Zumax Nigeria Ltd v First City Monument Bank Plc
| Jurisdiction | England & Wales |
| Judge | Davis-White,Barling J,Miles J |
| Judgment Date | 17 November 2022 |
| Neutral Citation | [2022] EWHC 2885 (Ch) |
| Docket Number | Case No: BL-2019-000708 |
| Court | Chancery Division |
[2022] EWHC 2885 (Ch)
HH JUDGE Davis-White KC
(SITTING AS A JUDGE OF THE CHANCERY DIVISION)
Case No: BL-2019-000708
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS LIST (ChD)
Rolls Building,
Fetter Lane, London, EC4A 1NL
Mr Chukwuemeka Nduka-Eze as director of the Claimant company in person
Ms Poonam Melwani KC and Mr Paul Henton (instructed by Preston Turnbull LLP) for the Defendant
Mr Francis Collaço Moraes (instructed by Devonshires Solicitors LLP) for Samuna Limited, an Applicant
Hearing dates: 6–7 October 2022
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.
HH JUDGE Davis-White KC (SITTING AS A JUDGE OF THE CHANCERY DIVISION)
This judgment was handed down by the Judge remotely by circulation to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be 10am on 17 November 2022
If this Transcript is to be reported or published, there is a requirement to ensure that no reporting restriction will be breached. This is particularly important in relation to any case involving a sexual offence, where the victim is guaranteed lifetime anonymity ( Sexual Offences (Amendment) Act 1992), or where an order has been made in relation to a young person
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HH Judge Davis-White KC:
The primary issue before me is whether or not, on the application of the defendant, the current proceedings should be struck out as an abuse of process. This arises in circumstances where an earlier set of proceedings, commenced in 2013 and between the same parties (the “2013 Claim”), has been struck out for failure to comply with an “unless” order. The “unless” order required the claimant (“Zumax”), among other things, to repay a sum of money of over £3.5 million. The vast majority of this sum was equal to a sum that Zumax had received from the defendant (the “Bank”) in satisfaction of an order for summary judgment. The summary judgment had subsequently been set-aside, on appeal, by the Court of Appeal. That court also ordered the repayment of the sum paid by the Bank to Zumax under the judgment.
Following a sustained failure to repay the sum in question as ordered, the unless order was made by Miles J on 16 July 2020, following the handing down of his judgment on 14 July 2020 ( [2020] EWHC 1852 (ChD) (the “1st Miles J Judgment”)) and a judgment regarding consequential matters on 16 July 2020. Following continued failure to repay, the 2013 Claim was struck out, under the unless order, in August 2020.
The 2013 Claim concerned nine or ten transfers made between May 2000 and April 2002 by a company called Redsear Limited, a nominee for Zumax, for the account of Zumax The transfers were made to accounts held by a predecessor of the Bank with a correspondent bank, Commerzbank, in London, for Zumax as payee. Zumax claims that the Bank has never paid on or accounted for the value of the transfers.
As explained by Miles J in his 1 st judgment of 14 July 2020 in relation to the 2013 Claim:
“[2] Zumax started these proceedings in October 2013 alleging that the Bank became a trustee for it of the monies received into the Commerzbank accounts. In November 2017 Barling J gave summary judgment in respect of nine of the transfers. 1 The Bank appealed his order. By the time of the appeal Zumax had received the judgment sum and amounts on account of its costs. In March 2019 the Court of Appeal allowed the appeal and held that the Bank was not a trustee of the sums received into the Commerzbank accounts. By its order of 13 March 2019, it required Zumax to repay the judgment sum and to pay further amounts on account of a proportion of the costs of the appeal and the hearing in the court below. The total, more than £3.68m, was payable in March and April 2019. Zumax has so far paid only £100,000. The Bank [then applied] for an order that unless Zumax pays the outstanding sums the claim shall be dismissed and that Zumax shall be debarred from commencing or continuing any further proceedings based on the same facts or causes of action” (“the sanctions application”).”
[3] The Court of Appeal held that the existing claim was unsustainable. 2 Zumax needs to amend if it is to proceed with the claim and it has issued an application for permission to amend to allege claims in debt, restitution, agency, breach of contract, tort, and breach of fiduciary duty.
[4] The Bank has also issued an application for security for costs, contingent on the application for permission to amend being successful.
[5] The applications for permission to amend and for security for costs were listed to be heard at the same time as the Bank's sanctions application and the parties have submitted skeleton arguments addressing them all. At the hearing there was time only for the sanctions application. The parties agreed that the outcome of the amendment application is potentially relevant to the Bank's sanctions application. One course would have been to postpone deciding the sanctions application until the amendment application could be heard. But, as a pragmatic alternative, the Bank invited the Court to decide the sanctions application on the assumption (against itself) that Zumax will be permitted to amend its claim, while reserving its right to argue in due course that the amendments should not in fact be allowed. I shall proceed on this basis. The parties have also agreed that time shall not run against Zumax for limitation purposes until the amendment application has been heard.”
As indicated by Miles J, the sanction sought to be imposed before Miles J was not just the striking out of the 2013 Claim but the prevention of Zumax from commencing or continuing further proceedings based on the same facts or causes of action. The current proceedings, commenced in April 2019 and served on the Bank in October 2019 (the “2019 Claim”), was one such set of proceedings. The 2019 Claim asserts the same non-trust claims in relation to the ten payments as Zumax sought to introduce by amendment into the 2013 Claim. The 2019 Claim was expressly issued on the basis that it constituted “protective proceedings” to cover a potential limitation issue arising in the 2013 Claim. That issue was that amendment might not be permitted to the extent that, because of the doctrine of “relation back” of amendments, a permitted amendment might rob the Bank of an arguable limitation defence. The 2019 Claim was stayed by consent in November 2019. However, the Bank had filed an acknowledgement of service indicating an intention to contest jurisdiction should the stay be lifted.
By his Order dated 16 July 2020, Miles J granted an unless order but limited the sanction to the striking out of the 2013 Claim. As regards the extended sanction sought he said this:
“ [136] The Bank seeks an order that if it fails to comply with the proposed sanction Zumax shall be prevented from taking or continuing with any other claim based on the same causes of action as in the present action. The Bank refers specifically to the second proceedings. It contends that it would be abusive for Zumax to continue that action where it is continuing breach of the order of the Court of Appeal in the present case. While I see considerable force in the Bank's submission, I was not taken to any of the authorities about a second action being abusive and heard no argument about it, and I am not prepared to make this order. Naturally by taking this course I am not to be taken to suggest that Zumax may properly continue the second proceedings without first complying with the Court of Appeal's order of 13 March 2018.”
The effect of this holding on the application to strike out the 2019 Claim (the “Strike Out Application”) was one of the issues before me.
As well as the Strike Out Application, I also have before me an application purportedly by a third party entity to be joined to the proceedings and, thus, to be heard on the Strike Out Application. The assertion is that, by assignment, it is interested in the relevant causes of action asserted by Zumax. There is a dispute as to whether those acting for the third party are properly empowered to do so. That is why I have referred to the application being purportedly made by the entity in question.
In this judgment I have gone rather more fully than I might otherwise have done into the facts and background to this case. That is in part because of the history of this matter. That history includes a large number of court hearings in different jurisdictions and in different proceedings, disputes between the parties as to what some of the hearings decided or did not decide and an appeal by Zumax to the entire history of proceedings between Zumax and the Bank as grounds justifying a refusal to make the order sought by the Bank on the application before me.
In part I set out the history fully because, in certain respects, my understanding of what Mr Nduka-Eze, for Zumax, asserted to be the factual position was not the factual position as I understand it to be from the documents. In this respect, and by way of example, I refer to what is said by the Bank's solicitor in proceedings concerned with the registration in England of a judgment of the Nigerian Court of Appeal, Lagos Division. I need not set out the detail here, the facts highlight, stating the position at its most neutral, a complete disagreement between the Bank's solicitor (Mr Preston) and Zumax's then...
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