Claim No. CFI 041/2024

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

ANASTASIIA DENISOVA

Claimant

and

(1) ALEKSEI GALTCEV
(2) REALISTE HOLDING LTD

Defendants

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ORDER WITH REASONS OF H.E. CHIEF JUSTICE WAYNE MARTIN

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UPON the Order with Reasons of H.E. Justice Sapna Jhangiani dated 15 May 2025 finding in favour of the Claimant on the preliminary issue, and ordering the Defendants to pay the Claimant’s costs in relation to the preliminary issue on a standard basis (the “Order”)

AND UPON the Order with Reasons of H.E. Justice Sapna Jhangiani dated 26 May 2025 immediately assessing the Claimant’s costs in relation to the preliminary issue on a standard basis (the “Costs Order”)

AND UPON the Order with Reasons of H.E. Justice Sapna Jhangiani dated 15 August 2025 refusing the Defendants’ appeal notice dated 9 June 2025 seeking permission to appeal the Order and the Costs Order

AND UPON the Defendants’ renewed Appeal Notice dated 4 September 2025 seeking permission to appeal the Order and the Costs Order (the “Renewed Application”)

AND UPON the Claimant’s submissions in opposition to the Defendants’ Renewed Application dated 22 September 2025

AND PURSUANT TO the Rules of the DIFC Courts (the “RDC”)

IT IS HEREBY ORDERED THAT:

1. The Renewed Application is dismissed.

2. The Defendants are to pay the Claimant’s costs of the Renewed Application to be assessed in accordance with the following matters.

3. The Claimant is to file and serve a Statement of Costs and any short submissions in support of the costs claimed within twenty-one (21) days of the date of these orders.

4. The Defendants are to provide any submissions in response to the costs claimed within fourteen (14) days of service of the Statement of Costs.

5. The Claimant is to provide any submissions in reply to the Defendants’ response within seven (7) days of service of that response.

6. The quantum of costs to be paid by the Defendants to the Claimant will thereafter be assessed by the Chief Justice by way of immediate assessment on the papers.

Issued by:
Delvin Sumo
Assistant Registrar
Date of issue: 8 October 2025
Time: 10am

SCHEDULE OF REASONS

Summary

1. The Defendants, Mr Alexsei Gaulcev and Realiste Holding Holding (together the “Defendants”) have made a Renewed Application to the Court of Appeal for Permission to Appeal (the “Renewed Application”) from the decision of the Trial Judge on a preliminary issue, and from a subsequent order for costs made by the Trial Judge in relation to the trial of the preliminary issue, their Initial Application for Permission to Appeal (the “Initial Application”) having been refused by the Trial Judge.

2. For the reasons which follow, the appeal would have no real prospect of success nor is there any other compelling reason why the appeal should be heard, and the Renewed Application must be dismissed with costs.

The decision of the Trial Judge on the preliminary issue

3. In the claim form, the Claimant asserted that she brought and paid for 10,000 ordinary shares in the Second Defendant for the sum of USD 1,000. She further asserted that some months later she agreed to sell 4,000 of those shares to a third party for USD 200,000. She received payment for the shares she was selling, but when the Claimant directed the First Defendant to transfer the shares in the Second Defendant to the Purchaser, he refused. Further, the First Defendant asserted that the shares had not been paid for and arranged for the shares to be cancelled in the Register of Shares held in the Second Defendant.

4. The Defence documents filed on behalf of the Defendants raised a multitude of issues, amongst which was the assertion that the Claimant had not paid for the shares in the Second Defendant, with the result that the Second Defendant was entitled to cancel her shares. The Judge ordered the trial of a preliminary issue limited to the question of whether or not the Claimant had paid USD 1,000 for the 10,000 shares in the Second Defendant which were issued to her.

5. The preliminary issue was tried over the course of one day. The Judge’s orders with reasons were published on 15 May 2025. The Judge found in favour of the Claimant and declared that the Claimant had paid the First Defendant USD 1,000 for the shares in the Second Defendant which were issued to her. The Judge further ordered that the Claimant was entitled to her costs in relation to the preliminary issue and made directions with respect to the assessment of those costs. The Judge made other directions with respect to alternative dispute resolution which are not germane to the issues which arise on the Renewed Application.

6. The Judge’s reasons recount the procedural history of the case and the course of the trial. In that context she observed:

“Mr Maksim Kuchin was due to give evidence at the Hearing on behalf of the Defendants, but just before he was to be sworn in as a witness, the Defendants’ Counsel informed the Court that Mr Kuchin did not speak English and that no interpreter had been arranged. Upon the Court’s indication that Mr Kuchin’s evidence in any event had little direct relevance to the preliminary issue, Mr Kuchin’s evidence was struck from the case record with the Defendants’ agreement.”¹

7. The Judge observed that the factual context for the dispute was a shareholder resolution dated 7 January 2024 passed by the First Defendant, who was then the sole shareholder in the Second Defendant, resolving to transfer 10,000 ordinary shares in the Second Defendant from the First Defendant to the Claimant. The same resolution approved transfers of shares in the Second Defendant from the First Defendant to four others, including Mr Dmitrii Grigorev.

8. The Judge observed that the Claimant’s evidence was to the effect that after she and the First Defendant had attended a meeting outside the office (the Claimant was then an employee of the Second Defendant or a related company) she and the First Defendant returned to the office of the Second Defendant where she handed the First Defendant USD 1,000 in cash. The First Defendant did not deny attending the meeting outside the office on 23 January 2024, but denied that he and the Claimant returned to the Second Defendant’s office after that meeting, or that she paid him USD 1,000 in cash. The First Defendant further denies that he was ever paid that amount by the Claimant.

9. The Judge observed that the Claimant relied upon a document entitled “Instrument of Transfer of Shares of Realiste Holding Ltd” as a receipt for her payment. As the Judge observed that document describes the First Defendant as the Transferor and provides that:

“…for good and valuable consideration of 1,000 (one thousand USD) provided to me by ANASTASIIA DENISOVA”

the First Defendant did “hereby transfer” to the Claimant 10,000 ordinary shares in the Second Defendant.

10. The document is dated 30 January 2024 and bears the signatures of the Claimant and the First Defendant. The signature of the First Defendant appears to have been witnessed by Hijamal Karmyshakova. The name of the witness to the Claimant’s signature is not apparent from the face of the document.

11. The Judge noted that the Claimant’s evidence was to the effect that a few days after providing the First Defendant with the cash payment for the shares, she came into the office of the Second Defendant and found the “Instrument of Transfer” prepopulated and dated on her desk. She signed the document and returned it to Ms Karmyshakova.

12. The Judge noted that the First Defendant’s evidence in relation to the Instrument of Transfer was that he thought he had signed it online, because on 30 January he wasn’t in the office, as he wasn’t in the UAE. However, as the Judge noted, the First Defendant does not deny that he signed the Instrument of Transfer.

13. The Judge noted that the Defendants admitted in their Defence that the Claimant was issued with the shares in the Second Defendant on 30 January 2024.

14. The Judge observed that some time in April or May 2024, the relationship between the Claimant and the First Defendant began to sour, and the First Defendant’s evidence was that he verbally “fired” the Claimant in May 2024, but allowed her to stay at the company for a few months longer. The Claimant’s evidence was that the termination was mutual, and she had decided to leave the company in May 2024. As the Judge noted, the precise circumstances of the termination of the Claimant’s employment was not directly relevant to the preliminary issue.

15. The Judge further observed that on 27 May 2024, the Claimant entered into an agreement for the sale of 4,000 of her shares in the Second Defendant to Mr Nikola Kosutic for a price of AED 734,000 (which was approximately USD 200,000 at the then prevailing rate of exchange).

16. The Judge noted that on 1 June 2024, the First Defendant became aware of the share sale agreement and sent various messages to the Claimant complaining about the sale and asserting that he would recommend to the purchaser that the deal be reversed.

17. On 3 June 2024, the Claimant wrote to representatives of the Second Defendant, copied to Mr Kosutic, attaching the share sale agreement and requesting that the Second Defendant transfer 4,000 of the Claimant’s shares to Mr Kosutic.

18. As the Judge noted, on the same day, 3 June 2024, the First Defendant messaged the Claimant in the following terms:

“So far, you have been denied share registration of shares due to the fact that you have not paid for your shares. You will receive the corresponding letter today by email. Come to the office and provide the payment made before 3 June for the shares. So far, the holding has refused to register the transaction and the holding has initiated the return of all your shares due to your non-payment for these shares…”

19. As the Judge noted, the Claimant responded to this message by asserting that she didn’t understand the First Defendant, as his position was changing. She asserted that she had the right to sell the shares and asked if the First Defendant was going to prevent that.

20. The Judge noted that the Claimant was asked in cross-examination why she did not deny the First Defendant’s allegation that she hadn’t paid for the shares. The Claimant responded by indicating that she was shocked that the shares were “revoked” and because her “closest partner and friend just took the shares”. The Claimant observed that she knew that she needed a lawyer, and she commenced these proceedings on 10 June 2024, seven days after the First Defendant’s assertion that her shares were to be “revoked”.

21. As the Judge noted, also on 3 June 2024, the First Defendant passed a resolution as sole director of the Second Defendant requesting that the Share Transfer to the Claimant dated 30 January 2024 be cancelled on the ground that payment for those shares had not been made by the transferee. As the Judge noted, the effect of that resolution was to transfer 10,000 ordinary shares in the Second Defendant from the Claimant back to the First Defendant.

22. On 4 June 2024, the Claimant received an email from the Second Defendant attaching a copy of the resolution by the First Defendant in his capacity as a director on 3 June 2024, and asserting that pursuant to the Articles of Association of the Second Defendant, the directors were entitled to refuse to register the transfer of a share if the shares were not fully paid and observing that if the directors refused to register the transfer of a share, notice was to be given to the parties to the transfer accordingly.

23. I digress to observe that the Articles to which reference was made authorise the refusal to register a transfer of a share and do not deal with the cancellation of a transfer previously registered, which was in fact what the First Defendant had resolved to direct.

24. As the Judge noted, by 11 July 2024 when the Claimant checked the public Register of Shares in the Second Defendant she found that she was listed as a former shareholder who had been deregistered as a shareholder on 3 June 2024.

25. In her reasons, the Judge then carefully summarised the competing contentions of the parties. In that context, she noted that the Defendants contended that the Claimant’s evidence was not credible because she had changed her position, having first asserted that she paid the cash on 30 January 2024, only changing her position after the First Defendant adduced evidence to the effect that he was not in Dubai on 30 January 2024

26. The Judge also noted the Defendants’ submission that there was no documentary record or accounting entry in respect of any cash transaction having taken place on 23 January 2024, and the further submission that the Instrument of Transfer did not constitute an independent verification of payment. The Judge also noted various other arguments advanced by the Defendants, including the assertion that when the First Defendant came to know that the Claimant had not paid for the shares around 3 June 2024, he took immediate steps to arrange for the Share Register to be rectified.

27. The Judge then set out her analysis and reasoning. In relation to the standard of proof, she observed:

The standard of proof in this Court is on a balance of probabilities, and in order to succeed on the preliminary issue, the Claimant must prove that it is more likely than not that she paid USD1,000 for the Claimed Shares.²

28. In that context the Judge observed:

“The Claimant’s and First Defendant’s oral evidence about whether or not the Claimant paid USD1,000 in cash to the First Defendant for the Claimed Shares is in direct conflict. Neither witness came across as dishonest, and I am unable to resolve the issue of whether the Claimant paid for the Claimed Shares based on witness testimony alone.”³

29. However, the Judge went on to observe that the First Defendant was vague in his oral evidence about his understanding of whether the Claimant had paid him for the shares when he signed the Instrument of Transfer. As the Judge noted, at first the First Defendant said that when he signed the Instrument he “supposed the money will come” but later in his evidence asserted that he “really thought she had already paid to me, like on my bank account, but it never happened” and “I thought that the transfer was made to my bank account, so I signed the instrument of transfer”. In that context, the Judge noted that the pleaded defence was to the effect that the shares were issued to the Claimant ‘with the understanding that the consideration would be paid as agreed”. As the Judge noted, the various positions put by the First Defendant in relation to payment were not consistent.⁴

30. The Judge then referred to Mr Grigorev’s evidence to the effect that as Company Secretary of the Second Defendant, he could not find any evidence of payment by the Claimant for the shares in the Second Defendant’s company documents. However, as the Judge noted, as the shares had been transferred from the First Defendant to the Claimant, rather than allotted to the Claimant from the unissued capital of the Second Defendant, the Claimant, like Mr Grigorev, had paid the First Defendant, not the Second Defendant, so no evidence of payment would be expected in the books and records of the Second Defendant.⁵

31. The Judge went on to express the view that the most useful evidence in relation to the question of whether or not the Claimant had paid for the shares was the Instrument of Transfer. In that context, she rejected the Defendants’ argument that the document was simply a standard form document and did not constitute a receipt or acknowledgement of payment. As she observed, the document expressly recorded that the First Defendant was transferring shares to the Claimant “for good and valuable consideration of 1,000 (one thousand) USD provided to me by [the Claimant]”.⁶ The Judge considered that the Instrument constituted strong evidence that the Claimant had paid for the shares.

32. The Judge also rejected the Defendants’ submission that the Claimant’s position was undermined by the lack of any receipt, bank record, exchange slip or other written confirmation of the payment. She observed that the payment was in cash, to the First Defendant, and the Instrument of Transfer and the fact of registration of the shares could serve as proof of payment without any additional documents being necessary.⁷

33. In her reasons, the Judge also rejected various other arguments advanced on behalf of the Defendants which are not pressed in the Renewed Application.

34. The Judge then addressed the Defendants’ submission with respect to the Claimant’s credibility arising from the Claimant’s change in position with respect to the date upon which she paid the cash to the First Defendant. The Judge concluded that the change in the Claimant’s position with respect to the date of payment did not undermine her evidence to the point at which the First Defendant’s evidence should be preferred for the following reasons:

The Judge’s decision on costs

35. As noted, the Judge ordered that the Defendants were to pay the Claimant’s costs of the preliminary issue and made directions for the exchange of submissions in relation to the quantum of those costs. The Defendants do not challenge the order that they pay the Claimant’s costs, at least not until they successfully appeal from the determination of the preliminary issue, but challenge the Judge’s quantification of those costs at USD 50,000.

36. In her reasons for that determination, the Judge noted that the Claimant had submitted a schedule of costs totalling USD 76,591.50, including disbursements of USD 1,200. She noted that the hourly rates set out in the schedule were within the average hourly rates set out in Practice Direction no. 1 of 2023.

37. The Judge noted that the schedule included in the statement of costs four interlocutory applications in addition to the preliminary issue, being an Application for Default Judgment, an Application for Document Production, and two applications to exclude witness evidence which had been served by the Defendants.

38. The Judge then summarised the competing submissions advanced by the parties in relation to the quantification of costs and set out the applicable principles and relevant Rules of Court.

39. In her analysis and reasoning, the Judge observed that she did not consider it appropriate to reduce the hourly rates claimed, given that they were within the range identified in the relevant Practice Direction.

40. In relation to the interlocutory applications, the Judge considered that the first application to exclude evidence was warranted by reason of the Defendants’ failure to comply with the deadline for filing of evidence, but because the Court had exercised its discretion to allow the evidence, the Judge did not consider that the second application was necessary.

41. The Judge rejected the Defendants’ argument that the costs claimed were disproportionate to the amount in issue, which was said to be the sum of USD 1,000. In particular, she rejected the submission that the amount of USD 1,000 reflected the value of the subject matter of the action, which was the shares.

42. In relation to the Application for Default Judgment, the Judge considered that the costs of that application were not recoverable as part of the Claimant’s costs relating to the preliminary issue.

43. The Judge then issued her ruling in the following terms:

“Taking into account all the matters set out above, and bearing in mind that the Claimant’s costs schedule does not set out the Claimant’s costs relating to each application or discrete task, I apply a broadbrush approach in assessing the Claimant’s costs, and in applying an appropriate discount to the full costs claimed such that the costs recovered are both reasonable and proportionate in accordance with RDC 38.2. I immediately assess the Claimant’s costs at the sum of USD50,000.”⁸

Permission to appeal – legal principles

44. Rule 44.117 of the Rules of the DIFC Courts (the “RDC”) provides:

45. RDC 44.5 requires that an appellant obtain permission to appeal to the Court of Appeal except where the appeal is against a committal order.

46. RDC 44.19 provides:

47. RDC 44.19 provides that permission to appeal may only be given where the appeal would have a real prospect of success or there is some other compelling reason why the appeal should be heard.

48. In the context of an assessment of the prospects of success “real” means realistic rather than fanciful and involves the same test as is applied in applications for immediate judgment.⁹

49. A real prospect of success does not mean a probability of success, but more than mere arguability.¹⁰

50. “Some other compelling reason why the appeal should be heard” may include the public interest in clarifying the meaning and scope of relevant practice and provisions of DIFC and wider UAE law.¹¹

51. It is established that “real” in the context of an assessment of the prospects of success means realistic rather than fanciful, applying the same test as is applied in an application for immediate judgment.¹²

52. It is also established that a real prospect of success does not mean a probability of success, but more than mere arguability.¹³

53. Accordingly, in order to obtain the grant of permission a prospective appellant needs to establish more than the proposition that the proposed appeal is reasonably arguable – rather, it must be established that there is a real prospect of success.¹⁴

54. Particular principles apply to applications for permission to appeal against case management decisions and multi factorial assessments undertaken by a Judge at first instance, given the hurdles which must be overcome to obtain appellant intervention in such cases.¹⁵ However, as this case does not involve either an application to appeal against a procedural or case management decision, or against a multi factorial assessment by the Trial Judge, it is unnecessary to essay the relevant principles in these reasons.

55. Similarly, it is well established that particular considerations apply to:

56. It is well established in this and other common law jurisdictions that an appellate court will be reluctant to overturn a finding of fact made by a judge at first instance which involves the assessment of the credibility of witnesses because of the obvious advantage which a Trial Judge enjoys as compared to the Court of Appeal. Accordingly, the Court of Appeal will defer to the decision of the Judge at First Instance unless it is clear that the Judge has misused the advantage which he or she enjoys.

57. It is also well established that “permission to appeal from an exercise of the discretion to make an order with respect to costs, or an assessment of costs pursuant to such an order will only be granted in exceptional circumstances”.¹⁶ In Melody v Melance the Court held that permission to appeal in respect of a costs order would only be granted if there was an arguable case that there had been:

58. As the Defendants apply for permission to appeal from a finding of fact which depended upon the evaluation of conflicting testimony and from the exercise of discretion with respect to the quantification of costs, the bar which must be overcome in order to obtain permission is a particularly high one.

The grounds of appeal

Grounds of appeal relating to the preliminary issue

59. There are five grounds of appeal relating to the Judge’s determination of the preliminary issue. They can be collectively characterised as an assertion that the Judge was wrong to reject the arguments which were advanced on behalf of the Defendants at trial. Viewed at this level, it would be sufficient to dispose of all of the grounds with the observation that:

60. However, for the sake of completeness, each of the grounds of appeal will be addressed, albeit briefly.

Ground 1

61. Ground 1 asserts that the Judge’s finding that the Claimant had paid for the shares was against the weight of the evidence and unsupported by “any reliable proof”.

62. In support of this ground, it is asserted that there was no documentary evidence of the payment for the shares. However, as the Judge noted, the payment was made in cash to the First Defendant, and the Claimant had no way of knowing how the First Defendant had dealt with the cash after it was given to him. In these circumstances, the absence of documentary evidence of the payment is unremarkable.

63. It is further asserted that the Judge was wrong to consider that the Instrument of Transfer provided evidence of payment. This submission overlooks the fact that the First Defendant did not dispute that he signed the Instrument which expressly acknowledges that the shares were being transferred in consideration of the payment made by the Claimant. The Judge was clearly correct to attach significant weight to the Instrument.

64. Reliance is also placed upon the proposition that the First Defendant’s testimony was “unchallenged”. That proposition is clearly incorrect – the Claimant gave evidence directly contrary to that given by the First Defendant. Further, although the Judge did not disbelieve the First Defendant, she did observe that his evidence with respect to the issue of payment was inconsistent. The Judge had to resolve the conflict in testimony between the Claimant and the First Defendant, and she did so by a logical analysis of all relevant evidence before the Court. No error in that process of analysis has been revealed.

Ground 2

65. Ground 2 asserts that the Judge failed to evaluate the Claimant’s credibility. Two matters are relied upon. The first is the shift in the Claimant’s position in relation to the date upon which the payment was made.

66. However, as will be seen from the passage in the Judge’s reasons set out above, the Judge gave careful consideration to the evaluation of the Claimant’s testimony in relation to the date upon which the payment was made. She did so in the context of having seen each of the Claimant and the First Defendant give their oral testimony. It was clearly open to the Judge to find, as she did, that the Claimant’s original position with respect to the date of payment was an innocent mistake which did not undermine her credibility generally, having regard to the other matters which corroborated her testimony, including in particular the Instrument of Transfer and the registration of the Transfer

67. he second matter relied upon is the assertion that an inference should be drawn from the Claimant’s failure to call Ms Karmyshakova. There are two fundamental flaws in this contention. First, there is no reason to think that Ms Karmyshakova would have been in a position to give relevant testimony, as the Claimant did not assert that she was present when the money was given to the First Defendant. Second and in any event, Ms Karmyshakova is an employee of the Second Defendant. If there was any reason to think that she was in a position to give relevant testimony, it would be expected that the Defendants would have called her to give that testimony, so that any adverse inference from failure to call Ms Karmyshakova would be drawn against the Defendants, not the Claimant.

Ground 3

68. Ground 3 asserts that the Judge misinterpreted material evidence and considered irrelevant factors. In support of this ground it is asserted that the Judge erred by relying on the fact that the Defendants did not raise any issue of non-payment until 3 June 2024. It is asserted that whether the First Defendant delayed before accusing the Claimant of non-payment has no logical bearing upon whether the payment was actually made months earlier.

69. This assertion cannot be accepted. The uncontested evidence established that:

70. These matters are clearly relevant to the question of whether or not in fact payment had been made, and it was entirely appropriate for the Judge to take them into account.

71. Next it is asserted that the fact that the First Defendant gave the Claimant no opportunity to pay for the shares before reversing the Transfer was irrelevant to the question which the Judge had to decide. This proposition cannot be accepted. The question which the Judge had to determine was whether the First Defendant had fabricated the allegation of non- payment for the shares in order to prevent the Claimant from transferring her shares to Mr Kosutic at a substantial profit. The fact that the First Defendant had not previously demanded payment for the shares, and did not give the Claimant any opportunity to pay for the shares before resolving to reverse the transfer of shares to her is clearly relevant to that question.

72. Next it is asserted that the Judge erred by not taking proper account of the fact that Mr Grigorev had paid the First Defendant for his shares. However, the Judge did take this into account and inferred, correctly, that the fact that Mr Grigorev had paid the First Defendant for the shares transferred to him was irrelevant to the question of whether the Claimant had paid for her shares. The Defendants seek to overcome this obvious difficulty by asserting that the Judge had missed the point because Mr Grigorev’s testimony implied that he was unaware of the Claimant paying for her shares, and that as Company Secretary, one would expect him to know if the cash had been paid to the First Defendant. This proposition suffers from the same flaw as the proposition relating to the lack of company documentation – that is, to assume that the money was paid to the company, when in fact the shares were transferred by the First Defendant and the money was paid to him. There was no inference available from Mr Grigorev’s evidence which was relevant to the issue before the Judge, and she was correct to take that approach.

Ground 4

73. Ground 4 asserts that the Defendants were denied procedural fairness because the evidence of Mr Maksim Kuchin was not received in evidence.

74. The circumstances in which Mr Kuchin’s evidence was not received were described by the Judge in the passage set out above.

75. In amplification of that summary, it is to be noted that Mr Kuchin’s signed statement was provided in English. The Defendants’ counsel advised that Mr Kuchin required an interpreter. No evidence was proffered of any statement signed by Mr Kuchin in his native language (Russian) or of any translation of Mr Kuchin’s English statement into Russian.

76. Mr Kuchin’s statement dealt with two issues – the first was the Claimant’s role in the Second Defendant’s business. That evidence was not relevant to the issue which was to be determined.

77. The second matter addressed in Mr Kuchin’s statement was the assertion that unlike himself and other investors, the Claimant did not pay for the shares she held in the Second Defendant. No evidentiary basis for that assertion is provided in his statement. As presented in the statement it is an inadmissible conclusion. It may be that the conclusion is based on hearsay, but that is sheer speculation, as the statement is entirely devoid of any explanation as to how Mr Kuchin was able to assert that the Claimant did not pay the First Defendant.

78. The Defendants contend that when the Judge observed, correctly, that Mr Kuchin’s evidence would likely have little direct relevance to the question she had to determine “the Defendants’ counsel felt compelled to agree to strike Mr Kuchin’s testimony from the record”. The Defendants contend that the evidence was effectively rejected by the Court.

79. That submission is not consistent with the transcript of the hearing. The transcript reveals that when Mr Kuchin came to be sworn counsel for the Defendants advised the Court that Mr Kuchin did not speak English, which was confirmed by Mr Kuchin. Counsel for the Defendants then tried to explain why no interpreter had been provided.

80. The Judge then asked counsel for the Claimant how she would like to proceed in a context in which counsel had earlier advised the Judge that she wished to cross-examine Mr Kuchin. It was in that context that the Judge observed that so far as she could tell from his witness statement, his evidence was not directly relevant to the preliminary issue. Counsel for the Claimant then complained that she was prejudiced by her inability to cross-examine Mr Kuchin in order to obtain evidence to support the Claimant’s case. Counsel for the Claimant contended (reasonably) that if she was not able to cross-examine Mr Kuchin, his written statement should not be received in evidence.

81. Counsel for the Defendants did not request an adjournment in order to attempt to arrange an interpreter to enable Mr Kuchin to be cross-examined. Instead, he submitted that the written statement could be received and admitted as hearsay without Mr Kuchin being cross- examined. That submission was, with respect, hopeless because:

82. In the result, the Judge ruled that Mr Kuchin’s witness statement would not be received in evidence.

83. The Defendants submit that the Judge was wrong to state that Mr Kuchin’s testimony had “little relevance” because she did not know what he would actually say. That contention appears to ignore the procedure adopted in this Court which requires the evidence in chief of each witness to be provided in the form of a witness statement well in advance of trial. In that context the Judge was perfectly entitled to assume that Mr Kuchin’s evidence would be in accordance with his statement. It would have been quite wrong for her to speculate on the evidence he might possibly have given. Further, counsel for the Claimant could obviously have objected if the Defendants sought to lead evidence from Mr Kuchin which went beyond that disclosed in his statement, on the ground of denial of procedural fairness.

84. This ground of appeal is entirely without substance and has no prospect of success.

Ground 5

85. Ground 5 asserts that the Judge misapplied fundamental legal principles on the burden and standard of proof. In support of this ground, it is asserted that the Judge effectively reversed the burden and required the Defendants to disprove payment. It is further asserted that the Judge resolved any doubt in the Claimant’s favour.

86. These contentions appear to have been made without any reference to the Judge’s reasons, which clearly and explicitly identify the approach which she took to the burden of proof and which was undoubtedly correct.

87. This ground is entirely without substance and has no prospect of success.

The grounds of appeal against the costs order

Ground 1

88. Ground 1 asserts that the award of costs in the amount of USD 50,000 was grossly disproportionate to the amount of USD 1,000 in dispute.

89. The flaw in this contention is that the amount in dispute was not USD 1,000, as the Judge correctly held. The value of the subject matter of the dispute was equivalent to the value of the shares.

90. The Defendants seek to overcome that fact by asserting that there was no evidence as to the value of the shares. There are two flaws in this contention. First, if there was no evidence as to the value of the shares, it could not be said that the award of costs was disproportionate to the value of the subject matter. Second, there was in fact evidence as to the value of the shares, in the form of the sale of 40% of the shares to Mr Kosutic for USD 200,000. On the basis of that evidence, it could not be said that the costs awarded by the Judge were disproportionate to the value of the subject matter.

Ground 2

91. Ground 2 asserts the costs were assessed without adequate evidence or explanation. The Defendants complain that the Judge gave no breakdown of how she arrived at USD 50,000.

92. This submission suffers so many flaws it is difficult to know where to begin. First, the Judge was engaging in a process of immediate assessment pursuant to RDC Part 38, rather than detailed assessment pursuant to RDC Part 40. The process of immediate assessment is designed to avoid significant costs being incurred in the assessment of costs by providing the Court with sufficient information upon which to make an assessment without necessarily condescending to detail.

93. Second, the Judge did give detailed assessment to the statement of costs provided by the Claimant and specifically addressed the hourly rates claimed, the components of the work the subject of the statement, and the total amount claimed.

94. Third, as the Judge discounted the amount claimed by a little over one third, it cannot be contended that it was necessary for the Judge to also undertake a minute assessment of each and every component of the amount claimed.

95. This ground has no prospect of success.

Ground 3

96. Ground 3 asserts that the Judge erred by allowing the Claimant to recover costs for unsuccessful procedural applications.

97. This is another ground which appears to have been advanced without reference to the reasons actually given by the Judge. In those reasons, she made clear that she disallowed the claim for costs in respect of the default judgment application and the second application to exclude evidence. No doubt that disallowance was reflected in the extent of the discount of the amount claimed. The Judge allowed the claim for costs in respect of the other two applications because they were connected with the preliminary issue – one being in relation to the disclosure of documents and the other being an application to exclude evidence because of the Defendants’ non-compliance with the directions of the Court – an application which the Judge considered was warranted.

98. This ground has no prospect of success.

Ground 4

99. Ground 4 asserts that the reasons given by the Judge were inadequate because there was “no itemisation”.

100. t is difficult to see how this ground differs from ground 2, but if it does somehow differ from that ground, it suffers the same flaws and has no prospect of success.

Summary and conclusion

101. None of the grounds of appeal against the preliminary determination or against the Judge’s orders with respect to costs have any prospect of success. Contrary to the Defendants’ assertion, none of the grounds of appeal give rise to any issue of principle or provide any other compelling reason why the appeal should be heard. Accordingly, the Renewed Application must be dismissed.

102. The Defendants must pay the Claimant’s costs of the Renewed Application and directions will be made for the assessment of the quantum of those costs.