SBM Bank (Mauritius) Ltd v (1) Renish Petrochem FZE (2) Mr Hiteshkumar Chinubhai Mehta [2024] DIFC CA 011 (25 May 2024)

Claim No: CA 011/2022

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

In the Name of His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Ruler of Dubai

IN THE COURT OF APPEAL
BEFORE CHIEF JUSTICE ZAKI AZMI, H.E. JUSTICE SHAMLAN AL SAWALEHI AND JUSTICE ROBERT FRENCH

BETWEEN

SBM BANK (MAURITIUS) LTD

Respondent/Claimant

And

(1) RENISH PETROCHEM FZE
(2) MR HITESHKUMAR CHINUBHAI MEHTA

Appellants/Defendants

JUDGMENT OF THE COURT OF APPEAL

Hearing :	21 September 2023
Counsel :	Mr Rupert Reed KC and Mr James Weale instructed by Dentons & Co for the Respondent/Claimant Mr Rajesh Pillai KC and Mr Calum Mulderrig instructed by DLA Piper for the Appellants/Defendants
Judgment :	25 March 2024

UPON the Judgment of Justice Lord Angus Glennie dated 29 December 2021 (the “Judgment”)

AND UPON the Defendants’ Permission to Appeal Application dated 19 January 2022 against the Judgment (the “Permission Application”)

AND UPON the Order of Justice Lord Angus Glennie dated 13 May 2022 refusing the Permission Application

AND UPON the Defendants’ Second Permission to Appeal Application dated 3 June 2022 (the “Renewed Permission Application”)

AND UPON the Order with Reasons of Chief Justice Zaki Azmi dated 18 August 2022 granting the Renewed Permission Application

AND UPON the Claimant’s Permission to Appeal Application dated 16 February 2023

AND UPON hearing Counsel for the Appellants and the Respondent at the appeal hearing held before Chief Justice Tun Zaki Azmi, H.E. Justice Shamlan Al Sawalehi and Justice Robert French on 21 September 2023 (the “Hearing”)

AND UPON reading the submissions and relevant documents on the Court file

AND UPON reviewing the Rules of the DIFC Courts (the “RDC”)

IT IS HEREBY ORDERED THAT:

1. The Appellants’ appeal is dismissed.

2. Permission is granted to the Respondent to cross-appeal in relation to the fourth advance made by the Respondent.

3. The cross-appeal in relation to the fourth advance is dismissed.

4. Permission is granted to the Respondent to cross-appeal on the costs order at trial.

5. The Respondent’s cross-appeal on the costs order at trial is allowed.

6. Paragraph 3 of the trial judge’s order as to costs made on 29 December 2021 be set aside and in lieu thereof it is ordered that:

The First and Second Defendants shall pay the Claimant three quarters of the costs of the action in so far as not otherwise dealt with, to be assessed by the Registrar on the standard basis if not otherwise agreed between the parties.

7. The Appellants pay the Respondent’s costs of the appeal and the cross-appeal on costs less the Appellants’ costs of the cross-appeal on the fourth advance. All costs to be assessed by the Registrar on the standard basis if not otherwise agreed between the parties.

Issued by:
Delvin Sumo
Assistant Registrar
Date of Issue: 25 March 2024
Time: 1pm

SCHEDULE OF REASONS

CHIEF JUSTICE ZAKI AZMI, H.E. JUSTICE SHAMLAN AL SAWALEHI AND JUSTICE ROBERT FRENCH

Introduction

1. On 29 December 2021, Justice Lord Angus Glennie gave judgment in favour of SBM Bank (Mauritius) Ltd (“SBM”) against Renish Petrochem FZE (“Renish”) and Hiteshkumar Chinubhai Mehta (“Mehta”) in the sum of USD 21,890,819.50 (the “Judgment”). The Judgment was in respect of fraud found to have been committed by Mehta and Renish against SBM in connection with payments made under a Facility Agreement with SBM. Mehta and Renish appealed against that judgment. SBM seeks permission to cross appeal against the dismissal of another claim and against a costs order which allowed it to recover only 50% of its costs.

Factual History

2. SBM is a bank registered in Mauritius. Renish is registered in the Free Zone of Hamriyah. Mehta is its sole shareholder. He is an Indian national. Prime Energy FZE (“Prime”) which had been a defendant in the proceedings brought by SBM, carried on the business of importing, exporting and trading in petroleum products until at least mid-2018.

3. The factual history was set out in the trial judge’s judgment and was not in serious contention. It is summarised in the following paragraphs.

4. On 12 November 2017, SBM and Renish entered into a Facility Agreement with an upper limit of USD 30 million to provide trade finance to support Renish’s business activities. Renish’s repayment obligations were supported by a personal guarantee from Mehta. Both agreements contained clauses conferring jurisdiction on the Courts of the DIFC.

5. Renish made six requests for funds to be transferred by SBM to Prime pursuant to the Facility Agreement in the period between January and June 2018. Each request was accompanied by purported contracts between Renish and Prime for the purchase of oil to be sold on to Lanka IOC Plc (“Lanka”), a buyer in Sri Lanka. SBM made payments into Prime’s account with the National Bank of Kuwait (“NBK”) pursuant to those six requests as follows:

(1) 30 January 2018 USD 9,100,080.00 (repayable by 5 April 2018)

(2) 1 March 2018 USD 8,595,013.68 (repayable by 16 April 2018)

(3) 19 March 2018 USD 10,445,168.25 (repayable by 15 May 2018)

(4) 24 April 2018 USD 8,844,660.00 (repayable by 20 June 2018)

(5) 22 May 2018 USD 13,751,100.00 (repayable by 5 August 2018)

(6) 6 June 2018 USD 7,439,719.50 (repayable by 29 August 2018)

6. The first three advances were repaid, save for a shortfall of a little over USD 3,000 in relation to the third advance.

7. As to the fourth payment, two payments of USD 6,794.51 and USD 68,443.25 were made on 2 May and 22 June 2018. SBM credited them against the fourth advance. On 31 May 2018, a further payment of USD 15,742.88 was made and credited against the fifth advance. No further payments have been made. In effect there had been, as the trial judge pointed out, a failure to repay the fourth, fifth and sixth advances.¹

8. On 27 June 2018, SBM contacted Mehta seeking repayment of the fourth advance then overdue. Mehta made an initial promise to pay but had made no further contact with SBM and no further payments were made. SBM served an Acceleration Notice pursuant to the Facility Agreement. In the result the unpaid balance of the sums advanced became immediately due and payable.²At 1 August 2018, the sum outstanding under the Facility Agreement was in excess of USD 30 million.

9. An explanation offered by Mehta in statements filed at trial was that in June/July 2018 Renish was the victim of a disinformation campaign and, in particular, a malicious email falsely accusing Renish of illegal trading and fake accounting. This came to the notice of a large number of Renish’s bankers and colleagues. In the event, a number of banks reacted with concern. One recalled Renish’s credit line in its entirety and presented a number of undated cheques drawn by Renish and held by the bank as security for Mehta’s credit line. They had a face value of AED 85 million. They could not be honoured. SBM also made a police complaint against Mehta. On that basis, Mehta could not set foot in the UAE again but remained in India. Renish’s business was no longer solvent and Mehta could not undertake an orderly closure of the business.

10. The absence of Mehta combined with his failure to ensure that Renish met its obligations under the Facility Agreement caused SBM to commence proceedings against them and Prime. SBM’s basic contention, as the trial judge characterised it, was that those three parties: Renish, Mehta and Prime, had combined together from the start to defraud SBM and that there was no genuine oil trade between them so as to justify the various advances requested and made under the Facility Agreement.

SBM’s pleaded case

11. SBM’s pleaded fraud case against Renish and Mehta had two parts:

(i) Mehta and/or Renish and/or Renish’s Chief Executive had induced SBM to enter into the Facility Agreement by representing that it was required for the purposes of bona fide commercial arrangements for the supply and/or purchase of petroleum products and that Renish intended to repay all sums due thereunder. These were called the ”Facility Agreement Representations”.

(ii) Renish induced SBM to make six transfers of funds to Prime between January and June 2018 by representing that the payments were required to fulfil genuine bona fide commercial arrangements for the purchase of oil from Prime and the sale and shipment of that oil to a buyer in Sri Lanka, Lanka. These were called the “Payment Representations”.

12. The particulars of the alleged Payment Representations were as follows:

(a) That Renish had concluded a sale agreement with Lanka for the supply of petroleum products which Renish intended to fulfil.

(b) That Renish had concluded a sale agreement with Prime for the purchase of petroleum products which both Renish and Prime intended to perform.

(c) That Renish was to make advance payments to Prime in consideration for the delivery of a consignment of oil to the Kore Fakkan Port, Sharjah.

(d) That Renish was then to ship the oil consignment to Lanka.

(e) That Lanka would then pay Renish in its account at SBM pursuant to a Notice of Assignment and Notice of Acknowledgment of Assignment.

The matters set out in the above paragraphs were collectively designated in the Particulars of Claim as “the Purported Sale”.

13. Both sets of representations were said to be false. SBM pleaded:

(i) that the Purported Sale (and its component transactions) was a sham transaction;

(ii) none of Renish, Prime or Mehta had any intention of fully performing the terms:

(a) of the Purported Sale; or

(b) of the Facility Agreement and/or Personal Guarantee in so far as they were party to the same;

(iii) each of Renish, Prime and Mehta knew and understood that the Purported Sale was a device intended to deceive SBM and defraud it of sums advanced by it under the Facility Agreement.

The settlement with Prime

14. Shortly before the commencement of the trial, Prime settled with SBM so his Honour was concerned only with the claims against Renish and Mehta.

The claim as particularised at trial

15. At the time of trial it had been accepted, as set out in a letter from SBM’s solicitors that the represented purchaser of the oil, Lanka, had entered into contracts with Renish by award letters of 16 January and 23 March 2018, that the letters were genuine, that they were presented to SBM by Renish when seeking payment of advances made under the Facility Agreement and that deliveries of oil were made by Renish to Lanka in accordance with those contracts, at least in respect of the first three of the six payments which SBM made under the Facility Agreement.

16. This concession, as his Honour pointed out, should have been made in the Particulars of Claim. There was no proper basis in the Particulars for the allegation of dishonesty in relation to the matters covered by the letter from SBM’s solicitors.

17. There were a number of matters of fact set out in the Particulars of Claim relied upon by SBM in support of its allegations of fraud. His Honour set out at paragraph 35 of the Judgment those directed at Renish and Mehta, omitting those solely directed against Prime. They were:

(1) Misleading statements by Renish and Mehta in June 2018 seeking to explain delays in payment by reference to delays in delivery of the oil.

(2) Failures by Renish and Mehta in July 2018 to respond to requests by SBM for payment of the sums outstanding and Mehta subsequently absconding and failing to make contact with SBM.

(3) Failure by Renish’s auditor in July 2018 to respond to SBM’s email seeking further information as to Renish’s current financial position.

(4) Information from a business intelligence consultancy in a report to SBM dated 31 July 2018 to the effect that Renish’s registered office and its trading address were locked and apparently abandoned. The inference was that officers and controllers knew they had committed a fraud against SBM and sought to evade liability. Similar inferences were to be drawn against Mehta from the fact of his absence from his residential address in Dubai.

(5) Failure by Renish and Mehta in and after August 2018 to comply with a Worldwide Freezing Order (“WFO”) obtained by SBM and served on them at various addresses.

(6) Moneys received from SBM by Prime pursuant to requests by Renish under the Facility Agreement were dissipated by Prime within a matter of days — such payments out of Prime’s account including sums paid to Renish totalling over USD 7 million (on 23 May 2018) and USD 675,000 (on 10 June 2018), as well as sums paid to other entities such as Petro Hub Energy FZE (“Petro Hub”) (two payments totalling nearly USD 3.5 million on 23 and 24 May 2018) the owner and director and authorised signatory of which was Mr Ahmed, the CEO of Renish. There was no legitimate commercial purpose behind such payments which constituted a means of dissipating moneys to Renish, Mehta, Prime and others pursuant to the fraud against SBM.

(7) The principal accounts used to make such transfers were all held at the NBK, from which it was to be inferred that Renish and Prime used the same bank to facilitate the transfer of funds with minimum scrutiny and to enable funds to be dissipated as quickly as possible in furtherance of the fraud — paragraph 61.

(8) A reference was submitted to the Joint Judicial Council by the then fourth defendant, NBK, in October 2018. That made extensive reference to the terms of the WFO. Despite being served with the Application, Renish, Mehta and Prime all ignored it — giving rise to the inference that they had no basis to deny their involvement in the fraud and no honest explanation for their involvement in the relevant transactions or their failure to account for the sums received from SBM.

Procedural history

18. The procedural history as set out in the Judgment commenced on 2 August 2018 when SBM instituted proceedings against Renish, Mehta and Prime alleging fraud. On that day it obtained ex parte a WFO against all three. Renish and Mehta did not acknowledge service or file defences.

19. On 12 August 2020, SBM applied for immediate judgment against Renish and Mehta pursuant to RDC Part 24. Immediate judgment for the full amount of the claim plus interest was awarded by H.E. Justice Ali Al Madhani on 27 September 2020. His Honour was satisfied, on unchallenged evidence adduced by SBM, that the inference of fraud was overwhelming. Renish and Mehta than applied for permission to appeal against that judgment. They claimed to have been unaware, until that judgment was entered against them, of the proceedings against them and of the WFO. Permission to appeal was refused on 9 February 2021.

20. In February 2021, Renish and Mehta applied to set aside the immediate judgment under RDC 24.22. That application came before the trial judge on 29 April 2021. His Honour’s decision, on 31 May 2021 (the“May Judgment”), was, in effect, to set aside the immediate judgment in so far as it was based on a finding of fraud however, he left the judgment in place insofar as it was based on contract claims.

21. In the event and following a case management hearing, a trial was fixed for 3 October 2021 with a time estimate of seven days. A defence was served by Renish and Mehta on 19 February 2021. It contained admissions that Mehta had signed the Facility Agreement and the Personal Guarantee and that those agreements expressly conferred jurisdiction on the Courts of the DIFC.

22. There was an attempt by Renish and Mehta to defer the trial hearing by about six months from October 2021 to March 2022 failing which they sought directions to certain banks to allow them access to funds lying in dormant accounts of Mehta. The basis of the application was that Renish and Mehta were unable to instruct solicitors or counsel for the scheduled trial due to lack of funds.

23. The trial judge, by an order dated 9 September 2021, refused that application leaving it open to Mehta to come back to Court with better information.

24. On 9 September 2021, the solicitors on the record for Renish and Mehta applied for and were granted an order that they had ceased to act on behalf of Renish and Mehta. Neither Renish nor Mehta were legally represented after that date. A further application to defer the trial was made and was refused.

25. Mehta appeared personally at the commencement of the trial on 3 October 2021. The last minute settlement between SBM and Prime had taken him by surprise. It altered the shape of the forthcoming trial so far as it concerned him. His Honour said that it was only fair to Renish and Mehta that he should give Mehta some time to take stock of the changed position and that he require senior counsel for SBM to revise the skeleton argument so as to focus the case against the remaining Defendants. The trial was adjourned until 6 October 2021. When the Court reconvened on that date, Mehta was not present although he had lodged a further application to defer the trial. That application was refused.

26. Subsequent inquiries from the Registry of the Court confirmed that Mehta did not intend to appear at, or to take part in, the trial. Although it was open to SBM to apply under RDC 35.14 to strike out the defence, senior counsel for SBM made it clear that he did not wish to proceed in that way. He sought to prove SBM’s case on the evidence. The trial then proceeded in the absence of Renish and Mehta. It appears to have been largely documentary with limited witness evidence. Witnesses called for SBM were:

(1) Ravi Guness, a Senior Officer in the Recovery, Workout and Collection Units. His evidence derived entirely from information obtained from discussions with colleagues at SBM or documents he had read. The trial judge characterised his evidence as seeking to pull together the relevant documents to give an account of what had or had not taken place in respect of the relevant dealings between SBM, Renish and Mehta, and their transactions with their customers and suppliers, including Prime. There was no cross-examination because there was no defendant and his statement was taken as read.

(2) Clare Lavin, a forensic accountant with Grant Thornton who had been instructed to review payments received by and made by Prime in respect of a number of relevant cargo transactions, to reconstruct a ledger of the transactions and payments.

As to the Defendants (including Prime) the following materials had been filed:

(1) Two affidavits or witness statements made by Adbul Hadi Farhang, sole director and shareholder of Prime.

(2) Two affidavits or witness statements made by Ali Dideh Var Sadr, a consultant with Prime to whom Mr Farhang had delegated day-to-day conduct of Prime’s operations.

(3) An expert report by Christopher Drewe, a chartered accountant and a partner at Mazars LLP, a UK firm — commissioned by Prime.

(4) Two witness statements filed on behalf of Mehta and Renish, although neither had been made specifically for the purposes of the trial. The first related to the WFO, while the second was made in support of the partially successful application to set aside the immediate judgment.

27. His Honour observed that in light of SBM’s settlement with Prime and its absence from trial and the failure of Renish and Mehta to appear, none of the affidavits or witness statements filed by the Defendants were in evidence, although his Honour had raised with counsel for SBM what status such material had. No application was made by SBM to put these statements or the expert report in as hearsay evidence.

28. His Honour observed that notwithstanding the absence of that material as evidence on the trial record, counsel for SBM had sought to rely on particular passages in the statements and those of Mr Sadr in particular. His Honour observed that that approach was not legitimate. If the statements were not in as hearsay evidence in whole or in part, they had no evidential value for any purpose. They were not evidence.

The relevant law

29. The fraud claim was brought pursuant to Article 31 of the Law of Obligations (DIFC Law No 5 of 2005). That provides:

“31 Deceit

(1) A defendant is liable in deceit if:

(a) he makes a statement that is fraudulent;

(b) he intends that a person should rely on the fraudulent statement;

(d) the claimant suffers loss as a result of relying upon the statement.

(2) A statement is fraudulent if its maker:

(a) knows that it is false;

(b) has no belief in its truth; or

(3) it is no defence to an action under this Article that the claimant could have discovered the deceit if he had exercised reasonable care.”

The standard of proof for fraud in civil proceedings

30. The trial judge discussed the standard of proof which in civil proceedings is the ordinary civil standard, that is balance of probabilities. He referred toOtkritie IIM Ltd v Urumopv [2014] EWHC 191 (Comm) at para 88. All that was required was that the primary facts give rise to an inference of fraud or dishonesty which is more probable than any innocent explanation. It could be made out by inference from an accumulation of primary facts none of which on their own would prove the allegation to the requisite standard. The standard of proof was the subject of the first ground of appeal raised by Mehta and Renish and is discussed later in these Reasons.

The disparity between SBM’s pleadings and its case

31. In his discussion of the relevant law, his Honour adverted to what he called “a clear disparity between the case pleaded against Renish and Mr. Mehta and the case sought to be made against them on the evidence and in submissions.”³His Honour was of the opinion that if SBM had wanted to advance a case which was not reflected in its pleadings, it should have amended the Particulars of Claim to reflect the additional evidence or lines of argument that emerged during the course of preparation for the trial. He referred toHRH Emere Godwin Bebe Okpabi v Royal Dutch Shell plc [2021] 1 WLR 1294 at para 105.

Evidence excluded from consideration

32. There were three lines of evidence relied upon by SBM that were excluded from consideration by his Honour on the basis that the points advanced had not been pleaded. They were as follows:

(1) That Renish and Prime “operated in effect as a single entity throughout the material time”.

(2) That Renish and Prime opened bank accounts in the name of Prime with NBK in February 2017 after Renish, through Mehta and Ahmed, met officials of SBM to discuss the proposed Facility Agreement. SBM alleged that Renish suggested this in order to enable transfers to be made “within seconds” and to minimise scrutiny.

(3) The third line concerned the genuineness of documents presented by Renish to SBM when requesting payments under the Facility Agreement — it being argued that they were forgeries made by Renish. This was based on what Mr Sadr said in his Second Witness Statement, which was not in evidence and the analysis by SBM’s expert witness Ms Lavin.

His Honour concluded that were the Court to allow those lines of evidence to be deployed against the defendants, it would be at risk of making findings of fraud on the basis of a case made at trial of which the defendants had had no proper notice.

Findings on the Facility Agreement Representations fraud

33. His Honour accepted that the alleged Facility Agreement Representations had been made, if not expressly then by necessary implication. However, he saw nothing to persuade him that, in the period of pre-contractual negotiation, the representations were untrue.⁴His Honour referred to evidence from documentation produced by SBM that from November 2017 until at least the end of March 2018, the Facility Agreement was used by Renish for numerous high value transactions in the oil and petroleum trade, with a number of different suppliers. Finance was provided and repaid on time in each case. In addition, the first three transactions with Prime were also repaid in full save for an insignificant shortfall of about USD 3,000 on the third.

34. His Honour found there had been 10 successful transactions using the Facility. He had no reason to doubt that they were bona fide genuine transactions. His Honour rejected the submission for SBM that that evidence just showed how subtle and carefully crafted the fraud was. His Honour accepted that as a possible explanation, but was not persuaded on the evidence that it was the correct one.

35. His Honour rejected the fraud case based upon the Facility Agreement Representations as formulated in the Particulars of Claim, holding that there was simply no evidence to support it.⁵

Findings on the Payments Representations

36. The alleged Payments Representation fraud concerned only the third, fourth, fifth and sixth payments made to Prime. Accordingly, his Honour confined his consideration to those four payments. Although as his Honour found, the third advance was repaid in full. It was accepted that the Lanka contracts for which it was represented that advances were required, were genuine contracts. SBM’s case was that the purported sale and purchase agreements between Renish and Prime were sham transactions purportedly evidenced by documentation presented to SBM to induce it to make advances to Prime ostensibly for cargo shown on the relevant documentation. Prime and Renish would then walk away with the advance leaving SBM with no means of recovering its losses. His Honour noted the tension between that case and SBM’s pleading in para 5 of its Reply where it said it had no positive case and made no admissions as to the nature or extent of the alleged or any trading relationship between Prime and Renish.⁶

37. The pleaded case as characterised by the trial judge was to the effect that monies received from SBM by Prime pursuant to requests by Renish under the Facility Agreement were dissipated by Prime to Renish for entities involved with Renish for no obvious legitimate commercial reason. These included sums paid to Renish totalling over USD 7 million on 23 May 2018, USD 675,000 on 10 June 2018. Two payments totalling nearly USD 3.5 million were allegedly made on 23 and 24 May 2018 to Petro Hub. SBM’s case was that the payments constituted a means of dissipating monies to Renish, Mehta and Prime pursuant to a fraud against SBM.

38. The trial judge found that the payments were made.⁷Mehta had offered no explanation for them. The trial judge referred to the defence filed by Mehta in which it was said, inter alia, that payments totalling USD 7,886,000 to or for the benefit of Renish “were strictly transfers in the ordinary course of business”. No explanation was given of the business referred to. The trial judge said:

“Absent any explanation from Mr. Mehta I accept the inference sought to be drawn by Mr. Reed [Counsel for SBM] so far as it relates to the fifth and sixth advances made by the Bank.”⁸

The trial judge accepted the submission on behalf of SBM that the payments to Renish and Petro Hub were “characteristic of illegitimate and fraudulent trading”. The timing spoke for itself.

39. The trial judge made no findings about the ownership or control of other entities to whom payments were made out of Prime’s account. They included Astron Global Ltd (US$4 million) and Noven International Pte Ltd (US$1,500,000). He was concerned with Renish’s position. Absent any coherent explanation from Mehta for the payments to which he had referred, the inference of fraud was irresistible. The trial judge said:

“Given that the first payments to Prime (and the payments to Petro Hub) were made immediately after receipt of the fifth advance from the Bank, it is legitimate to conclude that the fraud was being perpetrated in respect of the fifth and sixth payments, i.e. those of 22 May and 6 June 2018.”⁹

40. The inference the trial judge drew from the payments to Renish and Petro Hub from Prime’s account related only to the fifth and sixth advances made by SBM. The fifth advance was USD 13,751,000 on 22 May 2018 and the sixth was USD 7,439,719.50 made on 6 June 2018. There was no similar link in terms of timing to justify drawing a similar inference in respect of earlier payments.

41. The third advance had been repaid in full and on time. The fourth advance made on 24 April 2018 was not due to be repaid until mid-June 2018. There was no evidence of funds removed from Prime’s account at NBK immediately upon receipt of those sums. The trial judge found that SBM’s case was established in respect of the last two advances in a sum totalling USD 21,190,819.50. The figure by way of interest to the date of judgment was added in the sum of USD 700,000. The trial judge gave judgment to SBM on its fraud claim to the extent of USD 21,890,819.50 inclusive of interest to the date of the judgment.¹⁰

42. It was made clear in a Rider to the judgment that the judgment on SBM’s fraud claim awarded damages and interest in an amount already included within the judgment debt constituted by the judgment of 31 May 2021 on SBM’s contract claims. Those two judgment debts were not to be aggregated. So far as recovery was made in respect of either judgment, that sum must be deducted from the amounts awarded and outstanding under both judgments.¹¹

The Set Aside and Permission Application

43. On 13 May 2022, the trial judge refused an application by Renish and Mehta to set aside his judgment pursuant to RDC 35.16. In the alternative, they applied for permission to appeal against the judgment pursuant to RDC 44.5.

44. His Honour refused both applications. The application to set aside was based upon the absence of Renish and Mehta at the trial. The trial judge pointed to his decision to refuse applications by Renish and Mehta to adjourn or defer the trial and the absence of any attempt to appeal those decisions. In the event, the trial judge found that neither Renish nor Mehta had good reason for failing to attend the trial. His assessment was that they simply took a tactical decision not to take any further part in it.

45. Although it was not necessary to decide the question, the trial judge also considered the third limb of RDC 35.18 in relation to an application to set aside a judgment, namely that the applicants must show that they would have had “a reasonable prospect of success at the trial”. After canvassing various submissions put by Renish and Mehta, the trial judge concluded that they had not shown that they would have had a reasonable prospect of success at the trial if his judgment were to be set aside and a new trial ordered. They had still failed to offer any coherent explanation for the transfers from Prime to Renish and Renish connected entities immediately after the advances were made. These were transfers which cried out for an explanation. Nor had they explained what witnesses they would call and how they would compel their attendance.

46. The Permission Application was also refused on the basis that the trial judge was not persuaded that the proposed appeal would have a realistic prospect of success.

The Reasons for refusing permission to appeal

47. His Honour’s reasons for refusing permission to appeal were referred to in argument as they included reference to some matters in support of the primary judgment which had not expressly been covered in the Reasons for that judgment.

48. In dealing with Renish and Mehta’s reasonable prospects of success at trial in the context of the set aside application, his Honour observed:

(1) The critical difference between the fifth and sixth advances and the other advances lay in the fact that on the receipt of the fifth and sixth advances Prime made transfers almost immediately back to Renish or companies associated with Renish.¹²

(2) His Honour had not found the fourth advance not to be fraudulent. He had simply declined on the evidence to infer that it was fraudulent.¹³

(3) He had accepted SBM’s case that, at each request for funds to be transferred under the Facility Agreement, Renish and Mehta had represented to SBM that the payments were required to fulfil genuinebona fidecommercial arrangements for the purchase, sale and shipment of oil to Lanka.¹⁴

49. On the question of the test to be applied for actionable fraud, his Honour said he did not assume an actionable representation but accepted SBM’s case that at each request for funds to be transferred under the Facility, Renish and Mehta represented to SBM that they were required to fulfil genuine,bona fidecommercial arrangements for the purchase, sale and shipment of oil to Lanka. He citedCorinth Pipeworks SA Barclays Bank Plc v Afras Ltd and Another{2010] DIFC CFI 024 which had been referred to in para 27 of the December Judgment, to make it clear that in trade finance there is commonly an implied representation to that effect.

50. His Honour, at para 18 of the Reasons on the Permission Application, said:

“Having accepted that the Payment Representations were made, by necessary implication from the act of presenting the relevant documents to the Bank (i.e. contracts of sale and pro-forma invoices – see para 6 of the Judgment), it was but a small step to find that in respect of the Fifth and Sixth advances those representations were false to the knowledge of the Applicants…”

The timing of the transfers from Prime to various accounts connected with Renish and the absence of any discernible business reason gave rise, if unexplained, to the obvious inference that this was planned before presentation of the documents to the Bank.”¹⁵

51. The preceding comments were made in relation to the Set Aside Application but were relevant to the Permission Application so far as they went to the question whether the Appellants would have a reasonable prospect of success on a retrial.

52. In relation to the correct test to be applied, his Honour again referred expressly to the presentation of commercial documents in the form of contracts and proforma invoices to SBM as constituting representations to SBM that the payments were required to fulfil genuine bona fide commercial arrangements for the purchase, sale and shipment of oil evidenced by those documents. In other words, the documents were presented with utilisation requests to induce SBM to make the relevant advances and were represented as genuine documents relating to genuine commercial arrangements. It was obvious that the Appellants must have understood that they were making implied representations to that effect and they must have understood that SBM would have understood them to be making such representations.¹⁶

53. As to the alleged disconformity between the findings on the fourth advance and those on the fifth and sixth advances, his Honour made his findings on the evidence adduced before him. The fifth and sixth advances were markedly different from what had preceded them.

Permission to Appeal Granted

54. Permission to appeal was granted by order of the Chief Justice on 18 August 2022.

Appellants’ Argument

55. In their Skeleton Argument, Renish and Mehta set out what were called four points of context, none of which appears to be relevant to the merits of their appeal. They concerned the circumstances surrounding the collapse of Renish, the circumstances surrounding Mehta’s breach of the WFO, Mehta’s lack of legal representation and what was called “SBM’s relentless pursuit of Mr Mehta”.

The Appellants’ Grounds of Appeal

56. The grounds of appeal relied upon by Renish and Mehta were that the trial judge erred in law, having:

(1) failed to identify and apply the correct legal test and principles trying a case in deceit based on inference;

(2) failed to identify and apply the correct test for implied representations;

(3) wrongly held that Renish and Mehta were liable for alleged fraudulent misrepresentation when that was mutually incompatible with the trial judge’s other findings and inconsistent with the material on the Court record;

(4) erred in his conduct in oversight of the trial by failing to ensure that all potential arguable defences were considered in the absence of the Appellants and so did not ensure compliance with natural justice and the obligation of fair presentation.

SBM’s Application for Permission to Appeal and for Permission to Cross-Appeal

57. SBM sought permission to appeal two aspects of the trial judge’s order:

(1) The dismissal of the claim in fraud insofar as it concerned the payment of USD 8,844,660 made on or around 24 April 2018 (the fourth payment).

(2) The trial judge’s order in respect of costs by which having found fraud on the part of the Appellants and awarded damages against them on the claim in the sum of USD 21,890,819.50, he ordered the Appellants to pay the Respondent’s costs but only on the standard basis and subject to a reduction of 50%.

First Ground of Appeal — the correct legal test

58. Renish and Mehta referred to the following passage at para 29 in the December Judgment:

“The standard of proof required to make good an allegation of fraud is the ordinary civil standard … Direct evidence of fraud is rare. All that is required is that the primary facts give rise to an inference of fraud or dishonesty which is more probable than any innocent explanation. All facts can be taken into account, whether occurring before, at the time of or after the critical events. It is wrong to look at each fact individually and ask, in relation to each, whether that fact gives rise to an inference of dishonesty – any assessment of whether the facts are sufficient to prove fraud or dishonesty must be made on the basis of all the relevant evidence taken as a whole, it being in the nature of a case based on inference from circumstantial evidence that the whole is greater than the individual parts. Dishonesty or fraud can therefore be made out by inference from an accumulation of primary facts, none of which on their own would prove the allegation to the requisite standard.”

59. They submitted that the primary facts relied upon by the trial judge to justify his inference of fraud were that (i) moneys received by Prime from SBM were within a matters of days dissipated to Renish and (ii) no obvious legitimate commercial reason was given by Mehta why these payments were made.¹⁷

60. They submitted that the trial judge applied the wrong test for inferring fraud from primary facts and that there were consequential failures to take into account relevant considerations on the facts before him and a reversal of the burden of proof.

61. The correct test was said to require that an inference of fraud be drawn only where it is the only reasonable inference. Reliance was placed upon a number of English decisions:CMOC Sales and Marketing Ltd v Persons Unknown [2018} EWHC 2230 (Comm) (HHJ Waksman QC);JSC BTA Bank v Mukhtar [2012] EWHC 237 (Comm) (Teare J);ED & F Man Capital Markets v Come Harvest Holdings Ltd [2022] EWHC 229 (Comm) (Calver J).

62. Renish and Mehta also relied upon an observation by Carnwath LJ in the Court of Appeal inJafari-Fini v Skillglass Ltd [2007] EWCA 261, [40] that:

“… wherever the court is faced with a choice between two rival explanations of any particular incident, one innocent and the other not. Unless it is dealing with known fraudsters, the court should start from a strong presumption that the innocent explanation is more likely to be correct.”

63. SBM submitted that the first ground of appeal was misconceived because Renish and Mehta relied upon “outdated authorities and statements of principle which are no longer good law”. SBM’s fallback position was that in any event it was clear that the trial judge would have made the same finding regardless of the presumption for which Renish and Mehta contended.

64. The appropriate test as to the applicable standard of proof was said to be that set out inOtkritie IIM Ltd v Urumov [2014] EWHC 191 (Comm) in which Justice Eder held that:

“… the suggestion that the standard of proof might vary with the gravity of the misconduct alleged or even the seriousness of the consequences for the person concerned is, in my view, based upon a common misconception arising in part from an erroneous interpretation of Lord Nicholls’ judgment in Re H [1996] AC 563. See Re B [2009] AC 11 at par 5 Lord Hoffman; Re: S-B [2010] 1 AC 678 at pars 11-13 per Baroness Hale. In a series of decisions in the House of Lords and the Supreme Court following Re H it has been firmly established that:

(i) First there is only one civil standard of proof and that is proof that the fact in issue more probably occurred than not:Re Bat par 13 per Lord Hoffman.

(ii) Second, the proposition that “the more serious the allegation the more cogent the evidence needed to prove it” is wrong in law and must be rejected:Re S-Bat par 13 per Baroness Hale;Re J [2013] 1 AC 680 at par 35 per Baroness Hale.

(iii) Third, while inherent probabilities are relevant in considering whether it was more likely than not that an event had taken place, there is no necessary connection between seriousness and inherent probability:Re S-Bat par 12 citing Lord Hoffman inRe Bat par 1.”

65. SBM further referred to Lord Hoffman’s observation in Re B [2009] 1 AC 11 that:

“It would be absurd to suggest that the tribunal must in all cases assume that serious conduct is unlikely to have occurred. In many cases, the other evidence will show that it was all too likely.”

66. SBM pointed out that the trial judge had relied uponOtkritieas the principal authority.

67. SBM submitted that the trial judge’s statement that “[a]ll that is required is that the primary facts give rise to an inference of fraud or dishonesty which is more probable than any innocent explanation”¹⁸accurately reflected the test set out in JSC Bank of Moscow v Kekhman [2015] EWHC 3073 (Comm), [5884].

68. SBM further submitted that once the proper tests were applied the argument advanced by Renish and Mehta, resting upon the alleged error in the test as formulated by the trial judge, fell away. In particular, SBM referred to:

(1) Renish and Mehta’s untested propositions as to Renish’s trading history, factual matters expressly denied by SBM and matters demonstrably unsustainable. The trial judge had observed correctly that it was not open to them to seek to rely, in support of their First Permission to Appeal Application, on evidence about their commercial profile which could have been given by Mehta had he not decided to absent himself from the trial and on evidence which could have been adduced from Prime in the form of their witness statements had Mehta taken part in the trial and had he decided that such evidence would have been of assistance to his case.

(2) Renish and Mehta’s defence had failed to provide any particularised or sustainable explanation for the circular payments to Renish and the payment to Petro Hub. The rapid dissipation of funds distinguished the fifth and sixth advances and merited an explanation from Mehta, which was not forthcoming. Given the fact of the transfers, their timing, immediacy and identity of the recipients, relied upon by his Honour, and given that inherent probabilities are not to be accorded any special or automatic weight, the trial judge was plainly entitled to draw the inference he did in relation to the fifth and sixth advances.

(3) As to the trial judge’s focus on the fourth, fifth and sixth advances, rather than the first, second and third, this was understandable as it is a necessary ingredient of actionable deceit under Article 31 of the Law of Obligations that the claimant suffers loss as a result of reliance on the fraudulent statement.

Consideration and conclusions on the First Ground of Appeal

69. There has been a variety of formulations of the standard of proof applicable to allegations, in civil proceedings, of dishonesty or other serious misconduct.

70. A recent decision on the standard of proof in relation to allegations of fraud in civil cases in the United Kingdom wasBank of St Petersburg v Arkhangelsky [2020] EWCA Civ 408. The trial judge in that case had refused to draw inferences of dishonesty and conspiracy from factual elements relied upon by the appellants. He had emphasised the need for “cogent proof” given “the gravity of what is alleged”. He asserted that the more serious the allegation and the more improbable the event sought to be established, the stronger must be the evidence that it did occur before on the balance of probabilities its occurrence would be established: citingIn re H (Minors) [1996] AC 563 per Lord Nicholls.

71. Lord Chancellor Vos in the Court of Appeal, with whom Patten LJ and Males LJ agreed, said at [44]:

“It does not seem to me that the law is now much in doubt. It is encapsulated in the following passages from Lady Hale’s judgment in Re B, which, though stated to be applicable to care proceedings are, I think, of more general application in civil proceedings:

“64. Lord Nicholls’s nuanced explanation [in Re H] left room for the nostrum, ‘the more serious the allegation, the more cogent the evidence needed to prove it’, to take hold and be repeated again and again in fact finding hearings in care proceedings.”

.....

“70. My Lords, for that reason I would go further and announce loud and clear that the standard of proof in finding the facts necessary to establish the threshold under s 31(2) or the welfare considerations in s 1 of the 1989 Act is the simple balance of probabilities, neither more nor less. Neither the seriousness of the allegation nor the seriousness of the consequences should make any difference to the standard of proof to be applied in determining the facts. The inherent probabilities are simply something to be taken into account, where relevant, in deciding where the truth lies.

.....

“72. As to the seriousness of the allegation, there is no logical or necessary connection between the seriousness and probability. Some seriously harmful behaviour, such as murder, is sufficiently rare to be inherently improbable in most circumstances. Even then there are circumstances, such as a body with its throat cut and no weapon to hand, where it is not at all improbable. Other seriously harmful behaviour such as alcohol or drug abuse, is regrettably all too common and not at all improbable. Nor are serious allegations made in a vacuum. Consider the famous example of the animal seen in Regents Park. If it is seen outside the zoo on a stretch of greensward regularly used for walking dogs, then of course it is more likely to be a dog than a lion. If it is seen in the zoo next to the lion’s enclosure when the door is open, then it may well be more likely to be a lion than a dog.””

The Lord Chancellor also agreed with the proposition from Bryan J inBank of Moscow v Kekhman [2018] EWHC 791 (Comm) that the correct test is whether or not, on the basis of the primary facts pleaded, an inference of dishonesty is more likely than one of innocence or negligence. There must be some fact which tilts the balance and justifies an inference of dishonesty. The Chancellor went on to say:

“As it seems to me, in commercial cases, there will be a wide spectrum of probabilities as to the occurrence of reprehensible conduct. It is not appropriate for this Court to lay down any more specific guidelines than in the well-known cases that I have referred to.”

72. In our opinion, the approach taken by the trial judge to standard of proof was correct in law and consistent with what the Court of Appeal most recently said inBank of St Petersburg.

73. The standard of proof in civil proceedings is and remains proof on the balance of probabilities (unless modified by statute). What is necessary to meet the standard in a particular case will depend upon the facts of that case. Allegations of dishonesty may range across a wide spectrum of human conduct. Some allegations may depend upon facts which are, on their face, unusual. They might be facts which would elicit the initial opinion that they seem odd or bizarre or improbable. In such cases the standard of persuasion remains the same. The fact that the alleged conduct is unusual or seems improbable may be a factor legitimately taken into account in determining whether it is proven on the balance of probabilities when all the evidence is considered. That, with respect, is also consistent with what Justice Eder said inOtkritie,relied upon by the trial judge.

74. In the Court’s opinion, the first ground of appeal fails.

The Second Ground of Appeal — identification and application of the correct test for actionable implied misrepresentation

75. Renish and Mehta submitted that SBM’s claim in deceit was based upon implied misrepresentations by them. The trial judge was said to have given very limited consideration to the law and to have failed to apply the relevant test. The test relied upon by the Appellants was said to have been established inIFE v Goldman Sachs [2007] 1 Lloyds Rep 264 at [50] (“IFE”) where Toulson J said:

“In determining what, if any, implied misrepresentation has been made, the Court has to … consider what a reasonable person would have inferred was being implicitly represented by the representor’s words and conduct in their context.”

76. The test was said to have been cited in numerous decisions including decisions of the Court of Appeal.[2021] QB 1027 at [52] per Cockerill J; Marme Inversiones (2007) SL v NatWest Markets Plc and Others [2019] EWHC 366 (Comm) at 115 per Picken J and Property Alliance Group v Royal Bank of Scotland Plc [2018] 1 WLR 3529 (CA).">¹⁹None of the authorities had been referred to. The only authority cited by SBM in its Skeleton Argument at the trial was the decision inCorinth Pipeworks.That decision, a decision of the Court of First Instance, was said, according to Renish and Mehta, not to set out any test for implied representations. Moreover, there did not appear to have been any legal argument in the case as only one party attended at trial.

77. Two other principles relied upon by Renish and Mehta were the following:

(1) In a deceit case, the representor must understand that he is making the implied representation and that it had the misleading sense alleged.[2011] 1 CLC 701 at 221.">²⁰

(2) Further, it must have been reasonable for the representee to rely on the implied representation. The extent and nature of the representations would require a consideration of the relevant contractual framework in order to understand their extent and nature.[2008] EWHC 1186 (Comm) at [669].">²¹

78. The trial judge was said to have erred for the following reasons because of his misplaced reliance on a concept of commonly implied representations. His Honour had assumed that by reference only to a general submission as to “commonly implied (fraudulent) representations in trade finance an actionable misrepresentation had been made” from which he went on to consider whether such a representation was false.

79. This approach was said to have been demonstrably wrong for a number of reasons:

(1) The judge could not conclude whether an actionable implied representation had been made without considering (on an objective basis) what a reasonable person would have inferred was being implicitly represented by the representor’s words and conduct in their context. An assumption of the existence of actionable representations based on those “commonly implied” in different cases was said to contradict the well-established test inIFE.

(2) The approach inCorinthhad made no sense on its own terms. It invited the Court to assume that certain representations were “commonly implied” in “finance frauds”. There was no such principle. Each case would turn on its own facts.

(3) Even if the concept of “a finance fraud” were entertained, the Court was required to first consider the evidence to determine if a representation had been made at all.

80. Then it was said by Renish and Mehta that there was no breakdown of the alleged representations said to have induced the fifth and sixth advances. The trial judge had considered whether there were grounds for inferring dishonesty without considering whether there was an actionable representation in the first place. Given that omission, there was no analysis of whether they intended SBM to rely on the purported representation or whether SBM did so rely.

81. They further argued that, as part of the trial judge’s consideration of whether and what implied representations had been made, it was also necessary for him to consider the express representations contained in the Facility Agreement because the contractual context had to be taken into account.

82. Had the trial judge identified the applicable express representations, he would have reached the inevitable conclusion that in light of context no implied representations were given. On the proper construction of the Facility Agreement:

(1) The payment of any advance depended upon Renish first making a utilisation request pursuant to express contractual representations under the same clause.

(2) The representations were repeated each time a utilisation request was made. Therefore, SBM expressly relied on those representations when Renish made the utilisation requests for the fifth and sixth advances.

83. Applying the correct test inIFE,it was said that a representee with the known characteristics of SBM would have understood that the only representations in this context were the express representations provided for under cl 15 of the Facility Agreement. They covered the position. SBM, as a sophisticated lender, would not also have understood that a borrower was making additional implied, and potentially competing representations when each utilisation request was made.

84. Renish and Mehta argued that the express representation in cl 15 covered the substance of the implied representations advanced by SBM in the proceedings. Having regard to the judge’s finding about the Facility Agreement, the express representations were not made with any fraudulent intention in respect of any of the advances.

85. Renish and Mehta then criticised SBM’s responsive submissions and, in particular, its reliance uponCorinthfor the proposition that there is a general concept of a “trade finance fraud” which could give sufficient comfort to establish an implied representation.Corinthcould not provide a shortcut such that the correct test for establishing any actionable implied misrepresentation could simply be overlooked. The test was said to be that set out inIFE.

86. In its submissions, SBM observed that the trial judge had found that any argument in favour of an implied representation must be considered and tested against all the particular facts and circumstances while recognising the archetypal implied representations made in trade finance fraud as set out inCorinth. Having specifically citedCorinthit was plain that the trial judge had the principles set out in it in mind when determining what representations were made on the specific facts of this case. The provisions of the Facility Agreement itself could not advance the second ground. Clause 15 served only to confirm that the relevant representations pleaded in the Particulars of Claim had or were being made by implication and the term “information” plainly covered representations made on each occasion in the utilisation requests.

87. SBM also relied upon the trial judge’s judgment on the Application for Permission to Appeal. In his Honour’s reasons he had rejected the submission that he had made any assumption as to an actionable implied representation.

Consideration and conclusions on the second ground of appeal

88. The question whether, by speech or conduct or some combination of speech and conduct, a person makes an implied representation to another is ultimately a question of fact, the answer to which will depend upon the factual circumstances of the particular case. There has been much judicial ink spilt on the proper approach to the determination of that question.

89. In a recent decision inLoreley Financing (Jersey) No 30 Ltd v Credit Suisse Securities (Europe) Limited [2023] EWHC 2759, Cockerill J referred toIFEand observed that the exercise for an implied representation is in essence the same as that conducted for express representations — except that the question is what a reasonable person would have inferred was being impliedly represented by the representor’s words and conduct in their context (at [294]). That context would include contractual and other documentation passing between the parties (at [296]).

90. Cockerill J also cited the observation made by the Court of Appeal inProperty Alliance Group v Royal Bank of Scotland Plc [2018] 1 WLR 3529 at [432]:

“We do think it is a helpful test, in relation to the existence of an implied representation, to consider whether a reasonable representee would naturally assume that the true state of facts did not exist and that, if it did, he would necessarily have been informed of it.”

In so saying, the Court was approving what was called the “helpful test” enunciated by Colman J inGeest plc v Fyffes [1999] 1 All ER (Comm) 672 at 683B. However the Court of Appeal added:

“To that extent we would approve the dictum … but that is not to water down the requirement that there must be clear words or clear conduct of the representor from which the relevant representation can be implied.”

Cockerill J observed that the courts should be cautious so that implied representations should not be “too easily found”. Further, the more vague, uncertain, imprecise or “elastic” the meaning of the implied representation the less likely it would be to be implied and the more that would be required in terms of words or conduct.

91. The relevant representations in this case concerned the third, fourth, fifth and sixth payments made to Prime. As set out in para 48 of the judgment, the allegation was that SBM was induced to make those payments by express or implied representations to the effect that they were required to fulfil genuine, bona fide commercial arrangements for the purchase of oil from Prime and the sale and shipment of that oil to a buyer in Sri Lanka. The Lanka contracts were accepted to be genuine. The focus of SBM’s case therefore was on the relations between Renish and Prime. The allegation was framed in the following terms:

“…that the purported sale and purchase agreements between Renish and Prime were sham transactions, which neither party had any intention of performing – they were designed in effect to present documentation to the Bank to induce it to make payments to Prime, ostensibly for the cargos shown on the relevant documentation (particularly sale contracts and bills of lading), which Prime and Renish would then walk away with leaving the Bank with no means of recovering its losses.”

92. The trial judge had excluded evidence about the relationship between Renish and Prime and expert evidence suggesting that there was no correlation between payments advanced by SBM and any shipments made by Prime. There was, however, other evidence found to be both admissible and compelling. In this context the trial judge referred to SBM’s case pleaded in its Particulars of Claim and to the effect that the moneys received from SBM by Prime pursuant to requests by Renish under the Facility Agreement were dissipated within a matter of days by Prime to Renish or entities involved with Renish for no obvious legitimate commercial reasons. He was clearly referring to payments made pursuant to the presentation of relevant documentation to SBM which was plainly not going to be paying any money to Prime except upon presentation of documentation as required pursuant to the Facility Agreement.

93. Having found that certain payments made by SBM to Prime were paid over to Renish or related entities for no apparent commercial reason, the trial judge was prepared to make the finding that the money was not paid in the course of trade nor, as claimed in the Defence, in the ordinary course of business.

94. It is a necessary incident of his Honour’s reasoning, reflected in para 48, that relevant documentation purporting to evidence genuine trading transactions, had been presented to SBM before those payments were made. His Honour found as a fact that the payments were not made for the purpose of performing a commercial transaction of the kind represented by the presentation of the documents which was a necessary condition of SBM’s willingness to make the relevant payments. His Honour took into account the timing of the dissipation of the funds by Prime to Renish or related entities in inferring that the moneys were not paid in relation to the represented transaction. Mehta’s failure to explain the transaction to which the moneys related was a fact upon which his Honour was entitled to rely in strengthening the inference which he found to be available from the timing of the payments and the parties between whom they were made.

95. Overall, his Honour’s judgment took a constrained approach to SBM’s case, confining SBM to those things properly pleaded. His Honour’s reasoning obviously involved:

(1) A finding that documentation had been presented to SBM by Renish and Mehta purporting to represent a transaction of the kind upon which SBM would make a payment to Prime under the Facility Agreement.

(2) SBM was induced to make the payment.

(3) By reason of their timing and the parties between whom they were made, the inference was open that the payments were not made in the performance of transactions evidenced by the documentation presented to SBM.

(4) That inference was strengthened by the absence of any explanation of the disposition of the moneys on the part of the Appellants.

(5) The represented transactions in respect of the fifth and sixth payments did not exist.

96. As appears from para 55 in the trial judge’s judgment, the timings of the fifth and sixth payments were central to his Honour’s conclusion. It was not, however, an isolated factor but a factor taken in the context of surrounding circumstances and which had greater probative force having regard to the absence of any explanation.

97. The Court does not accept the argument that his Honour’s finding as to the Facility Agreement was inconsistent with his conclusion in relation to the fifth and sixth payments. It is important to note that his Honour was not satisfied on the balance of probabilities that the Facility Agreement representations were false. He rejected the fraud case based on that Agreement as formulated in paras 9 and 40 of the Particulars of Claim. The payments in respect of which he found fraud would have only required a finding of dishonesty at the time of the presentation of the relevant transaction documents supporting those payments. It did not require any anterior finding about the state of mind of the Appellants when they entered into the Facility Agreement.

98. SBM also pointed to the trial judge’s reasons on the Application for Permission to Appeal which has been referred to earlier. This was in answer to the proposition that the judge had made some assumption as to the existence of an actionable implied representation. In the course of those reasons, in a passage relied upon by SBM, his Honour had referred toCorinthas a case which made it clear that in trade finance there is commonly an implied representation to the effect that payments made pursuant to a request for funds to be transferred from a facility were required to fulfil genuine, bona fide commercial arrangements. This was said to take into account relevant principles summarised in SBM’s Skeleton for the first PTA Application. His Honour said he regarded the existence of such an implied representation in this case as obvious. They were made by necessary implication from the act of presenting the relevant documents to SBM.

99. This Court would be reluctant to rely upon elaboration of reasons given in a primary judgment by the trial judge where the trial judge responds to an Application for Permission to Appeal. Suffice it to say what his Honour said in his reasons on the Application for Permission to Appeal was obvious from his judgment, as already explained. The second ground of appeal fails.

Ground Three — Inconsistency between the Judge’s findings

100. Renish and Mehta contended that the trial judge had erred by holding that they were liable for alleged fraudulent misrepresentations because that finding was inconsistent with his other findings and material on the Court record. They pointed to the trial judge’s findings that there was no fraud in relation to the first to fourth advances, a finding of fraud in relation to the fifth and sixth advances was inconsistent with those conclusions. The primary fact on which the trial judge had placed greatest emphasis to infer fraud, namely the timing of the payments from Prime to Renish, had occurred in respect of other advances and was not unique to the fifth and sixth advances. Then it was said in light of the trial judge’s conclusion, his Honour had no foundation for finding fraud in respect of the fifth and sixth advances.

101. To determine that the fifth and sixth advances were induced fraudulently while concluding that the first four advances were not, the trial judge would have had to examine whether an actionable implied representation had been made by Renish and Mehta. He did not undertake that exercise. There were innocent explanations for the timing of payments after the fifth and sixth advances.

102. The finding of fraud was incompatible with the findings as to the genuine conduct of Renish and Mehta under the Facility Agreement. The trial judge also overlooked material evidence which pointed to the payments having been made in the ordinary course of business. This was said to include the evidence of Mr Drewe and Mr Sarda.

103. The trial judge was said not to have considered other evidence pointing to the improbability that the fifth and sixth advances were fraudulent. Nor was there any explanation for his Honour’s conclusions that the fifth and sixth advances were recoverable in full even if an inference of fraud could rightly be found.

104. SBM in response contended that Renish and Mehta’s argument was made on the premise that because the trial judge had rejected some aspects of SBM’s case, he was obliged to dismiss it all.

105. In relation to the timing of the payments following the fifth and sixth advances, the trial judge could have found the fourth advance fraudulent but did not find the circumstances of that transaction similarly compelling. It was clear that he did not find the fourth advance not to be fraudulent. He simply declined on the evidence to infer that it was fraudulent.

106. The trial judge was said to have failed to have regard to Prime’s evidence that that complaint was unsustainable given that the evidence had not been led by Prime and was not relied upon by SBM as hearsay. The trial judge specifically found that it could accordingly be of very little or no weight. Renish and Mehta had specifically disavowed all of Prime’s factual witness and expert evidence. They declined the opportunity to identify those aspects of that evidence upon which they wished to rely by choosing not to participate further in the trial after day one. Given that no party had sought to rely upon it and where Renish and Mehta had expressly disavowed it, the trial judge was bound to ignore it all or place very little weigh on Prime’s evidence.

107. In so far as there were inconsistencies in the trial judge’s reasoning, that would only give rise to the basis to an appeal where the factual conclusions actually reached were plainly wrong.

Consideration and Conclusions

108. In support of its submissions in relation to the third ground of appeal, SBM citedFAGE v Chabani [2014] EWCA Civ 5, where Lewison LJ cautioned against appellate courts interfering with findings of fact. That caution applied not only to findings of primary fact but also to the evaluation of those facts and to the inferences to be drawn from them. Those warnings had come from decisions both from the House of Lords and the Supreme Court. The reasons for that approach included:

(1) The expertise of a trial judge in determining what facts are relevant to the legal issues to be decided and what those facts are if they are disputed.

(2) The trial is not a dress rehearsal.

(3) Duplication of the trial judge’s role on appeal is a disproportionate use of the limited resources of an appellate court and will seldom lead to a different outcome in an individual case.

(4) In making his decisions the trial judge will have regard to the whole of the sea of evidence presented to him whereas an appellate court will only be islandhopping.

(5) The atmosphere of the courtroom cannot, in any event, be recreated by reference to documents (including transcripts of evidence).

(6) Thus, even if it were possible to duplicate the role of the trial judge, it cannot in practice be done.

109. Lewison LJ also made an observation about the reasons to be given by a trial judge in relation to fact findings:

“115.… he should give his reasons in sufficient detail to show the parties and, if need be, the Court of Appeal the principles on which he has acted and the reasons that have led him to his decision. They need not be elaborate. There is no duty on a judge, in giving his reasons to deal with every argument presented by counsel in support of his case. His function is to reach conclusions and to give reasons to support his view not to spell out every matter as if summing up to a jury. Nor need he deal at any length with matters that are not disputed. It is sufficient if what he says shows the basis on which he has acted. These are not controversial observations.”

110. Also relevant was the observation of Hamblen LJ inHaringey LBC v Ahmed [2017] EWCA Civ 1861 at [31] that interference with a finding of fact:

“…will only be justified where a critical finding of fact is unsupported by the evidence or where the decision is one which no reasonable judge could have reached.”

111. The preceding principles apply to this case and they are, in the opinion of this Court, fatal to Ground 3. The trial judge drew a distinction between the fourth advance and the fifth and sixth advances which, on the evidence, he was entitled to drew even if it was a fine distinction. It was not a distinction which supported a finding that the fourth advance representation was not fraudulent. It was simply that the evidence was insufficient to satisfy him that it was fraudulent. The Court rejects the third ground of appeal.

Ground 4 — Failure to secure that all potential arguable defences were considered in the absence of the Appellants

112. Renish and Mehta contended that a duty of fair presentation required SBM to bring to the attention of the Court points factual or legal that might be to their benefit of:CMOC Sales and Marketing Limited v Persons Unknown [2018] EWHC 2230 (Comm) at [14].”

113. The primary judge himself had spoken of “the duty of counsel … to put before the court all legal points both for and against his client’s case and to identify arguments which have been raised in pleadings, correspondence and/or witness statements by the absent party”.²²Renish and Mehta contended that several factors had to be addressed to ensure the hearing was conducted fairly and that they would have been obvious both to the Court and SBM. The factors referred to seemed to focus on disadvantages under which they laboured, namely:

(1) The effects of Prime’s late settlement.

(2) That the Appellant, Mehta, was a litigant in person with no legal training and not a native English speaker.

(3) The Appellant, Mehta’s inability to obtain access to all of Renish’s business records.

(4) The fact that Prime’s witnesses could not be summoned to give evidence.

114. SBM was said also to have failed to bring to the Court’s attention points which Renish and Mehta had taken in their defence and points which they might have taken, including reliance on Prime’s pleaded case and evidence as to the ordinary commercial nature of the impugned payments.

115. SBM, it was said, was obliged to raise defences that would be put by Renish and Mehta had they been present and did not do that. It was in a better position than the Court to identify what material would be relevant to potential defences and did not take the Court to such material.

116. Some of these arguments seem to go to disadvantage which might have warranted an adjournment of the trial. Nevertheless, Renish and Mehta contended that it was clear from the judgment and from the transcript of the first day of the trial that the judge was well aware of the difficulties that Mehta faced as a result of the absence of legal representation. He made every reasonable allowance to Mehta to enable him to put forward his case on behalf of himself and Renish. That included exploring with Mehta a mechanism by which he could adduce evidence from Prime in so far as he wished to do so, making clear to Mehta that he would be given every opportunity to adjust his submissions in light of the withdrawal of Prime from the proceedings. The trial judge also gave a direction requiring SBM to refile its Skeleton Argument in short order, focussing only on its claims against Renish and Mehta and following which Mehta would have a reasonable period to prepare his case. He also gave a clear explanation to the Appellant, Mehta, of the steps he was required to take and ensuring that he understood those steps.

117. SBM also pointed out that Renish and Mehta had in fact filed a detailed Skeleton Argument at trial setting out their case in full. The trial judge had the benefit of reading their pleadings, witness statements and detailed written submissions. The criticism of SBM was said to rest almost entirely on its failure to bring Prime’s evidence to the attention of the Court. That ignored the fact that large parts of Prime’s evidence were inconsistent with Renish and Mehta’s defence and evidence and that Prime effectively accused Renish of fraud and/or forging documents. Renish and Mehta’s Skeleton Argument was said to have painted a picture that the trial was entirely one-sided or that SBM’s case was not subject to rigorous scrutiny. The transcripts of the trial, combined with the judgment itself, demonstrated that that was not the case.

Consideration and conclusion on Ground Four

118. The Court does not consider that there is any substance to the fourth ground. The conduct of the hearing set out earlier in these Reasons, indicates that the trial judge was robust in the constraints which he applied to SBM and in the exclusion of evidence against Renish and Mehta which was not covered in particulars of the alleged frauds. SBM was not required to trawl through all the documents and to present Renish and Mehta’s case for them. Their non-participation in the trial was a matter of their own choosing. The fourth ground of appeal is rejected.

The Respondent’s Application for Permission to Appeal in relation to the Fourth Payment

119. SBM sought permission to cross-appeal in relation to the trial judge’s finding that fraud was not made out in connection with the fourth advance by the Respondent to Prime. At the hearing of the appeal, the Court granted that permission, albeit it would be confined to the argument that the trial judge should have found fraud on the fourth payment having regard to the findings he made on the fifth and sixth payments.

120. SBM contended that its position was very simple. The matters which led the trial judge to conclude that the fifth and sixth payments were fraudulent applied with equal force to the fourth payment. Based on the logic and reasoning in the judgment it was said the trial judge was bound to find that the fourth payment was fraudulent. It appeared from the judgment that the trial judge simply overlooked and/or was mistaken as to the fact that all of the relevant features the trial judge had identified with the fifth and sixth payments, were also present with the fourth payment.

121. SBM then set out the various matters upon which the trial judge had relied in making his findings, particularly the rapid dissipation of moneys received under the Facility Agreement by Prime to Renish or entities involved with Renish and the absence of any explanation for the onward payments out of Prime’s account.

122. SBM also referred to various aspects of Renish and Mehta’s conduct after the event including:

(i) Misleading statements and the creation of sham documents to explain apparent delays in making repayments under the Facility Agreement;

(ii) A failure to respond at all to SBM’s requests for payment;

(iii) Mehta’s absconding and failing to make contact with SBM knowing the extent of Renish’s contractual indebtedness;

(iv) The abandonment within a few days of Renish and Mehta’s business and residential addresses;

(v) The loss of all relevant electronic data and alleged theft of documents by loyal staff members;

(vi) A failure to comply with the WFO and asset disclosure order even when aware of them.

SBM observed that the trial judge had to accept that such matters could “be treated as casting light on the conduct of [the Appellants] at the time” albeit he declined to accept them as the basis for a wider inference.

123. SBM referred to the distinction that the trial judge drew between the Appellants’ treatment of the fifth and sixth payments and the fourth payment. That has already been referred to above. The trial judge’s reasoning was said to be erroneous for the following reasons:

(1) The inference which the trial judge drew was not limited to the timing of the payments but was based on all the matters set out in his judgment His inference was plainly not limited to the timing of the payments but included the circulatory and timing of the onward payments, the absence of any legitimate commercial explanation whether from Mehta or at all and the subsequent conduct of Mehta. These considerations all pertained as much to the fourth payment as to the fifth and sixth.

(2) The trial judge overlooked the fact that in respect of the fourth payment there was unchallenged evidence of payments in round figure sums having been made from Prime’s account back to Renish. There was evidence that:

(i) AED 986,170 was paid to Renish on 28 April 2018 (i.e. within three days of receipt);

(ii) USD 21,500 was paid to Renish on 1 May 2018 (i.e. within six days of receipt);

(iii) AED 2,050,000 was paid to Renish on 2 May 2018 (i.e. within seven days of receipt).

SBM noted by way of comparison that the final payment to Renish, referable to the sixth payment, was made six days after the receipt of the funds from the Respondent.

124. SBM’s expert had been specifically able to verify the fourth payment by reference to underlying documents on the payer’s side and the recipient’s side. The trial judge was also said to have overlooked the fact that there were payments of USD8,800,000 made from Prime’s USD account on the same date as the receipt of the fourth payment into that account and further substantial payments over the next four days. There was, it was said, no proper basis for the judge not to draw a similar inference by reason of the onward payments from the Prime account of the sum paid into that account by way of the fourth payment and the timings of such payments.

125. All of the other matters relied upon by the trial judge in support of his conclusion of fraud in respect of the fifth and sixth payments were said to apply equally to the fourth payment.

126. Then it was said that the trial judge had analysed the fourth payment in a vacuum rather than taking into account subsequent events. His Honour had not identified any event between the fourth payment on 24 April 2018 and the fifth payment on 22 May 2018 that could be said to have prompted a sudden change of intention on the part of Renish and Mehta. He had noted that the fourth payment was “not due to be repaid until mid- June 2018”. The inference drawn from that fact was nowhere identified or explained.

127. SBM argued that the only reason given by the judge for dismissing the fourth payment was because under the parties’ contractual terms the fourth payment “was not due to be repaid until mid-June”. It further argued that this was entirely irrelevant to the question of whether the procurement of the fourth payment was fraudulent. Moreover, the fifth and sixth payments which the trial judge concluded were fraudulent were made in May 2018 long before the repayment date of the fourth payment. That payment was sough and the relevant payment representation made in mid-April 2018.

128. In response to Renish and Mehta’s Application for Permission to Appeal, the judge, it was said, appeared to recognise that there was in fact a proper basis for concluding that the fourth payment was fraudulent, however the judge had said in his judgment of 13 May 2022 on the Application for Permission to Appeal:

“It may be that a finding of fraud could also have been made in respect of the fourth advance but explained in para 55 of the judgment I did not find the circumstances of the transaction similarly compelling.”

129. SBM pointed to the absence of any explanation as to why that distinction was drawn.

130. Renish and Mehta submitted that the challenge to the trial judge’s finding in relation to the fourth advance was a thinly disguised invitation to the Court to rehear and reassess the evidence before the trial judge and to substitute its view of that evidence over the conclusions which he had reached.

131. Renish and Mehta referred to the observation of Hamblen LJ inHaringey v Ahmedthat interference with a fact:

“…will only be justified where a critical finding of fact is unsupported by the evidence or where the decision is one which no reasonable judge could have reached.[2017] EWCA Civ 1861 at [31].">²³

They argued that the trial judge had the benefit of the documentary evidence which ran into several thousand pages and which could not be considered by this Court, less still on the selective basis advanced by SBM. It would be improper and disproportionate for this Court to rehear and reconsider the large volume of evidence before the trial judge at first instance. The point was also said to be academic as the Court of Appeal is limited to reviewing the decision of the Court of First Instance under RDC 44.110 and not conducting the rehearing exercise invited by SBM.

132. The matters which the trial judge considered and on which his Honour made findings included his rejection of SBM’s pleaded case on fraud based on the Facility Agreement representations, Renish’s track record of repayment under the Facility Agreement and the trial judge’s conclusion that the contracts of sale to Lanka were genuine. The trial judge had also found no fraud in relation to the first to third advances, as well as the fourth. These conclusions were said to support Renish and Mehta’s case that the fourth advance was not fraudulent and militate against a conclusion that this Court should be “compelled” to revisit the trial judge’s finding of fact. It is not a case where the decision reached was one “which no reasonable judge could have reached”.

Consideration and Conclusion

133. This appeal on the part of SBM invites this Court to revisit factual findings by the trial judge. That is a function which is undertaken subject to constraints well-established by the authorities. While the distinction which the trial judge drew between the treatment of the fourth advance and the treatment of the fifth and sixth advances was critically dependent upon what might be thought to be a narrow factual point, it was a point of distinction which it was open to the judge to make. The distinction he drew was evidently a matter of degree leading him to find the evidence insufficiently compelling to support an inference of fraud in relation to the fourth advance.

Costs

134. On SBM’s Application for Permission to Appeal against the costs order made by his Honour, the Court advised that SBM could put its submission in support of its Application for Permission to Appeal as though it was putting the full appeal argument.

135. At para 58 of his judgment, the trial judge said:

“58.I have already throughout this judgment made it clear that the evidence sought to be adduced by the Bank went far beyond any case that was open to it on the pleadings. Much of the material filed with the Court was not relevant to the Bank’s pleaded case. This should be reflected in the order in respect of costs. My order is that the Bank is entitled to recover one half of its legal costs of the action, in so far as not already dealt with, to be assessed by the Registrar on the standard basis if not agreed between the parties.”

136. The formal order made by his Honour was:

“3.That the First and Second Defendants shall pay the Claimant one half of its costs of the action, in so far as not otherwise dealt with, to be assessed by the Registrar on the standard basis if not otherwise agreed between the parties.”

137. SBM contended that the trial judge’s approach was procedurally unfair. He had not afforded SBM or any other party a fair opportunity to make any submissions whether written or oral on costs in advance of making the costs ruling.

138. On the final day of the trial, the judge had asked counsel for SBM to indicate whether it would, if successful, seek its costs. SBM submitted that it was entirely inappropriate for the judge to canvass submissions on costs in circumstances where he had given no indication of his decision on the substantive claim. He had not produced a reasoned judgment to enable costs submissions properly to be prepared and delivered. Reference was made to the recent practice of the DIFC Court for judges in cases where there was a likely costs outcome to give an indication of their intended ruling on costs while giving the parties a period of time to apply for the variation of that ruling.

139. Counsel for SBM stated at the hearing that it would not only seek its costs but, in the event that the fraud claim were to succeed “I anticipate that we would be seeking [costs] on the indemnity basis”. So it was said that counsel made it clear that the application had not been made but would be made.

140. The trial judge then invited SBM to state whether it wished to make its application “now”. In response to that invitation counsel confirmed that in principle the Respondent would seek indemnity costs, albeit making the point that it would be “difficult to predict at this point … what the position would be”.

141. SBM submitted that it was given an opportunity to do nothing more than confirm against an hypothetical outcome that it would seek its costs in principle. SBM referred to various authorities said to support the general proposition that a party should be given a fair opportunity to make and develop submissions on matters of costs.

142. Further it was said that the trial judge’s conclusion was perverse for a number of reasons:

(1) His Honour had found the Appellants liable in fraud in respect of the majority of the Respondent’s claim, namely USD 21,890,890.50 out of USD 30,735,479.50, that is over 70% of the total sum claimed.

(2) It necessarily followed from the judge’s conclusions in respect of his findings of fraud that the case advanced by the Appellants was false and must have been known to have been false by the Appellants. That would have merited an order for costs against the Appellants on an indemnity basis.

(3) While under RDC 38.8 the Court may consider circumstances of partial success, it has always been clear that the Court should identify the party that had broadly succeeded.

143. The trial judge in awarding SBM only half of its costs did not reflect any particular complexity or weight of documents or need for trial time in relation to the issue on which SBM did not succeed.

144. SBM went on to argue in favour of an award of indemnity costs by reference to a number of factors:

(1) The Appellants had consistently sought to obstruct and delay the progression of the proceedings.

(2) The Appellants had failed to engage with the proceedings in any respect until over a year after they were issued.

(3) The Appellants failed to produce a Document Production Statement in compliance with a previous order which necessitated the Court making a further order against them shortly before the trial.

(4) At a time when the trial had been listed for several months the Appellants made another attempt to adjourn it on the first day. When that application failed they failed to attend the remainder of the trial. They effectively capitulated by failing or declining to offer any evidence or submissions in response to the Respondent at the last minute.

145. SBM criticised the basis upon which his Honour had awarded only 50% of costs on the standard basis.

146. The first related to SBM’s referring to evidence going beyond its pleaded case. The second was the volume of material in the trial bundles.

147. Renish and Mehta argued that the transcript of the hearing left no doubt that the trial judge had invited SBM to make an application for its costs and that SBM had made an application for indemnity costs. This, it was said, should be a complete answer to this ground of cross-appeal.

148. As to the merits of the trial judge’s determination, Renish and Mehta pointed to the broad discretion conferred on him on the matter of costs by RDC 38.6 to 38.8. The trial judge had exercised his discretion having regard, in particular, to SBM’s conduct of the case as expressly required under RDC 38.8. Concerns about the manner in which the Respondent had sought to rely on evidence which had not been properly adduced were raised during the hearing. That was evident from the transcript. The judge had maintained serious misgivings about SBM’s conduct of the case. An important part of the pleaded case that the Lanka transactions were a sham had failed. The trial judge concluded that those allegations had been improperly maintained. Secondly, his Honour had rejected the majority of SBM’s fraud allegations including the entirety of the fraud alleged in respect of the Facility Agreement Representations and two of the six fraud allegations in respect of the Payment Representations.

149. The trial judge, it was said, was entitled to make a costs order that reflected his disapproval of the manner in which the case had been advanced by SBM as well as the relevant success of the parties in bringing and defending the claims. SBM itself had recognised the very high threshold to appeal a discretionary decision of a first instance judge, including a decision as to costs. SBM had tried to characterise the trial judge's decision as perverse. However, according to Renish and Mehta, the costs order was well within the generous ambit of the trial judge’s discretion.

150. Renish and Mehta also referred to SBM’s attempt to advance separate reasons to uphold the trial judge’s order which had already been held by the trial judge to be inadmissible.

Consideration and Conclusions

151. The exchange between the trial judge and counsel for SBM concerning costs was set out in Renish and Mehta’s Skeleton Argument and taken from the transcript of the hearing. The extracts were as follows:

“Lord Angus Glennie: And costs, if you are successful, you want your costs?

Mr Reed: We will be seeking our costs, yes, and I would anticipate that we would be seeking on the indemnity basis, given the facts taking this case out of the norm.

Lord Angus Glennie: Are you wanting to make that application now or are you wanting to leave that under after the judgment?

Mr Reed: I am happy to formally make that application now on the basis that this has been a complex fraud, it has required very costly and time consuming investigation involving the use of chartered forensic accountants and in those circumstances we would seek costs on the indemnity basis and we would seek an order to that effect.”

152. Renish and Mehta submitted that SBM could have requested an opportunity to make a separate costs submission. Instead, it expressly took up the trial judge’s invitation to make its costs application there and then.

153. The Court is of the opinion that permission to appeal in relation to the costs order should be limited to the question of procedural fairness, that is to say, whether SBM had a fair opportunity to make a submission on costs in the event of partial success.

154. The exchange between the trial judge and counsel for SBM which has been set above, seems to have operated on the assumption of a binary outcome. That is to say, SBM was being asked whether it wanted its costs if it was successful. It gave an affirmative answer to that question and said that it would seek indemnity costs.

155. SBM was not asked to consider the possibility of the costs order that should be made in the event that it was partially successful. In such a case, as is well known, it is open to the Court to make a costs order reflecting partial success although it is not bound to do so. In our opinion the trial judge, having found in favour of SBM as to some of its claim and rejecting others, and reflecting adversely on its conduct of the case should, as a matter of procedural fairness have given SBM time to make submissions as to the costs order that ought to be made.

156. In the circumstances, this Court grants SBM permission to appeal against the costs order made by his Honour and will allow that appeal. Having regard to the submissions made by SBM and Renish and Mehta in relation to the costs, this Court would not substitute an order for indemnity costs. The Court does consider that an apportionment of the costs at trial was appropriate having regard to SBM’s partial success. In so doing, the Court has regard to the proportion of the sum claimed that was awarded under the trial judge’s judgment as pointed out in SBM’s submissions to this Court. However, it is also legitimate to have regard to those matters concerning the conduct of the case to which the trial judge legitimately had regard. In the circumstances, this Court would substitute an order in favour of SBM that Renish and Mehta pay three quarters of SBM’s costs of the trial to be assessed on the standard basis.

General Conclusion

157. For the preceding reasons, the Court will make the following orders: