Group Seven Ltd and Another v Ali Nasir and Others
| Jurisdiction | England & Wales |
| Judge | Mr Justice Morgan |
| Judgment Date | 06 October 2017 |
| Neutral Citation | [2017] EWHC 2466 (Ch) |
| Docket Number | Case Nos: HC-2014-000906 and HC-2014-001003 |
| Court | Chancery Division |
| Date | 06 October 2017 |
[2017] EWHC 2466 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Rolls Building, Fetter Lane, London, EC4A 1NL
Mr Justice Morgan
Case Nos: HC-2014-000906 and HC-2014-001003
Jeffrey Chapman QC, Simon AtrillandSimon Paul (instructed by Mishcon de Reya LLP) for the Claimants in both actions
William Flenley QC and Francis Bacon (instructed by Caytons Law) for Notable Services LLP, Mr Landman and Mr Meduri
Clive Freedman QC and Michael Ryan (instructed by Pinsent Masons LLP) for LLB Verwaltung (Switzerland) AG
Richard Jones QC and Olivia Chaffin-Laird (instructed by FPG, Solicitors) for Mr Louanjli
Hearing dates: 15–17, 20–24, 27–28 February 2017, 1–3, 6–10, 13–17, 20, 22–24, 27–29 March 2017, 4–7 and 25 April 2017 and written submissions thereafter
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.
| Heading | Paragraph number |
| Part 1: General Matters | 1 |
| The case in outline | 1 |
| Who everyone is | 4 |
| The earlier proceedings | 23 |
| The current proceedings | 25 |
| The Group Seven claims | 26 |
| The Larn claims | 34 |
| The witnesses apart from Mr Landman, Mr Meduri and Mr Louanjli | 35 |
| Mr Landman, Mr Meduri and Mr Louanjli: general remarks | 48 |
| Mr Landman | 60 |
| Mr Meduri | 71 |
| Mr Louanjli | 72 |
| The expert evidence | 73 |
| Part 2: the claims against Mr Nasir and Mr Yi | 74 |
| The relevant facts for the purposes of these claims | 74 |
| The liability of Mr Yi | 88 |
| Part 3: the claims against Notable, Mr Landman and Mr Meduri: the facts | 89 |
| The relevant facts for the purposes of these claims: before 2 November 2011 | 89 |
| 2 November 2011 | 145 |
| 3 November 2011 | 150 |
| The first meeting | 153 |
| The second meeting | 161 |
| The third meeting | 167 |
| The fourth meeting | 178 |
| The fifth meeting | 186 |
| 4 November 2011 | 188 |
| 5 November 2011 | 200 |
| 7 November 2011 | 201 |
| 8 November 2011 | 205 |
| 9 November 2011 | 207 |
| 10 November 2011 | 212 |
| 11 November 2011 | 221 |
| 14 November 2011 | 227 |
| The telephone calls from Notable to Mr Louanjli | 243 |
| 15 November 2011 | 256 |
| My findings about the payments | 266 |
| Events after 15 November 2011 | 344 |
| Part 4: the claims against Mr Louanjli, LLB, Mr Elbied, Renaissance and Bridge: the facts | 350 |
| Part 5: Group Seven's claims against Notable, Mr Landman and Mr Meduri: discussion and conclusions | 405 |
| The claims | 405 |
| The trust | 408 |
| The breach of trust | 409 |
| The assistance | 410 |
| Dishonesty | 411 |
| Did Notable dishonestly assist a breach of trust? | 441 |
| Did Mr Meduri dishonestly assist a breach of trust? | 442 |
| Did Mr Landman dishonestly assist a breach of trust? | 454 |
| Unconscionable receipt | 473 |
| The money claimed from Mr Landman | 479 |
| The money claimed from Notable | 488 |
| Part 6: Group Seven's claims against Mr Louanjli and Bridge: discussion and conclusions | 494 |
| The claims | 494 |
| Dishonest assistance | 495 |
| The assistance | 496 |
| Dishonesty | 499 |
| Deceit | 516 |
| Conspiracy | 522 |
| Unconscionable receipt | 525 |
| Part 7: Group Seven's claims against LLB: discussion and conclusions | 531 |
| Part 8: Group Seven's claims against Mr Elbied and Renaissance: discussion and conclusions | 556 |
| Part 9: the claims by Larn: discussion and conclusions | 560 |
| Part 10: the contribution claims | 570 |
PART 1: GENERAL MATTERS
The case in outline
These proceedings arise out of a substantial fraud whereby Allseas Group SA ("Allseas") was defrauded out of a large sum of money, €100 million. The fraud was followed by an attempt to launder the proceeds of the fraud using the client account of a firm of solicitors in London, Notable Services LLP ("Notable"). The attempt at money laundering was partly successful. Some €15 million were paid away by Notable. Some of these monies were recovered but, in the end, only €88 million was returned to Allseas which therefore lost about €12 million.
The way that the fraud worked was as follows. Allseas had €100 million which it wished to invest. A group of fraudsters persuaded Allseas that they could facilitate an extremely profitable investment of that sum by Allseas. Allseas formed a subsidiary company, Allseas Group Ltd (now known as Group Seven Ltd and referred to in this judgment as "Group Seven"), in order for it to make the relevant investment. Allseas transferred €100 million to Group Seven which transferred it to Allied Investment Corporation Ltd ("AIC").
AIC then set about removing the funds from the control of Allseas/Group Seven and laundering those funds. AIC transferred the funds to Notable's client account. Notable held that money in its client account for the benefit of Larn Ltd ("Larn"). Larn was controlled by a Mr Nobre who gave instructions (on behalf of Larn) to Notable to make a large number of payments out of its client account. Acting on these instructions, Notable paid away some €15 million. The Notable client account was with Barclays Bank. It seems that Barclays Bank reported these activities in relation to the Notable client account and the Metropolitan Police became involved. As a result of the police intervention the remaining monies were frozen and eventually, after some of the €15 million was returned to Notable, around €88 million were returned to Allseas.
Who everyone is
Allseas is a company registered in Switzerland, where it has its headquarters. It and its subsidiaries employ over 2,000 people in 9 countries. It specialises in pipe laying for the oil and gas industry.
Group Seven (under the name Allseas Group Ltd) was incorporated in Malta on 20 April 2011 for the purpose of making what it thought was an investment but which led to it being the victim of the fraud described above. Allseas was and is the principal shareholder in Group Seven.
Rheingold Management Inc ("Rheingold") is incorporated in Panama. By a Deed of Assignment of Rights and Causes of Action dated 16 November 2012, Group Seven assigned to Rheingold the causes of action which are the subject of these proceedings.
AIC was incorporated in Malta on 4 October 2011 for the purpose of participating in the fraud. Mr Rejniak was registered as a director, and sole shareholder, of AIC. In the course of the fraud, on 15 October 2011, Group Seven entered into a purported loan agreement, relating to the €100 million, under which AIC was the purported borrower. In earlier proceedings, to which I refer below, Peter Smith J set aside this loan agreement.
Mr Rejniak is a Polish national. In addition to being a director and shareholder of AIC, he was a director of Group Seven between 18 July and 23 November 2011. In the earlier proceedings, Group Seven/Rheingold obtained judgment for damages for fraud against Mr Rejniak.
Mr Sultana was held liable, in the earlier proceedings, for damages for fraud.
Mr Nasir and Mr Yi have been sued in the present proceedings. The case put forward by Group Seven/Rheingold is that Mr Nasir and Mr Yi were parties to the fraud and were fellow conspirators of Mr Rejniak and Mr Sultana.
Larn was formed on 26 September 2006. A single subscriber share was issued to Mr Nobre. Mr Nobre's full name is Luis (or Louis) Augusto Ramos Nobre so that the name of the company is Mr Nobre's initials. After incorporation, further shares were issued to Mr Nobre and he remained the sole shareholder of Larn. At all times, Mr Nobre was the sole director of Larn. On 15 October 2011, in order to assist with money laundering, AIC and Larn entered into a loan agreement, or purported loan agreement, whereby €100 million was loaned by AIC to Larn. In the earlier proceedings, to which I refer below, Peter Smith J set aside this loan agreement. Larn did not trade and did not have any business premises. Larn went into administration on 31 May 2012 and then into creditors' voluntary liquidation on 24 May 2013. Larn has since changed its name to Equity Trading Systems Ltd but I will continue to refer to it as Larn, its name at the time of the relevant events.
Mr Nobre is Portuguese. In February 2016, after a trial lasting some 80 days, he was convicted at Southwark Crown Court on 6 counts of money laundering and 3 counts in connection with the possession of fraudulent banking documents contrary to the Fraud Act 2006. The first 2 counts of money laundering related to the €100 million which are the subject of the present proceedings. He was sentenced to imprisonment for 12 years in relation to the money laundering offences and 2 years in relation to the fraudulent documents, to run consecutively.
In relation to most of the matters which are the subject of this judgment, it is not necessary...
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