NABB Brothers Ltd v Lloyds Bank International (Guernsey) Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Lawrence Collins |
| Judgment Date | 18 March 2005 |
| Neutral Citation | [2005] EWHC 405 (Ch) |
| Docket Number | Case No: HC 04 C 0226 |
| Court | Chancery Division |
| Date | 18 March 2005 |
[2005] EWHC 405 (Ch)
Mr Justice Lawrence Collins
Case No: HC 04 C 0226
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand
London WC2A 2LL
Mr Louis Flannery (of Howes Percival) for the Defendant/Applicant
Miss Rosana Bailey (instructed by Cedars & Co) for the Claimant/Respondent
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
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I Parties and background
This is an application to set aside an order for service out of the jurisdiction in proceedings commenced by NABB Brothers Ltd ("the claimant"), which was incorporated in Ghana in 1969, and carries on business as an importer and exporter of rice, foodstuffs, biscuits, coffee and agricultural products, and is also involved in estate development.
In about 1959 Mr Kwabena Ntem, Mr Daniel Kwabena Brifo, Mr Wilson Kofi Brifo, and Mr Joseph Ernest Kwabena Ansah ("Mr Ansah") formed a partnership known as NABB Brothers. The partnership was based in Kumasi in Ghana. In 1969 the partners took the view that the partnership should become an incorporated limited company, and NABB Brothers Ltd was incorporated in September 1969. Mr Ansah became the Managing Director, and remained so until his death in 2000.
Mr Kwabena Ntem, Mr Daniel Kwabena Brifo and Mr Wilson Kofi Brifo are brothers. Mr. Ansah was a cousin of the brothers. Mr Ansah died in London on July 6, 2000.
The defendant is a professional trustee. On May 16, 1997 it changed its name to Lloyds Private Banking (Guernsey) Ltd and on September 24, 1999 there was a further change of name to Lloyds TSB Offshore Private Banking (Guernsey) Ltd. Pursuant to the Migration of Companies Ordinance 1997 and Companies (Jersey) Law 1991, the defendant became a company under the Companies (Jersey) Law 1991, and ceased to be a company under Guernsey law with effect from January 1, 2004. Trusts administered by the defendant have been transferred to Hill Samuel Offshore Trust Company Ltd ("Hill Samuel") under Jersey law. On March 5, 2004 the winding-up of the defendant commenced, when a special resolution of the defendant was passed pursuant to Article 146 of the Companies (Jersey) Law 1991. But it will not be dissolved pending the outcome of this claim, and it has been agreed that nothing turns in this action on the transfer. Some of the correspondence in this matter has been conducted by Hill Samuel, but for convenience I shall refer to it as correspondence by the defendant.
On April 20, 1994 Mr Ansah established a settlement called the Tubuoh Trust ("the Trust"), with the defendant as trustee. By clause 2 the settlement was established under Guernsey law, which was to be "the forum for the administration thereof". The Trust was a discretionary trust, and the beneficiaries were Mr Ansah, his wife (Vida Abrokwah), Sarah Osei, the children and remoter issue of Mr Ansah, the sisters and sisters-in-law of Mr Ansah and their issue, Isaac Kojo Ansah, John Kwaku Ansah, the cousins of Mr Ansah, and the Methodist Church at Atonsu.
II The claim
According to the claimant, in order to facilitate international and/or other transactions, Mr Ansah made use of bank accounts which were held in his own name with Lloyds Bank plc, now called Lloyds Bank TSB plc ("Lloyds Bank") at its branch at 32 Oxford Street, London, W1A 2LD. Funds were transferred to and from a sterling account number and a dollar account for the purposes of conducting the international business of the claimant.
Mr Ansah would use the accounts to establish a letter of credit in favour of a supplier of goods to the claimant. The supplier would confirm its willingness to provide goods which had been agreed previously between the supplier and Mr Ansah acting on behalf of the claimant. The agreement by the supplier would facilitate the transfer of funds to the supplier after the goods were sold to the claimant. On the date when the letter of credit was due to take effect payment would be made by Lloyds Bank to the supplier debiting the relevant bank account.
But at the same time Mr Ansah would make arrangements for the claimant to transfer to the supplier through local banks the amount invoiced by the supplier. As a result the supplier would have received two payments in relation to the same goods. The supplier would then refund one of the payments by transferring the refund to one of the accounts at Lloyds Bank in the name of Mr Ansah.
No explanation is given in the evidence as to why the supplier should be paid twice, and in argument Miss Bailey for the claimant suggested that it was to give comfort to the supplier. But it is obvious that in international transactions sufficient comfort is given by the opening of a letter of credit. If there were such double payments, in the absence of further evidence it is a reasonable inference that they were a device to extract money from Ghana in breach of exchange control regulations.
The claim is that on various occasions between September 19, 1969 and July 6, 2000 Mr Ansah (without the knowledge of the claimant) retained the sums which were refunded to the claimant through the Lloyds Bank accounts. It is also alleged that other sums which were transferred to the Lloyds Bank accounts for business purposes were retained by Mr Ansah. Mr Ansah never accounted to the claimant for the funds, or for interest on the funds.
The claimant says that Mr Ansah was in breach of fiduciary duty, and in effect misappropriated the claimant's funds, and so defrauded the claimant.
According to the particulars of claim, the liability of the defendant is said to arise as follows. First, the claimant claims the sums being held in the Trust or in the alternative such other sum "as money had and received by [Mr Ansah] and by reason thereof by the Defendant [sic] servants agents or successors in title to the use of the Claimant." Second, the claimant seeks from the defendant or its successors in title "restitution in relation to the monies which have been redirected into the Tubuoh Trust in so far as the same is possible." Third, it is said that Mr Ansah wrongfully deprived the claimant of the use and possession of the sums deposited in the Trust and has converted the sums therein to his own use, and "the Defendant [sic] servants agents or successors in title have failed to return the said sums to the Claimant as required or at all notwithstanding being given ample opportunity to do so." Fourth, it is said that the defendant holds the sums in the Trust on trust for the claimant.
In paragraph 41 of the particulars of claim, the claimant, averred, subject to the production of a valid trust instrument, that the Trust was invalid and had not been set up properly or at all.
The prayer claims: (a) a declaration that Mr Ansah and thereby the defendant or its successors in title are liable to account to the claimant for such sums in the Trust as the court thinks fit on the ground of breach of fiduciary duty and/or breach of trust and/or restitution and/or conversion and/or misrepresentation by Mr Ansah; (b) an order that the defendant or its successors in title do pay to the claimant such sums as the court thinks fit; (c) a declaration that the claimant is entitled to trace and/or follow such sums transferred into the Trust and the claimant claims equitable title to the funds sums and/or assets within the Trust and that the defendant or its successors in title hold them or such other assets on trust for the claimant; (d) an order that the defendant's servants agents or successors in title do deliver up the funds sums and/or assets to the claimant.
III The transfers
Evidence before Master Bowman
The allegations in the particulars of claim and the evidence in support of the application to serve out of the jurisdiction are these:
(a) on about April 26, 1994 £708,738.01 (the dollar figure of $708,738.01 in the particulars and witness statement is accepted to be in error) was transferred into the Lloyds Bank sterling account, and on May 3, 1994 Mr Ansah transferred £700,000 (the dollar figure of $700,000 also accepted to be in error) into the Trust;
(b) on about August 22, 1994 a supplier made a payment into the Lloyds Bank dollar account of $699,989.08, and on August 24, 1994 $677,000 was transferred into the Trust;
(c) on about September 1, 1994 a supplier made a payment of $399,989.20 into the Lloyds Bank dollar account and on about September 2, 1994 $400,000 was transferred into the Trust.
The claimant also says that the statements generated in connection with a fixed deposit account 71483020 placed with the defendant by the Trust show substantial deposits, which in several cases it says can be identified as coming from the Lloyds Bank dollar account: (1) $807,256 in May/June 1994; (2) $179,000 at the end of June 1994; (3) $988,826.21 in June/July 1994; (4) $58,000 in July 1994; (5) $100,000 in July 1994; (6) $1,150,088.25 in July/August 1994; (7) $677,000 in August 1994; (8) $1,831,897.69 in August/September 1994; (9) $400,000 in September 1994 (particulars of claim, para 20).
The statement of truth in the particulars of claim was made by Mr Emmanuel Ansah, an executive director of the claimant. His witness statement in support of the application for service out of the jurisdiction repeated the allegations, but without exhibiting any documents to support them. Those documents were exhibited to a witness statement of the same date in support of an application against the defendants and Lloyds Bank to compel disclosure of Mr Ansah's bank statements.
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