) which sought repayment of the price paid for the shares, in the event that IsZo’s action succeeded in having the allotment set aside. Nam Tai, still under the de facto control of Kaisa, entered into negotiations with West Ridge, in which Nam Tai agreed to indemnify West Ridge for any losses that it would suffer in the event of the Main claim succeeding and the allotment of shares being set aside (the “Deed of Indemnity”). Some of the terms of the Deed of Indemnity were incorporated in a Tomlin Order dated 14th December 2020. Under the terms of the indemnity, Nam Tai agreed that it would not file a defence to the Ancillary claim, which was stayed, except for carrying out the terms of the Tomlin Order. The Main claim against West Ridge was stayed on the basis of IsZo’s agreement that Nam Tai could enter into the Deed of Indemnity with West Ridge, and West Ridge would be bound by the result of the Main claim. The effect of the settlement on West Ridge was that it received an indemnity, gave up its right to defend the Main claim on the understanding that its subscription was unaffected by any irregularity with the allotment, and it did not need to take any further part in the Main claim. The Main claim was subsequently determined in the lower court with the judge finding that the allotment of shares under the PIPE was made for an improper purpose and was void since the purpose of the allotment was not to raise money for the company, but rather to shift the balance of voting power amongst shareholders, with a view to maintaining the existing Kaisa directors. The judge also found that the Kaisa directors did not act in the best interests of Nam Tai and its shareholders and acted in breach of their duty under sections 120(1) and 121 of the BC Act. The judge therefore set aside the new allotments of shares to Greater Sail and West Ridge and ordered that the register of members of Nam Tai be rectified. Nam Tai appealed against the judge’s decision and on 4th October 2021, this Court affirmed the judge’s finding that the PIPE was for the improper purpose of defeating the requisition and keeping the Kaisa directors in de facto control of Nam Tai. The appeal was allowed to the extent of setting aside the finding that the Kaisa directors had breached section 120(1) of the BC Act. Following the appeal, a shareholders meeting was held by reference to the register of members as it stood prior to the allotment. The Kaisa directors were removed, and a new board was appointed. West Ridge thereafter applied under the Ancillary claim to enforce paragraph 1 of the Tomlin Order for the return of the subscription money it had paid for the shares, all their costs and other losses associated with the indemnity, to be quantified by the court. Nam Tai filed a defence and counterclaim to West Ridge’s claim, asserting that the Kaisa directors breached their duty to Nam Tai by approving and implementing the PIPE for an improper purpose in furtherance of an unlawful means conspiracy between Nam Tai and West Ridge to keep the Kaisa directors in control of Nam Tai. Alternatively, Nam Tai asserted that West Ridge dishonestly assisted the Kaisa directors in making the PIPE for an improper purpose. Nam Tai also alleged that the Kaisa directors breached their duties to Nam Tai under sections 120(1) and 121 of the BC Act and approved the Deed of Indemnity to withhold from the court in the Main claim, the disclosure of documents and evidence from West Ridge that would have confirmed that the PIPE was made for an improper purpose. Nam Tai submitted that the indemnity was ineffective and void, and/or not binding on Nam Tai and that the allotment was void. West Ridge therefore was not entitled to the return of its subscription money and instead, was liable to Nam Tai for damages and equitable compensation in an amount to be ascertained. On 7th April 2022, on a summary judgment application brought by West Ridge to enforce the Tomlin Order, the judge found that Nam Tai did not have a realistic prospect of success on its claim to set aside the Tomlin Order. The judge granted West Ridge’s application, enforced the Tomlin Order and dismissed Nam Tai’s defence and counterclaim. Nam Tai thereafter appealed to this Court. In the 2023 judgment, this Court dismissed Nam Tai’s appeal and affirmed the learned judge’s finding that the terms of the Deed of Indemnity, as incorporated into the Tomlin Order, stood to be enforced. Specifically, this Court found, inter alia, that: (i) Nam Tai’s claims of unlawful means conspiracy and dishonest assistance did not rise to the level of having a realistic prospect of success if the matter proceeded to trial; (ii) Nam Tai did not have a realistic prospect of showing that the Kaisa directors (on behalf of Nam Tai) entered into the Deed of Indemnity for an improper purpose; and (iii) West Ridge’s entitlement to rely on the Deed of Indemnity was not barred, because Nam Tai did not have a realistic prospect of showing that the Deed of Indemnity was issued for an improper purpose in breach of section 121 of the BC Act, or that West Ridge assisted in the alleged breach. It is against the 2023 judgment that Nam Tai has sought conditional leave to appeal to His Majesty in Council. In the application for leave (the “Application”) Nam Tai alleged 7 grounds for the proposed appeal asserting that the proposed appeal involved a question or questions of great general or public importance or otherwise ought to be submitted to His Majesty in Council pursuant to section 3(2)(a) of the Virgin Islands (Appeals to Privy Council) Order 1967 (the “1967 Order”). The Court noted that grounds 4 to 7 of Nam Tai’s proposed appeal were parasitic on grounds 1 to 3 and therefore sought to consider grounds 1 to 3 first. In determining grounds 1 to 3, the Court found that there was no need to further consider grounds 4 to 7. The issues raised for determination by grounds 1 – 3 of the proposed appeal were: (i) whether this Court erred by concluding that Nam Tai’s claim in unlawful means conspiracy against West Ridge had no realistic prospect of succeeding; (ii) whether Nam Tai’s claim of dishonest assistance against West Ridge had no realistic prospect of succeeding; and (iii) whether this Court erred by finding that Nam Tai had no realistic prospect of demonstrating that the Deed of Indemnity was ineffective or void or not binding on it. Held: dismissing the Application for conditional leave to appeal to His Majesty in Council and ordering that Nam Tai pay West Ridge’s costs of the Application to be assessed if not agreed within 21 days of the date of this judgment, that: 1. Section 3(2)(a) of the 1967 Order provides two bases upon which the Court of Appeal may exercise its jurisdiction to grant conditional leave. Under the ‘great general or public importance’ limb, the Court would look for matters which involve a serious issue of law, a constitutional provision which has not been settled, an area of law in dispute, or a legal question, the resolution of which, poses dire consequences to the public. This list is non-exhaustive and generally the matters under this limb would involve a difficult question of law. As to the ‘or otherwise’ limb, an applicant would have to satisfy the Court that there is some other compelling reason why the appeal ought to be referred to His Majesty in Council. Such a reason would include where there was reasonable doubt as to the correctness of the Court of Appeal’s decision if, for example, where the decision was based on a principle which has been overruled by a higher authority or where it was based on a statute or statutory provision which has been repealed prior to such decision being rendered. What is clear is that the Court will not grant leave under section 3(2)(a) where the real question on the proposed appeal is: (i) the way the Court has applied settled and clear law to the facts; or (ii) whether a judicial discretion was properly exercised. Section 3(2)(a) of the Virgin Islands (Appeals to Privy Council) Order 1967 Statutory Instrument No. 234 of 1967 applied; Multibank FX International Corporation v Von Der Heydt Invest SA BVIHCVAP2022/0008; BVIHCVAP2021/0009 (delivered 7th July 2023, unreported) followed; Martinus Francois v The Attorney General Civil Appeal No. 37 of 2003 (delivered 7th June 2004, unreported) followed; Renaissance Ventures Ltd et al v Comodo Holdings Ltd. BVIHCMAP2018/0005; BVIHCMAP2018/0008 (delivered 18th October 2018, unreported) followed. 2. The elements of the tort of unlawful means conspiracy are: (i) a combination, agreement or understanding between two or more people; (ii) an intention to injure another individual or separate legal entity; (iii) use of unlawful means as part of the concerted action; and (iv) loss being caused to the target of the conspiracy. As to the intent to injure, there must be an intent to inflict damage on the claimant as an end in itself, or to inflict it as a means to some other end. Merely resulting or incidental damage will not do, even if foreseeable. As to proof of loss, in unlawful means conspiracy, the loss must be pecuniary. E D & F Man Capital Markets Ltd v Come Harvest Holdings Ltd and others [2022] EWHC 229 (Comm.) applied; Grant & Mumford (1st Edition: 2018) at para. 2-007 considered. Lonrho plc. and others v Fayed and others (No. 5) [1993] 1 W.L.R. 1489 considered; OBG Ltd. and another v Allan and others; Douglas and others v Hello! Ltd and others (No 3); Mainstream Properties Ltd v Young [2008] 1 AC 1 considered. 3. On a reading of this Court’s 2023 judgment, it is evident that this Court, in its assessment of the decisions in Lonrho plc. and others v Fayed and others (No. 5) and OBG Ltd. and another v Allan and others, fell into error and conflated two elements of the tort of unlawful means conspiracy; that is, the intent to injure and proof of loss/damage. A proper reading of Lonrho and OBG confirmed that the intention in an unlawful means conspiracy need not be an intention to specifically cause pecuniary harm. Whilst the loss or harm suffered must be pecuniary, the intention to injure need not be. Consequently, in so far as this Court conflated the two elements of the tort, it erred. However, this Court’s decision did not ultimately turn on this finding. The judge, whose understanding of the law of intent and loss accorded with the principles in Lonrho and OBG, concluded that on the material before him, Nam Tai did not have a realistic prospect of showing that West Ridge intended to harm it. This Court accepted and left undisturbed this finding of the trial judge. The appeal on this ground did not turn on the Court’s finding of a failure to plead a specific intention to cause pecuniary damage but an acceptance of the judge’s finding that Nam Tai’s pleadings failed to show an intention to harm. Consequently, Nam Tai did not meet the threshold for the grant of leave to appeal on this ground. Lonrho plc. and others v Fayed and others (No. 5) [1993] 1 W.L.R. 1489 considered; OBG Ltd. and another v Allan and others; Douglas and others v Hello! Ltd and others (No 3); Mainstream Properties Ltd v Young [2008] 1 AC 1 considered. 4. An application to set aside a Tomlin order is to be treated as if it were an application for summary judgment. Thus, the relief sought ought to be granted where the court considers that a party has no realistic prospects of succeeding on or defending the claim. When dealing with such applications, the court must examine the pleadings and the evidence critically, to see if, when properly assessed, they disclose a realistic prospect of defending or succeeding on a claim. The word “realistic” here carries some degree of conviction beyond being merely arguable. However, the court must take care not to conduct a mini trial at this stage. Even so, this does not mean that the court must take at face value and without analysis everything that a claimant says in their statements before the court. On the facts, this Court reminded itself of these principles and conducted an evaluation of the defence and counterclaim, the evidence before the Court and the lower court’s assessment of the evidence. The Court found that there was no basis to disturb the trial judge’s finding that the conspiracy claim failed as Nam Tai did not plead a proper case of intent to injure. Nam Tai’s challenge on this ground did not give rise to a genuine dispute on the approach a court should take in the enforcement or setting aside or a Tomlin order. Leave therefore cannot be granted on this ground. Flat Point Development Limited v Canisby Limited ANUHCVAP2016/0006 (delivered 7th December 2017, unreported) followed; Saint Lucia Motor & General Insurance Co. Ltd. v Peterson Modeste SLUHCVAP2009/008 (delivered 11th January 2010, unreported) followed; Heritage Travel and Tourism Ltd et al v Lars Windhorst et al [2021] EWHC 2380 (Comm) applied; Easyair Ltd (t/a Openair) v Opal Telecom Ltd [2009] EWHC 339 (Ch) considered. 5. In a claim for dishonest assistance there must be: (i) a trust or fiduciary obligation owed by the trustee/fiduciary to the claimant; (ii) a breach by the trustee/fiduciary which need not be dishonest since it is the dishonesty of the third party that matters; and (iii) the third party must have assisted in, induced or procured the breach and must have done so dishonestly. In the 2023 judgment, this Court found that the judge fell into error by concluding that Nam Tai had to prove that West Ridge assisted and procured the breach of duty by the Kaisa directors. The Court therefore considered the matter afresh and considered the test set out in Ivey v Genting Casinos (UK) Ltd (trading as Crockfords Club) and the dictum of Cockerill J in FM Capital Partners Ltd v Frederic Marino and others. Having defined the appropriate test, the Court then applied it to the facts. An examination of Nam Tai’s submissions reveals that they do not dispute the Court’s identification of the elements of dishonest assistance as articulated in FM Capital Partners Ltd. Moreover, Nam Tai does not assert that the Court erred in its statement of the law as set out in Ivey v Genting Casinos. In reality, Nam Tai is merely asserting that the Court misapplied the test to the facts. This does not rise to the level that there is some genuine dispute on the test to be applied to determine dishonest assistance since the real question on this ground is the way this Court has applied settled and clear law to the facts. Even if this Court were to find that there were inconsistent findings by the Court as to the facts, for Nam Tai’s submissions to rise to the level of significance so as to be submitted to His Majesty in Council, they had to have shown that the inconsistent findings created some reasonable doubt as to the correctness of the decision of the Court. This, they did not do and leave to appeal would not be granted on this ground. FM Capital Partners Ltd v Frederic Marino and others [2018] EWHC 1768 (Comm) applied; Ivey v Genting Casinos (UK) Ltd (trading as Crockfords Club) [2018] AC 391 applied. 6. In relation to the Deed of Indemnity, the thrust of Nam Tai’s argument was that favourable terms were given to West Ridge in exchange for its agreement not to give evidence or disclosure in the Main claim and so the indemnity was given for an improper purpose in breach of the then Kaisa directors’ duties under the BC Act. In the 2023 judgment, the Court found that there was no pleading of the actual evidence West Ridge would have given and as such, there was no way of knowing if the evidence would have helped or hurt Nam Tai. Having so found, the Court was reluctant to attribute any improper purpose to Nam Tai (under the direction of the then Kaisa directors). The Court concluded that Nam Tai’s allegation was speculative and did not meet the low threshold of showing a realistic prospect that the Kaisa directors acted in breach of their duties under sections 120(1) and 121 of the BC Act. Contrary to Nam Tai’s assertions, the issue of whether a breach of section 120(1) and/or 121 of the BC Act resulted in a transaction being void or voidable did not arise on the appeal. Nam Tai never overcame the hurdle of establishing that there was, in fact, a breach of the Act. This issue is therefore entirely academic and Nam Tai, on this ground, has failed to satisfy the threshold for the grant of leave to appeal. JUDGMENT

[1]TAYLOR-ALEXANDER JA [AG.]: In this application, Nam Tai Property Inc (“Nam Tai”) applied for conditional leave to appeal to His Majesty in Council (the “Privy Council”) pursuant to section 3(2)(a) of The Virgin Islands (Appeals to Privy Council) Order 19671 (“the 1967 Order”) against the judgment of this Court rendered on 27th July 2023 (the “2023 judgment”), dismissing Nam Tai’s appeal and affirming the judgment of Jack J [Ag.] dated 7th April 2022 which ruled that the terms of a Deed of Indemnity as incorporated into a Tomlin Order stood to be enforced. Nam Tai submitted that this Court erred in law and in fact on 7 material grounds, and these grounds involved questions of great general or public importance, or otherwise, such that Nam Tai ought to be granted leave to appeal to the Privy Council. The Essential Background to Nam Tai’s Application for Conditional Leave

[2]The genesis of these proceedings is rooted in shareholder dissatisfaction with the manner in which the then directors of Nam Tai were conducting its business. At that time, 5 of the 7 then directors of Nam Tai were directors of a company called Kaisa Group Holdings Limited (“Kaisa”). This dissatisfaction led to IsZo Capital LP (“IsZo”), a shareholder of Nam Tai, as well as other shareholders representing more than 30% of the shareholding in Nam Tai, serving a requisition on Nam Tai on 11th September 2020 to hold a special meeting of its shareholders for the purpose of replacing most of the directors of its board. That meeting, however, did not happen. Instead, on 5th October 2020, the majority directors in Nam Tai approved an allotment of shares under a private investment in public equity (“PIPE”). Under the PIPE, West Ridge Investment Limited (“West Ridge”) received 2,603,366 issued shares and Greater Sail Ltd. (“Greater Sail”), a subsidiary of Kaisa, received 16,051,219 issued shares.

[3]The consequence of the allotment was that Kaisa’s beneficial ownership of the shares in Nam Tai moved from 23.9% to 43.9%. The purpose of the new share issuance was to ensure that Nam Tai remained under the de facto control of Kaisa, so much so that Kaisa gained sufficient voting power to block the resolutions proposed in the said requisition. Also, West Ridge now owned 4.5% of the shares. Though Kaisa did not control West Ridge, West Ridge was a subsidiary of a company called Haitong International Securities Co Ltd (“Haitong”) which had friendly relations with Kaisa.

[4]After the allotment of the new shares, IsZo, issued proceedings against Nam Tai (the “Main claim”) challenging the validity of the PIPE. West Ridge and Greater Sail were named as additional defendants. The proceedings brought by IsZo alleged that the PIPE was made for an improper purpose and was in breach of sections 120(1) and 121 of the BVI Business Companies Act (the “BC Act”).2

[5]West Ridge thereafter issued an ancillary claim against Nam Tai (the “Ancillary claim”) which sought repayment of the price paid for the shares in the event that IsZo’s action succeeded in having the allotment set aside. Nam Tai, still under the de facto control of Kaisa, entered into negotiations with West Ridge, in which Nam Tai agreed to indemnify West Ridge for any losses that it suffered as a result of the Main claim succeeding and the allotment of shares being set aside (the “Deed of Indemnity”). Some of the terms of the Deed of Indemnity were incorporated in a Tomlin Order dated 14th December 2020. Under the terms of the indemnity, Nam Tai agreed that it would not file a defence to the Ancillary claim, which was stayed, except for carrying out the terms of the Tomlin Order. The Main claim against West Ridge was stayed on the basis of IsZo’s agreement that Nam Tai could enter into the Deed of Indemnity with West Ridge, and West Ridge would be bound by the result of the Main claim. The effect of the settlement on West Ridge was that it received an indemnity, gave up its right to defend the Main claim on the understanding that its subscription was unaffected by any irregularity with the allotment, and it did not need to take any further part in the Main claim.

[6]The Main claim was subsequently determined in the commercial court of the BVI with the learned judge finding that the allotment of shares under the PIPE was made for an improper purpose and was void, because the purpose of the allotment was not to raise money for the company but was to shift the balance of voting power amongst shareholders, with a view to maintaining the existing Kaisa directors in office. The learned judge also found that the Kaisa directors did not act in the best interest of Nam Tai and its shareholders and acted in breach of their duty under sections 120(1) and 121 of the BC Act. By his order, the learned judge set aside the new allotments of shares to Greater Sail and West Ridge and ordered that the register of members of Nam Tai be rectified to delete the entries for the shares allotted under the PIPE.

[7]On an appeal from Nam Tai, this Court on 4th October 20213 affirmed the judge’s finding that the PIPE was for the improper purpose of defeating the requisition and keeping the Kaisa directors in de facto control of Nam Tai. The appeal was allowed to the extent of setting aside the finding that the Kaisa directors had breached section 120(1) of the BC Act. Following the appeal, a shareholders meeting was held by reference to the register of members as it stood prior to the allotment. The Kaisa directors were removed from office and a new board was appointed, with Nam Tai now being under the control of a new board of directors. West Ridge thereafter applied under the Ancillary claim to enforce paragraph 1 of the Tomlin Order for the return of the subscription money it had paid for the shares, all their costs and other losses associated with the indemnity, to be quantified by the court.

[8]Nam Tai, now under the control of the new directors, filed a defence and counterclaim. The essence of the defence was that the Kaisa directors breached their duty to Nam Tai by approving and implementing the PIPE for an improper purpose in furtherance of an unlawful means conspiracy between Nam Tai and Westridge to keep the Kaisa directors in control of Nam Tai. Alternatively, that West Ridge dishonestly assisted the Kaisa directors in making the PIPE for an improper purpose. Nam Tai also alleged that the Kaisa directors were protecting their own interests and the interests of Kaisa in breach of their duties to Nam Tai under sections 120(1) and 121 of the BC Act, and approved the Deed of Indemnity in order to withhold from the court in the Main claim, disclosure of documents and evidence from West Ridge that would have confirmed that the PIPE was made for an improper purpose. Nam Tai submitted that the indemnity was ineffective and void, and/or not binding on Nam Tai and that the allotment was void and West Ridge was not entitled to the return of the subscription money, and was liable to Nam Tai for damages and equitable compensation in an amount to be ascertained, which amount would exceed any amount due to West Ridge under the indemnity giving rise to a right to a defence of equitable set off. Nam Tai also pleaded defences of change of position and breach of public policy.

[9]On 7th April 2022, on a summary judgment application brought by West Ridge to enforce the Tomlin Order, the judge found that Nam Tai did not have a realistic prospect of succeeding on its claim to set aside the Tomlin Order and ordered the enforcement of the Tomlin Order granting West Ridge’s application for judgment, pursuant to the Deed of Indemnity and accompanying Tomlin Order, and in doing so, he dismissed Nam Tai’s defence and counterclaim. Nam Tai appealed.

Appeal to this Court

[10]On 27th July 2023, this Court, in a judgment authored by Webster JA [Ag.], dismissed Nam Tai’s appeal with costs to West Ridge and affirmed the finding of the learned judge that the terms of the Deed of Indemnity, as incorporated into the Tomlin Order, stood to be enforced. Specifically, this Court found that: (i.) Nam Tai’s claims of unlawful means conspiracy and dishonest assistance did not rise to the level of having a realistic prospect of success if the matter proceeded to trial. (ii.) Nam Tai did not have a realistic prospect of showing that the Kaisa directors (on behalf of Nam Tai) entered into the Deed of Indemnity for an improper purpose. (iii.) there was no need to make an order regarding the lifting of the stay imposed by the Tomlin Order. (iv.) West Ridge’s entitlement to rely on the Deed of Indemnity was not barred, because Nam Tai did not have a realistic prospect of showing that the Deed of Indemnity was issued for an improper purpose in breach of section 121 of the BC Act, or that West Ridge assisted in the alleged breach; and (v.) the issues raised by the counter notice of appeal were covered by the findings in the judgment and any issues raised on the counterclaim that have not been dealt with were not necessary for the disposal of the appeal.

[11]It is against this decision that Nam Tai has sought conditional leave to appeal to the Privy Council.

Nam Tai’s Grounds of Appeal pursuant to its Conditional Leave

Application

[12]Nam Tai filed its Notice of Motion for Conditional Leave to Appeal to the Privy Council on 16th August 2023 (“the Application” or “the Application for conditional leave”). Nami Tai’s 7 grounds of appeal attached to the Application are summarised as follows:

Ground 1 – Unlawful Means Conspiracy

[13]On this ground Nam Tai submitted that: a) the Court erred in concluding that Nam Tai’s claim in unlawful means conspiracy against West Ridge had no realistic prospect of success. In particular, the Court erred in law in holding that to make the cause of action for conspiracy complete, the pleadings must allege a specific intention by the alleged conspirators to cause “pecuniary damage” to Nam Tai; b) further or alternatively, the Court erred in law and in fact by concluding that the potential costs to Nam Tai from the litigation which resulted from the impugned PIPE (which Nam Tai calls the “Improper Allotment”, and will be referred to as such when practical to do so at some points throughout this judgment) was only a foreseeable consequence of the Improper Allotment; c) further or alternatively, the Court erred in law and in fact by concluding that West Ridge wanted Nam Tai to prosper; and d) further or alternatively, the Court erred in law by concluding that, because West Ridge’s alleged ultimate objective was for Nam Tai to prosper, it could not have intended to cause harm to Nam Tai, even if the achievement of its ultimate objective involved the infliction of harm on Nam Tai in the short to medium term.

[14]Nam Tai argued that ground 1 involved a question or questions of great general or public importance or otherwise and/or ought to be submitted to His Majesty in Council under article 3(2)(a) of the 1967 Order as the decision of the Court had rendered uncertain: (a) the question of what is required to demonstrate an ‘intention to cause harm’ for the purposes of the tort of unlawful means conspiracy, and in particular whether ‘harm’ for these purposes is limited to pecuniary loss; and (b) the approach which the Court should take when reviewing a claim in unlawful means conspiracy on a summary basis, namely, should a court, on an interlocutory application to enforce a Tomlin Order prior to disclosure and exchange of evidence and before such evidence has been tested at trial, make findings of fact which are adverse to an appellant’s case.

Ground 2 – Dishonest Assistance

[15]On this ground Nam Tai submitted: a) the Court erred in concluding that its claim in dishonest assistance against West Ridge had no realistic prospect of success. In particular, having concluded that Nam Tai had a realistic prospect of showing that West Ridge combined with the Kaisa directors to effect the Improper Allotment and to do so for an improper purpose, the Court erred in law in concluding that such conduct on the part of West Ridge was not dishonest for the purposes of a claim in dishonest assistance; b) further or alternatively, the Court erred in law in concluding that participating in the PIPE for an improper purpose in breach of section 121 of the BC Act was not dishonest for the purposes of a claim in dishonest assistance; and c) further or alternatively, the Court erred in law and in fact by concluding that West Ridge decided to invest in Nam Tai as part of “a reasonable commercial venture reached at arms-length by sophisticated businesspersons advised by lawyers at all stages.”

[16]Nam Tai stated that ground 2 involved a question or questions of “great general or public importance” within the meaning of section 3(2)(a) of the 1967 Order and/or “ought to be submitted to His Majesty in Council” under section 3(2)(a) in any event, in that: a) the Court misapplied the test of dishonesty as set out by the Supreme Court of the United Kingdom in Ivey v Genting Casinos (UK) Ltd (trading as Crockfords Club),4 in particular, the Court found that, that test was not met even though it had found that Nam Tai had a realistic prospect of showing that West Ridge combined with Nam Tai’s Kaisa directors to effect the PIPE and to do so for an improper purpose; and b) the Court’s decision endorsed, as legitimate and honest, conduct to deliberately subvert the constitutional arrangements of a publicly listed company.

Ground 3 – Setting aside the Purported Indemnity

[17]On this ground Nam Tai submitted: a) the Court erred in concluding that it had no realistic prospect of demonstrating that the Deed of Indemnity dated 14th December 2020 (which Nam Tai calls the “Purported Indemnity” and will be referred to as such when practical to do so at some points throughout this judgment) was ineffective and/or void and/or not binding on it. In particular: (i) the Court erred in law and in fact in dismissing as speculative the allegation that the Kaisa directors’ real purpose in giving the Purported Indemnity was to keep West Ridge’s evidence out of the Main claim. To the extent that the purpose of providing the Purported Indemnity was a disputed question of fact, the Court ought to have assumed that question of fact in Nam Tai’s favour on the application before it; (ii) the Court erred in law and in fact in asserting that there was no pleading of the actual evidence that West Ridge would have given support to Nam Tai’s case in the Main claim; and (iii) further or alternatively, the Court erred in law in holding that it was necessary for Nam Tai to prove that West Ridge accepted the Purported Indemnity to avoid giving evidence and disclosure in the Main claim, for the Purported Indemnity to be ineffective and/or void and/or not binding.

[18]Nam Tai said ground 3 involved a question (or questions) of “great general or public importance” within the meaning of section 3(2)(a) of the 1967 Order and/or “ought to be submitted to His Majesty in Council” under section 3(2)(a) in any event as: a) this ground raised the question of the effect of a breach of duty under section 121 of the BC Act. In his judgment in the Main claim, Jack J [Ag.] expressed the view that, under BVI law, an act taken in breach of section 121 of the BC Act is void rather than voidable.5 However, without hearing any argument on the issue or even acknowledging that Jack J [Ag.] had expressed a different view, the Court appeared to have proceeded on the basis that an act taken in breach of section 121 of the BC Act is voidable rather than void; and b) even if the correct position, as a matter of law, is that an act taken in breach of section 121 of the BC Act is voidable rather than void, the Court proceeded on the incorrect basis that, in order for the impugned act to be set aside, West Ridge not only had to be aware that the Kaisa directors were acting for an improper purpose, but also that they had to have been motivated by the same improper purpose as the Kaisa directors.

Ground 4 – The Construction of the Purported Indemnity and/or Public

Policy

[19]On this ground Nam Tai submitted that the Court erred in concluding that, as a matter of construction, West Ridge’s claim under the Purported Indemnity fell within the 4 corners of the deed and prima facie, that the amounts claimed under the Purported Indemnity were due and payable, and that the Purported Indemnity was not contrary to public policy.

[20]Nam Tai submitted that the proposed appeal on ground 4 depended, in part, on the proposed appeal on grounds 1 and 2, each of which gave rise to questions of great general or public importance. For that reason alone, ground 4 met the test for permission to appeal to the Privy Council. Separately, ground 4 involved a question or questions of “great general or public importance” within the meaning of section 3(2)(a) of the 1967 Order and/or “ought to be submitted to His Majesty in Council” under section 3(2)(a) in any event, as clarification is required of: (a) the extent to which (if at all) it is permissible for 1 party (here, Nam Tai) to enter into a contractual arrangement by which it assumes responsibility for the consequences of dishonest wrongdoing by the contractual counterparty; and (b) if it is permissible, what is required as a matter of contract for 1 party to assume such responsibility.

Ground 5 – Illegality

[21]On this ground Nam Tai submitted: a) the Court erred in concluding that Nam Tai had no realistic prospect of proving that West Ridge’s claim in contract failed because the subscription agreement pursuant to which the Improper Allotment was made was entered into for an unlawful purpose. In particular, the Court held that the issue of illegality did not have realistic prospects of success because: (i) the issue was not particularised and pleaded and therefore did not merit serious consideration; and (ii) West Ridge’s claim for an indemnity was not based on its alleged wrongdoing but on the Purported Indemnity; and b) Nam Tai submitted that ground 5 depended, in part, on the proposed appeal on grounds 1 and 2, each of which gives rise to questions of great general or public importance. For that reason alone, ground 5 met the threshold test for permission to appeal to the Privy Council. Ground 5 by itself gave rise to questions of great general or public importance for the following reason: (i) in Briefline Assets Ltd. v Nikolay Anatolyevich et al6 Jack J [Ag.] observed that the law on illegality is not clear in this jurisdiction, and in particular there is a difficult question of the law of precedent as to whether the Court is bound by decisions of the Privy Council which apply the decision in Tinsley v Milligan7 or by the decision of the U.K. Supreme Court in Patel v Mirza.8 Nam Tai submitted that in the very least, that is an issue which ought to be permitted to proceed to trial, even if it is not resolved by the Privy Council on this appeal.

Ground 6 – Loss and Damage

[22]On this ground Nam Tai submitted: a) the Court erred in concluding that it had no realistic prospect of showing that it was entitled to recover the loss on its investment in the fund associated with Greensill Capital (the “Greensill Fund”). In particular, the Court erred in law by applying the wrong test of causation and/or by wrongly introducing a requirement of remoteness into the claim for conspiracy; and b) further or alternatively, the Court erred in law and in fact by concluding that West Ridge provided no assistance to the Kaisa directors in making the investment in the Greensill Fund and/or was not responsible for the losses which resulted from the investment.

[23]Nam Tai submitted that ground 6 involved a question (or questions) of “great general or public importance” within the meaning of section 3(2)(a) of the 1967 Order and/or “ought to be submitted to His Majesty in Council” under section 3(2)(a) in any event as: a) the Court misapplied the law on causation in claims of conspiracy; and b) the Court’s approach to causation on the claim for dishonest assistance was also contrary to the established law that, as in conspiracy, it is inappropriate to become involved in attempts to assess the precise causative significance of the dishonest assistance in respect of either the breach of fiduciary duty or the resulting loss.

Ground 7 – Change of Position

[24]On this ground Nam Tai submitted: a) the Court erred in concluding that Nam Tai had no realistic prospect of setting up a defence of change of position to West Ridge’s claim. In particular, in holding that Nam Tai did not spend the subscription monies in good faith, the Court erred in law and fact by attributing the knowledge of the Kaisa directors to Nam Tai. For the purposes of the defence and counterclaim (including the defence of change of position), the knowledge of the Kaisa directors was not to be attributed to Nam Tai by reason of West Ridge’s involvement in the Kaisa directors’ unlawful conduct; b) further or alternatively, the Court erred in holding that the defence of change of position was not properly pleaded; and c) further or alternatively, to the extent that the defence was not properly pleaded, Nam Tai ought to have been given an opportunity to amend its pleading before it was summarily dismissed.

[25]Ground 7 involved a question (or questions) of “great general or public importance” within the meaning of section 3(2)(a) of the 1967 Order and/or “ought to be submitted to His Majesty in Council” under section 3(2)(a) in any event because: a) In attributing the knowledge of the Kaisa directors to Nam Tai, the Court adopted an approach which was contrary to that of the U.K. Supreme Court in Bilta (UK) Ltd (in liquidation) and others v Nazir and others (No. 2).9 b) Applying the correct approach as set out by the Supreme Court in Bilta, for the purposes of the defence and counterclaim, the knowledge of the directors is not to be attributed to Nam Tai.

Discussion on the Scope of Section 3(2)(a) of the 1967 Order

[26]Firstly, I note that counsel for Nam Tai, Mr. Rivett, submitted that grounds 4 to 7 of its grounds of appeal are parasitic on grounds 1 to 3 of its Application, such that grounds 4 to 7 fall away or are engaged depending on the Court’s acceptance of grounds 1 to 3. In the circumstances, I propose to first have a preliminary discussion on the scope of section 3(2)(a) of the 1967 Order; the section under which Nam Tai has made the Application which, in my view, sets the stage for a proper and informed consideration of grounds 1, 2 and 3. The success or not of any of each of these grounds would determine whether grounds 4 to 7 should be further considered.

Section 3(2)(a) of the 1967 Order

[27]In the British Virgin Islands, a party may apply for leave to appeal to the Privy Council in one of three ways: (1) as of right; (2) with leave of the Court of Appeal; or (3) with the special leave of the Privy Council in any criminal or civil case.10 This proposed appeal is concerned with the second method of appealing, and particularly, the first circumstance, contained in section 3(2)(a) of the 1967 Order which reads: “(2) Subject to the provisions of this Order, an appeal shall lie from decisions of the Court to Her Majesty in Council with the leave of the Court in the following cases- (a) where in the opinion of the Court the question involved in the appeal is one that, by reason of its great general or public importance or otherwise, ought to be submitted to Her Majesty in Council…”

[28]In Multibank FX International Corporation v Von Der Heydt Invest SA,11 a decision of this Court, Farara JA [Ag.] deconstructed section 3(2)(a), explaining that it provided two bases upon which the Court can exercise its jurisdiction to grant conditional leave: (i) where the matter in issue before the Court is one which involves a question or issue of ‘great general or public importance’; or (ii) where the question or issue, while not being considered one of great general or public importance, is ‘otherwise’ of such significance that it ought, nevertheless, to be submitted to the Privy Council for determination. The Great “general or public importance limb” of Section 3(2)(a)

[29]In Multibank, Farara JA [Ag.] explained that the meaning of ‘great general or public importance’ was well settled. In construing that expression, the Court would look for matters that involve ‘a serious issue of law; a constitutional provision that has not been settled; an area of law in dispute, or a legal question the resolution of which poses dire consequences to the public.’ The term had been explained much earlier in Martinus Francois v The Attorney General.12 Saunders JA (as he then was) there was referring to the words in the context of section 108(2) of the Constitution of Saint Lucia. The provisions are equivalent in substance and purpose. Saunders JA explained that leave under this ground is normally granted when there is a difficult question of law involved. He further stated that in circumstances where the case concerns an area of law so well settled that further litigation on the subject will not be regarded by this Court as being of great importance, leave to appeal to the Privy Council must be refused.

[30]The meaning of the term was further developed by this Court in Renaissance Ventures Ltd et al v Comodo Holdings Ltd.13 The Court said this: “[10] ……Where there is no genuine dispute on the applicable principles of law underlying the question which the applicant wishes to pursue on his or her proposed appeal, a question of great general or public importance does not ordinarily arise, especially where the principle of law is settled either by the highest appellate court or by longevity of application. Where the principle is one established by this Court but is either unsettled, in the sense that there are differing views or conflicting dicta, or there is some genuine uncertainty surrounding the principle itself, or it is considered to be far reaching in its effect, or given to harsh consequences, or for some other good reason would benefit from consideration at the final appellate level, this Court would be minded to seek the guidance of their Lordships’ Board. Where, however, the real question on the proposed appeal is the way this Court has applied settled and clear law to the particular facts of the case, or whether a judicial discretion was properly exercised, leave will ordinarily not be granted on this ground. In such a case, the question on the proposed appeal may be of great importance to the aggrieved applicant, but it would not for that reason alone be a question of great general or public importance. [11] It follows as well that the question of law which is said to be of great general or public importance must genuinely arise from the way the case was decided in the Court of Appeal. The question must be ‘involved’ in the appeal. Such a question cannot arise if it was not raised on the appeal, or if the principle of law which the applicant wishes to have settled by the highest court has not been put in doubt.” The “or otherwise limb” of Section 3(2)(a)

[31]In Renaissance Ventures Ltd14 the meaning of “or otherwise” was considered. Mendes JA [Ag.] said this: “But even where an applicant fails to establish that the question he or she wishes to pursue before the Privy Council is of great general or public importance, this Court may yet grant leave if it is satisfied that there are good grounds which would otherwise justify referral to [His] Majesty in Council, as for example where there is some reasonable doubt as to the correctness of the decision of the court.”

[32]In Multibank, Farara JA [Ag.] further expounded on the ‘or otherwise limb’ and explained that for an applicant to satisfy the ‘or otherwise’ limb of section 3(2)(a), they must demonstrate that there is some good reason or ground why leave to appeal ought to be granted. He stated that perhaps the most persuasive of such reasons is where there is reasonable doubt as to the correctness of the Court of Appeal’s decision as, for example, where the decision was based on a principle which has been overruled by higher and binding authority or where it was based on a statute or statutory provision which has been repealed prior to such decision being rendered.

[33]It is manifest from the above decisions that the Court may grant conditional leave to appeal, under section 3(2)(a) of the 1967 Order, in circumstances (which are non-exhaustive) where the question of law arising from the way the case was decided in the Court of Appeal, is one which demonstrates a serious issue of law or involves a difficult question of law; involves the interpretation of a constitutional provision that has not been settled either by the highest appellate court or by longevity of application; an area of law in dispute; a legal question the resolution of which poses dire consequences to the public, or otherwise an applicant must demonstrate that the decision sought to be further appealed is so flawed or so incorrect that it ought not to be allowed to stand or there is some other good reason why the guidance of the Privy Council is required. What is clear is that, the Court will ordinarily not grant leave under section 3(2)(a) in circumstances where the real question on the proposed appeal is the way the Court has applied settled and clear law to the particular facts of the case, or whether a judicial discretion was properly exercised, leave will ordinarily not be granted on this ground. With this, I now turn to assess the questions which Nam Tai says are raised on the grounds of appeal.

Ground 1- Unlawful Means Conspiracy – Part (a)

[34]Ground 1 can be divided into parts (a) and (b). Firstly, on ground 1(a), Nam Tai submitted that, in broad terms, the ingredients of the tort of unlawful means conspiracy are: (i) a combination, agreement or understanding between two or more people; (ii) an intention to injure another individual or separate legal entity; (iii) use of unlawful means as part of the concerted action; and (iv) loss being caused to the target of the conspiracy.15 The only one of the 4 ingredients which both the first instance court and this Court concluded was not satisfied to the requisite standard was the requirement that West Ridge and its co-conspirators must have intended to injure Nam Tai.

[35]On that element, Nam Tai stated that there was no requirement, as was stated by the Court, that to make the cause of action for conspiracy complete the pleadings must allege a specific intention by the alleged conspirators to cause “pecuniary damage.” Nam Tai argued that the Court relied on the decision of Lonrho plc. and others v Fayed and others (No. 5)16 to conclude that Nam Tai was under an obligation to allege a specific intention by West Ridge to cause pecuniary harm to Nam Tai, when in fact the decision of Lonrho is simply authority for the proposition that a plaintiff in a civil action for conspiracy must prove actual pecuniary loss. This, Nam Tai argued, is in keeping with the fourth ingredient of the tort of conspiracy reflected at paragraph [34], that is loss caused to the target of the conspiracy.

[36]Nam Tai also argued that OBG Ltd. and another v Allan and others; Douglas and others v Hello! Ltd and others (No 3); Mainstream Properties Ltd v Young17 relied on by the Court, provided no support for the proposition that the pleadings must allege a specific intention to cause pecuniary damage. In OBG, the House of Lords considered a more discreet question of the degree of intention required for the purposes of the torts of unlawful means interference and procuring a breach of contract. The House of Lords did not address the nature or quality of the injury intended by the conspirators for the purposes of a claim in unlawful means conspiracy, which was the issue being addressed by the Court in the present case.

[37]Nam Tai submitted that the proposition that a claim in conspiracy could only succeed where the conspirators’ intention was to cause pecuniary injury would have startling consequences that have ramifications beyond the facts of this case. Nam Tai asserted that an intention deliberately to subvert the constitutional arrangements of a publicly listed company and/or to do so knowing that it will embroil a company in costly litigation, not meeting the requirement of an intention to cause harm for the purposes of the tort of conspiracy, ought to be of concern to all companies incorporated in the BVI and to their current and prospective investors. Most obviously, for a listed company to gain and enjoy access to capital markets, prospective investors must have confidence that its constitutional arrangements will not be deliberately and unlawfully undermined by its directors and co-conspirators and/or that companies will have remedies against such wrongdoers.

[38]Nam Tai further submitted that the Court wrongly concluded that the potential costs to Nam Tai from the litigation which resulted from the impugned ‘private investment in public equity’ (PIPE) was only a foreseeable consequence of the Improper Allotment. Nam Tai’s pleaded case was that West Ridge knew that there was a substantial risk that the Improper Allotment would result in litigation to which the appellant would need to be a party and in the defence of which Nam Tai would incur substantial costs. Nam Tai submitted that in circumstances where West Ridge knew of the risk of loss to Nam Tai but proceeded with the Improper Allotment regardless, the loss to Nam Tai was the ‘obverse side of the coin’ from the gain to West Ridge. This, Nam Tai argued, was sufficient to meet the test for intention for the purposes of unlawful means conspiracy.

[39]Nam Tai also submitted that the Court was wrong to conclude that, because West Ridge’s alleged ultimate objective was for Nam Tai to prosper, it could not have intended to cause harm to Nam Tai even if the achievement of its ultimate objective involved the infliction of harm on Nam Tai in the short to medium term. It submitted that the requirement of intention to cause harm is satisfied not only where an entity intends to cause harm to another as an end in itself but also where it does so as a means to an end. Nam Tai submitted that its pleaded case was that West Ridge entered into the subscription agreement in a manner inconsistent with the protection of its own ordinary commercial interests, as such the Court could not properly draw an inference that West Ridge’s motive was an ordinary commercial motive.

[40]Accordingly, Nam Tai argued that the Court ought to have held that the requirement of intention was established at least to the relevant threshold on the application before it, because the purpose of the combination and/or agreement between West Ridge and its co-conspirators was to subvert Nam Tai’s constitutional arrangements to determine the composition of Nam Tai’s board of directors, which authority is vested in Nam Tai’s members at a general meeting.

[41]West Ridge, in response, submitted that the issues Nam Tai sought to raise in this ground were entirely academic. The first instance court and this Court did not reject the conspiracy claim because Nam Tai needed to but had failed to plead pecuniary loss, but because they had no realistic prospect of establishing an intent to injure at all. The first instance court had set out Nam Tai’s submissions and concluded that Nam Tai had no realistic prospect of showing that West Ridge had an intention to harm it. The first instance court’s reasoning and finding did not turn on any disputed legal analysis in relation to pecuniary loss. Nam Tai failed on this issue regardless of the legal point they sought to advance. West Ridge submitted that this Court considered the conspiracy issue and found that there was no basis to interfere with the judge’s findings that, on the material before him, Nam Tai did not have a realistic prospect of showing that West Ridge intended to harm Nam Tai. The conspiracy claim therefore failed. The Judgment at First Instance

[42]The learned judge identified the four elements of the tort of unlawful means conspiracy at paragraph [25] of his judgment. He found that elements (i) and (iii) were established, at least to the ‘real prospect of success’ standard on an application for summary judgment. He also concluded that Nam Tai had established loss, although he was not satisfied of their ability to prove all of the loss that the company had claimed, he was satisfied of Nam Tai’s ability to prove loss at least to the sum of US $14.4 million. However, he found that the element of intention to injure had not been made out by Nam Tai as he accepted that at the root of the dispute amongst the management of Nam Tai were policy differences as to the future direction of Nam Tai, and which management style was better for the company, be it that of the old Kaisa-dominated management or the new IsZo-influenced management. He found no realistic prospect of Nam Tai showing that West Ridge had any intention to injure Nam Tai. He concluded that everyone wanted Nam Tai to prosper, including IsZo and West Ridge; they simply differed as to the means of ensuring this. This Court’s Findings on the Unlawful Means Conspiracy Issue

[43]It is worthwhile to recite verbatim the decision of this Court contained at paragraphs [41] to [47] of the 2023 judgment: “[41] As we are dealing with an application to enforce a Tomlin Order and a response by way of a defence and counterclaim seeking to set aside the order, what is essential is that Nam Tai’s pleaded case must show that it has a realistic prospect that West Ridge intended to cause pecuniary harm to Nam Tai. The alleged harm is pleaded in paragraph 27 of the defence. It consists of three elements: a) The combination was inherently harmful to the Company because it was designed to subvert the Company’s constitutional arrangements pursuant to which it determines the composition of its board of directors. (b) The purpose of the combination was to keep the Kaisa directors in control of the Company whose actions have damaged and continue to damage the Company as described in IsZo’s open letter dated 27th May 2020. c) The Kaisa directors and West Ridge knew that there was a substantial risk that the PIPE would result in litigation and substantial costs to the Company. [42] There is no allegation of a pecuniary loss in subparagraphs (a) and (b), far less of an intention to cause pecuniary loss. What is pleaded is that the purpose of the alleged conspiracy, and the intention of the conspirators, was to keep control of the board of Nam Tai in the hands of the Kaisa directors, not to cause pecuniary damage to the Company. As to subparagraph (c) the allegation that the conspirators knew that there was a substantial risk that the PIPE would result in litigation that the Company would have to defend and thereby incur substantial costs is a foreseeable consequence of the PIPE. It was not the intention of the Kaisa directors, far less West Ridge, to cause the Company to incur substantial costs in litigation that might follow the PIPE. The potential costs to Nam Tai were nothing more than a foreseeable risk. It was not, to use Lord Nichols language in the OBG, ‘the obverse of the side of the coin’ to maintain the status quo by keeping the Kaisa directors in control of the Company. If Nam Tai chose to defend a claim brought against it and incur costs that could be the foreseeable consequence of the PIPE, but not the intention of the Kaisa directors, nor of West Ridge. [43] The Judge’s finding that there was no intention to injure Nam Tai is set out at paragraphs 27 to 29 of his judgment. He noted firstly that in the trial of the Main Claim IsZo had asserted that the shares were being issued at a price very much below their value and that Haitong and West Ridge would have seen the investment as being attractive. He then referred to his own judgment in the Main Claim where he made the important observation that: “The root of the dispute between the parties is the future direction of Nam Tai’s business. Dr. Sheehy’s view [on behalf of IsZo] is that Nam Tai should realise the extra-ordinarily large profits from the existing Shenzhen land and buy back shares. He strongly opposed the purchase of the Dongguan land, because, having been bought at market price, it will not be as profitable as the Shenzhen land. The current management of Nam Tai take the view that Nam Tai should develop a long- term business of property development. Pursuing that strategy inevitably involved buying more land, otherwise the business would simply peter out. It is not for the Court to determine which policy is better: that is a matter for the shareholders.”

[44]The Judge recognised, no doubt because of his familiarity with the case, that there was an ongoing struggle between the Kaisa faction and the IsZo faction regarding how the Company was being managed and will continue to be managed. He concluded on this point that the root of the dispute between the two factions was over who should control the Company and chart its course going forward. This finding echoes the Judge’s observation in the opening sentence of the main judgment that ‘[t]his is a shareholder dispute concerned with the control of the first defendant (Nam Tai), a BVI company listed on the New York Stock Exchange’.

[45]On the related issue of West Ridge’s intention to harm Nam Tai, the Judge found that ‘it is fanciful to suppose that West Ridge wanted to harm Nam Tai: it was investing $23 million in order to make a profit from Nam Tai’s success’. This is an understandable observation by the Judge – it is not logical to invest millions of dollars in a company with the intention of harming the company. The Kaisa directors and West Ridge did not intend to harm Nam Tai. They wanted to keep control of the Company but went about it using an improper procedure that has been found to have breached their section 121 duties to the Company.

[46]The findings by the Judge set out in the preceding paragraphs epitomise the real cause of the disputes between the parties – control of Nam Tai. The Kaisa directors had and sought to maintain control of the Company by effecting the PIPE which would keep them on the board. The IsZo faction sought to seize power by appointing the new directors. This kind of power struggle is not unusual in successful commercial entities and the methods employed by the competing factions to gain or keep control are not necessarily conspiratorial or dishonest. The fact that the methods used by one of the factions turns out to be improper and in breach of their duty to the Company does not necessarily mean that they intended to harm the Company. The intention to cause harm to the company, as well as the harm so caused, must be clearly alleged in the pleadings and later proved at the trial.

[47]The Judge concluded on the material before him that Nam Tai did not have a realistic prospect of showing that West Ridge intended to harm Nam Tai and the conspiracy claim therefore failed. There is no basis to interfere with the Judge’s finding.” Discussion on Ground 1(a) [44] I accept as correct the submissions of Nam Tai that this Court in its assessment of OBG and Lonrho fell into error and conflated two elements of the tort of unlawful means conspiracy, that of: (i) intention to injure; and (ii) proof of loss/damage. The Court found that to make the cause of action for conspiracy complete, the pleadings must allege a specific intention by the alleged conspirators to cause pecuniary damage, and that the pleaded case must demonstrate a realistic prospect of showing that there was an intention to cause pecuniary harm. [45] Counsel for West Ridge countered the submission of Nam Tai arguing that in so far as it is accepted that the Court conflated the two elements of intent to injure and pecuniary loss being caused, the decision of the Court did not turn on that. In any event, proof of loss for the tort has been settled in the case law as being pecuniary loss. Counsel for West Ridge submitted that the assessment of the first instance court on whether an intention to injure was made out on the pleadings was accepted by this Court and the first instance court’s findings were left undisturbed. [46] There is no dispute between the parties on the elements of unlawful means conspiracy, namely, combination, arrangement or understanding between two or more people; an intention to injure another individual or separate legal entity; use of unlawful means as part of the concerted action; and finally there must be loss or damage caused to the target of the conspiracy. A claimant must prove that each unlawful act relied upon was causative of loss and that each such act was carried out pursuant to the alleged conspiracy.18 [47] It is also agreed that but for the element of intention to injure, the learned judge found that the other elements were made out, and in the circumstances, the requirement of proving actual loss was not under challenge on the appeal as the court at first instance had accepted it had been proven. What was in dispute on appeal, was the finding of the learned judge that on the pleadings, the element of intention to injure had not been made out to overcome the threshold test on a summary judgment application of having a “real prospect of success.”

[48]In Lonrho, the plaintiffs claimed damages and an injunction for conspiracy, alleging that by the conspiracy, the defendants had sponsored and encouraged a third party to publish defamatory statements about the plaintiffs and financed and caused another third party to bring an action against the plaintiffs. The Court of Appeal considered that the claim, as originally pleaded, was defective because no particulars of the damage were given. However, the absence of any particulars of pecuniary loss in the original pleading did not prevent either the court at first instance or the Court of Appeal in Lonrho from concluding that the plaintiffs’ claim included a properly pleaded allegation of intention to cause injury.

[49]The required mental element for unlawful means conspiracy is an intention to inflict damage on a claimant as an end in itself or to inflict it as a means to some other end. Merely resulting or incidental damage will not do, even if foreseeable or inevitable. It is not enough that a defendant foresees that a claimant will probably suffer harm.19 Where gain to the conspirators is necessarily at the expense of loss to a claimant then the requisite intention to injure is established. Where loss to a claimant is the other side of the coin to that of the defendant’s gain, and the defendant knows that to be so, then the two are inseparably linked and the requisite intention is established, and it is for the victim to establish the ‘inseparable link’ between a defendant’s primary intention of self-gain and damage to the claimant.

The Loss/Damage Element

[50]Lonrho concerned lawful means conspiracy but the principles of the case are nonetheless good authority for the tort of conspiracy generally, which may either take the form of lawful or unlawful means conspiracy.20 Lonrho asserted that 465 in the speech of Lord Bridge of Harwich. the essential ingredients of the tort of conspiracy to injure by lawful means were an agreement by two or more persons to do acts, which were lawful in themselves, for the sole or predominant purpose of causing injury to the plaintiff and which in fact caused injury to the plaintiff. Lonrho was significant because it found that an essential element of the tort of conspiracy is pecuniary loss. The Court stated at page 1508 that: “Second, and following on from the first, is the question, what kind of damage must the plaintiffs prove in order to succeed, and allege in order to avoid their claim being struck out? It is common ground that this must include pecuniary loss, which I take to mean loss that is capable of being measured in money terms, and not merely capable of being assessed as financial compensation for some other kind of injury, as general damages for personal injury or for loss of reputation in defamation actions are. Where the plaintiffs allege facts which, if proved, will establish damage of this kind, as with the alleged loss of immensely valuable contracts (or contacts) in Iran, then the claim cannot be struck out unless the proceedings are brought for some improper or collateral motive. Where, however, the pleading itself asserts that the plaintiffs are presently unable to identify any such loss, or to allege that any measurable loss has occurred, then the claim is defective because it fails to describe a factual situation which gives rise to the cause of action upon which the plaintiffs rely. In such cases, the claim is not necessarily struck out at once. A proper opportunity to amend or to add to particulars may well be given, as it has been given here….”

[51]Significantly, the Court did not confine the requirement that pecuniary loss be occasioned in just lawful means conspiracy, the Court stated that such loss is a requirement in, broadly, the tort of conspiracy to injure. The Court stated at page 1505 that: “…such acts cause damage to the plaintiffs it must in my view be pecuniary damage and it must be pleaded with sufficient particularity. In other words, there must be a sufficient nexus between the act causing pecuniary loss and the other damage for which compensation is claimed. Since the tort of conspiracy to injure is not complete without pecuniary loss, any damages at large must be referable to the act causing the pecuniary loss which constitutes the tort.” The Intention Element – OBG’s case

[52]In OBG, the House of Lords considered three appeals principally concerned with claims in tort for economic loss caused by intentional acts. The first concerned conversion and wrongful interference with contractual relations. The second concerned breach of confidence and unlawful interference with economic interests. The third concerned wrongful interference with contractual relations. The Lords considered the ingredients of the tort of interference with a business by unlawful means and the tort of inducing breach of contract. When considering the ingredient of “intent to injure,” the Lords held at page 57 that: “164…A defendant may intend to harm the claimant's business either as an end in itself or as a means to an end. A defendant may intend to harm the claimant as an end in itself where, for instance, he has a grudge against the claimant. More usually a defendant intentionally inflicts harm on a claimant's business as a means to an end. He inflicts damage as the means whereby to protect or promote his own economic interests. 165 Intentional harm inflicted against a claimant in either of these circumstances satisfies the mental ingredient of this tort….. 166 Lesser states of mind do not suffice. A high degree of blameworthiness is called for, because intention serves as the factor which justifies imposing liability on the defendant for loss caused by a wrong otherwise not actionable by the claimant against the defendant. The defendant's conduct in relation to the loss must be deliberate. In particular, a defendant's foresight that his unlawful conduct may or will probably damage the claimant cannot be equated with intention for this purpose. The defendant must intend to injure the claimant….”

[53]The cases of OBG and Lonrho confirm that the mental element of the tort, the intention, does not have to necessarily be an intention to cause pecuniary harm. It is, in fact, the element of loss which must be pecuniary in nature given that it is an economic tort. These principles have been settled by longevity of application. Whatever uncertainty was created by the Court in conflating the elements of intention and loss, I nevertheless agree with Counsel for West Ridge, Mr. Machell KC, that ultimately the decision of the Court did not turn on this finding. The learned judge whose understanding of the law on the element of intention and loss accorded with the principles in the cases of OBG and Lonrho, had concluded that on the material before him, Nam Tai did not have a realistic prospect of showing that West Ridge intended to harm Nam Tai. This Court accepted and left undisturbed this finding of Jack J [Ag.]. I find that the appeal on this ground did not turn on the Court’s finding of a failure to plead a specific intention to cause pecuniary damage but an acceptance of Jack J [Ag.] finding that the pleadings of Nam Tai failed to show an intention to harm. I accordingly find that Nam Tai has not met the threshold test for the grant of leave to appeal on ground 1(a).

Ground 1- Unlawful Means Conspiracy – Part (b)

[54]On ground 1 (b), Nam Tai also raised, as a question arising from the appeal, the approach which a Court should take when reviewing a claim in unlawful means conspiracy on a summary basis. Should a Court, on an interlocutory application to enforce a Tomlin Order prior to disclosure and exchange of evidence, and before such evidence has been tested at trial, make findings of fact which are adverse to an appellant’s case?

[55]Nam Tai submitted that there was no evidence before the Court for it to conclude as it did that West Ridge wanted Nam Tai to prosper. There was no evidence before the Court that this was the case and in any event, the Court ought to have been slow to conclude at an interlocutory stage, prior to disclosure and evidence that West Ridge did not intend to cause harm to Nam Tai. This is because West Ridge’s knowledge and intentions are peculiarly within its own knowledge and, having regard to the nature of a conspiracy, shrouded in secrecy.

[56]Nam Tai submitted that courts have frequently warned of the dangers of drawing any conclusions about a defendant’s knowledge or intentions prior to disclosure and evidence. In Lonrho, Dillon L.J. said (at page 1493G): “…what the defendants’ predominant purpose was is again a question of fact which cannot be decided on the affidavits and must be left for the trial.”

[57]The approach of the Court of Appeal in Lonrho towards the question of intention is particularly striking, Nam Tai submitted, given that the claim in those proceedings was in lawful means conspiracy, for which the test of intention is higher than that required for a claim in unlawful means conspiracy. Nam Tai placed further reliance on Grant & Mumford, Civil Fraud21 which states: “….There has been wide judicial recognition of the difficulties of pleading a fully particularised claim in conspiracy at the outset of proceedings, bearing in mind that matters such as the defendants’ knowledge or intentions are peculiarly within the defendant’s knowledge and (if the claim is justified) likely to have been concealed from the claimant.”

[58]Nam Tai submitted that applying the correct approach, the Court ought not to have made a finding of fact as to the state of West Ridge’s knowledge at an interlocutory stage. It should not have concluded that Nam Tai had no realistic prospect of demonstrating that West Ridge intended to harm Nam Tai, a fortiori, in circumstances where it was satisfied to the requisite standard that West Ridge had combined with the Kaisa directors to effect the PIPE and to do so for an improper purpose.

Discussion on Ground 1(b)

[59]Summary judgment applications are governed by part 15 of the Civil Procedure Rules Revised Edition 2023 (the “CPR”) and in particular, CPR 15.2 provides that a court may give summary judgment on a claim or on a particular issue if it considers that the defendant has no real prospect of successfully defending the claim or the particular issue. CPR 15.6 provides for the type of proceedings for which summary judgment is not available. Under the rule, claims in conspiracy, lawful or unlawful, are not excluded from summary judgment determination.

[60]When dealing with applications for summary judgment, the Court in Flat Point Development Limited v Canisby Limited22 stated that the judge should examine the pleadings and the evidence critically to see if, when properly assessed, they disclose a reasonable prospect of succeeding on or defending the claim, as the case may be. The Court in Flat Point cited positively the dicta of George-Creque JA (as she then was) in Saint Lucia Motor & General Insurance Co. Ltd. v Peterson Modeste,23 when she said: “….the court is not tasked with adopting a sterile approach but rather to consider the matter in the context of the pleadings and such evidence as there is before it and on that basis to determine whether, the claim or the defence has a real prospect of success. If at the end of the exercise of the court arrives at the view that it would be difficult to see how the claimant or the defendant could establish its case then it is open to the court to enter summary judgment.”

[61]In Amstel Investment Holdings Limited et al v AMS Holdings Limited et al24 Farara JA [Ag.] accepted that certain categories or types of claims are not well- suited for determination by summary judgment. He acknowledged that claims grounded upon allegations of reprehensible conduct, including fraud or dishonesty, are ill-suited for determination by summary judgment as they are usually fact sensitive claims, relying on complex facts and involving significant questions of law and fact for determination. It does not however follow that summary judgment could never be appropriate in such fact sensitive claims. In Easyair Ltd (t/a Openair) v Opal Telecom Ltd,25 the court noted that although a court hearing a summary judgment application should not attempt to conduct a mini-trial “… that does not mean that the court has to accept without analysis everything said by a party in his statements before the court.” The court acknowledged that, “In some cases it may be clear that there is no real substance in factual assertions made…”

[62]This matter was before the first instance court on West Ridge’s application to enforce the terms of the Tomlin Order. Nam Tai opposed the application and applied to set aside the Tomlin Order. Counsel for Nam Tai, in those proceedings, Mr. David Chivers KC, submitted that the approach to an application to set aside a Tomlin Order is to be treated as if it were an application for summary judgment and the relief sought may be granted if the defence and counterclaim had a realistic, as opposed to fanciful, prospect of success. This is consistent with the case of Heritage Travel and Tourism Ltd et al v Lars Windhorst et al26 which establishes that an application to enforce a Tomlin Order ought to be treated as if it were an application for summary judgment. This approach was accepted by the lower court and by this Court.

[63]The Court agreed with the relevant principles articulated by Mr. Chivers KC when considering an application under CPR 15.2; they are: “4.1 Does the Defence and Counterclaim have a ‘realistic’ as opposed to a ‘fanciful’ prospect of success? 4.2 A claim is ‘fanciful’ if it is entirely without substance. A ‘realistic’ prospect of success carries some degree of conviction beyond being merely arguable. 4.3 The object is to winnow out cases that are not fit for trial. The Court must avoid conducting a ‘mini-trial’ without disclosure and oral evidence. The Court should avoid being drawn into an attempt to resolve conflicts of fact. The Court should bear in mind what evidence can reasonably be expected to be available at trial. 4.4 The Court should be alive to the warning in Easyair Ltd (t/a Openair) v Opal Telecom Ltd:27 ‘If it is possible to show by evidence that although material...is not currently before the Court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment....’ 4.5 The Court must assume disputed questions of fact in favour of the party against whom the application is made, i.e. in favour of [Nam Tai]. The conclusion that a defence has no real prospect of success ought only to be reached in the clearest of cases, ‘where it is clear that a [statement of case] on its face obviously cannot be sustained, or in some other way is an abuse of the process of the court...’

[64]The Court adopted and followed this approach with a further qualification from the judgment of Lewison J in Easyair (following his reference to the court not conducting a mini trial at this stage): “(iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents...” The Court felt that this qualification was important and interpreted it to mean that it is not every statement that a party against whom summary judgment is sought makes in its pleading or evidence that the court should assume in favour of that party. The court must carry out its own analysis to see if there is substance in the statement before assuming it in favour of the party making the statement.

[65]The Court having reminded itself of these principles conducted an evaluation of the defence and the counterclaim, the evidence before the Court and the lower court, and the lower court’s assessment of the evidence. The Court found that there was no basis to interfere with the judge’s finding that the conspiracy claim failed because Nam Tai did not plead a proper case of intention to injure and did not have a realistic prospect of showing that the respondent intended to harm the appellant based on the material placed before the judge.

[66]Nam Tai’s challenge on this ground does not give rise to a genuine dispute on the approach a court should take in the enforcement of or the setting aside of a Tomlin Order, but lies squarely in the finding of fact by the Court that Nam Tai’s defence and counterclaim lacked pleadable substance in establishing an intention to injure. A question of great general or public importance or otherwise does not arise and consequently leave cannot be not granted in reliance on this ground.

Ground 2 – Dishonest Assistance

[67]Nam Tai submitted that, in reaching its conclusion that West Ridge had not been dishonest, the Court relied on the alleged fact that Nam Tai had been selling shares at what appeared to have been a reasonable though low price and West Ridge decided to invest “in what the Judge found to be a reasonable commercial venture reached at arms-length by sophisticated businesspersons advised by lawyers at all stages.” Nam Tai argued that this finding was unsupported by evidence and/or inconsistent with the Court’s conclusions elsewhere. In particular, there was no evidence before the Court as to the basis on which West Ridge made its decision to participate in the PIPE or as to the advice which it received. More significantly, the Court had concluded earlier in its judgment that there was a realistic prospect that the evidence at trial would show that “West Ridge knew the real reason for the subscription and participated in the plan to maintain the Kaisa directors in control of Nam Tai.” The Court had also earlier found that “Nam Tai has a realistic prospect of showing that West Ridge combined with Nam Tai to effect the PIPE and to do so for an improper purpose.” Nam Tai submits that a combination between West Ridge and the Kaisa directors to effect the PIPE for an improper purpose is a far cry from “a reasonable commercial venture reached at arms-length.”

[68]Nam Tai submitted that in addition to making inconsistent findings of fact, the Court appeared to have misapplied the test for dishonesty and/or to have applied a different test from that endorsed by the U.K. Supreme Court in Ivey v Genting Casinos.28 Nam Tai relied as well on Royal Brunei Airlines Sdn. Bhd. v Philip Tan Kok Ming29 where Lord Nicholls of Birkenhead provided (at pp. 390F-391A) the following guidance on what constituted dishonest conduct: “The individual is expected to attain the standard which would be observed by an honest person placed in those circumstances. It is impossible to be more specific. Knox J. captured the flavour of this, in a case with a commercial setting, when he referred to a person who is “guilty of commercially unacceptable conduct in the particular context involved:” see Cowan de Groot Properties Ltd. v. Eagle Trust Plc. [1992] 4 All E.R. 700, 761. Acting in reckless disregard of others’ rights or possible rights can be a tell-tale sign of dishonesty. An honest person would have regard to the circumstances known to him, including the nature and importance of the proposed transaction, the nature and importance of his role, the ordinary course of business, the degree of doubt, the practicability of the trustee or the third party proceeding otherwise and the seriousness of the adverse consequences to the beneficiaries. The circumstances will dictate which one or more of the possible courses should be taken by an honest person. He might, for instance, flatly decline to become involved. He might ask further questions. He might seek advice, or insist on further advice being obtained. He might advise the trustee of the risks but then proceed with his role in the transaction. He might do many things. Ultimately, in most cases, an honest person should have little difficulty in knowing whether a proposed transaction, or his participation in it, would offend the normally accepted standards of honest conduct.”

[69]Nam Tai submitted that the Court appeared to be of the view that participating in a project for an improper purpose in breach of section 121 of the BC Act is not dishonest, however, such conduct involved a breach of Nam Tai’s rights and therefore met the test for dishonesty as articulated by Lord Nicholls of Birkenhead in Royal Brunei Airlines, particularly given the Court’s acceptance that West Ridge is a “sophisticated businessperson” and the rights which were breached related to the issue of shares by a publicly listed company. The effect of the decision of the Court, in accordance with Nam Tai’s submission, is to endorse such conduct as commercially acceptable when it is plainly not.

[70]Nam Tai submitted that the issues of great general or public importance raised by this ground of appeal are: (1) the test of dishonesty for the purposes of dishonest assistance and its application to the facts of the present case; further or alternatively (2) the inconsistent findings by the Court as to West Ridge’s conduct.

[71]West Ridge, in response, submitted that this Court considered the dishonest assistance claim and concluded that the judge erred in his treatment of the elements of the cause of action. The Court set aside the trial judge’s findings and considered the issue afresh. Having done so, the Court found that Nam Tai’s case did not “satisfy the threshold of proving a realistic prospect of showing that West Ridge’s participation in the PIPE was dishonest or that it dishonestly assisted the Kaisa directors in implementing the PIPE for an improper purpose in breach of the Kaisa directors’ duty to Nam Tai.” The Court distinguished that participating in a project for an improper purpose in breach of section 121 of the BC Act is very different from dishonestly participating in the project in breach of section 120(1).

[72]West Ridge submitted that Nam Tai’s submissions did not suggest that this Court erred at all in its statement of the law on dishonesty and dishonest assistance. Nam Tai’s ground of appeal merely asserted that the Court misapplied the test in relation to the facts of this case. As such, West Ridge submitted that this ground of appeal did not attempt to identify a legal question of great general or public importance and this Court should not, therefore, grant leave.

Discussion

[73]Dishonest assistance was considered afresh by the Court to determine if Nam Tai had satisfied the threshold of showing that the claim for dishonest assistance has a realistic prospect of success if the matter proceeds to trial. In doing so, the Court restated the elements of dishonest assistance as set out in the judgment of Cockerill J in FM Capital Partners Ltd v Frédéric Marino and others30 which were summarised as being: (a) there must be a trust or fiduciary duty owed by the Kaisa directors to the target company (Nam Tai) and the Kaisa directors breached that duty; (b) the breach of duty by the Kaisa directors need not be dishonest because it is the dishonesty of the third party (West Ridge) that matters; and (c) West Ridge must have procured or assisted the breach and did so dishonestly.

[74]The Court found that the first element was satisfied by the findings of the judge in the Main claim and by the Court of Appeal that the Kaisa directors acted for an improper purpose in breach of section 121 of the BC Act by approving and implementing the PIPE. There is no dispute on this finding between the parties. The Court accepted that in this case, it is the dishonesty of West Ridge that is relevant and Nam Tai did not have to prove that the Kaisa directors were dishonest in effecting the PIPE in order to establish liability against West Ridge. The Court also accepted that the lower court again fell into error in concluding that Nam Tai had to prove that West Ridge assisted and procured the breach of duty by the Kaisa directors [emphasis added]. The Court accepted West Ridge’s concession that if Nam Tai proved assistance in the breach that was sufficient to satisfy the fourth element of the test and Nam Tai did not have to go on to prove that West Ridge procured the breach.

[75]The Court considered the application of the test for dishonesty set out in Ivey v Genting Casinos relied on by the trial judge. The test relied on is as follows: “…When dishonesty is in question the fact-finding tribunal must first ascertain (subjectively) the actual state of the individual’s knowledge or belief as to the facts. The reasonableness or otherwise of his belief is a matter of evidence (often in practice determinative) going to whether he held the belief, but it is not an additional requirement that his belief must be reasonable; the question is whether it is genuinely held. When once his actual state of mind as to knowledge or belief as to facts is established, the question whether his conduct was honest or dishonest is to be determined by the fact-finder by applying the (objective) standards of ordinary decent people. There is no requirement that the defendant must appreciate that what he has done is, by those standards, dishonest.”31

[76]The Court also considered the dictum by Cockerill J at paragraph 82 of FM Capital Partners Ltd as relied on by the trial judge in further clarification of the test: “However, the standards in question are those of an ordinary honest person in the circumstances of the defendant. Thus, in applying the test of dishonesty, the Court must have regard to all the circumstances known to the defendant at the time, and have regard to the defendant’s personal attributes, such as their experience and the reason why they acted as they did...”

[77]Having defined the appropriate test, the Court then applied it to the facts. The Court’s application of the test to the facts as pleaded, at paragraphs [59] to [62] of its judgment, and its assessment is worth repeating: “[59] The state of a company’s knowledge of the facts and the company’s belief in the facts are normally determined by reference to the knowledge and belief of the company’s directors and officers. In this case there is no direct evidence of who are the directors and officers of West Ridge, but as I said above, it is reasonable to infer that they are persons nominated by Haitong. The Court must also find that the knowledge and belief of the unknown West Ridge directors and officers are genuinely held and whether West Ridge’s knowledge and belief meet the standards of honest persons in the circumstances of the Company. [60] Nam Tai relies on the matters pleaded in paragraphs 26 to 28 of the defence to show that there is a realistic prospect of showing that West Ridge’s participation in the PIPE was dishonest. Most of these matters are briefly described in paragraphs 3 to 8 above and I will not repeat them here. Nam Tai also relies on the additional circumstance of West Ridge’s alleged unwillingness to provide disclosure or give evidence in the Main Claim. I will deal with this issue below when I come to deal with the allegation that the Kaisa directors and West Ridge entered into the Deed for the improper purpose of keeping West Ridge’s disclosure and evidence out of the Main Claim. [61] In my opinion, the matters outlined in paragraphs 26 to 28 of the defence do not satisfy the threshold of proving that there is a realistic prospect of showing that West Ridge’s participation in the PIPE was dishonest. Nam Tai is a long- established company listed on the NYSE. It was selling shares at what appears to have been a reasonable though low price, and West Ridge decided to invest in what the Judge found to be a reasonable commercial venture reached at arms-length by sophisticated businesspersons advised by lawyers at all stages. [62] I find that Nam Tai does not have a realistic prospect of showing that West Ridge’s participation in the PIPE was dishonest or that it dishonestly assisted the Kaisa directors in implementing the PIPE for an improper purpose in breach of the Kaisa directors’ duty to Nam Tai. Participating in a project for an improper purpose in breach of section 121 is very different from dishonestly participating in the project in breach of section 120(1).”

[78]Nam Tai’s pleadings at paragraphs 26-28 of its defence to the Ancillary claim relies on the aggregated knowledge of various operatives as follows: “26. In support of its averment that West Ridge was a party to the conspiracy too and joined in its execution by entering into the Subscription Agreement, the Company relies on, inter alia, the following: 26.1. West Ridge's parent company, Haitong, has a close business relationship with Kaisa, and paragraph 5 above is repeated. 26.2. West Ridge was aware (via, at least, Mr. Leung and/or Mr. Shi) that the PIPE needed to be executed urgently because of the threat to Kaisa's control of the Company's board of directors posed by the requisition notice served by IsZo on 11th September 2020, and paragraphs 18 and 21 above are repeated. 26.3. West Ridge was willing to provide (and did in fact provide) investment in the amount of US$23,820,798.90 without having had any (or any adequate) opportunity to conduct due diligence in relation to the Company, and paragraphs 14 and 17 above are repeated. 26.4. West Ridge was willing to provide (and did in fact provide) investment in the amount of US$23,820,798.90 before formal authorisation for the subscription had been given, and paragraphs 20-1 and 23 above are repeated. 26.5. It is to be inferred that West Ridge knew that its investment pursuant to the PIPE was not sought or required in order to meet any urgent need for liquidity within the Company or in light of any actual or threatened deterioration in the financial position of the Company, or to meet any other legitimate economic need of the Company. In particular, if West Ridge had genuinely believed that its investment was required for the purposes of meeting an urgent need for liquidity, it would not have been willing to provide such investment, alternatively it would not have been willing to provide such investment by way of equity as opposed to debt and without having first conducted a proper due diligence exercise and procured formal authorisation. 26.6. West Ridge agreed to acquire a minority (approximately 4.5%) shareholding in the Company, notwithstanding the fact that the Company's shareholders were in dispute with each other and West Ridge had no previous interest in the Company which it needed or wanted to protect. It is to be inferred that West Ridge was willing to acquire such a shareholding because it proposed to act in concert with Kaisa and together Kaisa and West Ridge would have de facto control of the Company. 26.7. In the circumstances described at paragraphs 43-5 and 49 further below, it is also to be inferred from West Ridge's unwillingness to provide disclosure or give evidence in support of the Company's defence to the Main Claim that West Ridge had notice of the improper purpose for which the Unlawful Allotment was made. 27. In combining to execute the above combination and/or agreement, Kaisa, the Kaisa connected Directors and West Ridge acted with the intention of causing harm to the Company: 27.1. The purpose of the combination and/or agreement was to ensure that the Proposed Resolutions would be defeated and the Kaisa- connected Directors would remain in office. As such, the combination and/or arrangement was inherently harmful to the Company, because it was designed and intended to subvert the Company's constitutional arrangements pursuant to which power to determine the composition of the Company's board of directors is vested in the Company's members in general meeting. 27.2. Further or alternatively, the purpose of the combination and/or agreement was to keep in office those directors whose actions were damaging the Company (as described in IsZo's open letter to shareholders dated 27th May 2020) and continued to damage the Company following the Unlawful Allotment (as described in paragraphs 30-3 below). 27.3. Kaisa, the Kaisa-connected Directors and West Ridge knew that there was a substantial risk that the PIPE would result in litigation to which the Company would need to be a party and in the defence of which the Company would incur substantial costs, and paragraph 18 above is repeated. Dishonest assistance 28. Further or alternatively, West Ridge assisted the former directors in their breach of duty in approving the Unlawful Allotment, because the improper allotment of shares in the Company to West Ridge required West Ridge's agreement to subscribe and pay for those shares. 29. Such assistance on the part of West Ridge was dishonest by the objective standards of ordinary decent people, having regard to West Ridge's state of knowledge at the time of its entry into the Securities Purchase Agreement (alternatively by virtue of West Ridge having suspected the true state of affairs but taken a conscious decision not to make inquiries which might result in actual knowledge of those facts), and paragraphs 26-7 above are repeated.”

[79]The submissions of Nam Tai satisfy me that it has no dispute with the Court’s identification of the elements of dishonest assistance as articulated in Cockerill J in FM Capital Partners Ltd. Further, the submissions of Nam Tai do not suggest that the Court erred at all in its statement of the law on dishonesty and dishonest assistance as set out in Ivey v Genting Casinos, nor in the principles to which it was to address its mind. Nam Tai disputed the finding of the Court that participating in a project for an improper purpose in breach of section 121 did not rise to the level of dishonestly participating in the project in breach of section 120(1) of the BC Act.

[80]I agree with Counsel for West Ridge, Mr. Machell KC, that Nam Tai’s appeal on this ground merely asserted that the Court misapplied the test to the facts of the case. It follows that there is no genuine dispute on the test that is to be applied to determine dishonest assistance and the real question on this proposed ground of appeal is the way this Court had applied settled and clear law to the particular facts of the case. In my view, this ground of appeal does not rise to the level of being a matter of great general or public importance, within the meaning of section 3(2)(a) of the 1967 Order.

[81]Even if I were to conclude that there were inconsistent findings by the Court as to the facts, as submitted by Nam Tai, in order for this submission to rise to the level of being of such significance that it ought, nevertheless, to be submitted to the Privy Council for determination, Nam Tai would be required to show that the inconsistent findings created some reasonable doubt as to the correctness of the decision of the Court, and the guidance offered in Renaissance Ventures Ltd, as to the “or otherwise limb” is restated. The Court conducted an evaluative exercise of the pleadings and was clear in its finding that the pleadings referenced evidence of West Ridge acting for an improper purpose which did not rise to the level of dishonest conduct.

Ground 3 - Setting aside the Purported Indemnity

[82]Nam Tai’s submission on this ground centered on the Deed of Indemnity executed between Nam Tai and West Ridge, which Nam Tai submitted was given for an improper purpose in breach of the Kaisa directors’ duty to the company under sections 120 and 121 of the BC Act, rendering the Deed of Indemnity ineffective, void and not binding on Nam Tai.

[83]The decision of this Court on this point is contained at paragraphs [64]-[72] of the 2023 judgment. The Court concluded at paragraph [72] that Nam Tai did not have a realistic prospect of proving that West Ridge entered into the Deed of Indemnity for the purpose of deliberately suppressing evidence which may be harmful to Nam Tai’s case in the Main claim. The Court found that in its case as pleaded, Nam Tai did not establish, even to the low standard of realistic prospect of success, that West Ridge accepted the indemnity to avoid giving evidence and disclosure in the main claim and that West Ridge made the agreement for an improper purpose, far less dishonestly, such that it should not be able to claim its entitlements under the Deed. The Court’s conclusion was based on: (i) Its findings that the inference by Nam Tai that the giving of the indemnity on favourable terms was to keep West Ridge’s evidence out of the Main claim, was unsupported by pleadings [of] actual evidence on which this was based. In the absence of this evidence, the Court found that there was no way of knowing how that evidence would either help or hurt Nam Tai’s case. (ii) The acceptance by the Court of the learned trial judge’s observations at paragraph 10 of his judgment that ‘It would not be an unusual litigation strategy to limit both the number of parties and the issues in order to save costs and reduce the risk of unpleasant surprises,’ and at paragraph 11 that the three [documents entered into] on 14th December 2020 represent a ‘reasonable arm’s length commercial settlement of a shareholder dispute,’ and mindful of the warning of this Court in Pussers Limited et al v CITCO Banking Corporation N.V.32 that the Court should not step into the commercial arena to determine commercial issues. (iii) The Court rejected as weak, Nam Tai’s submission that it is to be inferred that West Ridge had notice of the improper purpose for which the Improper Allotment was made and that West Ridge knew that the indemnity was being offered in exchange for their silence. The Court noted that the allegation came from a Nam Tai director, and not from West Ridge, that West Ridge had agreed to accept the indemnity in exchange for not having to give evidence in the Main claim. (iv) That a person withdrawing from a trial will avoid having to undertake the onerous obligations of a trial, such as giving evidence, giving disclosure, retaining lawyers, and the trial itself. But a withdrawal from a trial is a long distance from saying that the true reason for entering into the Deed of Indemnity ‘was to suppress evidence that supported IsZo’s case.’ (v) Its finding that there was no substance in the allegation that the pleadings established that West Ridge was aware of the real reason for Nam Tai giving the indemnity.

[84]The Court also concluded that Nam Tai did not have a realistic prospect of showing that the Kaisa directors acted in breach of their duties under sections 120 and 121 of the BC Act by granting a favourable indemnity to West Ridge.

[85]Nam Tai submitted that in reaching its decision, the Court misapplied the law and/or misunderstood Nam Tai’s case. Nam Tai submitted that: “(a) In so far as the Court said that “there is no pleading of the actual evidence that West Ridge would have given to support Nam Tai’s case,” this was incorrect as at paragraph 49 of its Defence and Counterclaim, Nam Tai had alleged that West Ridge’s evidence in the Main claim “if honestly given, would confirm that the Unlawful Allotment was void on the grounds that it had been made for an improper purpose.” (b) In so far as the Court held that Nam Tai’s allegation that the real purpose of the Kaisa directors giving the Purported Indemnity on favourable terms was to keep West Ridge’s evidence out of the Main claim was speculative, the Court ignored evidence relied upon by Nam Tai, including (i) the legal advice given to the Kaisa directors by Nam Tai’s former legal advisers as to the importance of Nam Tai procuring evidence from West Ridge in support of its defence to the Main claim, and the fact that that advice was not followed by the Kaisa directors and (ii) other than keeping evidence of the Improper Allotment out of the Main claim, there was no reason for Nam Tai to provide the Purported Indemnity. In fact, the Purported Indemnity was less advantageous to Nam Tai than simply consenting to judgment on the Ancillary Claim. (c) The Court at paragraph 67 of its judgment appeared to be of the view that Nam Tai needed to demonstrate that West Ridge entered into the Purported Indemnity for the purpose of enhancing Nam Tai’s defence of the Main claim and/or was aware of the ‘real’ reason for Nam Tai giving the indemnity. This Nam Tai submits is incorrect and involved an error of law. On that analysis of the law, for the Purported Indemnity to be void, it was sufficient that the Kaisa directors procured Nam Tai to grant the Purported Indemnity in breach of their duty under section 121 of the Act. The state of knowledge of West Ridge is irrelevant.”

[86]Nam Tai submitted that in his judgment in the Main claim, Jack J [Ag.] at paragraph [183] expressed the view that, under BVI law, an act taken in breach of section 121 of the BC Act is void rather than voidable. Accordingly, in making findings as to West Ridge’s knowledge and motive in entering the Purported Indemnity, the Court not only made findings of fact which it was inappropriate to do prior to disclosure and live evidence, but it also implicitly adopted a different approach as to the effect of a breach of section 121 of the BC Act from that expressed by Jack J [Ag.] in the Main claim.

[87]Nam Tai submitted that the view of Jack J [Ag.] on the question of the effect of a breach of section 121 was correct and the Court was wrong to take a different approach. This particular issue of the effect of a breach of section 121, Nam Tai submitted, was of great general or public importance, permeating as it does the operation of BVI company law.

[88]West Ridge countered ground 3 of the appeal, by submitting that Jack J [Ag.] in the lower court at paragraphs [5] to [12] and [41], addressed the issue of the invalidity of the Deed of Indemnity and concluded that Nam Tai should be held to its bargain. West Ridge submitted that this Court addressed the validity of the Deed of Indemnity and found speculative, Nam Tai’s invitation to infer from the pleaded facts that the real purpose of the Kaisa directors in giving the indemnity was to keep West Ridge’s evidence out of the Main claim.

[89]West Ridge submitted that what ground of appeal 3 sought is, in part, a complaint about this Court’s factual finding and did not raise a point of law whether of general or public importance or otherwise. Where Nam Tai in that ground raised the issue of whether acts done in breach of section 120(1) and 121 of the BC Act are void or voidable, this is entirely academic given that the Court rejected Nam Tai’s case as to whether there had been a breach of duty on the part of Nam Tai’s then directors.

[90]West Ridge further submitted that in any event, the void vs voidable issue is academic for a further reason. That Nam Tai’s submission proceeded on the basis that a transaction entered into by a company with a third party as a result of a breach of duty by a director of section 121 of the BC Act is void as against the third party regardless of the state of knowledge of the third party, West Ridge submitted this is plainly misconceived. Where a director acts in breach of duty under section 121 and causes the company to enter into a transaction with a third party, the breach of duty means that the director lacks actual authority to cause the company to enter into that transaction, but it does not follow that the transaction is automatically void as against the third party; the transaction is only void if the third party was on notice either because of the operation of section 31 of the BC Act or ordinary agency principles. Thus, the directors had apparent or ostensible authority to enter into the Deed and West Ridge was entitled to rely on that authority unless it was on notice of the breach of duty, and West Ridge submitted that this Court found in paragraphs [67] to [72] that there was no prospect of Nam Tai succeeding in that regard.

Discussion

[91]The crux of Nam Tai’s appeal on this ground is whether an act taken by directors of a company in breach of duty under section 120(1) and 121 of the BC Act is void or voidable. Nam Tai asserted that this involves an issue of great general or public importance or otherwise which would justify referral to the Privy Council owing to doubts as to the correctness of the decision of the Court. For reasons adumbrated below, I have concluded that Nam Tai has not met the threshold test for leave to be granted to appeal to the Privy Council.

[92]Nam Tai’s pleaded case on this ground is that favourable terms were given to West Ridge in exchange for its agreement not to give evidence or disclosure in the Main claim, which evidence would go towards proving the improper purpose of the PIPE. The indemnity was therefore given for an improper purpose in breach of the Kaisa directors’ duty to the company under sections 120 and 121 of the BC Act, and it is ineffective, void and not binding on Nam Tai.

[93]The Court referenced paragraph 50 of Nam Tai’s defence, which summarised its defence to the Ancillary claim on this ground as follows: “By so acting, Dr Tam and the directors who approved the Purported Indemnity breached their duty under section 121 of the Business Companies Act, 2000 to exercise their powers as a director for a proper purpose and/or their duty under section 120(1) of the Act to act honestly and in good faith and in what they believed to be in the best interests of the Company. In particular, by so doing, they exercised their powers for the purposes of protecting their own interests and the interests of Kaisa. In the premises, the purported indemnity is ineffective and void and/or not binding on the Company.”

[94]The Court found that there was no pleading of the actual evidence that West Ridge would have given, and as such, there was no way of knowing if the evidence would have helped or hurt Nam Tai. Having so found, the Court was reluctant to attribute any improper purpose to Nam Tai for what otherwise appeared to be a reasonable commercial transaction. The Court concluded that Nam Tai’s allegation was speculative and did not meet even the low threshold of showing a realistic prospect that the Kaisa directors acted in breach of their duties under sections 120 and 121 of the BC Act by granting a favourable indemnity to West Ridge.

[95]I therefore accept the submission of West Ridge that the issue of whether a breach of section 120(1) and/or 121 of the BC Act results in a transaction being void or voidable did not arise on the appeal, as Nam Tai had not overcome the hurdle of establishing that there was, in fact, a breach of the BC Act. West Ridge submitted, and I accept, that this issue is entirely academic, and Nam Tai has not satisfied the threshold for the grant of leave under section 3(2)(a) of the 1967 Order as explained in Multibank and Renaissance Ventures Ltd.

Order

[96]The above findings on grounds 1-3 are dispositive of the entire Application for reasons stated at paragraph [26] above. The Application for conditional leave to appeal to the Privy Council is dismissed with costs to West Ridge to be assessed, if not agreed within 21 days of the date of this judgment. I concur. Mario Michel Justice of Appeal I concur.

Eddy D. Ventose

Justice of Appeal

By the Court

Deputy Chief Registrar

THE EASTERN CARIBBEAN SUPREME COURT IN THE COURT OF APPEAL TERRITORY OF THE VIRGIN ISLANDS BVIHCMAP2022/0046 BETWEEN: NAM TAI PROPERTY INC (a company incorporated in the British Virgin Islands) Applicant/Appellant and WEST RIDGE INVESTMENT LIMITED (a company incorporated in Hong Kong) Respondent Before: The Hon. Mr. Mario Michel Justice of Appeal The Hon. Mr. Eddy D. Ventose Justice of Appeal The Hon. Mde. Vivian Georgis Taylor-Alexander Justice of Appeal [Ag.] Appearances: Mr. Jack Rivett with him Ms. Arabella di Iorio and Ms. Misha Walters for the Applicant Mr. John Machell KC with him Ms. Kimberley Crabbe-Adams and Ms. Jhneil Stewart for the Respondent __________________________________ 2024: February 16; August 20. ___________________________________ Application for conditional leave to His Majesty in Council – Section 3(2)(a) of the Virgin Islands (Appeals to Privy Council) Order 1967 – Great general or public importance limb of section 3(2)(a) – Whether question of great general or public importance raised in proposed appeal – ‘Or otherwise’ limb of section 3(2)(a) – Whether appeal ought to be submitted to His Majesty in Council – Whether Court erred in finding that Nam Tai had no realistic prospect of succeeding in its claims of unlawful means conspiracy and dishonest assistance against West Ridge – Whether Court erred in finding that Nam Tai had no realistic prospect of demonstrating that the Deed of Indemnity was ineffective or void or not binding on it The genesis of these proceedings is rooted in shareholder dissatisfaction with the manner in which the then directors of Nam Tai were conducting its business. At that time, the majority of Nam Tai’s directors were also directors of Kaisa Group Holdings Limited (“Kaisa”). The dissatisfaction led to IsZo Capital LP (“IsZo”), a shareholder of Nam Tai, along with other shareholders serving a requisition on Nam Tai in September 2020 to hold a special shareholder meeting to replace most of the directors. This meeting, however, never happened and instead, in October 2020, the majority directors in Nam Tai approved an allotment of shares under a private investment in public equity (“PIPE”). Under the PIPE, West Ridge Investment Limited (“West Ridge”) received over 2 million issued shares and Greater Sail Ltd. (“Greater Sail”), a subsidiary of Kaisa, received over 16 million issued shares. The consequence of the allotment was that Kaisa’s beneficial ownership over Nam Tai moved from 23.9% to 43.9%. The allotment ensured that Nam Tai remained under the de facto control of Kaisa, so much so that Kaisa gained sufficient voting power to block the resolutions proposed in the said requisition. Moreover, West Ridge now owned 4.5% of Nam Tai’s shares. Although Kaisa did not control West Ridge, West Ridge was a subsidiary of Haitong International Securities Co Ltd (“Haitong”) a company which had friendly relations with Kaisa. After the allotment, IsZo issued proceedings against Nam Tai (the “Main claim”), with West Ridge and Greater Sail named as additional defendants, challenging the validity of the PIPE. The Main claim alleged that the PIPE was made for an improper purpose and was in breach of sections 120(1) and 121 of the BVI Business Companies Act (the “BC Act”). West Ridge thereafter issued an ancillary claim against Nam Tai (the “Ancillary claim”) which sought repayment of the price paid for the shares, in the event that IsZo’s action succeeded in having the allotment set aside. Nam Tai, still under the de facto control of Kaisa, entered into negotiations with West Ridge, in which Nam Tai agreed to indemnify West Ridge for any losses that it would suffer in the event of the Main claim succeeding and the allotment of shares being set aside (the “Deed of Indemnity”). Some of the terms of the Deed of Indemnity were incorporated in a Tomlin Order dated 14th December 2020. Under the terms of the indemnity, Nam Tai agreed that it would not file a defence to the Ancillary claim, which was stayed, except for carrying out the terms of the Tomlin Order. The Main claim against West Ridge was stayed on the basis of IsZo’s agreement that Nam Tai could enter into the Deed of Indemnity with West Ridge, and West Ridge would be bound by the result of the Main claim. The effect of the settlement on West Ridge was that it received an indemnity, gave up its right to defend the Main claim on the understanding that its subscription was unaffected by any irregularity with the allotment, and it did not need to take any further part in the Main claim. The Main claim was subsequently determined in the lower court with the judge finding that the allotment of shares under the PIPE was made for an improper purpose and was void since the purpose of the allotment was not to raise money for the company, but rather to shift the balance of voting power amongst shareholders, with a view to maintaining the existing Kaisa directors. The judge also found that the Kaisa directors did not act in the best interests of Nam Tai and its shareholders and acted in breach of their duty under sections 120(1) and 121 of the BC Act. The judge therefore set aside the new allotments of shares to Greater Sail and West Ridge and ordered that the register of members of Nam Tai be rectified. Nam Tai appealed against the judge’s decision and on 4th October 2021, this Court affirmed the judge’s finding that the PIPE was for the improper purpose of defeating the requisition and keeping the Kaisa directors in de facto control of Nam Tai. The appeal was allowed to the extent of setting aside the finding that the Kaisa directors had breached section 120(1) of the BC Act. Following the appeal, a shareholders meeting was held by reference to the register of members as it stood prior to the allotment. The Kaisa directors were removed, and a new board was appointed. West Ridge thereafter applied under the Ancillary claim to enforce paragraph 1 of the Tomlin Order for the return of the subscription money it had paid for the shares, all their costs and other losses associated with the indemnity, to be quantified by the court. Nam Tai filed a defence and counterclaim to West Ridge’s claim, asserting that the Kaisa directors breached their duty to Nam Tai by approving and implementing the PIPE for an improper purpose in furtherance of an unlawful means conspiracy between Nam Tai and West Ridge to keep the Kaisa directors in control of Nam Tai. Alternatively, Nam Tai asserted that West Ridge dishonestly assisted the Kaisa directors in making the PIPE for an improper purpose. Nam Tai also alleged that the Kaisa directors breached their duties to Nam Tai under sections 120(1) and 121 of the BC Act and approved the Deed of Indemnity to withhold from the court in the Main claim, the disclosure of documents and evidence from West Ridge that would have confirmed that the PIPE was made for an improper purpose. Nam Tai submitted that the indemnity was ineffective and void, and/or not binding on Nam Tai and that the allotment was void. West Ridge therefore was not entitled to the return of its subscription money and instead, was liable to Nam Tai for damages and equitable compensation in an amount to be ascertained. On 7th April 2022, on a summary judgment application brought by West Ridge to enforce the Tomlin Order, the judge found that Nam Tai did not have a realistic prospect of success on its claim to set aside the Tomlin Order. The judge granted West Ridge’s application, enforced the Tomlin Order and dismissed Nam Tai’s defence and counterclaim. Nam Tai thereafter appealed to this Court. In the 2023 judgment, this Court dismissed Nam Tai’s appeal and affirmed the learned judge’s finding that the terms of the Deed of Indemnity, as incorporated into the Tomlin Order, stood to be enforced. Specifically, this Court found, inter alia, that: (i) Nam Tai’s claims of unlawful means conspiracy and dishonest assistance did not rise to the level of having a realistic prospect of success if the matter proceeded to trial; (ii) Nam Tai did not have a realistic prospect of showing that the Kaisa directors (on behalf of Nam Tai) entered into the Deed of Indemnity for an improper purpose; and (iii) West Ridge’s entitlement to rely on the Deed of Indemnity was not barred, because Nam Tai did not have a realistic prospect of showing that the Deed of Indemnity was issued for an improper purpose in breach of section 121 of the BC Act, or that West Ridge assisted in the alleged breach. It is against the 2023 judgment that Nam Tai has sought conditional leave to appeal to His Majesty in Council. In the application for leave (the “Application”) Nam Tai alleged 7 grounds for the proposed appeal asserting that the proposed appeal involved a question or questions of great general or public importance or otherwise ought to be submitted to His Majesty in Council pursuant to section 3(2)(a) of the Virgin Islands (Appeals to Privy Council) Order 1967 (the “1967 Order”). The Court noted that grounds 4 to 7 of Nam Tai’s proposed appeal were parasitic on grounds 1 to 3 and therefore sought to consider grounds 1 to 3 first. In determining grounds 1 to 3, the Court found that there was no need to further consider grounds 4 to 7. The issues raised for determination by grounds 1 – 3 of the proposed appeal were: (i) whether this Court erred by concluding that Nam Tai’s claim in unlawful means conspiracy against West Ridge had no realistic prospect of succeeding; (ii) whether Nam Tai’s claim of dishonest assistance against West Ridge had no realistic prospect of succeeding; and (iii) whether this Court erred by finding that Nam Tai had no realistic prospect of demonstrating that the Deed of Indemnity was ineffective or void or not binding on it. Held: dismissing the Application for conditional leave to appeal to His Majesty in Council and ordering that Nam Tai pay West Ridge’s costs of the Application to be assessed if not agreed within 21 days of the date of this judgment, that:

[1]TAYLOR-ALEXANDER JA [AG.]: In this application, Nam Tai Property Inc (“Nam Tai”) applied for conditional leave to appeal to His Majesty in Council (the “Privy Council”) pursuant to section 3(2)(a) of The Virgin Islands (Appeals to Privy Council) Order 1967 (“the 1967 Order”) against the judgment of this Court rendered on 27th July 2023 (the “2023 judgment”), dismissing Nam Tai’s appeal and affirming the judgment of Jack J [Ag.] dated 7th April 2022 which ruled that the terms of a Deed of Indemnity as incorporated into a Tomlin Order stood to be enforced. Nam Tai submitted that this Court erred in law and in fact on 7 material grounds, and these grounds involved questions of great general or public importance, or otherwise, such that Nam Tai ought to be granted leave to appeal to the Privy Council. The Essential Background to Nam Tai’s Application for Conditional Leave

[2]The genesis of these proceedings is rooted in shareholder dissatisfaction with the manner in which the then directors of Nam Tai were conducting its business. At that time, 5 of the 7 then directors of Nam Tai were directors of a company called Kaisa Group Holdings Limited (“Kaisa”). This dissatisfaction led to IsZo Capital LP (“IsZo”), a shareholder of Nam Tai, as well as other shareholders representing more than 30% of the shareholding in Nam Tai, serving a requisition on Nam Tai on 11th September 2020 to hold a special meeting of its shareholders for the purpose of replacing most of the directors of its board. That meeting, however, did not happen. Instead, on 5th October 2020, the majority directors in Nam Tai approved an allotment of shares under a private investment in public equity (“PIPE”). Under the PIPE, West Ridge Investment Limited (“West Ridge”) received 2,603,366 issued shares and Greater Sail Ltd. (“Greater Sail”), a subsidiary of Kaisa, received 16,051,219 issued shares.

[3]The consequence of the allotment was that Kaisa’s beneficial ownership of the shares in Nam Tai moved from 23.9% to 43.9%. The purpose of the new share issuance was to ensure that Nam Tai remained under the de facto control of Kaisa, so much so that Kaisa gained sufficient voting power to block the resolutions proposed in the said requisition. Also, West Ridge now owned 4.5% of the shares. Though Kaisa did not control West Ridge, West Ridge was a subsidiary of a company called Haitong International Securities Co Ltd (“Haitong”) which had friendly relations with Kaisa.

[4]After the allotment of the new shares, IsZo, issued proceedings against Nam Tai (the “Main claim”) challenging the validity of the PIPE. West Ridge and Greater Sail were named as additional defendants. The proceedings brought by IsZo alleged that the PIPE was made for an improper purpose and was in breach of sections 120(1) and 121 of the BVI Business Companies Act (the “BC Act”).

[5]West Ridge thereafter issued an ancillary claim against Nam Tai (the “Ancillary claim”) which sought repayment of the price paid for the shares in the event that IsZo’s action succeeded in having the allotment set aside. Nam Tai, still under the de facto control of Kaisa, entered into negotiations with West Ridge, in which Nam Tai agreed to indemnify West Ridge for any losses that it suffered as a result of the Main claim succeeding and the allotment of shares being set aside (the “Deed of Indemnity”). Some of the terms of the Deed of Indemnity were incorporated in a Tomlin Order dated 14th December 2020. Under the terms of the indemnity, Nam Tai agreed that it would not file a defence to the Ancillary claim, which was stayed, except for carrying out the terms of the Tomlin Order. The Main claim against West Ridge was stayed on the basis of IsZo’s agreement that Nam Tai could enter into the Deed of Indemnity with West Ridge, and West Ridge would be bound by the result of the Main claim. The effect of the settlement on West Ridge was that it received an indemnity, gave up its right to defend the Main claim on the understanding that its subscription was unaffected by any irregularity with the allotment, and it did not need to take any further part in the Main claim.

[6]The Main claim was subsequently determined in the commercial court of the BVI with the learned judge finding that the allotment of shares under the PIPE was made for an improper purpose and was void, because the purpose of the allotment was not to raise money for the company but was to shift the balance of voting power amongst shareholders, with a view to maintaining the existing Kaisa directors in office. The learned judge also found that the Kaisa directors did not act in the best interest of Nam Tai and its shareholders and acted in breach of their duty under sections 120(1) and 121 of the BC Act. By his order, the learned judge set aside the new allotments of shares to Greater Sail and West Ridge and ordered that the register of members of Nam Tai be rectified to delete the entries for the shares allotted under the PIPE.

[7]On an appeal from Nam Tai, this Court on 4th October 2021 affirmed the judge’s finding that the PIPE was for the improper purpose of defeating the requisition and keeping the Kaisa directors in de facto control of Nam Tai. The appeal was allowed to the extent of setting aside the finding that the Kaisa directors had breached section 120(1) of the BC Act. Following the appeal, a shareholders meeting was held by reference to the register of members as it stood prior to the allotment. The Kaisa directors were removed from office and a new board was appointed, with Nam Tai now being under the control of a new board of directors. West Ridge thereafter applied under the Ancillary claim to enforce paragraph 1 of the Tomlin Order for the return of the subscription money it had paid for the shares, all their costs and other losses associated with the indemnity, to be quantified by the court.

[8]Nam Tai, now under the control of the new directors, filed a defence and counterclaim. The essence of the defence was that the Kaisa directors breached their duty to Nam Tai by approving and implementing the PIPE for an improper purpose in furtherance of an unlawful means conspiracy between Nam Tai and Westridge to keep the Kaisa directors in control of Nam Tai. Alternatively, that West Ridge dishonestly assisted the Kaisa directors in making the PIPE for an improper purpose. Nam Tai also alleged that the Kaisa directors were protecting their own interests and the interests of Kaisa in breach of their duties to Nam Tai under sections 120(1) and 121 of the BC Act, and approved the Deed of Indemnity in order to withhold from the court in the Main claim, disclosure of documents and evidence from West Ridge that would have confirmed that the PIPE was made for an improper purpose. Nam Tai submitted that the indemnity was ineffective and void, and/or not binding on Nam Tai and that the allotment was void and West Ridge was not entitled to the return of the subscription money, and was liable to Nam Tai for damages and equitable compensation in an amount to be ascertained, which amount would exceed any amount due to West Ridge under the indemnity giving rise to a right to a defence of equitable set off. Nam Tai also pleaded defences of change of position and breach of public policy.

[9]On 7th April 2022, on a summary judgment application brought by West Ridge to enforce the Tomlin Order, the judge found that Nam Tai did not have a realistic prospect of succeeding on its claim to set aside the Tomlin Order and ordered the enforcement of the Tomlin Order granting West Ridge’s application for judgment, pursuant to the Deed of Indemnity and accompanying Tomlin Order, and in doing so, he dismissed Nam Tai’s defence and counterclaim. Nam Tai appealed. Appeal to this Court

[10]On 27th July 2023, this Court, in a judgment authored by Webster JA [Ag.], dismissed Nam Tai’s appeal with costs to West Ridge and affirmed the finding of the learned judge that the terms of the Deed of Indemnity, as incorporated into the Tomlin Order, stood to be enforced. Specifically, this Court found that: (i.) Nam Tai’s claims of unlawful means conspiracy and dishonest assistance did not rise to the level of having a realistic prospect of success if the matter proceeded to trial. (ii.) Nam Tai did not have a realistic prospect of showing that the Kaisa directors (on behalf of Nam Tai) entered into the Deed of Indemnity for an improper purpose. (iii.) there was no need to make an order regarding the lifting of the stay imposed by the Tomlin Order. (iv.) West Ridge’s entitlement to rely on the Deed of Indemnity was not barred, because Nam Tai did not have a realistic prospect of showing that the Deed of Indemnity was issued for an improper purpose in breach of section 121 of the BC Act, or that West Ridge assisted in the alleged breach; and (v.) the issues raised by the counter notice of appeal were covered by the findings in the judgment and any issues raised on the counterclaim that have not been dealt with were not necessary for the disposal of the appeal.

[11]It is against this decision that Nam Tai has sought conditional leave to appeal to the Privy Council. Nam Tai’s Grounds of Appeal pursuant to its Conditional Leave Application

[12]Nam Tai filed its Notice of Motion for Conditional Leave to Appeal to the Privy Council on 16th August 2023 (“the Application” or “the Application for conditional leave”). Nami Tai’s 7 grounds of appeal attached to the Application are summarised as follows: Ground 1 – Unlawful Means Conspiracy

[13]On this ground Nam Tai submitted that: a) the Court erred in concluding that Nam Tai’s claim in unlawful means conspiracy against West Ridge had no realistic prospect of success. In particular, the Court erred in law in holding that to make the cause of action for conspiracy complete, the pleadings must allege a specific intention by the alleged conspirators to cause “pecuniary damage” to Nam Tai; b) further or alternatively, the Court erred in law and in fact by concluding that the potential costs to Nam Tai from the litigation which resulted from the impugned PIPE (which Nam Tai calls the “Improper Allotment”, and will be referred to as such when practical to do so at some points throughout this judgment) was only a foreseeable consequence of the Improper Allotment; c) further or alternatively, the Court erred in law and in fact by concluding that West Ridge wanted Nam Tai to prosper; and d) further or alternatively, the Court erred in law by concluding that, because West Ridge’s alleged ultimate objective was for Nam Tai to prosper, it could not have intended to cause harm to Nam Tai, even if the achievement of its ultimate objective involved the infliction of harm on Nam Tai in the short to medium term.

[14]Nam Tai argued that ground 1 involved a question or questions of great general or public importance or otherwise and/or ought to be submitted to His Majesty in Council under article 3(2)(a) of the 1967 Order as the decision of the Court had rendered uncertain: (a) the question of what is required to demonstrate an ‘intention to cause harm’ for the purposes of the tort of unlawful means conspiracy, and in particular whether ‘harm’ for these purposes is limited to pecuniary loss; and (b) the approach which the Court should take when reviewing a claim in unlawful means conspiracy on a summary basis, namely, should a court, on an interlocutory application to enforce a Tomlin Order prior to disclosure and exchange of evidence and before such evidence has been tested at trial, make findings of fact which are adverse to an appellant’s case. Ground 2 – Dishonest Assistance

[15]On this ground Nam Tai submitted: a) the Court erred in concluding that its claim in dishonest assistance against West Ridge had no realistic prospect of success. In particular, having concluded that Nam Tai had a realistic prospect of showing that West Ridge combined with the Kaisa directors to effect the Improper Allotment and to do so for an improper purpose, the Court erred in law in concluding that such conduct on the part of West Ridge was not dishonest for the purposes of a claim in dishonest assistance; b) further or alternatively, the Court erred in law in concluding that participating in the PIPE for an improper purpose in breach of section 121 of the BC Act was not dishonest for the purposes of a claim in dishonest assistance; and c) further or alternatively, the Court erred in law and in fact by concluding that West Ridge decided to invest in Nam Tai as part of “a reasonable commercial venture reached at arms-length by sophisticated businesspersons advised by lawyers at all stages.”

[16]Nam Tai stated that ground 2 involved a question or questions of “great general or public importance” within the meaning of section 3(2)(a) of the 1967 Order and/or “ought to be submitted to His Majesty in Council” under section 3(2)(a) in any event, in that: a) the Court misapplied the test of dishonesty as set out by the Supreme Court of the United Kingdom in Ivey v Genting Casinos (UK) Ltd (trading as Crockfords Club), in particular, the Court found that, that test was not met even though it had found that Nam Tai had a realistic prospect of showing that West Ridge combined with Nam Tai’s Kaisa directors to effect the PIPE and to do so for an improper purpose; and b) the Court’s decision endorsed, as legitimate and honest, conduct to deliberately subvert the constitutional arrangements of a publicly listed company. Ground 3 – Setting aside the Purported Indemnity

[17]On this ground Nam Tai submitted: a) the Court erred in concluding that it had no realistic prospect of demonstrating that the Deed of Indemnity dated 14th December 2020 (which Nam Tai calls the “Purported Indemnity” and will be referred to as such when practical to do so at some points throughout this judgment) was ineffective and/or void and/or not binding on it. In particular: (i) the Court erred in law and in fact in dismissing as speculative the allegation that the Kaisa directors’ real purpose in giving the Purported Indemnity was to keep West Ridge’s evidence out of the Main claim. To the extent that the purpose of providing the Purported Indemnity was a disputed question of fact, the Court ought to have assumed that question of fact in Nam Tai’s favour on the application before it; (ii) the Court erred in law and in fact in asserting that there was no pleading of the actual evidence that West Ridge would have given support to Nam Tai’s case in the Main claim; and (iii) further or alternatively, the Court erred in law in holding that it was necessary for Nam Tai to prove that West Ridge accepted the Purported Indemnity to avoid giving evidence and disclosure in the Main claim, for the Purported Indemnity to be ineffective and/or void and/or not binding.

[18]Nam Tai said ground 3 involved a question (or questions) of “great general or public importance” within the meaning of section 3(2)(a) of the 1967 Order and/or “ought to be submitted to His Majesty in Council” under section 3(2)(a) in any event as: a) this ground raised the question of the effect of a breach of duty under section 121 of the BC Act. In his judgment in the Main claim, Jack J [Ag.] expressed the view that, under BVI law, an act taken in breach of section 121 of the BC Act is void rather than voidable. However, without hearing any argument on the issue or even acknowledging that Jack J [Ag.] had expressed a different view, the Court appeared to have proceeded on the basis that an act taken in breach of section 121 of the BC Act is voidable rather than void; and b) even if the correct position, as a matter of law, is that an act taken in breach of section 121 of the BC Act is voidable rather than void, the Court proceeded on the incorrect basis that, in order for the impugned act to be set aside, West Ridge not only had to be aware that the Kaisa directors were acting for an improper purpose, but also that they had to have been motivated by the same improper purpose as the Kaisa directors. Ground 4 – The Construction of the Purported Indemnity and/or Public Policy

[19]On this Ground Nam Tai submitted that The Court erred in concluding that, as a matter of Construction West Ridge’s claim under the Purported Indemnity fell within the 4 corners of the deed and prima facie, that the amounts claimed under the Purported Indemnity were due and payable, and that the Purported Indemnity was not contrary to Public policy.

[20]Nam Tai submitted that the proposed appeal on ground 4 depended, in part, on the proposed appeal on grounds 1 and 2, each of which gave rise to questions of great general or public importance. For that reason alone, ground 4 met the test for permission to appeal to the Privy Council. Separately, ground 4 involved a question or questions of “great general or public importance” within the meaning of section 3(2)(a) of the 1967 Order and/or “ought to be submitted to His Majesty in Council” under section 3(2)(a) in any event, as clarification is required of: (a) the extent to which (if at all) it is permissible for 1 party (here, Nam Tai) to enter into a contractual arrangement by which it assumes responsibility for the consequences of dishonest wrongdoing by the contractual counterparty; and (b) if it is permissible, what is required as a matter of contract for 1 party to assume such responsibility. Ground 5 – Illegality

[23]Nam Tai submitted that Ground 6 involved a question (or questions) of “great general or public importance” within the meaning of section 3(2)(a) of the 1967 Order and/or “ought to be submitted to His Majesty in Council” under section 3(2)(a) in any event as: a) the Court misapplied the law on causation in claims of conspiracy; and b) the Court’s approach to causation on the claim for dishonest assistance was also contrary to the established law that, as in conspiracy, it is inappropriate to become involved in attempts to assess the precise causative significance of the dishonest assistance in respect of either the breach of fiduciary duty or the resulting loss. Ground 7 – Change of Position

[21]On this ground Nam Tai submitted: a) the Court erred in concluding that Nam Tai had no realistic prospect of proving that West Ridge’s claim in contract failed because the subscription agreement pursuant to which the Improper Allotment was made was entered into for an unlawful purpose. In particular, the Court held that the issue of illegality did not have realistic prospects of success because: (i) the issue was not particularised and pleaded and therefore did not merit serious consideration; and (ii) West Ridge’s claim for an indemnity was not based on its alleged wrongdoing but on the Purported Indemnity; and b) Nam Tai submitted that ground 5 depended, in part, on the proposed appeal on grounds 1 and 2, each of which gives rise to questions of great general or public importance. For that reason alone, ground 5 met the threshold test for permission to appeal to the Privy Council. Ground 5 by itself gave rise to questions of great general or public importance for the following reason: (i) in Briefline Assets Ltd. v Nikolay Anatolyevich et al Jack J [Ag.] observed that the law on illegality is not clear in this jurisdiction, and in particular there is a difficult question of the law of precedent as to whether the Court is bound by decisions of the Privy Council which apply the decision in Tinsley v Milligan or by the decision of the U.K. Supreme Court in Patel v Mirza. Nam Tai submitted that in the very least, that is an issue which ought to be permitted to proceed to trial, even if it is not resolved by the Privy Council on this appeal. Ground 6 – Loss and Damage

[25]Ground 7 involved a question (or questions) of “great general or public importance” within the meaning of section 3(2)(a) of the 1967 Order and/or “ought to be submitted to His Majesty in Council” under section 3(2)(a) in any event because: a) In attributing the knowledge of the Kaisa directors to Nam Tai, the Court adopted an approach which was contrary to that of the U.K. Supreme Court in Bilta (UK) Ltd (in liquidation) and others v Nazir and others (No. 2). b) Applying the correct approach as set out by the Supreme Court in Bilta, for the purposes of the defence and counterclaim, the knowledge of the directors is not to be attributed to Nam Tai. Discussion on the Scope of Section 3(2)(a) of the 1967 Order

[22]On this ground Nam Tai submitted: a) the Court erred in concluding that it had no realistic prospect of showing that it was entitled to recover the loss on its investment in the fund associated with Greensill Capital (the “Greensill Fund”). In particular, the Court erred in law by applying the wrong test of causation and/or by wrongly introducing a requirement of remoteness into the claim for conspiracy; and b) further or alternatively, the Court erred in law and in fact by concluding that West Ridge provided no assistance to the Kaisa directors in making the investment in the Greensill Fund and/or was not responsible for the losses which resulted from the investment.

[28]In Multibank FX International Corporation v Von Der Heydt Invest SA, a decision of this Court, Farara JA [Ag.] deconstructed section 3(2)(a), explaining that it provided two bases upon which the Court can exercise its jurisdiction to grant conditional leave: (i) where the matter in issue before the Court is one which involves a question or issue of ‘great general or public importance’; or (ii) where the question or issue, while not being considered one of great general or public importance, is ‘otherwise’ of such significance that it ought, nevertheless, to be submitted to the Privy Council for determination. The Great “general or public importance limb” of Section 3(2)(a)

[24]On this ground Nam Tai submitted: a) the Court erred in concluding that Nam Tai had no realistic prospect of setting up a defence of change of position to West Ridge’s claim. In particular, in holding that Nam Tai did not spend the subscription monies in good faith, the Court erred in law and fact by attributing the knowledge of the Kaisa directors to Nam Tai. For the purposes of the defence and counterclaim (including the defence of change of position), the knowledge of the Kaisa directors was not to be attributed to Nam Tai by reason of West Ridge’s involvement in the Kaisa directors’ unlawful conduct; b) further or alternatively, the Court erred in holding that the defence of change of position was not properly pleaded; and c) further or alternatively, to the extent that the defence was not properly pleaded, Nam Tai ought to have been given an opportunity to amend its pleading before it was summarily dismissed.

[11]It follows as well that the question of law which is said to be of great general or public importance must genuinely arise from the way the case was decided in the Court of Appeal. The question must be ‘involved’ in the appeal. Such a question cannot arise if it was not raised on the appeal, or if the principle of law which the applicant wishes to have settled by the highest court has not been put in doubt.” The “or otherwise limb” of Section 3(2)(a)

[26]Firstly, I note that counsel for Nam Tai, Mr. Rivett, submitted that grounds 4 to 7 of its grounds of appeal are parasitic on grounds 1 to 3 of its Application, such that grounds 4 to 7 fall away or are engaged depending on the Court’s acceptance of grounds 1 to 3. In the circumstances, I propose to first have a preliminary discussion on the scope of section 3(2)(a) of the 1967 Order; the section under which Nam Tai has made the Application which, in my view, sets the stage for a proper and informed consideration of grounds 1, 2 and 3. The success or not of any of each of these grounds would determine whether grounds 4 to 7 should be further considered. Section 3(2)(a) of the 1967 Order

[32]In Multibank, Farara JA [Ag.] further expounded on the ‘or otherwise limb’ and explained that for an applicant to satisfy the ‘or otherwise’ limb of Section 3(2)(a) they must demonstrate that there is some good reason or ground why leave to appeal ought to be granted. He stated that perhaps the most persuasive of such reasons is where there is reasonable doubt as to the correctness of the Court of Appeal’s decision as, for example, where the decision was based on a principle which has been overruled by higher and binding authority or where it was based on a statute or statutory provision which has been repealed prior to such decision being rendered.

[27]In the British Virgin Islands, a party may apply for leave to appeal to the Privy Council in one of three ways: (1) as of right; (2) with leave of the Court of Appeal; or (3) with the special leave of the Privy Council in any criminal or civil case. This proposed appeal is concerned with the second method of appealing, and particularly, the first circumstance, contained in section 3(2)(a) of the 1967 Order which reads: “(2) Subject to the provisions of this Order, an appeal shall lie from decisions of the Court to Her Majesty in Council with the leave of the Court in the following cases- (a) where in the opinion of the Court the question involved in the appeal is one that, by reason of its great general or public importance or otherwise, ought to be submitted to Her Majesty in Council…”

[29]In Multibank, Farara JA [Ag.] explained that the meaning of ‘great general or public importance’ was well settled. In construing that expression, the Court would look for matters that involve ‘a serious issue of law; a constitutional provision that has not been settled; an area of law in dispute, or a legal question the resolution of which poses dire consequences to the public.’ The term had been explained much earlier in Martinus Francois v The Attorney General. Saunders JA (as he then was) there was referring to the words in the context of section 108(2) of the Constitution of Saint Lucia. The provisions are equivalent in substance and purpose. Saunders JA explained that leave under this ground is normally granted when there is a difficult question of law involved. He further stated that in circumstances where the case concerns an area of law so well settled that further litigation on the subject will not be regarded by this Court as being of great importance, leave to appeal to the Privy Council must be refused.

[30]The meaning of the term was further developed by this Court in Renaissance Ventures Ltd et al v Comodo Holdings Ltd. The Court said this: “[10] ……Where there is no genuine dispute on the applicable principles of law underlying the question which the applicant wishes to pursue on his or her proposed appeal, a question of great general or public importance does not ordinarily arise, especially where the principle of law is settled either by the highest appellate court or by longevity of application. Where the principle is one established by this Court but is either unsettled, in the sense that there are differing views or conflicting dicta, or there is some genuine uncertainty surrounding the principle itself, or it is considered to be far reaching in its effect, or given to harsh consequences, or for some other good reason would benefit from consideration at the final appellate level, this Court would be minded to seek the guidance of their Lordships’ Board. Where, however, the real question on the proposed appeal is the way this Court has applied settled and clear law to the particular facts of the case, or whether a judicial discretion was properly exercised, leave will ordinarily not be granted on this ground. In such a case, the question on the proposed appeal may be of great importance to the aggrieved applicant, but it would not for that reason alone be a question of great general or public importance.

[31]In Renaissance Ventures Ltd the meaning of “or otherwise” was considered. Mendes JA [Ag.] said this: “But even where an applicant fails to establish that the question he or she wishes to pursue before the Privy Council is of great general or public importance, this Court may yet grant leave if it is satisfied that there are good grounds which would otherwise justify referral to [His] Majesty in Council, as for example where there is some reasonable doubt as to the correctness of the decision of the court.”

[33]It is manifest from the above decisions that the Court may grant conditional leave to appeal, under section 3(2)(a) of the 1967 Order, in circumstances (which are non-exhaustive) where the question of law arising from the way the case was decided in the Court of Appeal, is one which demonstrates a serious issue of law or involves a difficult question of law; involves the interpretation of a constitutional provision that has not been settled either by the highest appellate court or by longevity of application; an area of law in dispute; a legal question the resolution of which poses dire consequences to the public, or otherwise an applicant must demonstrate that the decision sought to be further appealed is so flawed or so incorrect that it ought not to be allowed to stand or there is some other good reason why the guidance of the Privy Council is required. What is clear is that, the Court will ordinarily not grant leave under section 3(2)(a) in circumstances where the real question on the proposed appeal is the way the Court has applied settled and clear law to the particular facts of the case, or whether a judicial discretion was properly exercised, leave will ordinarily not be granted on this ground. With this, I now turn to assess the questions which Nam Tai says are raised on the grounds of appeal. Ground 1- Unlawful Means Conspiracy – Part (a)

[40]Accordingly, Nam Tai argued that the Court ought to have held that the requirement of intention was established at least to the relevant threshold on the application before it, because the purpose of the combination and/or agreement between West Ridge and its co-conspirators was to subvert Nam Tai’s constitutional arrangements to determine the composition of Nam Tai’s board of directors, which authority is vested in Nam Tai’s members at (a) general meeting.

[34]Ground 1 can be divided into parts (a) and (b). Firstly, on ground 1(a), Nam Tai submitted that, in broad terms, the ingredients of the tort of unlawful means conspiracy are: (i) a combination, agreement or understanding between two or more people; (ii) an intention to injure another individual or separate legal entity; (iii) use of unlawful means as part of the concerted action; and (iv) loss being caused to the target of the conspiracy. The only one of the 4 ingredients which both the first instance court and this Court concluded was not satisfied to the requisite standard was the requirement that West Ridge and its co-conspirators must have intended to injure Nam Tai.

[35]On that element, Nam Tai stated that there was no requirement, as was stated by the Court, that to make the cause of action for conspiracy complete the pleadings must allege a specific intention by the alleged conspirators to cause “pecuniary damage.” Nam Tai argued that the Court relied on the decision of Lonrho plc. and others v Fayed and others (No. 5) to conclude that Nam Tai was under an obligation to allege a specific intention by West Ridge to cause pecuniary harm to Nam Tai, when in fact the decision of Lonrho is simply authority for the proposition that a plaintiff in a civil action for conspiracy must prove actual pecuniary loss. This, Nam Tai argued, is in keeping with the fourth ingredient of the tort of conspiracy reflected at paragraph [34], that is loss caused to the target of the conspiracy.

[36]Nam Tai also argued that OBG Ltd. and another v Allan and others; Douglas and others v Hello! Ltd and others (No 3); Mainstream Properties Ltd v Young relied on by the Court, provided no support for the proposition that the pleadings must allege a specific intention to cause pecuniary damage. In OBG, the House of Lords considered a more discreet question of the degree of intention required for the purposes of the torts of unlawful means interference and procuring a breach of contract. The House of Lords did not address the nature or quality of the injury intended by the conspirators for the purposes of a claim in unlawful means conspiracy, which was the issue being addressed by the Court in the present case.

[37]Nam Tai submitted that the proposition that a claim in conspiracy could only succeed where the conspirators’ intention was to cause pecuniary injury would have startling consequences that have ramifications beyond the facts of this case. Nam Tai asserted that an intention deliberately to subvert the constitutional arrangements of a publicly listed company and/or to do so knowing that it will embroil a company in costly litigation, not meeting the requirement of an intention to cause harm for the purposes of the tort of conspiracy, ought to be of concern to all companies incorporated in the BVI and to their current and prospective investors. Most obviously, for a listed company to gain and enjoy access to capital markets, prospective investors must have confidence that its constitutional arrangements will not be deliberately and unlawfully undermined by its directors and co-conspirators and/or that companies will have remedies against such wrongdoers.

[38]Nam Tai further submitted that the Court wrongly concluded that the potential costs to Nam Tai from the litigation which resulted from the impugned ‘private investment in public equity’ (PIPE) was only a foreseeable consequence of the Improper Allotment. Nam Tai’s pleaded case was that West Ridge knew that there was a substantial risk that the Improper Allotment would result in litigation to which the appellant would need to be a party and in the defence of which Nam Tai would incur substantial costs. Nam Tai submitted that in circumstances where West Ridge knew of the risk of loss to Nam Tai but proceeded with the Improper Allotment regardless, the loss to Nam Tai was the ‘obverse side of the coin’ from the gain to West Ridge. This, Nam Tai argued, was sufficient to meet the test for intention for the purposes of unlawful means conspiracy.

[39]Nam Tai also submitted that the Court was wrong to conclude that, because West Ridge’s alleged ultimate objective was for Nam Tai to prosper, it could not have intended to cause harm to Nam Tai even if the achievement of its ultimate objective involved the infliction of harm on Nam Tai in the short to medium term. It submitted that the requirement of intention to cause harm is satisfied not only where an entity intends to cause harm to another as an end in itself but also where it does so as a means to an end. Nam Tai submitted that its pleaded case was that West Ridge entered into the subscription agreement in a manner inconsistent with the protection of its own ordinary commercial interests, as such the Court could not properly draw an inference that West Ridge’s motive was an ordinary commercial motive.

[41]West Ridge, in response, submitted that the issues Nam Tai sought to raise in this ground were entirely academic. The first instance court and this Court did not reject the conspiracy claim because Nam Tai needed to but had failed to plead pecuniary loss, but because they had no realistic prospect of establishing an intent to injure at all. The first instance court had set out Nam Tai’s submissions and concluded that Nam Tai had no realistic prospect of showing that West Ridge had an intention to harm it. The first instance court’s reasoning and finding did not turn on any disputed legal analysis in relation to pecuniary loss. Nam Tai failed on this issue regardless of the legal point they sought to advance. West Ridge submitted that this Court considered the conspiracy issue and found that there was no basis to interfere with the judge’s findings that, on the material before him, Nam Tai did not have a realistic prospect of showing that West Ridge intended to harm Nam Tai. The conspiracy claim therefore failed. The Judgment at First Instance

[42]The learned judge identified the four elements of the tort of unlawful means conspiracy at paragraph

[43]It is worthwhile to recite verbatim the decision of this Court contained at paragraphs

[44]The Judge recognised, no doubt because of his familiarity with the case, that there was an ongoing struggle between the Kaisa faction and the IsZo faction regarding how the Company was being managed and will continue to be managed. He concluded on this point that the root of the dispute between the two factions was over who should control the Company and chart its course going forward. This finding echoes the Judge’s observation in the opening sentence of the main judgment that ‘[t]his is a shareholder dispute concerned with the control of the first defendant (Nam Tai), a BVI company listed on the New York Stock Exchange’.

[45]On the related issue of West Ridge’s intention to harm Nam Tai, the Judge found that ‘it is fanciful to suppose that West Ridge wanted to harm Nam Tai: it was investing $23 million in order to make a profit from Nam Tai’s success’. This is an understandable observation by the Judge – it is not logical to invest millions of dollars in a company with the intention of harming the company. The Kaisa directors and West Ridge did not intend to harm Nam Tai. They wanted to keep control of the Company but went about it using an improper procedure that has been found to have breached their section 121 duties to the Company.

[46]The findings by the Judge set out in the preceding paragraphs epitomise the real cause of the disputes between the parties – control of Nam Tai. The Kaisa directors had and sought to maintain control of the Company by effecting the PIPE which would keep them on the board. The IsZo faction sought to seize power by appointing the new directors. This kind of power struggle is not unusual in successful commercial entities and the methods employed by the competing factions to gain or keep control are not necessarily conspiratorial or dishonest. The fact that the methods used by one of the factions turns out to be improper and in breach of their duty to the Company does not necessarily mean that they intended to harm the Company. The intention to cause harm to the company, as well as the harm so caused, must be clearly alleged in the pleadings and later proved at the trial.

[47]of the 2023 judgment: “[41] as we are dealing with an application to enforce a Tomlin Order and a response by way of a defence and counterclaim seeking to set aside the order, what is essential is that Nam Tai’s pleaded case must show that it has a realistic prospect that West Ridge intended to cause pecuniary harm. to Nam Tai the alleged harm is pleaded In paragraph 27 of the defence. It consists of three elements: a) the combination was inherently harmful to the Company because it was designed to subvert the Company’s constitutional arrangements pursuant to which it determines the composition of its board of directors. (b) the purpose of the combination was to keep the Kaisa directors in control of the Company whose actions have damaged and continue to damage the Company as described in IsZo’s open letter dated 27th May 2020. c) the Kaisa directors and West Ridge knew that there was a substantial risk that the PIPE would result in litigation and substantial costs to the Company.

[48]In Lonrho, the plaintiffs claimed damages and an injunction for conspiracy, alleging that by the conspiracy, the defendants had sponsored and encouraged a third party to publish defamatory statements about the plaintiffs and financed and caused another third party to bring an action against the plaintiffs. The Court of Appeal considered that the claim, as originally pleaded, was defective because no particulars of the damage were given. However, the absence of any particulars of pecuniary loss in the original pleading did not prevent either the court at first instance or the Court of Appeal in Lonrho from concluding that the plaintiffs’ claim included a properly pleaded allegation of intention to cause injury.

[49]The required mental element for unlawful means conspiracy is an intention to inflict damage on a claimant as an end in itself or to inflict it as a means to some other end. Merely resulting or incidental damage will not do, even if foreseeable or inevitable. It is not enough that a defendant foresees that a claimant will probably suffer harm. Where gain to the conspirators is necessarily at the expense of loss to a claimant then the requisite intention to injure is established. Where loss to a claimant is the other side of the coin to that of the defendant’s gain, and the defendant knows that to be so, then the two are inseparably linked and the requisite intention is established, and it is for the victim to establish the ‘inseparable link’ between a defendant’s primary intention of self-gain and damage to the claimant. The Loss/Damage Element

[50]Lonrho concerned lawful means conspiracy but the principles of the case are nonetheless good authority for the tort of conspiracy generally, which may either take the form of lawful or unlawful means conspiracy. Lonrho asserted that the essential ingredients of the tort of conspiracy to injure by lawful means were an agreement by two or more persons to do acts, which were lawful in themselves, for the sole or predominant purpose of causing injury to the plaintiff and which in fact caused injury to the plaintiff. Lonrho was significant because it found that an essential element of the tort of conspiracy is pecuniary loss. The Court stated at page 1508 that: “Second, and following on from the first, is the question, what kind of damage must the plaintiffs prove in order to succeed, and allege in order to avoid their claim being struck out? It is common ground that this must include pecuniary loss, which I take to mean loss that is capable of being measured in money terms, and not merely capable of being assessed as financial compensation for some other kind of injury, as general damages for personal injury or for loss of reputation in defamation actions are. Where the plaintiffs allege facts which, if proved, will establish damage of this kind, as with the alleged loss of immensely valuable contracts (or contacts) in Iran, then the claim cannot be struck out unless the proceedings are brought for some improper or collateral motive. Where, however, the pleading itself asserts that the plaintiffs are presently unable to identify any such loss, or to allege that any measurable loss has occurred, then the claim is defective because it fails to describe a factual situation which gives rise to the cause of action upon which the plaintiffs rely. In such cases, the claim is not necessarily struck out at once. A proper opportunity to amend or to add to particulars may well be given, as it has been given here….”

[51]Significantly, the Court did not confine the requirement that pecuniary loss be occasioned in just lawful means conspiracy, the Court stated that such loss is a requirement in, broadly, the tort of conspiracy to injure. The Court stated at page 1505 that: “…such acts cause damage to the plaintiffs it must in my view be pecuniary damage and it must be pleaded with sufficient particularity. In other words, there must be a sufficient nexus between the act causing pecuniary loss and the other damage for which compensation is claimed. Since the tort of conspiracy to injure is not complete without pecuniary loss, any damages at large must be referable to the act causing the pecuniary loss which constitutes the tort.” The Intention Element – OBG’s case

[52]In OBG, the House of Lords considered three appeals principally concerned with claims in tort for economic loss caused by intentional acts. The first concerned conversion and wrongful interference with contractual relations. The second concerned breach of confidence and unlawful interference with economic interests. The third concerned wrongful interference with contractual relations. The Lords considered the ingredients of the tort of interference with a business by unlawful means and the tort of inducing breach of contract. When considering the ingredient of “intent to injure,” the Lords held at page 57 that: “164…A defendant may intend to harm the claimant’s business either as an end in itself or as a means to an end. A defendant may intend to harm the claimant as an end in itself where, for instance, he has a grudge against the claimant. More usually a defendant intentionally inflicts harm on a claimant’s business as a means to an end. He inflicts damage as the means whereby to protect or promote his own economic interests. 165 Intentional harm inflicted against a claimant in either of these circumstances satisfies the mental ingredient of this tort….. 166 Lesser states of mind do not suffice. A high degree of blameworthiness is called for, because intention serves as the factor which justifies imposing liability on the defendant for loss caused by a wrong otherwise not actionable by the claimant against the defendant. The defendant’s conduct in relation to the loss must be deliberate. In particular, a defendant’s foresight that his unlawful conduct may or will probably damage the claimant cannot be equated with intention for this purpose. The defendant must intend to injure the claimant….”

[53]The cases of OBG and Lonrho confirm that the mental element of the tort, the intention, does not have to necessarily be an intention to cause pecuniary harm. It is, in fact, the element of loss which must be pecuniary in nature given that it is an economic tort. These principles have been settled by longevity of application. Whatever uncertainty was created by the Court in conflating the elements of intention and loss, I nevertheless agree with Counsel for West Ridge, Mr. Machell KC, that ultimately the decision of the Court did not turn on this finding. The learned judge whose understanding of the law on the element of intention and loss accorded with the principles in the cases of OBG and Lonrho, had concluded that on the material before him, Nam Tai did not have a realistic prospect of showing that West Ridge intended to harm Nam Tai. This Court accepted and left undisturbed this finding of Jack J [Ag.]. I find that the appeal on this ground did not turn on the Court’s finding of a failure to plead a specific intention to cause pecuniary damage but an acceptance of Jack J [Ag.] finding that the pleadings of Nam Tai failed to show an intention to harm. I accordingly find that Nam Tai has not met the threshold test for the grant of leave to appeal on ground 1(a). Ground 1- Unlawful Means Conspiracy – Part (b)

[54]On ground 1 (b), Nam Tai also raised, as a question arising from the appeal, the approach which a Court should take when reviewing a claim in unlawful means conspiracy on a summary basis. Should a Court, on an interlocutory application to enforce a Tomlin Order prior to disclosure and exchange of evidence, and before such evidence has been tested at trial, make findings of fact which are adverse to an appellant’s case?

[55]Nam Tai submitted that there was no evidence before the Court for it to conclude as it did that West Ridge wanted Nam Tai to prosper. There was no evidence before the Court that this was the case and in any event, the Court ought to have been slow to conclude at an interlocutory stage, prior to disclosure and evidence that West Ridge did not intend to cause harm to Nam Tai. This is because West Ridge’s knowledge and intentions are peculiarly within its own knowledge and, having regard to the nature of a conspiracy, shrouded in secrecy.

[56]Nam Tai submitted that courts have frequently warned of the dangers of drawing any conclusions about a defendant’s knowledge or intentions prior to disclosure and evidence. In Lonrho, Dillon L.J. said (at page 1493G): “…what the defendants’ predominant purpose was is again a question of fact which cannot be decided on the affidavits and must be left for the trial.”

[57]The approach of the Court of Appeal in Lonrho towards the question of intention is particularly striking, Nam Tai submitted, given that the claim in those proceedings was in lawful means conspiracy, for which the test of intention is higher than that required for a claim in unlawful means conspiracy. Nam Tai placed further reliance on Grant & Mumford, Civil Fraud which states: “….There has been wide judicial recognition of the difficulties of pleading a fully particularised claim in conspiracy at the outset of proceedings, bearing in mind that matters such as the defendants’ knowledge or intentions are peculiarly within the defendant’s knowledge and (if the claim is justified) likely to have been concealed from the claimant.”

[58]Nam Tai submitted that applying the correct approach, the Court ought not to have made a finding of fact as to the state of West Ridge’s knowledge at an interlocutory stage. It should not have concluded that Nam Tai had no realistic prospect of demonstrating that West Ridge intended to harm Nam Tai, a fortiori, in circumstances where it was satisfied to the requisite standard that West Ridge had combined with the Kaisa directors to effect the PIPE and to do so for an improper purpose. Discussion on Ground 1(b)

[59]Summary judgment applications are governed by part 15 of the Civil Procedure Rules Revised Edition 2023 (the “CPR”) and in particular, CPR 15.2 provides that a court may give summary judgment on a claim or on a particular issue if it considers that the defendant has no real prospect of successfully defending the claim or the particular issue. CPR 15.6 provides for the type of proceedings for which summary judgment is not available. Under the rule, claims in conspiracy, lawful or unlawful, are not excluded from summary judgment determination.

[60]When dealing with applications for summary judgment, the Court in Flat Point Development Limited v Canisby Limited stated that the judge should examine the pleadings and the evidence critically to see if, when properly assessed, they disclose a reasonable prospect of succeeding on or defending the claim, as the case may be. The Court in Flat Point cited positively the dicta of George-Creque JA (as she then was) in Saint Lucia Motor & General Insurance Co. Ltd. v Peterson Modeste, when she said: “….the court is not tasked with adopting a sterile approach but rather to consider the matter in the context of the pleadings and such evidence as there is before it and on that basis to determine whether, the claim or the defence has a real prospect of success. If at the end of the exercise of the court arrives at the view that it would be difficult to see how the claimant or the defendant could establish its case then it is open to the court to enter summary judgment.”

[61]In Amstel Investment Holdings Limited et al v AMS Holdings Limited et al Farara JA [Ag.] accepted that certain categories or types of claims are not well-suited for determination by summary judgment. He acknowledged that claims grounded upon allegations of reprehensible conduct, including fraud or dishonesty, are ill-suited for determination by summary judgment as they are usually fact sensitive claims, relying on complex facts and involving significant questions of law and fact for determination. It does not however follow that summary judgment could never be appropriate in such fact sensitive claims. In Easyair Ltd (t/a Openair) v Opal Telecom Ltd, the court noted that although a court hearing a summary judgment application should not attempt to conduct a mini-trial “… that does not mean that the court has to accept without analysis everything said by a party in his statements before the court.” The court acknowledged that, “In some cases it may be clear that there is no real substance in factual assertions made…”

[62]This matter was before the first instance court on West Ridge’s application to enforce the terms of the Tomlin Order. Nam Tai opposed the application and applied to set aside the Tomlin Order. Counsel for Nam Tai, in those proceedings, Mr. David Chivers KC, submitted that the approach to an application to set aside a Tomlin Order is to be treated as if it were an application for summary judgment and the relief sought may be granted if the defence and counterclaim had a realistic, as opposed to fanciful, prospect of success. This is consistent with the case of Heritage Travel and Tourism Ltd et al v Lars Windhorst et al which establishes that an application to enforce a Tomlin Order ought to be treated as if it were an application for summary judgment. This approach was accepted by the lower court and by this Court.

[63]The Court agreed with the relevant principles articulated by Mr. Chivers KC when considering an application under CPR 15.2; they are: “4.1 Does the Defence and Counterclaim have a ‘realistic’ as opposed to a ‘fanciful’ prospect of success?

[64]The Court adopted and followed this approach with a further qualification from the judgment of Lewison J in Easyair (following his reference to the court not conducting a mini trial at this stage): “(iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents...” The Court felt that this qualification was important and interpreted it to mean that it is not every statement that a party against whom summary judgment is sought makes in its pleading or evidence that the court should assume in favour of that party. The court must carry out its own analysis to see if there is substance in the statement before assuming it in favour of the party making the statement.

[65]The Court having reminded itself of these principles conducted an evaluation of the defence and the counterclaim, the evidence before the Court and the lower court, and the lower court’s assessment of the evidence. The Court found that there was no basis to interfere with the judge’s finding that the conspiracy claim failed because Nam Tai did not plead a proper case of intention to injure and did not have a realistic prospect of showing that the respondent intended to harm the appellant based on the material placed before the judge.

[66]Nam Tai’s challenge on this ground does not give rise to a genuine dispute on the approach a court should take in the enforcement of or the setting aside of a Tomlin Order, but lies squarely in the finding of fact by the Court that Nam Tai’s defence and counterclaim lacked pleadable substance in establishing an intention to injure. A question of great general or public importance or otherwise does not arise and consequently leave cannot be not granted in reliance on this ground. Ground 2 – Dishonest Assistance

[67]Nam Tai submitted that, in reaching its conclusion that West Ridge had not been dishonest, the Court relied on the alleged fact that Nam Tai had been selling shares at what appeared to have been a reasonable though low price and West Ridge decided to invest “in what the Judge found to be a reasonable commercial venture reached at arms-length by sophisticated businesspersons advised by lawyers at all stages.” Nam Tai argued that this finding was unsupported by evidence and/or inconsistent with the Court’s conclusions elsewhere. In particular, there was no evidence before the Court as to the basis on which West Ridge made its decision to participate in the PIPE or as to the advice which it received. More significantly, the Court had concluded earlier in its judgment that there was a realistic prospect that the evidence at trial would show that “West Ridge knew the real reason for the subscription and participated in the plan to maintain the Kaisa directors in control of Nam Tai.” The Court had also earlier found that “Nam Tai has a realistic prospect of showing that West Ridge combined with Nam Tai to effect the PIPE and to do so for an improper purpose.” Nam Tai submits that a combination between West Ridge and the Kaisa directors to effect the PIPE for an improper purpose is a far cry from “a reasonable commercial venture reached at arms-length.”

[68]Nam Tai submitted that in addition to making inconsistent findings of fact, the Court appeared to have misapplied the test for dishonesty and/or to have applied a different test from that endorsed by the U.K. Supreme Court in Ivey v Genting Casinos. Nam Tai relied as well on Royal Brunei Airlines Sdn. Bhd. v Philip Tan Kok Ming where Lord Nicholls of Birkenhead provided (at pp. 390F-391A) the following guidance on what constituted dishonest conduct: “The individual is expected to attain the standard which would be observed by an honest person placed in those circumstances. It is impossible to be more specific. Knox J. captured the flavour of this, in a case with a commercial setting, when he referred to a person who is “guilty of commercially unacceptable conduct in the particular context involved:” see Cowan de Groot Properties Ltd. v. Eagle Trust Plc. [1992] 4 All E.R. 700, 761. Acting in reckless disregard of others’ rights or possible rights can be a tell-tale sign of dishonesty. An honest person would have regard to the circumstances known to him, including the nature and importance of the proposed transaction, the nature and importance of his role, the ordinary course of business, the degree of doubt, the practicability of the trustee or the third party proceeding otherwise and the seriousness of the adverse consequences to the beneficiaries. The circumstances will dictate which one or more of the possible courses should be taken by an honest person. He might, for instance, flatly decline to become involved. He might ask further questions. He might seek advice, or insist on further advice being obtained. He might advise the trustee of the risks but then proceed with his role in the transaction. He might do many things. Ultimately, in most cases, an honest person should have little difficulty in knowing whether a proposed transaction, or his participation in it, would offend the normally accepted standards of honest conduct.”

[69]Nam Tai submitted that the Court appeared to be of the view that participating in a project for an improper purpose in breach of section 121 of the BC Act is not dishonest, however, such conduct involved a breach of Nam Tai’s rights and therefore met the test for dishonesty as articulated by Lord Nicholls of Birkenhead in Royal Brunei Airlines, particularly given the Court’s acceptance that West Ridge is a “sophisticated businessperson” and the rights which were breached related to the issue of shares by a publicly listed company. The effect of the decision of the Court, in accordance with Nam Tai’s submission, is to endorse such conduct as commercially acceptable when it is plainly not.

[70]Nam Tai submitted that the issues of great general or public importance raised by this ground of appeal are: (1) the test of dishonesty for the purposes of dishonest assistance and its application to the facts of the present case; further or alternatively (2) the inconsistent findings by the Court as to West Ridge’s conduct.

[71]West Ridge, in response, submitted that this Court considered the dishonest assistance claim and concluded that the judge erred in his treatment of the elements of the cause of action. The Court set aside the trial judge’s findings and considered the issue afresh. Having done so, the Court found that Nam Tai’s case did not “satisfy the threshold of proving a realistic prospect of showing that West Ridge’s participation in the PIPE was dishonest or that it dishonestly assisted the Kaisa directors in implementing the PIPE for an improper purpose in breach of the Kaisa directors’ duty to Nam Tai.” The Court distinguished that participating in a project for an improper purpose in breach of section 121 of the BC Act is very different from dishonestly participating in the project in breach of section 120(1).

[72]West Ridge submitted that Nam Tai’s submissions did not suggest that this Court erred at all in its statement of the law on dishonesty and dishonest assistance. Nam Tai’s ground of appeal merely asserted that the Court misapplied the test in relation to the facts of this case. As such, West Ridge submitted that this ground of appeal did not attempt to identify a legal question of great general or public importance and this Court should not, therefore, grant leave. Discussion

[73]Dishonest assistance was considered afresh by the Court to determine if Nam Tai had satisfied the threshold of showing that the claim for dishonest assistance has a realistic prospect of success if the matter proceeds to trial. In doing so, the Court restated the elements of dishonest assistance as set out in the judgment of Cockerill J in FM Capital Partners Ltd v Frédéric Marino and others which were summarised as being: (a) there must be a trust or fiduciary duty owed by the Kaisa directors to the target company (Nam Tai) and the Kaisa directors breached that duty; (b) the breach of duty by the Kaisa directors need not be dishonest because it is the dishonesty of the third party (West Ridge) that matters; and (c) West Ridge must have procured or assisted the breach and did so dishonestly.

[74]The Court found that the first element was satisfied by the findings of the judge in the Main claim and by the Court of Appeal that the Kaisa directors acted for an improper purpose in breach of section 121 of the BC Act by approving and implementing the PIPE. There is no dispute on this finding between the parties. The Court accepted that in this case, it is the dishonesty of West Ridge that is relevant and Nam Tai did not have to prove that the Kaisa directors were dishonest in effecting the PIPE in order to establish liability against West Ridge. The Court also accepted that the lower court again fell into error in concluding that Nam Tai had to prove that West Ridge assisted and procured the breach of duty by the Kaisa directors [emphasis added]. The Court accepted West Ridge’s concession that if Nam Tai proved assistance in the breach that was sufficient to satisfy the fourth element of the test and Nam Tai did not have to go on to prove that West Ridge procured the breach.

[75]The Court considered the application of the test for dishonesty set out in Ivey v Genting Casinos relied on by the trial judge. The test relied on is as follows: “…When dishonesty is in question the fact-finding tribunal must first ascertain (subjectively) the actual state of the individual’s knowledge or belief as to the facts. The reasonableness or otherwise of his belief is a matter of evidence (often in practice determinative) going to whether he held the belief, but it is not an additional requirement that his belief must be reasonable; the question is whether it is genuinely held. When once his actual state of mind as to knowledge or belief as to facts is established, the question whether his conduct was honest or dishonest is to be determined by the fact-finder by applying the (objective) standards of ordinary decent people. There is no requirement that the defendant must appreciate that what he has done is, by those standards, dishonest.”

[76]The Court also considered the dictum by Cockerill J at paragraph 82 of FM Capital Partners Ltd as relied on by the trial judge in further clarification of the test: “However, the standards in question are those of an ordinary honest person in the circumstances of the defendant. Thus, in applying the test of dishonesty, the Court must have regard to all the circumstances known to the defendant at the time, and have regard to the defendant’s personal attributes, such as their experience and the reason why they acted as they did...”

[77]Having defined the appropriate test, the Court then applied it to the facts. The Court’s application of the test to the facts as pleaded, at paragraphs

[78]Nam Tai’s pleadings at paragraphs 26-28 of its defence to the Ancillary claim relies on the aggregated knowledge of various operatives as follows: “26. In support of its averment that West Ridge was a party to the conspiracy too and joined in its execution by entering into the Subscription Agreement, the Company relies on, inter alia, the following:

[79]The submissions of Nam Tai satisfy me that it has no dispute with the Court’s identification of the elements of dishonest assistance as articulated in Cockerill J in FM Capital Partners Ltd. Further, the submissions of Nam Tai do not suggest that the Court erred at all in its statement of the law on dishonesty and dishonest assistance as set out in Ivey v Genting Casinos, nor in the principles to which it was to address its mind. Nam Tai disputed the finding of the Court that participating in a project for an improper purpose in breach of section 121 did not rise to the level of dishonestly participating in the project in breach of section 120(1) of the BC Act.

[80]I agree with Counsel for West Ridge, Mr. Machell KC, that Nam Tai’s appeal on this ground merely asserted that the Court misapplied the test to the facts of the case. It follows that there is no genuine dispute on the test that is to be applied to determine dishonest assistance and the real question on this proposed ground of appeal is the way this Court had applied settled and clear law to the particular facts of the case. In my view, this ground of appeal does not rise to the level of being a matter of great general or public importance, within the meaning of section 3(2)(a) of the 1967 Order.

[81]Even if I were to conclude that there were inconsistent findings by the Court as to the facts, as submitted by Nam Tai, in order for this submission to rise to the level of being of such significance that it ought, nevertheless, to be submitted to the Privy Council for determination, Nam Tai would be required to show that the inconsistent findings created some reasonable doubt as to the correctness of the decision of the Court, and the guidance offered in Renaissance Ventures Ltd, as to the “or otherwise limb” is restated. The Court conducted an evaluative exercise of the pleadings and was clear in its finding that the pleadings referenced evidence of West Ridge acting for an improper purpose which did not rise to the level of dishonest conduct. Ground 3 – Setting aside the Purported Indemnity

[61]In my opinion, the matters outlined in paragraphs 26 to 28 of the defence do not satisfy the threshold of proving that there is a realistic prospect of showing that West Ridge’s participation in the PIPE was dishonest. Nam Tai is a long- established company listed on the NYSE. It was selling shares at what appears to have been a reasonable though low price, and West Ridge decided to invest in what the Judge found to be a reasonable commercial venture reached at arms-length by sophisticated businesspersons advised by lawyers at all stages.

[82]Nam Tai’s submission on this ground centered on the Deed of Indemnity executed between Nam Tai and West Ridge, which Nam Tai submitted was given for an improper purpose in breach of the Kaisa directors’ duty to the company under sections 120 and 121 of the BC Act, rendering the Deed of Indemnity ineffective, void and not binding on Nam Tai.

[83]The decision of this Court on this point is contained at paragraphs [64]-[72] of the 2023 judgment. The Court concluded at paragraph

[84]The Court also concluded that Nam Tai did not have a realistic prospect of showing that the Kaisa directors acted in breach of their duties under sections 120 and 121 of the BC Act by granting a favourable indemnity to West Ridge.

[85]Nam Tai submitted that in reaching its decision, the Court misapplied the law and/or misunderstood Nam Tai’s case. Nam Tai submitted that: “(a) In so far as the Court said that “there is no pleading of the actual evidence that West Ridge would have given to support Nam Tai’s case,” this was incorrect as at paragraph 49 of its Defence and Counterclaim, Nam Tai had alleged that West Ridge’s evidence in the Main claim “if honestly given, would confirm that the Unlawful Allotment was void on the grounds that it had been made for an improper purpose.” (b) In so far as the Court held that Nam Tai’s allegation that the real purpose of the Kaisa directors giving the Purported Indemnity on favourable terms was to keep West Ridge’s evidence out of the Main claim was speculative, the Court ignored evidence relied upon by Nam Tai, including (i) the legal advice given to the Kaisa directors by Nam Tai’s former legal advisers as to the importance of Nam Tai procuring evidence from West Ridge in support of its defence to the Main claim, and the fact that that advice was not followed by the Kaisa directors and (ii) other than keeping evidence of the Improper Allotment out of the Main claim, there was no reason for Nam Tai to provide the Purported Indemnity. In fact, the Purported Indemnity was less advantageous to Nam Tai than simply consenting to judgment on the Ancillary Claim. (c) The Court at paragraph 67 of its judgment appeared to be of the view that Nam Tai needed to demonstrate that West Ridge entered into the Purported Indemnity for the purpose of enhancing Nam Tai’s defence of the Main claim and/or was aware of the ‘real’ reason for Nam Tai giving the indemnity. This Nam Tai submits is incorrect and involved an error of law. On that analysis of the law, for the Purported Indemnity to be void, it was sufficient that the Kaisa directors procured Nam Tai to grant the Purported Indemnity in breach of their duty under section 121 of the Act. The state of knowledge of West Ridge is irrelevant.”

[86]Nam Tai submitted that in his judgment in the Main claim, Jack J [Ag.] at paragraph

[87]Nam Tai submitted that the view of Jack J [Ag.] on the question of the effect of a breach of section 121 was correct and the Court was wrong to take a different approach. This particular issue of the effect of a breach of section 121, Nam Tai submitted, was of great general or public importance, permeating as it does the operation of BVI company law.

[88]West Ridge countered ground 3 of the appeal, by submitting that Jack J [Ag.] in the lower court at paragraphs

[89]West Ridge submitted that what ground of appeal 3 sought is, in part, a complaint about this Court’s factual finding and did not raise a point of law whether of general or public importance or otherwise. Where Nam Tai in that ground raised the issue of whether acts done in breach of section 120(1) and 121 of the BC Act are void or voidable, this is entirely academic given that the Court rejected Nam Tai’s case as to whether there had been a breach of duty on the part of Nam Tai’s then directors.

[90]West Ridge further submitted that in any event, the void vs voidable issue is academic for a further reason. That Nam Tai’s submission proceeded on the basis that a transaction entered into by a company with a third party as a result of a breach of duty by a director of section 121 of the BC Act is void as against the third party regardless of the state of knowledge of the third party, West Ridge submitted this is plainly misconceived. Where a director acts in breach of duty under section 121 and causes the company to enter into a transaction with a third party, the breach of duty means that the director lacks actual authority to cause the company to enter into that transaction, but it does not follow that the transaction is automatically void as against the third party; the transaction is only void if the third party was on notice either because of the operation of section 31 of the BC Act or ordinary agency principles. Thus, the directors had apparent or ostensible authority to enter into the Deed and West Ridge was entitled to rely on that authority unless it was on notice of the breach of duty, and West Ridge submitted that this Court found in paragraphs

27.In combining to execute the above combination and/or agreement, Kaisa, the Kaisa connected Directors and West Ridge acted with the intention of causing harm to the Company:

[91]The crux of Nam Tai’s appeal on this ground is whether an act taken by directors of a company in breach of duty under section 120(1) and 121 of the BC Act is void or voidable. Nam Tai asserted that this involves an issue of great general or public importance or otherwise which would justify referral to the Privy Council owing to doubts as to the correctness of the decision of the Court. For reasons adumbrated below, I have concluded that Nam Tai has not met the threshold test for leave to be granted to appeal to the Privy Council.

[92]Nam Tai’s pleaded case on this ground is that favourable terms were given to West Ridge in exchange for its agreement not to give evidence or disclosure in the Main claim, which evidence would go towards proving the improper purpose of the PIPE. The indemnity was therefore given for an improper purpose in breach of the Kaisa directors’ duty to the company under sections 120 and 121 of the BC Act, and it is ineffective, void and not binding on Nam Tai.

[93]The Court referenced paragraph 50 of Nam Tai’s defence, which summarised its defence to the Ancillary claim on this ground as follows: “By so acting, Dr Tam and the directors who approved the Purported Indemnity breached their duty under section 121 of the Business Companies Act, 2000 to exercise their powers as a director for a proper purpose and/or their duty under section 120(1) of the Act to act honestly and in good faith and in what they believed to be in the best interests of the Company. In particular, by so doing, they exercised their powers for the purposes of protecting their own interests and the interests of Kaisa. In the premises, the purported indemnity is ineffective and void and/or not binding on the Company.”

[94]The Court found that there was no pleading of the actual evidence that West Ridge would have given, and as such, there was no way of knowing if the evidence would have helped or hurt Nam Tai. Having so found, the Court was reluctant to attribute any improper purpose to Nam Tai for what otherwise appeared to be a reasonable commercial transaction. The Court concluded that Nam Tai’s allegation was speculative and did not meet even the low threshold of showing a realistic prospect that the Kaisa directors acted in breach of their duties under sections 120 and 121 of the BC Act by granting a favourable indemnity to West Ridge.

[95]I therefore accept the submission of West Ridge that the issue of whether a breach of section 120(1) and/or 121 of the BC Act results in a transaction being void or voidable did not arise on the appeal, as Nam Tai had not overcome the hurdle of establishing that there was, in fact, a breach of the BC Act. West Ridge submitted, and I accept, that this issue is entirely academic, and Nam Tai has not satisfied the threshold for the grant of leave under section 3(2)(a) of the 1967 Order as explained in Multibank and Renaissance Ventures Ltd. Order

[96]The above findings on grounds 1-3 are dispositive of the entire Application for reasons stated at paragraph

[72]that Nam Tai did not have a realistic prospect of proving that West Ridge entered into the Deed of Indemnity for the purpose of deliberately suppressing evidence which may be harmful to Nam Tai’s case in the Main claim. The Court found that in its case as pleaded, Nam Tai did not establish, even to the low standard of realistic prospect of success, that West Ridge accepted the indemnity to avoid giving evidence and disclosure in the main claim and that West Ridge made the agreement for an improper purpose, far less dishonestly, such that it should not be able to claim its entitlements under the Deed. The Court’s conclusion was based on: (i) Its findings that the inference By Nam Tai that the giving of the indemnity on favourable terms was to keep West Ridge’s evidence out of the Main claim, was unsupported by pleadings [of] actual evidence on which this was based. In the absence of this evidence, the Court found that there was no way of knowing how that evidence would either help or hurt Nam Tai’s case. (ii) The acceptance by the Court of the learned trial judge’s observations at paragraph 10 of his judgment that ‘It would not be an unusual litigation strategy to limit both the number of parties and the issues in order to save costs and reduce the risk of unpleasant surprises,’ and at paragraph 11 that the three [documents entered into] on 14th December 2020 represent a ‘reasonable arm’s length commercial settlement of a shareholder dispute,’ and mindful of the warning of this Court in Pussers Limited et al v CITCO Banking Corporation N.V. that the Court should not step into the commercial arena to determine commercial issues. (iii) The Court rejected as weak, Nam Tai’s submission that it is to be inferred that West Ridge had notice of the improper purpose for which the Improper Allotment was made and that West Ridge knew that the indemnity was being offered in exchange for their silence. The Court noted that the allegation came from a Nam Tai director, and not from West Ridge, that West Ridge had agreed to accept the indemnity in exchange for not having to give evidence in the Main claim. (iv) That a person withdrawing from a trial will avoid having to undertake the onerous obligations of a trial, such as giving evidence, giving disclosure, retaining lawyers, and the trial itself. But a withdrawal from a trial is a long distance from saying that the true reason for entering into the Deed of Indemnity ‘was to suppress evidence that supported IsZo’s case.’ (v) Its finding that there was no substance in the allegation that the pleadings established that West Ridge was aware of the real reason for Nam Tai giving the indemnity.

1.Section 3(2)(a) of the 1967 Order provides two bases upon which the Court of Appeal may exercise its jurisdiction to grant conditional leave. Under the ‘great general or public importance’ limb, the Court would look for matters which involve a serious issue of law, a constitutional provision which has not been settled, an area of law in dispute, or a legal question, the resolution of which, poses dire consequences to the public. This list is non-exhaustive and generally the matters under this limb would involve a difficult question of law. As to the ‘or otherwise’ limb, an applicant would have to satisfy the Court that there is some other compelling reason why the appeal ought to be referred to His Majesty in Council. Such a reason would include where there was reasonable doubt as to the correctness of the Court of Appeal’s decision if, for example, where the decision was based on a principle which has been overruled by a higher authority or where it was based on a statute or statutory provision which has been repealed prior to such decision being rendered. What is clear is that the Court will not grant leave under section 3(2)(a) where the real question on the proposed appeal is: (i) the way the Court has applied settled and clear law to the facts; or (ii) whether a judicial discretion was properly exercised. Section 3(2)(a) of the Virgin Islands (Appeals to Privy Council) Order 1967 Statutory Instrument No. 234 of 1967 applied; Multibank FX International Corporation v Von Der Heydt Invest SA BVIHCVAP2022/0008; BVIHCVAP2021/0009 (delivered 7th July 2023, unreported) followed; Martinus Francois v The Attorney General Civil Appeal No. 37 of 2003 (delivered 7th June 2004, unreported) followed; Renaissance Ventures Ltd et al v Comodo Holdings Ltd. BVIHCMAP2018/0005; BVIHCMAP2018/0008 (delivered 18th October 2018, unreported) followed.

2.The elements of the tort of unlawful means conspiracy are: (i) a combination, agreement or understanding between two or more people; (ii) an intention to injure another individual or separate legal entity; (iii) use of unlawful means as part of the concerted action; and (iv) loss being caused to the target of the conspiracy. As to the intent to injure, there must be an intent to inflict damage on the claimant as an end in itself, or to inflict it as a means to some other end. Merely resulting or incidental damage will not do, even if foreseeable. As to proof of loss, in unlawful means conspiracy, the loss must be pecuniary. E D & F Man Capital Markets Ltd v Come Harvest Holdings Ltd and others [2022] EWHC 229 (Comm.) applied; Grant & Mumford (1st Edition: 2018) at para. 2-007 considered. Lonrho plc. and others v Fayed and others (No. 5) [1993] 1 W.L.R. 1489 considered; OBG Ltd. and another v Allan and others; Douglas and others v Hello! Ltd and others (No 3); Mainstream Properties Ltd v Young [2008] 1 AC 1 considered.

3.On a reading of this Court’s 2023 judgment, it is evident that this Court, in its assessment of the decisions in Lonrho plc. and others v Fayed and others (No. 5) and OBG Ltd. and another v Allan and others, fell into error and conflated two elements of the tort of unlawful means conspiracy; that is, the intent to injure and proof of loss/damage. A proper reading of Lonrho and OBG confirmed that the intention in an unlawful means conspiracy need not be an intention to specifically cause pecuniary harm. Whilst the loss or harm suffered must be pecuniary, the intention to injure need not be. Consequently, in so far as this Court conflated the two elements of the tort, it erred. However, this Court’s decision did not ultimately turn on this finding. The judge, whose understanding of the law of intent and loss accorded with the principles in Lonrho and OBG, concluded that on the material before him, Nam Tai did not have a realistic prospect of showing that West Ridge intended to harm it. This Court accepted and left undisturbed this finding of the trial judge. The appeal on this ground did not turn on the Court’s finding of a failure to plead a specific intention to cause pecuniary damage but an acceptance of the judge’s finding that Nam Tai’s pleadings failed to show an intention to harm. Consequently, Nam Tai did not meet the threshold for the grant of leave to appeal on this ground. Lonrho plc. and others v Fayed and others (No. 5) [1993] 1 W.L.R. 1489 considered; OBG Ltd. and another v Allan and others; Douglas and others v Hello! Ltd and others (No 3); Mainstream Properties Ltd v Young [2008] 1 AC 1 considered.

4.An application to set aside a Tomlin order is to be treated as if it were an application for summary judgment. Thus, the relief sought ought to be granted where the court considers that a party has no realistic prospects of succeeding on or defending the claim. When dealing with such applications, the court must examine the pleadings and the evidence critically, to see if, when properly assessed, they disclose a realistic prospect of defending or succeeding on a claim. The word “realistic” here carries some degree of conviction beyond being merely arguable. However, the court must take care not to conduct a mini trial at this stage. Even so, this does not mean that the court must take at face value and without analysis everything that a claimant says in their statements before the court. On the facts, this Court reminded itself of these principles and conducted an evaluation of the defence and counterclaim, the evidence before the Court and the lower court’s assessment of the evidence. The Court found that there was no basis to disturb the trial judge’s finding that the conspiracy claim failed as Nam Tai did not plead a proper case of intent to injure. Nam Tai’s challenge on this ground did not give rise to a genuine dispute on the approach a court should take in the enforcement or setting aside or a Tomlin order. Leave therefore cannot be granted on this ground. Flat Point Development Limited v Canisby Limited ANUHCVAP2016/0006 (delivered 7th December 2017, unreported) followed; Saint Lucia Motor & General Insurance Co. Ltd. v Peterson Modeste SLUHCVAP2009/008 (delivered 11th January 2010, unreported) followed; Heritage Travel and Tourism Ltd et al v Lars Windhorst et al [2021] EWHC 2380 (Comm) applied; Easyair Ltd (t/a Openair) v Opal Telecom Ltd [2009] EWHC 339 (Ch) considered.

5.In a claim for dishonest assistance there must be: (i) a trust or fiduciary obligation owed by the trustee/fiduciary to the claimant; (ii) a breach by the trustee/fiduciary which need not be dishonest since it is the dishonesty of the third party that matters; and (iii) the third party must have assisted in, induced or procured the breach and must have done so dishonestly. In the 2023 judgment, this Court found that the judge fell into error by concluding that Nam Tai had to prove that West Ridge assisted and procured the breach of duty by the Kaisa directors. The Court therefore considered the matter afresh and considered the test set out in Ivey v Genting Casinos (UK) Ltd (trading as Crockfords Club) and the dictum of Cockerill J in FM Capital Partners Ltd v Frederic Marino and others. Having defined the appropriate test, the Court then applied it to the facts. An examination of Nam Tai’s submissions reveals that they do not dispute the Court’s identification of the elements of dishonest assistance as articulated in FM Capital Partners Ltd. Moreover, Nam Tai does not assert that the Court erred in its statement of the law as set out in Ivey v Genting Casinos. In reality, Nam Tai is merely asserting that the Court misapplied the test to the facts. This does not rise to the level that there is some genuine dispute on the test to be applied to determine dishonest assistance since the real question on this ground is the way this Court has applied settled and clear law to the facts. Even if this Court were to find that there were inconsistent findings by the Court as to the facts, for Nam Tai’s submissions to rise to the level of significance so as to be submitted to His Majesty in Council, they had to have shown that the inconsistent findings created some reasonable doubt as to the correctness of the decision of the Court. This, they did not do and leave to appeal would not be granted on this ground. FM Capital Partners Ltd v Frederic Marino and others [2018] EWHC 1768 (Comm) applied; Ivey v Genting Casinos (UK) Ltd (trading as Crockfords Club) [2018] AC 391 applied.

6.In relation to the Deed of Indemnity, the thrust of Nam Tai’s argument was that favourable terms were given to West Ridge in exchange for its agreement not to give evidence or disclosure in the Main claim and so the indemnity was given for an improper purpose in breach of the then Kaisa directors’ duties under the BC Act. In the 2023 judgment, the Court found that there was no pleading of the actual evidence West Ridge would have given and as such, there was no way of knowing if the evidence would have helped or hurt Nam Tai. Having so found, the Court was reluctant to attribute any improper purpose to Nam Tai (under the direction of the then Kaisa directors). The Court concluded that Nam Tai’s allegation was speculative and did not meet the low threshold of showing a realistic prospect that the Kaisa directors acted in breach of their duties under sections 120(1) and 121 of the BC Act. Contrary to Nam Tai’s assertions, the issue of whether a breach of section 120(1) and/or 121 of the BC Act resulted in a transaction being void or voidable did not arise on the appeal. Nam Tai never overcame the hurdle of establishing that there was, in fact, a breach of the Act. This issue is therefore entirely academic and Nam Tai, on this ground, has failed to satisfy the threshold for the grant of leave to appeal. JUDGMENT

[25]of his judgment. He found that elements (i) and (iii) were established, at least to the ‘real prospect of success’ standard on an application for summary judgment. He also concluded that Nam Tai had established loss, although he was not satisfied of their ability to prove all of the loss that the company had claimed, he was satisfied of Nam Tai’s ability to prove loss at least to the sum of US $14.4 million. However, he found that the element of intention to injure had not been made out by Nam Tai as he accepted that at the root of the dispute amongst the management of Nam Tai were policy differences as to the future direction of Nam Tai, and which management style was better for the company, be it that of the old Kaisa-dominated management or the new IsZo-influenced management. He found no realistic prospect of Nam Tai showing that West Ridge had any intention to injure Nam Tai. He concluded that everyone wanted Nam Tai to prosper, including IsZo and West Ridge; they simply differed as to the means of ensuring this. This Court’s Findings on the Unlawful Means Conspiracy Issue

[41]to

[42]There is no allegation of a pecuniary loss in subparagraphs (a) and (b), far less of an intention to cause pecuniary loss. What is pleaded is that the purpose of the alleged conspiracy, and the intention of the conspirators, was to keep control of the board of Nam Tai in the hands of the Kaisa directors, not to cause pecuniary damage to the Company. As to subparagraph (c) the allegation that the conspirators knew that there was a substantial risk that the PIPE would result in litigation that the Company would have to defend and thereby incur substantial costs is a foreseeable consequence of the PIPE. It was not the intention of the Kaisa directors, far less West Ridge, to cause the Company to incur substantial costs in litigation that might follow the PIPE. The potential costs to Nam Tai were nothing more than a foreseeable risk. It was not, to use Lord Nichols language in the OBG, ‘the obverse of the side of the coin’ to maintain the status quo by keeping the Kaisa directors in control of the Company. If Nam Tai chose to defend a claim brought against it and incur costs that could be the foreseeable consequence of the PIPE, but not the intention of the Kaisa directors, nor of West Ridge.

[43]The Judge’s finding that there was no intention to injure Nam Tai is set out at paragraphs 27 to 29 of his judgment. He noted firstly that in the trial of the Main Claim IsZo had asserted that the shares were being issued at a price very much below their value and that Haitong and West Ridge would have seen the investment as being attractive. He then referred to his own judgment in the Main Claim where he made the important observation that: “The root of the dispute between the parties is the future direction of Nam Tai’s business. Dr. Sheehy’s view [on behalf of IsZo] is that Nam Tai should realise the extra-ordinarily large profits from the existing Shenzhen land and buy back shares. He strongly opposed the purchase of the Dongguan land, because, having been bought at market price, it will not be as profitable as the Shenzhen land. The current management of Nam Tai take the view that Nam Tai should develop a long-term business of property development. Pursuing that strategy inevitably involved buying more land, otherwise the business would simply peter out. It is not for the Court to determine which policy is better: that is a matter for the shareholders.”

[47]The Judge concluded on the material before him that Nam Tai did not have a realistic prospect of showing that West Ridge intended to harm Nam Tai and the conspiracy claim therefore failed. There is no basis to interfere with the Judge’s finding.” Discussion on Ground 1(a)

[44]I accept as correct the submissions of Nam Tai that this Court in its assessment of OBG and Lonrho fell into error and conflated two elements of the tort of unlawful means conspiracy, that of: (i) intention to injure; and (ii) proof of loss/damage. The Court found that to make the cause of action for conspiracy complete, the pleadings must allege a specific intention by the alleged conspirators to cause pecuniary damage, and that the pleaded case must demonstrate a realistic prospect of showing that there was an intention to cause pecuniary harm.

[45]Counsel for West Ridge countered the submission of Nam Tai arguing that in so far as it is accepted that the Court conflated the two elements of intent to injure and pecuniary loss being caused, the decision of the Court did not turn on that. In any event, proof of loss for the tort has been settled in the case law as being pecuniary loss. Counsel for West Ridge submitted that the assessment of the first instance court on whether an intention to injure was made out on the pleadings was accepted by this Court and the first instance court’s findings were left undisturbed.

[46]There is no dispute between the parties on the elements of unlawful means conspiracy, namely, combination, arrangement or understanding between two or more people; an intention to injure another individual or separate legal entity; use of unlawful means as part of the concerted action; and finally there must be loss or damage caused to the target of the conspiracy. A claimant must prove that each unlawful act relied upon was causative of loss and that each such act was carried out pursuant to the alleged conspiracy.

[47]It is also agreed that but for the element of intention to injure, the learned judge found that the other elements were made out, and in the circumstances, the requirement of proving actual loss was not under challenge on the appeal as the court at first instance had accepted it had been proven. What was in dispute on appeal, was the finding of the learned judge that on the pleadings, the element of intention to injure had not been made out to overcome the threshold test on a summary judgment application of having a “real prospect of success.”

4.2 A claim is ‘fanciful’ if it is entirely without substance. A ‘realistic’ prospect of success carries some degree of conviction beyond being merely arguable.

4.3 The object is to winnow out cases that are not fit for trial. The Court must avoid conducting a ‘mini-trial’ without disclosure and oral evidence. The Court should avoid being drawn into an attempt to resolve conflicts of fact. The Court should bear in mind what evidence can reasonably be expected to be available at trial.

4.4 The Court should be alive to the warning in Easyair Ltd (t/a Openair) v Opal Telecom Ltd: ‘If it is possible to show by evidence that although material…is not currently before the Court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment….’

4.5 The Court must assume disputed questions of fact in favour of the party against whom the application is made, i.e. in favour of [Nam Tai]. The conclusion that a defence has no real prospect of success ought only to be reached in the clearest of cases, ‘where it is clear that a [statement of case] on its face obviously cannot be sustained, or in some other way is an abuse of the process of the court…’

[59]to

[62]of its judgment, and its assessment is worth repeating: “[59] The state of a company’s knowledge of the facts and the company’s belief in the facts are normally determined by reference to the knowledge and belief of the company’s directors and officers. In this case there is no direct evidence of who are the directors and officers of West Ridge, but as I said above, it is reasonable to infer that they are persons nominated by Haitong. The Court must also find that the knowledge and belief of the unknown West Ridge directors and officers are genuinely held and whether West Ridge’s knowledge and belief meet the standards of honest persons in the circumstances of the Company.

[60]Nam Tai relies on the matters pleaded in paragraphs 26 to 28 of the defence to show that there is a realistic prospect of showing that West Ridge’s participation in the PIPE was dishonest. Most of these matters are briefly described in paragraphs 3 to 8 above and I will not repeat them here. Nam Tai also relies on the additional circumstance of West Ridge’s alleged unwillingness to provide disclosure or give evidence in the Main Claim. I will deal with this issue below when I come to deal with the allegation that the Kaisa directors and West Ridge entered into the Deed for the improper purpose of keeping West Ridge’s disclosure and evidence out of the Main Claim.

[62]I find that Nam Tai does not have a realistic prospect of showing that West Ridge’s participation in the PIPE was dishonest or that it dishonestly assisted the Kaisa directors in implementing the PIPE for an improper purpose in breach of the Kaisa directors’ duty to Nam Tai. Participating in a project for an improper purpose in breach of section 121 is very different from dishonestly participating in the project in breach of section 120(1).”

26.1. West Ridge’s parent company, Haitong, has a close business relationship with Kaisa, and paragraph 5 above is repeated.

26.2. West Ridge was aware (via, at least, Mr. Leung and/or Mr. Shi) that the PIPE needed to be executed urgently because of the threat to Kaisa’s control of the Company’s board of directors posed by the requisition notice served by IsZo on 11th September 2020, and paragraphs 18 and 21 above are repeated.

26.3. West Ridge was willing to provide (and did in fact provide) investment in the amount of US$23,820,798.90 without having had any (or any adequate) opportunity to conduct due diligence in relation to the Company, and paragraphs 14 and 17 above are repeated.

26.4. West Ridge was willing to provide (and did in fact provide) investment in the amount of US$23,820,798.90 before formal authorisation for the subscription had been given, and paragraphs 20-1 and 23 above are repeated.

26.5. It is to be inferred that West Ridge knew that its investment pursuant to the PIPE was not sought or required in order to meet any urgent need for liquidity within the Company or in light of any actual or threatened deterioration in the financial position of the Company, or to meet any other legitimate economic need of the Company. In particular, if West Ridge had genuinely believed that its investment was required for the purposes of meeting an urgent need for liquidity, it would not have been willing to provide such investment, alternatively it would not have been willing to provide such investment by way of equity as opposed to debt and without having first conducted a proper due diligence exercise and procured formal authorisation.

26.6. West Ridge agreed to acquire a minority (approximately 4.5%) shareholding in the Company, notwithstanding the fact that the Company’s shareholders were in dispute with each other and West Ridge had no previous interest in the Company which it needed or wanted to protect. It is to be inferred that West Ridge was willing to acquire such a shareholding because it proposed to act in concert with Kaisa and together Kaisa and West Ridge would have de facto control of the Company.

26.7. In the circumstances described at paragraphs 43-5 and 49 further below, it is also to be inferred from West Ridge’s unwillingness to provide disclosure or give evidence in support of the Company’s defence to the Main Claim that West Ridge had notice of the improper purpose for which the Unlawful Allotment was made.

27.1. The purpose of the combination and/or agreement was to ensure that the Proposed Resolutions would be defeated and the Kaisa-connected Directors would remain in office. As such, the combination and/or arrangement was inherently harmful to the Company, because it was designed and intended to subvert the Company’s constitutional arrangements pursuant to which power to determine the composition of the Company’s board of directors is vested in the Company’s members in general meeting.

27.2. Further or alternatively, the purpose of the combination and/or agreement was to keep in office those directors whose actions were damaging the Company (as described in IsZo’s open letter to shareholders dated 27th May 2020) and continued to damage the Company following the Unlawful Allotment (as described in paragraphs 30-3 below).

27.3. Kaisa, the Kaisa-connected Directors and West Ridge knew that there was a substantial risk that the PIPE would result in litigation to which the Company would need to be a party and in the defence of which the Company would incur substantial costs, and paragraph 18 above is repeated. Dishonest assistance

28.Further or alternatively, West Ridge assisted the former directors in their breach of duty in approving the Unlawful Allotment, because the improper allotment of shares in the Company to West Ridge required West Ridge’s agreement to subscribe and pay for those shares. 29. Such assistance on the part of West Ridge was dishonest by the objective standards of ordinary decent people, having regard to West Ridge’s state of knowledge at the time of its entry into the Securities Purchase Agreement (alternatively by virtue of West Ridge having suspected the true state of affairs but taken a conscious decision not to make inquiries which might result in actual knowledge of those facts), and paragraphs 26-7 above are repeated.”

[183]expressed the view that, under BVI law, an act taken in breach of section 121 of the BC Act is void rather than voidable. Accordingly, in making findings as to West Ridge’s knowledge and motive in entering the Purported Indemnity, the Court not only made findings of fact which it was inappropriate to do prior to disclosure and live evidence, but it also implicitly adopted a different approach as to the effect of a breach of section 121 of the BC Act from that expressed by Jack J [Ag.] in the Main claim.

[5]to

[12]and [41], addressed the issue of the invalidity of the Deed of Indemnity and concluded that Nam Tai should be held to its bargain. West Ridge submitted that this Court addressed the validity of the Deed of Indemnity and found speculative, Nam Tai’s invitation to infer from the pleaded facts that the real purpose of the Kaisa directors in giving the indemnity was to keep West Ridge’s evidence out of the Main claim.

[67]to

[72]that there was no prospect of Nam Tai succeeding in that regard. Discussion

[26]above. The Application for conditional leave to appeal to the Privy Council is dismissed with costs to West Ridge to be assessed, if not agreed within 21 days of the date of this judgment. I concur. Mario Michel Justice of Appeal I concur. Eddy D. Ventose Justice of Appeal By the Court Deputy Chief Registrar