(1) Richard Conway v Prince Arthur Ikpechukwu Eze
| Jurisdiction | England & Wales |
| Judge | Keyser |
| Judgment Date | 12 January 2018 |
| Neutral Citation | [2018] EWHC 29 (Ch) |
| Docket Number | Case No: HC-2016-000720 |
| Court | Chancery Division |
| Date | 12 January 2018 |
[2018] EWHC 29 (Ch)
H.H. JUDGE Keyser Q.C.
sitting as a Judge of the High Court
Case No: HC-2016-000720
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
7 Rolls Building, Fetter Lane
London, EC4A 1NL
Matthew Collings QC and Timothy Becker (instructed by Kennedys LLP) for the Claimants
David Mumford QC and Edward Granger (instructed by Watson Farley & Williams LLP) for the Defendant
Hearing dates: 21, 22, 23, 24, 27 and 28 November 2017
Judgment Approved
H.H. Judge Keyser Q.C.:
Introduction
On 7 August 2015 the parties exchanged contracts for the sale by the claimants, Mr and Mrs Conway, to the defendant, Prince Eze, of their property at 86 Uphill Road, London, NW7 4QE (“the Property”) for a price of £5 million. Prince Eze later decided not to proceed with the purchase and failed to comply with a notice to complete. In these proceedings the Conways claim damages for breach of contract; the substantial losses alleged include the difference between the price agreed with Prince Eze and the price achieved on the subsequent sale of the Property to another purchaser, as well as costs incurred by the Conways in respect of bridging finance to enable them to proceed with their purchase of another property. The Conways acknowledge that they must give credit for the deposit of £500,000 that was paid by Prince Eze upon exchange of contracts.
Prince Eze defends the claim on the principal basis that the contract was concluded following the Conways' promise to pay a bribe or secret commission to his agent, Mr Richard Obahor; this, he says, rendered the contract void or at least voidable and unenforceable by them. He counterclaims a declaration to that effect and the repayment of his deposit. Alternatively, if the contract is enforceable by the Conways, Prince Eze takes issue with the amount of damages claimed.
For the reasons set out below, I find that the contract between the parties was valid and enforceable, that Prince Eze was not entitled to avoid the contract but was in breach of contract, and that the Conways are entitled to damages for breach of contract, though not to the full extent of their claim.
The remainder of this judgment will be structured as follows. First I shall say something about the four witnesses who gave evidence at trial; these are also the four most significant people in terms of the unfolding of events. Second, I shall set out the main facts in more detail. It is impractical and unnecessary to recite all of the twists and turns of the abortive sale, but the central issue in the case requires that sufficient minutiae be mentioned to give a reasonable picture of what happened. Third, I shall identify more precisely the issues that arise on the facts. Finally I shall address those issues in turn. My conclusions as summarised in paragraph 3 above mean that the lengthy discussion of two issues in paragraphs 115 to 156 below does not form the basis of my decision but is strictly obiter.
I am grateful to Mr Matthew Collings QC and Mr Timothy Becker, who appeared for Mr and Mrs Conway, and to Mr David Mumford QC and Mr Edward Granger, who appeared for Prince Eze, for their helpful oral and written submissions.
The witnesses
Four witnesses gave evidence at trial: Mr Richard Conway, Prince Eze, Mr Richard Obahor and Mr Richard Howarth. They are also the key figures in the events that give rise to these proceedings.
Mr Conway is a businessman with a background in IT consultancy and project management. Although he and Mrs Conway made relevant decisions together, Mr Conway took the lead both in considering the detail and in negotiating the terms of the proposed sale of the Property. He had no particular expertise in property transactions but brought to bear on the matter his keen business sense and his temperamental disposition to get closely involved in what was happening and in the way that others, such as estate agents, were acting on his behalf. To put it another way: he had clear ideas both of what he wanted and of how it might best be achieved. As I shall mention in more detail below, the Conways had particular reasons for wanting the sale to Prince Eze to proceed, and Mr Conway did his very best to ensure that it would. I am unable to take the thoroughly benign view of his conduct that Mr Collings invites me to take. Nevertheless, nothing leads me to doubt his basic honesty, and I think that on the whole his evidence was truthful, although there were occasions when a combination of the natural imperfection of memory and his desire to reconstruct past events in the manner most favourable to his own interests made his evidence less than wholly reliable.
Mr Obahor is a UK-based Nigerian property developer, property manager and (as he describes himself) “acquisition agent”. His work as an acquisition agent involves finding UK properties for British and foreign investors. Sometimes he will look for a property on instructions from a specific client; sometimes he will find a property and then look for a client who would be interested in purchasing it. In either case his role typically involves not only finding the property at the outset but then coordinating the activities of all those involved in the transaction in order to ensure that they are doing what needs to be done and doing it at the right time. Mr Obahor carries on his business interests through a number of corporate vehicles, one of which is Fresco Property Services UK Limited (“Fresco”). It was Mr Obahor who negotiated the terms of sale and introduced the Property to Prince Eze. He, or more properly Fresco, received a payment of £150,000 from Prince Eze and the promise of a payment of £75,000 from the Conways. It is that promise of payment that Prince Eze relies on as entitling him to avoid the contract of sale.
Mr Obahor described himself in evidence as “a professional”. Mr Collings described him as “a chancer”. On the whole I prefer Mr Collings' description. There is no doubt that Mr Obahor showed himself willing and able to perform his functions as an acquisition agent. However, his conduct in connection with this matter shows him to be someone who has an eye to making easy money by the exercise of brash self-confidence, plausible charm and as many lies as he deems necessary. In his evidence Mr Obahor adopted a penitential tone. Mr Mumford described his performance as a witness as calm, measured and convincing. It did not convince me. In my view he is quite happy to lie whenever he deems it to be in his own interest to do so. However, he does not lie for the sake of it; this means, strangely, that much of his evidence is truthful, accurate and reliable. There are two central areas in which it has to be viewed with particular caution: first, the supposed centrality of his role in the abortive purchase; second, the motivation of his conduct in the transaction.
Prince Eze is a prominent and successful businessman in Nigeria. His main business interests concern gas and oil holdings in Nigeria and across Africa. He also has some relatively small property investments in the UK. Because of the extent of his commercial interests and the pressures on his time, his way of doing business is brisk and focused. Meetings and telephone conversations will typically be concluded within a matter of minutes, and, certainly outside the sphere of his main activities, he delegates matters of detail and practicality to trusted advisers, taking himself only such decisions as merit his attention.
In his closing submissions Mr Collings did not challenge the basic veracity and sincerity of Prince Eze's evidence, though he urged that on certain points the evidence be treated with caution. I think that caution is certainly required. However, on the balance of probabilities I accept the following important points in Prince Eze's evidence: that he did not know Mr Obahor before the latter approached him about the opportunity to purchase the Property; that he did not trouble himself greatly about the finer details of the transaction, relying instead on others to take care of such matters; and that he did not know that the Conways had promised to make a payment to Mr Obahor or Fresco.
Nevertheless, there were several unsatisfactory features about Prince Eze's evidence. First, he tried to make too much of some points that he clearly felt supported his case, such as the trust he reposed in Mr Obahor. Second, parts of his evidence were (in my judgment) simply untrue: for example, I do not believe what he told me concerning his reason for not proceeding with the purchase of the Property, as I shall explain below. Third, his evidence was at times difficult to understand. One reason for this is his obvious impatience with detail. Another reason, perhaps, is that, although he is reasonably proficient in English, it is not his first language or his natural medium of thought or expression. However, when all allowance has been made, Prince Eze's evidence leaves the uneasy feeling that, as Mr Collings suggested, we have not got to the bottom of things. At this stage I mention only some related points concerning Prince Eze's relationship with Mr Obahor.
1) When assessing the reliability of witnesses I find it a matter of concern that Prince Eze has not sought and Mr Obahor, his witness, has not offered repayment of the £150,000, even though on the basis of Prince Eze's case and Mr Obahor's ostensible penitence the money must be recoverable. Although no corrupt motive has been alleged against Prince Eze for failing to seek recovery of the money, it would be naïve not to see that, while the money remains unclaimed, Prince Eze has a position of some dominance over Mr Obahor. Neither Prince Eze nor Mr Obahor is naïve.
2) The...
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