Case Summaries

JTrust Asia Pte Ltd v Group Lease Holdings Pte Ltd and others [2020] SGCA 54


1 June 2020

Case summary

JTrust Asia Pte Ltd v Group Lease Holdings Pte Ltd and others [2020] SGCA 54
Civil Appeal No 21 of 2020 (Summons No 21 of 2020)


Decision of the Court of Appeal (delivered by Justice Steven Chong):

Outcome: CoA allows an application in part to reinstate the domestic Mareva injunction against Mr Mitsuji Konoshita and the worldwide Mareva injunction against Group Lease Holdings Pte Ltd, but dismisses the application to reinstate the Mareva injunction against Cougar Pacific Pte Ltd.


1 JTrust Asia Pte Ltd (“JTA”) invested US$210m in Group Lease Public Company Ltd (“GL Thailand”) under three investment agreements in reliance on GL Thailand’s consolidated financial statements and representations made by Mr Mitsuji Konoshita (“MK”) as to GL Thailand’s financial health and profitability. (at [16], [18]–[19]).

2 On 16 October 2017, the Securities and Exchange Commission of Thailand (the “Commission”) issued a news release stating that Group Lease Holdings Pte Ltd (“GLH”), a subsidiary of GL Thailand, had issued sham loans the interest on which was repaid using the loan principals under a round-tripping scheme designed to inflate GL Thailand’s operating results. The borrowers included the Cyprus Borrowers and Cougar ie, the third to seventh respondents, who were allegedly owned and controlled ultimately by MK. The Commission stated that the principal in the loans had been used by the Cyprus Borrowers and Cougar to repay the interest on the GLH Loans and that interest was recorded as income in GLH’s financial statements. Following the Commission’s news release, the auditors of GL Thailand issued a report which substantially revised GL Thailand’s 2015, 2016, 1Q2017 and 2Q2017 profits and net assets downwards. To date, the downward revisions have remained unchanged (at [20]–[21]).

3 In December 2017, JTA brought an action in HC/S 1212/2017 (the “Suit”) in the tort of deceit against GLH and MK, as well as in the tort of conspiracy against the first to seventh respondents, alleging that they conspired to defraud JTA of its investment in GL Thailand. Pending the trial of the Suit, JTA successfully obtained a domestic Mareva injunction against MK and worldwide Mareva injunctions against GLH and Cougar Pacific Pte Ltd (“Cougar”) (collectively referred to as the “Injunctions”). Following the trial, the Judge dismissed JTA’s claims in deceit and conspiracy and discharged the Injunctions accordingly. JTA’s application to renew the Injunctions pending its appeal against the Judge’s dismissal of its claims (“CA 21/2020”) was refused by the Judge. JTA’s application under CA/SUM 21/2020 was for an order that the Injunctions be continued or renewed pending the determination of CA 21/2020. (at [6]–[7], [22]–[24]).

The Court of Appeal’s decision

Threshold of a good arguable appeal

4 The Court of Appeal (“the Court”) held that the threshold for a good arguable appeal did not require the court to find a more than 50% chance of success in the appeal as it would mean that the appellate court hearing an application to maintain the injunction had to essentially decide and pre-empt the outcome of the substantive appeal before the substantive appeal was even heard. (at [32]–[33]).

5 The Court of Appeal agreed with the English Court of Appeal’s observations in Ketchum International Plc v Group Public Relations Holdings Ltd and others [1997] 1 WLR 4 at 10G–H that a good arguable appeal would likely be a more difficult test to satisfy than a good arguable case. However, that was usually limited to a situation where the appeal turned upon questions of fact which the trial judge had resolved against the plaintiff and in such a case, the threshold for appellate intervention was high. The distinction between a good arguable case and a good arguable appeal was borne out by the need to recognise two significant developments which would typically take place in any trial process, ie, findings of facts made by the trial judge and the proof of evidence at the trial. Absent the burden to challenge adverse findings of facts or the need to address any failure to prove evidence at the trial to support the injunction, the threshold to satisfy a good arguable appeal would effectively be similar to that of a good arguable case. (at [34]–[37])

Whether JTA had a good arguable appeal

6 The Court held that JTA had satisfied the threshold of a good arguable appeal for the Mareva injunctions to be maintained pending appeal. (at [44]).

7 It appeared arguable that the Judge’s finding that GLH’s financial statements were not prepared with the requisite dishonest intention was against the weight of the evidence before the Court. The fact that GL Thailand’s financial statements were prepared for the purpose of GL Thailand’s listing requirements on the Thai stock exchange did not, in and of itself, exclude a finding of dishonest intention on the part of MK and GLH in fraudulently misrepresenting to a class of potential public investors including JTA. The Judge appeared to have erroneously adopted a binary approach instead. Further, the Judge did not address the dishonesty of MK’s own representations to JTA. (at [45]–[46] and [49]).

8 It was no defence to the tort of deceit that the plaintiff acted incautiously and failed to take steps to verify the truth of the representations that a prudent investor would have taken. The Court found that it was no answer that the directors of JTA failed to examine the consolidated financial statements in detail. While an investor may not have fully appreciated the specific details in a financial statement, he was nonetheless entitled to rely on the “general impression of profitability” disclosed in GL Thailand’s financial statements. If indeed the loans were shams and the interest earned was derived from round-tripping, it could not be said that JTA did not rely on the reported profitability of GL Thailand before entering into each of the investment agreements. (at [52]).

9 In support of JTA’s case, evidence was led at the trial that a round-tripping scheme was perpetrated by the respondents to artificially inflate GL Thailand’s reported financial results and which resulted in the GLH Loans being used for purposes to benefit MK and not for the financial growth of GH Thailand. However, the Judge made no finding as regards the round-tripping scheme notwithstanding the evidence before him. The Court found that there appeared to be sufficient objective documentary evidence to support the two levels of round-tripping and to enable the Court to draw the inference that (a) the GLH Loans were shams created to disguise the true nature of the loans and were not legitimate loans earning proper profits; and (b) JTA’s investments were not used for the purpose of driving the growth of GL Thailand’s retail financing business as was represented by MK to JTA. (at [70] and [86]).

Real risk of dissipation

10 The Court held that the inquiry of whether there was a real risk of dissipation to frustrate the potential enforcement of an anticipated judgment should JTA succeed in its appeal should be examined in the light of the current state of the evidence before the Court. (at [91])

11 The present evidence before the Court appeared to suggest that there was a heightened risk of dissipation on the part of both MK and GLH. However as regards Cougar, given the change in its management, the Court found that there was no evidence before the Court to show that there remained a real risk of dissipation. The Court held that there was a real risk of dissipation of assets on the part of MK and GLH under the current circumstances, but not Cougar. (at [95][96], [100][101]).


This summary is provided to assist in the understanding of the Court’s judgment. It is not intended to be a substitute for the reasons of the Court. All numbers in bold font and square brackets refer to the corresponding paragraph numbers in the Court’s judgment.