Abou-Rahmah v Abacha
| Jurisdiction | England & Wales |
| Judge | The Honourable Mr Justice Treacy |
| Judgment Date | 28 November 2005 |
| Neutral Citation | [2005] EWHC 2662 (QB) |
| Docket Number | Case No: HQ02X03988 |
| Court | Queen's Bench Division |
| Date | 28 November 2005 |
[2005] EWHC 2662 (QB)
The Honourable Mr Justice Treacy
Case No: HQ02X03988
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Mr Rupert D'Cruz (instructed by Sohal & Company, Solicitors) for the Claimants
Mr Richard Slade (instructed by Constant & Constant, Solicitors) for the 4 th Defendant
Hearing dates: 23/05/2005–27/05/2005 & 01/09/2005–02/09/2005
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This claim arises out of a fraud of which the Claimants say they were victims. The perpetrators of the fraud are alleged to be the 1 st to 3 rd Defendants. There is also a claim against the 5 th Defendant. This trial has been solely concerned with the actions of the 4 th Defendant, City Express Bank of Lagos.
The background to the fraud is as follows. In about May 2001 the 1 st Claimant was contacted by the 2 nd Defendant. The 2 nd Defendant wanted the Claimant's assistance on behalf of the 1 st Defendant to invest some $65m in an Arab country. Subsequent to this request, the 1 st Claimant went to the West African country of Benin and met the 1 st to 3 rd Defendants to discuss the matter. During his meeting with them he was told that the 1 st Defendant intended to create a family trust of some $65m which he wished to transfer to the 1 st Claimant as a Trustee to invest in an Arab country. A formal Trust agreement was entered into on the 14 August 2001. In return for his assistance, the 1 st Claimant was promised some 40% of the Trust capital and some 15% of the income produced. The agreement, he says, was that those monies once transferred to Kuwait, (from which country the 1 st Claimant emanates), would be invested in real estate. He claims that the real estate market in Kuwait was very buoyant and that very generous returns on investments were possible.
The 2 nd Claimant agreed to assist the 1 st Claimant in making suitable investments with the proposed trust money and there was an agreement asserted to exist between those two claimants that they would share in any monies made from the 1 st Claimant's agreement with the 1 st to 3 rd Defendants. That agreement between the 1 st and 2 nd Claimants does not appear ever to have been reduced to writing.
The 1 st to 3 rd Defendants claimed that the trust money was located in Benin. Having obtained the agreement of the 1 st Claimant to act as their trustee in Kuwait in administering the scheme after receipt of funds, there then emerged, according to the 1 st to 3 rd Defendants, a series of bureaucratic obstacles to transfer which could only be overcome by payments being made. Over a period of time, the 1 st Claimant was asked by the 1 st to 3 rd Defendants, to contribute towards those payments. A pattern emerged of unexpected requests for money which the 1 st to 3 rd Defendants said they would pay, but to which they eventually ended up asking the 1 st Claimant to make a contribution. In compliance with their requests, the 1 st Claimant, in August 2001, paid $100,000 in cash as part of the fee of $450,000 which it was claimed had to be paid to the Ministry of Finance in Benin in order to secure authorisation for the transfer of the alleged Trust money. In October and November 2001 the 2 nd Claimant, at the request of the 1 st Claimant, paid a total of $450,000 as part of what the 1 st Claimant had been told was a fee which needed to be paid to the Benin Drug Enforcement Agency in order to obtain a drugs certificate required for the release of the money. On 9 January 2002 and on 5 February 2002 the 2 nd Claimant, at the request of the 1 st Claimant, paid $400,000 and $225,000 respectively into the 4 th Defendant's HSBC Bank account in Poultry London. Those payments were made with instructions that the money was to be held for the benefit of Trust International, which was the name of the party to whom the 1 st Defendant had instructed the 1 st Claimant to pay the money. The 1 st Claimant had been told that these two payments of $400,000 and $225,000 were VAT payable on the alleged trust money.
In March 2002, the 2 nd Claimant, again at the request of the 1 st Claimant, paid the sum of $200,000 as part of what he was told was the fee for an Anti-Terrorist certificate required for transfer of the alleged trust money. Despite these payments having been made and despite assurances throughout the process that each successive payment would trigger the release of the trust money, the trust money was never transferred to the 1 st Claimant. The 1 st, 2 nd and 3 rd Defendants have disappeared. It became clear that the scheme was a scam used to defraud the Claimants of a total of $1.375m, representing the sums referred to above.
The 4 th Defendant is a Nigerian registered Bank, hereinafter referred to as "the Defendant". It has no branches in the UK. It held a bank account at HSBC in London known as the "CEB Independent Account". This account was used to receive sums in dollars and sterling in London. Against that account, the 4 th Defendant could release sums in Nigerian Naira to customers in Nigeria. Payments of $400,000 and $225,000 matching those referred to at Paragraph 4 above were released to customers at the Defendant's branch in Apapa, Nigeria. The customers to whom the money was released do not appear to be any of the first three Defendants. The customers who obtained the monies opened the account using names of Mr Ibrahim and Mr Saminu. They operated under the business name Trusty International. The name of this account, it will be noted, varies from the name of Trust International for whose benefit the money paid into the HSBC account by the Claimants was instructed to be held.
The Claimants raise four heads of claim. Firstly, they contend that the circumstances of the Defendant's receipt and handling of the total of $625,000 amounts to knowing or dishonest assistance on its part in the fraud which was committed against the Claimants. Secondly, the Claimants maintain that they have an action in negligence. They say that the payments by the Defendant of the sum of $625,000 to a party other than the one identified in the Claimant's instructions as the proper beneficiary, give rise to a claim in negligence. Next, the Claimants assert that the money that was held by the Defendant on a resulting or Quistclose trust which was breached when the money was paid to a party other than the one identified in the Claimant's instructions as the proper beneficiary. Fourthly, the Claimants maintain that the circumstances of the payment give rise to a claim for restitution of the money on the basis of money had and received and/or mistake.
The Defendant responds in this way to those four heads of claim. Firstly, there is an over-arching allegation of illegality. It is said that the Claimant was knowingly involved in a dishonest scheme or was involved in the illegal performance of a scheme in such a way as to disentitle him to relief from our courts.
Turning to the individual heads of claim, so far as knowing or dishonest assistance is concerned, the Defendant denies that it had any necessary degree of knowledge which would render it liable under this head of claim. As to negligence, it is contended that the Defendant did not owe the Claimants a duty of care in relation to the money paid into its HSBC account. It denies breach of any duty in paying the money to Trusty International and it denies in any event that loss has been sustained as a result of any action that it carried out. Further, in relation to negligence, it is asserted that if negligence is established, then there was contributory negligence on behalf of the Claimants.
As to the Quistclose or resulting trust head of claim, the response of the Defendant is to deny that the instructions which were given and which accompanied the payments of the monies into the HSBC account were capable of amounting to an express trust. Further, it is said that by paying the money to HSBC, the Claimants had parted with any beneficial interest in the money which they had previously had.
Turning finally to the action for money had and received, the case for the Defendant is that it changed its position by reason of having remitted the money to the account of Trusty International, and, having released the monies to Messrs Ibrahim and Saminu, that such payment was made in innocence and good faith and consequently this head of claim must fail.
The evidence before me has consisted of:
i) Oral evidence from the 1 st Claimant with a confirmatory statement from the 2 nd Claimant,
ii) A trial bundle of documents evidencing the working and progress of the fraud by the 1 st to 3 rd Defendants and the mechanisms of money transfers involved.
iii) Oral evidence from:
a) Dare Faronbi, Branch Manager of the Defendant's Apapa branch in 2001–2.
b) Aderemi Adejobi, Head of Operations at the Apapa branch in 2001–2.
And
c) Olusola Adeoti, Director and Chief Executive Officer of the Defendant.
Illegality
It is convenient first to consider the issue of illegality raised by the Defendant and which, if made out, would lead this court to refuse to grant the Claimants any relief. No direct claim of illegality is raised against the 2 nd Claimant; the submission is that the 1 st Claimant is tainted and that that is sufficient. No argument to the contrary has been raised. The burden of proof rests with the Defendant.
The Defendant submitted...
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