Zumax Nigeria Ltd v First City Monument Bank Plc
| Jurisdiction | England & Wales |
| Judge | Lord Justice Kitchin,Lord Justice Christopher Clarke,Mr Justice Cobb |
| Judgment Date | 23 June 2016 |
| Neutral Citation | [2016] EWCA Civ 567 |
| Docket Number | Case No: A3/2014/2421 |
| Court | Court of Appeal (Civil Division) |
| Date | 23 June 2016 |
[2016] EWCA Civ 567
Lord Justice Kitchin
Lord Justice Christopher Clarke
and
Mr Justice Cobb
Case No: A3/2014/2421
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
MR CHARLES HOLLANDER QC
(sitting as a Deputy Judge of the High Court)
[2014] EWHC 2075 (Ch)
Royal Courts of Justice
Strand, London, WC2A 2LL
Fidelis Oditah QC and Phillip Aliker (instructed by Alan Taylor & Co) for the Appellant
Francis Collaco Moraes (instructed by Mordi & Co) for the Respondent
Hearing dates: 4/5 May 2016
Approved Judgment
Introduction
This is an appeal by the defendant, First City Monument Bank plc ("FCMB"), against the judgment of Mr Charles Hollander QC, sitting as a deputy judge of the Chancery Division, given on 1 July 2014 dismissing applications made by FCMB dated 6 December 2013, 11 December 2013 and 7 May 2014.
The parties and the claim
The claimant, Zumax Nigeria Limited ("Zumax"), a company incorporated in Nigeria, was engaged in the business of providing engineering services in Nigeria, primarily to companies in the Shell and Chevron groups of companies. Zumax would invoice these clients for some of its fees in US dollars and the remainder in Nigerian naira. A nominee of Zumax, Redsear Limited ("Redsear"), a company incorporated in the Isle of Man, received the US dollar payments in a US dollar account at the London branch of Chase Manhattan International Limited ("Chase"), which subsequently became JP Morgan Bank. Zumax used these funds to purchase equipment and for other purposes connected with its business, and any surplus funds were remitted to Nigeria for use by it in its Nigerian operations.
FCMB is a Nigerian registered bank and, as the deputy judge explained, it is the product of a number of Nigerian bank mergers. By these mergers it assumed the liabilities and obligations of, among other banks, IMB International Bank plc ("IMB") and Finbank plc ("Finbank"). IMB was Zumax's main banker. IMB Morgan plc ("IMB Morgan") was a subsidiary of IMB. One of the directors of IMB was Mr Edwin Chinye. He was also a director of Zumax.
At all times material to these proceedings IMB maintained in its own name a US dollar correspondent bank account at the London branch of Commerzbank AG ("Commerzbank"), as did IMB Morgan.
Zumax asserts in these proceedings that between May 2000 and April 2002 monies amounting to US$ 3,547,000 held in Redsear's US dollar account at Chase in London were transferred upon the instruction of Mr Chinye to the IMB and IMB Morgan Commerzbank correspondent accounts for the sole purpose of remitting them to Zumax. It also contends that IMB and IMB Morgan held these monies ("the Redsear proceeds") on trust for Zumax.
Zumax continues that it never received the Redsear proceeds and that IMB and IMB Morgan, acting by Mr Chinye, fraudulently and in breach of trust wrongfully retained them. It makes these claims against FCMB as the successor in title of IMB. It recognises that FCMB did not succeed to the liabilities of IMB Morgan but says that IMB Morgan was for this purpose the agent or nominee of IMB.
The proceedings and the applications
On 10 April 2013 solicitors for Zumax wrote a letter of claim to FCMB detailing the matters to which I have referred and demanding payment of the Redsear proceeds together with interest. Some two months later, on 24 June 2013, solicitors in Nigeria for FCMB replied denying that the Redsear proceeds had ever been received by IMB and IMB Morgan and asserting that Zumax had admitted as much in the course of proceedings it had pursued in the Nigerian courts against Mr Chinye and Finbank under claim number FHC/L/CS/784/2009 (the "784/2009" claim).
Zumax considered that FCMB had failed to put forward a credible defence to its claim and accordingly, on 11 September 2013, it issued an application for permission to serve these proceedings on FCMB in Nigeria. The application was supported by a witness statement of Mr Nduka-Eze, a solicitor and director of Zumax, who explained that Zumax relied upon grounds (11), (15) and (16) of paragraph 3.1 of CPR Practice Direction 6B; that he believed that the claim had a reasonable prospect of success; and that this was the proper jurisdiction in which to bring the claim. On 19 September 2013 Master Nurse granted the permission sought.
On 8 October 2013 the proceedings were served upon FCMB in Nigeria. Service was acknowledged by FCMB on 30 October 2013. On 7 November 2013 FCMB sought from Zumax and was given a 28 day extension of time to prepare an application and evidence in support of a challenge to the jurisdiction. That extension expired on 5 December 2013.
Meanwhile, on 4 December 2013 FCMB's then solicitors sought a further extension until 31 January 2014. They explained that they were reviewing seven different sets of proceedings in the Nigerian courts and that they needed more time in order properly to prepare their challenge. They invited a response by noon on 5 December 2013 and indicated that if the extension was not forthcoming they would make an application to the court.
On 6 December 2013 Zumax refused the extension sought. It did, however, extend time for FCMB to file a defence for 28 days from 13 November 2013, which extension therefore expired on 11 December 2013. In the meantime, FCMB's solicitors had prepared an application to the court for an extension of time. It was purportedly dated 5 December 2013 but was in fact sent to the court by fax at 16:16 hours on Friday, 6 December 2013 and, given the time of receipt, was only issued by the court on Monday, 9 December 2013. That application was supported by brief evidence in paragraph 10 of the application notice given by Ms Ravat, one of the solicitors then acting for FCMB, in which she explained that they had received a substantial body of documentation in respect of the proceedings in Nigeria; that they required further information and instructions; and that representatives of FCMB were due in London in the week beginning 9 December 2013 for the purpose of providing the further information and the instructions they needed.
On 11 December 2013 FCMB made a substantive application to challenge the jurisdiction, which challenge was again supported by brief evidence in paragraph 10 of the application notice, on this occasion from Ms Nkontchou who was at that time a partner in the firm of solicitors then acting for FCMB. This evidence contained a reference to a seven page letter which accompanied the notice and which elaborated upon the matters referred to in it. In broad terms FCMB sought to have the order permitting service out of the jurisdiction set aside on the basis that Zumax had failed to make out a sufficiently arguable case on the merits, not least because the claims which are the subject of these proceedings had been compromised in the course of other proceedings in Nigeria; that the case did not fall within one or more of the classes of case for which permission to serve out could properly be given; that the appropriate forum for the hearing of the dispute was Nigeria; and that the order should be set aside for material non-disclosure.
On 16 December 2013 Zumax's solicitors wrote to FCMB's solicitors seeking disclosure and inspection of the records of the US dollar correspondent accounts held by IMB and IMB Morgan with Commerzbank in light of FCMB's denial that the Redsear proceeds had ever been transferred to those accounts. That request was refused and so, on 20 December 2013, Zumax made an application for the disclosure of those records under the Bankers' Books Evidence Act 1879.
FCMB's application of the 11 December 2013 challenging the jurisdiction came before Master Teverson for directions on 16 January 2014. He extended FCMB's time for filing evidence in support of the application until 6 February 2014; directed that any evidence in answer by Zumax should be filed by 6 March 2014; and directed that any evidence in reply by FCMB should be filed by 20 March 2014. He also directed that the application should be referred to a judge with a time estimate of one day.
On 4 February 2014 Master Teverson made an order upon Zumax's application of 20 December 2013 requiring the disclosure to Zumax of such account statement entries in IMB and IMB Morgan's US dollar correspondent accounts with Commerzbank as related to the transfer into those accounts of the Redsear proceeds. Disclosure of the documents, heavily redacted, duly took place and the documents revealed that, contrary to FCMB's assertions, the Redsear proceeds had indeed been transferred into those accounts.
On 4 April 2014 FCMB made its own application for an order under the Bankers' Books Evidence Act. The application was supported by a witness statement of Ms Nkontchou, who was by now employed by FCMB, dated that same day in which she explained that FCMB had first had sight of the documents disclosed by Commerzbank to Zumax when they were exhibited to and served with the fourth witness statement of Mr Nduka-Eze dated 4 March 2014. She continued that their heavy redaction meant that they only revealed details of the credits to the IMB and IMB Morgan US dollar correspondent accounts; and that FCMB therefore needed access to the unredacted account records in order to establish to whom the monies in those accounts had been transferred, and in particular whether those monies had been transferred to Zumax. She maintained that FCMB needed such an order because Commerzbank was not prepared to disclose these documents so far as they related to IMB Morgan. Then, at paragraph [15], she said this:
"The claimant makes very serious allegations of fraud against the Defendant. It is essential the Defendant is able to...
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