MSM Consulting Ltd v The United Republic of Tanzania
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE CHRISTOPHER CLARKE |
| Judgment Date | 30 January 2009 |
| Neutral Citation | [2009] EWHC 121 (QB) |
| Docket Number | Case No: HQ06800955 |
| Court | Queen's Bench Division |
| Date | 30 January 2009 |
[2009] EWHC 121 (QB)
Mr Justice Christopher Clarke
Case No: HQ06800955
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Phillip Aliker (instructed by Huggins & Lewis Foskett) for the Claimant
James Clifford (instructed by MacRae & Co LLP) for the Defendant
Hearing dates: 16th – 21st October 2008
In the present action MSM Consulting Ltd (“MSMâ€) seeks to recover commission, or alternatively a quantum meruit payment, from the defendant, the United Republic of Tanzania (“Tanzaniaâ€), for acting on its behalf in the search for new premises for its High Commission between 2002 and 2004. The commission claimed in the pleadings is £ 105,750 being 1.5% x £ 6,000,000 + VAT at 17.5%. MSM also claims commission on the £ 60,000 paid for furnishings, making its total claim, including VAT, £ 116,325.
MSM was incorporated on 15 th January 2003. It is a company belonging to Ms Miriam Mukasa Oyaka (“Ms Mukasaâ€), who owns 99 out of its 100 £1 shares and is its only director. She is the daughter of a well respected and well known African diplomat – the late Ambassador Laban Oyaka – a Ugandan who had worked at the Organisation of African Unity and had been based in Dar es Salaam for some years.
The premises which formerly constituted the Tanzanian High Commission were at 43, Hertford Street, London W1. The lease of those premises, which the High Commission had occupied since independence in 1964, was due to expire in June 2004. The premises had not been upgraded for 40 years; were somewhat shabby; and were also too small to house all the staff of the mission.
At the material time the High Commissioner and Tanzania's representative at the Court of St James was Dr Hassan Omar Gombo Kibelloh (“Mr Kibellohâ€), currently Tanzanian Ambassador in Paris; and the Head of Chancery was Mr Rajab Gamaha (“Mr Gamahaâ€).
Mr Kibelloh was appointed High Commissioner to the United Kingdom in early 2002. Prior to his appointment he had served as Permanent Secretary at the Ministry of Foreign Affairs in Dar es Salaam, where one of his functions was to oversee the acquisition of Chancery premises and residences for overseas missions. Mr Gamaha was appointed Head of Chancery in November 2001 and took over the portfolio, which covered responsibility for all the administrative affairs of the mission, including the premises of the High Commission, in January 2002.
MSM's accounts for the period 15 th January 2003 to 31 st January 2004 reveal no turnover and a loss consisting of administrative expenses of £ 2,556, financed largely by a loan from Ms Mukasa. The accounts for the following 3 years reveal losses of £ 11,268, £ 15,691 and £ 6,028. Ms Mukasa has a degree in economics; and had worked for a US investment bank and a Russian stockbroking firm. By 2004 she had had some dealings with the Sierra Leone Embassy. She had also looked at some properties for the Rwandan Embassy. She had not, however, been involved in any property negotiations which had come to fruition – notwithstanding the statement in her letter of 19 th November 2002 to the High Commissioner that “Negotiation is one of our main areas of expertiseâ€.
In 2002 Ms Mukasa, whom Mr Kibelloh had first met at a dinner function of the UK/Tanzania Business Council in the summer of 2002 1, became aware that the High Commission was looking for new premises. At this stage she was a regular visitor to the High Commission where her usual contact was Mr Simon May, who was the Head of the Tanzanian Trade Centre based in London Bridge. He had introduced her to the Tanzanian Trade & Industry Minister to whom she had given a presentation.
On 5 th August 2002 she wrote to Mr Kibelloh on MSM paper (although it had not then been incorporated) introducing herself and MSM and asking to meet him in order to discuss investment opportunities for foreign investors in Tanzania. On the same day Mr Kibelloh spoke to her on the telephone when she mentioned her background. On the next day she wrote to him indicating that MSM had previewed over 25 properties in London on behalf of US investors in the £ 2- £ 10 million price range for over a year and was working with Gilly Holloway Property Services Ltd. That was the company of Gilly Holloway (“Ms Hollowayâ€), who was and is an experienced property expert with over 20 years experience in the high value end of the property market 2. She indicated that she would like MSM to help the High Commission find suitable premises, which she recommended should be in the £ 3- 6,000,000 range. The postscript to her letter confirmed that Mr Kibelloh's secretary had fixed an appointment for 12 th August.
The High Commission was not familiar with the practice whereby a prospective purchaser retains an agent to locate a suitable property, using its own database and contacts, and then negotiates the terms of its purchase and acts generally on the buyer's behalf. Mr Kibelloh and Mr Gamaha had assumed that the High Commission would have to look around and contact possible vendors and their agents, shortlist properties, select one, and then, after the necessary tendering process and budgetary approval (as to which see para 19 below) appoint an agent who would negotiate the terms, carry out the necessary surveys and deal with planning requirements. In 2002 the High Commission felt that it was far away from being in a position to instruct an agent.
On 12 th August 2002 Ms Mukasa came to see Mr Kibelloh by appointment at the High Commission. An agenda that she drew up for the meeting set out 5 specific topics of which the first four related to the attraction of foreign investment into Tanzania and certain possible projects: Biogas Technology, Biological Sewage Treatment Plants, Tyre Recycling and Mining and the fifth was “ Embassy propertyâ€.
She explained the services which MSM could offer. According to her evidence Mr Kibelloh was suitably impressed and asked for MSM's help in the search for new High Commission premises. Mr Kibelloh's evidence is that he hesitated to deal with her because he wondered whether she had the necessary expertise; and her offer of help was neither accepted nor declined.
I am satisfied that Mr Kibelloh is correct in this respect. He did not then know Ms Mukasa, although he had met her once before. He did not have the necessary authority from the Ministry of Foreign Affairs and Treasury in Tanzania to engage her. At the same time he did not wish to be slighting or to turn away someone who might turn out to be helpful. I note that Ms Mukasa's letter of 20 th August 2002, written after and referring to the meeting, does not mention the topic of property, much less suggest any engagement.
On 25 th September 2002 Ms Mukasa wrote to the High Commissioner 3 and, amongst other things, told him that she would like to organise a “Meet & Greet†session for him to meet a number of people including Ms Gilly Holloway.
On 16 th October 2002 a further meeting took place at the High Commission between Ms Mukasa, Mr Kibelloh and Ms Holloway. Ms Mukasa's evidence about that meeting was as follows. Mr Kibelloh confirmed that he wanted MSM to source new High Commission premises. He said that Tanzania was interested in 15, Knightsbridge but that he had concerns about its suitability as High Commission premises. Mr Kibelloh had visited the property when he had been permanent secretary at the Ministry of Foreign Affairs. He thought the asking price to be high, and was concerned about the size of the building and its high maintenance costs. He asked her to find out as much information about the property as she could and at the same time to see if there were any other better alternatives.
Mr Kibelloh's evidence was that he may have expressed interest in this property but that Ms Mukasa cannot have understood that he was retaining her as the High Commission's agent. I accept that Mr Kibelloh said nothing which could reasonably have been understood to amount to a retainer of her or MSM. The meeting was designed to kindle the High Commissioner's interest in appointing MSM as its agent, and the High Commissioner was interested (and probably expressed interest) in anything Ms Mukasa had to offer.
On 16 th October Ms Mukasa made enquiries about 15 Knightsbridge. She discovered that it was being marketed for about £ 8,000,000, required substantial refurbishment (having previously been used as a bank) and was likely to attract VAT. She advised
Mr Kibelloh that the property (which had been on the market for over a year) was far too expensive; and that it was uncertain whether Tanzania would be given the necessary planning permission to use it as an embassy. She expressed concern about the pizza restaurant next door which posed a potential fire hazard unattractive to insurers. Mr Kibelloh agreed that the building was unsuitable and she should look for new premises which should be larger than 43, Hertford Street, and have enough space
Thereafter Ms Mukasa looked at a number of properties with a view to seeing whether they were potentially suitable and made 18 visits to some 9 properties with representatives of the High Commission on 8 separate occasions between November 2002 and September 2003. (Representatives of the High Commission also viewed properties at the invitation of other agents during this period). This included 3 viewings in April and September 2003 of 3 Stratford Place, the property eventually purchased in August 2004. These occasions were as follows:
| Date | Property | Attendees | Comment |
| 1.11.02 | 4, Collingham Gardens, SW54 | Ms Mukasa, Ms Holloway Mr Kibelloh | Â |
| Â | Â | Â | Â |
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