Nayyar & Others v Denton Wilde Sapte
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE HAMBLEN,Mr Justice Hamblen |
| Judgment Date | 16 December 2009 |
| Neutral Citation | [2009] EWHC 3218 (QB) |
| Docket Number | Case No: TLQ/09/0156 |
| Court | Queen's Bench Division |
| Date | 16 December 2009 |
[2009] EWHC 3218 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Hamblen
Case No: TLQ/09/0156
Claim No: HQ08X01902
Mr Stephen Cogley and Mr Tim Marland (instructed by Blake Lapthorn) for the Claimants
Mr Justin Fenwick QC (instructed by Barlow Lyde & Gilbert LLP) for the 1 st Defendant
Mr Bob Moxon Browne QC and Mr Charles Phipps (instructed by Kennedys) for the 2 nd Defendant
Hearing dates: 17–20, 23–24, 30 November, 1 December 2009
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.
Introduction
The Claimants (“Mr Nayyar”, “Mr Kang”, “Holiday Mood” and “Moresand”) are travel agents. At the material time, Mr Nayyar was a director and 50% shareholder in Holiday Mood, the other shares being held by his father. Mr Kang was one of the directors and one of four equal shareholders in Moresand, a family company established in 1987. Holiday Mood and Moresand were the corporate vehicles through which Mr Nayyar and Mr Kang conducted their respective travel agency businesses.
The Claimants seek damages against the Defendants for negligence and/or breach of contract and/or breach of fiduciary duty in relation to the sum of £383,259 paid by the Claimants in anticipation of the appointment of their joint venture, Maharaja Travel Limited (“Maharaja Travel”), by Air India as its exclusive Global Sales Agent for the UK and Ireland. The appointment was to be for a minimum of 4 1/2 years. Such appointments are well known in the aviation industry —and are referred to as “GSAs”.
GSAs are recognised as being very lucrative for travel agents. They involve being made the airline's exclusive sales agent in the specified country or territory. This means that a commission is earned on every ticket sold. As Mr Kang put it, they are the “ultimate dream” of any travel agent. In the present case it was anticipated by the Claimants that the proposed GSA would yield net profits of over £2 million per year.
The GSA opportunity was introduced to Mr Nayyar by the Second Defendant, Ms Advani. At the time she was a senior solicitor employed by the First Defendant (“DWS”) in the India Group. Her main role involved marketing and development and the introduction of parties in the commercial field with a view to generating fees for DWS and increasing its profile and presence in India. She was a dual qualified lawyer who had contacts and connections within India, and was the ex daughter in law of the Deputy Prime Minister at the material time, Mr Lal Krishna Advani.
The Claimants contend that Ms Advani promoted the idea, and actively encouraged the Claimants, to pursue the GSA. They say that they were told that to obtain the GSA would cost £2 million: an upfront payment or deposit of £400,000 and a balance of £1.6 million payable in two instalments, including £250,000 in legal fees. The person who introduced the opportunity to Ms Advani was Mr Ashkok Yadav, a former Tourism Minister for the State of Utter Pradesh (“Mr Yadav”). Apparently Mr Yadav had connections in the aviation industry in India and with the then Aviation Minister, Mr Hussain. Mr Yadav was introduced to the Claimants by Ms Advani and they met with him in India in September and October 2002.
The Claimants further contend that, acting on the advice of Ms Advani, and with her positive encouragement, they paid £13,000 in cash to Mr Yadav's assistant as part of the deposit on 20 September 2002. A further sum totalling £370,259 was paid by transfers from the account of Moresand in two tranches —£100,000 on 26 September 2002, and £270,259 on 2 October 2002. These sums were transferred into the account of a BVI company called Avacorp at HSBC in Hong Kong. The payment details were allegedly given to Mr Nayyar by Ms Advani on the Claimants' return to the UK from India on 26 September 2002.
The GSA was never awarded to the Claimants and, despite repeated demands of Mr Yadav, the deposit has not been recovered. The Claimants now claim the loss of the deposit and wasted costs as damages against Ms Advani and DWS.
As against Ms Advani, the Claimants contend that she assumed a duty of care toward them, positively advised them, made representations to the effect that they should proceed, and encouraged them to rely on her skill, expertise, knowledge and experience as a solicitor. They contend that she was acting as the Claimants' solicitor; she told them this, they believed it, and each treated the other as solicitor/client. The Claimants also contend that Ms Advani misrepresented the position and her misrepresentations were negligent; as an incidence of her duty as a solicitor, she gave negligent advice, when positively advising, and was further negligent in omitting to give advice and/or to consider appropriately the risks involved with the Claimants. The Claimants further contend that Ms Advani was acting in a fiduciary capacity —arising from the relationship of solicitor and client, but in any event because, on the facts, the Claimants reposed trust and confidence in her, which she knew and actively encouraged. Her duties were allegedly owed to all Claimants – she was aware of each and that the companies were the businesses through which Mr Nayyar and Mr Kang operated and would be involved. Each of the Claimants contributed to the lost deposit.
As against DWS, the Claimants contend that the activities carried on by Ms Advani were within the scope of her employment. Alternatively, they were so closely connected with what she was expressly authorised to do in her capacity as an employee, that it is fair and just in all the circumstances to find DWS vicariously responsible. Further or alternatively, DWS clothed Ms Advani with apparent/ostensible authority: she deployed her business card, her website entries and her status as solicitor with DWS. These factors, in conjunction with what she was expressly employed to do in any event, establish that she had the requisite apparent/ostensible authority.
Ms Advani's defence is that none of the Claimants ever retained her, or DWS, as their solicitor, and that her role in the GSA transaction was limited to putting Mr Nayyar in touch with Mr Yadav. This was the type of introduction that formed the basis of Ms Advani's daily work for DWS, and was directed towards promoting commerce amongst her numerous contacts, and the prospect, either immediate or more remote, of legal work (e.g. in drafting a GSA) which might result to the benefit of her fee-earning colleagues, and hence to the firm. Ms Advani's case is that there was nothing unusual or irregular in effecting this type of introduction. Ms Advani denies that she knew anything about whether Mr Yadav would require payment for his involvement, and if so on what terms and that neither Mr Yadav nor the Claimants discussed this with her. Ms Advani denies that she had any of the several meetings which allegedly took place with the Claimants, denies that she met them in India, or took them to meet Mr Yadav and says that the only thing she did was to effect an introduction in late Spring/early Summer 2002. For the purposes of effecting the introduction, she was acting within the scope of her employment in that she was developing business.
DWS's defence is that it was never retained as solicitors for any of the Claimants, and that if Ms Advani in fact acted for them in the ways alleged, her actions were outside the usual scope of a solicitor's work, and therefore outside the terms of her employment with DWS. DWS also say that if Ms Advani acted as alleged the Claimants cannot reasonably have considered that she was acting as a solicitor, and in such event she had no ostensible authority so to act.
Both Ms Advani and DWS contend that in any event the Claimants must have known and intended that the deposit monies should be used as an illegal inducement since there is no way that an honest businessman could have believed that these were legitimate advance payments for a GSA. They contend that the payments to Mr Yadav were intended by the Claimants to secure a preference over other applicants in relation to the award of the GSA and involved an attempted bribe. The Claimants have to rely on those tainted payments to establish the damage they claim to have suffered, so the doctrine of illegality is triggered. The claim is accordingly barred. The Defendants rely on the maxim ex turpi causa non oritur actio: the court will not assist a claimant to recover compensation for the consequences of his own wrongful conduct.
The outline facts
Prior to the incorporation of Holiday Mood, Mr Nayyar was a manager at Holiday Express which also operates as a travel agency. In 1999, whilst working at Holiday Express, he was introduced to DWS. Holiday Express did a considerable amount of travel agency work for DWS.
Whilst employed with Holiday Express, Mr Nayyar was introduced to Ms Advani at DWS's offices. Thereafter Ms Advani contacted Mr Nayyar on various occasions to make arrangements for business and personal trips. This continued after Mr Nayyar left Holiday Express to establish Holiday Mood.
In the summer of 2002, Ms Advani telephoned and informed him that a business opportunity had arisen for the acquisition of the Air India UK and Ireland GSA and that she was therefore making enquiries as to whether Mr Nayyar was interested or knew of a suitable candidate.
The evidence of the Claimants was that following the initial telephone conversation...
To continue reading
Request your trial
-
UBS Ag (London Branch) and Another v Kommunale Wasserwerke Leipzig Gmbh UBS Ltd and Another (Third Parties)
...which a bribe was paid by an agent who was in an agency relationship with both parties to the transaction, although UBS did cite Nayyar v Denton Wilde Sapte [2009] EWHC 3218 (QB), [2010] PNLR 15 in this connection. A question arose whether the defendant firm of solicitors was vicariously r......
-
Les Laboratoires Servier v Apotex Inc.
...the view that what matters is the claimant's state of knowledge at the relevant time. 82 In Nayyar v Denton Wilde Sapte [2009] EWHC 3218 (QB), [2010] Lloyd's Rep PN 139 the claimants were involved in the travel business in England. The second defendant was an Indian-qualified solicitor empl......
-
Les Laboratoires Servier v Apotex Inc.
...Consultants Pte Ltd v Leong Kwok Onn [2005] 4 SLR 214, Stone & Rolls Ltd v. Moore Stephens [2009] UKHL 39, [2009] 1 AC 1391, Nayyar v Denton Wilde Sapte [2009] EWHC 3218 (QB), [2010] Lloyd's Rep PN 139, Safeway Stores Ltd v Twigger [2010] EWHC 11 (Comm), [2010] 3 All ER 577, [2010] EWC......
-
Patel v Mirza
...16 See for example paragraphs 1.11 – 1.14 of the Introduction; and paragraphs 3.1 — 36 in the main body of the report. 17 [2009] EWHC 3218. 18 [2009] EWHC 19 Op.cit. paragraphs 35–36. 20 [2012] EWCA Civ 593. The appeal to the Supreme Court was heard on 10 June 2014 and judgment is currentl......
-
Solicitors' PI - Recovery Of Costs From Former Employee
...Insurance Co Ltd (2) Denton Wilde Sapte v Gauri Advani [2012] EWHC 623 (QB); [Nayyar & Others v Denton Wilde Sapte & Advani [2010] PNLR 15 This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to Law-Now infor......
-
Solicitors PI: Illegality And Vicarious Liability
...be available to a law firm to defeat the claim against it. Further reading: Nayyar & Others v Denton Wilde Sapte & Another [2009] EWHC 3218 (QB) This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to Law-Now......
-
The defence of joint illegal enterprise.
...decisions, the High Court of England and Wales held that conduct evincing moral turpitude is sufficient: Nayyar v Denton Wilde Sapte [2009] EWHC 3218 (QB) (16 December 2009) [92] (Hamblen J); Safeway Stores Ltd v Twigger [2010] 3 All ER 577. It has not been decided whether breaches of forei......
-
Mozambican Illegal Debts: Testing the Odious Debt Doctrine.
...55, at 1229-30. (57.) See id. at 1325-26; A discussion of connected transactions can be found in Nayyar v. Denton Wilde Sapte. See [2009] EWHC 3218 (QB) (58.) It is also a general principle of law that contracts resulting from acts of corruption are void. See Goldmann, supra note 24, at 34.......